Document:

Exhibit 10.5

 

SUBLEASE

 

THIS SUBLEASE (this “Sublease”) is dated for reference purposes only as of December 13, 2011,  by and between NEKTAR THERAPEUTICS, a Delaware corporation (“Sublandlord”), and GENE SECURITY NETWORK, INC.,  a Delaware corporation (“Subtenant”).

 

RECITALS

 

A.                                    Sublandlord is the Tenant under a written Amended and Restated Built-to-Suit Lease dated as of August 17, 2004, with BMR-201 Industrial Road LLC, a Delaware limited liability company (successor-in-interest to Inhale 201 Industrial Road, L.P.) (“Master Landlord”)  as Landlord, as amended by that certain Amendment to Build-to-Suit Lease dated January 11, 2005 and that certain Second Amendment to Build-to-Suit Lease dated July 29, 2007 (as so amended, the “Master Lease”), pursuant to which Sublandlord is leasing from Master Landlord certain premises which include Suite 420 (the “Premises”) on the fourth floor of the building with an address at 201 Industrial Road, San Carlos, California (the “Building”). A copy of the Master Lease is attached as Exhibit A to this Sublease.

 

B.                                    Subtenant desires to sublease from Sublandlord the portion of the Premises shown as the “Subleased Premises” on Exhibit B to this Sublease (the “Subleased Premises”), upon and subject to the terms and conditions set forth below. For the purposes of this Sublease, the parties agree that the rentable area of the Subleased Premises is 20,123 rentable square feet.

 

C.                                    Sublandlord is willing to sublease the Subleased Premises to Subtenant, subject to Master Landlord’s approval, if required under the Master Lease, upon and subject to the terms and conditions set forth below.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained herein, Sublandlord and Subtenant agree as set forth below.

 

1.                                      Sublease Agreement. Sublandlord hereby subleases the Subleased Premises to Subtenant, and Subtenant hereby subleases the Subleased Premises from Sublandlord, on the terms and conditions set forth in this Sublease.

 

2.                                      Term of Sublease. The term of this Sublease (the “Sublease Term”) shall commence on the date that the consent of the Master Landlord is obtained (the “Sublease Commencement Date”)  and (unless sooner terminated pursuant to the provisions of this Sublease), shall expire on October 5, 2016 (the “Sublease Expiration Date”). As used herein, the “Sublease Rent Commencement Date”  shall mean the date on which the Sublease Alterations (as defined in Section 7 below) are substantially completed, but in no event later than May 1,2012.

 

3.                                      Sublease Rent; Security Deposit.

 

3.1                               Base Sublease Rent. Commencing on the Sublease Rent Commencement Date, and continuing on the first day of each month thereafter through the Sublease Expiration Date, Subtenant shall pay to Sublandlord, in advance, without notice or demand, and without any

 

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set-off, counterclaim, abatement or deduction whatsoever, except as may be expressly set forth in this Sublease, in lawful money of the United States, by wire transfer of funds or by check payable to Nektar Therapeutics, base sublease rental (“Base Sublease Rent”) as follows:

 

	
Period
    	
 
    	
Base Sublease Rent Per Month
    	
 
    
	
Sublease Rent Commencement   Date – Last day of 7th month following Sublease Rent Commencement   Date (the “Reduced Rent Period”)*
    	
 
    	
$
    	
 17,000.00
    	
**
    
	
 
    	
 
    	
 
    	
 
    
	
If the Reduced Rent Period   shall expire prior to October 5, 2012, then from the first day following   expiration of the Reduced Rent Period – 10/5/12
    	
 
    	
$
    	
 34,209.10
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
From the later to occur   of: (i) the first day following expiration of the Reduced Rent Period; or   (ii) 10/6/12 – 10/5/13
    	
 
    	
$
    	
 35,215.25
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
10/6/13 – 10/5/14
    	
 
    	
$
    	
 36,221.40
    	
 
    
	
10/6/14 – 10/5/15
    	
 
    	
$
    	
 37,227.55
    	
 
    
	
10/6/15 – 10/5/16
    	
 
    	
$
    	
 38,233.70
    	
 
    

 

*If the Sublease Rent Commencement Date does not occur on the first (1st) day of a calendar month, the period from the Sublease Rent Commencement Date to the first (1st) day of the next calendar month shall be included in the 8th month following the Sublease Rent Commencement Date for purposes of determining the monthly Base Sublease Rent rate applicable for such partial month

 

**During this period, Base Sublease Rent is payable only with respect to 10,000 rentable square feet of the Subleased Premises.

 

A payment of Base Sublease Rent for the first month of the Sublease Term in the amount of $17,000.00 shall be delivered to Sublandlord concurrently with Subtenant’s execution of this Sublease.

 

3.2                               Additional Rent. “Additional Rent” shall mean all sums other than Base Sublease Rent payable by Subtenant to Sublandlord under this Sublease, including (without limitation): overtime or excess service charges, and late charges, damages, interest and other costs and expenses related to Subtenant’s failure to perform any of its obligations under this Sublease. Subtenant shall pay to Sublandlord, as Additional Rent, Subtenant’s pro rata share of Tenant’s Operating Cost Share of Operating Expenses pursuant to Section 7 of the Master Lease (excluding Section 7.6 [Reserve Account]). Such Additional Rent amounts shall be paid by Subtenant within ten (10) days of receipt of Sublandlord’s billing therefor. Subtenant’s prorata share of such Operating Costs under this Sublease shall be 20.11% of Tenant’s Operating Cost Share relating solely to the Premises and 20.11% of Tenant’s Exterior Common Area Cost Share relating solely to the Premises, as those terms are defined in Section 7.1(a) of the Master Lease.

 

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When reasonably requested by Subtenant if there has been a ten percent (10%) or greater increase in Operating Expenses, Sublandlord shall use its judgment reasonably exercised, to determine whether to audit the calculation of the annual Operating Expense statement as permitted under the Master Lease. In the event that Sublandlord elects to audit Operating Expenses and Sublandlord determines that Sublandlord was overcharged for Operating Expenses and Sublandlord in turn had overcharged Subtenant, then Sublandlord shall reimburse Subtenant for the amount of Subtenant’s overpayment promptly following the conclusion of such audit.

 

3.3                               Security Deposit.

 

(a)                                 Upon Subtenant’s execution and delivery of this Sublease, Subtenant shall pay to Sublandlord the sum of $205,254.60 in cash or irrevocable standby letter of credit (the “Security Deposit”), to be held by Sublandlord as security for the faithful performance and observance by Subtenant of all the terms, covenants and conditions of this Sublease, it being expressly understood that the Security Deposit shall not be considered an advance payment of rent or measure of Sublandlord’s damages in case of default by Subtenant. If Subtenant provides cash to fund the security deposit upon execution of this Sublease, Subtenant shall have the option to exchange such cash in full for an irrevocable letter of credit within sixty (60) days after execution. Subtenant agrees that any irrevocable letter of credit shall be drawn on a US commercial bank and in a form substantially acceptable to Sublandlord. Upon default by Subtenant, Sublandlord, from time to time, without prejudice to any other remedy, may (but shall not be required to) apply the Security Deposit against any arrearages of Base Sublease Rent, Additional Rent, or any other damage, injury, loss, cost, expense or liability caused to Sublandlord by such default on the part of Subtenant. Should all or any part of the Security Deposit be used for the purposes described above during the term of this Sublease, then Subtenant shall remit to Sublandlord immediately (and in all events within not more than five days) after Sublandlord’s request therefor, the amount necessary to restore the Security Deposit to its original balance. Subtenant’s failure to restore the Security Deposit upon notice from Sublandlord shall be a material breach of this Sublease. Upon any termination of Sublandlord’s interest in the Premises, Sublandlord shall have no further obligation to Subtenant with respect to the Security Deposit or any other sums due hereunder and prepaid by Subtenant upon transfer of the Security Deposit and any other such sums to Sublandlord’s successor in interest. No interest shall be payable on the Security Deposit and Sublandlord shall have no obligation to keep the Security Deposit separate from its general funds unless otherwise required by applicable Law. Subject to the requirements of, and conditions imposed by, Laws applicable to security deposits under commercial leases, Sublandlord shall, within thirty (30) days following the later to occur of the following: (i) the expiration of the Sublease, and (ii) the date on which Subtenant surrenders possession of the Subleased Premises to Sublandlord in the condition required hereunder, including, without limitation the conditions set forth in Section 11 below, return to Subtenant the portion of the Security Deposit remaining after deducting all damages, charges and other amounts permitted by Law. Sublandlord and Subtenant agree that such deductions shall include, without limitation, all damages and losses that Sublandlord has suffered or that Sublandlord reasonably estimates that it will suffer as a result of any breach of this Sublease by Subtenant. Subtenant hereby waives the protections of Section 1950.7(c) of the California Civil Code, as it may hereafter be amended, or similar laws of like import.

 

(b)                                 Notwithstanding the foregoing provisions of this Section 3.3(a) to the

 

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contrary, provided that: (A) Subtenant has not been late in the payment of any rent due under the Sublease more than once during the immediately preceding twelve (12)-month period, (B) no Event of Default by Subtenant under this Sublease has occurred and is still continuing as of the effective date of reduction with no apparent effort by Subtenant to cure such Event of Default as reasonably determined by Sublandlord, and (C) Subtenant has achieved net proceeds from an equity financing transaction equal to or greater than $15,000,000 as evidenced by Subtenant’s most current financial statements which shall be either: (i) audited financial statements, or (ii) unaudited financial statements certified to be true and correct by a senior officer of Subtenant, then Subtenant shall be permitted to decrease the amount of the Security Deposit to $68,418.20. The amount to be refunded to Subtenant pursuant to the preceding sentence shall be credited against rent next due hereunder within thirty (30) days after Subtenant delivers to Sublandlord the financial statement(s) which evidence satisfaction of the requirement set forth in (C) above. Notwithstanding the foregoing, in no event shall any such reduction be construed as an admission by Sublandlord that Subtenant has performed all of its covenants and obligations hereunder. Moreover, if an Event of Default with respect to the payment of Base Sublease Rent or Additional Rent occurs beyond applicable cure periods then, upon Sublandord’s written demand therefor delivered to Subtenant, Subtenant shall be required to restore the Security Deposit to the originally required amount of $205,254.60.

 

4.                                      Application of Master Lease.

 

4.1                               Sublease Subordinate to Master Lease. This Sublease is and shall be at all times subject and subordinate to the Master Lease.

 

4.2                               Incorporation of Obligations Set Forth in Master Lease. In addition to the obligations of Subtenant under the terms of this Sublease as set forth in the other paragraphs of this Sublease (and except as otherwise expressly provided to the contrary in this Sublease), Subtenant shall also have and perform for the benefit of Sublandlord all obligations of the “Tenant” as are set forth in the Master Lease, which are hereby incorporated into this Sublease as though set forth herein in full, substituting “Subtenant” wherever the term “Tenant” appears, “Sublandlord” wherever the term “Landlord” appears, “Subleased Premises” wherever the term “Premises” appears” appears, and “Base Sublease Rent” wherever the term “Minimal Rental” appears; provided, however, that Subtenant’s obligations under the Master Lease shall be limited to the extent of the Subleased Premises and for the duration of the Sublease Term. Notwithstanding the foregoing, Sublandlord shall, at Subtenant’s request, use commercially reasonable efforts to cause Master Landlord to perform Master Landlord’s obligations under the Master Lease, but Sublandlord shall not be obligated to perform for the benefit of Subtenant any of the obligations of Master Landlord under the Master Lease; the amount of rent payable to Sublandlord by Subtenant under this Sublease shall be as provided in paragraphs 3.1 and 3.2 above; and the following provisions of the Master Lease shall not apply to this Sublease: Section 1.1(a) (Lease of Premises), Section 2 (Term), Section 3.1 (Minimum Rental), Section 4 (parking), Section 5 (Construction), Section 6.2(b) (Tax Protests), Section 6.2(c) (Tax Refunds), Section 7.4(b) (Audit Right), Section 7.6 (Reserve Account), Section 9 (Alterations) [but shall include Section 9.4 (No Liens)], Section 10.2 (Landlord’s Obligation for Maintenance), Section 12.1 (Landlord’s Insurance), Section 12.10(b) (Landlord’s Indemnification Obligations), Section 12.11 (Limitation on Landlord Liability), Section 13 (Sublease and Assignment), Section 17 (Subordination, Attornment and Sale) [but shall

 

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include Section 17.3 (Estoppel Certificates)], Section 18 (Security), Section 19.14 (Brokers), Section 19.8 (Entire Agreement), Section 19.15 (Memorandum of Lease) and Exhibit C (Work Letter). In addition, whenever any period for notice from “Tenant” to “Landlord” is specified under the Master Lease, or any period within which “Tenant” is required to do anything under the Master Lease, the period applicable to Subtenant’s obligation to give such notice to Sublandlord or to perform under this Sublease shall be three days shorter than the corresponding period applicable to “Tenant” under the Master Lease (so that Sublandlord shall always have at least three days within which to give its own notice or performance to Master Landlord); further, wherever any period for notice from “Landlord” to “Tenant” is specified under the Master Lease, Sublandlord shall similarly have an additional period of at least three days within which to give notice to Subtenant under this Sublease. If any provisions of this Sublease conflict with any portion of the Master Lease as incorporated herein, the terms of this Sublease will govern.

 

4.3                               Preservation of Master Lease. So long as Subtenant is performing all of Subtenant’s obligations as provided in this Sublease, Sublandlord shall not enter into any agreement that will cause either the Master Lease to be terminated or the Subleased Premises to be surrendered prior to the expiration of the Sublease Term, or cause any breach or default by Sublandlord under the Master Lease that will result in any such termination or surrender which breach or default remains uncured beyond applicable cure periods, unless Master Landlord shall accept this Sublease as a direct lease between Master Landlord and Subtenant and expressly assume Sublandlord’s obligations hereunder. Sublandlord shall not enter into any amendment or other agreement with respect to the Master Lease that will prevent or adversely affect the use by Subtenant of the Subleased Premises in accordance with the terms of this Sublease, increase the obligations of Subtenant or decrease the rights of Subtenant under this Sublease, shorten the term of this Sublease or increase the rental or any other sums required to be paid by Subtenant under this Sublease, without the prior written consent of Subtenant in each case. In the event Subtenant makes a request that Subtenant is entitled to make under this Sublease, which request requires the approval of Master Landlord, Sublandlord shall use commercially reasonable efforts to obtain such approval (but Sublandlord shall not be required to incur any cost or expense in order to do so).

 

4.4                               Subtenant’s Insurance; Subrogation. Subtenant shall keep in force at all times throughout the Sublease Term, at Subtenant’s expense, for the benefit of Sublandlord and Master Landlord, insurance as required under the Master Lease, with Sublandlord, Master Landlord and any other parties designated by Sublandlord or Master Landlord as additional insureds. Subtenant hereby waives and shall cause its insurance carriers to waive any and all rights of recovery, claims, actions or causes of action against Sublandlord and Master Landlord for any loss or damage with respect to Subtenant’s property, improvements and alterations, the Building, the Subleased Premises, or any contents thereof, including rights, claims, actions and causes of action based on negligence, which loss or damage is (or would have been, had Subtenant carried the insurance required by this Sublease) covered by insurance.

 

4.5                               Default by Subtenant; Indemnification. Upon the failure of Subtenant to pay rent or comply with any other provisions of this Sublease or the occurrence of any other event which constitutes a default under this Sublease, Sublandlord shall be entitled to all the same rights and remedies against Subtenant on account of such default by Subtenant under this Sublease as are granted in the Master Lease to Master Landlord against Tenant on account of a

 

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default by Tenant under the Master Lease. In addition to, and not in limitation of, the indemnification obligations set forth in the Master Lease, Subtenant shall indemnify, defend and hold Sublandlord harmless from and against all liability, damages, claims, costs and expenses, including reasonable attorneys’ fees incurred in connection therewith, arising out of Subtenant’s default under this Sublease.

 

4.6                               Limitation of Liability. In no event shall Sublandlord or its stockholders, principals, officers, directors, employees, lenders, or agents be liable to Subtenant for any lost profit, damage to or loss of business or any form of special, indirect or consequential damage.

 

5.                                      Use. Subtenant shall use the Subleased Premises for general office purposes, laboratory and research and development only (the “Permitted Use”) and for no other purpose whatsoever. The parties acknowledge that Subtenant may use Hazardous Materials in connection with the Permitted Use (“Subtenant Hazardous Materials Operations”)  and that such use shall be permitted only to the extent that it is in compliance with the terms of Section 11.4 of the Master Lease, the terms of this Sublease and all applicable environmental laws.

 

6.                                      Condition of Subleased Premises.

 

(a)                                 Subtenant has thoroughly inspected and examined the Subleased Premises, has elected to sublease the Subleased Premises from Sublandlord under the terms of this Sublease on a strictly “AS IS” and “with all faults” basis, and acknowledges that Sublandlord has no obligation to make any improvements or provide any furnishings or equipment to Subtenant in connection therewith, except that Sublandlord shall provide an allowance as described in Section 7 below. Sublandlord represents and warrants to Subtenant that on the Sublease Commencement Date, all systems, fixtures, and equipment located within the Subleased Premises and/or servicing the Subleased Premises shall be in good working order. Sublandlord hereby represents and warrants to Subtenant that, to Sublandlord’s knowledge as of the date of this Sublease, without investigation, Sublandlord has not received any notices from governmental authorities that the Subleased Premises: (i) are in violation of any environmental law, (ii) are in violation of the requirements of the Americans with Disabilities Act with respect to access to the Subleased Premises, and (iii) are subject to any enforcement or correction order(s) issued by any governmental authority in connection with the generation, use, storage, treatment, or disposal of Hazardous Materials.

 

(b)                                 During the Sublease Term, Subtenant shall be permitted to use the existing furniture located in the Subleased Premises, as more specifically shown on Exhibit D attached hereto (collectively, the “Furniture”) at no additional cost to Subtenant. Sublandlord makes no representation or warranty regarding the suitability of the Furniture for Subtenant’s particular use and Subtenant acknowledges that such use is strictly on an “AS IS” basis, without any representation or warranties, express or implied or statutory, of any kind whatsoever by Sublandlord and without recourse against Sublandlord. Upon the expiration of the Sublease Term, Subtenant shall surrender the Furniture to Sublandlord in the original condition received, ordinary wear and tear and damage due to casualty excepted. Subtenant acknowledges that the items listed as “Excluded Assets” on Exhibit E attached hereto will not be included in the Furniture provided to Subtenant, and shall be removed from the Subleased Premises prior to the Sublease Commencement Date.

 

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(c)                                  Subject to Section 6(a) above, by taking possession of the Subleased Premises, Subtenant acknowledges that the Subleased Premises are in a tenantable and good condition. Subtenant shall not make any alterations, additions or improvements to the Subleased Premises without first obtaining the written consent of Sublandlord and, if required by the Master Lease, of Master Landlord; provided, however, that by execution of this Sublease, Sublandlord shall be deemed to have approved the Sublease Alterations as more particularly described in Exhibit C attached hereto. Subject to the Allowance described in Section 7 below, any approved alterations, additions or improvements to the Subleased Premises shall be made by Subtenant at Subtenant’s sole cost and expense, and otherwise upon all applicable terms and conditions of the Master Lease (including any removal and restoration obligations) and this Sublease. Sublandlord agrees that Subtenant shall be allowed to perform the Sublease Alterations (as defined in Section 7 below) in the Subleased Premises, subject to Sublandlord’s review and approval of the plans and specifications and the approval of Master Landlord to the extent required by the Master Lease.

 

(d)                                 Subject to Section 7 below, Subtenant understands and agrees that it shall be solely responsible for any and all costs, expenses and related liabilities to construct any of its alterations and any and all damages or other sums that may be due to Master Landlord under the terms of the Master Lease in connection with the Subtenant’s alterations including, without limitation, any restriction that may be required by Master Landlord as a condition to its consent or otherwise required pursuant to the terms of the Master Lease and/or costs and expenses associated with restoring the Subleased Premises to its condition prior to such agreed upon alterations and any other alterations if required under the terms of this Sublease. All alterations to be made by Subtenant are contingent upon Master Landlord’s prior written consent and all other requirements provided in the Master Lease. Subtenant shall indemnify, defend and hold Sublandlord harmless from and against, and shall reimburse Sublandlord for, any and all claims, losses, liabilities for damages, other than consequential damages, (including, without limitation, attorneys fees) resulting from any alterations to be performed to the Subleased Premises by Subtenant.

 

7.                                      Allowance. Upon and subject to the terms and conditions of this Section 7, Sublandlord shall reimburse Subtenant for the costs of completing the laboratory build out in the current warm shell laboratory space in the Subleased Premises (the “Sublease Alterations”);  provided, however, Sublandlord’s obligation to reimburse Subtenant for the Sublease Alterations shall be limited to the lesser of (A) actual construction costs incurred by third parties on behalf of Subtenant in its construction of the Sublease Alterations; and (B) an amount up to, but not exceeding, $250,000.00 (the “Allowance”). Sublandlord shall pay the Allowance to Subtenant within thirty (30) days after Sublandlord’s receipt of Subtenant’s written request (the “Disbursement Request”) therefor accompanied by partial, conditional lien waivers and copies of invoices from third parties providing services as part of the Sublease Alterations using AIA G701/702/703 documents, disbursed in the following increments:

 

(a)                                 20% of the Allowance no earlier than thirty (30) days following the Sublease Rent Commencement Date to the extent of paid invoices submitted.

 

(b)                                 20% of the Allowance no earlier than sixty (60) days following the Sublease Rent Commencement Date to the extent of paid invoices submitted.

 

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(c)                                  20% of the Allowance no earlier than ninety (90) days following the Sublease Rent Commencement Date to the extent of paid invoices submitted.

 

(d)                                 25% of the Allowance no earlier than one hundred and twenty (120) days following the Sublease Rent Commencement Date to the extent of paid invoices submitted.

 

Each Disbursement Request shall be signed by Subtenant. Sublandlord shall have no obligation to disburse any portion of the Allowance if there is a monetary Event of Default or a material, non-monetary Event of Default outstanding under the Sublease until such Event of Default is cured. Each Disbursement Request pursuant to this Section 7 must be accompanied by copies of paid invoices as evidenced by unconditional progress waivers from contractors and subcontractors. Notwithstanding the foregoing, the final disbursement of the remaining 15% of the Allowance shall be disbursed within thirty (30) days after Subtenant’s written request therefor once Subtenant has substantially completed all of the Sublease Alterations in accordance with the approved plans and specifications, all building permits issued in connection with the Sublease Alterations, all applicable laws and the terms and provisions of this Section 7. Such final Disbursement Request shall be accompanied by: (i) third-party invoices for costs incurred by Subtenant in constructing the Sublease Alterations; (ii) evidence that Subtenant has paid the invoices for such costs; (iii) final, unconditional lien waivers and mechanics’ lien releases from any contractor or subcontractor who has constructed any portion of Sublease Alterations or any materialman who has supplied materials used or incorporated into any portion of the Sublease Alterations (if applicable), all such waivers and releases to be in the forms prescribed by California Civil Code Section 3262; and (iv) a copy of the certificate of occupancy for the Subleased Premises. All bills for the Sublease Alterations must be submitted to Sublandlord within six (6) months after the Sublease Rent Commencement Date, and Sublandlord will make no further payments related to the Sublease Alterations after such six (6)-month period. Any unfunded portion of the Allowance shall be deemed forfeited.

 

8.                                      No Assignment or Subletting.

 

(a)                                 Subtenant shall not directly or indirectly (by sale or transfer of a controlling interest in Subtenant’s capital stock or other form of proprietary interests, merger, consolidation, combination, reorganization recapitalization or otherwise), voluntarily or by operation of law or otherwise, transfer, assign, mortgage or hypothecate this Sublease, or any part thereof or interest therein, or permit the use of all or any portion of the Subleased Premises by any person or persons (including concessionaires and licensees) other than Subtenant, or sublet the Subleased Premises, or any part thereof, without the prior written consent of (i) Sublandlord (which may not be unreasonably withheld, delayed or conditioned by Sublandlord) and (ii) the Master Landlord pursuant to the Master Lease, in each instance. Any assignment or subletting without the consent of both Sublandlord and Master Landlord shall be void, shall constitute a material default hereunder and shall give Sublandlord the right, at its option, to exercise any of its remedies under this Sublease. Consent to any assignment or subletting shall not operate as a waiver of the necessity for a consent to any subsequent assignment or subletting, and the terms of such consent shall be binding upon any person holding by, under or through Subtenant. If the rental or other consideration payable to Subtenant in respect of such subletting or assignment exceeds the rent payable by Subtenant under this Sublease, then all such excess rent and other consideration shall be deemed additional rent owed by Subtenant to Sublandlord,

 

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and shall be payable to Sublandlord by Subtenant in the same manner and on the same terms as installments of Base Sublease Rent are payable by Subtenant under this Sublease (or upon Subtenant’s receipt thereof, whichever is earlier). Notwithstanding any assignment, subletting or other transfer by Subtenant or consent thereto by Sublandlord, Subtenant shall remain fully liable on this Sublease and shall not be released from performing any of the terms, covenants and conditions of this Sublease. So long as Subtenant is not in default under the Sublease, Sublandlord shall have no right to recapture or retake possession of the Subleased Premises.

 

(b)                                 Notwithstanding Section 8(a), Subtenant may assign its interest in this Sublease (a “Permitted Transfer”)  to the following types of entities (a “Permitted Transferee”)  without the written consent of Sublandlord (although the consent of Master Landlord may be required in accordance with the terms of the Master Lease):

 

(1)                                 an Affiliate of Subtenant, as used herein, “Affiliate” shall mean any person or entity which, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with Subtenant;

 

(2)                                 any corporation, limited partnership, limited liability partnership, limited liability company or other business entity in which or with which Subtenant, or its corporate successors or assigns, is merged or consolidated, in accordance with applicable statutory provisions governing merger and consolidation of business entities, so long as (A) Subtenant’s obligations hereunder are assumed by the entity surviving such merger or created by such consolidation; and (B) the Tangible Net Worth of the surviving or created entity is not less than the Tangible Net Worth of Subtenant on the date of this Sublease; or

 

(3)                                 any corporation, limited partnership, limited liability partnership, limited liability company or other business entity acquiring all or substantially all of Subtenant’s assets if such entity’s Tangible Net Worth after such acquisition is not less than the Tangible Net Worth of Subtenant on the date of this Sublease.

 

Subtenant shall promptly notify Sublandlord of any such Permitted Transfer. Subtenant shall remain liable for the performance of all of the obligations of Subtenant hereunder, or if Subtenant no longer exists because of a merger, consolidation or acquisition, the surviving or acquiring entity shall expressly assume in writing the obligations of Subtenant hereunder. Additionally, the Permitted Transferee shall comply with all of the terms and conditions of this Sublease, including the Permitted Use. No later than five (5) business days prior to the effective date of any Permitted Transfer, Subtenant agrees to furnish Sublandlord with (A) a copy of the instrument effecting such Permitted Transfer, (B) documentation establishing Subtenant’s satisfaction of the requirements set forth above applicable to such Permitted Transfer, and (C) evidence of insurance as required under the Master Lease and this Sublease with respect to the Permitted Transferee. The occurrence of a Permitted Transfer shall not waive Sublandlord’s rights as to any subsequent assignments or sublettings. “Tangible Net Worth” means the excess of total assets over total liabilities, in each case as determined in accordance with generally accepted accounting principles consistently applied (“GAAP”), excluding, however, from the determination of total assets all assets which would be classified as intangible assets under GAAP including goodwill, licenses, patents, trademarks, trade names, copyrights and franchises. Any subsequent assignment of this Sublease or subletting of the Subleased Premises by a

 

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Permitted Transferee shall be subject to the terms of this Section 8.

 

(c)                                  In addition, notwithstanding Section 8(a) or any other provision of this Sublease and/or the Master Lease to the contrary, in no event shall the occurrence of any of the following during the Sublease Term be considered an assignment or sublease for purposes of this section:

 

(1)                                 any cash or other capital contribution received by Subtenant, whether or not such contribution might cause a change in the ownership percentages or equity structure of Subtenant;

 

(2)                                 any Initial Public Offering of stock, partnership, membership, or other ownership interests in Subtenant; or

 

(3)                                 any other sale or exchange of stock if Subtenant shall become a publicly traded company.

 

9.                                      Security; Janitorial. Sublandlord shall have no responsibility for or with respect to the amount and type of security services, if any, to be provided to the Subleased Premises. Sublandlord shall not be liable to Subtenant, and Subtenant hereby and expressly assumes all risk of loss in connection with, and waives any claim against Sublandlord for: (i) any unauthorized or criminal entry of third parties into the Subleased Premises or the Building, (ii) any damage or injury to property or persons, and (iii) any theft or loss of or damage to any property in or about the Subleased Premises or the Building from any unauthorized or criminal acts of third parties, regardless of any action, inaction, failure, breakdown or insufficiency of security. Sublandlord shall have no obligation to provide janitorial services to the Subleased Premises and Subtenant shall be responsible at its sole cost and expense for providing janitorial services to the Subleased Premises.

 

10.                               Holding Over. If Subtenant (directly or through any transferee or other successor-in-interest of Subtenant) remains in possession of all or any part of the Subleased Premises after the expiration of the Sublease Term or earlier termination of this Sublease, such holding over, in the absence of an express written agreement to the contrary, shall be on the basis of a tenancy at the sufferance of Sublandlord. In such event, Subtenant shall continue to comply with all of the terms, conditions and covenants of this Sublease as though the Sublease Term had continued, except that such tenancy at sufferance shall be terminable by Sublandlord at any time and rent shall be paid for each month (or portion thereof) during which Subtenant holds over in the Subleased Premises after the expiration or earlier termination of this Sublease, in an amount equal to 200% of the highest monthly Base Sublease Rent due under this Sublease for any month during the Sublease Term, plus all other amounts that would otherwise have been payable as Additional Rent had the Sublease Term continued through the period of such holding over. If Subtenant fails to surrender the Subleased Premises on the expiration of this Sublease, in addition to any other liabilities to Sublandlord accruing therefrom, Subtenant shall indemnify and hold Sublandlord harmless from all loss or liability resulting from such failure, including without limitation (i) any claims of Master Landlord against Sublandlord for failure to surrender the Premises at the time and in the manner required under the Master Lease or for violating any term of the Master Lease, and (ii) any claims made by any succeeding subtenant, tenant or other

 

10

 

party based upon such failure. This indemnification obligation shall survive the expiration or earlier termination of this Sublease. The provisions of this paragraph are in addition to and do not limit Sublandlord’s rights or Subtenant’s obligations under this Sublease.

 

11.                               Surrender. Subtenant shall deliver and surrender to Sublandlord possession of the Subleased Premises immediately upon the Sublease Expiration Date or the earlier termination of this Sublease in the following condition: (i) with the Sublease Alterations remaining in place (so long as the Master Landlord had previously waived the requirement to remove same) and otherwise free of Subtenant’s personal property, broom clean and in as good condition and repair as the same were on the delivery date (loss by any insured casualty or condemnation and ordinary wear and tear only excepted), (ii) free of Hazardous Materials placed or permitted on the Subleased Premises by any party other than Sublandlord, and (iii) to the extent required by applicable Law, released of all Hazardous Materials Clearances. As used herein, “Hazardous Materials Clearances” shall mean all licenses, clearances or other authorizations of any kind, including without limitation “closure” letters, required to enter into and restore the Subleased Premises issued by any governmental authority having jurisdiction over the use, storage, handling, treatment, generation, release, disposal, removal or remediation of Hazardous Materials in, on or about the Subleased Premises. At least three (3) months before the Sublease Expiration Date, Subtenant shall deliver to Sublandlord for Sublandlord’s review and approval and to the relevant governmental authority for its review and approval, a narrative description of the action proposed (or required by any governmental authority) to be taken by Subtenant in order to surrender the Subleased Premises at the expiration or earlier termination of the Sublease Term, free from any residual impact from the Subtenant Hazardous Materials Operations (including obtaining all necessary “closure” letters) and otherwise released for unrestricted use and occupancy (the “Closure Plan”). Such Closure Plan shall be accompanied by a current listing of: (a) all Hazardous Materials licenses and permits held by or on behalf of Subtenant with respect to the Subleased Premises, and (b) all Hazardous Materials used, stored, handled, treated, generated, released or disposed of from the Subleased Premises. The Closure Plan shall be subject to the review and approval of Sublandlord’s environmental consultant, such approval not to be unreasonably withheld. In connection with the review and approval of the Closure Plan, upon the request of Sublandlord, Subtenant shall deliver to Sublandlord or its consultant such additional non-proprietary information concerning the Subtenant Hazardous Materials Operations as Sublandlord shall request. On or before such surrender, Subtenant shall deliver to Sublandlord evidence that the approved Closure Plan shall have been satisfactorily completed (the “Closure Report”) and Sublandlord shall have the right, subject to reimbursement at Subtenant’s expense as set forth below, to cause Sublandlord’s environmental consultant to review the Closure Report and to confirm that the Subleased Premises are, as of the effective date of such surrender or early termination of this Sublease, free from any residual impact from the Subtenant Hazardous Materials Operations. Subtenant shall reimburse Sublandlord, as Additional Rent, for the actual out-of-pocket expense incurred by Sublandlord for Sublandlord’s environmental consultant to review and approve the Closure Plan, to visit the Subleased Premises, to verify the satisfactory completion of the Closure Plan, and to confirm that there is no residual impact from the Subtenant Hazardous Materials Operations. Sublandlord shall have the unrestricted right to deliver such Closure Plan and any report by Sublandlord’s environmental consultant with respect to the surrender of the Subleased Premises to Master Landlord and any other third parties. If Subtenant shall fail to prepare or submit a Closure Plan approved by Sublandlord, or if Subtenant shall fail to complete the approved Closure Plan, or if

 

11

 

such Closure Plan, whether or not approved by Sublandlord, shall fail to adequately address any residual effect of the Subtenant Hazardous Materials Operations in, on or about the Subleased Premises, Sublandlord shall have the right to take such actions as Sublandlord may deem reasonable or appropriate to assure that the Subleased Premises and the Building are surrendered free from any residual impact from the Subtenant Hazardous Materials Operations, the cost of such actions plus an administrative fee of ten percent (10%) of such cost shall be reimbursed by Subtenant as Additional Rent promptly upon receipt of Sublandlord’s invoice therefor

 

12.                               Return of Deposits. All deposits and other sums paid by Sublandlord to Master Landlord and held by Master Landlord for the benefit of Sublandlord shall be returned by Master Landlord to Sublandlord in accordance with the Master Lease and Subtenant shall have no right or claim thereto.

 

13.                               Parking. Subtenant shall be entitled to its pro rata share of the parking spaces allocated to the Premises pursuant to Section 4 of the Master Lease.

 

14.                               Terrorism/Governmental Action. Subtenant warrants and represents to Sublandlord that Subtenant is not, and shall not become, a person or entity with whom Sublandlord is restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury (including, but not limited to, those named on OFAC’S Specially Designated and Blocked Persons list) or under any statute, executive order (including, but not limited to, the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism) or other governmental action, and is not and shall not engage in any dealings or transaction or be otherwise associated with such persons or entities.

 

15.                               Contingent Nature of Sublease. This Sublease shall be contingent upon Sublandlord’s receipt of Master Landlord’s Consent. Sublandlord shall use commercially efforts to obtain the Master Landlord’s Consent within thirty (30) days of the full execution of this Sublease by Sublandlord and Subtenant. Sublandlord shall be responsible for all costs associated with obtaining Master Landlord’s consent including the fee set forth in Section 13.1(d) of the Master Lease. Sublandlord shall deliver prompt written notice to Subtenant of Master Landlord’s granting (or denial) of consent to this Sublease. If the consent of Master Landlord has not been obtained by the date which is thirty (30) days following the full execution of this Sublease by Sublandlord and Subtenant (the “Outside Date”), then Subtenant may elect to terminate this Sublease by written notice to Sublandlord delivered at any time after the Outside Date and prior to receipt of Master Landlord’s Consent. If Subtenant elects to terminate this Sublease in accordance with the foregoing sentence, Sublandlord shall promptly refund any prepaid rent and Security Deposit to Subtenant.

 

16.                               Signage. Sublandlord shall cooperate with Subtenant and use commercially reasonable efforts to obtain Master Landlord’s consent to install suite door signage, elevator lobby directory signage, and main lobby directory signage stating Subtenant’s name and location, at Subtenant’s sole cost and expense (and at no cost or expense to Sublandlord). In addition, in the event that: (i) Sublandlord leases the remainder of the Premises (excluding the Subleased Premises), (ii) the square footage of the Subleased Premises is greater than the square footage of any single subtenant’s sublease of a portion of the Premises, and (iii) Sublandlord

 

12

 

intends to offer exterior Building-signage rights to a subtenant who will be subleasing a portion of the Premises with a square footage which is less than the square footage of the Subleased Premises, then Sublandlord shall first offer its exterior Building signage rights to Subtenant (i.e., the right set forth in Section 9.5 of the Master Lease to display its corporate name and logo on the exterior of the Building) in the form of a written notice delivered to Subtenant which shall specify the terms of granting such signage rights to Subtenant (the “Signage Notice”). If Sublandlord and Subtenant fail to reach an agreement with regard to such signage rights within five (5) business days of Sublandlord’s delivery of the Signage Notice to Subtenant, then Subtenant shall have no further right with respect to such signage (it being understood that Subtenant’s right hereunder is a one-time right only), and Sublandlord may grant such signage rights to third parties on such terms as Sublandlord may elect in its sole and absolute discretion. Subtenant acknowledges that Master Landlord’s consent may be required in connection with Sublandlord’s granting such signage rights to Subtenant and if such consent is required by the terms of the Master Lease, Subtenant shall be responsible for all costs associated with obtaining such consent. In the event that such signage rights are granted to Subtenant, then Subtenant shall be responsible for all costs associated with installing and maintaining such signage.

 

17.                               Backup Generator. The parties hereto acknowledge that Sublandlord has installed a 350Kw backup generator that services the Premises (the “Generator”). Subject to the terms and conditions set forth herein, Subtenant shall be entitled to use up to 30Kw of electricity produced by the Generator. Subtenant, at Subtenant’s sole cost and expense, shall install a separate meter to measure the electricity and any necessary wiring. Subtenant shall be responsible, at Subtenant’s sole cost and expense, for obtaining all necessary approvals from the Master Landlord in connection with the installation of such separate meter and wiring.

 

18.                               Miscellaneous.

 

18.1                        Attorneys’ Fees. If Subtenant defaults in the performance of any terms, covenants, agreements or conditions contained in this Sublease and Sublandlord places the enforcement of this Sublease or the collection of any rent due or to become due hereunder, or recovery of the possession of the Subleased Premises, in the hands of an attorney, or files suit upon the same, Subtenant agrees to pay Sublandlord’s reasonable attorneys’ fees and expenses. In addition, if Subtenant requests any consent or other action on the part of Sublandlord, in connection with which Sublandlord deems it necessary for any documents to be prepared or reviewed by its counsel, Subtenant shall pay all reasonable attorneys’ fees and expenses incurred by Sublandlord in connection therewith.

 

18.2                        Accord and Satisfaction. No payment by Subtenant or receipt by Sublandlord of a lesser amount than the rent and other charges herein stipulated shall be deemed to be other than on account of the earliest stipulated rent or other charge, nor shall any endorsement or statement on any check or any letter accompanying a check or payment as rent or other charges be deemed an accord or satisfaction except in accordance with applicable law or upon the written consent of Sublandlord. Sublandlord may accept such check or payment without charge or pursue any other remedy in this Sublease.

 

18.3                        Entire Agreement. This Sublease sets forth the entire understanding between Sublandlord and Subtenant concerning the Subleased Premises and supersedes any and

 

13

 

and each term, covenant or condition of this Sublease shall be valid and be enforced to the fullest extent permitted by law.

 

18.9                        Exhibits. All Exhibits attached to this Sublease are hereby incorporated herein.

 

18.10                 Authority. If Subtenant is a corporation, limited liability company, partnership or other form of entity, the individuals signing this Sublease on behalf of Subtenant hereby represent and warrant that (i) Subtenant is duly organized, validly existing and in good standing and has all required power and authority to own, sublease, hold and operate properties and conduct business in the States of California and Delaware and (ii) such individuals have the authority to bind Subtenant to this Sublease.

 

18.11                 Execution of Sublease; Counterparts. The submission of this Sublease to Subtenant for examination or execution does not constitute a reservation of or option on the Subleased Premises or an offer of Sublandlord to sublease the Subleased Premises. This Sublease shall become effective as a Sublease, and Sublandlord shall become obligated hereunder, only upon the execution and delivery of this Sublease (theretofore executed by Subtenant) by Sublandlord to Subtenant. This Sublease may be executed in counterparts, each of which shall be deemed an original as against the party whose signature is affixed thereto, and which together shall constitute but one and the same agreement.

 

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

 

	
SUBLANDLORD:
    	
 
    	
SUBTENANT:
    
	
 
    	
 
    	
 
    
	
NEKTAR THERAPEUTICS,
    	
 
    	
GENE SECURITY NETWORK, INC.,
    
	
a Delaware corporation
    	
 
    	
a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Gil M. Labrucherie
    	
 
    	
By:
    	
/s/ Brad Roberts
    
	
 
    	
Name:
    	
Gil M. Labrucherie
    	
 
    	
 
    	
Name: 
    	
Brad Roberts
    
	
 
    	
Title:
    	
SVP & General Counsel
    	
 
    	
 
    	
Title:
    	
VP Finance
    

 

14

 

CONSENT OF MASTER LANDLORD

 

The undersigned Master Landlord does hereby consent to the foregoing Sublease (the “Sublease”) dated December 13, 2011 between NEKTAR THERAPEUTICS, a Delaware corporation (“Sublandlord”), and GENE SECURITY NETWORK, INC., a Delaware corporation (“Subtenant”), which Sublease and the occupancy and use by Subtenant thereunder shall be subject to all the terms and conditions of the Master Lease, as defined in, and in accordance with and to the extent set forth in, the Sublease, provided that (i) Sublandlord shall pay all sums due under the Master Lease; (ii) such consent shall not operate as a waiver of Master Landlord’s rights under the Master Lease in connection with any subsequent subleasing of said premises; and (iii) such consent shall not be construed as releasing or discharging Sublandlord from any obligation or liability of Sublandlord under the terms of the Master Lease. In addition, Master Landlord hereby consents to the proposed Sublease Alterations as more particularly described in Exhibit C to the Sublease and agrees that upon expiration or earlier termination of the Sublease and/or the Master Lease, neither Subtenant nor Sublandlord shall be required to remove the Sublease Alterations from the Subleased Premises or to restore the Subleased Premises to their condition prior to the installation of the Sublease Alterations. Master Landlord hereby confirms that, as of the date of Master Landlord’s execution hereof, Sublandlord is not in default or breach of any of the provisions of the Master Lease, and the Master Lease is in full force and effect and has not been amended or modified except as expressly set forth in the foregoing Sublease.

 

 

	
Dated:
    	
 
    	
 
    	
BMR-201 Industrial Road LLC,
    
	
 
    	
a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

15

 

EXHIBIT A

 

[Attach copy of Master Lease]

 

A-1

 

AMENDED AND RESTATED

BUILT-TO-SUIT LEASE

 

By and Between

 

Inhale 201 Industrial Road, L.P.

 

a California Limited Partnership, as

 

LANDLORD

 

And

 

Nektar Therapeutics (fka Inhale Therapeutic Systems, Inc.),

 

a Delaware Corporation, as

 

TENANT

 

201 Industrial Road

San Carlos, CA 94070

 

 

Table of Contents

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
1.
    	
PROPERTY
    	
4
    
	
 
    	
1.1
    	
Lease of Premises
    	
4
    
	
 
    	
 
    	
(a)
    	
Buildings, Real Property, Improvements
    	
4
    
	
 
    	
 
    	
(b)
    	
Use of Common Areas
    	
5
    
	
 
    	
1.2
    	
[Deleted]
    	
5
    
	
2.
    	
TERM
    	
5
    
	
 
    	
2.1
    	
Term
    	
5
    
	
 
    	
2.2
    	
[Deleted]
    	
5
    
	
 
    	
2.3
    	
[Deleted]
    	
5
    
	
 
    	
2.4
    	
Acknowledgement of Rent Commencement
    	
6
    
	
 
    	
2.5
    	
Holding Over
    	
6
    
	
 
    	
2.6
    	
Options To Extend Term
    	
6
    
	
3.
    	
RENTAL
    	
7
    
	
 
    	
3.1
    	
Minimum Rental
    	
7
    
	
 
    	
 
    	
(a)
    	
Commencement of Rental Obligations for Phase 1
    	
7
    
	
 
    	
 
    	
(b)
    	
Commencement of Rental Obligations for Phase 2A
    	
7
    
	
 
    	
 
    	
(c)
    	
Rental Amounts for Phase 1A, Phase 1B, and Phase 2A:   Annual Increases
    	
7
    
	
 
    	
 
    	
(d)
    	
Rental Amounts During First Extended Term
    	
8
    
	
 
    	
 
    	
(e)
    	
Rental Amounts During Second Extended Term
    	
9
    
	
 
    	
3.2
    	
Late Charge
    	
9
    
	
4.
    	
PARKING
    	
9
    
	
5.
    	
CONSTRUCTION
    	
9
    
	
 
    	
5.1
    	
Construction of Improvements
    	
9
    
	
 
    	
 
    	
(a)
    	
Base Building Work; Performance and Payment
    	
9
    
	
 
    	
 
    	
(b)
    	
Tenant’s Work; Phase 2A Improvements
    	
9
    
	
 
    	
 
    	
(c)
    	
Compliance with Law
    	
10
    
	
6.
    	
TAXES
    	
10
    
	
 
    	
6.1
    	
Personal Property
    	
10
    
	
 
    	
6.2
    	
Real Property Taxes
    	
10
    
	
 
    	
 
    	
(a)
    	
Real Property Taxes
    	
10
    
	
 
    	
 
    	
(b)
    	
Protests
    	
11
    
	
 
    	
 
    	
(c)
    	
Refunds
    	
11
    
	
 
    	
 
    	
(d)
    	
Other Taxes
    	
11
    
	
 
    	
 
    	
(e)
    	
Tax and Insurance Escrows
    	
11
    
	
7.
    	
OPERATING EXPENSES
    	
11
    
	
 
    	
7.1
    	
Payment of Operating Expenses
    	
11
    
	
 
    	
 
    	
(a)
    	
Tenant’s Operating Cost Share
    	
12
    

 

i

 

	
 
    	
 
    	
(b)
    	
Adjustment of Tenant’s Operating Cost Share
    	
12
    
	
 
    	
7.2
    	
Definition of Operating Expenses
    	
12
    
	
 
    	
 
    	
(a)
    	
Inclusions
    	
12
    
	
 
    	
 
    	
(b)
    	
Exclusions
    	
13
    
	
 
    	
7.3
    	
Determination of Operating Expenses
    	
15
    
	
 
    	
7.4
    	
Final Accounting For Lease Year
    	
15
    
	
 
    	
 
    	
(a)
    	
Annual Statement
    	
15
    
	
 
    	
 
    	
(b)
    	
Audit Rights
    	
15
    
	
 
    	
7.5
    	
Proration
    	
16
    
	
 
    	
7.6
    	
Reserve Account
    	
16
    
	
 
    	
7.7
    	
Property Management Fee
    	
17
    
	
8.
    	
UTILITIES
    	
17
    
	
 
    	
8.1
    	
Payment
    	
17
    
	
 
    	
8.2
    	
Interruption
    	
17
    
	
9.
    	
ALTERATIONS
    	
17
    
	
 
    	
9.1
    	
Right To Make Alterations
    	
17
    
	
 
    	
9.2
    	
Title To Alterations
    	
18
    
	
 
    	
9.3
    	
Tenant Fixtures and Personal Property
    	
19
    
	
 
    	
9.4
    	
No Liens
    	
19
    
	
 
    	
9.5
    	
Signs
    	
19
    
	
10.
    	
MAINTENANCE AND REPAIRS
    	
19
    
	
 
    	
10.1
    	
Tenant’s Obligation for Maintenance
    	
19
    
	
 
    	
 
    	
(a)
    	
Good Order, Condition and Repair
    	
19
    
	
 
    	
 
    	
(b)
    	
[Deleted]
    	
19
    
	
 
    	
 
    	
(c)
    	
Landlord’s Remedy
    	
20
    
	
 
    	
 
    	
(d)
    	
Condition Upon Surrender
    	
20
    
	
 
    	
10.2
    	
Landlord’s Obligations for Maintenance
    	
20
    
	
 
    	
 
    	
(a)
    	
Good Order, Condition and Repair
    	
20
    
	
 
    	
 
    	
(b)
    	
No Abatement
    	
21
    
	
 
    	
 
    	
(c)
    	
Landlords’ Right of Entry for Repairs
    	
21
    
	
11.
    	
USE OF PROPERTY
    	
21
    
	
 
    	
11.1
    	
Permitted Use
    	
21
    
	
 
    	
11.2
    	
No Nuisance
    	
21
    
	
 
    	
11.3
    	
Compliance With Laws
    	
21
    
	
 
    	
11.4
    	
Environmental Matters
    	
22
    
	
 
    	
 
    	
(a)
    	
Definition of Hazardous Materials
    	
22
    
	
 
    	
 
    	
(b)
    	
Tenant’s Obligations Re: Hazardous Substances
    	
22
    
	
 
    	
 
    	
(c)
    	
Tenant’s Indemnity
    	
24
    
	
 
    	
 
    	
(d)
    	
Survival
    	
24
    
	
12.
    	
INSURANCE AND INDEMNITY
    	
24
    
	
 
    	
12.1
    	
Landlord’s Insurance
    	
24
    
	
 
    	
12.2
    	
Tenant’s Insurance
    	
25
    
	
 
    	
 
    	
(a)
    	
Commercial General Liability Insurance
    	
25
    
	
 
    	
 
    	
(b)
    	
Tenant’s Risk
    	
25
    

 

ii

 

	
 
    	
 
    	
(c)
    	
Other Insurance
    	
25
    
	
 
    	
12.3
    	
Insurers; Primary Insurance
    	
26
    
	
 
    	
12.4
    	
Blanket Policy
    	
26
    
	
 
    	
12.5
    	
Deductibles
    	
26
    
	
 
    	
12.6
    	
Certificates
    	
27
    
	
 
    	
12.7
    	
Adjustment in the Event of Loss
    	
27
    
	
 
    	
12.8
    	
Proration Upon Termination
    	
27
    
	
 
    	
12.9
    	
Waiver of Subrogation
    	
27
    
	
 
    	
12.10
    	
Indemnification
    	
28
    
	
 
    	
 
    	
(a)
    	
Tenant’s Indemnification Obligations
    	
28
    
	
 
    	
 
    	
(b)
    	
Landlord’s Indemnification Obligations
    	
28
    
	
 
    	
12.11
    	
Limitation on Landlord Liability
    	
29
    
	
13.
    	
SUBLEASE AND ASSIGNMENT
    	
30
    
	
 
    	
13.1
    	
Assignment and Sublease of Building
    	
30
    
	
 
    	
 
    	
(a)
    	
Consent Required
    	
30
    
	
 
    	
 
    	
(b)
    	
Permitted Transfers
    	
30
    
	
 
    	
 
    	
(c)
    	
Consent Required
    	
30
    
	
 
    	
 
    	
(d)
    	
Procedure to Obtain Consent
    	
31
    
	
 
    	
 
    	
(e)
    	
Sublease of Phase 2A
    	
31
    
	
 
    	
13.2
    	
Rights of Landlord: Effect of Landlord’s   Consent
    	
32
    
	
 
    	
13.3
    	
Advertising
    	
32
    
	
 
    	
13.4
    	
Writing Required
    	
32
    
	
 
    	
13.5
    	
Transfer Premiums
    	
32
    
	
14.
    	
RIGHT OF ENTRY AND QUIET ENJOYMENT
    	
32
    
	
 
    	
14.1
    	
Right of Entry
    	
32
    
	
 
    	
14.2
    	
Quiet Enjoyment
    	
33
    
	
15.
    	
CASUALTY AND TAKING
    	
33
    
	
 
    	
15.1
    	
Damage or Destruction
    	
33
    
	
 
    	
 
    	
(a)
    	
Termination Rights
    	
33
    
	
 
    	
 
    	
(b)
    	
Limitations on Parties’ Obligations
    	
34
    
	
 
    	
 
    	
(c)
    	
Entitlement to Insurance Proceeds
    	
34
    
	
 
    	
 
    	
(d)
    	
Abatement of Rent
    	
35
    
	
 
    	
15.2
    	
Condemnation
    	
35
    
	
 
    	
 
    	
(a)
    	
Termination Rights
    	
35
    
	
 
    	
 
    	
(b)
    	
Limitations on Parties’ Obligations
    	
36
    
	
 
    	
15.3
    	
Reservation of Compensation
    	
36
    
	
 
    	
15.4
    	
Restoration of Improvements
    	
36
    
	
16.
    	
DEFAULT
    	
37
    
	
 
    	
16.1
    	
Events of Default
    	
37
    
	
 
    	
 
    	
(a)
    	
Nonpayment
    	
37
    
	
 
    	
 
    	
(b)
    	
Other Obligations
    	
37
    
	
 
    	
 
    	
(c)
    	
General Assignment
    	
37
    
	
 
    	
 
    	
(d)
    	
Bankruptcy
    	
37
    
	
 
    	
 
    	
(e)
    	
Receivership
    	
38
    

 

iii

 

	
 
    	
 
    	
(f)
    	
Attachment
    	
38
    
	
 
    	
 
    	
(g)
    	
Insolvency
    	
38
    
	
 
    	
16.2
    	
Remedies Upon Tenant’s Default
    	
38
    
	
 
    	
 
    	
(a)
    	
Re-entry; Termination
    	
38
    
	
 
    	
 
    	
(b)
    	
Continuation of Lease
    	
39
    
	
 
    	
 
    	
(c)
    	
Remedies
    	
39
    
	
 
    	
16.3
    	
Remedies Cumulative
    	
39
    
	
 
    	
16.4
    	
Landlord’s Default
    	
40
    
	
17.
    	
SUBORDINATION, ATTORNMENT AND SALE
    	
40
    
	
 
    	
17.1
    	
Subordination to Mortgage
    	
40
    
	
 
    	
17.2
    	
Sale of Landlord’s Interest
    	
41
    
	
 
    	
17.3
    	
Estoppel Certificates
    	
41
    
	
18.
    	
SECURITY
    	
42
    
	
 
    	
18.1
    	
Deposit
    	
42
    
	
 
    	
18.2
    	
Pledge of Security Deposit
    	
42
    
	
19.
    	
MISCELLANEOUS
    	
43
    
	
 
    	
19.1
    	
Notices
    	
43
    
	
 
    	
19.2
    	
Successors and Assigns
    	
44
    
	
 
    	
19.3
    	
No Waiver
    	
44
    
	
 
    	
19.4
    	
Severability
    	
44
    
	
 
    	
19.5
    	
Litigation Between Parties
    	
44
    
	
 
    	
19.6
    	
Surrender
    	
44
    
	
 
    	
19.7
    	
Interpretation
    	
45
    
	
 
    	
19.8
    	
Entire Agreement
    	
45
    
	
 
    	
19.9
    	
Governing Law
    	
45
    
	
 
    	
19.10
    	
No Partnership
    	
45
    
	
 
    	
19.11
    	
Financial Information
    	
45
    
	
 
    	
19.12
    	
Costs
    	
46
    
	
 
    	
19.13
    	
Time
    	
46
    
	
 
    	
19.14
    	
Brokers
    	
46
    
	
 
    	
19.15
    	
Memorandum of Lease
    	
46
    
	
 
    	
19.16
    	
Corporate Authority
    	
47
    
	
 
    	
19.17
    	
Execution and Delivery
    	
47
    
	
 
    	
19.18
    	
Survival
    	
47
    
	
 
    	
19.19
    	
Waiver of Jury Trial
    	
47
    
	
 
    	
19.20
    	
Exclusivity
    	
47
    
	
 
    	
19.21
    	
Tenant’s Remedies
    	
47
    
	
 
    	
19.22
    	
Security Measures
    	
47
    

 

iv

 

AMENDED AND RESTATED

 

BUILD-TO-SUIT LEASE

 

THIS AMENDED AND RESTATED BUILD-TO-SUIT LEASE (“Lease”)  is made and entered into as of August 17, 2004 by and between INHALE 201 INDUSTRIAL ROAD, L.P., a California limited partnership (“Landlord”), and NEKTAR THERAPEUTICS (FKA INHALE THERAPEUTIC SYSTEMS, INC.),  a Delaware corporation (“Tenant”).

 

RECITALS

 

A.            Contribution Agreement. Tenant and Landlord entered into that certain Contribution Agreement dated as of September 14 2000 (the “Contribution Agreement”)  pursuant to which, among other things: (i) Tenant agreed to contribute, and Landlord agreed to accept, inter alia, that certain real property situated at 201 Industrial Road, San Carlos, California, as partially improved by Tenant (the “Real Property”);  and (ii) the parties agreed to enter into a lease (the “Original Lease”) as of the date of closing under the Contribution Agreement. The Real Property is more particularly described in Exhibit A attached hereto and incorporated herein by this reference.

 

B.            Build-to-Suit. Pursuant to the lease and the plans, specifications, and other documents required hereby, Landlord constructed and/or completed certain improvements on the Real Property, including (i) two connected four-story buildings containing an aggregate of approximately 390,000 square feet, consisting of approximately 171,965 square feet of rentable area and two lower stories primarily of parking for the foregoing buildings as well as for adjacent property currently leased and occupied by Tenant located at 150  Industrial Road; (ii) site improvements; and (iii) certain other improvements.

 

C.            Amendment and Restatement. The Landlord and Tenant now desire to amend and restate the Original Lease as set forth in this Lease to provide for certain modifications, including the deletion of Tenant’s rights respecting Phase 2B and certain other modifications, in complete replacement of the Original Lease entered into in connection with the Contribution Agreement.

 

D.            Definitions. Unless the context otherwise specifies or requires for the purpose of this Lease, all words and phrases having their initial letters capitalized herein shall have the meanings set forth below:

 

Affiliate of Tenant: shall have the meaning assigned in Section 13.1(b).

 

Building Cost: shall have the meaning assigned in Section 18.2.

 

Building 1: shall have the meaning assigned in Section 1.1(a)(ii).

 

Building 1 Termination Date: shall have the meaning assigned in Section 2.1.

 

Building 2: shall have the meaning assigned in Section 1.1(a)(ii).

 

1

 

Building 2 Termination Date: shall have the meaning assigned in Section 2.1.

 

Buildings: shall have the meaning assigned in Section 1.1(a).

 

Common Areas: shall mean the Interior and Exterior Common Areas, collectively, as indicated in Section 1.1 (a)(x).

 

Cosmetic Alterations: shall have the meaning assigned in Section 9.1.

 

Effective Date: shall have the meaning assigned in Section 2.1.

 

Exterior Common Areas: shall have the meaning assigned in Section 1.1(a)(viii).

 

Fair Market Rental: shall have the meaning assigned in Section 3.1(d).

 

Hazardous Materials: shall have the meaning assigned in Section 11.4(a).

 

HVAC: shall have the meaning assigned in Section 7.2(a).

 

Improvements: shall have the meaning assigned in Section 1.1(a)(vii).

 

Interior Common Areas: shall have the meaning assigned in Section 1.1(a)(ix).

 

Landlord: shall have the meaning assigned in the Introduction.

 

Lease  Year: shall have the meaning assigned in Section 7.3.

 

Lease: shall have the meaning assigned in the Introduction.

 

Minimum Rental: shall have the meaning assigned in Section 3.1(c).

 

Operating Expenses: shall have the meaning assigned in Section 7.2(a).

 

Parking Lease: shall have the meaning assigned in Section 1.1(a).

 

Permitted Transfer: shall have the meaning assigned in Section 13.1(b).

 

Phase 1A: shall have the meaning assigned in Section 1.1(a)(iii).

 

Phase 1B: shall have the meaning assigned in Section 1.1(a)(iv).

 

Phase 2A: shall have the meaning assigned in Section 1.1(a)(v).

 

Phase 2B: shall have the meaning assigned in Section 1.1(a)(vi).

 

Phase 1 Rent Commencement Date: shall have the meaning assigned in Section 2.4.

 

2

 

Phase 2A Rent Commencement Date: shall have the meaning assigned in Section 2.4.

 

Premises: shall have the meaning assigned in Section 1.1(a).

 

Prevailing Party: shall have the meaning assigned in Section 19.5.

 

Project: shall have the meaning assigned in Section 1.1(a)(vii).

 

Real Property: shall have the meaning assigned in Recital A.

 

Rent Commencement Date: shall mean the Phase 1 Rent Commencement Date, or Phase 2A Rent Commencement Date, as defined in Section 2.4.

 

Requesting Party: shall have the meaning assigned in Section 17.3.

 

Requirements: shall have the meaning assigned in Section 11.3.

 

Responding Party: shall have the meaning assigned in Section 17.3.

 

Security Deposit: shall have the meaning assigned in Section 18.1.

 

Site Plan: shall have the meaning assigned in Section 1.1(a)(ii).

 

Tenant: shall have the meaning assigned in the Introduction.

 

Tenant Improvements: shall mean improvements to or within the Premises, other than improvements constructed by Landlord as part of the Building, constructed from time to time by Tenant.

 

Tenant’s Operating Cost Share: shall have the meaning assigned in Section 7.1(a).

 

Tenant’s Exterior Common Area Operating Cost Share: shall have the meaning assigned in Section 7.1(a).

 

Term: shall have the meaning assigned in Section 2.1.

 

Usable Square Feet: shall mean, with respect to each Phase shall mean the square feet indicated in Section 1.1(a) below.

 

3

 

THE PARTIES AGREE AS FOLLOWS:

 

1.            PROPERTY.

 

1.1          Lease of Premises.

 

(a)           Buildings, Real Property, Improvements.

 

Subject to the Parking Lease dated as of September 14, 2000 (the “Parking Lease”) by and between Landlord and Tenant, Landlord leases to Tenant and Tenant leases from Landlord, on the terms, covenants and conditions hereinafter set forth, Phase 1A, Phase 1B, and Phase 2A (all as defined below and referred to collectively herein as the “Premises”). Upon the Building 2 Termination Date, the Premises shall consist of Phase 1A and Phase 1B only. The Premises, together with Phase 2B, were constructed by Landlord; and are located in two connected four-story buildings containing an aggregate of approximately 390,000 square feet, consisting of approximately 171,965 square feet of rentable area for office and laboratory research and development and two lower stories primarily of parking (collectively, the “Buildings”  and each a “Building”). The Buildings were constructed on the Real Property in connection with the Project.

 

(i)            The Real Property is located at 201 Industrial Road in the City of San Carlos, County of San Mateo, State of California.

 

(ii)           The location of the Buildings on the Real Property is substantially as shown on the site plans attached hereto as Exhibit B (the “Site Plan”);  the first Building to be constructed (“Building 1”) was constructed on the Real Property in the location depicted on the Site Plan, and the second Building was constructed (“Building 2”) on the Real Property in the location depicted on the Site Plan.

 

(iii)          The term “Phase 1A” shall refer to that portion of Building 1 consisting of approximately 39,077 rentable square feet (37,703 usable square feet) located on the fourth floor and the approximately 964 rentable square feet (930 usable square feet) located on the second floor and shown on the Site Plan.

 

(iv)          The term “Phase 1B”  shall refer to that portion of Building 1 consisting of approximately 39,876 rentable square feet (38,474 usable square feet) located on the third floor and shown on the Site Plan.

 

(v)           The term “Phase 2A”  shall refer to that portion of Building 2 consisting of approximately 45,574 rentable square feet (43,972 usable square feet) located on the third floor and shown on the Site Plan.

 

(vi)          The term “Phase 2B”  shall refer to that portion of Building 2 consisting of approximately 46,474 rentable square feet (44,840 usable square feet) located on the fourth floor and shown on the Site Plan.

 

(vii)         The Buildings and the other improvements to be constructed on the Real Property in connection with the Project, including the Common Areas (defined below), are sometimes referred to collectively herein as the “Improvements.” The “Project,” when completed, will consist of the Real Property and the Improvements.

 

(viii)        The parking areas (whether inside or outside the Buildings), courtyard, driveways, sidewalks, landscaped areas and other portions of the Project, including any areas leased under the Parking Lease, that lie outside the exterior walls of the Buildings to be constructed on the Real Property, as depicted in the Site Plan and as hereafter modified by

 

4

 

Landlord from time to time in accordance with the provisions of this Lease, are sometimes referred to herein as the “Exterior  Common Areas.”

 

(ix)          The term “Interior Common Areas” shall refer to the interior lobby, elevators, stairwells, utility risers, and any mechanical rooms located outside any tenant’s premises in the Buildings.

 

(x)           The term “Common Areas”  shall refer collectively to the Exterior Common Areas and the Interior Common Areas

 

(b)           Use of Common Areas.

 

As an appurtenance to Tenant’s leasing of the Premises pursuant to Section 1.1(a), Landlord hereby grants to Tenant, for the benefit of Tenant and its employees, suppliers, shippers, customers and invitees, during the Term of this Lease, the non-exclusive right to use, in common with others entitled to such use, (i) those portions of the Common Areas improved from time to time for use as parking areas, driveways, courtyard, sidewalks, landscaped areas, lobbies, elevators, stairwells, utility risers, any mechanical rooms located outside any tenant’s premises, or for other common purposes, and (ii) all access easements and similar rights and privileges relating to or appurtenant to the Real Property and created or existing from time to time under any access easement agreements, declarations of covenants, conditions, and restrictions, or other written agreements now or hereafter of record with respect to the Real Property, subject however to the rights granted under the Parking Lease and any limitations applicable to such rights and privileges under applicable law, under this Lease and/or under the written agreements creating such rights and privileges.

 

1.2          [Deleted].

 

1.3

 

2.            TERM.

 

2.1          Term.

 

The term of this Lease (as it may be extended from time to time, the “Term”) shall commence upon mutual execution of this Lease by Landlord and Tenant (the “Effective Date”)  and shall terminate on October 5, 2016 as to Phase 1A and Phase 1B (as it may be extended pursuant to Section 2.6, below, the “Building 1 Termination Date”), and August 16, 2007 as to Phase 2A (the “Building 2 Termination Date”).

 

2.2          [Deleted].

 

2.3          [Deleted].

 

5

 

2.4          Acknowledgement of Rent Commencement.

 

The Landlord and the Tenant agree that the following dates are the Phase 1 Rent Commencement Date and the Phase 2A Rent Commencement Date:

 

Phase 1 Rent Commencement Date: October 6, 2000 (under Original Lease).

 

Phase 2A Rent Commencement Date: October 6, 2001 (under Original Lease).

 

2.5          Holding Over.

 

If Tenant holds possession of the Premises or any portion thereof after the Term of this Lease with Landlord’s written consent, then except as otherwise specified in such consent, Tenant shall become a tenant from month to month at one hundred and two percent (102%) of the rental and otherwise upon the terms herein specified for the period immediately prior to such holding over and shall continue in such status until the tenancy is terminated by either party upon not less than one hundred twenty (120) days prior written notice. If Tenant holds possession of the Premises or any portion thereof after the Term of this Lease without Landlord’s written consent, then Landlord in its sole discretion may elect (by written notice to Tenant) to have Tenant become a tenant either from month to month or at will, at one hundred fifty percent (150%) of the rental (prorated on a daily basis for an at-will tenancy, if applicable) and otherwise upon the terms herein specified for the period immediately prior to such holding over, or may elect to pursue any and all legal remedies available to Landlord under applicable law with respect to such holding over by Tenant. Tenant shall indemnify and hold Landlord harmless from any loss, damage, claim, liability, cost or expense (including reasonable attorneys’ fees) resulting from any delay by Tenant in surrendering the Premises or any portion thereof (except to the extent such delay is with Landlord’s prior written consent), including, but not limited to, any claims made by a succeeding tenant by reason of such delay. Acceptance of rent by Landlord following expiration or termination of this Lease shall not constitute a renewal of this Lease.

 

2.6          Options To Extend Term.

 

Tenant shall have the option to extend the Term of this Lease for Phase 1A and Phase 1B only (but not Phase 2A), at the Minimum Rental set forth in Section 3.1(b) and (c), below, and otherwise upon all the terms and provisions set forth herein with respect to the initial term of this Lease, for up to two (2) additional periods of ten (10) years each, the first commencing upon the expiration of the initial term hereof and the second commencing upon the expiration of the first extended term, if any. Exercise of such option with respect to the first such extended term shall be by written notice to Landlord at least eighteen (18) months prior to the expiration of the initial term hereof, exercise of such option with respect to the second extended term, if the first extension option has been duly exercised, shall be by written notice to Landlord at least eighteen (18) months prior to the expiration of the first extended term hereof. If Tenant is in material default hereunder, beyond any applicable notice and cure periods, on the date of such notice or on the date any extended term is to commence, then the exercise of the option shall be of no force or effect, the extended term shall not commence and this Lease shall expire at the end of the then current term hereof (or at such earlier time as Landlord may elect pursuant to the default

 

6

 

provisions of this Lease). If Tenant properly exercises one or more extension options under this Section, then all references in this Lease (other than in this Section 2.6) to the “term” of this Lease shall be construed to include the extension term(s) thus elected by Tenant. Except as expressly set forth in this Section 2.6, Tenant shall have no right to extend the Term of this Lease beyond its prescribed term.

 

3.             RENTAL.

 

Tenant shall cause payment of Minimum Rental and other rent or charges to be received by Landlord on the first calendar day of each month of the Term of this Lease in lawful money of the United States, without offset or deduction, except as specifically provided herein. All amounts payable by Tenant hereunder shall be deemed “Rent.”

 

3.1          Minimum Rental.

 

(a)           Commencement of Rental Obligations for Phase 1.

 

Tenant’s Minimum Rental obligations with respect to Phase 1A and Phase 1B shall commence on the Phase 1 Rent Commencement Date and Tenant’s Operating Expense Obligations with respect to Phase 1A and Phase 1B shall commence as of the Effective Date, and both shall end on the Building 1 Termination Date, unless sooner terminated or extended as hereinafter provided.

 

(b)           Commencement of Rental Obligations for Phase 2A.

 

Tenant’s Minimum Rental obligations with respect to Phase 2A shall commence on the Effective Date and Tenant’s Operating Expense obligations with respect to Phase 2A shall commence as of the Effective Date and both shall end on the Building 2 Termination Date, unless sooner terminated as hereinafter provided.

 

(c)           Rental Amounts for Phase 1A, Phase 1B, and Phase 2A: Annual Increases.

 

Tenant shall pay to Landlord as minimum rental for the following Phases, in advance, without deduction, offset, notice or demand, on or before the respective Rent Commencement Date and on or before the first day of each subsequent calendar month of the Term of this Lease, the following amounts per month, subject to adjustment in accordance with the terms of this Section 3.1 (“Minimum Rental”):

 

(i)            Phase 1A and 1B. Beginning on the Phase 1 Rent Commencement Date, Tenant shall pay Minimum Rental for Phase 1 in an amount equal to $287,701.20 ($3.60 per sq. ft. multiplied by 79,917).

 

(ii)           Phase 2A. Beginning on the Phase 2A Rent Commencement Date, Tenant shall pay Minimum Rental for Phase 2A in an amount equal to $164,066.40 ($3.60 per sq. ft. multiplied by 45,574).

 

(iii)          [Deleted].

 

7

 

(iv)          Annual Increases. On the anniversary of each of October 6 of each year (as to the Phase 1 Rent) and October 6 of each year (as to the Phase 2A Rent), the then current Minimum Rental for the relevant Phase shall be increased by two percent (2%).

 

(v)           Partial Months. If the obligation to pay Minimum Rental hereunder commences on other than the first day of a calendar month or if the Term of this Lease terminates on other than the last day of a calendar month, the Minimum Rental for such first or last month of the Term of this Lease, as the case may be, shall be prorated based on the number of days the Term of this Lease is in effect during such month. If an increase in Minimum Rental becomes effective on a day other than the first day of a calendar month, the Minimum Rental for that month shall be the sum of the two applicable rates, each prorated for the portion of the month during which such rate is in effect.

 

(d)           Rental Amounts During First Extended Term.

 

If Tenant properly exercises its right to extend the Term of this Lease pursuant to Section 2.6 hereof, the Minimum Rental during the first year of the first extended term shall be equal to one hundred percent (100%) of the fair market rental value (as defined below), determined as of the commencement of such extended term in accordance with this paragraph. Upon Landlord’s receipt of a proper notice of Tenant’s exercise of its option to extend the Term of this Lease, the parties shall have thirty (30) days in which to agree on the Fair Market Rental at the commencement of the first extended term for the uses permitted hereunder. If the parties agree on such Fair Market Rental, they shall execute an amendment to this Lease stating the amount of the applicable minimum monthly rental (including the indexed amounts applicable during subsequent years of the first extended term as described above in Section 3.1(c)(iv)). If the parties are unable to agree on such rental within such thirty (30) day period, then within thirty (30) days after the expiration of such period each party, at its cost and by giving notice to the other party, shall appoint a real estate appraiser with at least five (5) years experience appraising similar commercial properties in the County in which the Real Property is located to appraise and set the Fair Market Rental for the Premises at the commencement of the first extended term in accordance with the provisions of this Section 3.1(d). If either party fails to appoint an appraiser within the allotted time, the single appraiser appointed by the other party shall be the sole appraiser. If an appraiser is appointed by each party and the two appraisers so appointed are unable to agree upon a Fair Market Rental within thirty (30) days after the appointment of the second, the two appraisers shall appoint a third similarly qualified appraiser within ten (10) days after expiration of such 30-day period; if they are unable to agree upon a third appraiser, then either party may, upon not less than five (5) days notice to the other party, apply to the Presiding Judge of the Superior Court of the County in which the Real Property is located for the appointment of a third qualified appraiser. Each party shall bear its own legal fees in connection with appointment of the third appraiser and shall bear one-half of any other costs of appointment of the third appraiser and of such third appraiser’s fee. The third appraiser, however selected, shall be a person who has not previously acted for either party in any capacity. Within thirty (30) days after the appointment of the third appraiser, the third appraiser shall set the Fair Market Rental for the first extended term by selecting the appraised value determined by the first two appraisers which is closest to his own determination, and shall so notify the parties, which determination shall be binding on the parties and shall be enforceable in any further proceedings relating to this Lease. For purposes of this Section 3.1(d), the “Fair Market Rental” of the

 

8

 

Premises shall be determined with reference to the then prevailing market rental rates for properties in the City of San Carlos with improvements and common area improvements comparable to those then existing in the Premises and paid for by Landlord.

 

(e)           Rental Amounts During Second Extended Term.

 

If Tenant properly exercises its right to a second extended Term of this Lease pursuant to Section 2.6 hereof, the Minimum Rental during such second extended term shall be determined in the same manner provided in the preceding paragraph for the first extended term (including the rental increase provision for years after the first year of such second extended term), except that the determination shall be made as of the commencement of the second extended term.

 

3.2          Late Charge.

 

If Tenant shall fail to pay, when the same is due and payable (after giving effect to any applicable notice and cure period), any rent or other amounts due Landlord hereunder, such unpaid amounts shall bear interest for the benefit of the Landlord at a rate equal to the lesser of ten percent (10%) per annum or the maximum rate permitted by law, from the date due to the date of payment. Tenant further acknowledges that late payment of rent will cause Landlord to incur certain costs not contemplated by this Lease, the exact amount of such costs being extremely difficult and impractical to determine with certainty. For this reason, in addition to interest, if Tenant shall fail to pay (which for purposes of this paragraph, “pay” shall mean actual receipt of the payment by Landlord) any installment of rent by the fifth (5th) day of the calendar month for which such installment is due, a late charge equal to five percent (5%) of the overdue installment of rent automatically shall be due without further notice, and shall be in addition to all other sums due. The parties agree that this additional late charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of late payment by Tenant

 

4.             PARKING.

 

Landlord and Tenant agree that the Common Areas of the Real Property shall include not less than 690 parking spaces. Commencing on the Effective Date and ending on the Building 2 Termination Date, Tenant shall be entitled to 361 spaces, and commencing on the Building 2 Termination Date and ending on the Building 1 Termination Date, Tenant shall be entitled to 224 spaces, all in addition to those spaces provided in and subject to the Parking Lease.

 

5.             CONSTRUCTION.

 

5.1          Construction of Improvements.

 

(a)          Base Building Work; Performance and Payment.

 

Landlord has constructed Building 1 and Building 2 pursuant to its obligations under the Original Lease and Landlord and Tenant agree, subject to Section 5.1(c) below, that Landlord’s obligations in connection with such construction have been fully and satisfactorily performed.

 

9

 

(b)          Tenant’s Work; Phase 2A Improvements.

 

Tenant has constructed Tenant Improvements within Phase 1A Phase 1B of the Premises in accordance with the prior lease, and may make such future improvements and modifications to the same as set forth herein. Tenant and Landlord agreed under the Original Lease to provide Tenant with a Tenant improvement Allowance for tenant improvements within each Phase of the Premises equal to $100 per Usable Square Foot. Tenant and Landlord agree that this obligation has been satisfied as to Phase 1, and further agree Landlord shall construct improvements to Phase 2A pursuant to that Work Letter attached hereto as Exhibit C, and that such improvements constructed pursuant to the Work Letter shall meet Landlord’s obligations as to $70 per Usable Square Foot of Phase 2A, or such higher amount per Usable Square Foot actually expended by Landlord in constructing improvements within Phase 2A.

 

(c)           Compliance with Law.

 

Landlord warrants to Tenant that the Base Building Work and any other improvements constructed by Landlord from time to time shall not violate any applicable law, building code, regulation or ordinance in effect on the applicable Rent Commencement Date or at the time such improvements are placed in service. If it is determined that any of these warranties have been violated, then it shall be the obligation of the Landlord, after written notice from Tenant, to correct the conditions(s) constituting such violation promptly, at Landlord’s sole cost and expense.

 

6.            TAXES.

 

6.1          Personal Property.

 

Tenant shall be responsible for and shall pay prior to delinquency all taxes and assessments levied against or by reason of (a) any and all alterations, additions and items installed or placed on or in the Premises and taxed as personal property rather than as real property, and/or (b) all personal property, trade fixtures and other property placed by Tenant on or about the Premises. Upon request by Landlord, Tenant shall furnish Landlord with satisfactory evidence of Tenant’s payment thereof. If at any time during the Term of this Lease any of said alterations, additions or personal property, whether or not belonging to Tenant, shall be taxed or assessed as part of the Real Property, then such tax or assessment shall be paid by Tenant to Landlord within thirty (30) days after presentation by Landlord of copies of the tax bills in which such taxes and assessments are included and shall, for the purposes of this Lease, be deemed to be personal property taxes or assessments under this Section 6.1.

 

6.2          Real Property Taxes.

 

(a)           Real Property Taxes.

 

Commencing with the Effective Date and continuing for each calendar year, or tax year at Landlord’s option (such “tax year” being a period of twelve (12) consecutive calendar months for which the applicable taxing authority levies or assesses real property taxes), for the balance of the Lease Term, Tenant shall pay to Landlord the Tenant’s Operating Cost Share of all real property taxes, pursuant to Section 7.2(a) below. Such sum for any partial year of the Lease Term shall be prorated on the basis of the number of days of such partial year. Landlord also shall provide Tenant with a copy of the applicable tax bill or tax statement from the taxing

 

10

 

authority. In addition to any other amounts due from Tenant to Landlord, if Tenant fails to pay the real property taxes to Landlord as herein required, Tenant shall pay to Landlord the amount of any interest, penalties or late charges caused by Tenant’s late payment.

 

(b)           Protests.

 

If the Premises are separately assessed, Tenant shall have the right, by appropriate proceedings, to protest or contest in good faith any assessment or reassessment of real property taxes, any special assessment, or the validity of any real property taxes or of any change in assessment or tax rate; provided, however, that prior to any such challenge Tenant must either (a) pay the taxes alleged to be due in their entirety and seek a refund from the appropriate authority, or (b) post bond in an amount sufficient to insure full payment of the real property taxes. In any event, upon a final determination with respect to such contest or protest, Tenant shall promptly pay all sums found to be due with respect thereto. In any such protest or contest, Tenant may act in its own name, and at the request of Tenant, Landlord shall cooperate with Tenant in any way Tenant may reasonably require in connection with such contest or protest, including signing such documents as Tenant reasonably shall request, provided that such cooperation shall be at no expense to Landlord and shall not require Landlord to attend any appeal or other hearing. Any such contest or protest shall be at Tenant’s sole expense, and if any penalties, interest or late charges become payable with respect to the real property taxes as a result of such contest or protest, Tenant shall pay the same.

 

(c)           Refunds.

 

If Tenant obtains a refund as the result of Tenant’s protest or contest and subject to Tenant’s obligation to pay Landlord’s costs (if any) associated therewith, Tenant shall be entitled to such refund to the extent it relates to Phase 1 or Phase 2A (to the extent occupied by Tenant) of the Premises during the Lease Term.

 

(d)           Other Taxes.

 

If at any time during the Lease Term under the laws of the United States Government, state, county or city, or any political subdivision thereof in which the Premises are situated, a tax or excise on rent or any other tax however described is levied or assessed by any such political body against Landlord on account of rentals payable to Landlord hereunder, such tax or excise shall be considered “real property taxes” for the purposes of this Section 6.2, excluding, however, from such tax or excise any amount assessed against Landlord as state or federal income tax.

 

(e)           Tax and Insurance Escrows.

 

To the extent required by any lender of Landlord, Tenant shall timely pay all tax and insurance impound payments due on the Premises.

 

11

 

7.            OPERATING EXPENSES.

 

7.1          Payment of Operating Expenses.

 

(a)           Tenant’s Operating Cost Share.

 

(i)            Commencing on the Effective Date through the Building 1 Termination Date or the Building 2 Termination Date, as applicable, Tenant shall pay to Landlord, at the time and in the manner hereinafter set forth, as additional rental: (i) an amount equal to Tenant’s Operating Cost Share multiplied by the Operating Expenses defined in Section 7.2, and (ii) an amount equal to Tenant’s Operating Cost Share multiplied by the Exterior Common Area Cost.

 

(ii)           [Deleted]

 

(iii)          [Deleted].

 

(iv)          The term “Tenant’s Operating Cost Share” means 72.98% through and until the Building 2 Termination Date and thereafter means 46.47% through and until the Building 1 Termination Date. “Tenant’s Exterior Common Area Cost Share” shall be equal to the Tenant’s Operating Cost Share as established from time to time.

 

(b)           Adjustment of Tenant’s Operating Cost Share.

 

If at any time the percentage the gross square footage of the Premises as a part of the combined gross square footage of Buildings 1 and 2 should change, then Tenant’s Operating Cost Share shall be adjusted to be equal to the new percentage determined by dividing the new gross square footage of the Premises by the new gross square footage of Buildings 1 and/or 2 (as applicable).

 

7.2          Definition of Operating Expenses.

 

(a)           Inclusions.

 

Subject to the exclusions and provisions hereinafter contained, the term “Operating Expenses” shall mean the total costs and expenses incurred by Landlord or Tenant for operation and maintenance of the Buildings and the Real Property, including, without limitation, costs and expenses of:

 

(i)            insurance premiums for insurance carried by Landlord pursuant to Section 12.1 (which may include, at Landlord’s option, flood, earthquake or environmental remediation insurance), insurance deductibles, provided that any increase in premiums for flood, earthquake or environmental remediation coverage which is in excess of twenty five percent of the previous years’ premium shall not be included in Operating Expenses;

 

(ii)           the operation, repair and maintenance of the Building and Common Areas in a first class condition including but not limited to sidewalks, parking areas, curbs, roads, driveways, lighting standards, landscaping, sewers, water, gas and electrical distribution systems and facilities, drainage facilities, and all signs, both illuminated and non-illuminated that are now or hereafter in the Buildings and on the Real Property;

 

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(iii)          all Common Area utilities and services not separately metered to Tenant;

 

(iv)          real and personal property taxes and assessments or substitutes therefor levied or assessed against the Real Property or any part thereof, including (but not limited to any possessory interest, use, business, license or other taxes or fees, any taxes imposed directly on rents or services, any assessments or charges for police or fire protection, housing, transit, open space, street or sidewalk construction or maintenance or other similar services from time to time by any governmental or quasi-governmental entity, and any other new taxes on landlords in addition to taxes now in effect;

 

(v)           supplies, equipment, utilities and tools used in the operation and maintenance of the Real Property;

 

(vi)          capital improvements to the Real Property, the Improvements or the Buildings including, without limitation, all structural, roof, HVAC (defined as heating, ventilation, and air conditioning equipment and fixtures related thereto) serving the Common Areas, plumbing and electrical systems costing Seventy-Five Thousand Dollars ($75,000) or less, provided that the cost of all other capital improvements shall be amortized over the useful life of any such capital improvement (calculated in accordance with GAAP) and included in Operating Expenses;

 

(vii)         [Deleted]

 

(viii)        market rate lease costs for equipment; and

 

(ix)          any other costs (including, but not limited to, any parking or utilities fees or surcharges) allocable to or paid by Landlord, as owner of the Real Property, Buildings or Improvements, pursuant to any applicable laws, ordinances, regulations or orders of any governmental or quasi-governmental authority or pursuant to the terms of any declaration of covenants, conditions and restrictions now or hereafter affecting the Real Property or any other property over which Tenant has non-exclusive use rights as contemplated in Section 1.1(b) hereof.

 

(b)           Exclusions.

 

Notwithstanding anything to the contrary contained in this Lease, the following shall not be included within Operating Expenses:

 

(i)            Leasing commissions, attorneys’ fees, costs, disbursements, and other expenses incurred in connection with negotiations or disputes with tenants, or in connection with leasing, renovating or improving space for tenants or other occupants or prospective tenants or other occupants of the Real Property;

 

(ii)           The cost of any service sold to any tenant (including Tenant) or other occupant for which Landlord is entitled to be reimbursed as an additional charge or rental over and above the basic rent and operating expenses payable under the lease with that tenant;

 

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(iii)          Any depreciation on the Buildings or on any other improvements on the Real Property;

 

(iv)          Expenses in connection with services or other benefits of a type that are not offered or made available to Tenant but that are provided to another tenant of the Real Property or of any other property owned by Landlord;

 

(v)           Costs incurred due to Landlord’s violation of any terms or conditions of this Lease or of any other lease relating to the Buildings or to any other portion of the Real Property;

 

(vi)          Overhead profit increments paid to any subsidiary or affiliate of Landlord for services other than management on or to the Real Property, or for supplies or other materials to the extent that the cost of the services, supplies or materials exceeds the cost that would have been paid had the services, supplies or materials been provided by unaffiliated parties on a competitive basis;

 

(vii)         All interest, loan fees and other carrying costs related to any mortgage or deed of trust, and all rental and other amounts payable under any ground or underlying lease, or above market lease payments under any lease for any equipment ordinarily considered to be of a capital nature (except janitorial equipment which is not affixed to the Buildings and/or equipment the costs of which, if purchased, would be considered an amortizable Operating Expense under the provisions above, notwithstanding the capital nature of such equipment);

 

(viii)        Any compensation paid to clerks, attendants or other persons in commercial concessions operated by Landlord;

 

(ix)          Advertising and promotional expenditures;

 

(x)           Any costs, fines or penalties incurred due to violations by Landlord of any governmental rule or authority or of this Lease or any other lease of any portion of the Real Property or any other property owned by Landlord, or due to Landlord’s gross negligence or willful misconduct;

 

(xi)          Property management fees;

 

(xii)         Costs for sculpture, paintings or other objects of art, and for any insurance thereon or extraordinary security in connection therewith other than that provided in connection with the initial construction of the Buildings or the Common Area improvements on the Real Property;

 

(xiii)        Wages, salaries or other compensation paid to any executive employees above the grade of building manager;

 

(xiv)       The cost of containing, removing or otherwise remediating any contamination of the Real Property (including the underlying land and groundwater) by any

 

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toxic or Hazardous Materials (as defined in Section 11.4(a), below) for which Landlord is responsible under Section 11.4, below; and

 

(xv)         Premiums for earthquake, environmental remediation or flood insurance coverage other than as permitted under Section 7.2(a), above.

 

(xvi)        Operating Expenses shall not include any costs attributable to the work for which Landlord is required to pay under Article 5 or Exhibit C, nor any costs attributable to the initial construction of the Buildings or of Common Area improvements on the Real Property.

 

7.3          Determination of Operating Expenses.

 

During the last month of each calendar year of the Term of this Lease (“Lease Year”), or as soon thereafter as practical, Landlord shall provide Tenant notice of Landlord’s estimate of the Operating Expenses for the ensuing Lease Year or applicable portion thereof. On or before the first day of each month during the ensuing Lease Year or applicable portion thereof, beginning on the Phase 1 Rent Commencement Date, Tenant shall pay to Landlord Tenant’s Operating Cost Share of the portion of such estimated Operating Expenses allocable (on a pro rata basis) to such month; provided, however,  that if such notice is not given in the last month of a Lease Year, Tenant shall continue to pay on the basis of the prior year’s estimate, if any, until the month after such notice is given. If at any time or times it appears to Landlord that the actual Operating Expenses will vary from Landlord’s estimate by more than four percent (4%), Landlord may, by notice to Tenant, revise its estimate for such year and subsequent payments by Tenant for such year shall be based upon such revised estimate.

 

7.4          Final Accounting For Lease Year.

 

(a)           Annual Statement

 

Within ninety (90) days after the close of each Lease Year, or as soon after such 90-day period as practicable, Landlord shall deliver to Tenant a statement of Tenant’s Operating Cost Share of the Operating Expenses for such Lease Year prepared by Landlord from Landlord’s books and records, which statement shall be final and binding on Landlord and Tenant (except as provided in Section 7.4(b)). If on the basis of such statement Tenant owes an amount that is more or less than the estimated payments for such Lease Year previously made by Tenant, Tenant or Landlord, as the case may be, shall pay the deficiency to the other party within thirty (30) days after delivery of the statement. Failure or inability of Landlord to deliver the annual statement within such ninety (90) day period shall not impair or constitute a waiver of Tenant’s obligation to pay Operating Expenses, or cause Landlord to incur any liability for damages.

 

(b)           Audit Rights

 

At any time within one hundred twenty (120) days after receipt of Landlord’s annual statement of Operating Expenses as contemplated in Section 7.4(a), Tenant shall be entitled, upon reasonable written notice to Landlord and during normal business hours at Landlord’s office or such other places as Landlord shall designate, to inspect and examine those books and records of Landlord relating to the determination of Operating Expenses for the immediately

 

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preceding Lease Year covered by such annual statement or, if Tenant so elects by written notice to Landlord, to request an independent audit of such books and records. The independent audit of the books and records shall be conducted by a certified public accountant acceptable to both Landlord and Tenant or, if the parties are unable to agree, by a certified public accountant appointed by the Presiding Judge of the County Superior Court in which the Real Property is located upon the application of either Landlord or Tenant (with notice to the other party). In either event, such certified public accountant shall be one who is not then employed in any capacity by Landlord or Tenant. The audit shall be limited to the determination of the amount of Operating Expenses for the subject Lease Year, and shall be based on generally accepted accounting principles and tax accounting principles, consistently applied. If it is determined, by mutual agreement of Landlord and Tenant or by independent audit, that the amount of Operating Expenses billed to or paid by Tenant for the applicable Lease Year was incorrect, then the appropriate party shall pay to the other party the deficiency or overpayment, as applicable, within thirty (30) days after the final determination of such deficiency or overpayment. All costs and expenses of the audit shall be paid by Tenant unless the audit shows that Landlord overstated Operating Expenses for the subject Lease Year by more than five percent (5%), in which case Landlord shall pay all costs and expenses of the audit. Each party agrees to maintain the confidentiality of the findings of any such audit.

 

7.5          Proration.

 

If the Rent Commencement Date for Phase 1 or Phase 2A falls on a day other than the first day of a Lease Year and/or if the Building 1 Termination Date or the Building 2 Termination Date falls on a day other than the last day of a Lease Year, then the amount of Operating Expenses payable by Tenant with respect to such first or last partial Lease Year shall be prorated on the basis which the number of days during such Lease Year in which this Lease is in effect bears to 365. The termination of this Lease shall not affect the obligations of Landlord and Tenant pursuant to Section 7.4 to be performed after such termination.

 

7.6          Reserve Account.

 

Tenant shall each month, commencing on the Phase 1 Rent Commencement Date and on the first day of each calendar month thereafter of the Lease term, deposit into a segregated, interest bearing bank account in a federally insured bank or savings institute an amount equal to one percent (1%) of the monthly rent due for that month, to provide for future replacements to improvements and fixtures within the Premises (the “Reserve Account”); provided that if at any time the amount held in the Reserve Account is equal to the product of thirty six months times the amount of the monthly contribution, Tenant’s obligation to make additional deposits shall be temporarily suspended. Tenant’s obligation to make such deposits shall resume at such time as the amount in the Reserve Account drops below such amount. The Reserve Account shall remain the property of Tenant, but disbursements from the Reserve Account shall be made only by joint check executed by Landlord and Tenant upon the mutual consent of Landlord and Tenant, which consent shall not be unreasonably withheld, delayed or conditioned. Landlord shall, within ten (10) days after receipt of a written request, either sign any such check or convey in writing to Tenant any objections to signing the check, and shall thereafter diligently work with Tenant to resolve any differences with regard to the disbursement. Notwithstanding the foregoing, if Tenant, pursuant to the Lease, is required to make certain repairs, improvements, or

 

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replacements to the Premises or Common Area but fails to do so within the time allowed hereunder (subject to any applicable cure period), then Landlord, as provided under the Lease, may make such repairs, improvements, or replacements, and may disburse funds from the Reserve Account, without Tenant’s consent or signature on the disbursement check(s), to pay for the cost of the repairs, improvements, or replacements. Any amount in the Reserve Account remaining at the expiration of the Lease shall remain the property of Tenant.

 

7.7          Property Management Fee.

 

Commencing with the execution of this Lease, Tenant shall pay to Landlord a monthly fee (“Management Fee”) to cover costs of property management services in an amount not to exceed one percent (1.00%) of the Minimum Rental for the Premises whether or not Landlord incurs fees payable to any third party to provide such services and without regard to the actual costs incurred by Landlord for such services.

 

8.             UTILITIES.

 

8.1          Payment.

 

Commencing with the Phase 1 Rent Commencement Date and thereafter throughout the Term of this Lease, Tenant shall pay, before delinquency, all charges for water, trash collection, gas, heat, light, electricity, power, sewer, telephone, alarm system, janitorial and other services or utilities supplied to or consumed in or with respect to the Premises, including any taxes on such services and utilities, and Tenant’s Operating Cost Share of all charges for water, gas, heat, light, electricity, power, sewer, telephone, alarm system, janitorial and other services or utilities supplied to or consumed in or with respect to the Common Areas. It is the intention of the parties that to the extent feasible, all services provided to the Premises (as opposed to the Common Areas and as the same shall exist from time to time) shall be separately metered to the Premises.

 

8.2          Interruption.

 

There shall be no abatement of rent or other charges required to be paid hereunder and Landlord shall not be liable in damages or otherwise for interruption or failure of any service or utility furnished to or used with respect to the Premises because of accident, making of repairs, alterations or improvements, severe weather, difficulty or inability in obtaining services or supplies, labor difficulties or any other cause, except the gross negligence or willful misconduct of Landlord, its employees and/or agents.

 

9.            ALTERATIONS.

 

9.1          Right To Make Alterations.

 

Tenant shall make no alterations, additions or improvements to the Premises, other than interior non-structural alterations (“Cosmetic Alterations”) costing less than One Hundred Thousand Dollars ($100,000) in the aggregate during any twelve (12) month period, without the prior written consent of Landlord, which consent shall not be unreasonably withheld, delayed or conditioned, and if Tenant so requests, Landlord shall specify whether Landlord intends to

 

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require that Tenant remove such Cosmetic Alterations (or any specified portions thereof) upon expiration or termination of this Lease. Landlord’s failure to respond within fifteen (15) days of Tenant’s request or notice to Landlord shall be deemed Landlord’s consent to allow the Cosmetic Alterations to remain with the Premises at the end of the Lease Term. Tenant shall provide to Landlord copies of any plans submitted to any governmental agency in connection with the construction of any Cosmetic Alterations, within thirty (30) days of such submittal. All alterations, additions and improvements shall be completed with due diligence in a first-class, workmanlike manner, in compliance with plans and specifications approved in writing by Landlord and in compliance with all applicable laws, ordinances, rules and regulations, and to the extent Landlord’s consent is not otherwise required hereunder for such alterations, additions or improvements, Tenant shall give prompt written notice thereof to Landlord. With respect to all proposed alterations (other than Cosmetic Alterations or otherwise), Tenant shall provide Landlord with a cost estimate to perform the alterations, a set of plans and specifications for the proposed work, and a set of final “as built” plans of the work actually performed. Tenant shall cause any contractors engaged by Tenant for work in the Buildings or on the Real Property to maintain public liability and property damage insurance, and other customary insurance, with such terms and in such amounts as Landlord may reasonably require, naming as additional insureds Landlord and any of its partners, shareholders, property managers and lenders designated by Landlord for this purpose, and shall furnish Landlord with certificates of insurance or other evidence that such coverage is in effect. Notwithstanding any other provisions of this Section 9.1, under no circumstances shall Tenant make any structural alterations or improvements, or any changes to the roof or equipment installations on the roof, or any substantial changes or alterations to the building systems, except Cosmetic Alterations, without Landlord’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned). Landlord’s failure to respond within fifteen (15) days following Tenant’s request shall be deemed approval. Landlord shall receive no fee for supervision, profit, overhead or general conditions, but shall be entitled to be reimbursed by Tenant for any reasonable costs incurred by Landlord in connection with its retention of third parties to assist in its review of Tenant’s request for consent in connection with any alterations, additions or improvements constructed or installed by Tenant under this Lease after the date hereof.

 

9.2          Title To Alterations.

 

All alterations, additions and improvements installed in, on or about the Premises at Tenant’s expense shall belong to Tenant during the Lease Term and upon expiration or earlier termination shall become part of the Real Property and shall become the property of Landlord, unless Landlord elects (at the time it grants consent to installation) to require Tenant to remove the same upon the termination of this Lease; provided, however,  that the foregoing shall not apply to Tenant’s movable furniture and equipment and trade fixtures. Tenant shall promptly repair any damage caused by its removal of any such alterations, additions and improvements, furniture, equipment or trade fixtures. Landlord shall not be entitled to require removal unless Landlord specified its intention to do so at the time of granting of Landlord’s consent to the requested alterations, additions or improvements. Notwithstanding any other provisions of this Article 9, however, under no circumstances shall Tenant have any obligation to remove from the Buildings or the Real Property, at the expiration or termination of this Lease, any of the Tenant Improvements constructed by Landlord.

 

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9.3          Tenant Fixtures and Personal Property.

 

Subject to Section 9.2 and to Section 9.5, Tenant may install, remove and reinstall trade fixtures without Landlord’s prior written consent, except that installation and removal of any fixtures which are affixed to the Buildings or the Real Property or which affect the exterior or structural portions of the Buildings or the building systems shall require Landlord’s written approval, which approval shall not be unreasonably withheld, delayed or conditioned.

 

9.4          No Liens.

 

Tenant shall at all times keep the Premises free from all liens and claims of any contractors, subcontractors, materialmen, suppliers or any other parties employed either directly or indirectly by Tenant in construction work on the Buildings or the Real Property. Tenant may contest any claim of lien, but only if, prior to such contest, Tenant either (i) posts security in the amount of the claim, plus estimated costs and interest, or (ii) records a bond of a responsible corporate surety in such amount as may be required to release the lien from the Buildings and the Real Property no later than the thirtieth day following recordation of such lien. Tenant shall indemnify, defend and hold Landlord harmless against any and all liability, loss, damage, cost and other expenses, including, without limitation, reasonable attorneys’ fees, arising out of claims of any lien for work performed or materials or supplies furnished at the request of Tenant or persons claiming under Tenant. Tenant shall at no time voluntarily place any fixture filing or otherwise grant a security interest in any alterations, additions or improvements installed in, on or about the Premises.

 

9.5          Signs.

 

Tenant shall have the right to a proportionate share of external and monument signage, in proportion to the ratio between the Useable Square Footage in Tenant’s Premises and the total Useable Square Footage on the Real Property, provided however, Tenant shall have the right to  continue to display its corporate name and logo on the exterior of the Buildings in the size and manner it is displayed as of the Effective Date (subject to changes in applicable laws or regulations requiring a modification to such signage).

 

10.          MAINTENANCE AND REPAIRS.

 

10.1        Tenant’s Obligation for Maintenance.

 

(a)           Good Order, Condition and Repair.

 

(i)             In addition to Tenant’s obligation to pay Tenant’s Operating Cost Share as required by Section 7, Tenant’s repair and maintenance obligation shall be limited to the repair and maintenance of the interior of the Premises, as the same shall exist from time to time (being defined as the floor surfaces, ceiling, interior wall surfaces, electrical, plumbing, HVAC equipment exclusively serving the Premises and telephone and communications systems within such interior).

 

(b)           [Deleted].

 

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(c)           Landlord’s Remedy.

 

If Tenant, after notice from Landlord, fails to make or perform promptly any repairs or maintenance which are the obligation of Tenant hereunder, Landlord shall have the right, but shall not be required, to enter the Buildings and make the repairs or perform the maintenance necessary to restore the Buildings to good and sanitary order, in a first class condition and repair. In such case, immediately on demand from Landlord, the cost of such repairs shall be due and payable by Tenant to Landlord.

 

(d)           Condition Upon Surrender.

 

At the expiration or sooner termination of this Lease, Tenant shall surrender the Premises, including any additions, alterations and improvements thereto, broom clean, in good and sanitary order, in a first class condition and repair, free from Hazardous Materials caused to be present by Tenant, its agents or invitees (it being understood and agreed that Tenant shall have no responsibility for Hazardous Materials that have migrated onto the Real Property through the air, water or soils), ordinary wear and tear excepted, and delivered free of radioactive licenses or other restrictions on use, first, however, removing all goods and effects of Tenant and all fixtures and items required to be removed or specified to be removed at Landlord’s election pursuant to this Lease, and repairing any damage caused by such removal. Tenant expressly waives any and all interest in any personal property and trade fixtures not removed from the Premises by Tenant at the expiration or termination of this Lease, agrees that any such personal property and trade fixtures may, at Landlord’s election, be deemed to have been abandoned by Tenant, and authorizes Landlord (at its election and without prejudice to any other remedies under this Lease or under applicable law) to remove and either retain, store or dispose of such property at Tenant’s cost and expense, and Tenant waives all claims against Landlord for any damages resulting from any such removal, storage, retention or disposal.

 

10.2        Landlord’s Obligation for Maintenance.

 

(a)           Good Order, Condition and Repair.

 

Landlord, at its cost and expense, but subject to Tenant’s obligation to pay the Tenant’s Operating Cost Share as required by Section 7.1, shall keep and maintain in good and sanitary order, in a first class condition and repair, all Common Areas and each such Building and every part thereof, wherever located, including, but not limited to the structural components of the Buildings, the roof, signs, exterior, interior, walls, ceiling, electrical system, plumbing system, telephone and communications systems of each such Building, all the HVAC equipment and  related mechanical systems serving each such Building, all doors, door checks, windows, plate glass, door fronts, plumbing and sewage and other utility facilities, fixtures, lighting, wall surfaces, floor surfaces and ceiling surfaces of each such Building and all other interior repairs, foreseen and unforeseen, (except the interior of the Premises and the systems designated for Tenant’s exclusive use required to be repaired and maintained by Tenant as required by Section 10.1(a) above).

 

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(b)           No Abatement.

 

There shall be no abatement of rent and no liability of Landlord by reason of any injury to or interference with Tenant’s business arising from the making of any repairs, alterations or improvements in or to any portion of the Premises or Common Areas, or in or to improvements, fixtures, equipment and personal property therein.

 

(c)           Landlords’ Right of Entry for Repairs.

 

Landlord and Landlord’s agents shall have the right to enter upon the Premises, or any part thereof, for the purpose of performing any repairs or maintenance Landlord is permitted to make pursuant to this Lease, and of ascertaining the condition of the Premises or whether Tenant is observing and performing Tenant’s obligations hereunder, all without unreasonable interference from Tenant or Tenant’s agents. Except for emergency maintenance or repairs, the right of entry contained in this Section shall be exercisable at reasonable times, at reasonable hours and on reasonable notice (which shall not be less than twenty-four (24) hours).

 

11.           USE OF PROPERTY.

 

11.1        Permitted Use.

 

Subject to Sections 11.3, and 11.4 hereof, Tenant shall use the Premises solely for an office and laboratory research and development facility, including (but not limited to) storage and use of small laboratory animals, and other lawful purposes reasonably related to or incidental to such specified uses (subject in each case to receipt of all necessary approvals from the City and County in which the Real Property is located and other governmental agencies having jurisdiction over the Buildings and uses therein), and for no other purpose.

 

11.2        No Nuisance.

 

Tenant shall not use the Premises for or carry on or permit upon the Premises or any part thereof any offensive, noisy or dangerous trade, business, manufacture, occupation, odor or fumes, or any nuisance or anything against public policy, nor commit or allow to be committed any waste in, on or about the Premises. Tenant shall not do or permit anything to be done in or about the Premises, nor bring nor keep anything therein, which will in any way cause the Premises to be uninsurable with respect to the insurance required by this Lease or with respect to standard fire and extended coverage insurance with vandalism, malicious mischief and riot endorsements.

 

11.3        Compliance With Laws.

 

Tenant shall not use the Premises or permit the Premises to be used in whole or in part for any purpose or use that is in violation of any applicable laws, ordinances, regulations or rules of any governmental agency or public authority. Tenant shall keep the Premises equipped with all safety appliances required by law, ordinance or insurance on the Premises, or any order or regulation of any public authority, because of Tenant’s particular use of the Premises. Tenant shall procure at its costs all licenses and permits required for Tenant’s use of the Premises. Tenant shall use the Premises in strict accordance with all applicable ordinances, rules, laws and regulations and shall comply, at its expense, with all requirements of all governmental authorities now in force or which may hereafter be in force pertaining to the use of the Premises by Tenant,

 

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including, without limitation, regulations applicable to noise, water, soil and air pollution, and making such structural and nonstructural alterations and additions thereto as may be required from time to time by such laws, ordinances, rules, regulations and requirements of governmental authorities or insurers of the Premises (collectively, “Requirements”) because of Tenant’s construction of improvements in or other particular use of the Premises. The judgment of any court, or the admission by Tenant in any proceeding against Tenant, that Tenant has violated any law, statute, ordinance or governmental rule, regulation or requirement shall be conclusive of such violation as between Landlord and Tenant.

 

11.4        Environmental Matters.

 

(a)           Definition of Hazardous Materials.

 

For purposes of this Lease, “Hazardous Materials”  shall mean the substances included within the definitions of the term “hazardous substance” under (i) the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§ 9601 et seq., and the regulations promulgated thereunder, as amended, (ii) the California Carpenter-Presley-Tanner Hazardous Substance Account Act, California Health & Safety Code §§ 25300 et seq., and regulations promulgated thereunder, as amended, (iii) the Hazardous Materials Release Response Plans and Inventory Act, California Heath & Safety Code §§ 2-5500 et seq., and regulations, promulgated thereunder, as amended, and (iv) petroleum; “hazardous waste”  shall mean (i) any waste listed as or meeting the identified characteristics of a “hazardous waste” under the Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§ 6901 et seq., and regulations promulgated pursuant thereto, as amended, (ii) any waste meeting the identified characteristics of “hazardous waste,” “extremely hazardous waste” or “restricted hazardous waste” under the California Hazardous Waste Control Law, California Health & Safety Code §§ 25 100 et seq., and regulations promulgated pursuant thereto, as amended (collectively, the “CHWCL”), and/or (iii) any waste meeting the identified characteristics of “medical waste” under California Health & Safety Code §§ 25015-25027.8, and regulations promulgated thereunder, as amended; and “hazardous waste facility”  shall mean a hazardous waste facility as defined under the CHWCL.

 

(b)           Tenant’s Obligations Re: Hazardous Substances.

 

(i)            Tenant shall not cause or permit any Hazardous Material or hazardous waste to be brought upon, kept, stored or used in or about the Premises without the prior written consent of Landlord, which consent shall not be unreasonably withheld, delayed or conditioned, except that Tenant, in connection with its permitted use of the Premises as provided in Section 11.1, may keep, store and use materials that constitute Hazardous Materials which are customary for such permitted use, provided such Hazardous Materials are kept, stored and used in quantities which are customary for such permitted use and are kept, stored and used in full compliance with clauses (ii) and (iii) immediately below.

 

(ii)           Tenant shall comply with all applicable laws, rules, regulations, orders, permits, licenses and operating plans of any governmental authority with respect to the receipt, use, handling, generation, transportation, storage, treatment and/or disposal of Hazardous Materials or wastes by Tenant or its agents or employees.

 

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(iii)                                       Tenant shall not (A) operate on or about the Premises any facility required to be permitted or licensed as a hazardous waste facility or for which interim status as such is required, nor (B) store any hazardous wastes on or about the Premises for ninety (90) days or more, nor (C) conduct any other activities on or about the Premises that could result in the Premises being deemed to be a “hazardous waste facility” (including, but not limited to, any storage or treatment of Hazardous Materials or hazardous wastes which could have such a result).

 

(iv)                                      Tenant shall comply with all applicable laws, rules, regulations, orders and permits relating to underground storage tanks installed by Tenant or its agents or employees or at the request of Tenant (including any installation, monitoring, maintenance, closure and/or removal of such tanks) as such tanks are defined in California Health & Safety Code § 2528l(x), including, without limitation, complying with California Health & Safety Code §§ 25280-25299.7 and the regulations promulgated thereunder, as amended. Upon request by Landlord, Tenant shall furnish to Landlord copies of all registrations and permits issued to or held by Tenant from time to time for any and all underground storage tanks located on or under the Real Property. Notwithstanding the foregoing, Tenant shall not install any underground storage tanks at the Real Property without Landlord’s prior written consent, which Landlord may withhold in its reasonable discretion.

 

(v)                                         Tenant shall not keep any trash, garbage, waste or other refuse on the Premises except in sanitary containers and shall regularly and frequently remove the same from the Premises. Tenant shall keep all incinerators, containers or other equipment used for the storage or disposal of such matter in a clean and sanitary condition. Tenant shall properly dispose of all sanitary sewage and shall not use the sewage disposal system of the Buildings for the disposal of anything except as permitted by any governmental entity.

 

(vi)                                      At reasonable times and upon reasonable prior notice, prior to the expiration or earlier termination of the Lease Term, Landlord shall have the right to conduct (a) an annual hazardous waste investigation of the Premises and (b) if Landlord has reasonable cause to believe that any contamination exists on, in, under, or around the Buildings or the Premises, such other tests of the Premises and the Buildings as Landlord may deem necessary or desirable to demonstrate whether contamination has occurred as a result of Tenant’s use of the Premises. Tenant shall be solely responsible for and shall defend, indemnify and hold the Landlord, its agents and contractors harmless from and against any and all claims, demands or actions, arising out of or in connection with any removal, clean up, restoration and materials required hereunder to return the Premises and any other property of whatever nature to their condition existing prior to the time of any such contamination caused by Tenant, its employees or agents. Landlord shall pay for the cost of the annual investigation and other tests of the Premises, unless it has been determined that Tenant, its employees or agents have caused contamination of the Premises with Hazardous Materials, in which case Tenant shall bear such costs. Tenant shall pay the reasonable costs required to perform or conduct any closure study, exit audit or similar investigation required by then applicable laws.

 

(vii)                                   Tenant shall surrender the Premises at the expiration or earlier termination of this Lease free of any Hazardous Materials caused to be present by Tenant, its employees or agents and free and clear of all judgments, liens or encumbrances relating thereto

 

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and at its own cost and expense, shall repair all damage and clean up or perform any remedial action necessary relating to any Hazardous Materials caused to be present by Tenant, its employees or agents. Tenant, at its sole cost and expense, shall, following Landlord’s request, remove any alterations or improvements that may be contaminated or contain Hazardous Materials caused to be present by Tenant, its employees or agents.

 

(c)                                  Tenant’s Indemnity.

 

Tenant shall indemnify, defend and hold Landlord harmless from and against any and all claims, losses (including, but not limited to, loss of rental income and diminution in value), damages, liabilities, costs, legal fees and expenses of any sort arising out of or relating to (A) any failure by Tenant to comply with any provisions of this Section 11.4, or (B) any receipt, use handling, generation, transportation, storage, treatment, release and/or disposal of any Hazardous Material or waste or any radioactive material or radiation on or about the Premises as a proximate result of Tenant’s use of the Premises or as a result of any intentional or negligent acts or omissions of Tenant or of any agent, employee, vendor or invitee of Tenant.

 

(d)                                 Survival.

 

The provisions of this Section 11.4 shall survive the termination of this Lease.

 

12.                               INSURANCE AND INDEMNITY.

 

12.1                        Landlord’s Insurance.

 

During the Lease Term, Landlord shall keep and maintain, or cause to be kept and maintained, as part of Operating Expenses, a policy or policies of insurance on the Buildings insuring the same against loss or damage by the following risks: fire and extended coverage, vandalism, malicious mischief, sprinkler leakage (if sprinklers are required in the Buildings under applicable building code provisions, or are installed by Tenant in the absence of such requirement) in amounts not less than ninety percent (90%) of Full Replacement Value of the Buildings, (including both the Buildings and any tenant improvements), or the amount of such insurance Landlord’s lender requires Landlord to maintain. The term “Full Replacement Value” shall mean actual replacement cost, including changes required by new building codes or ordinances (exclusive of the cost of excavation, foundations and footings). Such insurance shall show, as a loss payee in respect of the Premises, Landlord, Tenant and any ground lessor or mortgagee of Landlord required to be named pursuant to its mortgage documents, as their interests may appear. Landlord, subject to availability thereof and, as part of Operating Expenses, shall further insure as Landlord deems appropriate coverage against flood, earthquake, environmental remediation, loss or failure of building equipment, rental loss for a period of eighteen (18) months for periods of repair or rebuild, 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 as to any improvements installed by Tenant, provided that such coverage does not duplicate coverages maintained by Tenant. Landlord, as part of the Operating Expenses, shall further carry General Liability with General Aggregate Amount & Per Occurrence Limit insurance with a single loss limit of not less

 

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than Five Million Dollars ($5,000,000) for death or bodily injury, or property damage with respect to the Real Property.

 

12.2                        Tenant’s Insurance.

 

(a)                                 Commercial General Liability Insurance.

 

During the Lease Term, Tenant shall keep and maintain, or cause to be kept and maintained, at Tenant’s sole cost and expense, a policy or policies of Commercial General Liability insurance, showing, as an additional insured in respect of the Premises, Landlord, Tenant, any management company retained by Landlord to manage the Premises, any ground lessor and any lender of Landlord required to be named pursuant to its loan documents. Such policy shall insure against any and all claims, demands or actions for injuries to persons, loss of life and damage to property occurring upon, in or about the Premises (including coverage for liability caused by independent contractors of Tenant or subtenants of Tenant working in or about the Premises), with minimum coverage in an amount not less than a Five Million Dollars ($5,000,000) combined single limit with respect to all bodily injury, death or property damage in any one accident or occurrence. In the event of a claim, action or demand relating to the Premises, the amount of any deductible or self-insured retention and/or any award in excess of the policy limits shall be the sole responsibility of Tenant.

 

(b)                                 Tenant’s Risk.

 

Tenant assumes the risk of damage to any fixtures, goods, inventory, merchandise and equipment, and Landlord shall not be liable for injury to Tenant’s business or any loss of income therefrom relative to such damage except as more particularly heretofore set forth within this Lease. Tenant at Tenant’s cost may carry such insurance as Tenant desires for Tenant’s protection with respect to personal property of Tenant, business interruption or other coverages.

 

(c)                                  Other Insurance.

 

In addition to all other insurance required to be carried by Tenant hereunder, Tenant, throughout the Lease Term, shall provide and keep in force at Tenant’s sole cost and expense the following:

 

(i)                                             Workman’s Compensation insurance to the full extent required under the laws of the State of California;

 

(ii)                                          Insurance on Tenant’s equipment, personal property and other contents in, on or about the Premises insuring against loss or damage by all risks covered by “special form” coverage, in amounts equal to ninety percent (90%) of their full replacement value;

 

(iii)                                       [Deleted]; and

 

(iv)                                      Other nonduplicative insurance required by Landlord, in types and amounts consistent with commercially reasonable practice.

 

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12.3                        Insurers; Primary Insurance.

 

All policies of insurance provided for herein shall be on an occurrence basis and shall be issued by insurance companies with a general policy holder’s rating of not less than A- and a financial rating of not less than Class XV as rated in the most current available “Best’s” Insurance Reports. Such insurance companies shall be qualified to do business in the State of California. All such policies carried by Tenant shall name Landlord, any ground lessor and any lender (or its successors and assigns) as additional insureds, and shall be for the mutual and joint benefit and protection of Landlord, Tenant, any ground lessor and Landlord’s first mortgagee or beneficiary. All public liability and property damage policies carried by Tenant shall contain a provision that Landlord, although named as an insured, nevertheless shall be entitled to recovery under said policies for any loss occasioned to it, its servants, agents and employees by reason of the negligence of Tenant. As often as any such policy shall expire or terminate, renewal or additional policies shall be procured and maintained by Tenant in like manner and to like extent. All policies of insurance must contain a provision that the company writing said policy will give to Landlord thirty (30) days notice in writing in advance of any cancellation or lapse. All public liability, property damage and other casualty policies carried by Tenant shall be written as primary policies, not contributing with and not in excess of coverage which Landlord may carry. Tenant shall, upon request from Landlord from time to time, immediately deliver to Landlord copies of all insurance policies (including the declarations pages) in effect with respect to the Premises. All liability policies shall contain endorsements for cross-liability, fire, legal liability, broad form contractual liability, employer’s automobile non-ownership, products completed operation coverage and dram shop liability, as applicable.

 

12.4                        Blanket Policy.

 

Notwithstanding anything to the contrary contained within this Section 12, Tenant’s obligations to carry the insurance provided for herein may be brought within the coverage of a so-called blanket policy or policies of insurance carried and maintained by Tenant; provided, however, that Landlord, any ground lessor and any lender shall be named as an additional insured thereunder as their interests appear, the coverage afforded Landlord will not be reduced or diminished by reason of the use of such blanket policy of insurance, and the requirements set forth herein are otherwise satisfied.

 

12.5                        Deductibles.

 

The deductible amounts, if any, with respect to all insurance, which Tenant is required to maintain hereunder, shall not exceed Twenty Thousand Dollars ($20,000) per claim or occurrence. The amount of the deductibles, if any, within this limitation shall be a business decision by Tenant; under no circumstances shall Landlord be required to reimburse Tenant for the amount of any deductible incurred by Tenant in connection with any insured event, except to the extent the event resulting in the claim was caused by Landlord’s or Landlord’s agents’ gross negligence or willful misconduct.

 

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12.6                        Certificates.

 

Upon the execution and delivery of this Lease and thereafter not less than thirty (30) days prior to the expiration dates of the expiring policies theretofore maintained, Tenant shall deliver to Landlord certificates of insurance with respect to the policies of insurance required by this Lease or duplicate originals of all such policies. Landlord, upon reasonable notice, may inspect and copy any policies of insurance, and any records relating thereto kept and maintained by Tenant.

 

12.7                        Adjustment in the Event of Loss.

 

Except as otherwise provided herein, all insurance proceeds payable with respect to any damage or destruction to the Premises (but not with respect to Tenant’s personal property, it being understood that insurance proceeds allocable to Tenant’s personal property shall be payable directly to Tenant) shall be payable to Landlord and Tenant, jointly, to be held in an interest bearing account. If Tenant and Landlord undertake to repair said damage in accordance with Article 15 below, the proceeds shall be made available to Tenant as to the tenant improvements and to Landlord as to the Building and Common Area used to fund the reconstruction. In all other events, the proceeds shall be the sole property of Landlord except otherwise expressly provided herein. Landlord shall be entitled to compromise, adjust or settle any and all claims with respect to insurance carried by it covering the Premises. Each party agrees to execute and deliver to the other party such releases, endorsements and other instruments as the other party reasonably may require in order to compromise, adjust or settle any insurance claim which such other party shall be entitled to compromise, adjust or settle pursuant to this paragraph and to enable the other party or its designee to collect such insurance proceeds as are payable in respect of such claim.

 

12.8                        Proration Upon Termination.

 

If any of the insurance required to be carried by Tenant hereunder is still in effect at the termination of this Lease, Landlord may elect to terminate such insurance, or Landlord shall reimburse Tenant for the pro rata portion of the premium paid by Tenant for such insurance based upon the number of days remaining unexpired in such insurance.

 

12.9                        Waiver of Subrogation.

 

To the extent permitted by law and without affecting the coverage provided by insurance required to be maintained hereunder, Landlord and Tenant each waive any right to recover against the other with respect to (i) damage to property, (ii) damage to the Premises or any part thereof, or (iii) claims arising by reason of any of the foregoing, but only to the extent that any of the foregoing damages and claims under clauses (i)-(iii) hereof are covered, and only to the extent of such coverage, by casualty insurance actually carried by either Landlord or Tenant. This provision is intended to waive fully, and for the benefit of each party, any rights and claims which might give rise to a right of subrogation in any insurance carrier. Each party shall procure a clause or endorsement on any casualty insurance policy denying to the insurer rights of subrogation against the other party to the extent rights have been waived by the insured prior to the occurrence of injury or loss. Coverage provided by insurance maintained by Tenant shall not be limited, reduced or diminished by virtue of the subrogation waiver herein contained.

 

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12.10                 Indemnification.

 

(a)                                 Tenant’s Indemnification Obligations.

 

Tenant shall indemnify, defend, and hold Landlord and its lenders, agents, employees, directors, officers, managers, members, partners, affiliates, independent contractors, and property managers (collectively, “Landlord’s Agents”  or “Agents”) harmless from and against any and all claims, demands, liability, loss or damage, whether for injury to or death of persons or damage to real or personal property, arising out of or in connection with the Premises, Tenant’s use of the Premises, any activity, work, or other thing done, permitted, or suffered by Tenant in or about the Buildings, or arising from any reason or cause whatsoever in connection with the use or occupancy of the Premises by any party during the Term of this Lease, except to the extent that the event giving rise to the claim, demand, liability, loss or damage was caused by the gross negligence or willful misconduct of Landlord or Landlord’s Agents. Tenant shall further indemnify, defend, and hold Landlord and Landlord’s Agents harmless against and from any and all claims arising from any breach or default in the performance of any obligation on Tenant’s part to be performed under the terms of this Lease, or arising from any act or negligence of Tenant or any officer, agent, employee, guest, or invitee of Tenant, and from and against all costs, attorneys’ fees, expenses, and liabilities incurred as a result of any such claim or any action or proceeding brought thereon. In any case, action, or proceeding brought against Landlord or Landlord’s Agents by reason of any such claim, Tenant, upon notice from Landlord, shall defend the same at Tenant’s expense by counsel reasonably satisfactory to Landlord. Tenant, as a material part of the consideration to Landlord, hereby assumes all risk of damage to property or injury to persons in, upon, or about the Premises from any cause arising prior to the later of the termination of this Lease or the date Tenant has performed all obligations under Section 10.1(d) and is no longer in possession of the Premises (except for such damage or injury caused by Landlord’s or Landlord’s Agents’ willful misconduct or gross negligence), and Tenant hereby waives all claims in respect thereof against Landlord and Landlord’s Agents. Tenant’s obligation to indemnify under this paragraph shall include attorneys’ fees, investigation costs, and other reasonable costs, expenses, and liabilities incurred by Landlord and Landlord’s Agents. If the ability of Tenant to use the Premises or the Buildings is interrupted for any reason, Landlord and Landlord’s Agents shall not be liable to Tenant for any loss or damages occasioned by such loss of use, except to the extent such loss or damages is caused by Landlord’s or its Agents’ willful misconduct or gross negligence.

 

(b)                                 Landlord’s Indemnification Obligations.

 

Landlord shall indemnify, defend and hold Tenant and its members, partners, shareholders, officers, directors, agents and employees harmless from any and all liability for injury to or death of any person, or loss of or damage to the property of any person, and all actions, claims, demands, costs (including, without limitation, reasonable attorneys’ fees), damages or expenses of any kind arising therefrom which may be brought or made against Tenant or which Tenant may pay or incur, to the extent such liabilities or other matters arise in, on or about the Premises by reason of the gross negligence or willful misconduct or omission by Landlord or Landlord’s Agents. Landlord shall further indemnify, defend, and hold Tenant and its members, partners, shareholders, officers, directors, agents and employees harmless against and from any and all claims arising from any breach or default in the performance of any

 

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obligation on Landlord’s part to be performed under the terms of this Lease, and from and against all costs, attorneys’ fees, expenses, and liabilities incurred as a result of any such claim or any action or proceeding brought thereon. In any case, action, or proceeding brought against Tenant or its members, partners, shareholders, officers, directors, agents and employees by reason of any such claim, Landlord, upon notice from Tenant, shall defend the same at Landlord’s expense by counsel reasonably satisfactory to Tenant.

 

12.11                  Limitation on Landlord Liability.

 

Neither Landlord nor Landlord’s Agents shall be liable for loss or damage to any property by theft or otherwise, or for any injury to or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water, or rain which may leak from any part of the Buildings or from the pipes, appliances, or plumbing works therein or from the roof, street, or subsurface or from any other place resulting from dampness or any other cause whatsoever, except to the extent caused by the gross negligence or willful misconduct of Landlord or Landlord’s Agents. Neither Landlord nor Landlord’s Agents, shall be liable for interference with or loss of business by Tenant. Tenant shall give prompt written notice to Landlord in case of fire or accidents in the Premises or in the Buildings or of defects therein or in the fixtures or equipment belonging to Landlord. If Landlord is in default of this Lease, and as a consequence. Tenant recovers a money judgment against Landlord, the judgment shall be satisfied only out of the proceeds of sale received on execution of the judgment and levy against the right, title, and interest of Landlord in the Premises, and out of rent or other income from the Premises receivable by Landlord or out of the consideration received by Landlord from the sale or other disposition of all or any part of Landlord’s right, title, and interest in the Premises. Landlord’s Agents shall not be personally liable for any deficiency except to the extent liability is based upon willful misconduct. If Landlord is a partnership, joint venture, or limited liability company, the partners or members of such partnership or limited liability company, as the case may be, shall not be personally liable and no partner or member of Landlord (or of any affiliated entity) shall be sued or named as a party in any suit or action, or service of process be made against any partner or member of Landlord (or of any affiliated entity), except as may be necessary to secure jurisdiction of the partnership, joint venture, or limited liability company or to the extent liability is caused by willful misconduct. If Landlord is a corporation, the shareholders, directors, officers, employees, and/or agents of such corporation shall not be personally liable and no shareholder, director, officer, employee, or agent of Landlord shall be sued or named as a party in any suit or action, or service of process be made against any shareholder, director, officer, employee or agent of Landlord, except as may be necessary to secure jurisdiction of the corporation. No partner, member, shareholder, director, employee, or agent of Landlord (or of any affiliated entity) shall be required to answer or otherwise plead to any service of process and no judgment will be taken or writ of execution levied against any partner, shareholder, director, employee, or agent of Landlord.

 

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13.                               SUBLEASE AND ASSIGNMENT.

 

13.1                        Assignment and Sublease of Building.

 

(a)                                 Consent Required.

 

Except in connection with a Permitted Transfer, Tenant shall neither voluntarily nor by operation of law assign, sell, encumber, pledge or otherwise transfer all or any part of Tenant’s leasehold estate hereunder, or permit any other person (excepting Tenant’s agents and employees) to occupy the Premises or any portion thereof, without Landlord’s prior written consent, which consent shall be not be unreasonably withheld, delayed or conditioned Consent by Landlord to one or more assignments of this Lease or to one or more sublettings of the Premises shall not constitute a waiver of Landlord’s right to require consent to any subsequent assignment, subletting or other transfer. If Tenant is a corporation, unincorporated association or partnership, the transfer, assignment or hypothecation of any stock or interest in such corporation, association or partnership in the aggregate in excess of twenty-five percent (25%) of all outstanding stock or interests, or liquidation thereof, shall be deemed an assignment within the meaning and provisions of this section and the sale of all or substantially all of the assets of Tenant shall be deemed an assignment within the meanings and provisions of this section. The foregoing sentence shall not apply to: (i) any corporation or partnership which is a reporting company under the Securities Exchange Act of 1934, or (ii) a sale to an entity with a net worth, as designated in its most recent financial statement (no older than 3 months), equal to or greater than Tenant’s net worth on the Effective Date. Tenant shall reimburse Landlord for all of Landlord’s reasonable costs and attorneys’ fees incurred in conjunction with the processing and documentation of any required consent to assignment, subletting, transfer, change of ownership or hypothecation of this Lease or Tenant’s interest in and to the Premises, not to exceed One Thousand Dollars ($1,000) per request plus reasonable out-of-pocket expenses payable to third parties. Any purported sublease or assignment of Tenant’s interest in this Lease requiring but not having received Landlord’s consent thereto (to the extent such consent is required hereunder) shall be void.

 

(b)                                 Permitted Transfers.

 

Notwithstanding the foregoing, (i) any bona fide financing or capitalization, including a public offering of the common stock of Tenant, shall not be deemed to be an assignment hereunder; and (ii) Tenant shall have the right to assign this Lease or sublet the Buildings, or any portion thereof, without Landlord’s consent, to any Affiliate of Tenant, or to any entity which results from a merger, reorganization or consolidation with Tenant, or to any entity which acquires substantially all of the stock or assets of Tenant as a going concern (hereinafter each a “Permitted Transfer”).  For purposes of the preceding sentence, an “Affiliate” of Tenant shall mean any entity in which Tenant owns at least a twenty five percent (25%) equity interest, any entity which owns at least a twenty five percent (25%) equity interest in Tenant and/or any entity which is related to Tenant by a chain of ownership interests involving at least twenty five percent (25%) equity interest at each level in the chain. Landlord shall have no right to terminate this Lease in connection with, and shall have no right to any sums or other economic consideration resulting from, any Permitted Transfer. The transferee under such Permitted Transfer shall be and remain subject to all of the terms and provisions of this Lease.

 

(c)                                  Consent Required.

 

Landlord’s consent may be based upon a determination that the same type, class, nature and quality of business, services, management and financial soundness of ownership shall exist after the proposed assignment or subletting and, provided further, that each and every covenant,

 

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condition and obligation imposed upon Tenant by this Lease and each and every right, remedy and benefit afforded Landlord by this Lease and the underlying purpose of this Lease is not thereby impaired or diminished. The determination by Landlord as to whether consent will be granted in any specific instance may be based on, without limitation, the following factors, which shall be in Landlord’s reasonable discretion: (a) whether the transferee’s use of the Premises will be compatible with the provisions of this Lease; (b) the financial capacity of the transferee; (c) the business reputation of the transferee; (d) the quality and type of the business operations of the transferee; and (e) the business experience of the proposed transferee. This list of factors is not intended to be exclusive, and Landlord may rely on such other basis for judgment as may apply from time to time.

 

(d)                                 Procedure to Obtain Consent.

 

If Tenant desires at any time to assign this Lease or to sublet the Premises or any portions thereof, it first shall notify Landlord of its desire to do so and shall submit in writing to Landlord (i) the name and legal composition of the proposed subtenant or assignee; (ii) the nature of the proposed subtenant’s or assignee’s business to be carried on in the Premises; (iii) the terms and provisions of the proposed sublease or assignment and all transfer documents relating to the proposed transfer; and (iv) such reasonable business and financial information as Landlord may request concerning the proposed subtenant or assignee. Any request for Landlord’s approval of a sublease or assignment shall be accompanied with a check in such reasonable amount as Landlord shall advise for the cost of review and preparation, including reasonable attorneys’ fees, of any documents relating to such proposed transfer, not to exceed One Thousand Dollars ($1,000) for each transfer plus reasonable out-of-pocket expenses payable to third parties. The provisions and conditions of any proposed sublease or assignment must not be inconsistent with any provision of this Lease, and must address all matters contained in this Lease. In addition, the transferee must expressly assume all of the obligations of Tenant under this Lease. Notwithstanding the assumption of the obligations of this Lease by the transferee, no subletting or assignment, even with the consent of Landlord, shall relieve Tenant of its continuing obligation to pay the rent and perform all the other obligations to be performed by Tenant hereunder. The obligations and liability of Tenant hereunder shall continue notwithstanding the fact that Landlord may accept rent and other performance from the transferee. The acceptance of rent by Landlord from any other person shall not be deemed to be a waiver by Landlord of any provision of this Lease or to be a consent to any assignment or subletting.

 

(e)                                  Sublease of Phase 2A.

 

In the event of any sublease of Phase 2A, in addition to any other payment obligation of Tenant hereunder, Tenant shall remit to Landlord, as additional rent, as and when received by Tenant, all net subrents received from a subtenant in excess of $2.00 per rentable square foot per month. For purposes of this section “net subrents” are defined as all rents received from a subtenant however designated, net of any out-of-pocket costs incurred by Tenant to sublease the space and net of any payments received from a subtenant as reimbursement of operating expenses, taxes, utilities or service fees.

 

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13.2                        Rights of Landlord: Effect of Landlord’s Consent.

 

Consent by Landlord to one or more assignments of this Lease, or to one or more sublettings of the Buildings or any portion thereof, or collection of rent by Landlord from any assignee or sublessee, shall not operate to exhaust Landlord’s rights under this Article 13, nor constitute consent to any subsequent assignment or subletting. No assignment of Tenant’s interest in this Lease and no sublease shall relieve Tenant of its obligations hereunder, notwithstanding any waiver or extension of time granted by Landlord to any assignee or sublessee, or the failure of Landlord to assert its rights against any assignee or sublessee, and regardless of whether Landlord’s consent thereto is given or required to be given hereunder. In the event of a default by any assignee, sublessee or other successor of Tenant in the performance of any of the terms or obligations of Tenant under this Lease, Landlord may proceed directly against Tenant without the necessity of exhausting remedies against any such assignee, sublessee or other successor.

 

13.3                        Advertising.

 

In no event shall Tenant display on or about the Premises any signs for the purpose of advertising the Premises for assignment, subletting or other transfer of rights, without the Landlord’s prior consent, which shall not be unreasonably withheld or delayed. Landlord shall not display on or about the Premises any signs for the purpose of advertising any of the Real Property for lease, subletting, assignment or rent except with the consent of Tenant, which consent shall not be unreasonably withheld or delayed.

 

13.4                        Writing Required.

 

Each Permitted Transfer, permitted assignment or sublease shall be consummated by an instrument in writing executed by the transferor and transferee in form satisfactory to Landlord. Each assignee and subtenant shall agree in writing for the benefit of the Landlord herein to assume all obligations of Tenant hereunder which are applicable to the space subject to the assignment or sublease and any associated common areas, including the payment of all amounts due or to become due under this Lease directly to the Landlord. At least one executed copy of such written instrument shall be delivered to the Landlord.

 

13.5                        Transfer Premiums.

 

If Tenant assigns or sublets its rights under this Lease, Tenant shall pay to Landlord as additional rent, after Tenant has recovered any relevant leasing commissions, costs of tenant improvements and other expenses of the assignment or sublease, the unamortized (over the Term of the Lease) costs of any tenant improvements consented to by Landlord paid for by Tenant prior to such Transfer, one-half (1/2) of all such excess consideration due and payable to Tenant from said assignment or sublease to the extent said consideration exceeds the rent or a pro rata portion of the rent, in the event only a portion of the Premises is sublet or assigned.

 

14.                               RIGHT OF ENTRY AND QUIET ENJOYMENT.

 

14.1                        Right of Entry.

 

Landlord and its authorized representatives shall have the right to enter the Buildings at any time during the Term of this Lease during normal business hours when accompanied by a

 

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representative of Tenant and upon not less than twenty-four (24) hours prior notice, except in the case of emergency (in which event no notice and no accompaniment shall be required and entry may be made at any time), for the purpose of inspecting and determining the condition of the Buildings or for any other proper purpose including, without limitation, to make repairs, replacements or improvements which Landlord may be entitled to make hereunder, to show the Buildings to prospective purchasers, lenders and investors, to show the Buildings to prospective tenants (but only during the final eighteen (18) months of the Term of this Lease), and to post notices of nonresponsibility. Landlord shall not be liable for inconvenience, annoyance, disturbance, loss of business, quiet enjoyment or other damage or loss to Tenant by reason of making any repairs or performing any work upon the Premises or by reason of erecting or maintaining any protective barricades in connection with any such work, and the obligations of Tenant under this Lease shall not thereby be affected in any manner whatsoever, provided, however, Landlord shall use its best reasonable efforts to minimize the inconvenience to Tenant’s normal business operations caused thereby.

 

14.2                        Quiet Enjoyment.

 

Landlord covenants that Tenant, upon paying the rent and performing its obligations hereunder and subject to all the terms and conditions of this Lease, shall peacefully and quietly have, hold and enjoy the Premises throughout the Term of this Lease, or until this Lease is terminated as provided by this Lease.

 

15.                               CASUALTY AND TAKING.

 

15.1                        Damage or Destruction.

 

(a)                                 Termination Rights.

 

If the Buildings, or the Common Areas necessary for Tenant’s use and occupancy of the Premises, are damaged or destroyed in whole or in part under circumstances in which (i) repair and restoration is permitted under applicable governmental laws, regulations and building codes then in effect and (ii) repair and restoration reasonably can be completed within a period of one (1) year (or, in the case of an occurrence during the last year of the Term of this Lease, within a period of sixty (60) days) following the date of the occurrence, then Landlord, as to the Buildings and Common Areas and the tenant improvements, shall commence and complete, with all due diligence and as promptly as is reasonably practicable under the conditions then existing, all such repair and restoration as may be required to return the affected portions of the Real Property to a condition comparable to that existing immediately prior to the occurrence. In the event of damage or destruction the repair of which is not permitted under applicable governmental laws, regulations and building codes then in effect, or if such damage or destruction (despite being repaired to the extent then permitted under applicable governmental laws, regulations and building codes) would materially impair Tenant’s ability to conduct its business in the Premises, then either party may terminate this Lease as of the date of the occurrence by giving written notice to the other within sixty (60) days after the date of the occurrence; if neither party timely elects such termination, or if such damage or destruction after being repaired would not materially impair Tenant’s ability to conduct its business in the Premises, then this Lease shall continue in full force and effect, except that there shall be an equitable adjustment in monthly

 

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Minimum Rental and of Tenant’s Operating Cost Share, based upon the extent to which Tenant’s ability to conduct its business in the Premises is impaired, and Landlord shall restore the Common Areas and Building and tenant improvements to a complete architectural whole and to a functional condition. In the event of damage or destruction which cannot reasonably be repaired within one (1) year (or, in the case of an occurrence during the last twenty-four (24) months of the Term of this Lease, within a period of sixty (60) days) following the date of the occurrence, then either Landlord or Tenant, at its election, may terminate this Lease as of the date of the occurrence by giving written notice to the other within thirty (30) days after the date of the occurrence; if neither party timely elects such termination, then this Lease shall continue in full force and effect and Landlord shall repair and restore applicable portions of the Real Property in accordance with the first sentence of this Section 15. Landlord and Tenant agree that the terms of this Lease shall govern the effect of any damage to or destruction of the Project with respect to termination of this Lease and hereby waive the provisions of any present or future statute to the extent inconsistent herewith.

 

(b)                                 Limitations on Parties’ Obligations.

 

The obligations of Landlord pursuant to Section 15.1(a) are subject to the following limitations:

 

(i)                                             If the occurrence results from a peril which is required to be insured pursuant to Section 12.1(c) above, the obligations of Landlord shall not exceed the amount of insurance proceeds received from insurers (or, in the case of any failure to maintain required insurance, proceeds that reasonably would have been available if the required insurance had been maintained) by reason of such occurrence, plus the amount of the permitted deductible (provided that Landlord shall be obligated to use its best efforts to recover any available proceeds from the insurance which it is required to maintain pursuant to the provisions of Article 12, and, if such proceeds (including, in the case of a failure to maintain required insurance, any proceeds that reasonably would have been available) are insufficient, either party may terminate the Lease unless the other party promptly elects and agrees, in writing, to contribute the amount of the shortfall; and

 

(ii)                                          If the occurrence results from a peril which is not required to be insured pursuant to Article 12 above and is not actually insured, Landlord shall be required to repair and restore the Building and Common Areas and tenant improvements to the extent necessary for Tenant’s continued use and occupancy of the Buildings, provided that Landlord’s obligation to repair and restore shall not exceed an amount equal to ten percent (10%) of the  replacement cost of the Building and Common Area improvements and ten percent (10%) of the  replacement cost of the tenant improvements; if the cost to repair and restore exceeds such amount, then Landlord may terminate this Lease unless the Tenant promptly elects and agrees, in writing, to contribute the amount of the shortfall.

 

(c)                                  Entitlement to Insurance Proceeds.

 

If this Lease is terminated pursuant to the foregoing provisions of this Section 15.1 following an occurrence which is a peril actually insured or required to be insured against pursuant to Article 12, Landlord and Tenant agree (and any Lender shall be asked to agree) that

 

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such insurance proceeds, after repayment of the loan, shall be allocated between Landlord and Tenant in a manner which fairly and reasonably reflects their respective ownership rights under this Lease, as of the termination or expiration of the Term of this Lease, with respect to the improvements, fixtures, equipment and other items to which such insurance proceeds are attributable.

 

(d)                                 Abatement of Rent.

 

From and after the date of an occurrence resulting in damage to or destruction of the Buildings or of the Common Areas necessary for Tenants use and occupancy of the Buildings, and continuing until the earlier of the date repair and restoration thereof are completed or the date on which rental loss insurance payments cease, there shall be an equitable abatement of Minimum Rental and of Tenant’s Operating Cost Share of Operating Expenses based upon the degree to which Tenant’s ability to conduct its business in the Buildings is impaired.

 

15.2                        Condemnation.

 

(a)                                 Termination Rights.

 

If during the Term of this Lease the Real Property or Improvements or any substantial part of either, is taken by eminent domain or by reason of any public improvement or condemnation proceeding, or in any manner by exercise of the right of eminent domain (including any transfer in avoidance of an exercise of the power of eminent domain), then (i) this Lease shall terminate as to the entire affected Premises at Landlord’s election by written notice given to Tenant within sixty (60) days after the taking has occurred, and (ii) this Lease shall terminate as to the entire affected Premises at Tenant’s election, by written notice given to Landlord within thirty (30) days after the nature and extent of the taking have been finally determined, if the portion of the Premises taken is of such extent and nature as substantially to handicap, impede or permanently impair Tenant’s use of the balance of the Premises, and (iii) this Lease shall remain in full force and effect as to the remaining portion of the Premises. If Tenant elects to terminate this Lease, as to the affected Premises, Tenant shall also notify Landlord of the date of termination, which date shall not be earlier than thirty (30) days nor later than ninety (90) days after Tenant has notified Landlord of Tenant’s election to terminate, except that this Lease shall terminate on the date of taking if such date falls on any date before the date of termination designated by Tenant. If neither party elects to terminate this Lease as hereinabove provided, this Lease shall continue in full force and effect (except that there shall be an equitable abatement of Minimum Rental and of Tenant’s Operating Cost Share of Operating Expenses based upon the degree to which Tenant’s ability to conduct its business in the Premises is impaired), Landlord shall restore the Building and Common Area and tenant improvements to a complete architectural whole and a functional condition and as nearly as reasonably possible to the condition existing before the taking. In connection with any such restoration, Landlord shall use its best efforts (including, without limitation, any necessary negotiation or intercession with its lender, if any) to ensure that any severance damages or other condemnation awards intended to provide compensation for rebuilding or restoration costs are promptly collected and made available to Tenant and Landlord subject only, to such payment controls as either party or its lender may reasonably require in order to ensure the proper application of such proceeds toward the restoration of the Improvements. Each party waives the provisions of Code of Civil

 

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Procedure Section 1265.130, allowing either party to petition the Superior Court to terminate this Lease in the event of a partial condemnation of the Buildings or Real Property.

 

(b)                                 Limitations on Parties’ Obligations.

 

The obligations of Landlord pursuant to Section 15.2(a) are subject to the following limitations:

 

(i)                                             Landlord’s obligation to repair and restore shall not exceed, net of any condemnation awards or other proceeds available for and allocable to such restoration as contemplated in Section 15.2(a), an amount equal to ten percent (10%) of the replacement cost of the Building and Common Area improvements and an amount equal to ten percent (10%) of the replacement cost of the tenant improvements; if the replacement cost exceeds such amount, then Landlord may terminate this Lease unless Tenant promptly elects and agrees, in writing, to contribute the amount of the shortfall; and

 

(ii)                                          If this Lease is terminated pursuant to the foregoing provisions of this Section 15.2, or if this Lease remains in effect but any condemnation awards or other proceeds become available as compensation for the loss or destruction of any of the Improvements, then Landlord and Tenant agree (and any Real Property lender shall be asked to agree) that such proceeds shall be allocated between Landlord and Tenant, respectively, in the respective proportions in which Landlord and Tenant would have shared, under Section 15.1(c), the proceeds of any insurance proceeds following loss or destruction of the applicable Improvements by an insured casualty.

 

15.3                        Reservation of Compensation.

 

Landlord reserves, and Tenant waives and assigns to Landlord, all rights to any award or compensation for damage to the Improvements and the Real Property, but not the leasehold estate created hereby, accruing by reason of any taking in any public improvement, condemnation or eminent domain proceeding or in any other manner by exercise of the right of eminent domain or of anything lawfully done by public authority, except that (a) Tenant shall be entitled to any and all compensation or damages expressly awarded to Tenant on account of Tenant’s loss of the leasehold estate and Tenant’s moving expenses, trade fixtures and equipment and any leasehold improvements installed by Tenant in the Buildings at its own sole expense, but only to the extent Tenant would have been entitled to remove such items at the expiration of the Term of this Lease and then only to the extent of the then remaining unamortized value of such improvements computed on a straight-line basis over the Term of this Lease, and (b) any condemnation awards or proceeds described in Section 15.2(b)(ii) shall be allocated and disbursed in accordance with the provisions of Section 15.2(b)(ii), notwithstanding any contrary provisions of this Section 15.3.

 

15.4                        Restoration of Improvements.

 

In connection with any repair or restoration of Improvements following a casualty or taking as hereinabove set forth, the party responsible for such repair or restoration shall, to the extent possible, return such Improvements to a condition substantially equal to that which existed immediately prior to the casualty or taking. To the extent such party wishes to make material

 

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modifications to such Improvements, such modifications shall be subject to the prior written approval of the other party (not to be unreasonably withheld, delayed or conditioned), except that no such approval shall be required for modifications that are required by applicable governmental authorities as a condition of the repair or restoration, unless such required modifications would substantially impair or impede Tenant’s conduct of its business in the Buildings (in which case any such modifications in the Building shall require Tenant’s consent, not unreasonably withheld, delayed or conditioned) or would materially affect the exterior appearance, the structural integrity or the mechanical or other operating systems of the Buildings (in which case any such modifications shall require Tenant’s consent, not to be unreasonably withheld, delayed or conditioned).

 

16.                               DEFAULT.

 

16.1                        Events of Default.

 

The occurrence of any of the following shall constitute an event of default on the part of Tenant:

 

(a)                                 Nonpayment.

 

Failure to pay, when due, any amount payable to Landlord hereunder, such failure continuing for a period of five (5) business days after written notice of such failure;

 

(b)                                 Other Obligations.

 

Failure to perform any obligation, agreement or covenant under this Lease other than those matters specified in subsection (a) hereof, such failure continuing for thirty (30) days after written notice of such failure; provided, however, that if such failure is curable in nature but cannot reasonably be cured within such 30-day period, then Tenant shall not be in default if, and so long as, Tenant promptly (and in all events within such 30-day period) commences such cure and thereafter diligently pursues such cure to completion; and provided further, however, that any such notice shall be in lieu of, and not in addition to, any notice required under California Code of Civil Procedure Section 1161 et seq., as amended from time to time. Notwithstanding the foregoing, if any such failure on the part of Tenant affects or threatens to affect the health or safety of others, or would result in the destruction of property, Tenant shall immediately begin to cure and shall use its diligent and best efforts in pursuing said cure to completion (it being understood and agreed that Landlord shall not be entitled to exercise any remedy to terminate this Lease unless and until such failure shall have continued for thirty (30) days after written notice of such failure);

 

(c)                                  General Assignment.

 

A general assignment by Tenant for the benefit of creditors;

 

(d)                                 Bankruptcy.

 

The filing of any voluntary petition in bankruptcy by Tenant, or the filing of an involuntary petition by Tenant’s creditors, which involuntary petition remains undischarged for a

 

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period of sixty (60) days. In the event that under applicable law the trustee in bankruptcy or Tenant has the right to affirm this Lease and continue to perform the obligations of Tenant hereunder, such trustee or Tenant shall, in such time period as may be permitted by the bankruptcy court having jurisdiction, cure all defaults of Tenant hereunder outstanding as of the date of the affirmance of this Lease and provide to Landlord such adequate assurances as may be necessary to ensure Landlord of the continued performance of Tenant’s obligations under this Lease. Specifically, but without limiting the generality of the foregoing, such adequate assurances must include assurances that the Buildings continue to be operated only for the use permitted hereunder. The provisions hereof are to assure that the basic understandings between Landlord and Tenant with respect to Tenant’s use of the Premises and the benefits to Landlord therefrom are preserved, consistent with the purpose and intent of applicable bankruptcy laws;

 

(e)                                  Receivership.

 

The employment of a receiver appointed by court order to take possession of substantially all of Tenants assets or its interest in the Buildings, if such receivership remains undissolved for a period of sixty (60) days;

 

(f)                                   Attachment.

 

The attachment, execution or other judicial seizure of all or substantially all of Tenant’s assets or its interest in the Buildings, if such attachment or other seizure remains undismissed or undischarged for a period of sixty (60) days after the levy thereof; or

 

(g)                                  Insolvency.

 

The admission by Tenant in writing of its inability to pay its debts as they become due, the filing by Tenant of a petition seeking any reorganization or arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, the filing by Tenant of an answer admitting or failing timely to contest a material allegation of a petition filed against Tenant in any such proceeding or, if within sixty (60) days after the commencement of any proceeding against Tenant seeking any reorganization or arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such proceeding shall not have been dismissed.

 

16.2                        Remedies Upon Tenant’s Default.

 

(a)                                 Re-entry; Termination.

 

Upon the occurrence of any event of default described in Section 16.1 hereof, Landlord, in addition to and without prejudice to any other rights or remedies it may have, shall have the immediate right to re-enter the Buildings or any part thereof and repossess the same, expelling and removing therefrom all persons and property (which property may be stored in a public warehouse or elsewhere at the cost and risk of and for the account of Tenant). In addition to or in lieu of such re-entry, and without prejudice to any other rights or remedies it may have, Landlord shall have the right either (i) to terminate this Lease and recover from Tenant all damages incurred by Landlord as a result of Tenant’s default, as hereinafter provided, or (ii) to

 

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continue this Lease in effect and recover rent and other charges and amounts as they become due.

 

(b)                                 Continuation of Lease.

 

Even if Tenant has breached this Lease and abandoned the Buildings, this Lease shall continue in effect for so long as Landlord does not terminate Tenant’s right to possession and Landlord may enforce all of its rights and remedies under this Lease, including the right to recover rent as it becomes due, and Landlord, without terminating this Lease, may exercise all of the rights and remedies of a lessor under 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 right to sublet or assign, subject only to reasonable limitations), or any successor Code section. Acts of maintenance, preservation or efforts to relet the Buildings or the appointment of a receiver upon application of Landlord to protect Landlord’s interests under this Lease shall not constitute a termination of Tenant’s right to possession.

 

(c)                                  Remedies.

 

If Landlord terminates this Lease pursuant to this Section 16.2, Landlord shall have all of the rights and remedies of a landlord provided by Section 1951.2 of the Civil Code of the State of California, or any successor Code section, which remedies include Landlord’s right to recover from Tenant (i) the worth at the time of award of the unpaid rent and additional rent and Tenant’s Operating Cost Share of Operating Expense which had been earned at the time of termination, (ii) the worth at the time of award of the amount by which the unpaid rent and additional rent and Tenant’s Operating Cost Share of Operating Expense which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided, (iii) the worth at the time of award of the amount by which the unpaid rent and additional rent and Tenant’s Operating Cost Share of Operating Expense for the balance of the Term after the time of award exceeds the amount of such rental loss that Tenant proves could be reasonably avoided, and (iv) any other amount reasonably necessary to compensate Landlord for all the detriment proximately caused by Tenant’s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, the cost of recovering possession of the Buildings, expenses of reletting, including necessary repair, renovation and alteration of the Buildings, reasonable attorneys’ fees, and other reasonable costs. The “worth at the time of award” of the amounts referred to in clauses (i) and (ii) above shall be computed by allowing interest at twelve percent (12%) per annum from the date such amounts accrued to Landlord. The “worth at the time of award” of the amounts referred to in clause (iii) above shall be computed by discounting such amount at one percentage point above the discount rate of the Federal Reserve Bank of San Francisco at the time of award.

 

16.3                        Remedies Cumulative.

 

All rights, privileges and elections or remedies of Landlord contained in this Article 16 are cumulative and not alternative to the extent permitted by law and except as otherwise provided herein.

 

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16.4                        Landlord’s Default.

 

Landlord shall not be deemed to be in default of this Lease unless Landlord fails within a reasonable time (or the time specified herein, if applicable) to perform an obligation required to be performed by it. Tenant agrees to give Landlord and any lender designated by Landlord notice of any Landlord default, and a reasonable opportunity to cure such default.

 

17.                               SUBORDINATION, ATTORNMENT AND SALE.

 

17.1                        Subordination to Mortgage.

 

This Lease, and any sublease entered into by Tenant under the provisions of this Lease, shall be subject and subordinate to any ground lease, mortgage, deed of trust, sale/leaseback transaction or any other hypothecation for security now or hereafter placed upon the Buildings, the Real Property, or any of them, and the rights of any assignee of Landlord or of any ground lessor, mortgagee, trustee, beneficiary or leaseback lessor under any of the foregoing, and to any and all advances made on the security thereof and to ail renewals, modifications, consolidations, replacements and extensions thereof; provided, however, that such subordination in the case of any future ground lease, mortgage, deed of trust, sale/leaseback transaction or any other hypothecation for security placed upon the Buildings, the Real Property, or any of them shall be conditioned on Tenant’s receipt from the ground lessor, mortgagee, trustee, beneficiary or leaseback lessor of a Non-Disturbance Agreement in a form reasonably acceptable to Tenant (i) confirming that so long as Tenant is not in material default hereunder beyond any applicable cure period (for which purpose the occurrence of any event of default under Section 16.1 hereof shall be deemed to be “material”), Tenant’s rights hereunder shall not be disturbed by such person or entity and (ii) agreeing that the benefit of such Non-Disturbance Agreement shall be transferable to any transferee under a Permitted Transfer and to any other assignee or subtenant that is acceptable to the ground lessor, mortgagee, trustee, beneficiary or leaseback lessor at the time of transfer. Tenant agrees to execute such other commercially reasonable documentation as may be required by an institutional lender to evidence such subordination and to attorn to any such ground lessor, mortgagee, trustee, beneficiary or leaseback lessor in the event such party succeeds to Landlord’s interest hereunder and agrees to recognize this Lease. Moreover, Tenant’s obligations under this Lease shall be conditioned on Tenant’s receipt within thirty (30) days after mutual execution of this Lease, from any existing ground lessor, mortgagee, trustee, beneficiary or leaseback lessor currently owning or holding a security interest in the Real Property, of a Non-Disturbance Agreement in a form reasonably acceptable to Tenant confirming (i) that so long as Tenant is not in material default hereunder beyond any applicable cure period. Tenant’s rights hereunder shall not be disturbed by such person or entity and (ii) agreeing that the benefit of such Non-Disturbance Agreement shall be transferable to any transferee under a Permitted Transfer and to any other assignee or subtenant that is acceptable to the ground lessor, mortgagee, trustee, beneficiary or leaseback lessor at the time of transfer. If any mortgagee, trustee, beneficiary, ground lessor, sale/leaseback lessor or assignee elects in writing to have this Lease be an encumbrance upon the Real Property prior to the lien of its mortgage, deed of trust, ground lease or leaseback lease or other security arrangement and gives notice thereof to Tenant, this Lease shall be deemed prior thereto, whether this Lease is dated prior or subsequent to the date thereof or the date of recording thereof. Tenant, and any sublessee, shall execute such documents as may reasonably be requested by any mortgagee,

 

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trustee, beneficiary, ground lessor, sale/leaseback lessor or assignee to evidence the subordination herein set forth, subject to the conditions set forth above, or to make this Lease prior to the lien of any mortgage, deed of trust, ground lease, leaseback lease or other security arrangement, as the case may be. Upon any default by Landlord in the performance of its obligations under any mortgage, deed of trust, ground lease, leaseback lease or assignment, Tenant (and any sublessee) shall, notwithstanding any subordination hereunder, attorn to the mortgagee, trustee, beneficiary, ground lessor, leaseback lessor or assignee thereunder upon demand and become the tenant of the successor in interest to Landlord, at the option of such successor in interest, and shall execute and deliver any instrument or instruments confirming the attornment herein provided for.

 

17.2                        Sale of Landlord’s Interest.

 

Upon sale, transfer or assignment of Landlord’s entire interest in the Buildings and the Real Property, Landlord shall be relieved of its obligations hereunder with respect to liabilities accruing from and after the date of such sale, transfer or assignment.

 

17.3                        Estoppel Certificates.

 

Tenant or Landlord (the “Responding Party”)  as applicable, shall at any time and from time to time, within ten (10) days after written request by the other party (the “Requesting Party”), execute, acknowledge and deliver to the Requesting Party a certificate in writing stating: (i) that this Lease is unmodified and in full force and effect, or if there have been any modifications, that this Lease is in full force and effect as modified and stating the date and the nature of each modification; (ii) the date to which rental and all other sums payable hereunder have been paid; (iii) that the Requesting Party is not in default in the performance of any of its obligations under this Lease, that the certifying party has given no notice of default to the Requesting Party and that no event has occurred which, but for the expiration of the applicable time period, would constitute an event of default hereunder, or if the responding party alleges that any such default, notice or event has occurred, specifying the same in reasonable detail; and (iv) such other matters as may reasonably be requested by the Requesting Party or by any institutional lender, mortgagee, trustee, beneficiary, ground lessor, sale/leaseback lessor or prospective purchaser of the Real Property, or prospective sublessee or assignee of this Lease. Any such certificate provided under this Section 17.3 may be relied upon by any lender, mortgagee, trustee, beneficiary, assignee or successor in interest to the Requesting Party, by any prospective purchaser, by any purchaser on foreclosure or sale, by any grantee under a deed in lieu of foreclosure of any mortgage or deed of trust on the Real Property, by any subtenant or assignee, or by any other third party. Failure to execute and return within the required time any estoppel certificate requested hereunder, if such failure continues for five (5) days after a second written request by the Requesting Party for such estoppel certificate, shall be deemed to be an admission of the truth of the matters set forth in the form of certificate submitted to the Responding Party for execution.

 

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18.                               SECURITY.

 

18.1                                 Deposit.

 

Upon execution of the original Lease, Tenant deposited with Landlord the sum of $5,500,000. In lieu of a cash security deposit, Tenant elected to provide one or more irrevocable letters of credit, payable to Landlord, as a security deposit. Upon the execution of this Lease, the amount of such deposit shall be reduced to $1,375,000. At Tenant’s election, in lieu of a cash security deposit, Tenant may continue to provide one or more irrevocable letters of credit in amounts described above, payable to Landlord, and issued by an institution and in form reasonably satisfactory to Landlord. Such sums or the Letter of Credit (individually and collectively, the “Security Deposit”) shall be held by Landlord as security for the faithful performance of all of the terms, covenants, and conditions of this Lease to be kept and performed by Tenant during the Term hereof; provided that if at any time Tenant shall have maintained an investment grade credit rating of BBB or better by Standard and Poors for a consecutive twelve month period, Landlord shall return the Security Deposit to Tenant. Upon the execution of this Lease, Landlord shall promptly obtain the release of any Letters of Credit pledged as permitted in Section 18.2 below which exceed the amounts indicated above and shall return such Letters of Credit to Tenant. Upon such release and return, Tenant shall cause to be issued and delivered a substitute letter of credit in the amount of the required security deposit. If Tenant defaults with respect to any provision of this Lease, including, without limitation, the provisions relating to the payment of rental and other sums due hereunder, Landlord shall have the right, but shall not be required, to use, apply or retain all or any part of the Security Deposit for the payment of rental, unreimbursed Operating Expenses or any other amount which Landlord may spend or become obligated to spend by reason of Tenant’s default or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant’s default. Landlord may also apply the Security Deposit toward costs incurred to repair damages to the Premises or to clean and bring the Premises to good order, condition and repair during its Lease Term and upon expiration or sooner termination of this Lease. If any portion of the Security Deposit is so used or applied, Tenant shall, within five (5) days after written 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. Landlord shall be required to keep any deposit under this Section separate from Landlord’s general funds in an interest bearing account reasonably acceptable to Tenant, and Tenant shall be entitled to the interest thereon, to be paid to Tenant when and if the Security Deposit is refundable to Tenant. If Tenant fully and faithfully performs every provision of this Lease to be performed by it, the Security Deposit, or any balance thereof, together with all accrued interest, shall be returned to Tenant or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder, at the expiration of the Term of this Lease and after Tenant has vacated the Premises. In the event of termination of Landlord’s interest in this Lease, Landlord shall transfer all deposits then held by Landlord under this Section to Landlord’s successor in interest, whereupon Tenant agrees to release Landlord from all liability for the return of such deposit or the accounting thereof.

 

18.2                        Pledge of Security Deposit.

 

The Security Deposit may be pledged by Landlord as additional collateral to any lender having a security interest in the Real Property. The lender may use, apply or retain all or any part of the Security Deposit for the payment of Building Costs, but only in the event that lender shall have notified Landlord and Tenant that such Building Costs remain unpaid and the parties shall have failed within thirty (30) days following receipt of such notice to cure such nonpayment. For purposes of this Section, “Building Cost(s)”  shall mean any and all costs

 

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actually incurred in constructing the Building, Common Area and the related site improvements including, but not limited to, costs for demolition, grading, utility fees, architectural and engineering fees, permits, surveys, appraisals, insurance, legal and accounting fees, development overhead, construction management, blueprinting, equity fees, construction lender, permanent lender and mortgage banker fees, interest carry, site improvements, off-site improvements and tenant improvements. If any portion of the Security Deposit is so applied, upon the Phase 1 Rent Commencement Date, Tenant shall 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 constitute a material breach of this Lease.

 

19.                               MISCELLANEOUS.

 

19.1                                  Notices.

 

All notices, consents, waivers and other communications which this Lease requires or permits either party to give to the other shall be in writing and shall be deemed given when delivered personally (including delivery by private courier or express delivery service) or three (3) days after deposit in the United States mail, registered or certified mail, postage prepaid, assessed to the parties at their respective addresses as follows:

 

	
To Tenant:
    	
 
    	
150 Industrial Road
    
	
 
    	
 
    	
San Carlos, CA 94070
    
	
 
    	
 
    	
Attn: Ajay Bansal, Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
with a copy to:
    	
 
    	
150 Industrial Road
    
	
 
    	
 
    	
San Carlos, CA 94070
    
	
 
    	
 
    	
Attn: Paula Kasler, Esq.
    
	
 
    	
 
    	
 
    
	
and with a copy to:
    	
 
    	
Greenberg Traurig LLP
    
	
 
    	
 
    	
Attn: Toni Wise, Esq.
    
	
 
    	
 
    	
2000 University Avenue
    
	
 
    	
 
    	
East Palo Alto, CA 94303
    
	
 
    	
 
    	
Attn: Toni P. Wise, Esq.
    
	
 
    	
 
    	
 
    
	
To Landlord:
    	
 
    	
Inhale 201 Industrial Road L.P.
    
	
 
    	
 
    	
c/o Bernardo Property Advisors, Inc.
    
	
 
    	
 
    	
17140 Bernardo Center Dr., Suite 195
    
	
 
    	
 
    	
San Diego, CA 92128
    
	
 
    	
 
    	
Attn: Alan D. Gold
    
	
 
    	
 
    	
 
    
	
with a copy to:
    	
 
    	
Seltzer Caplan McMahon Vitek
    
	
 
    	
 
    	
2100 Symphony Towers
    
	
 
    	
 
    	
750 B Street
    
	
 
    	
 
    	
San Diego, CA 92101
    
	
 
    	
 
    	
Attn: David J. Dome, Esq.
    

 

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or to such other address as may be contained in a notice at least fifteen (15) days prior to the address change from either party to the other given pursuant to this Section. Rental payments and other sums required by this Lease to be paid by Tenant shall be delivered to Landlord at Landlord’s address provided in this Section, or to such other address as Landlord may from time to time specify in writing to Tenant, and shall be deemed to be paid only upon actual receipt.

 

19.2                        Successors and Assigns.

 

The obligations of this Lease shall run with the land, and this Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the original Landlord named herein and each successive Landlord under this Lease shall be liable only for obligations accruing during the period of its ownership of the Real Property, and any liability for obligations accruing after termination of such ownership shall terminate as of the date of such termination of ownership and shall pass to the successor lessor.

 

19.3                        No Waiver.

 

The failure of Landlord to seek redress for violation, or to insist upon the strict performance, of any covenant or condition of this Lease shall not be deemed a waiver of such violation, or prevent a subsequent act which would originally have constituted a violation from having all the force and effect of an original violation.

 

19.4                        Severability.

 

If any provision of this Lease or the application thereof is held to be invalid or unenforceable, the remainder of this Lease or the application of such provision to persons or circumstances other than those as to which it is invalid or unenforceable shall not be affected thereby, and each of the provisions of this Lease shall be valid and enforceable, unless enforcement of this Lease as so invalidated would be unreasonable or grossly inequitable under all the circumstances or would materially frustrate the purposes of this Lease.

 

19.5                        Litigation Between Parties.

 

In the event of any litigation or other dispute resolution proceedings between the parties hereto arising out of or in connection with this Lease, the prevailing party shall be reimbursed for all reasonable costs, including, but not limited to, reasonable accountants’ fees and attorneys’ fees, incurred in connection with such proceedings (including, but not limited to, any appellate proceedings relating thereto) or in connection with the enforcement of any judgment or award rendered in such proceedings. “Prevailing Party”  within the meaning of this Section shall include, without limitation, a party who dismisses an action for recovery hereunder in exchange for payment of the sums allegedly due, performance of covenants allegedly breached or consideration substantially equal to the relief sought in the action.

 

19.6                        Surrender.

 

A voluntary or other surrender of this Lease by Tenant, or a mutual termination thereof between Landlord and Tenant, shall not result in a merger but shall, at the option of Landlord, operate either as an assignment to Landlord of any and all existing subleases and subtenancies, or

 

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a termination of all or any existing subleases and subtenancies. This provision shall be contained in any and all assignments or subleases made pursuant to this Lease.

 

19.7                        Interpretation.

 

The provisions of this Lease shall be construed as a whole, according to their common meaning, and not strictly for or against Landlord or Tenant. The captions preceding the text of each Section and subsection hereof are included only for convenience of reference and shall be disregarded in the construction or interpretation of this Lease.

 

19.8                     Entire Agreement.

 

This written Lease, together with the exhibits hereto, and that certain Redemption Agreement dated as of June 22, 2004, contains all the representations and the entire understanding between the parties hereto with respect to the subject matter hereof and replaces any prior agreements, including the prior lease, and any prior correspondence, memoranda or agreements. This Lease may be modified only by an agreement in writing signed by each of the parties.

 

19.9                        Governing Law.

 

This Lease and all exhibits hereto shall be construed and interpreted in accordance with and be governed by all the provisions of the laws of the State of California.

 

19.10                 No Partnership.

 

The relationship created by this lease between Landlord and Tenant is solely that of a lessor and lessee. Nothing contained in this Lease shall be construed as creating any type or manner of partnership, joint venture or joint enterprise with or between Landlord and Tenant. Neither party is the agent or representative of the other.

 

19.11           Financial Information.

 

From time to time Tenant shall promptly provide directly to prospective lenders and purchasers of the Real Property designated by Landlord such financial information pertaining to the financial status of Tenant as Landlord may reasonably request; provided, Tenant shall be permitted to provide such financial information in a manner which Tenant deems reasonably necessary to protect the confidentiality of such information. In addition, from time to time, Tenant shall provide Landlord with such financial information pertaining to the financial status of Tenant as Landlord may reasonably request. Landlord agrees that all financial information supplied to Landlord by Tenant shall be treated as confidential material, and shall not be disseminated to any party or entity (including any entity affiliated with Landlord) without Tenant’s prior written consent, except that Landlord shall be entitled to provide such information, subject to reasonable precautions to protect the confidential nature thereof, (i) to Landlord’s partners and professional advisors, solely to use in connection with Landlord’s execution and enforcement of this Lease, and (ii) to prospective lenders and/or purchasers of the Real Property, solely for use in connection with their bona fide consideration of a proposed financing or purchase of the Real Property, provided that such prospective lenders and/or

 

45

 

purchasers are not then engaged in businesses directly competitive with the business then being conducted by Tenant. For purposes of this Section, without limiting the generality of the obligations provided herein, it shall be deemed reasonable for Landlord to request copies of Tenant’s most recent audited annual financial statements, or, if audited statements have not been prepared, unaudited financial statements for Tenant’s most recent fiscal year, accompanied by a certificate of Tenant’s chief financial officer that such financial statements fairly present Tenant’s financial condition as of the date(s) indicated. Notwithstanding any other provisions of this Section 19.11, during any period in which Tenant has outstanding a class of publicly traded securities and is filing with the Securities and Exchange Commission, on a regular basis, Forms 10Q and 10K and any other periodic filings required under the Securities Exchange Act of 1934, as amended, it shall constitute sufficient compliance under this Section 19.11 for Tenant to furnish Landlord with copies of such periodic filings substantially concurrently with the filing thereof with the Securities and Exchange Commission.

 

Landlord and Tenant recognize the need of Tenant to maintain the confidentiality of information regarding its financial status and the need of Landlord to be informed of, and to provide to prospective lenders and purchasers of the Real Property financial information pertaining to, Tenant’s financial status. Landlord and Tenant agree to cooperate with each other in achieving these needs within the context of the obligations set forth in this Section.

 

19.12                 Costs.

 

Notwithstanding anything to the contrary contained in this Lease, if Tenant requests the consent of Landlord under any provision of this Lease for any act that Tenant proposes to do hereunder, including, without limitation, assignment or subletting of the Buildings or any portion thereof, Tenant shall, as a condition to doing any such act and the receipt of such consent, reimburse Landlord promptly for any and all reasonable costs and expenses incurred by Landlord in connection therewith (including, without limitation, reasonable attorneys’ fees) up to a maximum of $1,000 per request.

 

19.13                 Time.

 

Time is of the essence of this Lease, and of every term and condition hereof

 

19.14                 Brokers.

 

Each party represents and warrants that no other broker participated in the consummation of this Amended and Restated Lease and agrees to indemnify, defend and hold the other party harmless against any liability, cost or expense, including, without limitation, reasonable attorneys’ fees, arising out of any claims for brokerage commissions or other similar compensation in connection with any conversations, prior negotiations or other dealings by the indemnifying party with any other person making such claim.

 

19.15                 Memorandum of Lease.

 

At any time during the Term of this Lease, either party, at its sole expense, shall be entitled to record a memorandum of this Lease and, if either party so elects, both parties agree to

 

46

 

cooperate in the preparation, execution, acknowledgement and recordation of such document in reasonable form.

 

19.16                 Corporate Authority.

 

Each person signing this Lease on behalf of Tenant or Landlord warrants that he or she is fully authorized to do so and, by so doing, to bind the entity on whose behalf he or she is signing.

 

19.17                 Execution and Delivery.

 

This Lease may be executed in one or more counterparts and by separate parties on separate counterparts, but each such counterpart shall constitute an original and all such counterparts together shall constitute one and the same instrument.

 

19.18                 Survival.

 

Without limiting survival, provisions which would otherwise be implied or construed under applicable law, the provisions of Sections 2.5, 7.4, 9.2, 9.3, 9.4, 11.4, 12.10, 12.11, 19.5 and 19.11 hereof shall survive the termination of this Lease with respect to matters occurring prior to the expiration of this Lease.

 

19.19                 Waiver of Jury Trial.

 

The parties hereto shall, and they hereby do, waive trial by jury in any action or proceeding or counterclaim brought by either of the parties hereto against the other on any matters arising out of or in any way connected with this Lease.

 

19.20                 Exclusivity.

 

Landlord agrees that it shall not, during the Term of this Lease or any period during which Tenant occupies all or any portion of the Premises, lease or allow the use or occupancy of any portion of the Premises or the Buildings to or by any party which is a competitor of Tenant.

 

19.21                 Tenant’s Remedies.

 

Except to the extent expressly provided herein, no event or occurrence during the Lease Term is intended to allow Tenant the right to surrender or terminate this Lease or to relieve Tenant from any of its obligations hereunder, and Tenant waives any rights now or hereafter conferred upon it by statute or otherwise (except for rights conferred herein) to surrender or terminate this Lease or to claim any abatement or suspension of Rent or other sums payable hereunder.

 

19.22                 Security Measures.

 

Tenant acknowledges that the Rent payable to Landlord hereunder does not and will not include the cost of guard service or other security services and that Landlord shall have no obligation whatsoever to provide same. Tenant agrees that Landlord shall have no responsibility

 

47

 

for the protection of the Premises, Tenant, its agents and invitees or their property from the acts of third parties.

 

48

 

IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year first set forth above.

 

	
“Landlord” 
    	
“Tenant”
    
	
 
    	
 
    
	
Inhale 201 Industrial Road,   L.P.,
    	
Nektar Therapeutics (fka   Inhale
    
	
a California limited partnership 
    	
Therapeutic Systems, Inc.),
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    	
 
    
	
By SciMed Prop III, a California corporation,
    	
By:
    	
 
    
	
its General Partner
    	
Name:
    	
 
    
	
 
    	
Its:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By: 
    	
 
    	
 
    	
By: 
    	
/s/ Ajay Bansal
    
	
Name: 
    	
 
    	
 
    	
Name: 
    	
Ajay Bansal
    
	
Its: 
    	
 
    	
 
    	
Its: 
    	
CFO
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By: 
    	
 
    	
 
    	
By: 
    	
/s/ Ajit Gill
    
	
Name: 
    	
 
    	
 
    	
Name: 
    	
Ajit Gill
    
	
Its: 
    	
 
    	
 
    	
Its: 
    	
CEO
    

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year first set forth above.

 

	
“Landlord” 
    	
“Tenant”
    
	
 
    	
 
    
	
Inhale 201 Industrial Road,   L.P.,
    	
Nektar Therapeutics (fka   Inhale
    
	
a California limited partnership 
    	
Therapeutic   Systems, Inc.),
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
By SciMed Prop III, a California corporation,
    	
By:
    	
 
    
	
its General Partner 
    	
Name:
    	
 
    
	
 
    	
Its:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Gary A. Kreitzer
    	
 
    	
By:
    	
 
    
	
Name: 
    	
Gary A. Kreitzer
    	
 
    	
Name:
    	
 
    
	
Its: 
    	
E.V.P. 
    	
 
    	
Its:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By: 
    	
/s/ John Wilson
    	
 
    	
By:
    	
 
    
	
Name: 
    	
John Wilson 
    	
 
    	
Name:
    	
 
    
	
Its: 
    	
CFO 
    	
 
    	
Its:
    	
 
    

 

 

EXHIBITS

 

	
Exhibit A
    	
Real   Property Description
    
	
 
    	
 
    
	
Exhibit B
    	
Site   Plan
    
	
 
    	
 
    
	
Exhibit C
    	
Work   Letter
    

 

 

EXHIBIT A

 

REAL PROPERTY LEGAL DESCRIPTION

 

All that certain real property in the State of California, County of San Mateo, City of San Carlos more particularly described as follows:

 

ALL LANDS LYING WITHIN THE EXTERIOR BOUNDARIES OF THAT MAP ENTITLED “REVERSION TO ACREAGE OF THE LANDS OF ARNDT ELECTRONICS LYING WITHIN THE COUNTY OF SAN MATEO, BEING PARCELS 1, 2, 3 AND 4 AS SHOWN ON THAT CERTAIN PARCEL MAP FILED IN VOLUME 51 OF PARCEL MAPS AT PAGE 71 RECORDS OF SAN MATEO,” FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN MATEO COUNTY, STATE OF CALIFORNIA, ON OCTOBER 6, 1986 IN VOLUME 58 OF PARCEL MAPS AT PAGE 13.

 

	
ASSESSOR’S PARCEL NOS. 046-020-370
    	
JOINT PLANT NOS.
    	
 
    	
046-002-020-22A
    
	
 046-020-380
    	
 
    	
 
    	
046-002-020-22-01A
    
	
 
    	
 
    	
 
    	
046-002-020-22-02A
    
	
 
    	
 
    	
 
    	
046-002-020-22-03A
    
	
 
    	
 
    	
 
    	
046-002-020-23A
    
	
 
    	
 
    	
 
    	
046-002-020-23-01A
    

 

 

EXHIBIT B

 

SITE PLAN

 

(attached)

 

 

EXHIBIT C

 

Work Letter

 

 

WORK LETTER

 

This Work Letter (“Work Letter”) constitutes part of the Amended and Restated Build-to-Suit Lease dated as of August 17, 2004 (the “Lease”) between Inhale 201 Industrial Road L.P., a California Limited Partnership (“Landlord”) and Nektar Therapeutics (fka Inhale Therapeutic Systems, Inc.), a Delaware corporation (“Tenant”). The terms of this Work Letter are incorporated in the Lease for all purposes.

 

RECITALS

 

WHEREAS Landlord and Tenant have agreed in the Lease that Landlord shall provide a $100 per Usable Square Foot allowance for the construction of Tenant Improvements to Phase 2A (the “Phase 2A Allowance”); and

 

WHEREAS Landlord and Tenant agree that it would be in their respective best interests for the Landlord now to construct improvements to Phase 2A which would facilitate the subleasing of Phase 2A;

 

WHEREAS Landlord and Tenant agree that a portion of the Phase 2A Allowance should, be used to construct the Initial Phase 2A Improvements (defined below) and the balance of the Phase 2A Allowance be reserved for future improvements to Phase 2A.

 

AGREEMENT

 

NOW THEREFORE, the parties have entered into this Work Letter to augment and supplement the Lease as follows:

 

1.         Defined Terms.

 

(a)              Approved Plans. Plans and specifications to be prepared by the Architect for improvements within Phase 2A as approved by both Landlord and Tenant pursuant to Section 2(a) below, as modified to obtain Building Permits.

 

(b)              Architect. [To be determined]

 

(c)               Building Permits. The permits and approvals required to construct the Initial Phase 2A Improvements substantially in compliance with the Approved Plans, obtained pursuant to Section 2(b) below.

 

(d)              Completion. Construction of the Initial Phase 2A Improvements shall be deemed completed for purposes of this Work Letter upon the issuance of a written certificate signed by the Architect certifying that the Initial Phase 2A Improvements have been constructed (except for Punch List Work) in good and workman like condition, in compliance with the Approved Plans and Building Permits, and all required governmental inspections thereof have been passed.

 

 

(e)               Initial Phase 2A Improvements. The tenant improvements and other improvements within Phase 2A, shown on the Approved Plans, to be constructed within Phase 2A pursuant to the Lease and this Work Letter, to facilitate the subleasing of Phase 2 A..

 

(f)               Phase 2A. That portion of the Property defined as Phase 2A in the Lease.

 

(g)               Punch List Work. Minor corrections of construction and minor mechanical adjustments required to cause any applicable portion of the Initial Phase 2A Improvements as constructed to conform to the Approved Plans and Building Permits in all material respects. Landlord shall develop the Punch List following inspection of the Initial Phase 2A Improvements in consultation with the Architect.

 

2.         Plans and Construction.

 

Landlord and Tenant shall comply with the procedures set forth in this Section 2 in preparing, delivering and approving matters relating to the Initial Phase 2A Improvements.

 

(a)              Architect shall develop the scope, plans and specifications for the Initial Phase 2A Improvements, subject to the supervision of Landlord and the approval of the Tenant, which shall not be unreasonably withheld or delayed.

 

(b)              The Approved Plans shall be submitted to the City of San Carlos for approval and issuance of Building Permits.

 

(c)               Landlord shall diligently construct and complete the Initial Phase 2A Improvements substantially in accordance with the Approved Plans and Building Permits. Such construction shall occur in a neat and workmanlike manner and shall materially conform to all applicable governmental codes, laws and regulations in force at the time such work is completed.

 

(d)              Landlord shall spend out of the Phase 2 Allowance not less than $70.00 per Usable Square Foot within Phase 2A, for the Initial Phase 2A Improvements.

 

3.         Deadlines; Completion.

 

(a)              Landlord shall use reasonable commercial efforts to cause construction of the Improvements to be Complete within twelve (12) months of the date of execution of the Lease.

 

(b)              The deadline in Section 3(a) above shall be extended:

 

(i)            One (1) day for each one (1) day beyond ninety (90) days from the date of submission of Approved Plans to the City of San Carlos, until the issuance of Building Permits;

 

(ii)           One (1) day for each one (1) day delay resulting from acts of God, acts of public agencies, labor disputes, fires, freight embargoes, inability to obtain supplies,

 

2

 

materials, fuels or permits, or other causes or contingencies beyond the reasonable control of Landlord, without duplication for delays in Section 3(b)(i).

 

(c)           Landlord shall pay Tenant the sum of One Thousand Dollars ($1,000) per day as liquidated damages for each day beyond the date specified in Section 3(a) above (subject to adjustment as provided in Section 3(b) above) until the Improvements are Complete. THE PARTIES TO THIS AGREEMENT HAVE, PRIOR TO THE EXECUTION HEREOF, CONTEMPLATED THE DAMAGES WHICH WILL BE SUFFERED IN THE EVENT OF A FAILURE BY LANDLORD TO PERFORM ITS OBLIGATIONS UNDER SECTION 3(a) ABOVE (SUBJECT TO ADJUSTMENT AS PROVIDED IN SECTION 3(b) ABOVE). BECAUSE OF THE UNPREDICTABLE STATE OF THE ECONOMY, AND THE DIFFICULTY IN PREDICTING THE ACTUAL DAMAGES RESULTING FROM A DELAY IN THE COMPLETION OF THE CONSTRUCTION OF THE IMPROVEMENTS, THE POTENTIAL SHIFTS IN THE MONEY MARKET FOR REAL ESTATE LOANS OF ALL TYPES, AND A VARIETY OF OTHER FACTORS WHICH AFFECT THE VALUE AND MARKETABILITY OF PHASE 2A, THE PARTIES RECOGNIZE THAT IT WOULD BE EXTREMELY DIFFICULT AND IMPRACTICABLE TO ASCERTAIN PRIOR TO THE EXECUTION OF THIS AGREE-MENT WITHIN ANY DEGREE OF CERTAINTY THE AMOUNT OF DAMAGES WHICH WOULD BE SUFFERED IN THE EVENT OF SUCH A DELAY. ACCORDINGLY, BY INITIALLING BELOW THE PARTIES AGREE THAT TENANT SHALL BE ENTITLED TO LIQUIDATED DAMAGES AS SPECIFIED IN THIS SECTION 3(c). THE PARTIES ACKNOWLEDGE AND AGREE THAT (i) THIS PROVISION SHALL BE VALID AND ENFORCEABLE PURSUANT TO CALIFORNIA CIVIL CODE SECTION 1671; (ii) THIS PROVISION IS REASONABLE UNDER THE CIRCUMSTANCES EXIST-ING AT THE TIME OF EXECUTION OF THIS AGREEMENT; AND (iii) HEREBY WAIVES ANY RIGHTS IT MAY HAVE TO DISPUTE THE REASONABLENESS OF THIS PROVISION.

 

	
/s/ [ILLEGIBLE] 
    	
 
    	
/s/ Ajay Bansal   [ILLEGIBLE]
    
	
LANDLORD
    	
 
    	
TENANT
    

 

4.             Costs of Construction.

 

Except as otherwise agreed between Landlord and Tenant, the cost of construction of the Improvements shall be borne by the Landlord as its sole cost and expense, including any costs or cost increases incurred as a result of delays, governmental requirements or unanticipated conditions.

 

5.             No Agency.

 

Nothing in this Work Letter shall make or constitute either Landlord or Tenant as the agent of the other.

 

6.             Merger.

 

All understandings and agreements, oral and written, theretofore made between the parties hereto and relating to the matters covered herein are merged in this Work Letter, which,

 

3

 

along with the Lease and its exhibits, the Redemption Agreement and the documents referenced therein and contemplated thereby, fully and completely expresses the agreement between the Landlord and Tenant with regard to the matters set forth in this Work Letter.

 

7.             Subject to Lease.

 

This Work Letter is subject in all respects to the terms and conditions of the Lease.

 

In witness whereof, the parties have executed this Work Letter concurrently with and as of the date of the Lease.

 

	
Landlord 
    	
Tenant
    
	
 
    	
 
    
	
INHALE 201 INDUSTRIAL ROAD,   L.P., a 

California limited partnership 
    	
NEKTAR THERAPEUTICS, a Delaware 

corporation
    
	
 
    	
 
    
	
By: 
    	
SciMed Prop III, Inc., a California
    	
By: 
    	
/s/ Ajay Bansal
    
	
 
    	
corporation 
    	
Name:
    	
Ajay Bansal
    
	
 
    	
 
    	
Title: 
    	
CFO
    
	
 
    	
By: 
    	
/s/ Alan D. Gold 
    	
 
    	
 
    	
 
    
	
 
    	
Name: 
    	
Alan D. Gold 
    	
 
    	
By: 
    	
/s/ Ajit Gill
    
	
 
    	
Title: 
    	
Pres. 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
By: 
    	
/s/ Gary A. Kreitzer
    	
 
    	
 
    	
 
    
	
 
    	
Name: 
    	
Gary A. Kreitzer
    	
 
    	
 
    	
 
    
	
 
    	
Title: 
    	
E.V.P.
    	
 
    	
 
    	
 
    

 

4

 

CONSENT OF PARTNERS

 

THIS CONSENT OF PARTNERS (this “Consent”) of INHALE 201 INDUSTRIAL ROAD, L.P., a California limited partnership (the “Partnership”) is entered into by and between NEKTAR THERAPEUTICS  (FORMERLY KNOWN AS INHALE THERAPEUTIC SYSTEMS, INC.), a Delaware corporation (“Nektar”), SCIMED PROP III, INC., a California corporation (“General Partner”), 201 INDUSTRIAL PARTNERSHIP, a California general partnership (“201 Limited Partner”) with reference to the following facts:

 

RECITALS

 

A.            Nektar, Partnership and Bernardo Property Advisors, Inc., a California corporation, entered into an Agreement for the Contribution of 201 Industrial Road Project as of September 14, 2000, which provided for, among other things, (i) the contribution of certain real property, commonly known as 201 Industrial Road, San Carlos, California, by Nektar to the Partnership in return for Nektar receiving a 49.0% limited partnership interest in the Partnership, and (ii) Partnership, as “Landlord,” and Nektar, as “Tenant,” entering into a Build-to-Suit Lease Agreement for the Real Property

 

B.            General Partner is currently the sole general partner of the Partnership and 201 Limited Partner and Nektar are the sole limited partners of the Partnership.

 

C.            Pursuant to separate documents, General Partner intends to assign its general partnership interest in the Partnership to BioMed Realty, L.P., a Maryland limited partnership.

 

D.            Pursuant to the Redemption Agreement dated effective June 23, 2004 by and among Partnership, Nektar, General Partner and 201 Limited Partner, the parties have agreed to the redemption of all of Nektar’s limited partnership interest in the Partnership.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the mutual covenants and conditions set forth herein, and other valuable consideration, receipt of which is hereby acknowledged, the parties agree as follows:

 

 

1.             Consent of Nektar to General Partner Transfer. Nektar hereby consents to the transfer of the General Partner’s interest in the Partnership as set forth in Recital C above, and Nektar hereby waives any rights it may have, including rights of first refusal, arising from such transfer, notwithstanding any contrary provisions contained in the partnership agreement of the Partnership, or otherwise.

 

2.             Consent of General Partner to Nektar Transfer. General Partner hereby consents to the redemption and transfer of Nektar’s interest in the Partnership as set forth in Recital D above, and General Partner hereby waives any rights it may have, including rights of first refusal, arising from such transfer, notwithstanding any contrary provisions contained in the partnership agreement of the Partnership, or otherwise.

 

3.             Consent of 201 Limited Partner to Nektar Transfer. 201 Limited Partner hereby consents to the redemption and transfer of Nektar’s interest in the Partnership as set forth in Recital D above, and 201 Limited Partner hereby waives any rights it may have, including rights of first refusal, arising from such transfer, notwithstanding any contrary provisions contained in the partnership agreement of the Partnership, or otherwise.

 

4.             Consent of 201 Limited Partner of General Partner Transfer. 201 Limited Partner hereby consents to the redemption and transfer of General Partner’s interest in the Partnership as set forth in Recital C above, and 201 Limited Partner hereby waives any rights it may have, including rights of first refusal, arising from such transfer, notwithstanding any contrary provisions contained in the partnership agreement of the Partnership, or otherwise.

 

5.             Effective Date. This Consent shall be effective as of August 17, 2004.

 

	
GENERAL PARTNER: 
    	
SCIMED PROP III, Inc., a California

corporation
    
	
 
    	
 
    
	
 
    	
 
    	
By: 
    	
/s/ Alan D. Gold
    
	
 
    	
 
    	
Name: 
    	
Alan D. Gold
    
	
 
    	
 
    	
Title: 
    	
Pres
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By: 
    	
/s/ Gary A. Kreitzer
    
	
 
    	
 
    	
Name: 
    	
Gary A. Kreitzer
    
	
 
    	
 
    	
Title: 
    	
E.V.P.
    
	
 
    	
 
    
	
201 LIMITED PARTNER 
    	
201 INDUSTRIAL PARTNERSHIP, a

California general partnership
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Alan D. Gold
    
	
 
    	
Name: 
    	
Alan D. Gold
    
	
 
    	
Title: 
    	
Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Gary A. Kreitzer
    
	
 
    	
Name: 
    	
Gary A. Kreitzer
    
	
 
    	
Title: 
    	
Partner
    

 

2

 

	
NEKTAR: 
    	
NEKTAR THERAPEUTICS (formerly known

as Inhale Therapeutic Systems, Inc.), a

Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Ajay Bansal
    
	
 
    	
Name: 
    	
Ajay Bansal
    
	
 
    	
Title: 
    	
CFO
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Ajit Gill
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

3

 

AMENDMENT TO

AMENDED AND RESTATED BUILT-TO-SUIT LEASE

 

THIS AMENDMENT TO AMENDED AND RESTATED BUILT-TO-SUIT LEASE (the “Amendment”) is made effective as of January 11, 2005 by and between BMR-201 Industrial Road LLC, a Delaware limited liability company (formerly known as Inhale 201 Industrial Road, L.P., the “Landlord”) and Nektar Therapeutics, a Delaware corporation (formerly known as Inhale Therapeutic Systems, Inc., the “Tenant”).

 

RECITALS

 

A.            Landlord and Tenant have entered in that certain Amended and Restated Built-To-Suit Lease dated August 17, 2004 (the “Lease”), of that certain real property located at 201 Industrial Road, San Carlos, California, including: (i) the second floor, the third floor and the fourth floor of Building 1 (collectively, “Phase 1”),  and (ii) 45,574 rentable square feet located on the third floor of Building 2 (“Phase 2A” and, together with the Phase 1,  the “Leased Premises”). Capitalized terms used herein and not otherwise defined herein shall have the meaning assigned thereto in the Lease.

 

B.            Tenant no longer wishes to occupy Phase 2A. Landlord is willing to enter into a Lease with Nuvelo, Inc., a Delaware corporation (“Nuvelo”) (the “Nuvelo Lease”) to lease Phase 2A to Nuvelo.

 

C.            Landlord and Tenant now wish to amend this Lease to, among other things, terminate Tenant’s lease of Phase 2A to allow Landlord to enter into a new lease with Nuvelo, all as and to the extent more particularly set forth below.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration, Landlord and Tenant hereby agree as follows:

 

1.             Recital D.  The following defined terms are added to  Recital D of the Lease:

 

“Nuvelo: shall mean Nuvelo, Inc., a Delaware corporation.”

 

“Nuvelo Rent Commencement Date: shall mean the date the Nuvelo is required to commence paying rent under the Nuvelo Lease or October 1, 2005, whichever is sooner.”

 

“Nuvelo Effective Date: shall mean the date that the Nuvelo Lease is executed and is in full force and effect, which the parties agree shall be January 2005.”

 

“Nuvelo Lease: shall mean that certain Lease dated as of January 2005 between Nuvelo and Landlord, pursuant to which Nuvelo is leasing Phase 2A.”

 

 

2.             Amendment to Section 1.1(a). Section 1.1(a), excluding Section 1.1(a)(i)-1.1(a)(x) of the Lease is hereby amended and restated in its entirety as follows:

 

“(a)         Subject to the Parking Lease dated as of September 14, 2000 (the “Parking Lease”) by and between Landlord and Tenant, Landlord leases to Tenant and Tenant leases from Landlord, on the terms, covenants and conditions hereinafter set forth, Phase 1A, Phase 1B, and Phase 2A (all as defined below and referred to collectively herein as the “Premises”). As of the effective date of this Amendment, all of Tenant’s rights and obligations to Phase 2A shall expire and the Premises shall consist of Phase 1A and Phase 1B only. The Premises, together with Phase 2B, were constructed by Landlord; and are located in two connected four-story buildings containing an aggregate of approximately 390,000 square feet, consisting of approximately 171,965 square feet of rentable area for office and laboratory research and development and two lower stories primarily of parking (collectively, the “Buildings”  and each a “Building”). The Buildings were constructed on the Real Property in connection with the Project.”

 

3.             Amendment to Section 3.1(c)(ii). Section 3.1(c)(ii) of the Lease is hereby amended and restated in its entirety as follows:

 

“(ii)            Phase 2A.  Beginning on the Phase 2A Rent Commencement Date and terminating on January 31, 2005, Tenant shall pay Minimum Rental for Phase 2A in an amount equal to $164,066.40 ($3.60 per sq. ft. multiplied by 45,574).”

 

4.             Amendment to Section 4. Section 4 of the Lease is hereby amended and restated in its entirety as follows:

 

“PARKING. Landlord and Tenant agree that the Common Areas of the Real Property shall include not less than 690 parking spaces. Commencing on the Effective Date and ending on the Building 1 Termination Date, Tenant shall be entitled to 224 spaces, all in addition to those spaces provided in and subject to the Parking Lease.”

 

5.             Amendment to Section 5.1(b). Section 5.1(b) of the Lease is hereby amended and restated in its entirety as follows:

 

“(b) Tenant Work: Phase 2A: Improvements.  (i) Tenant has constructed Tenant Improvements within Phase 1A and Phase 1B of the Premises in accordance with the prior lease, and may make such future improvements and modifications to the same as set forth herein. Tenant and Landlord agreed under the Original Lease to provide Tenant with a Tenant Improvement Allowance for tenant improvements within each Phase of the Premises equal to $100 per Usable Square Foot. Landlord and Tenant agree that Landlord shall have satisfied its obligation to provide a Tenant Improvement Allowance for Phase 2A once Landlord has satisfied its obligations under the following Section 5.1(b)(ii).

 

(ii)  Landlord shall provide a tenant improvement allowance to Nuvelo in the amount of not less than $100 per Usable Square Foot for improvements to Phase 2A, in accordance with the Nuvelo Lease. Tenant shall reimburse Landlord for a portion of such allowance (“Tenant’s TI Reimbursement”), calculated as follows: (i) the difference

 

 

between (a) the amount actually funded by Landlord as a tenant improvement allowance to Nuvelo under the Nuvelo Lease (including any amounts provided to Novelo as rent credits), but in no event more than $6,380,360 [45,574 sf x $140/sf] and (b) $4,397,200 [43,972 sf x $l00/sf]; (ii) times 28.57%. Tenant’s TI Reimbursement shall be paid in two installments, the first installment of $283,294.40 shall be paid upon execution of this Amendment and the balance shall be paid on December 31, 2005.”

 

6.             Amendment to Section 7.1 (a) (iv). Section 7.1(a)(iv) of the Lease is hereby amended and restated in its entirety as follows:

 

“(iv) The term ‘Tenant’s Operating Cost Share’ means 72.98% through and until the Nuvelo Rent Commencement Date and thereafter means 46.47%. ‘Tenant’s Exterior Common  Area Cost Share’ shall be equal to the Tenant’s Operating Cost Share as established from time to time.”

 

7.             Amendment to Section 13.1(e).  Section 13.1(e) of the Lease is hereby deleted in its entirety and replaced with “[Intentionally Deleted].”

 

8.             Condition Precedent. This Amendment shall be conditioned upon execution and delivery of the Nuvelo Lease by Nuvelo and Landlord.

 

9.             Lease Termination. For and in consideration of Landlord’s agreement to terminate Tenant’s interest in Phase 2A as provided herein, Tenant agrees to pay Landlord the following sums:

 

(a)           Termination Fee. Tenant shall pay Landlord the sum of $50,000 upon execution of this Amendment.

 

(b)           Continuing Payments. Tenant shall pay Landlord the sum of $3,216,816.40 in accordance with the schedule attached hereto as Exhibit “A.”

 

(c)           Reimbursement of Brokers’ Fees. Tenant agrees to reimburse Landlord for a portion of the brokerage fees and commissions payable by Landlord in connection with the Nuvelo Lease, as follows: Tenant shall pay Landlord the sum of $102,536.37 upon execution of this Amendment and the sum of $102,536.37 on August 13, 2005. Subject to Tenant’s reimbursement obligations herein, Landlord agrees that it shall be responsible for, and shall indemnify Tenant from and against, any and all brokerage fees and commissions payable in connection with the Nuvelo Lease.

 

10.          Condition Upon Surrender. Upon the Nuvelo Effective Date, Tenant shall surrender Phase 2A, including any additions, alterations and improvements thereto, broom clean, in the same condition received, free from Hazardous Materials caused to be present by Tenant, its agents or invitees, ordinary wear and tear excepted, and delivered free of radioactive licenses or other restrictions on use, first, however, removing all goods and effects of Tenant.

 

11.          Hazardous Materials. As of the date of this Amendment, Tenant represents and warrants that Phase 2A is free from Hazardous Materials caused to be present by Tenant and that Tenant’s use of Phase 2A has not been and Phase 2A is not in violation of any

 

 

laws with respect to the disposal or storage of Hazardous Substances, human health or the environment as the result of any actions of Tenant.

 

12.          No  Further Amendment. Except as expressly amended or modified by this Amendment, each and every term and provision of the Lease remains in full force and effect, without modification or amendment. This Amendment shall be construed together with and as a part of the Lease.

 

13.          Counterparts. This Amendment may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Amendment. Except as amended hereby, the Lease shall remain in full force and effect.

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the day and year first above written.

 

	
 
    	
LANDLORD
    
	
 
    	
 
    
	
 
    	
BMR-201 INDUSTRIAL ROAD LLC,
    
	
 
    	
a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Gary A. Kreitzer
    
	
 
    	
 
    	
Name:
    	
Gary A. Kreitzer
    
	
 
    	
 
    	
Title:
    	
E.V.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TENANT
    
	
 
    	
 
    
	
 
    	
NEKTAR THERAPEUTICS,
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ajay Bansal
    
	
 
    	
 
    	
Name:
    	
Ajay Bansal
    
	
 
    	
 
    	
Title:
    	
CFO
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ajit Singh Gill
    
	
 
    	
 
    	
Name:
    	
Ajit Singh Gill
    
	
 
    	
 
    	
Title:
    	
President and CEO
    
					

 

 

Exhibit “A”

Payment Schedule

 

	
Payment Date
    	
 
    	
Amount
    
	
02/01/05
    	
 
    	
174,108.58
    
	
03/01/05
    	
 
    	
174,108.58
    
	
04/01/05
    	
 
    	
174,108.58
    
	
05/01/05
    	
 
    	
174,108.58
    
	
06/01/05
    	
 
    	
174,108.58
    
	
07/01/05
    	
 
    	
174,108.58
    
	
08/01/05
    	
 
    	
118,243.67
    
	
09/01/05
    	
 
    	
82,960.58
    
	
10/01/05
    	
 
    	
85,881.11
    
	
11/01/05
    	
 
    	
86,442.75
    
	
12/01/05
    	
 
    	
86,442.75
    
	
01/01/06
    	
 
    	
86,442.75
    
	
02/01/06
    	
 
    	
86,442.75
    
	
03/01/06
    	
 
    	
86,442.75
    
	
04/01/06
    	
 
    	
86,442.75
    
	
05/01/06
    	
 
    	
86,442.75
    
	
06/01/06
    	
 
    	
86,442.75
    
	
07/01/06
    	
 
    	
86,442.75
    
	
08/01/06
    	
 
    	
86,442.75
    
	
09/01/06
    	
 
    	
86,442.75
    
	
10/01/06
    	
 
    	
89,421.69
    
	
11/01/06
    	
 
    	
89,994.56
    
	
12/01/06
    	
 
    	
89,994.56
    
	
01/01/07
    	
 
    	
89,994.56
    
	
02/01/07
    	
 
    	
89,994.56
    
	
03/01/07
    	
 
    	
89,994.56
    
	
04/01/07
    	
 
    	
39.994.56
    
	
05/01/07
    	
 
    	
89,994.56
    
	
06/01/07
    	
 
    	
89,994.56
    
	
07/01/07
    	
 
    	
89,994.56
    
	
08/01/07
    	
 
    	
34,836.60
    
	
 
    	
 
    	
 
    
	
Total
    	
 
    	
$
    	
3,216,816.40
    

 

 

SECOND AMENDMENT TO AMENDED AND RESTATED BUILT-TO-SUIT LEASE

 

THIS SECOND AMENDMENT TO AMENDED AND RESTATED BUILT-TO-SUIT LEASE (this “Amendment”) is entered into as of this 19th day of July, 2007 (the “Effective Date”), by and between BMR-201 INDUSTRIAL ROAD LLC, a Delaware limited liability company (“Landlord,” as successor-in-interest to Inhale 201 Industrial Road, L.P. (“Original Landlord”)), and NEKTAR THERAPEUTICS, a Delaware corporation (“Tenant”).

 

RECITALS

 

A.               WHEREAS, Original Landlord and Tenant entered into that certain Amended and Restated Built-To-Suit Lease dated as of August 17, 2004, as supplemented by that certain Work Letter dated as of August 17, 2004, and as amended by that certain Amendment to Amended and Restated Built-To-Suit Lease dated as of January 11, 2005 (collectively, the “Lease”), whereby Tenant leases certain premises (the “Original Premises”) from Landlord in Building 1 at 201 Industrial Road in San Carlos, California;

 

B.               WHEREAS, Tenant desires to lease additional premises in Building 1; and

 

C.               WHEREAS, Landlord and Tenant desire to modify and amend the Lease only in the respects and on the conditions hereinafter stated.

 

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.               Definitions. For purposes of this Amendment, capitalized terms shall have the meanings ascribed to them in the Lease unless otherwise defined herein. The Lease, as amended by this Amendment, shall be referred to herein as the “Amended Lease.”

 

2.               Additional Premises. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, Suite 420 in Building 1, consisting of approximately twenty thousand one hundred twenty-three (20,123) rentable square feet of additional premises, as depicted on Exhibit A attached hereto (the “Additional Premises”). The Additional Premises are comprised of (a) approximately twelve thousand four hundred twenty (12,420) rentable square feet of partially improved space, as depicted on Exhibit B attached hereto (the “Partially Improved Premises”), and (b) approximately seven thousand seven hundred three (7,703) rentable square feet of shell space, as depicted on Exhibit C attached hereto (the “Shell Premises”). From and after the Additional Premises Commencement Date (as defined below), the term “Premises,” when used in the Lease, shall mean the Original Premises plus the Additional Premises.

 

3.               Additional Premises Term. The Term with respect to the Additional Premises shall commence on July 19, 2007 (the “Additional Premises Commencement Date”), and shall expire on the Building 1 Termination Date. The parties hereto acknowledge that the Building 1 Termination Date is October 5, 2016. Landlord shall tender possession of the Additional Premises to Tenant on or before the Additional Premises Commencement Date.

 

4.               Extension Options. Tenant shall have the right, with respect to the Additional Premises, to exercise the extension options described in Section 2.6 of the Lease, except that the reference to Section 3.1(b) and (c) in the first sentence of Section 2.6 shall be deleted and the phrase “Section 3.1(d)” shall be substituted therefor. For the sake of clarity, Tenant shall be permitted to exercise an extension option with respect to the Additional Premises without exercising such option with respect to Phase 1A and Phase 1B, and shall be permitted to exercise an extension option with respect to Phase 1A and Phase 1B without exercising such option with respect to the Additional Premises.

 

Form dated 5/3/07

 

	
 
    	
Approved   by:
    
	
 
    	
BMA   Legal
    
	
 
    	
/s/   [ILLEGIBLE]
    

 

 

5.       Minimum Rental.

 

a.           Tenant shall pay, as Minimum Rental with respect to the Additional Premises during the first twelve (12) months following the Minimum Rental Commencement Date (as defined below), (i) Two and 60/100 Dollars ($2.60) per rentable square foot per month for the Partially Improved Premises and (ii) One and 95/100 Dollars ($1.95) per rentable square foot per month for the Shell Premises. The following rental schedule is for the convenience of the parties:

 

	
Lease Month
    	
 
    	
Monthly Minimum Rental
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
1   - 12
    	
 
    	
$
    	
47,312.85
    	
 
    
	
13   - 24
    	
 
    	
$
    	
48,732.24
    	
 
    
	
25   - 36
    	
 
    	
$
    	
50,194.20
    	
 
    
	
37   - 48
    	
 
    	
$
    	
51,700.03
    	
 
    
	
49   - 60
    	
 
    	
$
    	
53,251.03
    	
 
    
	
61   - 72
    	
 
    	
$
    	
54,848.56
    	
 
    
	
73   - 84
    	
 
    	
$
    	
56,494.01
    	
 
    
	
85   - 96
    	
 
    	
$
    	
58,188.83
    	
 
    
	
97   – 10/5/2016
    	
 
    	
$
    	
59,934.50
    	
 
    

 

b.           Tenant’s obligation to pay Minimum Rental with respect to the Additional Premises shall commence on the date that is one hundred twenty (120) days after the Additional Premises Commencement Date (the “Minimum Rental Commencement Date”).

 

c.           Tenant shall have the right to occupy any completed offices in the Partially Improved Premises as of the Effective Date without incurring any obligation to pay Minimum Rental prior to the Minimum Rental Commencement Date.

 

d.           Minimum Rental with respect to the Additional Premises shall increase by three percent (3%) on each annual anniversary of the Minimum Rental Commencement Date, as shown in the chart in Section 5(a).

 

6.       Tenant’s Operating Cost Share. From and after the Additional Premises Commencement Date, Tenant’s Operating Cost Share shall equal fifty-nine and 02/100ths percent (59.02%).

 

7.       Tenant Improvements.

 

a.           Tenant shall cause to be constructed certain tenant improvements (including those listed in Sections 7(e), 7(f) and 7(g) below) in the Additional Premises (“Tenant’s Work”) pursuant to the Work Letter attached as Exhibit E hereto (the “Work Letter”). Landlord shall provide Tenant with an improvement allowance in an amount not to exceed Nine Hundred Five Thousand Five Hundred Thirty-Five Dollars ($905,535) (based upon Forty-Five Dollars ($45) per rentable square foot) (the “TI Allowance”). The TI Allowance may be used to pay for the following costs related to Tenant’s Work: (i) construction, (ii) project oversight by Landlord (which fee shall equal three percent (3%) of the TI Allowance), (iii) space planning, architect, engineering and other related services performed by third parties unaffiliated with Tenant and (iv) building permits and other taxes, fees, charges and levies by Governmental Authorities for permits or for inspections of Tenant’s Work. In no event shall the TI Allowance be used for: (v) payments to Tenant or any affiliates of Tenant, (w) the purchase of any furniture, personal property or other non-building system equipment, (x) the cost of work that is not authorized by the Approved Plans or otherwise approved in writing by Landlord, (y) costs resulting from any default by Tenant of its obligations under the Amended Lease or (z) costs that are recoverable or reasonably recoverable by Tenant from a third party (e.g., insurers, warrantors, or tortfeasors). If the total cost of Tenant’s Work exceeds Forty-Five Dollars ($45) per rentable square foot of the Additional Premises, then Tenant shall pay the overage as and when due. Tenant shall have until December 31, 2008, to expend any unused portion of the TI Allowance, after which date Landlord’s obligation to fund such costs shall expire. Tenant shall deliver to Landlord (Y) a certificate of occupancy for the Additional Premises suitable for the permitted use and (Z) a Certificate of Substantial Completion in the form of the American Institute of Architects document G704, executed by the project architect with respect to Tenant’s Work in the Additional Premises.

 

2

 

b.           Prior to entering upon the Additional Premises, Tenant shall furnish to Landlord evidence satisfactory to Landlord that insurance coverages required of Tenant under the provisions of the Amended Lease are in effect, and such entry shall be subject to all the terms and conditions of the Amended Lease other than the payment of Minimum Rental.

 

c.           Possession of areas of the Additional Premises necessary for utilities, services, safety and operation of Building 1 is reserved to Landlord, subject to Tenant’s right to access same from time to time as necessary for the construction of Tenant’s Work or the operation of Tenant’s business in the Additional Premises.

 

d.           In accordance with the terms of the Work Letter, Tenant shall obtain Landlord’s approval of Tenant’s architect, engineer, general contractor and major subcontractors, such approval not to be unreasonably withheld, conditioned or delayed.

 

e.           Subject to Section 7(a) and the Work Letter, Tenant shall have the right to convert the laboratory space in the Partially Improved Premises into office space in accordance with the plans referenced in Exhibit D attached hereto; provided, however, that Landlord shall have the right, upon written notice to Tenant delivered no later than one hundred eighty (180) days prior to the expiration of the Lease, to require Tenant to restore such areas to their condition as laboratory facilities as of the date of this Amendment, ordinary wear and tear excepted.

 

f.            Subject to Section 7(a) and the Work Letter, Tenant shall have the right to perform certain upgrades to the ground floor lobby, subject to the consent of Nuvelo and Landlord’s reasonable consent.

 

g.           Subject to Section 7(a) and the Work Letter, Tenant shall have the right to (i) change the order of the existing monument signage on the North side of the Real Property so that Tenant’s name appears first, (ii) change or upgrade the white letter signage on the glass façade at Building 1’s lobby entrance, and (iii) subject to applicable laws and approval by the City of San Carlos, add additional signage on the North façade of Building 1.

 

8.       Parking.

 

a.           Notwithstanding anything in Section 4 of the Lease to the contrary, from and after the Effective Date, Tenant shall have the non-exclusive right to use a total of two hundred eighty-four (284) parking spaces for the Original Premises and Additional Premises (“Tenant’s Parking”).

 

b.           As a portion of, but not in addition to, Tenant’s Parking, Tenant shall have (subject to (i) the consent of Nuvelo and Landlord’s reasonable consent and (ii) Tenant’s payment of any costs associated therewith, including maintenance), the exclusive right to use the following on the Northwest and North sides of Building 1 near the Original Premises or Additional Premises, with appropriate signage indicating its availability:

 

·        Twenty-four (24) spaces designated via asphalt striping as “Visitor” parking;

 

·        Four (4) spaces designated as handicapped parking;

 

·        Two (2) spaces for motorcycle parking; and

 

·        Two (2) spaces for a loading zone.

 

9.       Condition of Premises. Tenant acknowledges that (a) it is in possession of the Original Premises and is fully familiar with the condition of the Original Premises and Additional Premises and, notwithstanding anything contained in the Amended Lease to the contrary, Tenant agrees to take the same in their condition “as is” as of the Additional Premises Commencement Date, and (b) Landlord shall have no obligation to alter, repair or otherwise prepare the Original Premises or Additional Premises for Tenant’s occupancy or to pay for any improvements to the Original Premises or Additional Premises, except for Landlord’s payment of the TI Allowance or as may be otherwise expressly provided in the Amended Lease.

 

3

 

10.             Security Deposit. The Security Deposit is hereby increased by Two Hundred Twenty-Five Thousand Dollars ($225,000) (the “Additional Security Deposit”) to a total of One Million Six Hundred Thousand Dollars ($1,600,000). Tenant shall either (a) have deposited with Landlord in cash the Additional Security Deposit on or before the Effective Date, or (b) provide to Landlord within one (1) week of the Effective Date, an amendment to the existing letter of credit presently provided by Tenant as the Security Deposit increasing such letter of credit by the amount of the Additional Security Deposit.

 

11.             Right of First Offer. Tenant shall have a right of first offer (“ROFO”) as to any additional premises that are available for lease in Building 1 and Building 2 (collectively, the “Option Premises”). In the event Landlord intends to lease all or a portion of the Option Premises (the “Subject Premises”), Landlord shall provide written notice thereof to Tenant (the “Notice of Offer”).

 

a.             Within twenty-one (21) days following its receipt of a Notice of Offer, Tenant shall advise Landlord in writing whether Tenant elects to lease the Subject Premises, and on what terms and conditions (the “Reply”). If Tenant fails to notify Landlord of Tenant’s election within such twenty-one (21) day period, then Tenant shall be deemed to have elected not to lease the Subject Premises.

 

b.             If Tenant timely notifies Landlord that Tenant elects to lease the Subject Premises, then Landlord and Tenant shall enter into good faith negotiations regarding the terms of a lease of the Subject Premises in accordance with a Reply. If Landlord and Tenant reach an agreement on the terms of the lease of the Subject Premises, Landlord and Tenant shall work in good faith to execute a lease amendment with respect to such Subject Premises (the “First Offer Space Amendment”) within thirty (30) days after Landlord’s receipt of the Reply (the “Signing Period”).

 

c.             If (i) Tenant notifies Landlord that Tenant elects not to lease the Subject Premises, (ii) Tenant fails to notify Landlord of Tenant’s election within the twenty-one (21) day period described above or (iii) if, despite good faith efforts to reach an agreement regarding the leasing of the Subject Premises to Tenant, Landlord and Tenant are unable to reach such agreement within the applicable Signing Period, then Landlord shall have the right to consummate a lease of the Subject Premises with a third party for a period of one (1) year thereafter (a “Leasing Period”), and the ROFO shall no longer apply to such Subject Premises during such Leasing Period; provided that the net effective rent to be received by Landlord over the term of the lease of the Subject Premises to such third party (the “Third Party Offer”) is at least ninety percent (90%) of the net effective rent that would have been received by Landlord as set forth in the applicable Reply. If the Third Party Offer is less than ninety percent (90%) of the net effective rent that would have been received by Landlord as set forth in the applicable Reply, Landlord shall re-offer the Subject Premises to Tenant on the same terms as set forth in the Third Party Offer (a “Re-Offer Notice”) and if (a) Tenant does not deliver a notice electing to lease such Subject Premises on such terms (the “Election Notice”) within ten (10) days following Tenant’s receipt of the Re-Offer Notice or (b) Tenant delivers such Election Notice, and a First Offer Space Amendment is not executed during the Signing Period applicable to such re-offer, then Landlord shall be free thereafter for a new Leasing Period to enter into a lease for the Subject Premises on the terms of the Third Party Offer or any new third party offer satisfying the terms and conditions of this Section 11, and continuing as described above. If Landlord does not lease such Subject Premises within a Leasing Period, then the ROFO with respect to such Subject Premises shall be fully reinstated, and Landlord shall not thereafter lease such Subject Premises without first complying with the procedures set forth in this Section 11.

 

d.             Notwithstanding anything in this Section 11 to the contrary, Tenant shall not exercise the ROFO during such period of time that Tenant is in default under any provision of the Amended Lease, beyond any applicable notice or cure period. Any attempted exercise of the ROFO during a period of time in which Tenant is so in default beyond any applicable notice or cure period shall be void and of no effect. In addition, Tenant shall not be entitled to exercise the ROFO if Landlord has given Tenant two (2) or more notices of default under the Amended Lease, whether or not the defaults are cured, during the twelve (12) month period prior to the date on which Tenant seeks to exercise the ROFO.

 

e.             Notwithstanding anything in the Amended Lease to the contrary, Tenant shall not assign or transfer the ROFO, either separately or in conjunction with an assignment or transfer of

 

4

 

Tenant’s interest in the Lease other than in connection with a Permitted Transfer or to an Affiliate of Tenant in each case in accordance with the terms of Section 13.1(b) of the Lease, without Landlord’s prior written consent, which consent Landlord may withhold in its sole and absolute discretion.

 

12.             Broker. Tenant represents and warrants that it has not dealt with any broker or agent in the negotiation for or the obtaining of this Amendment, other than GVA Kidder Mathews (“Tenant’s Broker”), and agrees to indemnify, defend and hold Landlord harmless from any and all cost or liability for compensation claimed by any such broker or agent, other than Tenant’s Broker, employed or engaged by it or claiming to have been employed or engaged by it. Landlord represents and warrants that it has not dealt with any broker or agent in the negotiation for or the obtaining of this Amendment, other than NAI BT Commercial (“Landlord’s Broker”), and agrees to indemnify, defend and hold Tenant harmless from any and all cost or liability for compensation claimed by any such broker or agent, other than Landlord’s Broker, employed or engaged by it or claiming to have been employed or engaged by it. Each of Landlord’s Broker and Tenant’s Broker is entitled to a leasing commission in connection with the making of this Amendment, and Landlord shall pay such commission to Landlord’s Broker and Tenant’s Broker pursuant to a separate agreement between Landlord, Landlord’s Broker and Tenant’s Broker.

 

13.             No Default. Tenant represents, warrants and covenants that, to the best of Tenant’s knowledge, Landlord and Tenant are not in default of any of their respective obligations under the Lease and no event has occurred that, with the passage of time or the giving of notice (or both) would constitute a default by either Landlord or Tenant thereunder. Landlord represents, warrants and covenants that, to the best of Landlord’s knowledge, Landlord and Tenant are not in default of any of their respective obligations under the Lease and no event has occurred that, with the passage of time or the giving of notice (or both) would constitute a default by either Landlord or Tenant thereunder.

 

14.             Effect of Amendment. Except as modified by this Amendment, the Lease and all the covenants, agreements, terms, provisions and conditions thereof shall remain in full force and effect and are hereby ratified and affirmed. The covenants, agreements, terms, provisions and conditions contained in this Amendment shall bind and inure to the benefit of the parties hereto and their respective successors and, except as otherwise provided in the Lease, their respective assigns. In the event of any conflict between the terms contained in this Amendment and the Lease, the terms herein contained shall supersede and control the obligations and liabilities of the parties. From and after the Effective Date, the term “Lease” as used in the Lease shall mean the Lease, as modified by this Amendment.

 

15.             Miscellaneous. This Amendment becomes effective only upon execution and delivery hereof by Landlord and Tenant. The captions of the paragraphs and subparagraphs in this Amendment are inserted and included solely for convenience and shall not be considered or given any effect in construing the provisions hereof. All exhibits hereto are incorporated herein by reference.

 

16.             Counterparts. This Amendment may be executed in one or more counterparts that, when taken together, shall constitute one original.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

5

 

IN WITNESS WHEREOF, Landlord and Tenant have hereunto set their hands as of the date and year first above written, and acknowledge that they possess the requisite authority to enter into this transaction and to execute this Amendment.

 

	
LANDLORD:
    	
 
    
	
 
    	
 
    
	
BMR-201   INDUSTRIAL ROAD LLC,
    	
 
    
	
a   Delaware limited liability company
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ [ILLEGIBLE]
    	
 
    
	
Name:
    	
[ILLEGIBLE]
    	
 
    
	
Title:
    	
C.F.O.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
TENANT:
    	
 
    
	
 
    	
 
    
	
NEKTAR   THERAPEUTICS,
    	
 
    
	
a   Delaware corporation
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ [ILLEGIBLE]
    	
 
    
	
Name:
    	
[ILLEGIBLE]
    	
 
    
	
Title:
    	
SVP, CFO
    	
 
    

 

 

EXHIBIT A

 

ADDITIONAL PREMISES

 

[See attached]

 

 

 

 

 

 

 

 

 

 

EXHIBIT E

 

WORK LETTER

 

This Work Letter (the “Work Letter”) is made and entered into as of the 19th day of July, 2007, by and between BMR-201 INDUSTRIAL ROAD LLC, a Delaware limited liability company (“Landlord,” as successor-in-interest to Inhale 201 Industrial Road, L.P. (“Original Landlord”)), and NEKTAR THERAPEUTICS, a Delaware corporation (“Tenant”), and is attached to and made a part of that certain SECOND AMENDMENT TO AMENDED AND RESTATED BUILT-TO-SUIT LEASE dated as of July 19, 2007 (the “Amendment”), by and between Landlord and Tenant for the Premises located at 201 Industrial Road in San Carlos, California. All capitalized terms used but not otherwise defined herein shall have the meanings given them in the Amendment.

 

1.                                      General Requirements.

 

1.1.                            Tenant’s Authorized Representative. Tenant designates Todd Hancock (“Tenant’s Authorized Representative”) as the person authorized to initial all plans, drawings, changes orders and approvals pursuant to this Work Letter. Landlord shall not be obligated to respond to or act upon any such item until such item has been initialed by Tenant’s Authorized Representative.

 

1.2.                            Schedule. The schedule for design and development of Tenant’s Work (as hereinafter defined), including, without limitation, the time periods for preparation and review of construction documents, approvals and performance, shall be in accordance with that certain schedule to be prepared by Landlord and Tenant within sixty (60) days following the execution of this Work Letter (the “Schedule”). The Schedule shall be subject to adjustment as mutually agreed upon in writing by the parties, or as provided in this Work Letter.

 

1.3.                            Architects and Consultants. The architect, engineering consultants, design team, general contractor and subcontractors responsible for the construction of Tenant’s Work shall be selected by Tenant and approved by Landlord, such approval not to be unreasonably withheld, conditioned or delayed. Landlord’s approval of the same shall not be unreasonably withheld. Landlord hereby approves of DGA Architects as Tenant’s architect.

 

2.                                      Tenant’s Work.

 

2.1.                            Tenant Work Plans. All work to be performed on the Premises or Additional Premises (collectively, the “Premises”) shall be performed by Tenant (“Tenant’s Work”) at Tenant’s sole cost and expense and without cost to Landlord (except for the TI Allowance) and in accordance with the Approved Plans (as defined below). The quality of Tenant’s Work shall be of a nature and character not less than the quality of the tenant improvements in place at the Building and the Project as of the date of the Amendment. The design drawings, plans and specifications listed on Schedule 2.1 to this Work Letter (the “Tenant Work Plans”) are the initial list of plans that Tenant shall develop and submit to Landlord for approval. Tenant shall prepare and submit to Landlord for approval schematics covering Tenant’s Work prepared in conformity with the applicable provisions of this Work Letter (the “Draft Plans”). The Draft Plans shall contain sufficient information and detail to accurately describe Tenant’s proposed design to Landlord and such other information as Landlord may reasonably request. Tenant shall be solely responsible for ensuring that the Tenant Work Plans and the Draft Plans satisfy Tenant’s obligations for Tenant’s Work.

 

2.2.                            Landlord Approval of Plans. Landlord shall notify Tenant in writing within ten (10) business days after receipt of the Draft Plans whether Landlord approves or objects to the Draft Plans and of the manner, if any, in which the Draft Plans are unacceptable. Landlord shall not object to any Draft Plans that satisfy the requirements set forth in Section 2.1. If Landlord objects to the Draft Plans, then Tenant shall revise the Draft Plans and cause Landlord’s objections to be remedied in the revised Draft Plans. Tenant shall then resubmit the revised Draft Plans to Landlord for approval. Landlord’s approval of or objection to revised Draft Plans and Tenant’s correction of the same shall be in accordance with this Section 2.2, until Landlord has approved the Draft Plans in writing. The iteration of the Draft Plans that is approved by Landlord and Tenant without objection shall be referred to herein as the “Approved Plans.”

 

2.3.                            Completion of Tenant’s Work. Tenant shall perform and complete Tenant’s Work (a) in strict conformance with the Approved Plans, (b) otherwise in compliance with the Amended Lease

 

2

 

and (c) in accordance with applicable laws, Landlord’s insurance carriers and the board of fire underwriters having jurisdiction over the Real Property, Building 1 and the Premises.

 

2.4.                            Conditions to Performance of Tenant’s Work. Prior to the commencement of Tenant’s Work, Tenant shall submit to Landlord for Landlord’s approval (which approval Landlord shall not unreasonably withhold, condition or delay) a list (the “Contractor List”) of project managers, contractors and subcontractors that will perform Tenant’s Work. Landlord shall give Tenant notice in writing of its approval or disapproval of the Contractor List with ten (10) business days after Landlord’s receipt of the same. If Landlord reasonably disapproves of one or more parties on the Contractor List, Tenant shall revise the Contractor List and resubmit the same to Landlord for Landlord’s approval in accordance with the preceding two sentences. For all subcontracts in excess of One Hundred Thousand Dollars ($ 100,000), Tenant shall require its general contractor to provide Tenant with at least three (3) competitive bids.

 

2.5.                            Requests for Consent. Landlord shall respond to all requests for consents, approvals or directions made by Tenant pursuant to this Work Letter within (10) business days following Landlord’s receipt of such request. Landlord’s failure to respond within such ten (10) business day period shall be deemed approval by Landlord.

 

3.                                      Tenant’s Construction Obligations Shall Not Delay Commencement of the Term. Notwithstanding any Tenant Work to be performed by Tenant, the Additional Premises Commencement Date and Tenant’s obligation to pay rent shall not, under any circumstance, be extended or delayed. Tenant shall perform promptly such of its obligations contained in this Work Letter as are to be performed by it. Tenant shall also observe and perform all of its obligations under the Amended Lease from the Additional Premises Commencement Date.

 

4.                                      Completion of Tenant’s Construction Obligations. Tenant, at its sole cost and expense (except for the TI Allowance), shall complete Tenant’s Work described in this Work Letter in all respects in accordance with the provisions of the Amended Lease and this Work Letter. Tenant’s Work shall be deemed completed at such time as Tenant, at its sole cost and expense (except for the TI Allowance) shall furnish to Landlord (a) evidence satisfactory to Landlord that (i) all Tenant’s Work has been completed and paid for in full (which shall be evidenced by the architect’s certificate of completion referenced in Subsection (c) of this paragraph and the general contractor’s and each subcontractor’s and material supplier’s final unconditional waivers and releases of liens, each in a form reasonably acceptable to Landlord and complying with applicable laws), (ii) all Tenant’s Work has been accepted by Landlord, (iii) any and all liens related to Tenant’s Work have either been discharged of record (by payment, bond, order of a court of competent jurisdiction or otherwise) or waived by the party filing such lien and (iv) no security interests relating to Tenant’s Work are outstanding, (b) all certifications and approvals with respect to Tenant’s Work that may be required from any governmental authority and any board of fire underwriters or similar body for the use and occupancy of the Additional Premises, (c) an affidavit from Tenant’s architect certifying that all work performed in, on or about the Premises is in accordance with the Approved Plans and (d) complete drawing print sets and electronic CADD files on disc of Tenant’s Work.

 

5.                                      Insurance. Prior to commencing Tenant’s Work, Tenant shall provide, or shall cause Tenant’s contractors and subcontractors to provide, to Landlord, in addition to the insurance required of Tenant pursuant to the Lease, at all times during the period of construction of Tenant’s Work, statutory workers’ compensation insurance as required by applicable laws.

 

6.                                      Liability. Except to the extent caused by Landlord’s gross negligence or willful misconduct, Tenant assumes sole responsibility and liability for any and all injuries or the death of any persons, including Tenant’s contractors and subcontractors and their respective employees, and for any and all damages to property caused by, resulting from or arising out of any act or omission on the part of Tenant, Tenant’s contractors or subcontractors, or their respective employees in the prosecution of Tenant’s Work. Tenant agrees to indemnify, defend, protect and save free and harmless Landlord and Landlord’s affiliates, agents and employees from and against all losses and expenses, including reasonable attorneys’ fees and expenses, that Landlord may incur as the result of claims or lawsuits due to, because of, or arising out of any and all such injuries, death or damage, whether real or alleged, and Tenant and Tenant’s contractors and subcontractors shall assume and defend at their sole cost and expense all such claims or lawsuits; provided, however, that nothing contained in this Work Letter shall be deemed to indemnify or otherwise hold Landlord harmless from or against

 

3

 

liability caused by Landlord’s gross negligence or willful misconduct. Any deficiency in design or construction of Tenant’s Work shall be solely the responsibility of Tenant, notwithstanding the fact that Landlord may have approved of the same in writing. All material and equipment furnished by Tenant as Tenant’s Work shall be new or “like new” and Tenant’s Work shall be performed in a first-class, workmanlike manner.

 

7.                                      TI Allowance.

 

7.1.                            Contribution of TI Allowance. Landlord shall contribute the TI Allowance toward the costs and expenses incurred in connection with the performance of Tenant’s Work, in accordance with the terms and provisions of the Amended Lease and this Work Letter. If the entire TI Allowance is not applied toward or reserved for the costs of Tenant’s Work, Tenant shall not be entitled to a credit of such unused portion of the TI Allowance.

 

7.2.                            Approval of Budget for Tenant’s Work. Notwithstanding anything to the contrary set forth elsewhere in this Work Letter or the Amended Lease, Landlord shall not have any obligation to advance to Tenant any portion of the TI Allowance until Landlord shall have approved in writing the budget for the Tenant’s Work (the “Approved Budget”), such approval not to be unreasonably withheld, conditioned or delayed. Upon written notice to Landlord and subject to Landlord’s review and approval, Tenant shall be permitted to revise the Approved Budget during the course of construction of the Tenant’s Work. Tenant shall submit such revisions to the Approved Budget to Landlord for its review and approval, such approval not to be unreasonably withheld, conditioned or delayed. The Approved Budget, as revised by Tenant and approved by Landlord is hereinafter referred to as the “Revised Budget”. Prior to Landlord’s approval of the Approved Budget, Tenant shall pay all of the costs and expenses incurred in connection with Tenant’s Work as they become due. Landlord shall not be obligated to reimburse Tenant for costs or expenses relating to Tenant’s Work that exceed either (a) the amount of the TI Allowance (other than pursuant to Section 8.2) or (b) the Approved Budget or the Revised Budget, as the case may be, either on a line item or overall basis.

 

7.3.                            Advance Requests. Upon submission by Tenant to Landlord of (a) a statement (an “Advance Request”) setting forth the total amount requested, (b) a detailed summary of the Tenant’s Work performed using AIA standard form Application for Payment (G 702) executed by the general contractor and by the architect, (c) lien releases from the general contractor and each subcontractor and material supplier with respect to the portion of Tenant’s Work corresponding to the Advance Request, then Landlord shall, within thirty (30) days following receipt by Landlord of an Advance Request and the accompanying materials required by this Section 7.3, pay to Tenant the amount set forth in such Advance Request; provided, however, that, with respect to any Advance Requests subject to the limits set forth in Section 7.2, Landlord shall advance to Tenant the requested amount as limited by Section 7.2.

 

7.4.                            Application of TI Allowance. Tenant may apply the TI Allowance for the payment of construction and other costs (including, without limitation, standard laboratory improvements; finishes; building fixtures; building permits; and architectural, engineering, design and consulting fees), in each case as reflected in the Approved Budget or the Revised Budget, as the case may be, and the Approved Plans. In no event shall the TI Allowance be applied to: (a) payments to Tenant or any affiliates of Tenant, (b) the purchase of any furniture, personal property or other non-building system equipment, (c) the cost of work that is not authorized by the Approved Plans or otherwise approved in writing by Landlord, (d) costs resulting from any default by Tenant of its obligations under the Amended Lease or (e) costs that are recoverable or reasonably recoverable by Tenant from a third party (e.g., insurers, warrantors, or tortfeasors).

 

8.                                      Changes. Any changes to Tenant’s Work (each, a “Change”) requested by Landlord or Tenant after Landlord approves the Approved Plans in writing shall be requested and instituted in accordance with the provisions of this Article 8 and shall be subject to the reasonable written approval of the other party.

 

8.1.                            Changes Requested by Tenant.

 

(a)                                 Tenant may request Changes after Landlord approves the Approved Plans by notifying Landlord thereof in writing in substantially the same form as the AIA standard change order form (a “Tenant Change Order Request”), which Tenant Change Order Request shall detail the

 

4

 

nature and extent of any requested Changes. If the nature of a Change requires revisions to the Approved Plans, then Tenant shall be solely responsible for the cost and expense of such revisions. Tenant Change Order Requests shall be signed by Tenant’s Authorized Representative.

 

(b)                                 Landlord shall approve or reject any Tenant Change Order Requests in accordance with the procedures established pursuant to Article 2. If Landlord does not approve in writing a Tenant Change Order Request, then such Tenant Change Order Request shall be deemed rejected by Landlord, and Tenant shall not be permitted to alter Tenant’s Work as contemplated by such Tenant Change Order Request.

 

8.2.                                    Changes Requested by Landlord. Landlord may request Changes after Landlord approves the Approved Plans by notifying Tenant thereof in writing in substantially the same form as the AIA standard change order form (a “Landlord Change Order Request”), which Landlord Change Order Request shall detail the nature and extent of any requested Changes. If the nature of a Change requires revisions to the Approved Plans, then Landlord shall be solely responsible for the cost and expense of such revisions. Landlord shall reimburse Tenant for all additional costs and expenses payable by Tenant to complete Tenant’s Work due to a Landlord-requested Change in accordance with the payment provisions of this Work Letter.

 

8.3.                                    Preparation of Estimates. Tenant shall, before proceeding with any Change, using its best efforts, prepare as soon as is reasonably practicable (but in no event more than five (5) business days after delivering a Tenant Change Order Request to Landlord or receipt of a Landlord Change Order Request) an estimate of the increased costs or savings that would result from such Change, as well as an estimate on such Change’s effects on the Schedule. Landlord shall have ten (10) business days after receipt of such information from Tenant to (a) in the case of a Tenant Change Order Request, approve or reject such Tenant Change Order Request in writing, or (b) in the case of a Landlord Change Order Request, notify Tenant in writing of Landlord’s decision either to proceed with or abandon the Landlord-requested Change.

 

9.                                      Miscellaneous.

 

9.1.                            Headings, Etc. Where applicable in this Work Letter, the singular includes the plural and the masculine or neuter includes the masculine, feminine and neuter. The section headings of this Work Letter are not a part of this Work Letter and shall have no effect upon the construction or interpretation of any part hereof.

 

9.2.                            Time of the Essence. Time is of the essence with respect to the performance of every provision of this Work Letter in which time of performance is a factor.

 

9.3.                            Covenants. Each provision of this Work Letter performable by Tenant shall be deemed both a covenant and a condition.

 

9.4.                            Consent. Whenever consent or approval of either party is required, that party shall not unreasonably withhold such consent or approval, except as may be expressly set forth to the contrary.

 

9.5.                            Entire Agreement. The terms of this Work Letter are intended by the parties as a final expression of their agreement with respect to the terms as are included herein, and may not be contradicted by evidence of any prior or contemporaneous agreement, other than the Amended Lease.

 

9.6.                            Invalid Provisions. Any provision of this Work Letter that shall prove to be invalid, void or illegal shall in no way affect, impair or invalidate any other provision hereof, and all other provisions of this Work Letter shall remain in full force and effect and shall be interpreted as if the invalid, void or illegal provision did not exist.

 

9.7.                            Construction. The language in all parts of this Work Letter shall be in all cases construed as a whole according to its fair meaning and not strictly for or against either Landlord or Tenant.

 

9.8.                            Assigns. Each of the covenants, conditions and agreements herein contained shall inure to the benefit of and shall apply to and be binding upon the parties hereto and their respective

 

5

 

heirs; legatees; devisees; executors; administrators; and permitted successors, assigns, sublessees. Nothing in this Section 9.8 shall in any way alter the provisions of the Amended Lease restricting assignment or subletting.

 

9.9.                            Authority. Tenant covenants and warrants that the individual signing this Work Letter on Tenant’s behalf has the power, authority and legal capacity to sign this Work Letter on behalf of Tenant and to bind Tenant to the terms hereof. Landlord covenants and warrants that the individual signing this Work Letter on Landlord’s behalf has the power, authority and legal capacity to sign this Work Letter on behalf of Landlord and to bind Landlord to the terms hereof

 

9.10.                     Counterparts. This Work Letter may be executed in one or more counterparts, each of which, when taken together, shall constitute one and the same document.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Work Letter to be effective on the date first above written.

 

LANDLORD:

 

BMR-201 INDUSTRIAL ROAD LLC,

a Delaware limited liability company

 

 

	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

 

TENANT:

 

NEKTAR THERAPEUTICS,

a Delaware corporation

 

 

	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

 

SCHEDULE 2.1 TO EXHIBIT E

 

TENANT WORK PLANS

 

Architectural Drawings

 

1.  Site plan

2.  Floor and reflected ceiling plans

3.  Elevations (exterior and interior)

4.  Sections (building and wall)

5.  Details (exterior and interior)

6.  Schedules (doors, windows, finishes, etc.)

 

Engineering Drawings

 

1.  Mechanical

2.  Plumbing

3.  Electrical

4.  Fire protection

5.  Civil engineering

6.  Landscape architecture

 

Specifications — Required for all disciplines listed above

 

 

EXHIBIT B

Subleased Premises

 

 

B-1

 

EXHIBIT C

 

Subtenant’s Plans for the Sublease Alterartions

 

C-1

 

EXHIBIT D

 

Inventory of Included Furniture

 

D-1

 

EXHIBIT E

 

Inventory of Excluded Assets

 

E-1Exhibit 10.6

 

Execution Version

 

SUBLEASE AGREEMENT

 

THIS SUBLEASE AGREEMENT (this “Sublease”) is made as of March , 2014 by and between INTREXON CORPORATION, a Virginia corporation (“Sublandlord”) and NATERA, INC., a Delaware corporation (“Subtenant”).

 

WHEREAS, Sublandlord is the tenant under that certain Lease by and between BMR-201 Industrial Road L.P., a Delaware limited partnership (“Prime Landlord”), and Sublandlord, as tenant, dated August 5, 2011 (such Prime Lease, as amended on September 23, 2011 (“First Amendment”), and as it may be further amended from time to time, the “Prime Lease”), for certain space (the “Premises”) located at 201 Industrial Road, San Carlos, CA. (the “Building”). A true and correct redacted copy of the Prime Lease is attached hereto as Exhibit A.

 

WHEREAS, Sublandlord wishes to sublease to Subtenant and Subtenant wishes to sublease from Sublandlord that portion of the fourth (4th) floor of the Building estimated to be approximately 8,386 square feet (“Suite 420”) and 18,853 square feet (“Suite 450” and, together with Suite 420, the “Premises”), for an aggregate amount of sublease in the Building of approximately 27,239 square feet.

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, upon and subject to the terms and conditions of this Sublease, the parties hereby agree as follows, subject to obtaining Prime Landlord’s Consent as defined below:

 

1.                                      The Subleased Premises

 

(a)                                 The foregoing recitals are incorporated in and are a part of this Sublease. Sublandlord hereby (i) subleases to Subtenant and Subtenant hereby subleases from Sublandlord, Suite 420, which is more particularly described on Exhibit B (“Suite 420 Sublease Premises”), and, (ii) upon the Suite 450 Sublease Commencement Date, subleases to Subtenant and Subtenant hereby subleases from Sublandlord, Suite 450, which is more particularly described on Exhibit B (the “Suite 450 Sublease Premises” and, together with the Suite 420 Sublease Premises, the “Subleased Premises”).

 

(b)                                 The term of the Sublease with respect to Suite 420 Sublease Premises (the “Suite 420 Term”) shall commence on the receipt of Prime Landlord’s Consent (the “Suite 420 Commencement Date”), and shall expire on January 31, 2017 (the “Expiration Date”), unless the Suite 420 Term shall sooner terminate pursuant to the terms of this Sublease. At Sublandlord’s request, promptly after the Suite 420 Commencement Date is ascertained, Sublandlord and Subtenant shall execute a written declaration (the “Suite 420 Declaration”) setting forth the Suite 420 Commencement Date and the date upon which the term of this Sublease will expire. Any failure of the parties to execute such Suite 420 Declaration shall not affect the validity of the Suite 420 Commencement Date as determined in accordance with this Section.

 

 

(c)                                  The term of the Sublease with respect to the Suite 450 Sublease Premises (the “Suite 450 Term” and, together with the Suite 420 Term, the “Term”) shall commence on the later of (i) the receipt of Prime Landlord’s Consent, (ii) September 1, 2014 or (iii) upon Sublandlord’s move out of Suite 450 (the “Suite 450 Commencement Date” and, together with the Suite 420 Commencement Date, the “Commencement Date”), and shall expire on the Expiration Date, unless the Suite 450 Term shall sooner terminate pursuant to the terms of this Sublease. If, at any time, Sublandlord believes, for any reason, that it is reasonably likely that its move out of Suite 450 will not have occurred prior to November 1, 2014, Sublandlord shall promptly notify Subtenant in writing of such anticipated delay and shall grant Subtenant one of the following additional rights: (i) Subtenant shall have the right to immediately terminate the sublease of Suite 450 under this Sublease upon written notice to Sublandlord delivered anytime within thirty (30) days of Subtenant’s receipt of such notice from Sublandlord, in which case the Premises shall consist solely of Suite 420 or (ii) prior to any termination of the Sublease of Suite 450 by Subtenant, Subtenant shall have the right to receive a credit from Sublandlord against Base Rent (which shall accrue and shall be applied against any Base Rent payable under this Sublease at such time that Base Rent becomes due) in an amount calculated as follows:

 

	
For each day after November 1, 2014 through   November 30, 2014
    	
 
    	
$
    	
1,889.00
    	
 
    
	
For each day after November 30, 2014 through   December 31, 2014
    	
 
    	
$
    	
2,833.50
    	
 
    
	
For each day after December 31, 2014
    	
 
    	
$
    	
3,778.00
    	
 
    

 

Without limiting the foregoing, in the event the Suite 450 Commencement Date has not been reached as of January 31, 2015, Subtenant shall have the right, but not the obligation, to terminate the Sublease upon written notice to Sublandlord delivered by February 15, 2015. If Subtenant elects to terminate the Sublease pursuant to the immediately preceding sentence, Sublandlord shall pay to Subtenant in cash the amount of the credit accrued against the Base Rent through January 31, 2015 in the table above to the extent not already applied by Sublandlord against the Base Rent. At Sublandlord’s request, promptly after the Suite 450 Commencement Date is ascertained, Sublandlord and Subtenant shall execute a written declaration (the “Suite 450 Declaration”) setting forth the Suite 450 Commencement Date and the date upon which the term of this Sublease will expire. Any failure of the parties to execute such Suite 450 Declaration shall not affect the validity of the Suite 450 Commencement Date as determined in accordance with this Section. SUBTENANT HEREBY WAIVES THE REQUIREMENTS OF SECTION 1933 OF THE CALIFORNIA CIVIL CODE AS THE SAME MAY BE AMENDED FROM TIME TO TIME.

 

(d)                                 Sublandlord will not make, and is under no obligation to make, any structural or other alterations, decorations, additions or improvements in or to the Subleased Premises. Subtenant acknowledges that it has inspected the Subleased Premises and accepts possession thereof strictly in “AS-IS” condition as of the date of its occupancy. EXCEPT AS EXPRESSLY PROVIDED HEREIN, SUBLANDLORD EXPRESSLY DISCLAIMS ALL WARRANTIES, REPRESENTATIONS OR COVENANTS, EXPRESS OR IMPLIED, REGARDING THE CONDITION OF THE SUBLEASED PREMISES OR ANY OF ITS CONTENTS, OR THEIR SUITABILITY FOR SUBTENANT’S USE. Notwithstanding any provision herein to the contrary, the Suite 420 Sublease Premises and Suite 450 Sublease Premises shall be delivered by

 

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Sublandlord to Subtenant on the Suite 420 Commencement Date and Suite 450 Commencement Date, respectively, vacant and in broom-clean condition with all personal property, furniture, fixtures and equipment removed therefrom (other than the Sublease Furniture (as defined in Section 19(n) below)), and where applicable, decommissioned and decontaminated. Sublandlord represents and warrants to Subtenant that, to Sublandlord’s knowledge, effective as of the Suite 420 Commencement Date and Suite 450 Commencement Date, respectively, the heating, ventilating and air conditioning systems and the cabling and electrical systems serving the Subleased Premises are in good, working order and repair.

 

2.                                      Prime Lease

 

(a)                                 It is understood that Sublandlord is a sublandlord and that Sublandlord grants this Sublease under and by virtue of its rights under the Prime Lease and that this Sublease is subordinate and subject to the Prime Lease. Except as set forth below, the provisions of the Prime Lease are incorporated herein by reference, and made a part hereof, except that: (i) each reference in such incorporated sections to “Lease” shall be deemed a reference to this “Sublease”; (ii) each reference to the “Premises” shall be deemed a reference to the “Subleased Premises”; (iii) each reference to “Landlord” shall be deemed a reference to “Sublandlord” and each reference to “Tenant” shall be deemed a reference to “Subtenant”, except as otherwise expressly set forth herein; (iv) with respect to work, services, utilities, electricity, repairs (including, without limitation, repairs of any damage caused by Prime Landlord), restoration, insurance, indemnities, reimbursements, title, representations, warranties, covenants or the performance of any other obligation of the “Landlord” under the Prime Lease, whether or not incorporated herein, (A) reference to “Landlord” shall be deemed a reference solely to Landlord, and (B) the sole obligation of Sublandlord shall be to request the same in writing from Prime Landlord as and when requested to do so by Subtenant, and to use Sublandlord’s reasonable efforts (not including the payment of money or the incurring of any liabilities) to obtain Prime Landlord’s performance (provided, however, that Sublandlord shall not be required to institute any legal proceedings against Prime Landlord unless Subtenant pays all costs, and indemnifies, defends and holds Sublandlord harmless against all losses, costs (including reasonable attorney’s fees), claims, liabilities and damages, in connection therewith); (v) with respect to any obligation of Subtenant to be performed under this Sublease, wherever the Prime Lease grants to the “Tenant” a specified number of days to perform its obligations under the Prime Lease (including, without limitation, curing any defaults), Subtenant shall have three (3) fewer calendar days (or such lesser time as may be provided in this Sublease) to perform the obligation, but in no case shall Subtenant have less than three (3) business days to perform the obligation; (vi) with respect to any approval or consent required to be obtained from the “Landlord” under the Prime Lease, such approval or consent must be obtained from both Prime Landlord and Sublandlord, and Sublandlord’s withholding of approval or consent shall in all events be deemed reasonable if for any reason Prime Landlord’s approval or consent is not obtained, and if Prime Landlord’s approval may not be unreasonably withheld, conditioned and/or delayed under the Prime Lease, then Sublandlord’s consent shall likewise not be unreasonably withheld, conditioned and/or delayed, as the case may be; (vii) in any case where the “Landlord” reserves or is granted the right to manage, supervise, control, repair, alter, regulate the use of, enter or use the Premises or any areas beneath, above or adjacent thereto, such reservation or grant of right of entry shall be

 

3

 

deemed to be for the benefit of both Prime Landlord and Sublandlord; (viii) in any case where “Tenant” is to indemnify, release or waive claims against “Landlord”, such indemnity, release or waiver shall be deemed to run from Subtenant to both Prime Landlord and Sublandlord; (ix) in any case where “Tenant” is to execute and deliver certain documents or notices to “Landlord”, such obligation shall be deemed to run from Subtenant to both Prime Landlord and Sublandlord; (x) all payments shall be made to Sublandlord, except as otherwise expressly required by the Prime Lease or Prime Landlord’s Consent; (xi) Subtenant shall pay all consent and review fees described in the Prime Lease; (xii) Subtenant shall not have the right to terminate this Sublease as to any or all of the Subleased Premises due to casualty or condemnation unless Sublandlord has such right (and opts to exercise such right) under the Prime Lease; and (xiii) the following provisions of the Prime Lease are not incorporated herein:  Section 2.1; Section 2.2; Section 2.3; Section 2.4; Section 2.5; Section 2.6; Section 2.8; Section 2.10; Section 3; Section 4; Section 7.1; Section 8; Section 11; Section 12.1; Section 33; Section 41; Section 42; Exhibit A; Exhibit B; Exhibit D; and Exhibit F; and with respect to the First Amendment: Section 3; Section 5; Section 6; Section 8; Section 9; Section 10; Section 11; Section 12; Section 13; Section 15; and any other provisions that are contrary to the terms of this Sublease.  For purposes of this Sublease, all references to “Prime Lease” hereunder shall refer to the Prime Lease, excluding those Sections set forth in Section 2(a)(xiii).  As between Sublandlord and Subtenant, the provisions of Section 35.1 shall not apply, but shall apply as between Sublandlord and Prime Landlord, and Subtenant and Prime Landlord.

 

Subtenant expressly assumes and agrees to comply with all provisions of the Prime Lease and perform all of the obligations on the part of the “Tenant” to be performed under the Prime Lease (except where such obligation arises by reason of a (i) breach of Sublandlord under this Sublease, or (ii) breach of Sublandlord under the Prime Lease (other than a breach of the Prime Lease caused by Subtenant’s breach of its obligations under this Sublease)).  In the event that the Prime Lease is terminated for any reason whatsoever, then subject to the provisions of, and Prime Landlord’s rights under the Prime Lease, this Sublease shall terminate simultaneously with such termination without any liability of Sublandlord to Subtenant.  Subject to Subtenant’s performance of its obligations under this Sublease, Sublandlord shall not default in its monetary obligations under the Prime Lease (beyond any applicable notice and cure period).

 

(b)                                 During the term of this Sublease, Sublandlord shall promptly deliver to Subtenant copies of any and all notices of default delivered to or received from Prime Landlord.

 

(c)                                  Sublandlord hereby warrants and represents to Subtenant that (i) the Prime Lease is in full force and effect and Sublandlord has not received any notice of default thereunder from Prime Landlord which remains uncured as of the date hereof, and (ii) to Sublandlord’s knowledge, neither Sublandlord or Prime Landlord is in default under the Prime Lease (beyond any applicable notice and cure period), and there are no circumstances which with the giving of notice or passage of time would give rise to a default under the Prime Lease.

 

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3.                              Rent

 

(a)                                 The base rent for the Suite 420 Sublease Premises (the “Suite 420 Base Rent”) and the Suite 450 Sublease Premises (the “Suite 450 Base Rent”) due hereunder from Subtenant to Sublandlord in the manner provided below shall be as follows:

 

Suite 420 Base Rent / 8,386 SF of Office Space

 

	
Months
    	
 
    	
NNN Service Rent/RSF/Month
    	
 
    
	
1-3
    	
 
    	
Rent   Abated
    	
 
    
	
5-12
    	
 
    	
$1.25
    	
 
    

 

Suite 450 Base Rent / 18,853 SF of Lab Space

 

	
Months 
    	
 
    	
NNN Service Rent/RSF/Month
    	
 
    
	
1-12
    	
 
    	
$2.45
    	
 
    

 

The Suite 420 Base Rent and the Suite 450 Base Rent shall each escalate by three percent (3%) annually (on the anniversary of each applicable Commencement Date after the first year) through the end of the Term and including January 31, 2017. Each such monthly installment shall be paid in advance on or before the first of every month throughout the Term; provided, however, that Subtenant shall pay the first full monthly installment of Suite 420 Base Rent simultaneously with its execution of this Sublease.

 

For purposes of interpreting this Sublease and the Prime Lease, the term “Base Rent” shall mean: (a) prior to the Suite 450 Commencement Date, the Suite 420 Base Rent; and (b) from and after the Suite 450 Commencement Date, the Suite 420 Base Rent together with the Suite 450 Base Rent.

 

(b)                                 All amounts, other than Base Rent, payable by Subtenant hereunder are defined as “Additional Rent.” Base Rent and Additional Rent are defined herein collectively as “Rent.” It is agreed that Subtenant shall be required to pay its Share of Operating Expenses (as required of Sublandlord under the Prime Lease), as well as any and all other amounts which become due and payable by Sublandlord to Prime Landlord as additional rent thereunder or otherwise and which would not have been due and payable but for the acts, requests for services and/or failure to act of Subtenant, its agents, officers, contractors, invitees employees or visitors, including without limitation (i) increases in insurance premiums, (ii) fees for review of plans and specifications and (iii) charges for special or after hours services. All Base Rent shall be paid without notice, demand, set off, deduction, or counterclaim of any kind and all Additional Rent shall be paid without demand, set off, or deduction. The obligation of Subtenant to pay Rent, and the obligations of Sublandlord, are independent obligations. The monthly Base Rent for any partial month shall be pro-rated based on a thirty (30) day month. Subtenant shall be responsible for all telecommunications, including phone and internet services, through direct contract with commercial providers of such services.

 

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(c)                                  If Subtenant fails to pay Base Rent or Additional Rent hereunder on or before the fifth (5th) day after such payment is due, Subtenant shall pay to Sublandlord a late charge of five percent (5%) of the amount of such overdue Base Rent or Additional Rent. In addition, any such late payment shall bear interest from the fifth (5th) day after such payment is due to the date of payment thereof by Subtenant at the rate (the “Default Rate”) of the lesser of 12% per annum or the maximum interest rate allowed by law. Notwithstanding the foregoing, with respect to the first occurrence during any 12 month period that Subtenant fails to make payment on or before the fifth (5th) day after such payment is due, Sublandlord shall provide Subtenant with written notice of such non-payment and a three-day opportunity to cure before a late charge or interest is charged to Subtenant. Subtenant’s obligations to pay such amounts shall survive the expiration or termination of this Sublease. Sublandlord’s acceptance of any interest or late charge shall not waive Subtenant’s default in failing to pay the delinquent amount.

 

(d)                                 Rent shall be paid to Sublandlord in lawful money of the United States of America by good check to the following address:

 

Intrexon Corporation

Attn: Finance Department

1872 Pratt Drive

Blacksburg, VA 24060

 

Sublandlord’s acceptance of late Rent shall not excuse such delay nor any future delays in payment nor constitute a waiver of rights. The provisions of this Section 3(c) shall survive the expiration or termination of this Sublease.

 

4.                                      Nature of Occupancy; Hazardous Materials.

 

Subtenant shall use and occupy the Subleased Premises solely as general office, research, development, laboratory, and other related legal uses subject to Sublandlord’s approval which shall not be unreasonably withheld (and not for any other purposes) and at all times in compliance with the terms of the Prime Lease and its Rules and Regulations. For the avoidance of doubt, Subtenant shall comply with the provisions of Section 21 of the Prime Lease regarding use or storage of Hazardous Materials as defined therein. Subtenant shall, at its sole cost and expense, comply with all laws, regulations and ordinances applicable to the Subtenant’s particular use and occupancy of the Subleased Premises.

 

Sublandlord shall not be liable for any damage, injury, claim or loss, directly or indirectly resulting from, nor shall the Rent be abated or a constructive or other eviction be deemed to have occurred by reason of (a) any installation, use or interruption of use of any equipment in connection with furnishing or supplying any services, or (b) any failure or delay in furnishing any services. Any property placed by Subtenant in or about the Subleased Premises shall be at the sole risk of Subtenant. Notwithstanding the foregoing, if Sublandlord actually receives abatement of Rent in accordance with Section 16.2 of the Prime Lease, then Subtenant shall likewise be entitled to a proportional abatement of Rent.

 

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5.                                      Default, Remedies and Indemnification of Sublandlord

 

(a)                                 If (i) Subtenant defaults in the performance of any of the covenants, conditions or agreements contained in this Sublease or the Prime Lease and fails to cure the same after five (5) days after the date such payment is due for monetary defaults (provided, that with respect to the first occurrence during any 12 month period that Subtenant fails to make payment on or before the fifth (5th) day after such payment is due, Sublandlord shall provide Subtenant with written notice of such non-payment and a three-day opportunity to cure), and after ten (10) days written notice for non-monetary defaults, regardless of any longer cure periods set forth in the Prime Lease (unless (A) such non-monetary default is a default or causes an “Default” under the Prime Lease for which no cure period is provided in the Prime Lease, or which is designated an “uncurable” Default in the Prime Lease, in which events there shall be no cure period under this Sublease, (B) a lesser cure period is provided in the Prime Lease, in which case the lesser cure period shall apply, and (C) such non-monetary default is not one described in the immediately preceding clauses (A) or (B) and is incapable of being cured within ten (10) days, in which event Subtenant shall have a reasonable period of time if it diligently commences and proceeds to cure the same but not to exceed forty-five (45) days, inclusive of the original ten (10) days), (ii) any other act or omission of Subtenant occurs and constitutes a Default under the Prime Lease or (iii) an insolvency occurs involving Subtenant, then in each such event Sublandlord shall be entitled to invoke against Subtenant the remedies which are available to Prime Landlord under the Prime Lease and any other remedy available at law or equity. Further, anything to the contrary notwithstanding, (i) Subtenant shall indemnify and hold harmless Sublandlord from and against any and all losses, claims, damages, liabilities, actions, costs and expenses (including attorneys’ fees) (“Claims”) to the extent arising out of Subtenant’s gross negligence or willful misconduct in connection with the Subleased Premises and/or breach of this Sublease or the Prime Lease; and (ii) Sublandlord shall indemnify and hold harmless Subtenant from and against any and all Claims to the extent arising out of Sublandlord’s gross negligence or willful misconduct in connection with the Subleased Premises and/or breach of this Sublease or Prime Lease (excluding any breach of the Prime Lease caused by Subtenant’s breach of its obligations under this Sublease).

 

(b)                                 Subtenant hereby expressly waives any notice to quit or vacate which may be otherwise required by law.

 

(c)                                  In the event either party hereto brings or commences legal proceedings to enforce any of the terms of this Sublease, the successful party in such action shall then be entitled to receive and shall receive from the other of said parties, in every such action commenced, a reasonable sum as attorney’s fees and costs, to be fixed by the court in the same action.

 

6.                                      Improvements

 

Subtenant shall not make any improvements, alterations or installations to the Subleased Premises, structural or otherwise, without (a) strict compliance with Section 17 of the Prime Lease, including, without limitation, Prime Landlord’s prior written consent, and (b) Sublandlord’s prior written consent, not to be unreasonably withheld, conditioned or delayed.

 

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7.                                      Condition; Services

 

The parties acknowledge and agree that, except as expressly provided in this Sublease, Sublandlord has made no representations or warranties, express or implied, whatsoever with respect to the Subleased Premises, including, without limitation, any representation or warranty as to the suitability of the Subleased Premises for Subtenant’s intended use or any representation or warranty made by Prime Landlord under the Prime Lease. Sublandlord shall have no obligation to make or perform any alterations, improvements or repairs to the Subleased Premises or to pay all or any portion of the costs incurred therefor, including, without limitation. any improvement or repair required to comply with any law, regulation, building code or ordinance (including the Americans with Disabilities Act of 1990, as amended). In addition, Sublandlord shall have no obligation to perform any repairs, provide any services or utilities, or perform any other obligation of Prime Landlord required to be performed by Prime Landlord under the terms of the Prime Lease (including, without limitation, Prime Landlord’s obligations to comply with laws and carry insurance). Sublandlord shall, however, request performance of the same in writing from Prime Landlord promptly after being requested to do so by Subtenant and shall use Sublandlord’s reasonable efforts to obtain Prime Landlord’s performance, at Subtenant’s cost. Subtenant expressly waives the provisions of any laws that would permit Subtenant to terminate this Sublease for any failure of Prime Landlord or Sublandlord to perform any maintenance or repairs or that would permit Subtenant to make repairs at the expense of Prime Landlord or Sublandlord.

 

8.                                      Notices

 

Notices required or permitted hereunder shall conform to Section 39 of the Prime Lease, except as to the identities and addresses of the parties, which shall be as follows:

 

Sublandlord:

Intrexon Corporation

Attn: Finance Department

1872 Pratt Drive

Blacksburg, VA 24060

 

With a copy to

Intrexon Corporation

Attn: Legal Department

20358 Seneca Meadows Parkway

Germantown, MD 20876

 

Subtenant:

Natera, Inc.

Attn: Controller

201 Industrial Road, Ste 410

San Carlos, CA 94070

 

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With a copy to

Natera, Inc.

Attn: Legal Department

201 Industrial Road, Ste 410

San Carlos, CA 94070

 

9.                                      Insurance

 

(a)                                 Subtenant shall obtain and at all times during the Term hereof maintain, at its sole cost and expense, all policies of insurance (including, without limitation, a comprehensive general liability insurance policy and policies covering fixtures, property and equipment installed or located in the Subleased Premises) as required of Sublandlord (as Tenant), and in such amounts, as set forth in the Prime Lease.

 

(b)                                 All policies of insurance as aforesaid shall comply with the requirements of the Prime Lease and shall name Sublandlord, Prime Landlord, Prime Landlord’s management agent, and Prime Landlord’s lender(s) as additional insureds, as their interests may appear.

 

10.                               Subordination

 

This Sublease is subject and subordinate to the Prime Lease, to all ground leases, and to all mortgages and deeds of trust which may now or hereafter affect such leases, the leasehold estate or estates thereby created or the real property of which the Subleased Premises form a part, and to any and all renewals, modifications, amendments, consolidations, replacements and extensions thereof, provided that, notwithstanding any provision in this Sublease or the Prime Lease to the contrary, Sublandlord agrees not to effect any modification, termination or amendment of the Prime Lease which materially, adversely affects the rights of Subtenant hereunder without the prior written consent of Subtenant in each case (which consent shall not be unreasonably withheld, conditioned or delayed). This section shall be self-operative and no further instrument of subordination shall be required. Subtenant shall, however, execute any certificates confirming such subordination which Sublandlord or Prime Landlord may reasonably request no later than ten (10) days after receipt of such request.

 

11.                               Assignment and Further Subleases

 

Subtenant agrees that it will not, directly or indirectly assign, assign by operation of law, Transfer (as defined in Section 29 of the Prime Lease), or encumber, or permit to be encumbered, its right or interests under this Sublease, nor sub-sublet the whole or any part of the Subleased Premises, except (a) in strict compliance with Section 29 of the Prime Lease, (b) the prior written consent of Sublandlord in each case, which consent shall not be unreasonably withheld, and (iii) the prior written consent of Prime Landlord in accordance with Section 29 of the Prime Lease. Subtenant shall not assign this Sublease, sub-sublet the Subleased Premises, or permit occupancy or use of the Subleased Premises or any part thereof by another party or parties, without giving Sublandlord thirty (30) days prior written notice of Subtenant’s bona fide proposed

 

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assignment or subletting of all or any part of the Subleased Premises (a “Transfer Proposal”). If Subtenant desires to assign this Sublease or sub-sublet all or any portion of the Subleased Premises, then upon receipt of the Transfer Proposal, Sublandlord shall have the right, at its option during said thirty (30) day period, either (i) to the extent the Transfer Proposal includes more man seventy-five percent (75%) of the Subleased Premises, to terminate this Sublease, (ii) release Subtenant from the Sublease for such space, or (iii) sublet such space from the Subtenant at the same rental as in Subtenant’s proposed sub-sublease. The consent by Sublandlord to any assignment, transfer, or subletting to any party other than Sublandlord shall not be construed as a waiver or release of Subtenant from the terms of any covenant or obligation under this Sublease, nor shall the collection or acceptance of rent from any such assignee, transferee, subtenant or occupant constitute a waiver or release of Subtenant from any covenant or obligation contained in this Sublease, nor shall such assignment or subletting be construed to relieve Subtenant from giving Sublandlord said thirty (30) days notice, nor from obtaining the consent in writing of Sublandlord to any further assignment or subletting. In the event that Subtenant defaults hereunder, Subtenant hereby assigns to Sublandlord the rent due from any subtenant of Subtenant and hereby authorizes each such subtenant to pay said rent directly to Sublandlord. If Sublandlord consents to an assignment or sublease pursuant to this Section 11, Subtenant shall provide Sublandlord with an executed copy of such assignment or sublease within ten (10) days of its execution. For purposes of the foregoing, a transfer, conveyance, grant or pledge, directly or indirectly, in one or more transactions, of interest in Subtenant (whether stock, partnership interest or other form of ownership or control), or the issuance of new interests, by which an aggregate of more than fifty percent (50%) of the interest in Subtenant shall be vested in a party or parties who are not holders of such interest(s) as of the date hereof shall be deemed an assignment of this Sublease; provided, however, that this limitation shall not apply to any corporation, all the outstanding voting stock of which is listed on a national securities exchange as defined in the Securities Exchange Act of 1934. The merger or consolidation of Subtenant into or with any other entity, or the sale of all or substantially all of Subtenant’s assets, shall be deemed to be an assignment within the meaning of this Section. Sublandlord’s acceptance of any name for listing on the Building directory will not be deemed, nor will it substitute for Sublandlord’s consent to any sublease, assignment or other occupancy of the Subleased Premises. In the event of an assignment or subletting not in conformance with the terms of this Sublease, such assignment and/or subletting shall be void ab initio and Sublandlord shall have the right to terminate this Sublease or to require that the Subleased Premises be surrendered to Sublandlord for the balance of the Term (in the case of an assignment) or for the term of the proposed sublease (in the case of a sublease). Such termination shall in no event be construed to limit Sublandlord’s right to damages or any other relief for the violation of the terms of this Sublease. In the event that Sublandlord approves an assignment or subletting of all or any portion of the Subleased Premises, Subtenant shall pay from time to time to Sublandlord as Additional Rent an amount (the “Assignment or Sublet Premium”) equal to fifty percent (50%) of the difference between (a) all sums of any kind or nature paid to Subtenant or its agent by or on behalf of such assignee or subtenant in connection with the assignment or sublease and (b) the Rent paid by Subtenant from time to time under this Sublease and attributable to the portion of the Subleased Premises assigned or sublet. Reasonable brokerage fees and commissions, and costs of alterations in and to the Subleased Premises required by such assignee or subtenant and approved by Sublandlord and Prime Landlord as hereinabove required shall be amortized over the term of such assignment or sublease and deducted prior to calculating the Assignment or Sublet Premium due Sublandlord.

 

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12.                               Surrender

 

(a)                                 Upon the date this Sublease shall expire or be earlier terminated, the Subtenant shall quit and surrender to the Sublandlord the Subleased Premises and remove all of its furniture, furnishings, fixtures, equipment, personal property, alterations and improvements, and all of its computer cabling and wiring, all such removal at Subtenant’s sole cost and expense, using a contractor approved in advance by Sublandlord and Prime Landlord in writing to leave the Subleased Premises broom clean and in as good order and condition as they were on the date the Term of this Sublease commenced and otherwise in the condition required by Section 26 of the Prime Lease upon any surrender of the Premises, ordinary wear and tear excepted. Notwithstanding any provision to the contrary, Subtenant’s surrender obligations shall only apply to furniture, furnishings, fixtures, equipment, personal property, alterations, improvements, and computer cabling and wiring, installed or owned by Subtenant, and/or conditions created by Subtenant. Subtenant’s obligation to perform and observe this covenant shall survive the expiration or other termination of this Sublease. Subtenant shall indemnify, defend and hold harmless Sublandlord from and against any and all losses, costs, claims, liabilities and damages (including reasonable attorneys’ fees) arising from or relating to any failure of Subtenant, any sub-subtenant or any other occupant to surrender the Subleased Premises in the condition required by this Sublease, including, without limitation, all holdover rent, consequential damages and other amounts that Sublandlord shall be obligated to pay to Prime Landlord under the Prime Lease, and all other costs incurred by Sublandlord in returning the Subleased Premises to their required condition. Further, if the term of the Prime Lease has not then expired, but the Term of this Sublease has expired or sooner terminated, then if Subtenant fails to surrender the Subleased Premises at the expiration or earlier termination of the Term hereof, Subtenant shall become a tenant at sufferance, month-to month, and shall pay to Sublandlord immediately upon demand, 150% of the Base Rent then payable and 100% of the Additional Rent then payable under this Sublease, but such payment shall not relieve Subtenant of all liabilities arising from such failure to comply with the provisions of this Section.

 

(b)                                 If Subtenant vacates the Subleased Premises without complying with the requirements of this Section, Sublandlord (in addition to any other rights and remedies that may be available to it) may remove such items and make such repairs, and charge Subtenant for all reasonable third party costs incurred, plus interest at the Default Rate, all due and payable to Sublandlord on demand. Subtenant’s obligations in this Section shall survive the expiration or earlier termination of the Sublease.

 

13.                               Brokers

 

Sublandlord and Subtenant warrant and represent to each other that, other than Jones Lang LaSalle (“Broker”), no broker brought about this transaction or dealt with Sublandlord or Subtenant in connection herewith. Sublandlord shall pay a commission to Broker in accordance with a separate written agreement. Sublandlord and Subtenant shall indemnify and hold harmless each other against and from any claim for brokerage commissions or other fees and all costs, expenses and liabilities in connection with this Sublease (except amounts due to Broker),

 

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including, without limitation, reasonable attorneys’ fees and expenses, arising out of any dealings such indemnifying party had with any broker, finder or other person. The foregoing indemnity shall survive the expiration or earlier termination of this Sublease.

 

14.                               Parking

 

Subtenant shall have the right to the parking spaces described in Section 13 of the Prime Lease, and Subtenant shall comply with the provisions of such Section 13.

 

15.                               Signage

 

Subtenant shall have the right to signage described in Section 12.7 of the Prime Lease, and Subtenant shall comply with the provisions of such Section 12.7. Sublandlord shall request that Prime Landlord include Subtenant’s name in any tenant directory located in the lobby on the first floor of the Building. Subtenant may not install any signs, placards, lettering, drapes, window coverings, blinds or similar items except in strict compliance with Section 12 of the Prime Lease and in conformity with all laws and regulations, which shall be installed at Subtenant’s sole cost.

 

16.                               Access; Early Access; Server Room Access.

 

Subtenant shall have all rights of access to the Subleased Premises 24 hours per day, 7 days per week, subject to Articles 13, 14, 16, 18, 21, 24 and 25 of the Prime Lease. Sublandlord agrees to provide Subtenant with access to the Suite 420 Sublease Premises without payment of Base Rent solely for the purpose of commencing move-in and set-up activities at such site. To the extent Subtenant is not in default under the Sublease, Sublandlord agrees to provide Subtenant with access to the Suite 450 Sublease Premises thirty (30) days prior to the Suite 450 Commencement Date without payment of additional Rent for the sole purpose of commencing move-in and set-up activities at such site. Prior to any early access to the Subleased Premises, Subtenant shall provide Sublandlord evidence satisfactory to Sublandlord that insurance coverages required of Subtenant under Section 9 of this Sublease.

 

Notwithstanding anything to the contrary herein or the Prime Lease, Subtenant agrees that Sublandlord shall have unfettered access to the server room within the Suite 420 Sublease Premises from the Suite 420 Commencement Date through the Suite 450 Commencement Date.

 

17.                               Letter of Credit.

 

(a)                                 Subtenant shall deliver an unconditional, clean, irrevocable letter of credit (“Letter of Credit”) to Sublandlord in an amount equal to (i) six (6) months Suite 420 Base Rent for the Suite 420 Subleased Premises (the “Suite 420 Letter of Credit”) concurrently with Subtenant’s execution of this Sublease, and (ii) six (6) months Suite 450 Base Rent for the Suite 450 Subleased Premises (the “Suite 450 Letter of Credit”) upon the Suite 450 Commencement Date. For purposes of this Sublease, the term “Letter of Credit” shall include the Suite 420 Letter of Credit and, if applicable, the Suite 450 Letter of Credit and shall be issued by a solvent

 

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and nationally recognized bank (a bank which accepts deposits, maintains accounts, has a local San Francisco Bay Area office which will negotiate a letter of credit, and whose deposits are insured by the FDIC) reasonably acceptable to Sublandlord (such approved, issuing bank being referred to herein as the “Bank”). Subtenant shall pay all expenses, points and/or fees incurred by Subtenant in obtaining the Letter of Credit or any updates or replacements thereof. The Letter of Credit shall (i) be “callable” at sight, irrevocable and unconditional, (ii) be maintained in effect, whether through renewal or extension, for the period commencing on the date of this Sublease and continuing until the date (the “Letter of Credit Expiration Date”) that is no less than sixty (60) days after the Letter of Credit Expiration Date as the same may be extended, and Subtenant shall deliver a new Letter of Credit or certificate of renewal or extension to Sublandlord at least thirty (30) days prior to the expiration of the Letter of Credit then held by Sublandlord, without any action whatsoever on the part of Sublandlord, (iii) be fully assignable by Sublandlord, its successors and assigns, (iv) permit partial draws and multiple presentations and drawings, and (v) be otherwise subject to the International Standby Practices-ISP 98, International Chamber of Commerce Publication #590. Sublandlord, or its authorized representative, shall have the right to draw down an amount up to the face amount of the Letter of Credit if any of the following shall have occurred or be applicable: (A) such amount is due to Sublandlord under the terms and conditions of this Sublease, and has not been paid within applicable notice and cure periods, or (B) Subtenant has filed a voluntary petition under the U. S. Bankruptcy Code or any state bankruptcy code (collectively, “Bankruptcy Code”), or (C) an involuntary petition has been filed against Subtenant under the Bankruptcy Code that is not dismissed within thirty (30) days, or (D) the Bank has notified Sublandlord that the Letter of Credit will not be renewed or extended through the Letter of Credit Expiration Date, and Subtenant has not provided a replacement Letter of Credit that satisfies the requirements of this Sublease at least thirty (30) days prior to such expiration, or (E) Subtenant is placed into receivership or conservatorship, or becomes subject to similar proceedings under Federal or State law, or (F) Subtenant executes an assignment for the benefit of creditors, or (G) if there is a material adverse change in the financial condition of the Bank, and Subtenant has failed to provide Sublandlord with a replacement letter of credit, conforming in all respects to the requirements of this Article 17, in the amount of the applicable Letter of Credit, within ten (10) days following Sublandlord’s written demand therefor (with no other notice or cure or grace period being applicable thereto, notwithstanding anything in this Sublease to the contrary) (each of the foregoing being an “Letter of Credit Draw Event”). The Letter of Credit shall be honored by the Bank regardless of whether Subtenant disputes Sublandlord’s right to draw upon the Letter of Credit. Subtenant hereby acknowledges and agrees that Sublandlord is entering into this Sublease in material reliance upon the ability of Sublandlord to draw upon the Letter of Credit upon the occurrence of any Letter of Credit Draw Event. In the event of any Letter of Credit Draw Event, Sublandlord may, but without obligation to do so, and without notice to Subtenant, draw upon the Letter of Credit, in part or in whole, in the amount necessary to cure any such Letter of Credit Draw Event and/or to compensate Sublandlord for any and all damages of any kind or nature sustained or which Sublandlord reasonably estimates that it will sustain resulting from Subtenant’s breach or default of the Sublease or other Letter of Credit Draw Event and/or to compensate Sublandlord for any and all damages arising out of, or incurred in connection with, the termination of this Sublease, including, without limitation, those specifically identified in Section 1951.2 of the California Civil Code. The use, application or

 

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retention of the Letter of Credit, or any portion thereof, by Sublandlord shall not prevent Sublandlord from exercising any other right or remedy provided by this Sublease or by any applicable law, it being intended that Sublandlord shall not first be required to proceed against the Letter of Credit, and such Letter of Credit shall not operate as a limitation on any recovery to which Sublandlord may otherwise be entitled. Subtenant agrees and acknowledges that (i) the Letter of Credit constitutes a separate and independent contract between Sublandlord and the Bank, (ii) Subtenant is not a third party beneficiary of such contract, (iii) Subtenant has no property interest whatsoever in the Letter of Credit or the proceeds thereof, and (iv) in the event Subtenant becomes a debtor under any chapter of the Bankruptcy Code, Subtenant is placed into receivership or conservatorship, and/or there is an event of a receivership, conservatorship or a bankruptcy filing by, or on behalf of, Subtenant, neither Subtenant, any trustee, nor Subtenant’s bankruptcy estate shall have any right to restrict or limit Sublandlord’s claim and/or rights to the Letter of Credit and/or the proceeds thereof by application of Section 502(b)(6) of the U. S. Bankruptcy Code or otherwise. If any portion of the Letter of Credit is so used or applied, then Subtenant shall, within ten (10) business days following demand therefor, restore the Letter of Credit to its original amount, and Subtenant’s failure to do so shall be a material breach of this Sublease. The provisions of this Section 17 shall survive the expiration or earlier termination of this Sublease.

 

(b)                                 Sublandlord and Subtenant (1) acknowledge and agree that in no event or circumstance shall the Letter of Credit or any renewal thereof or substitute therefor or any proceeds thereof be deemed to be or treated as a “security deposit” under any law applicable to security deposits in the commercial context, including, but not limited to, Section 1950.7 of the California Civil Code, as such Section now exists or as it may be hereafter amended or succeeded (the Security Deposit Laws”), (2) acknowledge and agree that the Letter of Credit (including any renewal thereof or substitute therefor or any proceeds thereof) is not intended to serve as a security deposit, and the Security Deposit Laws shall have no applicability or relevancy thereto, and (3) waive any and all rights, duties and obligations that any such party may now, or in the future will, have relating to or arising from the Security Deposit Laws. Subtenant hereby irrevocably waives and relinquishes the provisions of Section 1950.7 of the California Civil Code and any successor statue, and all other provisions of law, now or hereafter in effect.

 

(c)                                  Subtenant agrees not to interfere in any way with any payment to Sublandlord of the proceeds of the Letter of Credit, either prior to or following a “draw” by Sublandlord of all or any portion of the Letter of Credit, regardless of whether any dispute exists between Subtenant and Sublandlord as to Sublandlord’s right to draw down all or any portion of the Letter of Credit. No condition or term of this Sublease shall be deemed to render the Letter of Credit conditional and thereby afford the Bank a justification for failing to honor a drawing upon such Letter of Credit in a timely manner. Subtenant’s sole remedy in connection with the improper presentment or payment of sight drafts drawn under any Letter of Credit shall be the right to obtain from Sublandlord a refund of the amount of any sight draft(s) that were improperly presented or the proceeds of which were misapplied and reasonable actual out-of-pocket attorneys’ fees, provided that at the time of such refund, Subtenant increases the amount of such Letter of Credit to the amount (if any) then required under the applicable provisions of this Sublease.

 

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18.                               Confidentiality. Subtenant and its representatives and Sublandlord and its representatives shall not disclose the terms of the Sublease or the Prime Lease to any third party except as permitted under Section 38 of the Prime Lease.

 

19.                               General Provisions

 

(a)                                 Benefit and Burden. The covenants, conditions, agreements, terms and provisions herein contained shall be binding upon, and shall inure to the benefit of, the parties hereto and each of their respective personal representatives, successors, heirs, executors, administrators and assigns, but such inclusion shall not, by itself, be deemed a consent by Sublandlord to the Subtenant originally named herein or any successor named Subtenant to further sublet the Subleased Premises or assign this Sublease. Subtenant shall attorn to each of Sublandlord’s successors and assigns.

 

(b)                                 Governing Law. It is the intention of the parties hereto that this Sublease (and the terms and provisions hereof) shall be construed and enforced in accordance with the laws of the state where the Subleased Premises are located without reference to conflict-of-laws or choice-of-laws provisions.

 

(c)                                  Entire Agreement. This Sublease contains all of the covenants, agreements, terms, provisions, conditions, warranties and understandings comprising the final and entire agreement between the parties hereto, and they shall not be bound by any terms, statements, conditions or representations, oral or written, express or implied, not herein contained. No waiver or modification of any covenant, agreement, term provision or condition shall be deemed to have been made unless expressed in writing and signed by both parties.

 

(d)                                 Sublease and Prime Lease. With respect to the relationship between Sublandlord and Subtenant, the terms and conditions of this Sublease shall take precedence with respect to any conflict between the terms and conditions contained herein and the terms and conditions of the Prime Lease. Nothing herein shall be construed in any way to affect the rights and obligations of the Sublandlord and Prime Landlord under the Prime Lease, including, without limitation, with respect to payment of rent.

 

(e)                                  Captions. The captions throughout this Sublease are for convenience of reference only and the words contained therein shall in no way be held or deemed to define, limit, describe, explain, modify, amplify or add to the interpretation, construction or meaning of any provision of or the scope or intent of this Sublease, nor in any way affect this Sublease.

 

(f)                                   Singular and Plural. Wherever appropriate herein, the singular includes the plural and the plural includes the singular.

 

(g)                                  Counterpart. This Sublease may be executed in several counterparts, each of which shall be deemed an original but all counterparts shall constitute but one and the same instrument.

 

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(h)                                 Waiver of Jury Trial. Subtenant hereby waives trial by jury in any action, proceeding or counterclaim brought by Sublandlord or Prime Landlord against Subtenant with respect to any matter whatsoever arising out of or in any way connected with this Sublease, the relationship of Sublandlord and Subtenant hereunder or Subtenant’s use or occupancy of the Subleased Premises. In the event Sublandlord commences any proceedings for nonpayment of rent, Subtenant shall not interpose any counterclaims (except compulsory counterclaims). This shall not, however, be construed as a waiver of Subtenant’s right to assert such claims in any separate action brought by Subtenant.

 

(i)                                     TIME IS OF THE ESSENCE. TIME IS OF THE ESSENCE WITH RESPECT TO ALL OF THE TIME PERIODS SET FORTH IN THIS SUBLEASE.

 

(j)                                    Right to Contest. If Sublandlord does not have the right to contest any matter in the Prime Lease due to expiration of any time limit that may be set forth therein or for any other reason, then notwithstanding any incorporation of any such provision from the Prime Lease into this Sublease, Subtenant shall also not have the right to contest any such matter.

 

(k)                                 No Drafting Presumption. The parties acknowledge that this Sublease has been agreed to by both the parties, that both Sublandlord and Subtenant have consulted with attorneys with respect to the terms of this Sublease, and that no presumption shall be created against Sublandlord because Sublandlord initially drafted this Sublease.

 

(1)                                 Force Majeure. In the event either party is in any way delayed, interrupted or prevented from performing any of its obligations under this Sublease (except, with respect to any obligation to pay sums due under this Sublease), and such delay, interruption or prevention is due to fire, act of God, governmental act, action or inaction (including, without limitation, government delays in issuing any required building, construction, occupancy or other permit, certificate or approval or performing any inspection or review in connection therewith), strike, labor dispute, inability to procure materials, act of terrorism or war or any other cause beyond such party’s reasonable control, including but not limited to the action or inaction of Prime Landlord (whether similar or dissimilar) (collectively, “Force Majeure”), then such party shall be excused from performing the affected obligations for the period of such delay, interruption or prevention so long as such party exercises reasonable diligence in dealing with such matter.

 

(m)                             Effectiveness. This Sublease is subject to the consent of Prime Landlord in accordance with the terms of the Prime Lease and shall have no effect until Prime Landlord shall have given its consent in the form required by Prime Landlord and, if such consent imposes additional obligations on Subtenant outside of the Sublease, subject to Subtenant’s reasonable approval of such additional obligations (the “Prime Landlord’s Consent”) and this Sublease is executed by and delivered to both Sublandlord and Subtenant. In connection therewith, Subtenant shall furnish all information reasonably requested by Prime Landlord and reasonably cooperate with Sublandlord in its efforts to obtain Prime Landlord’s Consent. Sublandlord shall have no obligation to pay any fee or charge of any nature whatsoever not specifically required to be paid under the Prime Lease in connection with such consent and shall suffer and incur no

 

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liability to Subtenant for its failure to obtain such consent. Sublandlord shall be responsible for all fees payable to Prime Landlord under the Prime Lease in connection with this Sublease, including any fees payable to Prime Landlord to obtain Prime Landlord’s Consent. In the event Prime Landlord’s Consent is not obtained by March 6, 2014 or such later date mutually agreed upon between the parties, then notwithstanding anything to the contrary herein, Subtenant’s sole remedy shall be to terminate this Sublease.

 

Subtenant agrees that Sublandlord shall not have any duty or responsibility under this Sublease with respect to obtaining the consent or approval of Prime Landlord when the same is required under the terms of the Prime Lease or under this Sublease, other than the transmission by Sublandlord to Prime Landlord of Subtenant’s request for such consent or approval. In addition, Subtenant hereby (i) waives any claim for monetary damages against Sublandlord which Subtenant may have based upon any assertion that Sublandlord has unreasonably withheld or unreasonably delayed any consent or approval requested by Subtenant (“Consent Delay”), and (ii) agrees that its sole remedy in the event of a Consent Delay shall be an action or proceeding in equity to enforce a related provision or for specific performance or other equitable remedy.

 

(n)                                 No Shop. Sublandlord shall not, nor permit any of its representatives to: offer any of the Suite 450 Sublease Premises for sublease or assignment, or solicit, initiate, respond to or engage in any discussions or negotiations with any third party with respect to the sublease or assignment of the Suite 450 Sublease Premises, at any time prior to the termination of the Sublease of Suite 450 in accordance with Section 1(c) above.

 

(o)                                 Suite 420 & Suite 450 Furniture. Sublandlord hereby agrees to lease to Subtenant (at no extra charge or rent) that certain furniture listed in Exhibit C that is situated at the Suite 420 Subleased Premises (“Suite 420 Furniture”) and that certain furniture, if any, identified by Sublandlord on Exhibit D and delivered to Subtenant on the Suite 450 Commencement Date (the “Suite 450 Furniture” and, together with the Suite 420 Furniture, the “Sublease Furniture”), all in its “AS-IS” condition and without warranty, express or implied, of any kind or nature. Subtenant shall maintain, repair and replace the Sublease Furniture as and when necessary, at Subtenant’s sole cost and expense, until such Sublease Furniture is beyond its useful life. Provided this Sublease is in full force and effect thirty (30) days prior to its scheduled Expiration Date, Subtenant shall have the option to purchase all such Sublease Furniture for the price of One Dollar ($1.00) by written notice to Sublandlord not before the thirtieth (30th) day prior to such scheduled Expiration Date and not later than the fifteenth (15th) day prior to such scheduled Expiration Date. If Subtenant timely exercises such option, then all right, title and interest of Sublandlord in such Sublease Furniture shall be deemed conveyed to Subtenant, and Subtenant shall, at its sole cost and expense, remove all of the same Sublease Furniture from the Subleased Premises as required by the Prime Lease, and Subtenant shall repair any damage caused by such removal. If Subtenant shall not timely exercise such option, then such option shall be null and void and Subtenant shall have no further right or interest in such Sublease Furniture.

 

[Signature Page Follows]

 

17

 

IN WITNESS WHEREOF, Sublandlord and Subtenant have each executed this Sublease under seal as of the day and year first hereinabove written.

 

	
 
    	
SUBLANDLORD:
    
	
 
    	
 
    
	
 
    	
INTREXON CORPORATION,
    
	
 
    	
a Virginia corporation
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Rick Sterling
    
	
 
    	
Name:
    	
Rick Sterling
    
	
 
    	
Title:
    	
CFO
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SUBTENANT:
    
	
 
    	
 
    
	
 
    	
NATERA, INC,
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jonathan Sheena
    
	
 
    	
Name:
    	
Jonathan Sheena
    
	
 
    	
Title:
    	
CTO 3.21.14
    

 

18

 

EXHIBIT A

 

REDACTED COPY OF THE PRIME LEASE

(In electronic version, see separate Exhibits A-1 and A-2)

 

 

EXHIBIT B

 

OUTLINE OF SUBLEASED PREMISES

SUITE 420 & SUITE 450

 

 

 

 

 

 

EXHIBIT C

SUITE 420 LIST OF FURNITURE

 

1 conference table with 12 chairs

1 projector in conference room

14 private offices with desks and overhead storage

2 private offices with partial desks and overhead storage

18 cubicles with desks and overhead storage

2 cubicles with no furnishings

34 task or side chairs

76 files (most are mobile pedestal files)

2 round tables

4 freestanding bookshelves

4 stools

1 refrigerator

1 Spacesaver filing system

 

 

EXHIBIT D

SUITE 450 LIST OF FURNITURE

 

[To be delivered by Sublandlord]

 

 

LEASE

 

by and between

 

BMR-201 INDUSTRIAL ROAD LLC,

a Delaware limited liability company

 

and

 

INTREXON CORPORATION,

a Virginia corporation

 

BMR form dated 3/16/11

 

	
 
    	
Approved by:
    
	
 
    	
BMR-Legal
    
	
 
    	
CMS
    

 

 

LEASE

 

THIS LEASE (this “Lease”) is entered into as of this 5th day of August, 2011 (the “Execution Date”), by and between BMR-201 INDUSTRIAL ROAD LLC, a Delaware limited liability company (“Landlord”), and INTREXON CORPORATION, a Virginia corporation (“Tenant”).

 

RECITALS

 

A.            WHEREAS, Landlord owns certain real property (the “Property”) and the improvements on the Property located at 201 Industrial Road, San Carlos, California, including the building located thereon(the “Building”); and

 

B.            WHEREAS, Landlord wishes to lease to Tenant, and Tenant desires to lease from Landlord, certain premises consisting of approximately eighteen thousand eight hundred fifty-three (18,853) square feet of space located on the fourth (4th) floor of the Building (the “Premises”), 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.

 

1.1.                            Effective on the Term Commencement Date, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises, as shown on Exhibit A attached hereto, including exclusive shafts, cable runs, mechanical spaces and rooftop areas, for use by Tenant in accordance with the Permitted Use (as defined below) and no other uses. The Property and all landscaping, parking facilities, private drives and other improvements and appurtenances related thereto, including 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 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 Execution Date and, except as specifically otherwise provided within this Lease, each of the provisions hereof shall be binding upon and inure to the benefit of Landlord and Tenant from the date of execution and delivery hereof by all parties hereto.

 

 

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 both subject to adjustment to the extent provided in this Lease.

 

	
Definition or Provision
    	
 
    	
Means the Following (As of the Term
   Commencement Date)
    
	
Approximate   Rentable Area of Premises
    	
 
    	
18,853 square feet
    
	
Approximate   Rentable Area of Project
    	
 
    	
176,956 square feet
    
	
Tenant’s   Pro Rata Share of Project
    	
 
    	
10.65 %
    

 

2.3.                            Monthly installments of Base Rent for the Premises (“Base Rent”) for the period from the Term Commencement Date through the thirty-sixth (36th) month of the Term shall be as set forth below. Base Rent for the thirty-seventh (37th) month of the Term through the Term Expiration Date shall increase as set forth in Article 8 of this Lease.

 

	
 
    	
 
    	
Square Feet of
    	
 
    	
Base Rent per Square
    	
 
    	
 
    	
 
    
	
Months
    	
 
    	
Rentable Area
    	
 
    	
Foot of Rentable Area
    	
 
    	
Monthly Base Rent
    	
 
    
	
1   – 6
    	
 
    	
10,000
    	
 
    	
$2.20 monthly
    	
 
    	
$
    	
22,000.00
    	
 
    
	
7   – 12
    	
 
    	
18,853
    	
 
    	
$2.20 monthly
    	
 
    	
$
    	
41,476.60
    	
 
    
	
13   – 24
    	
 
    	
18,853
    	
 
    	
$2.40 monthly
    	
 
    	
$
    	
45,247.20
    	
 
    
	
25   – 36
    	
 
    	
18,853
    	
 
    	
$2.60 monthly
    	
 
    	
$
    	
49,017.80
    	
 
    

 

2.4.                            Estimated Term Commencement Date: February 1, 2012

 

2.5.                            Estimated Term Expiration Date: January 31, 2017

 

2.6.                            Security Deposit: Forty-One Thousand Four Hundred Seventy-Six and 60/100 Dollars ($41,476.60), subject to increase in accordance with the terms hereof

 

2.7.                            Permitted Use: Office and laboratory use (and related uses ancillary to such uses) in conformity with all federal, state, municipal and local laws, codes, ordinances, rules and regulations of Governmental Authorities (as defined below), committees, associations, or other regulatory committees, agencies or governing bodies having jurisdiction over the Premises, the Building, the Property, the Project, Landlord or Tenant, including both statutory and common law and hazardous waste rules and regulations (“Applicable Laws”)

 

2

 

	
2.8.                            Address for   Rent Payment:
    	
BMR-201 Industrial Road LLC
    
	
 
    	
Unit G
    
	
 
    	
P.O. Box 51918
    
	
 
    	
Los Angeles, California 90051-6218
    
	
 
    	
 
    
	
2.9.                            Address for   Notices to Landlord:
    	
BMR-201 Industrial Road LLC
    
	
 
    	
17190 Bernardo Center Drive
    
	
 
    	
San Diego, California 92128
    
	
 
    	
Attn: Vice President, Real Estate Counsel
    
	
 
    	
 
    
	
2.10.                     Address for   Notices to Tenant:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Prior to Term Commencement at Date:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Intrexon Corporation
    
	
 
    	
 
    	
20368 Seneca Meadows Parkway
    
	
 
    	
 
    	
Germantown, Maryland 20876
    
	
 
    	
 
    	
Attn: Legal Department
    
	
 
    	
 
    	
 
    
	
 
    	
After Term Commencement Date:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Intrexon Corporation
    
	
 
    	
 
    	
20368 Seneca Meadows Parkway
    
	
 
    	
 
    	
Germantown, Maryland 20876
    
	
 
    	
 
    	
Attn: Legal Department
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
And
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Intrexon Corporation
    
	
 
    	
 
    	
201 Industrial Road
    
	
 
    	
 
    	
San Carlos, California 94070
    
	
 
    	
 
    	
Attn: President, Industrial Products Division
    
	
 
    	
 
    	
 
    
	
 
    	
With a copy to:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Intrexon Corporation
    
	
 
    	
 
    	
863 Mitten Road, Suite C
    
	
 
    	
 
    	
Burlingame, California 94010
    
	
 
    	
 
    	
Attn: Grace Colon
    
	
 
    	
 
    	
 
    
	
2.11.                     The following   Exhibits are attached hereto and incorporated herein by reference:
    
	
 
    	
 
    	
 
    
	
Exhibit A
    	
Premises
    
	
Exhibit B
    	
Work Letter
    
	
Exhibit C
    	
Acknowledgement of Term Commencement Date and Term Expiration Date
    
	
Exhibit D
    	
Form of Letter of Credit
    
	
Exhibit E
    	
Rules and Regulations
    
				

 

3

 

	
Exhibit F
    	
Tenant’s Personal Property
    
	
Exhibit G-1
    	
Form of Tenant Estoppel Certificate
    
	
Exhibit G-2
    	
Form of Landlord Estoppel Certificate
    
	
Exhibit H
    	
ROFR Premises
    
	
Exhibit I
    	
Exclusions from Operating Expenses
    
	
Exhibit J
    	
4th Floor Common Electrical Room
    

 

3.                                      Term. The actual term of this Lease (as the same may be extended pursuant to Article 42 hereof, and as the same may be earlier terminated in accordance with this Lease, the “Term”) shall commence on the actual Term Commencement Date (as defined in Article 4) and end on the date that is sixty (60) months after the actual Term Commencement Date (such date, the “Term Expiration Date”), subject to earlier termination of this Lease as provided herein. TENANT HEREBY WAIVES THE REQUIREMENTS OF SECTION 1933 OF THE CALIFORNIA CIVIL CODE, AS THE SAME MAY BE AMENDED FROM TIME TO TIME.

 

3.1.                            Termination Option. Tenant shall have the one-time option to terminate this Lease (the “Termination Option”) by providing written notice to Landlord on or before the last day of the twenty-seventh (27th) month of the Term (the “Termination Notice Deadline”). If Tenant elects to exercise the Termination Option on or before the Termination Notice Deadline, Tenant shall surrender the Premises on or before the date that is the last day of the thirty-sixth (36th) month after actual Term Commencement Date (the “Surrender Deadline”). Tenant shall surrender the Premises to Landlord (a) in the condition and (b) with all documentation required under this Lease. If Tenant does not surrender the Premises in accordance with Article 15 of this Lease by the Surrender Deadline, then Tenant, pursuant to Article 16 of the Lease, shall be become a tenant at sufferance until the actual date (the “Surrender Date”) that Tenant surrenders the Premises to Landlord in accordance with Article 15 of this Lease and this Section. This Lease, and all obligations of Tenant under this Lease (including Rent, Additional Rent and Property Management Fee) shall terminate on the later of (y) the Surrender Deadline and (z) the Surrender Date, and shall be of no further force or effect, except for those provisions and obligations that, by their express terms, survive the expiration or earlier termination of this Lease.

 

3.2.                            Termination Payment. In the event Tenant exercises the Termination Option, Tenant shall pay to Landlord, on or before the Surrender Deadline, an amount equal to Three Hundred Four Thousand Eight Hundred Fifty and 91/100 Dollars ($304,850.91).

 

4.                                      Possession and Commencement Date.

 

4.1.                            The “Term Commencement Date” shall be the earlier of (a) the Estimated Term Commencement Date and (b) the day the work described in the Work Letter (the “Tenant Improvements”) is Substantially Complete and Tenant begins occupancy of the Premises for the Permitted Use (subject to extension of the Term Commencement Date due to Landlord Delay). Tenant and Landlord shall execute and deliver to the other 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 C 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

 

4

 

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. The term “Substantially Complete” or “Substantial Completion” means that the Tenant Improvements are substantially complete in accordance with the Approved Plans (as defined in the Work Letter), except for punch list items, the completion of which does not interfere with the Permitted Use and that a certificate of occupancy has been issued for the Premises.

 

4.2.                            Tenant shall have the right to cause the Tenant Improvements to be constructed in the Premises pursuant to the Work Letter attached hereto as Exhibit B (the “Work Letter”) at a cost to Landlord not to exceed Seven Hundred Fifty-Four Thousand One Hundred Twenty and 00/100 Dollars ($754,120.00) (based upon Forty and 00/100 Dollars ($40.00) per square foot of Rentable Area (the “TI Allowance”). The TI Allowance may be applied to the costs of (n) construction, (o) project review by Landlord (which fee shall equal one and 75/100 percent (1.75%) of the cost of the Tenant Improvements, including the TI Allowance), (p) space planning, architect, engineering and other related services performed by third parties unaffiliated with Tenant, (q) building permits and other taxes, fees, charges and levies by Governmental Authorities (as defined below) for permits or for inspections of the Tenant Improvements, and (r) costs and expenses for labor, material, equipment, cabling (excluding telephone and tele-data cabling), electrical and fixtures. In no event shall the TI Allowance be used for (v) the cost of work that is not authorized by the Approved Plans (as defined in the Work Letter) or otherwise approved in writing by Landlord, (w) payments to Tenant (except for payments of amounts set forth in Reimbursement Requests submitted pursuant to the Work Letter which Reimbursement Requests shall not contain payment requests for services performed by Tenant but rather by contractors, etc. retained by Tenant) or any affiliates of Tenant, (x) the purchase of any furniture, personal property or other non-building system equipment (except affixed lab equipment), (y) costs resulting from any default by Tenant of its obligations under this Lease or (z) costs that are recovered by Tenant from a third party (e.g., insurers, warrantors, or tortfeasors) or in the case of Tenant’s failure to procure insurance required pursuant to the terms of this Lease, costs otherwise recoverable by Tenant from its insurance provider absent Tenant’s failure to such insurance.

 

4.3.                            Tenant shall have until eighteen (18) months from the Term Commencement Date (the “TI Deadline”), to expend the unused portion of the TI Allowance, after which date Landlord’s obligation to fund such costs shall expire.

 

4.4.                            In no event shall any unused TI Allowance entitle Tenant to a credit against Rent payable under this Lease. Upon Substantial Completion, Tenant shall deliver to Landlord (i) a certificate of occupancy for the Premises suitable for the Permitted Use and (ii) a Certificate of Substantial Completion in the form of the American Institute of Architects document G704, executed by the project architect and the general contractor.

 

4.5.                            Prior to entering upon the Premises, Tenant shall furnish to Landlord evidence satisfactory to Landlord that insurance coverages required of Tenant under the provisions of Article 23 are in effect, and such entry shall be subject to all the terms and conditions of this Lease other than the payment of Base Rent or Tenant’s Share of Operating Expenses (as defined below).

 

5

 

4.6.                            Tenant’s selection of the architect, engineer, general contractor and major subcontractors shall occur as set forth in Section 1.3 of the Work Letter. Subject to the process set forth in the Work Letter, Tenant shall have the right to use non-union labor to perform the Tenant Improvements; provided however, that Landlord shall not be responsible for any labor disharmony or delays that results from the use of non-union labor.

 

4.7.                            Promptly after the Execution Date, Landlord, at its sole cost and expense, shall install a sub-meter for electricity supplied to the Premises for use during Tenant’s construction of the Tenant Improvements and during the Term. Tenant shall pay all such electricity charges, together with any fees, surcharges and taxes thereon for the period beginning on the date that Tenant first accesses the Premises for any reason after the Execution Date. Prior to Landlord’s installation of the aforementioned sub-meter, Tenant shall be charged electricity costs, following the Execution Date through the date that such sub-meter is installed, in an amount equal to the electricity actually consumed by Tenant’s construction activities, as reasonably demonstrated and documented by Landlord, using as a starting point the baseline costs of electricity in the Building prior to the commencement of Tenant’s construction activities (with appropriate adjustments, as necessary, for weather and other seasonal factors). Tenant shall not be responsible for the cost of any utilities other than electricity prior to the Term Commencement Date.

 

5.                                      Condition of Premises. Tenant acknowledges that, except as expressly set forth herein, 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, except with respect to the TI Allowance, and except as otherwise set forth in the Work Letter. Tenant’s taking of possession of the Premises shall, except as otherwise agreed to in writing by Landlord and Tenant, conclusively establish that, to Tenant’s knowledge, the Premises were at such time in satisfactory condition and repair, except for latent defects. Notwithstanding the foregoing, Landlord covenants and represents that It shall deliver possession of the Premises to Tenant with all building systems and subsystems, all structural elements of the Premises and Building, and all roofs and foundations in good working order and condition.

 

6.                                      Rentable Area.

 

6.1.                            The term “Rentable Area” shall reflect such areas as reasonably calculated by Landlord’s architect. The Rentable Area of Tenant’s Premises shall not be adjusted during the Term unless Tenant exercises its ROFR as set forth in Article 42 or otherwise increases the useable square footage of the Premises.

 

6.2.                            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

 

6

 

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.

 

6.3.                            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 that portion of the Building devoted to corridors, equipment rooms, restrooms, elevator lobby, atrium and mailroom.

 

7.                                      Rent.

 

7.1.                            Tenant shall pay to Landlord as Base 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 8 hereof. Base Rent shall be paid in equal monthly installments as set forth in Section 2.3, subject to the rental adjustments provided in Article 8 hereof, each in advance on the first day of each and every calendar month during the Term.

 

7.2.                            In addition to Base Rent, Tenant shall pay to Landlord as additional rent (“Additional Rent”) at times hereinafter specified in this Lease (a) Tenant’s Share (as defined below) of Operating Expenses (as defined below), (b) the Property Management Fee (as defined below) and (c) any other amounts that Tenant expressly assumes or agrees to pay under the provisions of this Lease that are owed to Landlord, including any and all other sums that may become due by reason of any default of Tenant or failure on Tenant’s part to comply with the agreements, terms, covenants and conditions of this Lease to be performed by Tenant, after notice and the lapse of any applicable cure periods.

 

7.3.                            Base Rent and Additional Rent shall together be denominated “Rent.” Rent shall be paid to Landlord, without abatement, deduction or offset except as otherwise set forth herein, in lawful money of the United States of America at the office of Landlord as set forth in Section 2.8 or to such other person or at such other place as Landlord may from time designate in writing. In the event the Term commences or ends on a day other than the first day of a calendar month, then the Rent for such fraction of a month shall be prorated for such period on the basis of a thirty (30) day month and shall be paid at the then-current rate for such fractional month.

 

8.                                      Rent Adjustments. Commencing on the third (3rd) annual anniversary of the Term Commencement Date (i.e. the thirty-seventh (37th) month of the Term) Base Rent shall be subject to an annual upward adjustment of three and one-half percent (3.5%) of the then-current Base Rent. The first such adjustment shall become effective on the third (3rd) 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.

 

9.                                      Operating Expenses.

 

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

 

7

 

(a)                                             Government impositions including property tax costs consisting of real and personal property taxes and assessments, including arena, entertainment or stadium assessments and 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 the 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”); taxes on or measured by gross rentals received from the rental of space in the Project; 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 or interpretations thereof, promulgated by any Governmental Authority in connection with the use or occupancy of the Project or the parking facilities serving the Project (excluding any transfer 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 or otherwise. Operating Expenses shall not include any income (other than taxes measured by gross rentals as mentioned above), franchise, capital stock, arena (unless included as part of the real property tax assessments described above), entertainment (unless included as part of the real property tax assessments described above), stadium (unless included as part of the real property tax assessments described above), business, corporate, partnership, unincorporated business, recording, transfer, estate, gift or inheritance taxes, taxes that are the personal obligation of Tenant or of another tenant of the Project or any interest or penalties for late payments of taxes to the extent relating to a period in which Tenant was not in default of its obligations to pay Base Rent, Tenant’s Share of Operating Expenses or other payments under this Lease (and to the extent Tenant was in default of such obligations, shall only include interest and penalties to the extent in excess of interest at the Default Rate and late fees actually paid to Landlord by Tenant); 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 costs of repairs and replacements to improvements within the Project as appropriate to maintain the Project as required hereunder; costs of utilities furnished to the Common Areas; sewer fees; trash collection; cleaning of the Common Areas, 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 Building or Project systems and equipment; telephone, postage, stationery supplies and other expenses incurred in connection with the operation, maintenance or repair of the Project; accounting and legal fees and expenses incurred in connection with the production of operating statements, tax appeals or negotiation of contracts for services at the Project; costs of consultants, engineers and other professionals retained in connection with the operation and maintenance of the Building and the Project; costs of furniture, draperies, carpeting, landscaping and other customary and ordinary items of personal

 

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property provided by Landlord for use in Common Areas; capital expenditures (provided that such capital expenditures shall not include capital expenditures which are made to comply with Applicable Laws in effect as of the Term Commencement Date and provided further that capital expenditures shall be amortized over such item’s useful life as determined in accordance with Generally Accepted Accounting Principles, consistently applied but not to exceed fifteen (15) years with interest calculated at nine percent (9%) per annum, for each such year of useful life of the capital item during the Term); costs of complying with Applicable Laws (except (a) to the extent such costs are incurred to comply with Applicable Laws in effect as of the Term Commencement Date and (b) all fines and penalties assessed due to violation of Applicable Laws); costs to keep the Project in compliance with, or fees otherwise required under, any CC&Rs (as defined below); 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 on-site 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 janitors, floor waxers, window washers, watchmen, gardeners, sweepers and handymen.

 

Notwithstanding the foregoing, Operating Expenses shall not include any of the matters set forth in Exhibit I attached hereto and made a part hereof; expenses that relate to preparation of rental space for a tenant; expenses of initial development and construction, including grading, paving, landscaping and decorating (as distinguished from maintenance, repair and replacement of the foregoing); legal expenses relating to other tenants, loans or conveyances; costs of repairs to the extent reimbursed by payment of insurance proceeds received by Landlord; utility costs (except such costs generated in the Common Areas) of those utilities (including, gas, electric and water) that are separately metered and billed to Tenant; interest and any other costs of or upon loans to Landlord or secured by a mortgage or deed of trust covering the Project or a portion thereof (provided that interest upon a government assessment or improvement bond payable in installments shall constitute an Operating Expense under Subsection 9.1(a)); salaries of executive, administrative and corporate 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 in regard thereto that are provided for in Subsection 9.1(b)); and taxes that are excluded from Operating Expenses by the last sentence of Subsection 9.1(a). To the extent that Tenant uses more than Tenant’s Pro Rata Share of any item of Operating Expenses as reasonably demonstrated and consistently applied by Landlord, Tenant shall pay Landlord for such excess in addition to Tenant’s obligation to pay Tenant’s Pro Rata Share of Operating Expenses (such excess, together with Tenant’s Pro Rata Share, “Tenant’s Share”).

 

9.2.                            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 good faith estimate of Tenant’s Share of Operating Expenses with respect to the Building and the Project, as applicable, for such month.

 

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(x)                                 The “Property Management Fee” shall equal three percent (3%) of Base Rent due from Tenant during the Term. Tenant shall pay the Property Management Fee in accordance with Section 9.2 commencing on the Term Commencement Date and thereafter with respect to the entire Term, including any extensions thereof or any holdover periods, regardless of whether Tenant is obligated to pay Base Rent, Operating Expenses or any other Rent with respect to any such period or portion thereof.

 

(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 Share of Operating Expenses for the previous calendar year. Any additional sum due from Tenant to Landlord shall be due and payable thirty (30) days following delivery of such statement. If the amounts paid by Tenant pursuant to this Section exceed Tenant’s 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 for any period that is less than a full month shall be prorated (based on a thirty (30)-day month) for such fractional month.

 

9.3.                            Landlord may, from time to time, reasonably modify Landlord’s calculation and allocation procedures for Operating Expenses, so long as such reasonable modifications produce Dollar results substantially consistent with Landlord’s then-current practice at the Project, however, Tenant’s Pro Rata Share of the Project shall not be increased unless Tenant exercises its ROFR as set forth in Article 42 or otherwise increases the useable square footage of the Premises.

 

9.4.                            Tenant shall not be responsible for Operating Expenses or Property Management Fees attributable to the time period prior to the Term Commencement Date. Tenant’s responsibility for Tenant’s Share of Operating Expenses shall continue to the latest of (a) the date of termination of the Lease and (b) the date Tenant has fully vacated the Premises.

 

9.5.                            Operating Expenses for the calendar year in which Tenant’s obligation to share therein commences and for the calendar year in which such obligation ceases shall be prorated on a pro-rata 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.

 

9.6.                            Within ten (10) 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 or the Work Letter.

 

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9.7.                            In the event that the Building or Project is less than fully occupied, Tenant acknowledges that Landlord may extrapolate Operating Expenses that vary depending on the occupancy of the Building or Project, as applicable (except those that are separately metered to Tenant or separately provided by Tenant), by dividing (a) the total cost of Operating Expenses by (b) the Rentable Area of the Building or Project (as applicable) that is occupied, then multiplying (y) the resulting quotient by (z) ninety-five percent (95%) of the total Rentable Area of the Building or Project (as applicable). Tenant shall pay Tenant’s Share of the product of (y) and (z), subject to adjustment as reasonably determined by Landlord; provided, however, that Landlord shall not recover more than one hundred percent (100%) of Operating Expenses.

 

10.                               Taxes on Tenant’s Property.

 

10.1.                     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.

 

10.2.                     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, the Property or the Project 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 value of the Building, the Property or the Project, then Tenant shall, upon demand, repay to Landlord the taxes so paid by Landlord.

 

10.3.                     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, the Property or the Project 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 10.2. Any such excess assessed valuation due to improvements in or alterations to space in the Project leased by other tenants at the Project shall not be included in Operating Expenses. If the records of the County Assessor are available and sufficiently detailed to serve as a basis for determining whether said Tenant improvements or alterations are assessed at a higher valuation than the Building Standard, then such records shall be binding on both Landlord and Tenant.

 

11.                               Security Deposit.

 

11.1.                     Tenant shall deposit with Landlord on or before the Execution Date 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 Tenant’s obligations under this Lease. If Tenant defaults with respect to any provision of this Lease, including any provision relating to the payment of Rent, then Landlord may (but shall not be required to) after notice and the expiration of three (3) business days, use, apply or retain all or any part of the Security Deposit for the

 

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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) business 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 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.

 

11.2.                     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.

 

11.3.                     Landlord shall 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.

 

11.4.                     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.

 

11.5.                     If the Security Deposit shall be in cash, Landlord shall hold the Security Deposit in an account at a banking organization selected by Landlord; provided, however, that Landlord shall not be required to maintain a separate account for the Security Deposit, but may intermingle it with other funds of Landlord. Landlord shall be entitled to all interest and/or dividends, if any, accruing on the Security Deposit. 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.

 

11.6.                     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 when Tenant is in Default (as defined below), 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 and until the date that is ninety (90) days after the then-current Term Expiration Date, a letter of credit in the form of Exhibit D issued by an issuer reasonably satisfactory to Landlord, in the amount of the Security Deposit, with an initial term of at least one year. Landlord may require the L/C Security to be reissued by a different issuer at any time during the Term if the issuing bank of the L/C Security becomes insolvent; provided, however, Landlord shall return the existing L/C Security to the existing issuer immediately upon receipt of the substitute L/C Security. If any issuer of the L/C Security shall become insolvent or placed into FDIC receivership, then Tenant shall within five (5) business days deliver to Landlord (without the requirement of notice from Landlord) substitute L/C Security issued by an issuer reasonably satisfactory to Landlord, and otherwise

 

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conforming to the requirements set forth in this Article. As used herein with respect to the issuer of the L/C Security, “insolvent” shall mean the determination of insolvency as made by such issuer’s primary bank regulator (i.e., the state bank supervisor for state chartered banks; the OCC or OTS, respectively, for federally chartered banks or thrifts; or the Federal Reserve for its member banks). 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 within five (5) business days.

 

(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 (as defined below) exists; (ii) as of the date forty-five (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) ninety (90) days 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 (and fails to permit drawing upon the L/C Security by overnight courier or facsimile). This Section 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 (5) 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 Deposit changes while L/C

 

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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.

 

12.                               Use.

 

12.1.                     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.

 

12.2.                     Tenant shall not use or occupy the Premises in violation of Applicable Laws; zoning ordinances; or the certificate of occupancy issued for the Building or the Project, and shall, upon five (5) business 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.

 

12.3.                     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 or 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.

 

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

 

12.5.                     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, which consent shall not be unreasonably withheld, conditioned or delayed. Tenant shall, upon termination of this Lease, use reasonable efforts to return to Landlord all keys to offices and restrooms either furnished to or otherwise procured by Tenant.

 

12.6.                     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 which as to lab space, shall not be unreasonably withheld, conditioned or delayed, 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.

 

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12.7.                     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. Signage shall conform to Landlord’s design criteria. For any Signage, Tenant shall, at Tenant’s own cost and expense, (a) acquire all permits for such Signage in compliance with Applicable Laws and (b) design, fabricate, install and maintain such Signage in a first-class condition. Tenant shall be responsible for reimbursing Landlord for costs incurred by Landlord in removing any of Tenant’s Signage upon the expiration or earlier termination of the Lease. 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. Subject to Landlord’s review and approval of Tenant’s door Signage, Landlord agrees that Tenant’s door Signage may be in the form of Tenant’s logo (or the logo of any permitted subtenant or assignee). The lobby sign shall include its proportionate amount of space for Tenant and shall be provided exclusively for the display of the name and location of tenants only. Should Tenant exercise its ROFR (as defined in Article 42) Landlord shall work with Tenant and endeavor to provide directional signage for various divisions of Tenant in a manner consistent with the Building Signage program. Tenant shall not place anything on the exterior of the corridor walls or corridor doors other than Landlord’s standard lettering. At Landlord’s option, Landlord may install any Tenant Signage, and Tenant shall pay all costs associated with such installation within thirty (30) days after demand therefor. Tenant shall be entitled to one (1) signage spot on the existing monument sign, however, Tenant’s Signage to be inserted on the monument sign remains subject to Landlord’s review and approval. If Tenant occupies more than twenty-five percent (25%) of the then Rentable Area of the Building, Tenant may, with prior approval from Landlord, install a building-top fascia sign on the north or south facing façade of the Building which shall be visible from Highway 101. The location of such building-top sign shall be determined by Landlord in its reasonable discretion.

 

12.8.                     Tenant shall only place equipment within the Premises with floor loading consistent with the Building’s structural design without Landlord’s prior written approval, and such equipment shall be placed in a location designed to carry the weight of such equipment. Landlord represents that the floor load limits are eighty (80) pounds per square foot live load, twenty (20) pounds per square foot dead load, and one hundred (100) pounds per square foot live load for corridors and exits.

 

12.9.                     Tenant shall cause any 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 Project.

 

12.10.              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 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 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.

 

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12.11.              Notwithstanding any other provision herein to the contrary, Tenant shall be responsible for all liabilities, costs and expenses arising out of or in connection with the compliance of the Premises with the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq., and any state and local accessibility laws, codes, ordinances and rules (collectively, and together with regulations promulgated pursuant thereto, the “ADA”), and Tenant shall indemnify, save, defend (at Landlord’s option and with counsel reasonably acceptable to Landlord) and hold Landlord and its owners, directors, affiliates, employees, agents and contractors; and any lender, mortgagee or beneficiary (each, a “Lender” and, collectively with Landlord and its affiliates, employees, agents and contractors, the “Landlord Indemnitees”) harmless from and against any demands, claims, liabilities, losses, costs, expenses, actions, causes of action, damages or judgments, and all reasonable expenses (including reasonable attorneys’ fees, charges and disbursements) incurred in investigating or resisting the same (collectively, “Claims”) arising out of any such failure of the Premises to comply with the ADA. Landlord shall be responsible for ensuring that the Common Areas of the Building and the Project comply with the ADA (which cost may be included in Operating Expenses to the extent permitted by Article 9) provided that any non-compliance conditions existing as of the Term Commencement Date be remedied by Landlord at its sole cost and expense. The provisions of this Section shall survive the expiration or earlier termination of this Lease.

 

13.                               Rules and Regulations, CC&Rs, Parking Facilities and Common Areas.

 

13.1.                     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 E, 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 except for Landlord’s failure to use reasonable commercial efforts to enforce the same.

 

13.2.                     This Lease is subject to any recorded covenants, conditions or restrictions on the Project or Property (the “CC&Rs”), as the same may be amended, amended and restated, supplemented or otherwise modified from time to time; provided that any such amendments, restatements, supplements or modifications do not materially modify or restrict Tenant’s rights or increase Tenant’s obligations hereunder. Tenant shall comply with the CC&Rs.

 

13.3.                     Tenant, at no charge or fee of any kind or nature, shall have a non-exclusive, irrevocable license and right to use Tenant’s Pro Rata Share of the parking garage currently situated at the Building and any other parking facilities serving the Building in common on an unreserved basis with other tenants of the Building during the Term. Notwithstanding the foregoing, in no event shall the parking ratio for the Premises be less than 3 parking spaces per 1,000 rentable square feet of Premises.

 

13.4.                     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

 

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thereof if and to the extent Tenant is materially and repeatedly exceeding its parking ratio. Upon such determination, Landlord may reasonably allocate parking spaces among Tenant and other tenants of the Building or the Project so long as Tenant’s parking ratio is not reduced to less than 3 parking spaces per 1,000 rentable square feet of Premises. Nothing in this Section, however, is intended to create an affirmative duty on Landlord’s part to monitor parking.

 

13.5.                     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. Tenant’s Pro Rata Share of the Project shall not be increased unless Tenant exercises its ROFR as set forth in Article 42 or otherwise increases the useable square footage of the Premises.

 

14.                               Project Control by Landlord.

 

14.1.                     Landlord reserves full control over the Building and the Project to the extent not inconsistent with Tenant’s quiet enjoyment of the Premises as provided by this Lease. This reservation includes Landlord’s right to subdivide the Project; convert the Building to condominium units; change the size of the Project by selling all or a portion of the Project or adding real property and any improvements thereon to the Project; grant easements and licenses to third parties; maintain or establish ownership of the Building separate from fee title to the Property; make additions to or reconstruct portions of the Building and the Project; install, use, maintain, repair, replace and relocate for service to the Premises and other parts of the Building or the Project pipes, ducts, conduits, wires and appurtenant fixtures, wherever located in the Premises, the Building or elsewhere at the Project; and alter or relocate any other Common Area or facility, including private drives, lobbies and entrances.

 

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

 

14.3.                     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 rights and benefits created by this Lease or the quiet enjoyment and use of the Premises as provided for in this Lease.

 

14.4.                     Landlord may, at any and all reasonable times during non-business hours (or during business hours if Tenant so requests), upon twenty-four (24) hours’ prior notice and accompanied by a Tenant representative (provided that no time or other restrictions shall apply or advance notice or the presence of Tenant’s representative 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) access the 4th Floor Common Electrical Room (defined in

 

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Section 16.8), (d) show the Premises to prospective purchasers or tenants during the final year of the Term, (e) post notices of nonresponsibility, (f) access the telephone equipment, electrical substation and fire risers and (g) alter, improve or repair any portion of the Building other than the Premises for which access to the Premises is reasonably necessary; provided, however, that Landlord shall not copy any documents or take any pictures or videos of any kind during such access. In connection with any such alteration, improvement or repair as described in Subsection 14.4(g), 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; 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.

 

15.                               Quiet Enjoyment. So long as Tenant is not in default under this Lease, Tenant may quietly and peaceably enjoy the Premises and neither Landlord nor anyone claiming or acting by, through or under Landlord shall disturb Tenant’s occupancy or quiet enjoyment of the Premises, except as permitted by Articles 13, 14, 16, 18, 21, 24 and 25 of this Lease.

 

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, but without duplication of the amounts paid by Tenant as Tenant’s Pro Rata Share of Operating Expenses. All such utilities shall be separately sub-metered from meters that supply other suites in the Building as of the Term Commencement Date. The cost of Common Area utilities shall be included in Operating Expenses and Tenant shall pay Tenant’s Pro Rata Share of such Common Area utility charges. To the extent that Tenant uses more than Tenant’s Pro Rata Share of any item of Operating Expenses or Common Area utilities as reasonably demonstrated and consistently applied by Landlord, then Tenant shall pay Landlord for such excess in addition to Tenant’s obligation to pay Tenant’s Pro Rata Share of Operating Expenses. In the event that the Building or Project is less than fully occupied, Tenant acknowledges that, except regarding those utilities that are separately metered and those services paid directly by Tenant, Landlord may extrapolate utility usage that varies depending on the occupancy of the Building or Project, as applicable, by dividing (a) the total cost of utility usage by (b) the Rentable Area of the Building or Project (as applicable) that is occupied, then multiplying (y) the resulting quotient by (z) ninety-five percent (95%) of the total Rentable Area of the Building or Project (as applicable). Tenant shall pay Tenant’s Share of the product of (y) and (z), subject to adjustment based on actual usage as reasonably determined by Landlord; provided, however, that Landlord shall not recover more than one hundred percent (100%) of such utility costs.

 

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16.2.                     Landlord shall not be liable for, nor shall any eviction of Tenant result from, the failure to furnish any 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, inaction or delay; or other causes beyond Landlord’s control (collectively, “Force Majeure”) or Landlord’s negligence. In the event of such failure, Tenant shall not be entitled to termination of this Lease or any abatement or reduction of Rent, nor shall Tenant be relieved from the operation of any covenant or agreement of this Lease. Notwithstanding the foregoing, or anything to the contrary in this Lease, if as a result of matters that are solely within Landlord’s control, for more than five (5) consecutive business days following written notice to Landlord: (a) HVAC or electricity services to all or a material portion of the Premises is interrupted or is unable to support Tenant’s normal occupancy requirements for the Permitted Use, (b) an interruption of water prevents the use or occupancy of all or a material portion of the Premises for the Permitted Use, or (c) access to the Premises (or a substantial portion thereof) is not reasonably available, then Tenant’s Base Rent and Operating Expenses (or an equitable portion of such Base Rent and Additional Rent based on the impact of such interruption on Tenant’s business operations, to the extent that less than all of the Premises are affected) shall thereafter be abated until such services are restored and the Premises are again accessible by Tenant for the Permitted Use; provided, however, that if Landlord is diligently pursuing the repair of such utilities or services and Landlord provides substitute services reasonably suitable for Tenant’s continued use and occupancy of the Premises for Permitted Use purposes, as for example, bringing in portable air-conditioning equipment or potable water supplies, and Tenant has reasonable access to the Premises, then there shall not be an abatement of Base Rent. In any such event, regardless of cause, Landlord shall diligently pursue the repair of such utilities and services. The foregoing provisions shall be Tenant’s sole recourse and remedy in the event of an interruption of services to the Premises due to matters solely within Landlord’s control. The foregoing provisions shall not apply in the case of damage to, or destruction of, the Premises (which shall be governed by the provisions of Article 24 of the Lease). In addition to Tenant’s abatement rights set forth above, in the event that any of the foregoing shall occur, regardless of cause, regardless of force majeure, and regardless of whether same is within Landlord’s control, and such failure or circumstance continues for more than fifteen (15) business days then Tenant’s Base Rent and Operating Expenses (or an equitable portion of such Base Rent and Additional Rent based on the impact of such interruption on Tenant’s business operations, to the extent that less than all of the Premises are affected) shall thereafter be abated until such services and access are restored for the Permitted Use; provided, however, that if Landlord is diligently pursuing the repair of such utilities or services and Landlord provides substitute services reasonably suitable for Tenant’s continued use and occupancy of the Premises for Permitted Use purposes, as for example, bringing in portable air-conditioning equipment or potable water supplies, and Tenant has reasonable access to the Premises, then there shall not be an abatement of Base Rent. The foregoing provisions shall not apply in case of damage to, or destruction of, the Premises (which shall be governed by the provisions of Article 24 of the Lease). As part of the Tenant Improvements, with Landlord’s approval, Tenant may locate an emergency generator at the Project or on the roof of the Building in a location to be agreed upon by Landlord and Tenant during the design of the Tenant

 

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Improvements (the “Generator”). The cost of maintaining, repairing and replacing the Generator shall be Tenant’s sole responsibility.

 

16.3.                     Tenant shall, without duplication, 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, beyond those utilities provided by Landlord, including telephone, internet service, cable television and other telecommunications, together with any fees, surcharges and taxes thereon. Upon Landlord’s demand, utilities and services provided to the Premises that are separately metered shall be paid by Tenant directly to the supplier of such utilities or services.

 

16.4.                     Tenant shall not, without Landlord’s prior written consent, use any device in the Premises (including data processing machines) that will in any way (a) increase the amount of ventilation, air exchange, gas, steam, electricity or water required or consumed in the Premises based upon Tenant’s Pro Rata Share of the Building or Project (as applicable) beyond the existing capacity of the Building or the Project 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 or Project’s (as applicable) capacity to provide such utilities or services. Landlord represents that the Building has the capacity to provide at least five (5) watts of electricity per rentable square foot, independent of lighting and air conditioning.

 

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 or the Project by reason of Tenant’s equipment or extended hours of business operations (it being acknowledged by the parties that subject to Articles 13, 14, 16, 18, 21, 24 and 25 of this Lease, Tenant has access to the Building 24 hours per day, seven days per week), 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.                     Upon Landlord’s demand, utilities and services provided 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 hot and cold water in Common Areas for lavatory purposes only, which water shall be from the local municipal or similar source; 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 in the Common Areas for all purposes. If a separate water meter is installed to monitor Common Area water usage, Tenant shall pay Landlord for the costs of such meter and the installation thereof and, throughout the duration of Tenant’s occupancy of the Premises, Tenant shall keep said meter and installation equipment in good working order and repair at Tenant’s sole cost and expense. If Tenant fails to so maintain such meter and equipment, Landlord may repair or replace the same and shall collect the costs therefor from Tenant. Tenant agrees to pay for water consumed, as shown on said meter, as and when bills are rendered. If Tenant fails to timely make such payments, Landlord may pay such charges and collect the same from Tenant. Any such costs or expenses incurred, or payments made by

 

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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.                     At any and all times and upon twenty-four (24) hours’ prior notice (provided that no time or other restrictions shall apply or advance notice be required in cases of emergency), Landlord reserves the right to stop service of the elevator, plumbing, ventilation, air conditioning and electric systems and to access the electrical room that serves other 4th floor suites but that is located within the Premises and depicted on Exhibit J attached hereto (the “4th Floor Common Electrical Room”), 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, except as set forth in Section 16.2 above, 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 Landlord’s negligence; 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, subject to the provisions of Section 16.2, 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 or Landlord’s negligence. During the performance of any repairs, alterations or improvements, Landlord shall use commercially reasonable efforts to minimize interference with Tenant’s ongoing business operations.

 

16.9.                     For the Premises, Landlord shall (a) maintain and operate the Building heating, ventilating and air conditioning systems used for the Permitted Use only (“HVAC”) so that the temperature is not colder than 65 degrees nor warmer than 75 degrees, and (b) subject to clause (a) above, furnish HVAC as reasonably required (except as this Lease otherwise provides) for reasonably comfortable occupancy of the Premises twenty-four (24) hours a day, every day during the Term, subject to casualty, eminent domain or as otherwise specified in this Article. Notwithstanding anything to the contrary in this Section, 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 acts to cure any such interruption or impairment as soon as feasible.

 

16.10.              Landlord shall provide all of the services described in this Section 16 in a first class manner.

 

17.                               Alterations.

 

17.1.                     Except as set forth in the Work Letter, 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, condition or delay; provided, however, that in the event any proposed Alteration affects (a) any structural portions of the Building, including exterior walls, roof,

 

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foundation, foundation systems (including barriers and subslab systems), 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 or which are included on the Pre-Approved List (as defined in the Work Letter). 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, certified stamped engineering drawings and calculations by Tenant’s engineer of record or architect or record, (including connections to the Building’s structural system, modifications to the Building’s envelope, non-structural penetrations in slabs or walls, and modifications or tie-ins to life safety systems), work contracts, requests for laydown areas and such other information concerning the nature and cost of the Alterations as Landlord may reasonably request. In no event shall Tenant use or Landlord be required to approve any architects, consultants, contractors, subcontractors or material suppliers that Landlord reasonably believes could cause labor disharmony. Subject to the Landlord approval rights set forth above, Tenant shall have the right to use non-union labor to perform the Alterations; provided however, that Landlord shall not be responsible for any labor disharmony or delays that results from the use of non-union labor. Notwithstanding the foregoing, Tenant may make strictly cosmetic changes to the Premises, which shall not include the removal of any of the Tenant Improvements or other Landlord’s property described in Section 17.6, (“Cosmetic Alterations”) without Landlord’s consent; provided that (y) the cost of any Cosmetic Alterations does not change the value of existing work in place by more than Sixty Thousand Dollars ($60,000) in any one instance or Two Hundred Thousand Dollars ($200,000) annually, (z) such Cosmetic Alterations do not (i) require any structural or other substantial modifications to the Premises, (ii) require any changes to, or adversely affect, the Building systems, (iii) affect the exterior of the Building, (iv) involve demolition to the Premises or the Building or (v) trigger any requirement under Applicable Laws that would require Landlord to make any alteration or improvement to the Premises, the Building or the Project. Tenant shall give Landlord at least ten (10) days’ prior written notice of any Cosmetic Alterations.

 

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 with other tenants’ components located within 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 life safety systems to remain fully operable at all times.

 

17.4.                     Any work performed on the Premises, the Building or the Project by Tenant or Tenant’s contractors shall be done at such times and in such manner as Landlord may from time to time reasonably 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 or the Tenant Improvements, Tenant shall provide

 

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Landlord with complete “as-built” drawing print sets, electronic portable document format (PDF) versions of “as-built” drawings negatively generated and retaining all layer information 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. In addition, within thirty (30) days after completion of any Alterations or the Tenant Improvements, Tenant shall provide Landlord with a turnover package which shall include two (2) copies of both soft copy (PDF) and hard copy forms of the following close-out items: project directory, subcontractor directory, general contractor warranties, operation and maintenance manuals, “as-built” drawings, inspection and testing reports, permits, commissioning documents (if any), final submittals, requests for information and change orders.

 

17.5.                     Before commencing any Alterations or Tenant Improvements (except Cosmetic Alterations and except as described in the Work Letter), Tenant shall give Landlord at least fourteen (14) days’ prior written notice of the proposed commencement of such work and shall, if reasonably required by 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, movable laboratory casework and related appliances, trade fixtures, additions and improvements, subject to Section 17.8, attached to or built into the Premises, made and paid for by either of the Parties, including 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 in writing) 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 made pursuant to the Work Letter, 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 for Tenant’s furniture and moveable personal property and those items listed on Exhibit F attached hereto (which Exhibit may be updated by Tenant from and after the Execution Date, but in each case only upon receipt of Landlord’s prior written approval of such updates in accordance with the procedures set forth hereafter), and except as set forth in Section 17.6 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 removed by Tenant at any time during the Term. Following the Execution Date, and prior to the commencement of any work relating to any Tenant Improvements or Alterations occurring thereafter, Tenant shall have the ability to update Exhibit F by submitting such updated Exhibit F to Landlord at least ten (10) business days prior to the installation at the Premises of any items requested to be included on Exhibit F by Tenant.

 

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Within ten (10) business days of Landlord’s receipt of Tenant’s updated Exhibit F, Landlord shall notify Tenant whether or not Landlord approved the updated Exhibit F. If Landlord fails to respond within such ten (10) business day period, Tenant shall provide a written reminder notice to Landlord. Landlord’s failure to respond to such reminder notice within five (5) business days after delivery of such reminder notice shall be deemed approval by Landlord of the updated Exhibit F as submitted to Landlord. If Tenant shall fail to remove any of its furniture and moveable personal property 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 property; provided, however, that Tenant shall not be required to remove, and Landlord shall have no right to elect to have Tenant remove (1) any improvement, fixture or equipment (A) of a nature typically found in office/laboratory uses, (2) any of the initial Tenant Improvements to which Exhibit B relates, and (3) any improvement, fixture or equipment as to which, at the time Tenant requests Landlord’s consent, Landlord shall not have notified Tenant that Landlord elects to require Tenant to remove at the termination of this Lease.

 

17.9.                     Intentionally omitted.

 

17.10.              Tenant shall pay to Landlord an amount equal to one and 75/100 percent (1.75%) 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 the Tenant Improvements (or any other 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 Tenant Improvements (or any other Alterations performed by Tenant with respect to the Premises), together with supporting documentation reasonably acceptable to Landlord.

 

17.12.              Tenant shall take, and shall cause its contractors to take, commercially reasonable steps to protect the Premises during the performance of any Alterations, including covering or temporarily removing any window coverings so as to guard against dust, debris or damage.

 

17.13.              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.

 

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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 roofing and covering materials; foundations; exterior walls; Building systems, including plumbing, mechanical, fire sprinkler systems (if any); heating, ventilating, air conditioning systems; elevators; and electrical systems installed or furnished by Landlord in a first class manner and in good condition and repair.

 

18.2.                     Except for services of Landlord, if any, required by Section 18.1, Tenant shall at Tenant’s sole cost and expense clean, maintain and keep the Premises in good condition and repair, ordinary wear and tear, casualty and condemnation excepted. Tenant shall, upon the expiration or sooner termination of the Term, surrender the Premises to Landlord in good condition and repair in accordance with Article 17 and Article 26, ordinary wear and tear and damage thereto from casualty and condemnation excepted; and shall, at Landlord’s request, remove all telephone and data systems, wiring and equipment from the Premises, and repair any damage to the Premises caused thereby. Landlord shall have no obligation to alter, remodel, improve, repair, decorate or paint the Premises or any part thereof, other than pursuant to the terms and provisions of the Work Letter.

 

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 except as set forth in Section 31.12. Tenant waives its rights under Applicable Laws now or hereafter in effect to make repairs at Landlord’s expense.

 

18.4.                     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. During the performance of any excavation, Landlord shall use commercially reasonable efforts to minimize interference with Tenant’s ongoing business operations.

 

18.5.                     This Article relates to repairs and maintenance arising in the ordinary course of operation of the Building and the Project. In the event of a casualty described in Article 24, Article 24 shall apply in lieu of this Article. In the event of eminent domain, Article 25 shall apply in lieu of this Article.

 

18.6.                     Costs incurred by Landlord pursuant to this Article shall constitute Operating Expenses, unless such costs are incurred due in whole or in part to any act, neglect, fault or omission of Tenant or its employees, agents, contractors or invitees, in which case Tenant shall pay to Landlord the cost of such repairs and maintenance.

 

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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, bonded or insured over by Tenant within ten (10) days after the filing thereof, at Tenant’s sole cost and expense.

 

19.2.                     Should Tenant fail to discharge, bond against or insure over 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. Tenant shall indemnify, save, defend (at Landlord’s option and with counsel reasonably acceptable to Landlord) and hold the Landlord Indemnitees harmless from and against any Claims arising from any such liens, including any administrative, court or other legal proceedings related to such liens.

 

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 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 Premises, the Building or the Project 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 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.

 

20.                               Estoppel Certificate.  Tenant shall, within ten (10) business days of receipt of written notice from Landlord, execute, acknowledge and deliver a statement in writing substantially in the form attached to this Lease as Exhibit G-1, (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 reasonably 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

 

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Premises are a part. Tenant’s failure to deliver such statement within such the prescribed time shall, at Landlord’s option, constitute a Default (as defined below) 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. Landlord shall, within ten (10) business days of receipt of written notice from Tenant, execute, acknowledge and deliver a statement in writing substantially in the form attached to this Lease as Exhibit G-2 (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 Landlord’s knowledge, any uncured defaults on the part of Tenant 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 reasonably requested thereon. Landlord’s failure to deliver such statement within such the prescribed time shall be binding upon Landlord that the Lease is in full force and effect and without modification except as may be represented by Tenant in any certificate prepared by Tenant and delivered to Landlord for execution.

 

21.                               Hazardous Materials.

 

21.1.                     Tenant shall not cause or permit any Hazardous Materials (as defined below) to be brought upon, kept or used in or about the Premises, the Building or the Project in violation of Applicable Laws by Tenant or its employees, agents, 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 Project, any portion thereof, or any adjacent property or if contamination of the Premises or any portion thereof otherwise occurs during the Term or any extension or renewal or holding over in violation of Applicable Laws (other than if such contamination results from (a) migration of Hazardous Materials from outside the Premises not caused by Tenant or its employees, agents, contractors or invitees or (b) to the extent such contamination is caused by Landlord), then Tenant shall indemnify, save, defend (at Landlord’s option and with counsel reasonably acceptable to Landlord) and hold the Landlord Indemnitees harmless from and against any and all Claims, including (w) diminution in value of the Project or any portion thereof, (x) damages for the loss or restriction on use of rentable or usable space or of any amenity of the Project, (y) damages arising from any adverse impact on marketing of space in the Project or any portion thereof and (z) sums paid in settlement of Claims that arise during or after the Term as a result of such breach or contamination. This indemnification by Tenant includes costs incurred in connection with any investigation of site conditions or any clean-up, 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 or about the Project. Without limiting the foregoing, if the presence of any Hazardous Materials in, on, under or about the Project, any portion thereof or any adjacent property caused or permitted by Tenant in violation of Applicable Laws results in any contamination of the Project, any portion thereof or any adjacent property, then Tenant shall promptly take all actions at its sole cost and expense as are necessary to return the Project, any portion thereof or any adjacent property to its 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

 

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a material adverse long-term or short-term effect on the Project, any portion thereof or any adjacent property. Notwithstanding the foregoing, Landlord shall indemnify, save, defend (at Tenant’s option and with counsel reasonably acceptable to Tenant) and hold Tenant and its affiliates, employees, agents, invitees and contractors harmless from and against any and all Claims resulting from the presence of Hazardous Materials at the Project in violation of Applicable Laws as of the Execution Date, unless placed at the Project by Tenant or its affiliates, employees, agents or contractors. This indemnification by Landlord includes costs incurred in connection with any investigation of site conditions or any clean-up, 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 Project in violation of Applicable Laws.

 

21.2.                     Landlord acknowledges that it is not the intent of this Article to prohibit Tenant from operating its business for the Permitted Use. Tenant may operate its business according to the custom of Tenant’s industry so long as the use or presence of Hazardous Materials is monitored in accordance with 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 at the Project and setting forth any and all governmental approvals or permits required in connection with the presence of such Hazardous Material at the Project (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 to the Project. 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, concurrently 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, on, under or about 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, under or about 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, which Documents, in and of themselves, do not contain a reference to any Hazardous Materials or activities related to Hazardous Materials.

 

21.3.                     Notwithstanding the provisions of Sections 21.1 21.2 or 21.9, if (a) any proposed transferee, assignee or sublessee of Tenant has been required by any prior landlord, Lender or Governmental Authority to take material 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 (b) any proposed transferee, assignee or sublessee is subject to a material enforcement order issued by any Governmental Authority in connection with the use, disposal or storage of Hazardous Materials, then it shall not be unreasonable for Landlord to

 

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withhold its consent to any proposed transfer, assignment or subletting (with respect to any such matter involving such proposed transferee, assignee or sublessee).

 

21.4.                     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 Project or any portion thereof to demonstrate that Hazardous Materials are present in violation of Applicable Laws or that contamination has occurred due to Tenant or Tenant’s employees, agents, contractors or invitees. Tenant shall pay all reasonable costs of such tests if such tests reveal that Hazardous Materials exist at the Project in violation of this Lease.

 

21.5.                     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.

 

21.6.                     Tenant shall promptly report to Landlord any actual or suspected presence of mold or water intrusion at the Premises of which Tenant has actual knowledge.

 

21.7.                     Tenant’s and Landlord’s obligations under this Article 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 caused by Tenant or Tenant’s employees, agents, contractors or invitees, Tenant shall be deemed a holdover tenant and subject to the provisions of Article 27 below.

 

21.8.                     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.

 

21.9.                     Notwithstanding anything to the contrary in this Lease, Landlord shall have sole control over 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 Project for the storage of Hazardous Materials. Notwithstanding anything to the contrary in this Lease, the quantity of Hazardous Materials allowed by this Section 21.9 is specific to Tenant and shall not run with the Lease in the event of a Transfer (as defined in Article 29). In the event of a Transfer, if the use of Hazardous Materials by such new tenant (“New Tenant”) is such that New Tenant utilizes fire control areas in the Project in excess of New Tenant’s Pro Rata Share of the Building, then New Tenant 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 is not greater than New Tenant’s Pro Rata Share of the Building.

 

22.                               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 the 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

 

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

 

22.1.                     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.

 

22.2.                     If the Building has a ventilation system that, in Landlord’s judgment, is reasonably 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 reasonably 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 reasonably requires. The placement and configuration of all ventilation exhaust pipes, louvers and other equipment shall be subject to Landlord’s reasonable 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.

 

22.3.                     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 Section shall constitute Alterations.

 

22.4.                     Tenant’s responsibility to remove, eliminate and abate odors, fumes and exhaust shall continue throughout the Term. Landlord’s approval of the Tenant Improvements shall not preclude Landlord from requiring additional measures to eliminate odors, fumes and other adverse impacts of Tenant’s exhaust stream (as Landlord may designate in Landlord’s discretion). Tenant shall install additional equipment as Landlord requires from time to time under the preceding sentence. Such installations shall constitute Alterations.

 

22.5.                     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.

 

23.                               Insurance; Waiver of Subrogation.

 

23.1.                     Landlord shall maintain insurance for the Building and the Project in amounts equal to full replacement cost (exclusive of the costs of engineering and design plans, excavation,

 

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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, 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, anticipated rental loss during the period of repairs or rebuilding, workers’ 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. Such insurance, if placed by Landlord, is not intended to replace any coverage required to be maintained by Tenant in Section 23.5 herein.

 

23.2.                     In addition, Landlord shall carry commercial general liability insurance with limits of not less than Five Million Dollars ($5,000,000) per occurrence and in the aggregate for bodily injury (including death), or property damage with respect to the Project.

 

23.3.                     Tenant shall, at its own cost and expense, procure and maintain in effect, beginning on the Term Commencement Date or the date of occupancy, whichever occurs first, and continuing throughout the Term (and occupancy by Tenant, if any, after termination of this Lease) commercial general liability insurance with limits of not less than Two Million Dollars ($2,000,000) per occurrence and in the aggregate for bodily injury (including death) and for property damage arising from Tenant’s use of the Premises (including $100,000 fire legal liability (each loss)); and pollution and environmental liability insurance covering the environmental risks of Tenant’s business with limits of not less than Five Hundred Thousand Dollars ($500,000) per occurrence and not less than One Million Dollars ($1,000,000) in the aggregate, with respect to environmental contamination and pollution of the Premises or any adjacent or adjoining properties caused by Tenant.

 

23.4.                     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, directors, employees, agents, general partners, members, subsidiaries, affiliates and Lenders (“Landlord Parties”) as additional insureds as respects liability arising from Tenant’s use of the Premises. Said insurance shall be with companies authorized to do business in the state in which the Project is located and having a rating of not less than policyholder rating of A and financial category rating of at least Class XII in A.M. Best’s Insurance Ratings Guide — current edition. Tenant shall provide Landlord with certificates of insurance and any endorsements required herein including additional insured, waiver of subrogation and notice of cancellation. 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 must include dedicated limits or

 

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a per project aggregate that specifically provides that the amount of insurance shall not be prejudiced by losses at other properties covered by the policy. Tenant shall, at least twenty (20) days prior to the expiration of such policies, furnish Landlord with renewal certificates of insurance or binders evidencing the coverages required herein. 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.

 

23.5.                     Subject to Sections 23.3, 23.7 and 28.1, Tenant assumes the risk of damage to any fixtures, goods, inventory, merchandise, equipment and leasehold improvements. Furthermore, Landlord shall not be liable for injury to Tenant’s business or any loss of income therefrom, or any other form of special, consequential or punitive damages relative to any damage to any fixtures, goods, inventory, merchandise, equipment and leasehold improvements. 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.

 

23.6.                     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, the Property or the Project, (b) the landlord under any lease whereunder Landlord is a tenant of the Property 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.

 

23.7.                     Landlord, Tenant and each of their insurers agree to waive all rights of subrogation against one another as respects any loss, damage, claims, suits or demands, howsoever caused, that are covered, or should have been covered, by valid and collectible insurance, including any deductibles or self-insurance maintained there under. If necessary, each party agrees to endorse the required insurance policies to permit waivers of subrogation as required hereunder and hold harmless and indemnify the other party for any loss or expense incurred as a result of a failure to obtain such waivers of subrogation from insurers. If such release of either Landlord or Tenant, 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.

 

23.8.                     Landlord may require insurance policy limits required under this Lease to be reasonably raised to conform with requirements of Landlord’s Lender or to bring coverage limits to reasonable levels then being required of new tenants within the Project.

 

23.9.                     Any costs incurred by Landlord pursuant to this Article shall constitute a portion of Operating Expenses.

 

24.                               Damage or Destruction.

 

24.1.                     In the event of a partial destruction of (a) the Premises or (b) Common Areas of the Building or the Project ((a) and (b) together, the “Affected Areas”) 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 (x) the damage thereto is such that the Affected Areas

 

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may be repaired, reconstructed or restored within a period of six (6) months from the date of the happening of such casualty, (y) 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) and (z) such casualty was not intentionally caused by Tenant or its employees, agents or contractors, then Landlord shall commence and proceed diligently with the work of repair, reconstruction and restoration of the Affected Areas and this Lease shall continue in full force and effect.

 

24.2.                     In the event of any damage to or destruction of the Building or the Project more severe than as described in Section 24.1, Landlord may elect to repair, reconstruct and restore the Building or the Project, as applicable, in which case this Lease shall continue in full force and effect. If Landlord elects not to repair the Building or the Project, as applicable, then this Lease shall terminate as of the date of such damage or destruction.

 

24.3.                     Landlord shall give written notice to Tenant within sixty (60) days following the date of damage or destruction of its election not to repair, reconstruct or restore the Building or the Project, as applicable.

 

24.4.                     Upon any termination of this Lease under any of the provisions of this Article, 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.

 

24.5.                     In the event of repair, reconstruction and restoration as provided in this Article, 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 business interruption or loss of rental income insurance actually received by Tenant with respect to the Premises.

 

24.6.                     Notwithstanding anything to the contrary contained in this Article, 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, should any Force Majeure event endure for longer than ninety (90) days, at Landlord’s election, Landlord shall be relieved of its obligation to make such repair, reconstruction or restoration.

 

24.7.                     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 (a) those portions of the Premises that were originally provided at Landlord’s expense, (b) those portions of the Premises constructed using the TI Allowance but only to the extent that insurance proceeds are received to repair, reconstruct or restore the same, and (c) the

 

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Common Area portion of the Affected Areas. Except as otherwise provided in (b) above, 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 those provided as part of the initial Tenant Improvements installed pursuant to the Work Letter, Landlord shall, upon the need for replacement due to an insured loss, provide only the portion of the Tenant Improvements paid for utilizing the TI Allowance, unless Tenant again elects to complete all of the initial Tenant Improvements or upgrade such improvements and pay any incremental costs related thereto, except to the extent that excess insurance proceeds, if received, are adequate to provide for the repair and reconstruction of all of the initial Tenant Improvements or any further upgrades, in addition to providing for basic repair, reconstruction and restoration of the Premises, the Building and the Project.

 

24.8.                     Notwithstanding anything to the contrary contained in this Article, 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 occurs during the last twenty-four (24) months of the Term or any extension hereof, or to the extent that insurance proceeds are not available therefor.

 

24.9.                     Landlord’s obligation, should it elect or be obligated to repair or rebuild, shall be limited to the Affected Areas. 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 Affected Areas are 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, and subject to the requirements of any Lender of Landlord.

 

25.                               Eminent Domain.

 

25.1.                     In the event (a) the whole of all Affected Areas or (b) such part thereof as shall substantially interfere with Tenant’s use and occupancy of the Premises for the Permitted Use 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, except with regard to (y) items occurring prior to the damage or destruction and (z) provisions of this Lease that, by their express terms, survive the expiration or earlier termination hereof.

 

25.2.                     In the event of a partial taking of (a) the Building or the Project or (b) 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 (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) as of such taking if such taking is, in Landlord’s sole opinion, of a material nature such as to make

 

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it uneconomical to continue use of the unappropriated portion for purposes of renting office or laboratory space.

 

25.3.                     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.

 

25.4.                     If, upon any taking of the nature described in this Article, this Lease continues in effect, then Landlord shall promptly proceed to restore the Affected Areas to substantially their same condition prior to such partial taking. To the extent such restoration is infeasible, 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.

 

26.                               Surrender.

 

26.1.                     At least 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”) prepared by an independent third party reasonably acceptable to Landlord, and (b) written evidence of all appropriate governmental releases obtained by Tenant in accordance with Applicable Laws, including 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 shall survive the expiration or earlier termination of the Lease.

 

26.2.                     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.

 

26.3.                     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, the Property or the Project, unless Landlord consents in writing, and shall, at Landlord’s option, operate as an assignment to Landlord of any or all subleases.

 

26.4.                     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.

 

27.                               Holding Over.

 

27.1.                     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) Base Rent in accordance with Article 7, as adjusted in accordance with Article 8, and (b) any

 

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amounts for which Tenant would otherwise be liable under this Lease if the Lease were still in effect, including payments for Tenant’s Share of Operating Expenses. Any such month-to-month tenancy shall be subject to every other term, covenant and agreement contained herein.

 

27.2.                     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, (a) 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 Base Rent in effect during the last thirty (30) days of the Term, plus one hundred percent (100%) of the Additional Rent then in effect, and (b) Tenant shall be liable to Landlord for any and all damages suffered by Landlord as a result of such holdover, including any lost rent or consequential, special and indirect damages.

 

27.3.                     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.

 

27.4.                     The foregoing provisions of this Article 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.

 

28.                               Indemnification and Exculpation.

 

28.1.                     Subject to the provisions of Section 23.7, Tenant agrees to indemnify, save, defend (at Landlord’s option and with counsel reasonably acceptable to Landlord) and hold the Landlord Indemnitees harmless from and against any and all Claims arising from (a) injury or death to any person or damage to any property occurring within the Premises, the Building, the Property or the Project arising directly or indirectly out of Tenant’s or Tenant’s employees’, agents’, contractors’ or invitees’ use or occupancy of the Premises, (b) a breach or default by Tenant in the performance of any of its obligations hereunder, and (c) events which were caused as a result of Tenant’s use of non-union labor for the performance of the Tenant Improvements or Alterations, in each case ((a)-(c)) except to the extent caused by Landlord’s negligence or willful misconduct. Subject to Sections 23.7 and 28.2 and any subrogation provisions contained in the Work Letter, Landlord agrees to indemnify, save, defend (at Tenant’s option and with counsel reasonably acceptable to Tenant) and hold Tenant and its owners, directors, affiliates, employees, agents and contractors (collectively, “Tenant Indemnitees”) harmless from and against any and all Claims arising from injury or death to any person or damage to any property occurring within or about the Premises, the Building, the Property or the Project to the extent arising out of (a) Landlord’s gross negligence or willful misconduct or (b) a breach or default by Landlord in the performance of any of its obligations hereunder.

 

28.2.                     Subject to the provisions of Section 23.7, but otherwise notwithstanding any provision of Section 28.1 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 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 broken water lines, malfunctioning fire sprinkler systems, roof leaks or stoppages of lines), unless any such loss is due to Landlord’s

 

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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.

 

28.3.                     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.

 

28.4.                     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.

 

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

 

29.                               Assignment or Subletting.

 

29.1.                     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 Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Landlord, in all instances, shall respond to any request for consent within ten (10) business days. If Landlord does not respond within such period, Landlord’s consent shall be deemed denied. In no event shall Tenant perform a Transfer to or with an entity that is a tenant at the Project or that is in discussions or negotiations with Landlord or an affiliate of Landlord to lease premises at the Project unless (a) Tenant notifies Landlord of Tenant’s desire to do so and (b) Landlord fails to notify Tenant within ten (10) days after receipt of such notice that Landlord can accommodate such tenant or potential tenant’s space needs in the Building.

 

29.2.                     In the event Tenant desires to effect a Transfer, then, at least thirty (30) but not more than ninety (90) days prior to the date when Tenant desires the assignment or sublease to be effective (the “Transfer Date”), Tenant shall provide written notice to Landlord (the “Transfer Notice”) containing information (including references) concerning the character of the proposed transferee, assignee or sublessee; the Transfer Date; any ownership or commercial relationship between Tenant and the proposed transferee, assignee or sublessee; and the consideration and all other material terms and conditions of the proposed Transfer, all in such detail as Landlord shall reasonably require.

 

29.3.                     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, if applicable, to exercise its rights under Section 29.8 to cancel this Lease. In

 

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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 (as the same may be amended from time to time, the “Revenue Code”). 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 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.

 

29.4.                     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 respecting the relevant business experience and financial statements of the proposed transferee, assignee or sublessee;

 

(c)                                  Tenant shall reimburse Landlord for Landlord’s actual costs and expenses, including reasonable attorneys’ fees, charges and disbursements incurred in connection with the review, processing and documentation of such request, such reimbursement not to exceed the lesser of actual costs or two thousand dollars ($2,000);

 

(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 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 and excluding any consideration received for the value of Tenant’s business or personal property) 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, after making deductions for all costs and expenses incurred in connection with such transfer, including any reasonable marketing expenses, tenant improvement funds expended by Tenant, alterations, cash concessions, brokerage commissions, attorneys’ fees

 

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and free rent actually paid by or allowed Tenant. 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 permitted within 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;

 

(1)                                 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 21.7), 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 21.2.

 

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

 

29.6.                     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.

 

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29.7.                     Notwithstanding any Transfer, Tenant shall remain fully and primarily liable for the payment of all Rent and other sums due or to become due hereunder, and for the full performance of all other terms, conditions and covenants to be kept and performed by Tenant. The acceptance of Rent or any other sum due hereunder, or the acceptance of performance of any other term, covenant or condition thereof, from any person or entity other than Tenant shall not be deemed a waiver of any of the provisions of this Lease or a consent to any Transfer.

 

29.8.                     If Tenant delivers to Landlord a Transfer Notice indicating a desire to transfer this Lease to a proposed transferee, assignee or sublessee and if such Transfer is both (a) for over fifty percent (50%) of the Premises and (b) for more than fifty percent (50%) of the remainder of the Term, 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 recapture the space that is the subject of such Transfer Notice for the balance of the Term 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 ten (10) 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, such space shall not be recaptured by Landlord and this Lease shall continue in full force and effect. No failure of Landlord to exercise its option to recapture such space shall be deemed to be Landlord’s consent to a proposed Transfer.

 

29.9.                     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 (as defined below) by Tenant, Tenant shall have the right to collect such rent.

 

29.10.              Notwithstanding Section 29.1, Tenant shall have the right to Transfer without Landlord’s prior written consent the Premises or any part thereof to (a) 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”), (b) in connection with the sale of substantially all of Tenant’s assets, (c) a sale of the stock ownership interests of Tenant, (d) a merger of Tenant (regardless of the survivor of such merger) and (e) any similar entity level transaction effecting directly or indirectly the conveyance of Tenant’s business; provided that Tenant shall notify Landlord in writing at least ten (10) days prior to the effectiveness of any such Transfer (an “Exempt Transfer”) and otherwise comply with the requirements of this Lease regarding such Transfer. For purposes of the definition of Tenant’s Affiliate, “control” requires both (i) owning (directly or indirectly) more than fifty percent (50%) of the stock or other equity interests of another person and (ii) possessing, directly or indirectly, the power to direct or cause the direction of the management and policies of such person.

 

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30.                               Subordination and Attornment.

 

30.1.                     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 (collectively, “Mortgage”) without the necessity of the execution and delivery of any further instruments on the part of Tenant to effectuate such subordination.

 

30.2.                     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. If any such mortgagee, beneficiary or landlord under a lease wherein Landlord is tenant (each, a “Mortgagee”) so elects, however, 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.

 

30.3.                     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.

 

30.4.                     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.

 

30.5.                     The subordination and attornment provisions of this Article are conditioned upon Tenant and the holder of any current or future Mortgagee executing a subordination, non-disturbance and attornment agreement in reasonable form.

 

31.                               Defaults and Remedies.

 

31.1.                     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 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) days after the date such payment is due, Tenant shall pay to Landlord (a) an additional sum of five percent (5%) of the overdue Rent as a late charge plus (b) interest at an annual rate (the “Default Rate”) equal to the lesser of (a) twelve percent (12%) and

 

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(b) the highest rate permitted by Applicable Laws. 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 and shall be payable as Additional Rent to Landlord due with the next  installment of Rent or within five (5) business days after Landlord’s demand, whichever is earlier. Landlord’s acceptance of any Additional Rent (including a late charge or any other amount hereunder) shall not be deemed an extension of the date that Rent is due or prevent Landlord from pursuing any other rights or remedies under this Lease, at law or in equity. Notwithstanding the foregoing, Landlord shall not assess a late charge in accordance with this Section 31.1 for the first late payment in any twelve (12) month period.

 

31.2.                     No payment by Tenant or receipt by Landlord of a lesser amount than the Rent payment herein stipulated shall be deemed to be other than on account of the Rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Rent or pursue any other remedy provided in this Lease or in equity or at law. If a dispute shall arise as to any amount or sum of money to be paid by Tenant to Landlord hereunder, Tenant shall have the right to make payment “under protest,” such payment shall not be regarded as a voluntary payment, and there shall survive the right on the part of Tenant to institute suit for recovery of the payment paid under protest.

 

31.3.                     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, in each case within the applicable cure period (if any) described in Section 31.4, then 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 unreasonably interfered with the use of the Building or the Project by any other tenant or with the efficient operation of the Building or the Project, 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 31.1, Tenant shall pay to Landlord as Additional Rent all sums so paid or incurred by Landlord, together with interest at the Default Rate, computed from the date such sums were paid or incurred.

 

31.4.                     The occurrence of any one or more of the following events shall constitute a “Default” hereunder by Tenant:

 

(a)                                 Tenant abandons or vacates the Premises and fails to provide adequate access control for the Premises;

 

(b)                                 Tenant fails to make any payment of Rent, as and when due, or to satisfy its obligations under Article 19, where such failure shall continue for a period of five (5) business days after written notice thereof from Landlord to Tenant;

 

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(c)                                  Tenant fails to observe or perform any obligation or covenant contained herein (other than described in Subsections 31.4(a) and 31.4(b)) to be performed by Tenant, where such failure continues 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 commences 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 after 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 (as the same may be amended from time to time, the “Bankruptcy Code”) or an order for relief is entered against Tenant pursuant to a voluntary or involuntary proceeding commenced under any chapter of the Bankruptcy Code;

 

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

 

(h)                                 Tenant fails to deliver an estoppel certificate in accordance with Article 20; 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 shall specify the alleged default and shall demand that Tenant perform the provisions of this Lease or pay the Rent that is in arrears, as the case may be, within the applicable period of time, or quit the Premises. No such notice shall be deemed a forfeiture or a termination of this Lease unless Landlord elects otherwise in such notice.

 

31.5.                     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 has the right to do any or all of the following:

 

(a)                                 Halt any Tenant Improvements and Alterations and order Tenant’s contractors, subcontractors, consultants, designers and material suppliers to stop work;

 

(b)                                 Terminate Tenant’s right to possession of the Premises by written notice to Tenant or by any lawful means, in which case 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

 

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resort to legal process and without being deemed guilty of trespass or becoming liable for any loss or damage that may be occasioned thereby; and

 

(c)                                  Terminate this Lease, in which event 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:

 

(i)                                             The worth at the time of award of any unpaid Rent that had accrued at the time of such termination; plus

 

(ii)                                          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

 

(iii)                                       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

 

(iv)                                      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 the cost of restoring the Premises to the condition required under the terms of this Lease, including any rent payments not otherwise chargeable to Tenant (e.g., during any “free” rent period or rent holiday); plus

 

(v)                                         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 31.5(c)(i) and 31.5(c)(ii), “worth at the time of award” shall be computed by allowing interest at the Default Rate. As used in Subsection 31.5(c)(iii), 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.

 

31.6.                     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 and 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

 

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failure or refusal to relet the Premises. For purposes of this Section, 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 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.

 

31.7.                     If Landlord does not elect to terminate this Lease as provided in Section 31.5, then Landlord may, from time to time, recover all Rent as it becomes due under this Lease. At any time thereafter, Landlord may elect to terminate this Lease and to recover damages to which Landlord is entitled.

 

31.8.                     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 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.

 

31.9.                     All of Landlord’s rights, options and remedies hereunder shall be construed and held to be nonexclusive and cumulative. Landlord shall have the right to pursue any one or all of such remedies, or any other remedy or relief that may be provided by Applicable Laws, whether or not stated in this Lease. No waiver of any default of Tenant hereunder shall be implied from any acceptance by Landlord of any Rent or other payments due hereunder or any omission by Landlord to take any action on account of such default if such default persists or is repeated, and no express waiver shall affect defaults other than as specified in said waiver.

 

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31.10.              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.

 

31.11.              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.

 

31.12.              Landlord shall not be in default or liable for damages 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. In no event shall Tenant have the right to terminate or cancel this Lease or to withhold or abate rent or to set off any Claims against Rent as a result of any default or breach by Landlord of any of its covenants, obligations, representations, warranties or promises hereunder, except as may otherwise be expressly set forth in this Lease.

 

31.13.              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 of which Tenant shall have been given notice and an address (Tenant acknowledges that execution of a subordination and non-disturbance agreement shall constitute notice of the existence and provision of an address for any beneficiary of a deed of trust or a mortgagee), 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 or the Project 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 or via the execution of a subordination and non-disturbance agreement, the names and addresses of all such persons who are to receive such notices.

 

32.                               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:

 

32.1.                     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;

 

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

 

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

 

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

 

33.                               Brokers.

 

33.1.                     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 Jones Lang LaSalle (“Tenant Broker”) and Cornish & Carey Commercial Newmark Knight Frank (“Landlord Broker,” and together with Tenant 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 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 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 a separate agreement between Landlord and Brokers.

 

33.2.                     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. Landlord represents and warrants that no broker or agent has made any representation or warranty relied upon by Landlord in Landlord’s decision to enter into this Lease, other than as contained in this Lease.

 

33.3.                     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 and Tenant are executing this Lease in reliance upon the representations, warranties and agreements contained within Sections 33.1 and 33.2.

 

33.4.                     Tenant agrees to indemnify, save, defend (at Landlord’s option and with counsel reasonably acceptable to Landlord) and hold the Landlord Indemnitees harmless from any and all cost or liability for compensation claimed by any broker or agent, other than Brokers, employed or engaged by Tenant or claiming to have been employed or engaged by Tenant. Landlord agrees to indemnify, save, defend (at Tenant’s option and with counsel reasonably acceptable to Tenant) and hold the Tenant Indemnitees harmless from any and all cost or liability for compensation claimed by any broker or agent, other than Brokers, employed or engaged by Landlord or claiming to have been employed or engaged by Landlord.

 

34.                               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

 

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then-current successor-in-interest or assign. 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 any subsequent Landlord may transfer its interest in the Premises or this Lease without Tenant’s consent.

 

35.                               Limitation of Liability.

 

35.1.                     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, (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.

 

35.2.                     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, member or agent of Landlord.

 

35.3.                     If Tenant is a partnership or joint venture, then the partners of such partnership shall not be personally liable for Tenant’s obligations under this Lease, and no partner of Tenant 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 Tenant except as may be necessary to secure jurisdiction of the partnership

 

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or joint venture. If Tenant is a corporation, then the shareholders, directors, officers, employees and agents of such corporation shall not be personally liable for Tenant’s obligations under this Lease, and no shareholder, director, officer, employee or agent of Tenant 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 Tenant. If Tenant is a limited liability company, then the members of such limited liability company shall not be personally liable for Tenant’s obligations under this Lease, and no member of Tenant 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 Tenant except as may be necessary to secure jurisdiction of the limited liability company. No partner, shareholder, director, employee, member or agent of Tenant 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, member or agent of Tenant.

 

35.4.                     Each of the covenants and agreements of this Article 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.

 

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

 

36.1.                     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

 

36.2.                     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 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.

 

37.                               Representations. Tenant guarantees, warrants and represents 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, (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 and (e) neither (i) the execution, delivery or performance of this Lease nor (ii) the consummation of the transactions contemplated hereby will violate or conflict with any provision of documents or instruments under which Tenant is constituted or to which Tenant is a party. In addition, Tenant guarantees, warrants and represents that none of (x) it, (y) its affiliates or partners nor (z) to the best of its knowledge, its members, shareholders or other equity owners or any of their respective employees, officers, directors, representatives or agents is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury (including those named on OFAC’s

 

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Specially Designated and Blocked Persons List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism) or other similar governmental action. Landlord guarantees, warrants and represents that (a) Landlord is duly incorporated or otherwise established or formed and validly existing under the laws of its state of incorporation, establishment or formation, (b) Landlord has and is duly qualified to do business in the state in which the Property is located, (c) Landlord has full corporate, partnership, trust, association or other appropriate power and authority to enter into this Lease and to perform all Landlord’s obligations hereunder, (d) each person (and all of the persons if more than one signs) signing this Lease on behalf of Landlord is duly and validly authorized to do so and (e) neither (i) the execution, delivery or performance of this Lease nor (ii) the consummation of the transactions contemplated hereby will violate or conflict with any provision of documents or instruments under which Landlord is constituted or to which Landlord is a party. In addition, Landlord guarantees, warrants and represents that none of (x) it, (y) its affiliates or partners nor (z) to the best of its knowledge, its members or other equity owners or any of their respective employees, officers, directors, representatives or agents is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the OFAC of the Department of the Treasury (including those named on OFAC’s Specially Designated and Blocked Persons List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism) or other similar governmental action.

 

38.                               Confidentiality. Landlord and Tenant shall keep the terms and conditions of this Lease and any information provided to the other or its employees, agents or contractors pursuant to Article 9 confidential and shall not (a) disclose to any third party any terms or conditions of this Lease or any other Lease-related document (including subleases, assignments, work letters, construction contracts, letters of credit, subordination agreements, non-disturbance agreements, brokerage agreements or estoppels) or (b) provide to any third party an original or copy of this Lease (or any Lease-related document). Landlord shall not release to any third party any non-public financial information or non-public information about Tenant’s ownership structure that Tenant gives Landlord. Notwithstanding the foregoing, confidential information under this Section may be released by Landlord or Tenant under the following circumstances: (w) 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, (x) to a party’s attorneys, accountants, brokers, lenders and other bona fide consultants or advisers, such as architects and contractors (with respect to this Lease only); provided such third parties agree to be bound by this Section, (y) to bona fide prospective assignees or subtenants of this Lease or purchasers of Tenant or the Project; provided they agree in writing to be bound by this Section or (z) by Landlord in the form of aggregate leasing data provided to investors in the normal course of business.

 

39.                               Notices. 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 or overnight delivery with a reputable nationwide overnight delivery service, 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

 

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service. Any notices given pursuant to this Lease shall be addressed to Tenant or Landlord 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.

 

40.                               Miscellaneous.

 

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

 

40.2.                     To induce Landlord to enter into this Lease, Tenant agrees that it shall promptly furnish to Landlord, from time to time (but not more than once in any calendar year), upon Landlord’s written request, the most recent audited or certified 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 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 material respects. Unaudited financials certified by the chief financial officer of Tenant as true, correct and complete in all respects shall suffice for purposes of this Section.

 

40.3.                     Where applicable in this Lease, the singular includes the plural and the masculine or neuter includes the masculine, feminine and neuter. The words “include,” “includes,” “included” and “including” shall mean “‘include,’ etc., without limitation.” 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.

 

40.4.                     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 reimbursed by the other party for all reasonable costs and expenses, including reasonable attorneys’ fees and expenses, incurred by the substantially prevailing party in such action or proceeding and in any appeal in connection therewith.

 

40.5.                     Submission of this instrument for examination or signature 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.

 

40.6.                     Time is of the essence with respect to the performance of every provision of this Lease.

 

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

 

40.8.                     Whenever consent or approval of either party is required, that party shall not unreasonably withhold, condition or delay such consent or approval, except as may be expressly set forth to the contrary.

 

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40.9.                     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.

 

40.10.              Any provision of this Lease that shall prove to be invalid, void or illegal shall in no way affect, impair or invalidate any other provision hereof, and all other provisions of this Lease shall remain in full force and effect and shall be interpreted as if the invalid, void or illegal provision did not exist.

 

40.11.              Landlord may, but shall not be obligated to, record a short form or memorandum hereof without Tenant’s consent, at Landlord’s sole cost, including any transfer or other taxes incurred in connection with said recordation. Within ten (10) days after receipt of written request from Landlord, Tenant shall execute a termination of any short form or memorandum of lease recorded with respect hereto. Neither party shall record this Lease.

 

40.12.              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.

 

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

 

40.14.        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.

 

40.15.              Tenant and Landlord guarantee, warrant and represent to the other that the individual or individuals signing this Lease 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.

 

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

 

40.17.              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 or Tenant of any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition herein contained.

 

40.18.              To the extent permitted by Applicable Laws, 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;

 

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Tenant’s use or occupancy of the Premises; or any claim of injury or damage related to this Lease or the Premises.

 

41.                               Option to Extend Term. Tenant shall have the option (“Option”) to extend the Term by thirty-six (36) months 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 the Option shall be on all the same terms and conditions as this Lease, except as follows:

 

41.1.                     Base Rent during the extension term shall be equal to the then-current fair market rent for similar premises in similar buildings in the city of San Carlos as of the commencement of the extension term, including annual fair market rent increases (“FMR”), but in no event shall Base Rent be less than the Base Rent prior to the end of the expiration of the initial Term. If Landlord and Tenant cannot agree on the FMR for the extension term within thirty (30) days after the date on which Tenant notifies Landlord that it is exercising the Option, then, no later than an additional thirty (30) days thereafter (the “Submission Period”), Landlord and Tenant shall each furnish to the other a notice in writing (an “FMR Notice”) stating such party’s estimate of the FMR. Such notices shall be accompanied by a statement from a qualified, licensed, third party, unaffiliated real estate appraiser with at least ten (10) years’ experience in the San Carlos/Mid-Peninsula area (an “Appraiser”) stating such Appraiser’s opinion of FMR. If only one (1) party’s Appraiser timely submits its opinion of FMR, such FMR shall be binding on Landlord and Tenant. If, within twenty (20) days after expiration of the Submission Period, Landlord and Tenant still cannot agree on the FMR, the two (2) Appraisers shall appoint a third qualified, licensed, third party, unaffiliated real estate appraiser (the “Referee”) within seven (7) days. If the Appraisers are unable to agree upon the selection of the Referee, then the Referee shall be selected within ten (10) days thereafter from among the Northern California panel of qualified Real Estate Industry Arbitrators of the American Arbitrator Association (the “Association”) pursuant to the Real Estate Industry Arbitration rules of the Association. The Referee shall, within thirty (30) days after appointment, render the Referee’s decision as to the FMR, which opinion shall be strictly limited to choosing one of the two determinations made by the Appraisers. The decision by the Referee shall be binding upon Landlord and Tenant, and each shall pay for its own appraisal. The cost of the Referee shall be shared equally by Landlord and Tenant. In determining FMR, Landlord, Tenant and, if applicable, the Appraisers and Referee shall each take into account all relevant factors, including, without limitation, (a) the size of the Premises and length of the extension term, (b) rent in comparable buildings in the relevant competitive market, including concessions offered to new tenants, such as free rent, tenant improvement allowances, and moving allowances, (c) Tenant’s creditworthiness and (d) the quality, age, amenities and location of the Building and the Project.

 

41.2.                     The Option is not assignable separate and apart from this Lease.

 

41.3.                     The Option is conditional upon Tenant giving Landlord written notice of its election to exercise the Option at least nine (9) months prior to the end of the expiration of the then-current Term. Tenant assumes full responsibility for maintaining a record of the deadlines to exercise the Option. Tenant acknowledges that it would be inequitable to require Landlord to accept any exercise of the Option after the date provided for in this Section.

 

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41.4.                     Notwithstanding anything contained in this Article to the contrary, Tenant shall not have the right to exercise the Option:

 

(a)                                 During the time commencing from the date Landlord delivers to Tenant a written notice that Tenant is in monetary or material non-monetary 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 monetary or material non-monetary Default as described in Article 31 of the Lease (provided, however, that, for purposes of this Subsection 42.4(b), Landlord shall not be required to provide Tenant with further notice of such monetary or material non-monetary Default) and continuing until Tenant cures any such Default, if such monetary or material non-monetary Default is susceptible to being cured; or

 

(c)                                  In the event that Tenant has defaulted in the performance of its obligations under this Lease four (4) or more times and a service or late charge has become payable under Section 31.1 for each of such defaults during the twelve (12)-month period immediately prior to the date that Tenant intends to exercise the Option, whether or not Tenant has cured such defaults.

 

41.5.                     The period of time within which Tenant may exercise the 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.

 

41.6.                     All of Tenant’s rights under the provisions of the Option shall terminate and be of no further force or effect even after Tenant’s due and timely exercise of the 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 four (4) or more times and a service or late charge under Section 31.1 has become payable for any such default, whether or not Tenant has cured such defaults.

 

42.                               Right of First Refusal. During the eighteen (18) month period commencing on the Term Commencement Date, Tenant shall have a right of first refusal (“ROFR”) as to the suite across the hall from the Premises on the fourth (4th) floor of the Building, consisting of approximately eight thousand three hundred eighty-six (8,386) square feet of space, as shown on Exhibit H attached hereto (“ROFR Premises”); provided, however, that in no event shall Landlord be required to lease the ROFR Premises to Tenant for any period past the date on which this Lease expires or is terminated pursuant to its terms and as such if the Notice of Offer contains a term for the ROFR space that extends past the Term Expiration Date then in order to lease the ROFR upon the terms in the Notice of Offer Tenant shall be required to extend the Term with respect to the Premises. In the event Landlord intends to lease the ROFR Premises, Landlord shall provide written notice thereof to Tenant (the “Notice of Offer”), specifying the terms and conditions of a proposed lease to Tenant of the ROFR Premises.

 

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42.1.                     Within five (5) business days following its receipt of a Notice of Offer, Tenant shall advise Landlord in writing whether Tenant elects to lease all (not just a portion) of the ROFR Premises on the terms and conditions set forth in the Notice of Offer. If Tenant fails to notify Landlord of Tenant’s election within said five (5) business day period, then Tenant shall be deemed to have elected not to lease the ROFR Premises.

 

42.2.                     If Tenant timely notifies Landlord that Tenant elects to lease the ROFR Premises on the terms and conditions set forth in the Notice of Offer, then Landlord shall lease the ROFR Premises to Tenant upon the terms and conditions set forth in the Notice of Offer.

 

42.3.                     If Tenant notifies Landlord that Tenant elects not to lease the ROFR Premises on the terms and conditions set forth in the Notice of Offer, or if Tenant fails to notify Landlord of Tenant’s election within the five (5) business day period described above, then Landlord shall have the right to consummate the lease of the ROFR Premises on the same terms as set forth in the Notice of Offer following Tenant’s election (or deemed election) not to lease the ROFR Premises. If after Tenant’s election (or deemed election) not to lease the ROFR Premises, the material economic terms change by more than ten percent (10%) from the initial terms in the Notice of Office, then the ROFR shall be fully reinstated, and Landlord shall not thereafter lease the ROFR Premises without first complying with the procedures set forth in this Article.

 

42.4.                     Notwithstanding anything in this Article to the contrary, Tenant shall not exercise the ROFR during such period of time that Tenant is in monetary or material non-monetary default under any provision of this Lease. Any attempted exercise of the ROFR during a period of time in which Tenant is so in monetary or material non-monetary default shall be void and of no effect. In addition, Tenant shall not be entitled to exercise the ROFR if Landlord has given Tenant four (4) or more notices of default under this Lease, whether or not the defaults are cured, during the twelve (12) month period prior to the date on which Tenant seeks to exercise the ROFR.

 

42.5.                     Notwithstanding anything in this Lease to the contrary, Tenant shall not assign or transfer the ROFR, either separately without Landlord’s prior written consent, which consent Landlord may withhold in its sole and absolute discretion or in conjunction with an assignment or transfer of Tenant’s interest in the Lease, without Landlord’s prior written consent, which consent rights shall be as set forth in Article 29.

 

42.6.                     If Tenant exercises the ROFR, Landlord does not guarantee that the ROFR Premises will be available on the anticipated commencement date for the Lease as to such Premises due to a holdover by the then-existing occupants of the ROFR Premises or for any other reason beyond Landlord’s reasonable control.

 

42.7.                     Notwithstanding anything in this Lease to the contrary, the ROFR shall expire on the date that is eighteen (18) months following the Term Commencement Date.

 

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

 

	
LANDLORD:
    	
 
    
	
 
    	
 
    
	
BMR-201   INDUSTRIAL ROAD LLC,
    	
 
    
	
a   Delaware limited liability company
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Kevin M. Simonsen
    	
 
    
	
Name:
    	
Kevin   M. Simonsen
    	
 
    
	
Title:
    	
VP,   Real Estate Counsel
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
TENANT:
    	
 
    
	
 
    	
 
    
	
INTREXON   CORPORATION,
    	
 
    
	
a   Virginia corporation
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Donald P. Lehr
    	
 
    
	
Name:
    	
Donald   P. Lehr
    	
 
    
	
Title:
    	
Chief   Legal Officer
    	
 
    

 

 

EXHIBIT A

 

PREMISES

 

[See attached]

 

A-1

 

 

 

EXHIBIT B

 

WORK LETTER

 

This Work Letter (this “Work Letter”) is made and entered into as of the 1st day of August, 2011, by and between BMR-201 INDUSTRIAL ROAD LLC, a Delaware limited liability company (“Landlord”), and INTREXON CORPORATION, a Virginia corporation (“Tenant”), and is attached to and made a part of that certain Lease dated as of August 1, 2011 (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time, the “Lease”), by and between Landlord and Tenant for the Premises located at 201 Industrial Road, San Carlos, California. All capitalized terms used but not otherwise defined herein shall have the meanings given them in the Lease.

 

1.                                      General Requirements.

 

1.1.                            Authorized Representatives.

 

(a)                                 Landlord designates, as Landlord’s authorized representative (“Landlord’s Authorized Representative”), (a) Andrew Richard as the person authorized to initial plans, drawings and approvals pursuant to this Work Letter and (b) John Bonanno as the person authorized to initial plans, drawings, approvals and to sign change orders pursuant to this Work Letter and any amendments to this Work Letter or the Lease. Tenant shall not be obligated to respond to or act upon any such item until such item has been initialed or signed (as applicable) by the appropriate Landlord’s Authorized Representative. Landlord may change either Landlord’s Authorized Representative upon one (1) business day’s prior written notice to Tenant.

 

(b)                                 Tenant designates Steve Karp (“Tenant’s Authorized Representative”) as the person authorized to initial and sign all plans, drawings, change orders and approvals pursuant to this Work Letter. Landlord shall not be obligated to respond to or act upon any such item until such item has been initialed or signed (as applicable) by Tenant’s Authorized Representative. Tenant may change Tenant’s Authorized Representative upon one (1) business day’s prior written notice to Landlord.

 

1.2.                            Schedule. The schedule for design and development of the Tenant Improvements, including the time periods for preparation and review of construction documents, approvals and performance, shall be in accordance with a schedule to be prepared by Tenant which shall incorporate input and suggestions from Landlord (the “Schedule”). Tenant shall prepare the Schedule so that it is a reasonable schedule for the completion of the Tenant Improvements and so that it accommodates all reasonable requests by Landlord which are made in order to coordinate the timing of construction of the Tenant Improvements with the needs of other tenants of the Building and/or Project. As soon as the Schedule is completed, Tenant shall deliver the same to Landlord for Landlord’s approval of the timing of all aspects of construction that will impact other tenants of the Building and/or Project, which approval shall not be unreasonably withheld, conditioned or delayed. Such portions of the Schedule shall be approved or disapproved by Landlord within seven (7) business days after delivery to Landlord. Landlord’s failure to respond within such seven (7) business day period shall be deemed approval by

 

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Landlord. If Landlord disapproves certain portions of the Schedule, then Landlord shall notify Tenant in writing of its objections to such Schedule, and the parties shall confer and negotiate in good faith to reach agreement on the Schedule. The Schedule shall be subject to adjustment as mutually agreed upon in writing by the parties, or as provided in this Work Letter.

 

1.3.                            Tenant’s Architects, Contractors and Consultants. The architect, engineering consultants, design team, general contractor and major subcontractors responsible for the construction of the Tenant Improvements shall be selected by Tenant from the pool of contractors set forth on the pre-approved list of design and construction professionals (“Pre-Approved List”) attached as Schedule 1 to this Work Letter. Landlord shall be permitted to observe the bidding process and shall be permitted to provide input to Tenant which Tenant agrees to take into consideration in its selection of design, engineering and construction professionals. If Tenant desires to utilize an architect, engineer, consultant, designer, general contractor or major subcontractor that is not included on the Pre-Approved List, Tenant shall obtain Landlord approval (which approval Landlord shall not unreasonably withhold, condition or delay) prior to engaging such design professional, consultant or contractor. Other than as set forth in the Pre-Approved List, Landlord may refuse to use any architects, consultants, contractors, subcontractors or material suppliers that Landlord reasonably believes could cause labor disharmony. Subject to the Landlord approval rights set forth above, Tenant shall have the right to use non-union labor to perform the Tenant Improvements; provided however, that Landlord shall not be responsible for any labor disharmony or delays that results from the use of non-union labor. All Tenant contracts related to the Tenant Improvements shall provide that Tenant may assign such contracts to Landlord at any time.

 

2.                                      Tenant Improvements. All Tenant Improvements shall be performed by Tenant’s contractors, at Tenant’s sole and direct cost and expense (subject to Landlord’s obligations with respect to any portion of the TI Allowance) and in accordance with the Approved Plans (as defined below), the Lease and this Work Letter. As part of the Tenant Improvements, with Landlord’s approval, Tenant may locate a Generator (as defined in Section 16.2 of the Lease) at the Project or on the roof of the Building in a location to be agreed upon by Landlord and Tenant during the design of the Tenant Improvements. The cost of maintaining, repairing and replacing the Generator shall be Tenant’s sole responsibility. To the extent that the total projected cost of the Tenant Improvements (as reasonably projected by Tenant) exceeds the TI Allowance (such excess, the “Excess TI Costs”), Tenant shall pay such Excess TI Costs. Tenant shall pay all costs of the Tenant Improvements as such costs become due and Landlord (upon receipt of a Reimbursement Request (as defined in Section 6.3) and the accompanying materials required by Section 6.3) shall reimburse Tenant on a pari passu basis, in the proportion of the TI Allowance payable by Landlord to the total projected costs of the Tenant Improvements. If Tenant fails to pay, or is late in paying, any sum due under this Work Letter, then Landlord may, but shall not be obligated to, pay such sums and collect the same from Tenant and shall have all of the rights and remedies set forth in the Lease for nonpayment of Rent (including the right to interest and the right to assess a late charge), and for purposes of any litigation instituted with regard to such amounts the same shall be considered Rent. All material and equipment furnished by Tenant or its contractors as the Tenant Improvements shall be new or “like new;” the Tenant Improvements shall be performed in a good and workmanlike manner; and the Tenant Improvements shall be of Class A quality Tenant shall take, and shall require its contractors to take, commercially

 

B-2

 

reasonable steps to protect the Premises during the performance of any Tenant Improvements, including covering or temporarily removing any window coverings so as to guard against dust, debris or damage.

 

2.1.                            Work Plans. Landlord has approved Tenant’s general space plan (“Space Plan”) for the Tenant Improvements, a copy of which is attached to this Work Letter as Schedule 2. Tenant shall prepare and submit to Landlord for approval schematics covering the Tenant Improvements prepared in conformity with the applicable provisions of this Work Letter (the “Draft Schematic Plans”). The Draft Schematic Plans shall contain sufficient information and detail to accurately describe the proposed design to Landlord and such other information as Landlord may reasonably request. Landlord shall notify Tenant in writing within seven (7) business days after receipt of the Draft Schematic Plans whether Landlord approves or objects to the Draft Schematic Plans and of the manner, if any, in which the Draft Schematic Plans are unacceptable. Landlord’s failure to respond within such seven (7) business day period shall be deemed approval by Landlord. If Landlord reasonably objects to any draft of the Draft Schematic Plans, then Tenant shall revise the Draft Schematic Plans and cause Landlord’s objections to be remedied in the revised Draft Schematic Plans. Tenant shall then resubmit the revised Draft Schematic Plans to Landlord for approval, such approval not to be unreasonably withheld, conditioned or delayed, and such approval of the revised Draft Schematic Plans responding to Landlord’s comments shall be deemed given unless Landlord reasonably objects within three (3) business days after receipt of such revised Draft Schematic Plans. Landlord’s approval of or objection to revised Draft Schematic Plans and Tenant’s correction of the same shall be in accordance with this Section until Landlord has approved the Draft Schematic Plans in writing or been deemed to have approved them. The iteration of the Draft Schematic Plans that is approved or deemed approved by Landlord without objection shall be referred to herein as the “Approved Schematic Plans.”

 

2.2.                            Construction Plans. Tenant shall prepare final plans and specifications for the Tenant Improvements that (a) are consistent with and are logical evolutions of the Approved Schematic Plans and (b) incorporate any other Tenant-requested (and Landlord-approved) Changes (as defined below). As soon as such final plans and specifications (“Construction Plans”) are completed, Tenant shall deliver the same to Landlord for Landlord’s approval, which approval shall not be unreasonably withheld, conditioned or delayed. Such Construction Plans shall be approved or disapproved by Landlord within seven (7) business days after delivery to Landlord. Landlord’s failure to respond within such seven (7) business day period shall be deemed approval by Landlord. If the Construction Plans are reasonably disapproved by Landlord, then Landlord shall notify Tenant in writing of its objections to such Construction Plans, and the parties shall confer and negotiate in good faith to reach agreement on the Construction Plans. If subsequent versions of such Construction Plans are submitted in response to Landlord comments, Landlord shall be deemed to approve the same unless Landlord reasonably objects within three (3) business days after receipt thereof. Promptly after the Construction Plans are approved by Landlord and Tenant, two (2) copies of such Construction Plans shall be initialed and dated by Landlord and Tenant, and Tenant shall promptly submit such Construction Plans to all appropriate Governmental Authorities for approval. Notwithstanding the prior sentence, if Landlord has approved drafts or iterations of the Construction Plans prior to the finalization of such plans, Landlord’s pending approval of the finalized Construction Plans

 

B-3

 

shall not prohibit Tenant from submitting such Construction Plans to appropriate Governmental Authorities for approval prior to receipt of Landlord’s approval. Following Landlord’s approval of drafts or iterations of the Construction Plans prior to finalization of such plans, Landlord shall only have the ability to object to previously approved components or details included in subsequent versions of the Construction Plans submitted for its review and approval if Tenant makes modifications which constitute a material departure from the previously approved components or details included in the prior drafts or iterations of the Construction Plans. Landlord shall continue to have reasonable approval rights in its review of new components or details added in to subsequent versions of the Construction Plans. The final drafts of such Construction Plans so approved, and all change orders specifically permitted by this Work Letter, are referred to herein as the “Approved Plans.” Subject to the limitations set forth in Section 1.3, Tenant shall have the right and responsibility to coordinate the processes of bidding and selection of contractors and consultants, which process, may commence in phases prior to submission and approval of the final draft of the Construction Plans.

 

2.3.                            Changes to the Tenant Improvements. Any changes to the Approved Plans (except for de minimis modifications due to field conditions and other immaterial changes that have only a nominal affect upon the cost of construction) (each, a “Change”) shall be requested and instituted in accordance with the provisions of this Article 2 and shall be subject to the written approval of the non-requesting party in accordance with this Work Letter.

 

(a)                                 Change Request. Either Landlord or Tenant may request Changes after Landlord approves the Approved Plans by notifying the other party thereof in writing in substantially the same form as the AIA standard change order form (a “Change Request”), which Change Request shall detail the nature and extent of any requested Changes, including (a) the Change, (b) the party required to perform the Change and (c) any modification of the Approved Plans and the Schedule, as applicable, necessitated by the Change. If the nature of a Change requires revisions to the Approved Plans, then the requesting party shall be solely responsible for the cost and expense of such revisions and any increases in the cost of the Tenant Improvements as a result of such Change. If the nature of a Change requested by Landlord results in any actual delay in the date of Substantial Completion of the Tenant Improvements set forth in the Schedule, the number of days of such delay shall constitute a “Landlord Delay” and the Term Commencement Date shall be postponed by such number of days of Landlord Delay. Change Requests shall be signed by the requesting party’s Authorized Representative. Notwithstanding the foregoing, Landlord may only request Changes in order to address design and/or construction conflicts arising with other tenants of the Building and/or Project.

 

(b)                                 Approval of Changes. All Change Requests shall be subject to the other party’s prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed. The non-requesting party shall have five (5) business days after receipt of a Change Request to notify the requesting party in writing of the non-requesting party’s decision either to approve or object to the Change Request. The non-requesting party’s failure to respond within such five (5) business day period shall be deemed approval by the non-requesting party.

 

2.4.                            Preparation of Estimates. Tenant shall, before proceeding with any Change, using commercially reasonable efforts, prepare as soon as is reasonably practicable (but in no event

 

B-4

 

more than five (5) business days after delivering a Change Request to Landlord or receipt of a Change Request) an estimate of the increased costs or savings that would result from such Change, as well as an estimate on such Change’s effects on the Schedule. Landlord shall have five (5) business days after receipt of such information from Tenant to (a) in the case of a Tenant-initiated Change Request, approve or reasonably reject such Change Request in writing (and if Landlord shall fail to so notify Tenant, Landlord shall be deemed to have approved such Change Request), or (b) in the case of a Landlord-initiated Change Request, notify Tenant in writing of Landlord’s decision either to proceed with or rescind the Landlord-initiated Change Request (and if Landlord shall fail to so notify Tenant, Landlord shall be deemed to have rescinded such Change Request).

 

2.5.                            Review Standards. Landlord shall provide Tenant with one set of consolidated comments in response to each Tenant submission of plans or change requests, accompanied by marked plans and drawings showing its objections. Landlord shall not be permitted submit comments addressing aspects of the design and construction of the Tenant Improvements that are solely stylistic in nature.

 

3.                                      Completion of Tenant Improvements. Tenant, at its sole and direct cost and expense (except for the TI Allowance), shall perform and complete the Tenant Improvements in all respects (a) in substantial conformance with the Approved Plans, (b) otherwise in compliance with provisions of the Lease and this Work Letter and (c) in accordance with Applicable Laws, the requirements of Tenant’s insurance carriers, the requirements of Landlord’s insurance carriers (to the extent Landlord provides its insurance carriers’ requirements to Tenant) and the board of fire underwriters having jurisdiction over the Premises. The Tenant Improvements shall be deemed completed at such time as Tenant shall furnish to Landlord (v) evidence satisfactory to Landlord that (i) all Tenant Improvements have been completed and paid for in full (which shall be evidenced by the architect’s certificate of completion and the general contractor’s and each subcontractor’s and material supplier’s final unconditional waivers and releases of liens, each in a form acceptable to Landlord and complying with Applicable Laws), (ii) all Tenant Improvements have been accepted by Landlord, (iii) any and all liens related to the Tenant Improvements have either been discharged of record (by payment, bond, order of a court of competent jurisdiction or otherwise) or waived by the party filing such lien and (iv) no security interests relating to the Tenant Improvements are outstanding, (w) all certifications and approvals with respect to the Tenant Improvements that may be required from any Governmental Authority and any board of fire underwriters or similar body for the use and occupancy of the Premises, (x) certificates of insurance required by the Lease to be purchased and maintained by Tenant, (y) an affidavit from Tenant’s architect certifying that all work performed in, on or about the Premises is in accordance with the Approved Plans and (z) complete drawing print sets and electronic CADD files on disc of all contract documents for work performed by their architect and engineers in relation to the Tenant Improvements. If Tenant fails to pay, or is late in paying, any sum due under this Exhibit B, then Landlord may pay such sums and collect the same from Tenant and shall have all of the rights and remedies set forth in the Lease for nonpayment of Rent (including the right to interest and the right to assess a late charge), and for purposes of any litigation instituted with regard to such amounts the same shall be considered Rent.

 

B-5

 

4.                                      Insurance.

 

4.1.                            Property Insurance. At all times during the period beginning with commencement of construction of the Tenant Improvements and ending with final completion of the Tenant Improvements, Tenant shall maintain, or cause to be maintained (in addition to the insurance required of Tenant pursuant to the Lease), property insurance insuring Landlord and the Landlord Parties, as their interests may appear. Such policy shall, on a completed values basis for the full insurable value at all times, insure against loss or damage by fire, vandalism and malicious mischief and other such risks as are customarily covered by the so-called “broad form extended coverage endorsement” upon all Tenant Improvements and the general contractor’s and any subcontractors’ machinery, tools and equipment, all while each forms a part of, or is contained in, the Tenant Improvements or any temporary structures on the Premises, or is adjacent thereto; provided that, for the avoidance of doubt, insurance coverage with respect to the general contractor’s and any subcontractors’ machinery, tools and equipment shall be carried on a primary basis by such general contractor or the applicable subcontractor(s). Tenant agrees to pay any deductible, and Landlord is not responsible for any deductible, for a claim under such insurance. Said property insurance shall contain an express waiver of any right of subrogation by the insurer against Landlord and the Landlord Parties, and shall name Landlord and its affiliates as loss payees as their interests may appear.

 

4.2.                            Workers’ Compensation Insurance. At all times during the period of construction of the Tenant Improvements, Tenant shall, or shall cause its contractors or subcontractors to, maintain statutory workers’ compensation insurance as required by Applicable Laws.

 

5.                                      Liability. Tenant assumes sole responsibility and liability for any and all injuries or the death of any persons, including Tenant’s contractors and subcontractors and their respective employees, agents and invitees, and for any and all damages to property caused by, resulting from or arising out of any act or omission on the part of Tenant, Tenant’s contractors or subcontractors, or their respective employees, agents and invitees in the prosecution of the Tenant Improvements. Tenant agrees to indemnify, save, defend (at Landlord’s option and with counsel reasonably acceptable to Landlord) and hold the Landlord Indemnitees harmless from and against all Claims due to, because of or arising out of any and all such injuries, death or damage, whether real or alleged, and Tenant and Tenant’s contractors and subcontractors shall assume and defend at their sole cost and expense all such Claims; provided, however, that nothing contained in this Work Letter shall be deemed to indemnify or otherwise hold Landlord harmless from or against liability to the extent caused by Landlord’s negligence or willful misconduct. Any deficiency in design or construction of the Tenant Improvements shall be solely the responsibility of Tenant, notwithstanding the fact that Landlord may have approved of the same in writing.

 

6.                                      TI Allowance.

 

6.1.                            Application of TI Allowance. Tenant shall pay all applicable contractors, subcontractors and material suppliers directly for the costs and expenses incurred in connection with the performance of the Tenant Improvements, in accordance with Article 4 of the Lease and Article 2 of this Work Letter. Landlord shall not charge Tenant for utilities, other than electricity, supplied to the Premises prior to the Term Commencement Date. Tenant shall use the Reimbursement Request process outlined in Section 6.3 to seek reimbursement from the TI

 

B-6

 

Allowance for such costs and expenses incurred in connection with the performance of the Tenant Improvements. If, prior to the date that is eighteen (18) months following the Term Commencement Date, the entire TI Allowance is not applied toward (a) the costs of the Tenant Improvements, (b) the correction of any defect in the construction of such Tenant Improvements or (c) Changes to the Tenant Improvements, then Tenant shall not be entitled to a credit of such unused portion of the TI Allowance. Tenant may apply the TI Allowance for the payment of construction and other costs in accordance with the terms and provisions of the Lease and this Work Letter.

 

6.2.                            Approval of Budget for the Tenant Improvements. Notwithstanding anything to the contrary set forth elsewhere in this Work Letter or the Lease, Landlord shall not have any obligation to expend more than thirty-three percent (33%) of the TI Allowance until Landlord and Tenant shall have approved in writing the budget for the Tenant Improvements (the “Approved Budget”). The Approved Budget shall identify the Excess TI Costs which shall be paid by Tenant and shall establish a pari passu reimbursement ratio for the amount reimbursed by Landlord (as may be adjusted on account of any Changes) in the proportion of the TI Allowance to the total cost of the Tenant Improvements set forth in the Approved Budget (the “Reimbursement Ratio”). Tenant shall pay all of the costs and expenses incurred in connection with the Tenant Improvements as they become due. Landlord shall not be obligated to reimburse Tenant for costs nor expenses relating to the Tenant Improvements that exceed thirty-three percent (33%) of the TI Allowance prior to Landlord’s approval of the Approved Budget or that exceed the amount of the TI Allowance. Landlord shall not unreasonably withhold, condition or delay its approval of any budget for Tenant Improvements that is proposed by Tenant.

 

6.3.                            Reimbursement Requests. Upon submission by Tenant to Landlord of (a) a statement (a “Reimbursement Request”) setting forth the total amount of the TI Allowance requested, (b) a summary of the Tenant Improvements performed using AIA standard form Application for Payment (G 702) executed by the general contractor and by the architect, (c) invoices from the general contractor, the architect, and any subcontractors, material suppliers and other parties requesting payment with respect to the amount of the TI Allowance then being requested, (d) unconditional lien releases from the general contractor and each subcontractor and material supplier with respect to the Tenant Improvements performed that correspond to the Reimbursement Request each in a form acceptable to Landlord and complying with Applicable Laws, then Landlord shall, within thirty (30) days following receipt by Landlord of a Reimbursement Request and the accompanying materials required by this Section, pay to Tenant the amount of Tenant Improvement costs set forth in such Reimbursement Request; provided, however, that Landlord shall not be obligated to make any payments under this Section until the budget for the Tenant Improvements is approved in accordance with Section 6.2 above, and any Reimbursement Request under this Section shall be subject to the payment limits set forth in Article 2 of this Work Letter, Section 6.2 above and Article 4 of the Lease; and provided further, that Tenant may only submit one Reimbursement Request once every thirty (30) days.

 

6.4.                            Landlord’s Failure to Fund TI Allowance. In the event Landlord fails to disburse any portion of the TI Allowance requested in accordance with Sections 6.2 and 6.3 above, that has not been reasonably contested in writing by Landlord, Tenant may cease construction of the Tenant Improvements until such payment is received, in which case the number of days of any

 

B-7

 

actual delay in the date of Substantial Completion of the Tenant Improvements set forth in the Schedule caused by such delay in payment shall be a “Landlord Delay” for purposes of the Lease without the need for any notice to Landlord.

 

7.                                      Miscellaneous.

 

7.1.                            Number; Headings. Where applicable in this Work Letter, the singular includes the plural and the masculine or neuter includes the masculine, feminine and neuter. The section headings of this Work Letter are not a part of this Work Letter and shall have no effect upon the construction or interpretation of any part hereof.

 

7.2.                            Attorneys’ Fees. If either party commences an action against the other party arising out of or in connection with this Work Letter, 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.

 

7.3.                            Time of Essence. Time is of the essence with respect to the performance of every provision of this Work Letter in which time of performance is stated.

 

7.4.                            Covenant and Condition. Each provision of this Work Letter performable by Tenant or Landlord shall be deemed both a covenant and a condition.

 

7.5.                            Withholding of Consent. Whenever consent or approval of either party is required, that party shall not unreasonably withhold, condition or delay such consent or approval, except as may be expressly set forth to the contrary.

 

7.6.                            Invalidity. Any provision of this Work Letter that shall prove to be invalid, void or illegal shall in no way affect, impair or invalidate any other provision hereof, and all other provisions of this Work Letter shall remain in full force and effect and shall be interpreted as if the invalid, void or illegal provision did not exist.

 

7.7.                            Interpretation. The language in all parts of this Work Letter shall be in all cases construed as a whole according to its fair meaning and not strictly for or against either Landlord or Tenant.

 

7.8.                            Successors. 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 shall in any way alter the provisions of the Lease restricting assignment or subletting.

 

7.9.                            Governing Law. This Work Letter 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.

 

7.10.                     Power and Authority. Tenant and Landlord guarantee, warrant and represent that the individual or individuals signing this Work Letter have the power, authority and legal

 

B-8

 

capacity to sign this Work Letter on behalf of and to bind all entities, corporations, partnerships, limited liability companies, joint venturers or other organizations and entities on whose behalf said individual or individuals have signed.

 

7.11.                     Counterparts. This Work Letter may be executed in one or more counterparts, each of which, when taken together, shall constitute one and the same document.

 

7.12.                     Amendments; Waiver. No provision of this Work Letter may be modified, amended or supplemented except by an agreement in writing signed by Landlord and Tenant. The waiver by Landlord or Tenant of any breach by the other 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.

 

7.13.                     Waiver of Jury Trial. To the extent permitted by Applicable Laws, 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 Work Letter; the relationship between Landlord and Tenant; Tenant’s use or occupancy of the Premises; or any claim of injury or damage related to this Work Letter or the Premises.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

B-9

 

IN WITNESS WHEREOF, Landlord and Tenant have executed this Work Letter to be effective on the date first above written.

 

	
LANDLORD:
    	
 
    
	
 
    	
 
    
	
BMR-201   INDUSTRIAL ROAD LLC,
    	
 
    
	
a   Delware limited liability company
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Kevin M. Simonsen
    	
 
    
	
Name:
    	
Kevin M. Simonsen
    	
 
    
	
Title:
    	
VP, Real Estate Counsel
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
TENANT:
    	
 
    
	
 
    	
 
    
	
INTREXON   CORPORATION,
    	
 
    
	
a   Virginia corporation
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Donald P. Lehr
    	
 
    
	
Name:
    	
Donald P. Lehr
    	
 
    
	
Title:
    	
Chief Legal Officer
    	
 
    

 

B-10

 

SCHEDULE 1 TO EXHIBIT B

 

LIST OF PRE-APPROVED DESIGN AND CONSTRUCTION PROFESSIONALS

 

	
General Contractors
    
	
XL
    
	
Dome
    
	
Novo
    
	
BNB
    
	
Hathaway
    
	
Whiting-Turner
    
	
Skyline Construction
    
	
 
    
	
Mechanical
    
	
ACCO
    
	
Therma
    
	
Southland
    
	
Western Allied
    
	
Paragon
    
	
CMI
    
	
 
    
	
Plumbing
    
	
ACCO
    
	
Southland
    
	
Therma
    
	
KDS Plumbing
    
	
Rountree Plumbing
    
	
Hellwig
    
	
 
    
	
Electrical
    
	
Cupertino
    
	
Rosendin
    
	
Decker
    
	
Red wood City
    
	
Sprig
    
	
Red Top
    
	
 
    
	
AFS
    
	
Superior
    
	
Fire Stop
    
	
BFP Fire
    
	
Allied Fire
    
	
Golden Bear
    
	
 
    
	
Data, A/V and Security
    
	
Persons reasonably selected by Tenant and approved by Landlord
    

 

B-1-1

 

SCHEDULE 2 TO EXHIBIT B

 

SPACE PLAN

 

[See attached]

 

 

B-2-1

 

 

 

EXHIBIT C

 

DECLARATION OF TERM COMMENCEMENT DATE

AND TERM EXPIRATION DATE

 

THIS ACKNOWLEDGEMENT OF TERM COMMENCEMENT DATE AND TERM EXPIRATION DATE is entered into as of [            ], 20[  ], with reference to that certain Lease (the “Lease”) dated as of August 1, 2011, by and between INTREXON CORPORATION, a Virginia corporation (“Tenant”) and BMR-201 INDUSTRIAL ROAD LLC, a Delaware limited liability company (“Landlord”). All capitalized terms used herein without definition shall have the meanings ascribed to them in the Lease.

 

Tenant and Landlord hereby confirm the following:

 

1.             The Term Commencement Date is [            ], 20[  ], and, unless the Lease is terminated prior to the Term Expiration Date pursuant to its terms, the Term Expiration Date shall be [             ], 20[  ].

 

2.             The obligation to pay Rent is presently in effect and all Rent obligations on the part of Tenant under the Lease commenced to accrue on [              ], 20[  ], with Base Rent payable in the amounts set forth in the Lease.

 

3.             The undersigned Tenant has not made any prior assignment, transfer, hypothecation or pledge of the Lease or of the rents thereunder or sublease of the Premises or any portion thereof.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

C-1

 

IN WITNESS WHEREOF, Tenant has executed this Acknowledgement of Term Commencement Date and Term Expiration Date as of the date first written above.

 

	
TENANT:
    	
 
    
	
 
    	
 
    
	
INTREXON   CORPORATION,
    	
 
    
	
a   Virginia corporation
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
LANDLORD:
    	
 
    
	
 
    	
 
    
	
BMR-201   INDUSTRIAL ROAD LLC,
    	
 
    
	
a   Delaware limited liability company
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

C-2

 

EXHIBIT D

 

FORM OF LETTER OF CREDIT

 

[On letterhead or L/C letterhead of Issuer.]

 

LETTER OF CREDIT

 

Date:                , 200 

 

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

 

Ladies and Gentlemen:

 

We establish in favor of Beneficiary our irrevocable and unconditional Letter of Credit numbered as identified above (the “L/C”) for an aggregate amount of $                 , expiring at    :00 p.m. on            or, if such day is not a Banking Day, then the next succeeding Banking Day (such date, as extended from time to time, the “Expiry Date”). “Banking Day” means a weekday except a weekday when commercial banks in                    are authorized or required to close.

 

We authorize Beneficiary to draw on us (the “Issuer”) for the account of                (the “Account Party”), under the terms and conditions of this L/C.

 

Funds under this L/C are available by presenting the following documentation (the “Drawing Documentation”): (a) the original L/C and (b) a sight draft substantially in the form of Attachment 1, with blanks filled in and bracketed items provided as appropriate. No other evidence of authority, certificate, or documentation is required.

 

Drawing Documentation must be presented at Issuer’s office at                      on or before the Expiry Date by personal presentation, courier or messenger service, or fax. Presentation by fax shall be effective upon electronic confirmation of transmission as evidenced by a printed report from the sender’s fax machine. After any fax presentation, but not as a condition to its effectiveness, Beneficiary shall with reasonable promptness deliver the original Drawing Documentation by any other means. Issuer will on request issue a receipt for Drawing Documentation.

 

We agree, irrevocably, and irrespective of any claim by any other person, to honor drafts drawn under and in conformity with this L/C, within the maximum amount of this L/C, presented

 

D-1

 

to us on or before the Expiry Date, provided we also receive (on or before the Expiry Date) any other Drawing Documentation this L/C requires.

 

We shall pay this L/C only from our own funds by check or wire transfer, in compliance with the Drawing Documentation.

 

If Beneficiary presents proper Drawing Documentation to us on or before the Expiry Date, then we shall pay under this L/C at or before the following time (the ‘‘Payment Deadline”): (a) if presentment is made at or before noon of any Banking Day, then the close of such Banking Day; and (b) otherwise, the close of the next Banking Day. We waive any right to delay payment beyond the Payment Deadline. If we determine that Drawing Documentation is not proper, then we shall so advise Beneficiary in writing, specifying all grounds for our determination, within one Banking Day after the Payment Deadline.

 

Partial drawings are permitted. This L/C shall, except to the extent reduced thereby, survive any partial drawings.

 

We shall have no duty or right to inquire into the validity of or basis for any draw under this L/C or any Drawing Documentation. We waive any defense based on fraud or any claim of fraud.

 

The Expiry Date shall automatically be extended by one year (but never beyond            (the “Outside Date”)) unless, on or before the date 90 days before any Expiry Date, we have given Beneficiary notice that the Expiry Date shall not be so extended (a “Nonrenewal Notice”). We shall promptly upon request confirm any extension of the Expiry Date under the preceding sentence by issuing an amendment to this L/C, but such an amendment is not required for the extension to be effective. We need not give any notice of the Outside Date.

 

Beneficiary may from time to time without charge transfer this L/C, in whole but not in part, to any transferee (the “Transferee”). Issuer shall look solely to Account Party for payment of any fee for any transfer of this L/C. Such payment is not a condition to any such transfer. Beneficiary or Transferee shall consummate such transfer by delivering to Issuer the original of this L/C and a Transfer Notice substantially in the form of Attachment 2, purportedly signed by Beneficiary, and designating Transferee. Issuer shall promptly reissue or amend this L/C in favor of Transferee as Beneficiary. Upon any transfer, all references to Beneficiary shall automatically refer to Transferee, who may then exercise all rights of Beneficiary. Issuer expressly consents to any transfers made from time to time in compliance with this paragraph.

 

Any notice to Beneficiary shall be in writing and delivered by hand with receipt acknowledged or by overnight delivery service such as FedEx (with proof of delivery) at the above address, or such other address as Beneficiary may specify by written notice to Issuer. A copy of any such notice shall also be delivered, as a condition to the effectiveness of such notice, to:                    (or such replacement as Beneficiary designates from time to time by written notice).

 

D-2

 

No amendment that adversely affects Beneficiary shall be effective without Beneficiary’s written consent.

 

This L/C is subject to and incorporates by reference: (a) the International Standby Practices 98 (“ISP 98”); and (b) to the extent not inconsistent with ISP 98, Article 5 of the Uniform Commercial Code of the State of New York.

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
[Issuer Signature]
    

 

D-3

 

ATTACHMENT 1 TO EXHIBIT D

 

FORM OF SIGHT DRAFT

 

[BENEFICIARY LETTERHEAD]

 

TO:

 

[Name and Address of Issuer]

 

SIGHT DRAFT

 

AT SIGHT, pay to the Order of                                     , the sum of                              United States Dollars ($                           ). Drawn under [Issuer] Letter of Credit No.                          dated                                   .

 

[Issuer is hereby directed to pay the proceeds of this Sight Draft solely to the following account:                                               .]

 

[Name and signature block, with signature or purported signature of Beneficiary]

 

Date:                                  

 

D-1-1

 

ATTACHMENT 2 TO EXHIBIT D

 

FORM OF TRANSFER NOTICE

 

[BENEFICIARY LETTERHEAD]

 

TO:

 

[Name and Address of Issuer] (the “Issuer”)

 

TRANSFER NOTICE

 

By signing below, the undersigned, Beneficiary (the “Beneficiary”) under Issuer’s Letter of Credit No.                        dated                                (the “L/C”), transfers the L/C to the following transferee (the “Transferee”):

 

[Transferee Name and Address]

 

The original L/C is enclosed. Beneficiary directs Issuer to reissue or amend the L/C in favor of Transferee as Beneficiary. Beneficiary represents and warrants that Beneficiary has not transferred, assigned, or encumbered the L/C or any interest in the L/C, which transfer, assignment, or encumbrance remains in effect.

 

[Name and signature block, with signature or purported signature of Beneficiary]

 

Date:                                   ]

 

D-2-1

 

EXHIBIT E

 

RULES AND REGULATIONS

 

NOTHING IN THESE RULES AND REGULATIONS (“RULES AND REGULATIONS”) SHALL SUPPLANT ANY PROVISION OF THE LEASE. IN THE EVENT OF A CONFLICT OR INCONSISTENCY BETWEEN THESE RULES AND REGULATIONS AND THE LEASE, THE LEASE SHALL PREVAIL.

 

1.             Neither Tenant nor Tenant’s employees, agents, contractors or invitees shall encumber or obstruct the common entrances, lobbies, elevators, sidewalks and stairways of the Building(s) or the Project or use them for any purposes other than ingress or egress to and from the Building(s) or the Project.

 

2.             Except as specifically provided in the Lease, no sign, placard, picture, advertisement, name or notice shall be installed or displayed on any part of the outside of the Premises or the Building(s) without Landlord’s prior written consent. Landlord shall have the right to remove, at Tenant’s sole cost and expense and without notice, any sign installed or displayed in violation of this rule.

 

3.             If Landlord objects in writing to any curtains, blinds, shades, screens, hanging plants or other objects attached to or used in connection with any window or door of the Premises or placed on any windowsill, and (a) such window, door or windowsill is visible from the exterior of the Premises and (b) such curtain, blind, shade, screen, hanging plant or other object is not included in plans approved by Landlord, then Tenant shall promptly remove said curtains, blinds, shades, screens, hanging plants or similar objects at its sole cost and expense. Landlord acknowledges Tenant may need to tint certain large lab windows.

 

4.             No deliveries shall be made that impede or interfere with other tenants in or the operation of the Project.

 

5.             Except as permitted in the Lease, Tenant shall not place a load upon any floor of the Premises that exceeds the load per square foot that (a) such floor was designed to carry or (b) is allowed by Applicable Laws. Fixtures and equipment that cause noises or vibrations that may be transmitted to the structure of the Building(s) to such a degree as to be objectionable to other tenants shall be placed and maintained by Tenant, at Tenant’s sole cost and expense, on vibration eliminators or other devices sufficient to eliminate such noises and vibrations to levels reasonably acceptable to Landlord and the affected tenants of the Project.

 

6.             Tenant shall not use any method of heating or air conditioning other than that present at the Project and serving the Premises as of the Execution Date.

 

7.             Tenant shall not install any radio, television or other antennae; cell or other communications equipment; or other devices on the roof or exterior walls of the Premises except in accordance with the Lease. Tenant shall not interfere with radio, television or other digital or electronic communications at the Project or elsewhere.

 

E-1

 

8.                                      Canvassing, peddling, soliciting and distributing handbills or any other written material within, on or around the Project (other than within the Premises) are prohibited. Tenant shall cooperate with Landlord to prevent such activities by Tenant or its employees, agents, contractors and invitees.

 

9.                                      Tenant shall store all of its trash, garbage and Hazardous Materials within its Premises or in receptacles or storage sheds designated by Landlord or approved outside of the Premises. Tenant shall not place in any such receptacle any material that cannot be disposed of in the ordinary and customary manner of trash, garbage and Hazardous Materials disposal. Any Hazardous Materials transported through Common Areas shall be held in secondary containment devices.

 

10.                               The Premises shall not be used for lodging or for any improper, immoral or objectionable purpose. No cooking shall be done or permitted in the Premises; provided, however, that Tenant may use (a) equipment approved in accordance with the requirements of insurance policies that Landlord or Tenant is required to purchase and maintain pursuant to the Lease for brewing coffee, tea, hot chocolate and similar beverages, (b) microwave ovens for employees’ use and (c) equipment shown on Tenant Improvement plans approved by Landlord; provided, further, that any such equipment and microwave ovens are used in accordance with Applicable Laws.

 

11.                               Tenant shall not, without Landlord’s prior written consent, use the name of the Project, if any, in connection with or in promoting or advertising Tenant’s business except as Tenant’s address.

 

12.                               Tenant shall comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any Governmental Authority.

 

13.                               Tenant assumes any and all responsibility for protecting the Premises from theft, robbery and pilferage, which responsibility includes keeping doors locked and other means of entry to the Premises closed.

 

14.                               Tenant shall furnish Landlord with copies of keys, pass cards or similar devices for locks to the Premises.

 

15.                               Tenant shall cooperate and participate in all reasonable security programs affecting the Premises.

 

16.                               Tenant shall not permit any animals in the Project, other than for guide animals or for use in laboratory experiments.

 

17.                               Bicycles shall not be taken into the Building(s) except into areas designated by Landlord.

 

18.                               The water and wash closets and other plumbing fixtures shall not be used for any purposes other than those for which they were constructed, and no sweepings, rubbish, rags or other substances shall be deposited therein.

 

19.                               Discharge of industrial sewage shall only be permitted if Tenant, at its sole expense, first obtains all necessary permits and licenses therefor from all applicable Governmental Authorities.

 

E-2

 

20.                               Smoking is prohibited at the Project.

 

21.                               The Project’s hours of operation are currently 24 hours a day, seven days a week.

 

22.                               Tenant shall comply with all orders, requirements and conditions now or hereafter imposed by Applicable Laws or Landlord (“Waste Regulations”) regarding the collection, sorting, separation and recycling of waste products, garbage, refuse and trash generated by Tenant (collectively, “Waste Products”), including (without limitation) the separation of Waste Products into receptacles reasonably approved by Landlord and the removal of such receptacles in accordance with any collection schedules prescribed by Waste Regulations.

 

23.                               Tenant, at Tenant’s sole cost and expense, shall cause the Premises to be exterminated on a monthly basis to Landlord’s reasonable satisfaction and shall cause all portions of the Premises used for the storage, preparation, service or consumption of food or beverages to be cleaned daily in a manner reasonably satisfactory to Landlord, and to be treated against infestation by insects, rodents and other vermin and pests whenever there is evidence of any infestation. Tenant shall not permit any person to enter the Premises or the Project for the purpose of providing such extermination services, unless such persons have been approved by Landlord. If requested by Landlord, Tenant shall, at Tenant’s sole cost and expense, store any refuse generated in the Premises by the consumption of food or beverages in a cold box or similar facility.

 

Landlord may waive any one or more of these Rules and Regulations for the benefit of Tenant or any other tenant, but no such waiver by Landlord shall be construed as a waiver of such Rules and Regulations in favor of Tenant or any other tenant, nor prevent Landlord from thereafter enforcing any such Rules and Regulations against any or all of the tenants of the Project, including Tenant. These Rules and Regulations are in addition to, and shall not be construed to in any way modify or amend, in whole or in part, the terms covenants, agreements and conditions of the Lease. Landlord reserves the right to make such other and reasonable rules and regulations as, in its judgment, may from time to time be needed for safety and security, the care and cleanliness of the Project, or the preservation of good order therein; provided, however, that Tenant shall not be obligated to adhere to such additional rules or regulations until Landlord has provided Tenant with written notice thereof. Tenant agrees to abide by these Rules and Regulations and any additional rules and regulations issued or adopted by Landlord. Tenant shall be responsible for the observance of these Rules and Regulations by Tenant’s employees, agents, contractors and invitees.

 

E-3

 

EXHIBIT F

 

TENANT’S PERSONAL PROPERTY

 

	
EQUIPMENT
   DESCRIPTION
    	
 
    	
MANUFACTURER
    	
 
    	
MODEL
    	
 
    	
SERIAL NUMBER
    
	
Biosafety Hood
    	
 
    	
Forma Scientific
    	
 
    	
1202 A
    	
 
    	
1699-215
    
	
Fridge
    	
 
    	
 
    	
 
    	
61131
    	
 
    	
 
    
	
Fridge
    	
 
    	
Kenmore
    	
 
    	
253.60722
    	
 
    	
WA82900520
    
	
Chromatog. Cabinet
   Fridge
    	
 
    	
NorLake Sci.
    	
 
    	
NSCR522WWG/O
    	
 
    	
7010788
    
	
Freezer -80
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Fridge
    	
 
    	
Sanyo
    	
 
    	
SR1280
    	
 
    	
 
    
	
Fridge/Freezer Unit
    	
 
    	
Biomedical Sci.
    	
 
    	
C21-5
    	
 
    	
 
    
	
GC/MS
    	
 
    	
Agilent
    	
 
    	
7000 Series Triple
   Quadrupole GC/MS
    	
 
    	
 
    
	
Preparative centrifuge
    	
 
    	
Beckman Coulter
    	
 
    	
Avanti-J-E
    	
 
    	
 
    
	
Preparative centrifuge
    	
 
    	
Beckman Coulter
    	
 
    	
Avanti-J-E
    	
 
    	
 
    
	
Autoclave
    	
 
    	
Hirayama
    	
 
    	
AT-HV-110
    	
 
    	
3050705353
    
	
Autoclave
    	
 
    	
Amerex Instrument
    	
 
    	
Hirayama
    	
 
    	
 
    
	
Autoclave
    	
 
    	
Amerex Instrument
    	
 
    	
Hirayama
    	
 
    	
 
    
	
Biosafety Hood
    	
 
    	
Forma Scientific
    	
 
    	
1202 A
    	
 
    	
16745-78
    
	
Floor-standing
   Autoclave
    	
 
    	
Tuttnauer
    	
 
    	
69 Laboratory
    	
 
    	
 
    
	
Fridge
    	
 
    	
Kenmore
    	
 
    	
 
    	
 
    	
 
    
	
Glassware
   Washer/Dryer
    	
 
    	
Lancer
    	
 
    	
1600 LXP
    	
 
    	
 
    
	
MilliQ Water
   Purification Unit
    	
 
    	
Millipore
    	
 
    	
Elix 10
    	
 
    	
 
    
	
RiOs Water system
    	
 
    	
Millipore
    	
 
    	
RiOs 100
    	
 
    	
 
    

 

F-1

 

	
Water Purification
   system
    	
 
    	
Sartorius
    	
 
    	
Arium 611VF
    	
 
    	
23001962
    
	
Chest freezer
    	
 
    	
Kenmore
    	
 
    	
253.913918
    	
 
    	
 
    
	
Freezer -20
    	
 
    	
Sub Zero
    	
 
    	
 
    	
 
    	
 
    
	
Freezer -80
    	
 
    	
Thermo
    	
 
    	
ULP2186-6-A41
    	
 
    	
N16T-246767-NT
    
	
Freezer -80
    	
 
    	
Thermo Scientific
    	
 
    	
Revco Elite Plus
    	
 
    	
 
    
	
Freezer -80
    	
 
    	
Thermo Scientific
    	
 
    	
Revco Elite Plus
    	
 
    	
 
    
	
Freezer -80
    	
 
    	
Thermo Scientific
    	
 
    	
Revco Elite Plus
    	
 
    	
 
    
	
Freezer -20
    	
 
    	
Kenmore
    	
 
    	
253.287228
    	
 
    	
WB82852197
    
	
Freezer -20
    	
 
    	
Kenmore
    	
 
    	
253.913918
    	
 
    	
S302021448
    
	
Freezer -20
    	
 
    	
Kenmore
    	
 
    	
WB74732280
    	
 
    	
253.270427
    
	
Freezer -20
    	
 
    	
Kenmore
    	
 
    	
WB82852192
    	
 
    	
253.287228
    
	
FREEZER, -80
    	
 
    	
Harris
    	
 
    	
ULT-FREEZER
    	
 
    	
913991
    
	
Fridge/ Freezer Unit
    	
 
    	
BioMedical Sci.
    	
 
    	
C21-5
    	
 
    	
 
    
	
Chromatog. Cabinet
    	
 
    	
Powers Scientific
    	
 
    	
 
    	
 
    	
 
    
	
7/14/20 Liter SIP
   fermentor
    	
 
    	
New Brunswick
   Scientific
    	
 
    	
BioFlo 415
    	
 
    	
 
    
	
Biosafety Hood
    	
 
    	
Forma Scientific
    	
 
    	
1202 A
    	
 
    	
 
    
	
FREEZER, -20
    	
 
    	
BioMedical Sci.
    	
 
    	
 
    	
 
    	
F21-20m
    
	
Fridge
    	
 
    	
Kenmore
    	
 
    	
 
    	
 
    	
 
    
	
Biosafety Hood
    	
 
    	
Forma Scientific
    	
 
    	
1202 A
    	
 
    	
 
    
	
Biosafety Hood
    	
 
    	
Nuaire
    	
 
    	
NU-425-460
    	
 
    	
8373507BX3
    
	
Cabinet / Biosafety
    	
 
    	
LabConco
    	
 
    	
Delta Series
    	
 
    	
70773691
    
	
Chromatog. Cabinet
    	
 
    	
Powers Scientific
    	
 
    	
 
    	
 
    	
 
    
	
Fridge
    	
 
    	
Kenmore
    	
 
    	
 
    	
 
    	
 
    
	
Fridge
    	
 
    	
Kenmore
    	
 
    	
WA73201003
    	
 
    	
253.60722
    

 

F-2

 

	
Fridge
    	
 
    	
Kenmore
    	
 
    	
WA82900570
    	
 
    	
WA82900570
    
	
Fridge
    	
 
    	
Powers Scientific
    	
 
    	
 
    	
 
    	
 
    
	
Fridge
    	
 
    	
 
    	
 
    	
61131
    	
 
    	
 
    
	
Fridge/ Freezer Unit
    	
 
    	
BioMedical Sci.
    	
 
    	
C21-5
    	
 
    	
 
    
	
Centrifuge (ultra)
    	
 
    	
Beckman Coulter
    	
 
    	
L8-80M
    	
 
    	
1144172
    
	
Cytopeia Influx Cell
   sorter
   (including Cytek auto
   sampler)
    	
 
    	
Cytopeia (BD)
    	
 
    	
Influx 1L
    	
 
    	
00-00068
    
	
Freezer -80
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Fridge/Freezer Unit
    	
 
    	
Biomedical Sci.
    	
 
    	
C21-5
    	
 
    	
 
    
	
GC/MS
    	
 
    	
Agilent
    	
 
    	
7000 Series Triple
   Quadrupole GC/MS
    	
 
    	
 
    
	
Preparative centrifuge
    	
 
    	
Beckman Coulter
    	
 
    	
Avanti-J-E
    	
 
    	
 
    
	
Preparative centrifuge
    	
 
    	
Beckman Coulter
    	
 
    	
Avanti-J-E
    	
 
    	
 
    
	
Floor-standing
   Autoclave
    	
 
    	
Tuttnauer
    	
 
    	
69 Laboratory
    	
 
    	
 
    
	
Glassware Washer/Dryer
    	
 
    	
Lancer
    	
 
    	
1600 LXP
    	
 
    	
 
    
	
RiOs Water system
    	
 
    	
Millipore
    	
 
    	
RiOs 100
    	
 
    	
 
    
	
Freezer -80
    	
 
    	
Thermo Scientific
    	
 
    	
Revco Elite Plus
    	
 
    	
 
    
	
Freezer -80
    	
 
    	
Thermo Scientific
    	
 
    	
Revco Elite Plus
    	
 
    	
 
    
	
7/14/20 Liter SIP
   fermentor
    	
 
    	
New Brunswick
   Scientific
    	
 
    	
BioFlo 415
    	
 
    	
 
    
	
Chromatog. Cabinet
    	
 
    	
Powers Scientific
    	
 
    	
 
    	
 
    	
 
    

 

Note: Units without serial number or manufacturer are yet to be acquired.

 

F-3

 

EXHIBIT G-1

 

FORM OF TENANT ESTOPPEL CERTIFICATE

 

To:                             BMR-201 Industrial Road LLC

17190 Bernardo Center Drive

San Diego, California 92128

Attention: Vice President, Real Estate Counsel

 

BioMed Realty, L.P.

17190 Bernardo Center Drive

San Diego, California 92128

 

Re:                             The premises (the “Premises”) at 201 Industrial Road, San Carlos, California (the “Property”)

 

The undersigned tenant (“Tenant”) hereby certifies to you as follows:

 

1.                                      Tenant is a tenant at the Property under a lease (the “Lease”) for the Premises dated as of [            ], 20 [      ]. The Lease has not been cancelled, modified, assigned, extended or amended [except as follows: [               ]], and there are no other agreements, written or oral, affecting or relating to Tenant’s lease of the Premises or any other space at the Property. The lease term expires on [                  ], 20 [             ].

 

2.                                      Tenant took possession of the Premises, currently consisting of [              ] rentable square feet, on [             ], 20[      ], and commenced to pay rent on [                ], 20[      ]. Tenant has full possession of the Premises, has not assigned the Lease or sublet any part of the Premises [except as follows], and does not hold the Premises under an assignment or sublease[, except as follows: [                 ]].

 

3.                                      All base rent, rent escalations and additional rent under the Lease have been paid through [               ], 20[      ]. There is no prepaid rent[, except $[           ]][, and the amount of security deposit is $[             ] [in cash][OR][in the form of a letter of credit]]. Tenant currently has no right to any future rent abatement under the Lease [except as follows].

 

4.                                      Base rent is currently payable in the amount of $[             ] per month.

 

5.                                      Tenant is currently paying estimated payments of additional rent of $[            ] per month on account of real estate taxes, insurance, management fees and common area maintenance expenses.

 

6.                                      To Tenant’s knowledge, all work to be performed for Tenant under the Lease has been performed as required under the Lease and has been accepted by Tenant[, except [                ]], and all allowances to be paid to Tenant, including allowances for tenant improvements, moving expenses or other items, have been paid [except as follows:)                 ].

 

G-1-1

 

7.                                      To Tenant’s knowledge, the Lease is in full force and effect, free from default and free from any event that could become a default under the Lease, and to Tenant’s knowledge Tenant has no claims against the landlord or offsets or defenses against rent. Tenant has received no notice of prior sale, transfer, assignment, hypothecation or pledge of the Lease or of the rents payable thereunder[, except [              ]].

 

8.                                      [Tenant has the following expansion rights or options for the Property: [                ].][OR][Tenant has no rights or options to purchase the Property.]

 

9.                                      The undersigned has executed this Estoppel Certificate with the knowledge and understanding that [INSERT NAME OF LANDLORD, PURCHASER OR LENDER, AS APPROPRIATE] or its assignee is acquiring the Property in reliance on this certificate and that the undersigned shall be bound by this certificate. The statements contained herein may be relied upon by [INSERT NAME OF PURCHASER OR LENDER, AS APPROPRIATE], [LANDLORD], BioMed Realty, L.P., BioMed Realty Trust, Inc., and any [other] mortgagee of the Property and their respective successors and assigns.

 

10.                               The contents of this Estoppel Certificate shall not amend the Lease, and shall not waive or limit any right Tenant may have to review or audit any additional rent paid or payable under the Lease.

 

Any capitalized terms not defined herein shall have the respective meanings given in the Lease.

 

Dated this [         ] day of [              ], 20[            ].

 

INTREXON CORPORATION,

a Virginia corporation

 

 

	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

G-1-2

 

EXHIBIT G-2

 

FORM OF LANDLORD ESTOPPEL CERTIFICATE

 

To:                             Intrexon Corporation

201 Industrial Road

San Carlos, California 94070

Attention:                                              

 

Intrexon Corporation

863 Mitten Road, Suite C

Burlingame, California 94010

Attn: Grace Colon

 

Re:                             The premises (the “Premises”) at 201 Industrial Road, San Carlos, California (the “Property”)

 

The undersigned landlord (“Landlord”) hereby certifies to you as follows:

 

1.                                      Landlord is the landlord at the Property under a lease (the “Lease”) with Intrexon Corporation (“Tenant”) for the Premises dated as of [             ], 20[         ]. The Lease has not been cancelled, modified, assigned, extended or amended [except as follows: [         ]], and there are no other agreements, written or oral, affecting or relating to Tenant’s lease of the Premises or any other space at the Property. The lease term expires on [           ], 20[         ].

 

2.                                      Tenant took possession of the Premises, currently consisting of [                ] rentable square feet, on [            ], 20[      ], and commenced to pay rent on [            ], 20[       ]. Tenant has full possession of the Premises, has not assigned the Lease or sublet any part of the Premises [except as follows], and does not hold the Premises under an assignment or sublease[, except as follows: [                ]].

 

3.                                      All base rent, rent escalations and additional rent under the Lease have been paid through [               ], 20 [        ]. There is no prepaid rent[, except $[                   ]][, and the amount of security deposit is $[                ] [in cash][OR][in the form of a letter of credit]]. Tenant currently has no right to any future rent abatement under the Lease [except as follows].

 

4.                                      Base rent is currently payable in the amount of $[                 ] per month.

 

5.                                      Tenant is currently paying estimated payments of additional rent of $[                  ] per month on account of real estate taxes, insurance, management fees and common area maintenance expenses.

 

6.                                      To Landlord’s knowledge, all work to be performed for Tenant under the Lease has been performed as required under the Lease [, except [                  ]], and all allowances to be paid to Tenant, including allowances for tenant improvements, moving expenses or other items, have been paid [except as follows:)         ].

 

G-2-1

 

7.                                      To Landlord’s knowledge, the Lease is in full force and effect, free from default and free from any event that could become a default under the Lease, and to Landlord’s knowledge Landlord has no claims against Tenant for rent, and there are no disputes with Tenant. Landlord has received no notice of prior sale, transfer, assignment, hypothecation or pledge of the Lease or of the rents payable thereunder[, except [              ]].

 

8.                                      To Landlord’s knowledge, no hazardous wastes have been generated, treated, stored or disposed of by or on behalf of Landlord in, on or around the Premises or the Project in violation of any environmental laws.

 

9.                                      The statements contained herein may be relied upon by [INSERT NAME OF ASSIGNEE], [TENANT], and any [other] mortgagee of the Property and their respective successors and assigns.

 

10.                               The contents of this Estoppel Certificate shall not amend the Lease.

 

Any capitalized terms not defined herein shall have the respective meanings given in the Lease.

 

Dated this [          ] day of [              ], 20[         ].

 

BMR-201 INDUSTRIAL ROAD LLC,

a Delaware limited liability company

 

 

	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

G-2-2

 

EXHIBIT H

 

ROFR PREMISES

 

[See attached]

 

H-1

 

 

 

EXHIBIT I

 

EXCLUSIONS FROM OPERATING EXPENSES

 

A.                                    leasing, sale or other brokerage commissions (whether employed in-house or not) or marketing, advertising or promotional expenses of any kind;

 

B.                                    the cost (including taxes) of performing work or furnishing utilities or services to or for any tenant or to any area of the building available for leasing by tenants, other than Tenant, at Landlord’s expense, to the extent that such work, utilities or service is in excess of any work or service provided to Tenant at Landlord’s expense;

 

C.                                    salaries, wages, bonuses, benefits and social security and payroll taxes and all other compensation and benefits of all office, management or administrative personnel, officers, executives and staff members of Landlord or Landlord’s agents, or of Landlord’s independent contractors, above the grade of on-site building manager or supervisor;

 

D.                                    any unfunded pension or other benefits for any personnel which shall have accrued prior to the Lease Commencement Date;

 

E.                                     any rent, additional rent, imposition or other charge under any lease or sublease to or assumed, directly or indirectly, by Landlord, as tenant under such lease or sublease or any Landlord Affiliate, as tenant under such lease or sublease;

 

F.                                      ground rent under any lease;

 

G.                                    any cost which would otherwise be an Operating Expense to the extent the same is reimbursed to or for the benefit of Landlord by proceeds of insurance (or would be reimbursable if Landlord maintained or caused to be maintained the insurance required by Article 23), condemnation award, refund, credit, warranty, service contract, or from any tenant (including Tenant) of the Building;

 

H.                                   any costs (including acquisition, leasing, use and insurance) relating to sculpture, paintings or other objects of art;

 

I.                                        accounting fees, other than those incurred directly in connection with the preparation of statements required pursuant to the provisions of this Lease and similar provisions of other leases of space in the Building;

 

J.                                        legal fees, costs or penalties arising from the Common Areas of the Project failure to comply with Applicable Laws unless such non-compliance is caused by Tenant, its agents, employees, contractors or invitees;

 

K.                                   legal fees incurred by Landlord in order to obtain a determination of coverage from Landlord’s insurers;

 

I-1

 

L.                                     costs and expenses (including court costs, attorneys’ fees and disbursements) related to or arising under or in connection with disputes with tenants, any lessor under a ground lease or any holder of a mortgage or deed of trust and any cost incurred in connection with leasing, mortgaging, financing, refinancing, sale, any ground lease or any payment or prepayment of debts;

 

M.                                 the cost of any work or services performed or other expenses incurred in connection with installing, operating and maintaining any new or specialty service or facility, such as a concierge, a transportation or shuttle service, an observatory, a broadcasting facility or any luncheon, athletic or recreational club;

 

N.                                    costs incurred in connection with a sale, lease, transfer or any testamentary transfer or capital event involving all or any part of the Building or the Land or any interest therein or of any interest in Landlord or in any person comprising, directly or indirectly, Landlord or in any person having any control or equity interest, directly or indirectly, in Landlord;

 

O.                                    costs incurred to correct any misrepresentation by Landlord herein or related to or arising out of any indemnity obligation;

 

P.                                      any compensation paid to clerks, attendants or other persons in concessions operated for profit by Landlord or any of Landlord’s agents or any Landlord Affiliate;

 

Q.                                    costs which are attributable to the general overhead of Landlord or to the general management of the Building, for which Landlord receives a management fee, including without limitation, accounting and legal (except as otherwise included in Operating Expenses pursuant to Section 9.1(b)), secretarial, bookkeeping, office furniture and equipment, office rent, asset manager, audit, software, computer hardware, printer, and other such costs and expenses;

 

R.                                    the value or lost income to Landlord of any space in the Building which is utilized for the management of the Building;

 

S.                                      principal or interest on any debt;

 

T.                                     the cost of any services, alterations, additions, changes, decorations, repairs, replacements or other items which are made or incurred in order to prepare space for a tenant’s initial occupancy or lease renewal or extension;

 

U.                                    any amount paid to any Landlord Affiliate to the extent such amount is in excess of the amount which would be paid in the absence of such relationship;

 

V.                                    any cost or expense (including without limitation real estate taxes, elevators, labor, management fees, maintenance, costs for operation, repair, utilities, taxes, insurance, personnel and other expenses) incurred in connection with or allocable to the Building’s retail space;

 

W.                                 bad debt loss or reserve; costs and expenses incurred in connection with any transfer of an interest in the Landlord, Building or the Land;

 

I-2

 

X.                                    any reserve for repairs, maintenance, replacements or any other purpose.

 

Y.                                    any interest or penalties for late payments of Operating Expenses to the extent relating to a period in which Tenant was not in default of its obligations to pay Base Rent, Tenant’s Share of Operating Expenses or other payments under this Lease (and to the extent Tenant was in default of obligations, shall only include interest and penalties to the extent in excess of interest at the Default Rate and late fees actually paid to Landlord by Tenant)

 

I-3

 

EXHIBIT J

 

4th FLOOR COMMON ELECTRICAL ROOM

 

[See attached]

 

J-1

 

 

 

FIRST AMENDMENT TO LEASE

 

THIS FIRST AMENDMENT TO LEASE (this “First Amendment”) is entered into as of this 23rd day of September, 2011 (the “Amendment Execution Date”), by and between BMR-201 INDUSTRIAL ROAD LP, a Delaware limited partnership (“Landlord,” as successor-in-interest to BMR-201 INDUSTRIAL ROAD LLC, a Delaware limited liability company (“Original Landlord”)), and INTREXON CORPORATION, a Virginia corporation (“Tenant”).

 

RECITALS

 

A.                                    WHEREAS, Original Landlord and Tenant entered into that certain Lease dated as of August 5, 2011 (as the same may have been amended, supplemented or modified from time to time, the “Lease”) whereby Tenant leases certain premises, consisting of approximately eighteen thousand eight hundred fifty-three (18,853) square feet of space (the “Original Premises”) from Landlord on the fourth (4th) floor of the building located at 201 Industrial Road in San Carlos, California (the “Building”);

 

B.                                    WHEREAS, Tenant desires to lease from Landlord and Landlord desires to lease to Tenant additional space on the fourth (4th) floor of the Building, consisting of approximately eight thousand three hundred eighty-six (8,386) rentable square feet, as shown on Schedule 1 attached hereto (the “Additional Premises”); and

 

C.                                    WHEREAS, Landlord and Tenant desire to modify and amend the Lease only in the respects and on the conditions hereinafter stated.

 

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.                                      Definitions. For purposes of this First Amendment, capitalized terms shall have the meanings ascribed to them in the Lease unless otherwise defined herein.

 

2.                                      Lease of Additional Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Additional Premises for use by Tenant in accordance with the Permitted Use and in accordance with the terms and conditions of the Lease. From and after the Additional Premises Term Commencement Date (as defined below), the “Premises,” as defined in the Lease, shall (a) mean the Original Premises plus the Additional Premises and (b) contain approximately twenty-seven thousand two hundred thirty-nine (27,239) rentable square feet and (c) be as set forth on Exhibit A attached hereto which shall be substituted for the original Exhibit A of the Lease.

 

3.                                      Additional Premises Term. The Term with respect to the Additional Premises shall commence on the October 1, 2011 (“Additional Premises Term Commencement Date”), and expire on the Term Expiration Date (as defined in the Lease). The period from the Additional Premises Term Commencement Date to the Term Expiration Date shall be referred to herein as the

 

BMR form dated 3/16/11

 

 

 

“Additional Premises Term,” which may be extended pursuant to Article 41 of the Lease or earlier terminated in accordance with the Lease.

 

4.                                      Pro Rata Share. From and after the Additional Premises Term Commencement Date, the chart in Section 2.2 of the Lease is hereby deleted in its entirety and replaced with the following chart:

 

	
 
    	
 
    	
Means the Following (As of the Additional
    
	
Definition or Provision
    	
 
    	
Premises Term Commencement Date)
    
	
Approximate   Rentable Area of Original Premises
    	
 
    	
18,853 square feet
    
	
Approximate   Rentable Area of Additional Premises
    	
 
    	
8,386 square feet
    
	
Approximate   Rentable Ares of the Premises
    	
 
    	
27,239 square feet
    
	
Approximate   Rentable Area of Project
    	
 
    	
176,956 square feet
    
	
Tenant’s   Pro Rata Share of Project with respect to the Original Premises only
    	
 
    	
10.65%
    
	
Tenant’s   Pro Rata Share of Project with respect to the Additional Premises only
    	
 
    	
4.74%
    
	
Tenant’s   Pro Rata Share of the Project with respect to the Premises (Original Premises   and Additional Premises)
    	
 
    	
15.39%
    

 

5.                                      Base Rent. Section 2.3 of the Lease is hereby deleted in its entirety and replaced with the following:

 

“2.3 Monthly installments of Base Rent for the Original Premises (“Original Premises Base Rent”) for the period from the Term Commencement Date through the thirty-sixth (36th) month of the Term shall be as set forth in the chart below. Original Premises Base Rent for the thirty-seventh (37th) month of the Term through the Term Expiration Date shall increase as set forth in Article 8 of this Lease.

 

	
 
    	
 
    	
Square Feet of
    	
 
    	
Base Rent per Square
    	
 
    	
Monthly Base
    	
 
    
	
Months
    	
 
    	
Rentable Area
    	
 
    	
Foot of Rentable Area
    	
 
    	
Rent
    	
 
    
	
1 — 6
    	
 
    	
10,000
    	
 
    	
$2.20 monthly
    	
 
    	
$
    	
22,000.00
    	
 
    
	
7 — 12
    	
 
    	
18,853
    	
 
    	
$2.20 monthly
    	
 
    	
$
    	
41,476.60
    	
 
    

 

2

 

	
13 — 24
    	
 
    	
18,853
    	
 
    	
$2.40 monthly
    	
 
    	
$
    	
45,247.20
    	
 
    
	
25 — 36
    	
 
    	
18,853
    	
 
    	
$2.60 monthly
    	
 
    	
$
    	
49,017.80
    	
 
    

 

Monthly installments of Base Rent for the Additional Premises (“Additional Premises Base Rent”) for the period from the Additional Premises Term Commencement Date through the twelfth (12th) month of the Additional Premises Term shall be as set forth in the chart below. Additional Premises Base Rent for the thirteenth (13th) month of the Additional Premises Term through the Term Expiration Date shall increase as set forth in Article 8 of this Lease.

 

	
 
    	
 
    	
 
    	
 
    	
Base Rent per
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Square Feet of
    	
 
    	
Square Foot of
    	
 
    	
Monthly
    	
 
    
	
Dates
    	
 
    	
Rentable Area
    	
 
    	
Rentable Area
    	
 
    	
Base Rent
    	
 
    
	
October 1, 2011 — January 31, 2012
    	
 
    	
8,386
    	
 
    	
$0.00 monthly
    	
 
    	
$
    	
0.00
    	
 
    
	
February 1, 2012 — September 30, 2012
    	
 
    	
8,386
    	
 
    	
$1.25 monthly
    	
 
    	
$
    	
10,482.50
    	
 
    

 

From and after the Additional Premises Term Commencement Date, “Base Rent” as defined in the Lease shall mean Original Premises Base Rent together with Additional Premises Base Rent.”

 

6.                                      Rent Adjustments. Section 8 of the Lease is hereby deleted in its entirety and replaced with the following:

 

“8.        Rent Adjustments.

 

(a)                                 Commencing on the third (3rd) annual anniversary of the Term Commencement Date (i.e. the thirty-seventh (37th) month of the Term), Original Premises Base Rent shall be subject to an annual upward adjustment of three and one-half percent (3.5%) of the then-current Original Premises Base Rent. The first such adjustment shall become effective on the third (3rd) 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.

 

(b)                                 Commencing on the first (1st) annual anniversary of the Additional Premises Term Commencement Date, Additional Premises Base Rent shall be subject to an annual upward adjustment of three percent (3.0%)

 

3

 

of the then-current Additional Premises Base Rent. The first such adjustment shall become effective on the first (1st) annual anniversary of the Additional Premises Term Commencement Date, and subsequent adjustments shall become effective on every successive annual anniversary for so long as this Lease continues in effect.”

 

7.                                      Additional Rent. In addition to Additional Premises Base Rent, from and after the Additional Premises Term Commencement Date, Tenant shall pay to Landlord as Additional Rent with respect to the Additional Premises (a) Tenant’s Share of Operating Expenses as provided in Article 9 of the Lease with respect to the Additional Premises, (b) the Property Management Fee with respect to the Additional Premises and (c) any other amounts that Tenant assumes or agrees to pay under the provisions of the Lease that are owed to Landlord, including any and all other sums that may become due by reason of any default of Tenant or failure on Tenant’s part to comply with the agreements, terms, covenants and conditions of the Lease to be performed by Tenant, after notice and the lapse of any applicable cure periods.

 

8.                                      Additional Security Deposit. Within five (5) business days after the Amendment Execution Date, Tenant shall deliver to Landlord Ten Thousand Four Hundred Eighty-Two and 50/100 Dollars ($10,482.50) (the “Additional Security Deposit”), which shall become part of the Security Deposit. The Additional Security Deposit shall be (a) in the form of cash or (b) satisfy the requirements for L/C Security and be from an issuer reasonably acceptable to Landlord.

 

9.                                      Additional Premises Tenant Improvements. As of the Amendment Execution Date, Landlord shall make available to Tenant an additional tenant improvement allowance of Forty-One Thousand Nine Hundred Thirty and 00/100 Dollars ($41,930.00) (based upon Five and 00/100 Dollars ($5.00) per square foot of the Rentable Area of Additional Premises) (the “Additional TI Allowance”). The Additional TI Allowance may be used by Tenant to finance appropriate improvements to the Additional Premises or the Original Premises (“Additional Tenant Improvements”) consistent with the Permitted Use and subject to Landlord’s reasonable prior written approval. Tenant shall be responsible for performing and completing the Additional Tenant Improvements in accordance with the applicable terms of the Lease and the Work Letter with respect to the Tenant Improvements for the Original Premises, and Tenant shall pay Landlord a construction management fee of one and 75/100 percent (1.75%) of the cost of the Additional Tenant Improvements for Landlord’s oversight role related to the Additional Tenant Improvements. Landlord shall disburse the Additional TI Allowance in accordance with the applicable terms of the Lease and the Work Letter. Tenant shall have until the TI Deadline (as defined in the Lease) to expend the unused portion of the TI Allowance, after which date Landlord’s obligation to fund such costs shall expire.

 

10.                               Furniture, Fixtures and Equipment. Landlord shall deliver the Additional Premises to Tenant on the Additional Premises Term Commencement Date with the furniture, fixtures and equipment listed on Exhibit B attached hereto (the “FF&E Property”). The FF&E Property was abandoned by the prior tenant of the space and shall become the property of Tenant upon the Amendment Effective Date. Tenant accepts the FF&E Property in its condition “as is” and with all faults as of the date hereof, and Landlord hereby disclaims any warranties related to the FF&E

 

4

 

Property, including, without limitation, warranties of merchantability and fitness for a particular purpose. Landlord shall have no obligation to repair or maintain the FF&E Property. Upon the expiration or earlier termination of the Lease, Tenant shall have the option of removing the FF&E Property or surrendering the Premises with the FF&E Property in place. Should Tenant opt to surrender the Premises with the FF&E in place, Tenant shall not be required to repair or replace the FF&E Property so as to surrender it in the condition it is in on the Amendment Effective Date.

 

11.                               Option to Extend Term. The first paragraph of Article 41 of the Lease is deleted in its entirety and replaced with the following:

 

“Tenant shall have the option (“Option”) to extend the Term by thirty-six (36) months as to either (a) the entire Premises or (b) the Original Premises (as defined in the First Amendment) upon the following terms and conditions. Any extension of the Term pursuant to the Option shall be on all the same terms and conditions as this Lease, except as follows:”

 

Additionally the reference to “Premises” in Section 41.1 of the Lease is deleted and replaced with the words “Premises or Original Premises.”

 

12.                               Condition of Premises. Tenant acknowledges that (a) it is fully familiar with the condition of the Additional Premises and, notwithstanding anything contained in the Lease to the contrary, agrees to take the same in its condition “as is” as of the Additional Premises Commencement Date and (b) Landlord shall have no obligation to alter, repair or otherwise prepare the Additional Premises for Tenant’s occupancy or to pay for any improvements to the Additional Premises, except as may be expressly provided in Sections 9 and 10 of this Amendment.

 

13.                               Termination Option and Payment. The Termination Option set forth in Section 3.1 of the Lease expressly applies to the Original Premises and Additional Premises. Accordingly, the termination payment set forth in Section 3.2 of the Lease shall be increased by an amount equal to Thirty-Four Thousand Six Hundred Eighty-One and 84/100 Dollars ($34,681.84), for a total termination payment of Three Hundred Thirty-Nine Thousand Five Hundred Thirty-Two and 75/100 Dollars ($339,532.75).

 

14.                               Termination of Right of First Refusal. Article 42 of the Lease is hereby deleted in its entirety and is of no further force or effect.

 

15.                               Broker. Tenant and Landlord each represent and warrant to the other that it has not dealt with any broker or agent in the negotiation for or the obtaining of this First Amendment, other than Jones Lang LaSalle (“Broker”), and agrees to indemnify, defend and hold the other party harmless from any and all cost or liability for compensation claimed by any such broker or agent, other than Broker, employed or engaged by Tenant or Landlord, respectively or claiming to have been employed or engaged by Tenant or Landlord, respectively. Broker is entitled to a leasing commission in connection with the making of this First Amendment, and Landlord shall pay such commission to Broker pursuant to a separate agreement between Landlord and Broker.

 

5

 

16.                               No Default. Tenant represents, warrants and covenants that, to the best of Tenant’s knowledge, Landlord and Tenant are not in default of any of their respective obligations under the Lease and no event has occurred that, with the passage of time or the giving of notice (or both) would constitute a default by either Landlord or Tenant thereunder. Landlord represents, warrants and covenants that, to the best of Landlord’s knowledge, Landlord and Tenant are not in default of any of their respective obligations under the Lease and no event has occurred that, with the passage of time or the giving of notice (or both) would constitute a default by either Landlord or Tenant thereunder.

 

17.                               Effect of Amendment. Except as modified by this First Amendment, the Lease and all the covenants, agreements, terms, provisions and conditions thereof shall remain in full force and effect and are hereby ratified and affirmed. The covenants, agreements, terms, provisions and conditions contained in this First Amendment shall bind and inure to the benefit of the parties hereto and their respective successors and, except as otherwise provided in the Lease, their respective assigns. In the event of any conflict between the terms contained in this First Amendment and the Lease, the terms herein contained shall supersede and control the obligations and liabilities of the parties. From and after the date hereof, the term “Lease” as used in the Lease shall mean the Lease, as modified by this First Amendment.

 

18.                               Miscellaneous. This First Amendment becomes effective only upon execution and delivery hereof by Landlord and Tenant. The captions of the paragraphs and subparagraphs in this First Amendment are inserted and included solely for convenience and shall not be considered or given any effect in construing the provisions hereof. All exhibits hereto are incorporated herein by reference. 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, lease amendment or otherwise until execution by and delivery to both Landlord and Tenant.

 

19.                               Counterparts. This First Amendment may be executed in one or more counterparts, each of which, when taken together, shall constitute one and the same document.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

6

 

IN WITNESS WHEREOF, Landlord and Tenant have hereunto set their hands as of the date and year first above written, and acknowledge that they possess the requisite authority to enter into this transaction and to execute this Amendment.

 

LANDLORD:

 

BMR-201 INDUSTRIAL ROAD LP,

a Delaware limited partnership

 

	
 
    	
 
    	
 
    
	
By:
    	
/s/ Kevin M.Simonsen
    	
 
    
	
Name:
    	
Kevin M.Simonsen
    	
 
    
	
Title:
    	
VP,Real Estate Counsel
    	
 
    
	
 
    	
 
    	
 
    

 

TENANT:

 

INTREXON CORPORATION,

a Virginia corporation

 

	
 
    	
 
    	
 
    
	
By:
    	
/s/ Grace E. Colόn
    	
 
    
	
Name:
    	
Grace E. Colόn
    	
 
    
	
Title:
    	
President, Industrial Products Division & SVP
    	
 
    

 

 

SCHEDULE 1

 

ADDITIONAL PREMISES

 

See attached.

 

S-1

 

 

 

EXHIBIT A

 

PREMISES

 

See attached.

 

A-1

 

 

 

EXHIBIT B

 

FF&E LIST

 

·                  Eighteen (18) furnished cubicles (chair, desk, file cabinets)

 

·                  Sixteen (16) furnished private offices (chair, desk, file cabinets)

 

·                  Conference room table and projector

 

·                  One (1) refrigerator

 

·                  Sixty-seven (67) portable file cabinets (including file cabinets from private offices and cubicles)

 

B-1

 

FIRST AMENDMENT TO LEASE

 

THIS FIRST AMENDMENT TO LEASE (this “First Amendment”) is entered into as of this 23rd day of September, 2011 (the “Amendment Execution Date”), by and between BMR-201 INDUSTRIAL ROAD LP, a Delaware limited partnership (“Landlord,” as successor-in-interest to BMR-201 INDUSTRIAL ROAD LLC, a Delaware limited liability company (“Original Landlord”)), and INTREXON CORPORATION, a Virginia corporation (“Tenant”).

 

RECITALS

 

A.                                    WHEREAS, Original Landlord and Tenant entered into that certain Lease dated as of August 5, 2011 (as the same may have been amended, supplemented or modified from time to time, the “Lease”) whereby Tenant leases certain premises, consisting of approximately eighteen thousand eight hundred fifty-three (18,853) square feet of space (the “Original Premises”) from Landlord on the fourth (4th) floor of the building located at 201 Industrial Road in San Carlos, California (the “Building”);

 

B.                                    WHEREAS, Tenant desires to lease from Landlord and Landlord desires to lease to Tenant additional space on the fourth (4th) floor of the Building, consisting of approximately eight thousand three hundred eighty-six (8,386) rentable square feet, as shown on Schedule 1 attached hereto (the “Additional Premises”); and

 

C.                                    WHEREAS, Landlord and Tenant desire to modify and amend the Lease only in the respects and on the conditions hereinafter stated.

 

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.                                      Definitions. For purposes of this First Amendment, capitalized terms shall have the meanings ascribed to them in the Lease unless otherwise defined herein.

 

2.                                      Lease of Additional Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Additional Premises for use by Tenant in accordance with the Permitted Use and in accordance with the terms and conditions of the Lease. From and after the Additional Premises Term Commencement Date (as defined below), the “Premises,” as defined in the Lease, shall (a) mean the Original Premises plus the Additional Premises and (b) contain approximately twenty-seven thousand two hundred thirty-nine (27,239) rentable square feet and (c) be as set forth on Exhibit A attached hereto which shall be substituted for the original Exhibit A of the Lease.

 

3.                                      Additional Premises Term. The Term with respect to the Additional Premises shall commence on the October 1, 2011 (“Additional Premises Term Commencement Date”), and expire on the Term Expiration Date (as defined in the Lease). The period from the Additional Premises Term Commencement Date to the Term Expiration Date shall be referred to herein as the

 

BMR form dated 3/16/11

 

 

 

“Additional Premises Term,” which may be extended pursuant to Article 41 of the Lease or earlier terminated in accordance with the Lease.

 

4.                                      Pro Rata Share. From and after the Additional Premises Term Commencement Date, the chart in Section 2.2 of the Lease is hereby deleted in its entirety and replaced with the following chart:

 

	
 
    	
 
    	
Means the Following (As of the Additional
    
	
Definition or Provision
    	
 
    	
Premises Term Commencement Date)
    
	
Approximate Rentable Area of Original Premises
    	
 
    	
18,853 square   feet
    
	
Approximate Rentable Area of Additional Premises
    	
 
    	
8,386 square   feet
    
	
Approximate Rentable Ares of the Premises
    	
 
    	
27,239 square   feet
    
	
Approximate Rentable Area of Project
    	
 
    	
176,956 square   feet
    
	
Tenant’s Pro Rata Share of Project with respect to   the Original Premises only
    	
 
    	
10.65%
    
	
Tenant’s Pro Rata Share of Project with respect to   the Additional Premises only
    	
 
    	
4.74%
    
	
Tenant’s Pro Rata Share of the Project with respect   to the Premises (Original Premises and Additional Premises)
    	
 
    	
15.39%
    

 

5.                                      Base Rent. Section 2.3 of the Lease is hereby deleted in its entirety and replaced with the following:

 

“2.3 Monthly installments of Base Rent for the Original Premises (“Original Premises Base Rent”) for the period from the Term Commencement Date through the thirty-sixth (36th) month of the Term shall be as set forth in the chart below. Original Premises Base Rent for the thirty-seventh (37th) month of the Term through the Term Expiration Date shall increase as set forth in Article 8 of this Lease.

 

	
Months
    	
 
    	
Square Feet of
   Rentable Area
    	
 
    	
Base Rent per Square
   Foot of Rentable Area
    	
 
    	
Monthly   Base
   Rent
    	
 
    
	
1 – 6
    	
 
    	
10,000
    	
 
    	
$2.20 monthly
    	
 
    	
$
    	
22,000.00
    	
 
    
	
7 – 12
    	
 
    	
18,853
    	
 
    	
$2.20 monthly
    	
 
    	
$
    	
41,476.60
    	
 
    

 

2

 

	
13 – 24
    	
 
    	
18,853
    	
 
    	
$2.40 monthly
    	
 
    	
$
    	
45,247.20
    	
 
    
	
25 – 36
    	
 
    	
18,853
    	
 
    	
$2.60 monthly
    	
 
    	
$
    	
49,017.80
    	
 
    

 

Monthly installments of Base Rent for the Additional Premises (“Additional Premises Base Rent”) for the period from the Additional Premises Term Commencement Date through the twelfth (12th) month of the Additional Premises Term shall be as set forth in the chart below. Additional Premises Base Rent for the thirteenth (13th) month of the Additional Premises Term through the Term Expiration Date shall increase as set forth in Article 8 of this Lease.

 

	
Dates
    	
 
    	
Square Feet of
   Rentable Area
    	
 
    	
Base Rent per
   Square Foot of
   Rentable Area
    	
 
    	
Monthly
   Base Rent
    	
 
    
	
October 1,   2011 – January 31, 2012
    	
 
    	
8,386
    	
 
    	
$0.00 monthly
    	
 
    	
$
    	
0.00
    	
 
    
	
February 1,   2012 – September 30, 2012
    	
 
    	
8,386
    	
 
    	
$1.25 monthly
    	
 
    	
$
    	
10,482.50
    	
 
    

 

From and after the Additional Premises Term Commencement Date, “Base Rent” as defined in the Lease shall mean Original Premises Base Rent together with Additional Premises Base Rent.”

 

6.                                      Rent Adjustments. Section 8 of the Lease is hereby deleted in its entirety and replaced with the following:

 

“8.        Rent Adjustments.

 

(a)                                 Commencing on the third (3rd) annual anniversary of the Term Commencement Date (i.e. the thirty-seventh (37th) month of the Term), Original Premises Base Rent shall be subject to an annual upward adjustment of three and one-half percent (3.5%) of the then-current Original Premises Base Rent. The first such adjustment shall become effective on the third (3rd) 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.

 

(b)                                 Commencing on the first (1st) annual anniversary of the Additional Premises Term Commencement Date, Additional Premises Base Rent shall be subject to an annual upward adjustment of three percent (3.0%)

 

3

 

of the then-current Additional Premises Base Rent. The first such adjustment shall become effective on the first (1st) annual anniversary of the Additional Premises Term Commencement Date, and subsequent adjustments shall become effective on every successive annual anniversary for so long as this Lease continues in effect.”

 

7.                                      Additional Rent. In addition to Additional Premises Base Rent, from and after the Additional Premises Term Commencement Date, Tenant shall pay to Landlord as Additional Rent with respect to the Additional Premises (a) Tenant’s Share of Operating Expenses as provided in Article 9 of the Lease with respect to the Additional Premises, (b) the Property Management Fee with respect to the Additional Premises and (c) any other amounts that Tenant assumes or agrees to pay under the provisions of the Lease that are owed to Landlord, including any and all other sums that may become due by reason of any default of Tenant or failure on Tenant’s part to comply with the agreements, terms, covenants and conditions of the Lease to be performed by Tenant, after notice and the lapse of any applicable cure periods.

 

8.                                      Additional Security Deposit. Within five (5) business days after the Amendment Execution Date, Tenant shall deliver to Landlord Ten Thousand Four Hundred Eighty-Two and 50/100 Dollars ($10,482.50) (the “Additional Security Deposit”), which shall become part of the Security Deposit. The Additional Security Deposit shall be (a) in the form of cash or (b) satisfy the requirements for L/C Security and be from an issuer reasonably acceptable to Landlord.

 

9.                                      Additional Premises Tenant Improvements. As of the Amendment Execution Date, Landlord shall make available to Tenant an additional tenant improvement allowance of Forty-One Thousand Nine Hundred Thirty and 00/100 Dollars ($41,930.00) (based upon Five and 00/100 Dollars ($5.00) per square foot of the Rentable Area of Additional Premises) (the “Additional TI Allowance”). The Additional TI Allowance may be used by Tenant to finance appropriate improvements to the Additional Premises or the Original Premises (“Additional Tenant Improvements”) consistent with the Permitted Use and subject to Landlord’s reasonable prior written approval. Tenant shall be responsible for performing and completing the Additional Tenant Improvements in accordance with the applicable terms of the Lease and the Work Letter with respect to the Tenant Improvements for the Original Premises, and Tenant shall pay Landlord a construction management fee of one and 75/100 percent (1.75%) of the cost of the Additional Tenant Improvements for Landlord’s oversight role related to the Additional Tenant Improvements. Landlord shall disburse the Additional TI Allowance in accordance with the applicable terms of the Lease and the Work Letter. Tenant shall have until the TI Deadline (as defined in the Lease) to expend the unused portion of the TI Allowance, after which date Landlord’s obligation to fund such costs shall expire.

 

10.                               Furniture, Fixtures and Equipment. Landlord shall deliver the Additional Premises to Tenant on the Additional Premises Term Commencement Date with the furniture, fixtures and equipment listed on Exhibit B attached hereto (the “FF&E Property”). The FF&E Property was abandoned by the prior tenant of the space and shall become the property of Tenant upon the Amendment Effective Date. Tenant accepts the FF&E Property in its condition “as is” and with all faults as of the date hereof, and Landlord hereby disclaims any warranties related to the FF&E

 

4

 

Property, including, without limitation, warranties of merchantability and fitness for a particular purpose. Landlord shall have no obligation to repair or maintain the FF&E Property. Upon the expiration or earlier termination of the Lease, Tenant shall have the option of removing the FF&E Property or surrendering the Premises with the FF&E Property in place. Should Tenant opt to surrender the Premises with the FF&E in place, Tenant shall not be required to repair or replace the FF&E Property so as to surrender it in the condition it is in on the Amendment Effective Date.

 

11.                               Option to Extend Term. The first paragraph of Article 41 of the Lease is deleted in its entirety and replaced with the following:

 

“Tenant shall have the option (“Option”) to extend the Term by thirty-six (36) months as to either (a) the entire Premises or (b) the Original Premises (as defined in the First Amendment) upon the following terms and conditions. Any extension of the Term pursuant to the Option shall be on all the same terms and conditions as this Lease, except as follows:”

 

Additionally the reference to “Premises” in Section 41.1 of the Lease is deleted and replaced with the words “Premises or Original Premises.”

 

12.                               Condition of Premises. Tenant acknowledges that (a) it is fully familiar with the condition of the Additional Premises and, notwithstanding anything contained in the Lease to the contrary, agrees to take the same in its condition “as is” as of the Additional Premises Commencement Date and (b) Landlord shall have no obligation to alter, repair or otherwise prepare the Additional Premises for Tenant’s occupancy or to pay for any improvements to the Additional Premises, except as may be expressly provided in Sections 9 and 10 of this Amendment.

 

13.                               Termination Option and Payment. The Termination Option set forth in Section 3.1 of the Lease expressly applies to the Original Premises and Additional Premises. Accordingly, the termination payment set forth in Section 3.2 of the Lease shall be increased by an amount equal to Thirty-Four Thousand Six Hundred Eighty-One and 84/100 Dollars ($34,681.84), for a total termination payment of Three Hundred Thirty-Nine Thousand Five Hundred Thirty-Two and 75/100 Dollars ($339,532.75).

 

14.                               Termination of Right of First Refusal. Article 42 of the Lease is hereby deleted in its entirety and is of no further force or effect.

 

15.                               Broker. Tenant and Landlord each represent and warrant to the other that it has not dealt with any broker or agent in the negotiation for or the obtaining of this First Amendment, other than Jones Lang LaSalle (“Broker”), and agrees to indemnify, defend and hold the other party harmless from any and all cost or liability for compensation claimed by any such broker or agent, other than Broker, employed or engaged by Tenant or Landlord, respectively or claiming to have been employed or engaged by Tenant or Landlord, respectively. Broker is entitled to a leasing commission in connection with the making of this First Amendment, and Landlord shall pay such commission to Broker pursuant to a separate agreement between Landlord and Broker.

 

5

 

16.                               No Default. Tenant represents, warrants and covenants that, to the best of Tenant’s knowledge, Landlord and Tenant are not in default of any of their respective obligations under the Lease and no event has occurred that, with the passage of time or the giving of notice (or both) would constitute a default by either Landlord or Tenant thereunder. Landlord represents, warrants and covenants that, to the best of Landlord’s knowledge, Landlord and Tenant are not in default of any of their respective obligations under the Lease and no event has occurred that, with the passage of time or the giving of notice (or both) would constitute a default by either Landlord or Tenant thereunder.

 

17.                               Effect of Amendment. Except as modified by this First Amendment, the Lease and all the covenants, agreements, terms, provisions and conditions thereof shall remain in full force and effect and are hereby ratified and affirmed. The covenants, agreements, terms, provisions and conditions contained in this First Amendment shall bind and inure to the benefit of the parties hereto and their respective successors and, except as otherwise provided in the Lease, their respective assigns. In the event of any conflict between the terms contained in this First Amendment and the Lease, the terms herein contained shall supersede and control the obligations and liabilities of the parties. From and after the date hereof, the term “Lease” as used in the Lease shall mean the Lease, as modified by this First Amendment.

 

18.                               Miscellaneous. This First Amendment becomes effective only upon execution and delivery hereof by Landlord and Tenant. The captions of the paragraphs and subparagraphs in this First Amendment are inserted and included solely for convenience and shall not be considered or given any effect in construing the provisions hereof. All exhibits hereto are incorporated herein by reference. 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, lease amendment or otherwise until execution by and delivery to both Landlord and Tenant.

 

19.                               Counterparts. This First Amendment may be executed in one or more counterparts, each of which, when taken together, shall constitute one and the same document.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

6

 

IN WITNESS WHEREOF, Landlord and Tenant have hereunto set their hands as of the date and year first above written, and acknowledge that they possess the requisite authority to enter into this transaction and to execute this Amendment.

 

LANDLORD:

 

BMR-201 INDUSTRIAL ROAD LP,

a Delaware limited partnership

 

 

	
By:   
    	
/s/   Kevin M. Simonsen
    	
 
    
	
Name:   
    	
Kevin   M. Simonsen
    	
 
    
	
Title:   
    	
VP,   Real Estate Counsel
    	
 
    

 

 

TENANT:

 

INTREXON CORPORATION,

a Virginia corporation

 

 

	
By:   
    	
/s/ Grace E. Colόn
    	
 
    
	
Name:   
    	
Grace E. Colόn
    	
 
    
	
Title:   
    	
President, Industrial Products Division & SVP
    	
 
    

 

 

SCHEDULE 1

 

ADDITIONAL PREMISES

 

See attached.

 

S-1

 

 

 

EXHIBIT A

 

PREMISES

 

See attached.

 

A-1

 

 

 

EXHIBIT B

 

FF&E LIST

 

·                  Eighteen (18) furnished cubicles (chair, desk, file cabinets)

 

·                  Sixteen (16) furnished private offices (chair, desk, file cabinets)

 

·                  Conference room table and projector

 

·                  One (1) refrigerator

 

·                  Sixty-seven (67) portable file cabinets (including file cabinets from private offices and cubicles)

 

B-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00245-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00245-of-00352.parquet"}]]