Document:

Exhibit 10.7

 

WATERGATE OFFICE TOWERS

EMERYVILLE TOWER 1

EMERYVILLE, CALIFORNIA

 

OFFICE LEASE AGREEMENT

 

BETWEEN

 

CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership

(“LANDLORD”)

 

AND

 

NEUROMOLECULAR PHARMACEUTICALS, INC., a Delaware Corporation

(“TENANT”)

 

 

OFFICE LEASE AGREEMENT

 

THIS OFFICE LEASE AGREEMENT (the “Lease”) is made and entered into as of October 25, 2006, by and between, CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and NEUROMOLECULAR PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”).  The following exhibits and attachments are incorporated into and made a part of the Lease:  Exhibit A (Outline and Location of Premises), Exhibit B (Expenses and Taxes), Exhibit C (Intentionally Omitted), Exhibit D (Commencement Letter), Exhibit E (Building Rules and Regulations), Exhibit F (Additional Provisions), Exhibit G (Parking Agreement) and Exhibit H (Asbestos Notification).

 

1.              Basic Lease Information.

 

1.01        “Building” shall mean the building located at 1900 Powell Street, Emeryville, California, commonly known as Emeryville Tower I.  “Rentable Square Footage of the Building” is deemed to be 217,054 square feet.

 

1.02        “Premises” shall mean the area shown on Exhibit A to this Lease.  The Premises is located on the 10th floor and known as suite 1050.  If the Premises include one or more floors in their entirety, all corridors and restroom facilities located on such full floor(s) shall be considered part of the Premises.  The “Rentable Square Footage of the Premises” is deemed to be 9,172 square feet.  Landlord and Tenant stipulate and agree that the Rentable Square Footage of the Building and the Rentable Square Footage of the Premises are correct.

 

1.03     “Base Rent”:

 

	
Period
    	
 
    	
Annual Rate
   Per Square Foot
    	
 
    	
Monthly
   Base Rent
    	
 
    
	
12/01/06 — 11/30/07
    	
 
    	
$
    	
25.20
    	
 
    	
$
    	
19,261.20
    	
 
    
	
12/01/07 — 11/30/08
    	
 
    	
$
    	
26.21
    	
 
    	
$
    	
20,033.18
    	
 
    

 

1.04                        “Tenant’s Pro Rata Share”:  4.2257%.

 

1.05                        “Base Year” for Taxes (defined in Exhibit B):  2007; “Base Year” for Expenses (defined in Exhibit B):  2007.

 

1.06                        “Term”:  A period of 24 months.  Subject to Section 3, the Term shall commence on December 1, 2006 (the “Commencement Date”) and, unless terminated early in accordance with this Lease, end on November 30, 2008 (the “Termination Date”).

 

1.07                        Allowance(s):  None.

 

1.08                        “Security Deposit”:  $20,000.00, as more fully described in Section 6.

 

1.09                        “Guarantor(s)”:  As of the date of this Lease, there are no Guarantors.

 

1.10                        “Broker(s)”:  None.

 

1.11                        “Permitted Use”:  General office use; provided that in no event shall the Premises, or any portion of the Premises, be used (i) for the sale of prepackaged gourmet salads and sandwiches, soup and baked goods for on or off Premises consumption; (ii) for the operation of a quick printing business; and (iii) for the operation of a full table service, sit-down restaurant selling Mexican food and/or South American style food.

 

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1.12                        “Notice Address(es)”:

 

	
Landlord:
   CA-Emeryville Properties Limited 
   Partnership  
    c/o Equity Office Management, L.L.C.  
    One Market, Spear Tower  
    Suite 600  San Francisco, California 94105  
    Attn: Property Manager
    	
Tenant
   Prior to the Commencement Date:  
    Neuromolecular Pharmaceuticals, Inc.  
    1900 Powell Street, Suite 1050  
    Emeryville, California 94608  

From and after the Commencement 
   Date:  

Neuromolecular Pharmaceuticals, 
   Inc.  1900 Powell Street, Suite 1050  
    Emeryville, California 94608
    

 

A copy of any notices to Landlord shall be sent to Equity Office, One Market, 600 Spear Tower, San Francisco, CA 94105, Attn: Managing Counsel — San Francisco Region.

 

1.13                        “Business Day(s)” are Monday through Friday of each week, exclusive of New Years Day, Presidents Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day (“Holidays”).  Landlord may designate additional Holidays that are commonly recognized by other office buildings in the area where the Building is located.  “Building Service Hours” are 8:00 a.m. to 6:00 p.m. on Business Days.

 

1.14                        [Intentionally Omitted].

 

1.15                        “Property” means the Building and the parcel(s) of land on which it is located and, at Landlord’s discretion, the parking facilities and other improvements, if any, serving the Building and the parcel(s) of land on which they are located.

 

2.              Lease Grant.

 

The Premises are hereby leased to Tenant from Landlord, together with the right to use any portions of the Property that are designated by Landlord for the common use of tenants and others (the “Common Areas”).

 

3.              Adjustment of Commencement Date; Possession.

 

3.01     At Landlord’s request, Landlord and Tenant shall enter into a commencement letter agreement in the form attached as Exhibit D.  Tenant’s failure to execute and return the commencement letter, or to provide written objection to the statements contained in the letter, within 30 days after the date of the letter shall be deemed an approval by Tenant of the statements contained therein.  If the Termination Date does not fall on the last day of a calendar month, Landlord and Tenant may elect to adjust the Termination Date to the last day of the calendar month in which the Termination Date occurs by the mutual execution of a commencement letter agreement setting forth such adjusted date.

 

3.02     The Premises are accepted by Tenant in “as is” condition and configuration without any representations or warranties by Landlord.  By taking possession of the Premises, Tenant agrees that the Premises are in good order and satisfactory condition.  Landlord shall not be liable for a failure to deliver possession of the Premises or any other space due to the holdover or unlawful possession of such space by another party, however Landlord shall use reasonable efforts to obtain possession of the space.  The commencement date for the space, in such event, shall be postponed until the date Landlord delivers possession of the Premises to Tenant free from occupancy by any party.  If Tenant takes possession of the Premises before the Commencement Date, such possession shall be subject to the terms and conditions of this Lease and Tenant shall pay Rent (defined in Section 4.01) to Landlord for each day of possession before the Commencement Date.  However, except for the cost of services requested by Tenant (e.g. freight elevator usage), Tenant shall not be required to pay Rent for any days of possession before the Commencement Date during which Tenant, with the approval of Landlord, is in possession of the Premises for the sole purpose of performing improvements or installing furniture, equipment or other personal property.

 

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4.              Rent.

 

4.01     Tenant shall pay Landlord, without any setoff or deduction, unless expressly set forth in this Lease, all Base Rent and Additional Rent due for the Term (collectively referred to as “Rent”).  “Additional Rent” means all sums (exclusive of Base Rent) that Tenant is required to pay Landlord under this Lease.  Tenant shall pay and be liable for all rental, sales and use taxes (but excluding income taxes), if any, imposed upon or measured by Rent.  Base Rent and recurring monthly charges of Additional Rent shall be due and payable in advance on the first day of each calendar month without notice or demand, provided that the installment of Base Rent for the first full calendar month of the Term, and the first monthly installment of Additional Rent for Expenses and Taxes, shall be payable upon the execution of this Lease by Tenant All other items of Rent shall be due and payable by Tenant on or before 30 days after billing by Landlord. Rent shall be made payable to the entity, and sent to the address, Landlord designates and shall be made by good and sufficient check or by other means acceptable to Landlord.  Tenant shall pay Landlord an administration fee equal to 5% of all past due Rent, provided that Tenant shall be entitled to a grace period of 5 days for the first 2 late payments of Rent in a calendar year.  In addition, past due Rent shall accrue interest at 12% per annum.  Landlord’s acceptance of less than the correct amount of Rent shall be considered a payment on account of the earliest Rent due.  Rent for any partial month during the Term shall be prorated.  No endorsement or statement on a check or letter accompanying payment shall be considered an accord and satisfaction.  Tenant’s covenant to pay Rent is independent of every other covenant in this Lease.

 

4.02     Tenant shall pay Tenant’s Pro Rata Share of Taxes and Expenses in accordance with Exhibit B of this Lease.

 

5.              Compliance with Laws; Use.

 

The Premises shall be used for the Permitted Use and for no other use whatsoever.  Tenant shall comply with all statutes, codes, ordinances, orders, rules and regulations of any municipal or governmental entity whether in effect now or later, including the Americans with Disabilities Act (“Law(s)”), regarding the operation of Tenant’s business and the use, condition, configuration and occupancy of the Premises.  In addition, Tenant shall, at its sole cost and expense, promptly comply with any Laws that relate to the “Base Building” (defined below), but only to the extent such obligations are triggered by Tenant’s use of the Premises, other than for general office use, or Alterations or improvements in the Premises performed or requested by Tenant.  “Base Building” shall include the structural portions of the Building, the public restrooms and the Building mechanical, electrical and plumbing systems and equipment located in the internal core of the Building on the floor or floors on which the Premises are located.  Except to the extent properly included in Expenses, Landlord shall be responsible for the cost of correcting any violations of Title III of the Americans with Disabilities Act (ADA) with respect to the Common Areas of the Building.  Notwithstanding the foregoing, Landlord shall have the right to contest any alleged violation in good faith, including, without limitation, the right to apply for and obtain a waiver or deferment of compliance, the right to assert any and all defenses allowed by Law and the right to appeal any decisions, judgments or rulings to the fullest extent permitted by Law.  Landlord, after the exhaustion of any and all rights to appeal or contest, will make all repairs, additions, alterations or improvements necessary to comply with the terms of any final order or judgment.  Tenant shall promptly provide Landlord with copies of any notices it receives regarding an alleged violation of Law.  Tenant shall comply with the rules and regulations of the Building attached as Exhibit E and such other reasonable rules and regulations adopted by Landlord from time to time, including rules and regulations for the performance of Alterations (defined in Section 9).

 

6.              Security Deposit.

 

The Security Deposit shall be delivered to Landlord upon the execution of this Lease by Tenant and held by Landlord without liability for interest (unless required by Law) as security for the performance of Tenant’s obligations.  The Security Deposit is not an advance payment of Rent or a measure of damages.  Landlord may use all or a portion of the Security Deposit to satisfy past due Rent or to cure any Default (defined in Section 18) by Tenant, or to satisfy any other loss or damage resulting from Tenant’s Default as provided in Section 19.  If Landlord uses any portion of the Security Deposit, Tenant shall, within 5 days after demand, restore the Security Deposit to its original amount.  Landlord shall return any unapplied portion of the Security Deposit to Tenant within 45 days after the later to occur of: (a) determination of the final Rent due from Tenant: or (b) the later to occur of the Termination Date or the date Tenant surrenders the Premises to Landlord in compliance with Section 25.  Landlord may assign the Security Deposit to a successor or transferee and, following the assignment, Landlord shall have no further liability for the return of the Security Deposit.  Landlord shall not be required to keep

 

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the Security Deposit separate from its other accounts.  Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code, or any similar or successor Laws now or hereinafter in effect.

 

7.              Building Services.

 

7.01     Landlord shall furnish Tenant with the following services: (a) water for use in the Base Building lavatories; (b) customary heat and air conditioning in season during Building Service Hours, although Tenant shall have the right to receive HVAC service during hours other than Building Service Hours by paying Landlord’s then standard charge for additional HVAC service and providing such prior notice as is reasonably specified by Landlord; (c) standard janitorial service on Business Days; (d) elevator service; (e) electricity in accordance with the terms and conditions in Section 7.02; (f) access to the Building and Premises for Tenant and its employees 24 hours per day/7 days per week, subject to the terms of this Lease and such protective services or monitoring systems, if any, as Landlord may reasonably impose, including, without limitation, sign-in procedures and/or presentation of identification cards; and (g) such other services as Landlord reasonably determines are necessary or appropriate for the Property.

 

7.02     Electricity used by Tenant in the Premises shall be paid for by Tenant through inclusion in Expenses (except as provided for excess usage).  Without the consent of Landlord, Tenant’s use of electrical service shall not exceed, either in voltage, rated capacity, use beyond Building Service Hours or overall load, that which Landlord reasonably deems to be standard for the Building.  Landlord shall have the right to measure electrical usage by commonly accepted methods, including the installation of measuring devices such as submeters and check meters.  If it is determined that Tenant is using excess electricity, Tenant shall pay Landlord Additional Rent for the cost of such excess electrical usage and for the cost of purchasing and installing the measuring device(s).

 

7.03     Landlord’s failure to furnish, or any interruption, diminishment or termination of services due to the application of Laws, the failure of any equipment, the performance of repairs, improvements or alterations, utility interruptions or the occurrence of an event of Force Majeure (defined in Section 26.03) (collectively a “Service Failure”) shall not render Landlord liable to Tenant, constitute a constructive eviction of Tenant, give rise to an abatement of Rent, nor relieve Tenant from the obligation to fulfill any covenant or agreement.  However, if the Premises, or a material portion of the Premises, are made untenantable for a period in excess of 3 consecutive Business Days as a result of a Service Failure that is reasonably within the control of Landlord to correct, than Tenant, as its sole remedy, shall be entitled to receive an abatement of Rent payable hereunder during the period beginning on the 4th consecutive Business Day of the Service Failure and ending on the day the service has been restored.  If the entire Premises have not been rendered untenantable by the Service Failure, the amount of abatement shall be equitably prorated.

 

8.              Leasehold Improvements.

 

All improvements in and to the Premises, including any Alterations (defined in Section 9.03) (collectively, “Leasehold Improvements”) shall remain upon the Premises at the end of the Term without compensation to Tenant, provided that Tenant, at its expense, in compliance with the National Electric Code or other applicable Law, shall remove any Cable (defined in Section 9.01 below).  In addition, Landlord, by written notice to Tenant at least 30 days prior to the Termination Date, may require Tenant, at its expense, to remove any Alterations that, in Landlord’s reasonable judgment, are of a nature that would require removal and repair costs that are materially in excess of the removal and repair costs associated with standard office improvements (the Cable and such other items collectively are referred to as “Required Removables”).  Required Removables shall include, without limitation, internal stairways, raised floors, personal baths and showers, vaults, rolling file systems and structural alterations and modifications.  The Required Removables shall be removed by Tenant before the Termination Date.  Tenant shall repair damage caused by the installation or removal of Required Removables.  If Tenant fails to perform its obligations in a timely manner, Landlord may perform such work at Tenant’s expense.  Tenant, prior to execution of this Lease, and thereafter at any time Tenant requests approval for a proposed Alteration, may request in writing that Landlord advise Tenant whether the Alteration, or any portion thereof, is a Required Removable.  Within 10 days after receipt of Tenant’s request, Landlord shall advise Tenant in writing as to which portions of the alteration or other improvements are Required Removables.

 

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9.              Repairs and Alterations.

 

9.01     Tenant shall periodically inspect the Premises to identify any conditions that are dangerous or in need of maintenance or repair.  Tenant shall promptly provide Landlord with notice of any such conditions.  Tenant shall, at its sole cost and expense, perform all maintenance and repairs to the Premises that are not Landlord’s express responsibility under this Lease, and keep the Premises in good condition and repair, reasonable wear and tear excepted.  Tenant’s repair and maintenance obligations include, without limitation, repairs to: (a) floor covering; (b) interior partitions; (c) doors; (d) the interior side of demising walls; (e) electronic, fiber, phone and data cabling and related equipment that is installed by or for the exclusive benefit of Tenant (collectively, “Cable”); (f) supplemental air conditioning units, kitchens, including hot water heaters, plumbing, and similar facilities exclusively serving Tenant; and (g) Alterations.  Subject to the terms of Section 15 below, to the extent Landlord is not reimbursed by insurance proceeds, Tenant shall reimburse Landlord for the cost of repairing damage to the Building caused by the acts of Tenant, Tenant Related Parties and their respective contractors and vendors.  If Tenant fails to make any repairs to the Premises for more than 15 days after notice from Landlord (although notice shall not be required in an emergency), Landlord may make the repairs, and Tenant shall pay the reasonable cost of the repairs, together with an administrative charge in an amount equal to 10% of the cost of the repairs.

 

9.02     Landlord shall keep and maintain in good repair and working order and perform maintenance upon the: (a) structural elements of the Building; (b) mechanical (including HVAC), electrical, plumbing and fire/life safety systems serving the Building in general; (c) Common Areas; (d) roof of the Building; (e) exterior windows of the Building; and (1) elevators serving the Building. Landlord shall promptly make repairs for which Landlord is responsible.  Tenant hereby waives any and all rights under and benefits of subsection 1 of Section 1932, and Sections 1941 and 1942 of the California Civil Code, or any similar or successor Laws now or hereinafter in effect.

 

9.03     Tenant shall not make alterations, repairs, additions or improvements or install any Cable (collectively referred to as “Alterations”) without first obtaining the written consent of Landlord in each instance, which consent shall not be unreasonably withheld or delayed.  However, Landlord’s consent shall not be required for any Alteration that satisfies all of the following criteria (a “Cosmetic Alteration”): (a) is of a cosmetic nature such as painting, wallpapering, hanging pictures and installing carpeting; (b) is not visible from the exterior of the Premises or Building; (c) will not affect the Base Building; and (d) does not require work to be performed inside the walls or above the ceiling of the Premises. Cosmetic Alterations shall be subject to all the other provisions of this Section 9.03.  Prior to starting work, Tenant shall furnish Landlord with plans and specifications; names of contractors reasonably acceptable to Landlord (provided that Landlord may designate specific contractors with respect to Base Building); required permits and approvals; evidence of contractor’s and subcontractor’s insurance in amounts reasonably required by Landlord and naming Landlord as an additional insured; and any security for performance in amounts reasonably required by Landlord.  Changes to the plans and specifications must also be submitted to Landlord for its approval.  Alterations shall be constructed in a good and workmanlike manner using materials of a quality reasonably approved by Landlord.  Tenant shall reimburse Landlord for any sums paid by Landlord for third party examination of Tenant’s plans for non-Cosmetic Alterations.  In addition, Tenant shall pay Landlord a fee for Landlord’s oversight and coordination of any non-Cosmetic Alterations equal to 10% of the cost of the non-Cosmetic Alterations.  Upon completion, Tenant shall furnish “as-built” plans for non-Cosmetic Alterations, completion affidavits and full and final waivers of lien.  Landlord’s approval of an Alteration shall not be deemed a representation by Landlord that the Alteration complies with Law.

 

10.       Entry by Landlord.

 

Landlord may enter the Premises to inspect, show or clean the Premises or to perform or facilitate the performance of repairs, alterations or additions to the Premises or any portion of the Building.  Except in emergencies or to provide Building services, Landlord shall provide Tenant with reasonable prior verbal notice of entry and shall use reasonable efforts to minimize any interference with Tenant’s use of the Premises.  If reasonably necessary, Landlord may temporarily close all or a portion of the Premises to perform repairs, alterations and additions.  However, except in emergencies, Landlord will not close the Premises if the work can reasonably be completed on weekends and after Building Service Hours.  Entry by Landlord shall not constitute a constructive eviction or entitle Tenant to an abatement or reduction of Rent, except to the extent that as a result of such entry and activity by Landlord, the Premises, or a portion of the Premises, are rendered untenantable, in which case Tenant shall be entitled to an abatement of Rent as provided in Section 7.03.

 

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11.       Assignment and Subletting.

 

11.01  Except in connection with a Business Transfer (defined in Section 11.04), Tenant shall not assign, sublease, transfer or encumber any interest in this Lease or allow any third party to use any portion of the Premises (collectively or individually, a “Transfer”) without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed if Landlord does not exercise its recapture rights under Section 11.02. Without limitation, it is agreed that Landlord’s consent shall not be considered unreasonably withheld if the proposed transferee is an occupant of the Building or if the proposed transferee, whether or not an occupant of the Building, is in discussions with Landlord regarding the leasing of space within the Building.  If the entity(ies) or individual(s) or any combination thereof which directly or indirectly owns or controls the voting shares/rights of Tenant such that such entity(ies) or individual(s) can select a majority of the seats on Tenant’s board of directors, changes, whether in a single transaction or a set of integrated transactions, such change of ownership or control shall constitute a Transfer unless Tenant is an entity whose outstanding stock is listed on a recognized securities exchange or if at least 80% of its voting stock is owned by another entity, the voting stock of which is so listed.  Tenant hereby waives the provisions of Section 1995.310 of the California Civil Code, or any similar or successor Laws, now or hereinafter in effect, and all other remedies, including, without limitation, any right at law or equity to terminate this Lease, on its own behalf and, to the extent permitted under all applicable Laws, on behalf of the proposed transferee.  Any Transfer in violation of this Section shall, at Landlord’s option, be deemed a Default by Tenant as described in Section 18, and shall be voidable by Landlord as between Landlord and Tenant.  In no event shall any Transfer, including a Business Transfer, release or relieve Tenant from any obligation under this Lease, and Tenant shall remain primarily liable for the performance of the tenant’s obligations under this Lease, as amended from time to time.

 

11.02  Tenant shall provide Landlord with financial statements for the proposed transferee, a fully executed copy of the proposed assignment, sublease or other Transfer documentation and such other information as Landlord may reasonably request.  Within 15 Business Days after receipt of the required information and documentation, Landlord shall either: (a) consent to the Transfer by execution of a consent agreement in a form reasonably designated by Landlord; (b) reasonably refuse to consent to the Transfer in writing; or (c) in the event of an assignment of this Lease or subletting of more than 20% of the Rentable Square Footage of the Premises for more than 50% of the remaining Term (excluding unexercised options), recapture the portion of the Premises that Tenant is proposing to Transfer.  If Landlord exercises its right to recapture, this Lease shall automatically be amended (or terminated if the entire Premises is being assigned or sublet) to delete the applicable portion of the Premises effective on the proposed effective date of the Transfer, although Landlord may require Tenant to execute a reasonable amendment or other document reflecting such reduction or termination.  Tenant shall pay Landlord a review fee of $1,500.00 for Landlord’s review of any requested Transfer.

 

11.03  Tenant shall pay Landlord 50% of all rent and other consideration which Tenant receives as a result of a Transfer that is in excess of the Rent payable to Landlord for the portion of the Premises and Term covered by the Transfer.  Tenant shall pay Landlord for Landlord’s share of the excess within 30 days after Tenant’s receipt of the excess.  Tenant may deduct from the excess, on a straight-line basis, all reasonable and customary expenses directly incurred by Tenant attributable to the Transfer.  If Tenant is in Default, Landlord may require that all sublease payments be made directly to Landlord, in which case Tenant shall receive a credit against Rent in the amount of Tenant’s share of payments received by Landlord.

 

11.04  Tenant may assign this Lease to a successor to Tenant by stock transfer or sale, merger, consolidation or the purchase of substantially all of Tenant’s assets, or assign this Lease or sublet all or a portion of the Premises to an Affiliate (defined below), without the consent of Landlord, provided that all of the following conditions are satisfied (a “Business Transfer”): (a) Tenant must not be in Default; (b) Tenant must give Landlord written notice at least 15 Business Days before such Transfer; and (c) if such Transfer will result from a stock transfer or sale, merger, stock transfer, sale or consolidation of Tenant with another entity or entities, then the Credit Requirement (defined below) must be satisfied.  Tenant’s notice to Landlord shall include information and documentation evidencing the Business Transfer and showing that each of the above conditions has been satisfied.  If requested by Landlord, Tenant’s successor shall sign a commercially reasonable form of assumption agreement.  “Affiliate” shall mean an entity controlled by, controlling or under common control with Tenant.  The “Credit Requirement” shall be deemed satisfied if, as of the date immediately preceding the date of the Transfer, the financial strength of the entity with which Tenant is to merge or consolidate is not less than the greater of that of Tenant (i) as of the date of this Lease, and (ii) as of the day prior to the proposed Ownership Change, as determined (x) based on credit ratings of such entity and Tenant by both Moody’s and Standard & Poor’s (or by either such agency alone, if applicable ratings by the other agency do not exist), or (y) if such credit ratings do not exist, then either (1) if the

 

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successor entity has been in existence for two or more fiscal years, in accordance with Moody’s KMV RiskCalc (i.e., the on-line software tool offered by Moody’s for analyzing credit risk) based on CFO-certified financial statements for such entity and Tenant covering their last two fiscal years ending before the Transfer, or (2) if the successor entity has been in existence for less than two fiscal years, the Credit Requirement shall be deemed satisfied if, as of the date immediately preceding the date of the Transfer, Tenants successor shall have a net worth which is at least equal to the greater of Tenants net worth (i) as of the date of this Lease, or (ii) as of the day prior to the proposed Ownership Change.

 

12.       Liens.

 

Tenant shall not permit mechanics’ or other liens to be placed upon the Property, Premises or Tenants leasehold interest in connection with any work or service done or purportedly done by or for the benefit of Tenant or its transferees.  Tenant shall give Landlord notice at least 15 days prior to the commencement of any work in the Premises to afford Landlord the opportunity, where applicable, to post and record notices of non-responsibility.  Tenant, within 10 days of notice from Landlord, shall fully discharge any lien by settlement, by bonding or by insuring over the lien in the manner prescribed by the applicable lien Law and, if Tenant fails to do so, Tenant shall be deemed in Default under this Lease and, in addition to any other remedies available to Landlord as a result of such Default by Tenant, Landlord, at its option, may bond, insure over or otherwise discharge the lien.  Tenant shall reimburse Landlord for any amount paid by Landlord, including, without limitation, reasonable attorneys’ fees.

 

13.       Indemnity and Waiver of Claims.

 

Except to the extent caused by the negligence or willful misconduct of Landlord or any Landlord Related Parties (defined below), Tenant shall indemnify, defend and hold Landlord and Landlord Related Parties harmless against and from all liabilities, obligations, damages, penalties, claims, actions, costs, charges and expenses, including, without limitation, reasonable attorneys’ fees and other professional fees (if and to the extent permitted by Law) (collectively referred to as “Losses”), which may be imposed upon, incurred by or asserted against Landlord or any of the Landlord Related Parties by any third party and arising out of or in connection with any damage or injury occurring in the Premises or any acts or omissions (including violations of Law) of Tenant, the Tenant Related Parties (defined below) or any of Tenant’s transferees, contractors or licensees.  Except to the extent caused by the negligence or willful misconduct of Tenant or any Tenant Related Parties, Landlord shall indemnify, defend and hold Tenant, its trustees, members, principals, beneficiaries, partners, officers, directors, employees and agents (“Tenant Related Parties”) harmless against and from all Losses which may be imposed upon, incurred by or asserted against Tenant or any of the Tenant Related Parties by any third party and arising out of or in connection with the acts or omissions (including violations of Law) of Landlord or the Landlord Related Parties.  Tenant hereby waives all claims against and releases Landlord and its trustees, members, principals, beneficiaries, partners, officers, directors, employees, Mortgagees (defined in Section 23) and agents (the “Landlord Related Parties”) from all claims for any injury to or death of persons, damage to property or business loss in any manner related to (a) Force Majeure, (b) acts of third parties, (c) the bursting or leaking of any tank, water closet, drain or other pipe, (d) the inadequacy or failure of any security or protective services, personnel or equipment, or (e) any matter not within the reasonable control of Landlord.

 

14.       Insurance.

 

Tenant shall maintain the following insurance (“Tenant’s Insurance”): (a) Commercial General Liability Insurance applicable to the Premises and its appurtenances providing, on an occurrence basis, a minimum combined single limit of $2,000,000.00; (b) Property/Business Interruption Insurance written on an All Risk or Special Cause of Loss Form, including earthquake sprinkler leakage, at replacement cost value and with a replacement cost endorsement covering all of Tenant’s business and trade fixtures, equipment, movable partitions, furniture, merchandise and other personal property within the Premises (“Tenant’s Property”) and any Leasehold Improvements performed by or for the benefit of Tenant; (c) Workers’ Compensation Insurance in amounts required by Law; and (d) Employers Liability Coverage of at least $1,000,000.00 per occurrence.  Any company writing Tenant’s Insurance shall have an A.M. Best rating of not less than A-VIII.  All Commercial General Liability insurance policies shall name as additional insureds Landlord (or its successors and assignees), the managing agent for the Building (or any successor), EOP Operating Limited Partnership, Equity Office Properties Trust and their respective members, principals, beneficiaries, partners, officers, directors, employees, and agents, and other designees of Landlord and its successors as the interest of such designees shall appear. In addition, Landlord shall be named as a loss payee with respect to Property/Business Interruption Insurance on the Leasehold Improvements.  All policies of Tenant’s Insurance shall contain

 

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endorsements that the insurer(s) shall give Landlord and its designees at least 30 days’ advance written notice of any cancellation, termination, material change or lapse of insurance.  Tenant shall provide Landlord with a certificate of insurance evidencing Tenant’s Insurance prior to the earlier to occur of the Commencement Date or the date Tenant is provided with possession of the Premises, and thereafter as necessary to assure that Landlord always has current certificates evidencing Tenants Insurance.  So long as the same is available at commercially reasonable rates, Landlord shall maintain so called All Risk property insurance on the Building at replacement cost value as reasonably estimated by Landlord, together with such other insurance coverage as Landlord, in its reasonable judgment, may elect to maintain.

 

15.       Subrogation.

 

Landlord and Tenant hereby waive and shall cause their respective insurance carriers to waive any and all rights of recovery, claims, actions or causes of action against the other for any loss or damage with respect to Tenant’s Property, Leasehold Improvements, the Building, the 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 the insurance required by this Lease been carried) covered by insurance.  For the purposes of this waiver, any deductible with respect to a party’s insurance shall be deemed covered by and recoverable by such party under valid and collectable policies of insurance.

 

16.       Casualty Damage.

 

16.01  If all or any portion of the Premises becomes untenantable by fire or other casualty to the Premises (collectively a “Casualty”), Landlord, with reasonable promptness, shall cause a general contractor selected by Landlord to provide Landlord and Tenant with a written estimate of the amount of time required using standard working methods to Substantially Complete (as defined below) the repair and restoration of the Premises and any Common Areas necessary to provide access to the Premises (“Completion Estimate”).  If the Completion Estimate indicates that the Premises or any Common Areas necessary to provide access to the Premises cannot be made tenantable within 270 days from the date the repair is started, then either party shall have the right to terminate this Lease upon written notice to the other within 10 days after receipt of the Completion Estimate.  Tenant, however, shall not have the right to terminate this Lease if the Casualty was caused by the negligence or intentional misconduct of Tenant or any Tenant Related Parties.  In addition, Landlord, by notice to Tenant within 90 days after the date of the Casualty, shall have the right to terminate this Lease if:  (1) the Premises have been materially damaged and there is less than 2 years of the Term remaining on the date of the Casualty; (2) any Mortgagee requires that the insurance proceeds be applied to the payment of the mortgage debt; or (3) a material uninsured loss to the Building or Premises occurs.

 

For purposes hereof, “Substantially Complete” shall mean the date that the repair and restoration of the Premises and any Common Areas necessary to provide access to the Premises has been performed, other than any details of construction, mechanical adjustment or any other similar matter, the non-completion of which does not materially interfere with Tenant’s use of the Premises.

 

16.02  If this Lease is not terminated, Landlord shall promptly and diligently, subject to reasonable delays for insurance adjustment or other matters beyond Landlord’s reasonable control, restore the Premises and Common Areas.  Such restoration shall be to substantially the same condition that existed prior to the Casualty, except for modifications required by Law or any other modifications to the Common Areas deemed desirable by Landlord.  Upon notice from Landlord, Tenant shall assign or endorse over to Landlord (or to any party designated by Landlord) all property insurance proceeds payable to Tenant under Tenants Insurance with respect to any Leasehold Improvements performed by or for the benefit of Tenant; provided if the estimated cost to repair such Leasehold Improvements exceeds the amount of insurance proceeds received by Landlord from Tenant’s insurance carrier, the excess cost of such repairs shall be paid by Tenant to Landlord prior to Landlords commencement of repairs.  Within 15 days of demand, Tenant shall also pay Landlord for any additional excess costs to repair such Leasehold Improvements that are determined during the performance of the repairs.  In no event shall Landlord be required to spend more for the restoration than the proceeds received by Landlord, whether insurance proceeds or proceeds from Tenant.  Landlord shelf not be liable for any inconvenience to Tenant, or injury to Tenants business resulting in any way from the Casualty or the repair thereof.  Provided that Tenant is not in Default, during any period of time that all or a material portion of the Premises is rendered untenantable as a result of a Casualty, the Rent shall abate for the portion of the Premises that is untenantable and not used by Tenant.

 

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16.03  The provisions of this Lease, including this Section 16, constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises or the Property, and any Laws, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations concerning damage or destruction in the absence of an express agreement between the parties, and any similar or successor Laws now or hereinafter in effect, shall have no application to this Lease or any damage or destruction to all or any part of the Premises or the Property.

 

17.       Condemnation.

 

Either party may terminate this Lease if any material part of the Premises is taken or condemned for any public or quasi-public use under Law, by eminent domain or private purchase in lieu thereof (a “Taking”). Landlord shall also have the right to terminate this Lease if there is a Taking of any portion of the Building or Property which would have a material adverse effect on Landlord’s ability to profitably operate the remainder of the Building.  The terminating party shall provide written notice of termination to the other party within 45 days after it first receives notice of the Taking.  The termination shall be effective as of the effective date of any order granting possession to, or vesting legal title in, the condemning authority.  If this Lease is not terminated, Base Rent and Tenant’s Pro Rata Share shall be appropriately adjusted to account for any reduction in the square footage of the Building or Premises.  All compensation awarded for a Taking shall be the property of Landlord.  The right to receive compensation or proceeds are expressly waived by Tenant, however, Tenant may file a separate claim for Tenant’s Property and Tenant’s reasonable relocation expenses, provided the filing of the claim does not diminish the amount of Landlord’s award.  If only a part of the Premises is subject to a Taking and this Lease is not terminated, Landlord, with reasonable diligence, will restore the remaining portion of the Premises as nearly as practicable to the condition immediately prior to the Taking.  Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of the California Code of Civil Procedure, or any similar or successor Laws.

 

18.       Events of Default.

 

In addition to any other default specifically described in this Lease, each of the following occurrences shall be a “Default”: (a) Tenant’s failure to pay any portion of Rent when due, if the failure continues for 3 days after written notice to Tenant (“Monetary Default”); (b) Tenant’s failure (other than a Monetary Default) to comply with any term, provision, condition or covenant of this Lease, if the failure is not cured within 10 days after written notice to Tenant provided, however, if Tenant’s failure to comply cannot reasonably be cured within 10 days, Tenant shall be allowed additional time (not to exceed 60 days) as is reasonably necessary to cure the failure so long as Tenant begins the cure within 10 days and diligently pursues the cure to completion; (c) Tenant permits a Transfer without Landlord’s required approval or otherwise in violation of Section 11 of this Lease; (d) Tenant or any Guarantor becomes insolvent, makes a transfer in fraud of creditors, makes an assignment for the benefit of creditors, admits in writing its inability to pay its debts when due or forfeits or loses its right to conduct business; (e) the leasehold estate is taken by process or operation of Law; (f) in the case of any ground floor or retail Tenant, Tenant does not take possession of or abandons or vacates all or any portion of the Premises; or (g) Tenant is in default beyond any notice and cure period under any other lease or agreement with Landlord at the Building or Property.  If Landlord provides Tenant with notice of Tenant’s failure to comply with any specific provision of this Lease on 3 separate occasions during any 12 month period, Tenant’s subsequent violation of such provision shall, at Landlord’s option, be an incurable Default by Tenant.  All notices sent under this Section shall be in satisfaction of, and not in addition to, notice required by Law.

 

19.       Remedies.

 

19.01  Upon the occurrence of any Default under this Lease, whether enumerated in Section 18 or not, Landlord shall have the option to pursue any one or more of the following remedies without any notice (except as expressly prescribed herein) or demand whatsoever (and without limiting the generality of the foregoing, Tenant hereby specifically waives notice and demand for payment of Rent or other obligations, except for those notices specifically required pursuant to the terms of Section 18 or this Section 19, and waives any and all other notices or demand requirements imposed by applicable law):

 

(a)                                 Terminate this Lease and Tenant’s right to possession of the Premises and recover from Tenant an award of damages equal to the sum of the following:

 

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(i)                                     The Worth at the Time of Award of the unpaid Rent 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 which would have been earned after termination until the time of award exceeds the amount of such Rent loss that Tenant affirmatively proves could have been reasonably avoided;

 

(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 the amount of such Rent loss that Tenant affirmatively proves could be reasonably avoided;

 

(iv)                              Any other amount necessary to compensate Landlord for all the detriment either proximately caused by Tenant’s failure to perform Tenant’s obligations under this Lease or which in the ordinary course of things would be likely to result therefrom; and

 

(v)                                 All such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time under applicable law.

 

The “Worth at the Time of Award” of the amounts referred to in parts (i) and (ii) above, shall be computed by allowing interest at the lesser of a per annum rate equal to: (A) the greatest per annum rate of interest permitted from time to time under applicable law, or (B) the Prime Rate plus 5%.  For purposes hereof, the “Prime Rate” shall be the per annum interest rate publicly announced as its prime or base rate by a federally insured bank selected by Landlord in the State of California.  The “Worth at the Time of Award” of the amount referred to in part (iii), above, shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus 1%;

 

(b)                                 Employ the remedy described in California Civil Code § 1951.4 (Landlord may continue this Lease in effect after Tenant’s breach and abandonment and recover Rent as it becomes due, if Tenant has the right to sublet or assign, subject only to reasonable limitations); or

 

(c)                                  Notwithstanding Landlord’s exercise of the remedy described in California Civil Code § 1951.4 in respect of an event or events of default, at such time thereafter as Landlord may elect in writing, to terminate this Lease and Tenant’s right to possession of the Premises and recover an award of damages as provided above in Paragraph 19.01(a).

 

19.02  The subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular Rent so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance of such Rent.  No waiver by Landlord of any breach hereof shall be effective unless such waiver is in writing and signed by Landlord.

 

19.03  TENANT HEREBY WAIVES ANY AND ALL RIGHTS CONFERRED BY SECTION 3275 OF THE CIVIL CODE OF CALIFORNIA AND BY SECTIONS 1174 (c) AND 1179 OF THE CODE OF CIVIL PROCEDURE OF CALIFORNIA AND ANY AND ALL OTHER LAWS AND RULES OF LAW FROM TIME TO TIME IN EFFECT DURING THE LEASE TERM PROVIDING THAT TENANT SHALL HAVE ANY RIGHT TO REDEEM, REINSTATE OR RESTORE THIS LEASE FOLLOWING ITS TERMINATION BY REASON OF TENANT’S BREACH.  TENANT ALSO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING TO THIS LEASE.

 

19.04  No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy, and each and every right and remedy shall be cumulative and in addition to any other right or remedy given hereunder or now or hereafter existing by agreement, applicable law or in equity.  In addition to other remedies provided in this Lease, Landlord shall be entitled, to the extent permitted by applicable law, to injunctive relief, or to a decree compelling performance of any of the covenants, agreements, conditions or provisions of this Lease, or to any other remedy allowed to Landlord at law or in equity.  Forbearance by

 

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Landlord to enforce one or more of the remedies herein provided upon an event of default shall not be deemed or construed to constitute a waiver of such default.

 

19.05  If Tenant is in Default of any of its non-monetary obligations under the Lease, Landlord shall have the right to perform such obligations.  Tenant shall reimburse Landlord for the cost of such performance upon demand together with an administrative charge equal to 10% of the cost of the work performed by Landlord.

 

19.06  This Section 19 shall be enforceable to the maximum extent such enforcement is not prohibited by applicable law, and the unenforceability of any portion thereof shall not thereby render unenforceable any other portion.

 

20.       Limitation of Liability.

 

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) SHALL BE LIMITED TO THE LESSER OF (A) THE INTEREST OF LANDLORD IN THE PROPERTY, OR (B) THE EQUITY INTEREST LANDLORD WOULD HAVE IN THE PROPERTY IF THE PROPERTY WERE ENCUMBERED BY THIRD PARTY DEBT IN AN AMOUNT EQUAL TO 70% OF THE VALUE OF THE PROPERTY.  TENANT SHALL LOOK SOLELY TO LANDLORD’S INTEREST IN THE PROPERTY FOR THE RECOVERY OF ANY JUDGMENT OR AWARD AGAINST LANDLORD OR ANY LANDLORD RELATED PARTY.  NEITHER LANDLORD NOR ANY LANDLORD RELATED PARTY SHALL BE PERSONALLY LIABLE FOR ANY JUDGMENT OR DEFICIENCY, AND IN NO EVENT SHALL LANDLORD OR ANY LANDLORD RELATED PARTY BE LIABLE TO TENANT FOR ANY LOST PROFIT, DAMAGE TO OR LOSS OF BUSINESS OR ANY FORM OF SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGE. BEFORE FILING SUIT FOR AN ALLEGED DEFAULT BY LANDLORD, TENANT SHALL GIVE LANDLORD AND THE MORTGAGEE(S) WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES (DEFINED IN SECTION 23 BELOW), NOTICE AND REASONABLE TIME TO CURE THE ALLEGED DEFAULT.

 

21.       Relocation.

 

Landlord, at its expense, at any time before or during the Term, may relocate Tenant from the Premises to space of reasonably comparable size and utility (“Relocation Space”) within the Building or other buildings within the same project upon 60 days’ prior written notice to Tenant.  The Relocation Space must contain similar finishes as the Premises, and approximately the same Rentable Square Footage as the Premises and the same number of work stations, offices, breakrooms and reception areas as are contained in the Premises as of the date Tenant receives Landlord’s notice of relocation.  From and after the date of the relocation, the Base Rent and Tenant’s Pro Rata Share shall be adjusted based on the rentable square footage of the Relocation Space, provided that the total monthly Base Rent for the Relocation Space shall in no event exceed the total monthly Base Rent for the Premises prior to the relocation.  Landlord shall pay Tenant’s reasonable costs of relocation, including all costs for moving Tenant’s furniture, equipment, supplies and other personal property, as well as the cost of printing and distributing change of address notices to Tenant’s customers and one month’s supply of stationery showing the new address.

 

22.       Holding Over.

 

If Tenant fails to surrender all or any part of the Premises at the termination of this Lease, occupancy of the Premises after termination shall be that of a tenancy at sufferance.  Tenant’s occupancy shall be subject to all the terms and provisions of this Lease, and Tenant shall pay an amount (on a per month basis without reduction for partial months during the holdover) equal to 150% of the sum of the Base Rent and Additional Rent due for the period immediately preceding the holdover.  No holdover by Tenant or payment by Tenant after the termination of this Lease shall be construed to extend the Term or prevent Landlord from immediate recovery of possession of the Premises by summary proceedings or otherwise.  If Landlord is unable to deliver possession of the Premises to a new tenant or to perform improvements for a new tenant as a result of Tenant’s holdover and Tenant fails to vacate the Premises within 15 days after notice from Landlord, Tenant shall be liable for all damages that Landlord suffers from the holdover.

 

23.       Subordination to Mortgages; Estoppel Certificate.

 

Tenant accepts this Lease subject and subordinate to any mortgage(s), deed(s) of trust, ground lease(s) or other lien(s) now or subsequently arising upon the Premises, the Building or the Property, and to renewals, modifications, refinancings and extensions thereof (collectively

 

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referred to as a “Mortgage”).  The party having the benefit of a Mortgage shall be referred to as a “Mortgagee”.  This clause shall be self-operative, but upon request from a Mortgagee, Tenant shall execute a commercially reasonable subordination agreement in favor of the Mortgagee.  As an alternative, a Mortgagee shall have the right at any time to subordinate its Mortgage to this Lease.  Upon request, Tenant, without charge, shall attorn to any successor to Landlord’s interest in this Lease.  Landlord and Tenant shall each, within 10 days after receipt of a written request from the other, execute and deliver a commercially reasonable estoppel certificate to those parties as are reasonably requested by the other (including a Mortgagee or prospective purchaser).  Without limitation, such estoppel certificate may include a certification as to the status of this Lease, the existence of any defaults and the amount of Rent that is due and payable.

 

24.       Notice.

 

All demands, approvals, consents or notices (collectively referred to as a “notice”) shall be in writing and delivered by hand or sent by registered or certified mail with return receipt requested or sent by overnight or same day courier service at the party’s respective Notice Address(es) set forth in Section 1.  Each notice shall be deemed to have been received on the earlier to occur of actual delivery or the date on which delivery is refused, or, if Tenant has vacated the Premises or any other Notice Address of Tenant without providing a new Notice Address, 3 days after notice is deposited in the U.S. mail or with a courier service in the manner described above.  Either party may, at any time, change its Notice Address (other than to a post office box address) by giving the other party written notice of the new address.

 

25.       Surrender of Premises.

 

At the termination of this Lease or Tenant’s right of possession, Tenant shall remove Tenant’s Property from the Premises, and quit and surrender the Premises to Landlord, broom clean, and in good order, condition and repair excepting damage from Casualty and ordinary wear and tear and damage which Landlord is obligated to repair hereunder.  If Tenant fails to remove any of Tenant’s Property within 2 days after termination of this Lease or Tenant’s right to possession, Landlord, at Tenant’s sole cost and expense, shall be entitled (but not obligated) to remove and store Tenant’s Property.  Landlord shall not be responsible for the value, preservation or safekeeping of Tenant’s Property.  Tenant shall pay Landlord, upon demand, the expenses and storage charges incurred.  If Tenant fails to remove Tenant’s Property from the Premises or storage, within 30 days after notice, Landlord may deem all or any part of Tenant’s Property to be abandoned and title to Tenant’s Property shall vest in Landlord.

 

26.       Miscellaneous.

 

26.01  This Lease shall be interpreted and enforced in accordance with the Laws of the state or commonwealth in which the Building is located and Landlord and Tenant hereby irrevocably consent to the jurisdiction and proper venue of such state or commonwealth.  If any term or provision of this Lease shall to any extent be void or unenforceable, the remainder of this Lease shall not be affected.  If there is more than one Tenant or if Tenant is comprised of more than one party or entity, the obligations imposed upon Tenant shall be joint and several obligations of all the parties and entities, and requests or demands from any one person or entity comprising Tenant shall be deemed to have been made by all such persons or entities.  Notices to any one person or entity shall be deemed to have been given to all persons and entities.  Tenant represents and warrants to Landlord that each individual executing this Lease on behalf of Tenant is authorized to do so on behalf of Tenant and that Tenant is not, and the entities or individuals constituting Tenant or which may own or control Tenant or which may be owned or controlled by Tenant are not, (i) in violation of any laws relating to terrorism or money laundering, or (ii) among the individuals or entities identified on any list compiled pursuant to Executive Order 13224 for the purpose of identifying suspected terrorists or on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, http://www.treas.goviofackilsdn.pdf or any replacement website or other replacement official publication of such list.

 

26.02  If either party institutes a suit against the other for violation of or to enforce any covenant, term or condition of this Lease, the prevailing party shall be entitled to reimbursement of all of its costs and expenses, including, without limitation, reasonable attorneys’ fees. Landlord and Tenant hereby waive any right to trial by jury in any proceeding based upon a breach of this Lease. No failure by either party to declare a default immediately upon its occurrence, nor any delay by either party in taking action for a default, nor Landlord’s acceptance of Rent with knowledge of a default by Tenant, shall constitute a waiver of the default, nor shall it constitute an estoppel.

 

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26.03  Whenever a period of time is prescribed for the taking of an action by Landlord or Tenant (other than the payment of the Security Deposit or Rent), the period of time for the performance of such action shall be extended by the number of days that the performance is actually delayed due to strikes, acts of God, shortages of labor or materials, war, terrorist acts, civil disturbances and other causes beyond the reasonable control of the performing party (“Force Majeure”).

 

26.04  Landlord shall have the right to transfer and assign, in whole or in part, all of its rights and obligations under this Lease and in the Building and Property.  Upon transfer Landlord shall be released from any further obligations hereunder and Tenant agrees to look solely to the successor in interest of Landlord for the performance of such obligations, provided that, any successor pursuant to a voluntary, third party transfer (but not as part of an involuntary transfer resulting from a foreclosure or deed in lieu thereof) shall have assumed Landlord’s obligations under this Lease.

 

26.05  Landlord has delivered a copy of this Lease to Tenant for Tenant’s review only and the delivery of it does not constitute an offer to Tenant or an option. Tenant represents that it has dealt directly with and only with the Broker as a broker in connection with this Lease.  Tenant shall indemnify and hold Landlord and the Landlord Related Parties harmless from all claims of any other brokers claiming to have represented Tenant in connection with this Lease.  Landlord shall indemnify and hold Tenant and the Tenant Related Parties harmless from all claims of any brokers claiming to have represented Landlord in connection with this Lease. Equity Office Properties Management Corp. (“EOPMC”) is an affiliate of Landlord and represents only the Landlord in this transaction.  Any assistance rendered by any agent or employee of EOPMC in connection with this Lease or any subsequent amendment or modification hereto has been or will be made as an accommodation to Tenant solely in furtherance of consummating the transaction on behalf of Landlord, and not as agent for Tenant.

 

26.06  Time is of the essence with respect to Tenant’s exercise of any expansion, renewal or extension rights granted to Tenant.  The expiration of the Term, whether by lapse of time, termination or otherwise, shall not relieve either party of any obligations which accrued prior to or which may continue to accrue after the expiration or termination of this Lease.

 

26.07  Tenant may peacefully have, hold and enjoy the Premises, subject to the terms of this Lease, provided Tenant pays the Rent and fully performs all of its covenants and agreements.  This covenant shall be binding upon Landlord and its successors only during its or their respective periods of ownership of the Building.

 

26.08  This Lease does not grant any rights to light or air aver or about the Building. Landlord excepts and reserves exclusively to itself any and all rights not specifically granted to Tenant under this Lease.  This Lease constitutes the entire agreement between the parties and supersedes all prior agreements and understandings related to the Premises, including all lease proposals, letters of intent and other documents.  Neither party is relying upon any warranty, statement or representation not contained in this Lease.  This Lease may be modified only by a written agreement signed by an authorized representative of Landlord and Tenant.

 

[SIGNGATURES ARE ON THE FOLLOWING PAGE].

 

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Landlord and Tenant have executed this Lease as of the day and year first above written.

 

LANDLORD:

 

CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership

 

	
By:
    	
EOM GP, LL.D., a Delaware limited liability company,   its general partner
    
	
 
    	
 
    
	
 
    	
By:
    	
Equity Office Management, LL.D., a Delaware limited   liability company, its non-member manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Kenneth J. Churich
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Kenneth J. Churich
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
Vice-President, Leasing
    	
 
    
							

 

 

TENANT:

 

NEUROMOLECULAR PHARMACEUTICALS, INC., a Delaware corporation

 

	
By:
    	
/s/ Gregory T. Went
    	
 
    	
/s/ Deborah Foy
    
	
 
    	
 
    
	
Name:
    	
Gregory T. Went
    	
 
    	
Deborah Foy
    
	
 
    	
 
    
	
Title:
    	
CEO
    	
 
    	
Assistant Treasurer
    
	
 
    	
 
    
	
Tenant’s Tax ID Number (SSN or FEIN):
    	
 
    
	
 
    	
 
    
	
42-1560076
    	
 
    	
 
    
						

 

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EXHIBIT A

 

OUTLINE AND LOCATION OF PREMISES

 

This Exhibit is attached to and made a part of the Lease by and between CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and NEUROMOLECULAR PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”) for space in the Building located at 1900 Powell Street, Emeryville, California. commonly known as Emeryville Tower I.

 

 

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EXHIBIT B

 

EXPENSES AND TAXES

 

This Exhibit is attached to and made a part of the Lease by and between CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and NEUROMOLECULAR PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”) for space in the Building located at 1900 Powell Street, Emeryville, California, commonly known as Emeryville Tower I.

 

1.     Payments.

 

1.01    Tenant shall pay Tenant’s Pro Rata Share of the amount, if any, by which Expenses (defined below) for each calendar year during the Term exceed Expenses for the Base Year (the “Expense Excess’’) and also the amount, if any, by which Taxes (defined below) for each calendar year during the Term exceed Taxes for the Base Year (the “Tax Excess”).  If Expenses or Taxes in any calendar year decrease below the amount of Expenses or Taxes for the Base Year, Tenant’s Pro Rata Share of Expenses or Taxes, as the case may be, for that calendar year shall be $0.  Landlord shall provide Tenant with a good faith estimate of the Expense Excess and of the Tax Excess for each calendar year during the Term.  On or before the first day of each month, Tenant shall pay to Landlord a monthly installment equal to one-twelfth of Tenant’s Pro Rata Share of Landlord’s estimate of both the Expense Excess and Tax Excess.  After its receipt of the revised estimate, Tenant’s monthly payments shall be based upon the revised estimate.  If Landlord does not provide Tenant with an estimate of the Expense Excess or the Tax Excess by January 1 of a calendar year, Tenant shall continue to pay monthly installments based on the previous year’s estimate(s) until Landlord provides Tenant with the new estimate.

 

1.02    As soon as is practical following the end of each calendar year, Landlord shall furnish Tenant with a statement of the actual Expenses and Expense Excess and the actual Taxes and Tax Excess for the prior calendar year.  if the estimated Expense Excess or estimated Tax Excess for the prior calendar year is more than the actual Expense Excess or actual Tax Excess, as the case may be, for the prior calendar year, Landlord shall either provide Tenant with a refund or apply any overpayment by Tenant against Additional Rent due or next becoming due, provided if the Term expires before the determination of the overpayment, Landlord shall refund any overpayment to Tenant after first deducting the amount of Rent due.  If the estimated Expense Excess or estimated Tax Excess for the prior calendar year is less than the actual Expense Excess or actual Tax Excess, as the case may be, for such prior year, Tenant shall pay Landlord, within 30 days after its receipt of the statement of Expenses or Taxes, any underpayment for the prior calendar year.

 

2.     Expenses.

 

2.01    “Expenses” means all costs and expenses incurred in each calendar year in connection with operating, maintaining, repairing, and managing the Building and the Property.  Expenses include, without !imitation: (a) all labor and labor related costs, including wages, salaries, bonuses, taxes, insurance, uniforms, training, retirement plans, pension plans and other employee benefits; (b) management fees; (c) the cost of equipping, staffing and operating an on-site and/or off-site management office for the Building, provided if the management office services one or more other buildings or properties, the shared costs and expenses of equipping, staffing and operating such management office(s) shall be equitably prorated and apportioned between the Building and the other buildings or properties; (d) accounting costs; (e) the cost of services; (f) rental and purchase cost of parts, supplies, tools and equipment; (g) insurance premiums and deductibles; (h) electricity, gas and other utility costs; and (i) the amortized cost of capital improvements (as distinguished from replacement parts or components installed in the ordinary course of business) made subsequent to the Base Year which are: (1) performed primarily to reduce current or future operating expense costs, upgrade Building security or otherwise improve the operating efficiency of the Property; or (2) required to comply with any Laws that are enacted, or first interpreted to apply to the Property, after the date of this Lease.  The cost of capital improvements shall be amortized by Landlord over the lesser of the Payback Period (defined below) or the useful life of the capital improvement as reasonably determined by Landlord.  The amortized cost of capital improvements may, at Landlord’s option, include actual or imputed interest at the rate that Landlord would reasonably be required to pay to finance the cost of the capital improvement.  “Payback Period” means the reasonably estimated period of time that it takes for the cost savings resulting from a capital improvement to equal the total cost of the capital improvement.  Landlord, by itself or through an affiliate, shall have the right to directly perform, provide and be compensated for any services under this Lease.  If Landlord incurs Expenses for the Building or Property together with one or more other buildings or

 

1

 

properties, whether pursuant to a reciprocal easement agreement, common area agreement or otherwise, the shared costs and expenses shall be equitably prorated and apportioned between the Building and Property and the other buildings or properties.

 

2.02    Expenses shall not include: the cost of capital improvements (except as set forth above); depreciation; principal payments of mortgage and other non-operating debts of Landlord; the cost of repairs or other work to the extent Landlord is reimbursed by insurance or condemnation proceeds; costs in connection with leasing space in the Building, including brokerage commissions; lease concessions, rental abatements and construction allowances granted to specific tenants; costs incurred in connection with the sale, financing or refinancing of the Building; fines, interest and penalties incurred due to the late payment of Taxes or Expenses; organizational expenses associated with the creation and operation of the entity which constitutes Landlord; or any penalties or damages that Landlord pays to Tenant under this Lease or to other tenants in the Building under their respective leases.

 

2.03    If at any time during a calendar year the Building is not at least 95% occupied or Landlord is not supplying services to at least 95% of the total Rentable Square Footage of the Building, Expenses shall, at Landlord’s option, be determined as if the Building had been 95% occupied and Landlord had been supplying services to 95% of the Rentable Square Footage of the Building.  If Expenses for a calendar year are determined as provided in the prior sentence, Expenses for the Base Year shall also be determined in such manner.  Notwithstanding the foregoing, Landlord may calculate the extrapolation of Expenses under this Section based on 100% occupancy and service so long as such percentage is used consistently for each year of the Term.  The extrapolation of Expenses under this Section shall be performed in accordance with the methodology specified by the Building Owners and Managers Association.

 

3.     “‘Taxes” shall mean: (a) all real property taxes and other assessments on the Building and/or Property, including, but not limited to, gross receipts taxes, assessments for special improvement districts and building improvement districts, governmental charges, fees and assessments for police, fire, traffic mitigation or other governmental service of purported benefit to the Property, taxes and assessments levied in substitution or supplementation in whole or in part of any such taxes and assessments and the Property’s share of any real estate taxes and assessments under any reciprocal easement agreement, common area agreement or similar agreement as to the Property; (b) all personal property taxes for property that is owned by Landlord and used in connection with the operation, maintenance and repair of the Property; and (c) all costs and fees incurred in connection with seeking reductions in any tax liabilities described in (a) and (b), including, without limitation, any costs incurred by Landlord for compliance, review and appeal of tax liabilities. Without limitation, Taxes shall not include any income, capital levy, transfer, capital stock, gift, estate or inheritance tax.  If a change in Taxes is obtained for any year of the Term during which Tenant paid Tenant’s Pro Rata Share of any Tax Excess, then Taxes for that year will be retroactively adjusted and Landlord shall provide Tenant with a credit, if any, based on the adjustment. Likewise, if a change is obtained for Taxes for the Base Year, Taxes for the Base Year shall be restated and the Tax Excess for all subsequent years shall be recomputed. Tenant shall pay Landlord the amount of Tenant’s Pro Rata Share of any such increase in the Tax Excess within 30 days after Tenant’s receipt of a statement from Landlord.

 

4.     Audit Rights.  Tenant, within 365 days after receiving Landlord’s statement of Expenses, may give Landlord written notice (“Review Notice”) that Tenant intends to review Landlord’s records of the Expenses for the calendar year to which the statement applies.  Within a reasonable time after receipt of the Review Notice, Landlord shall make all pertinent records available for inspection that are reasonably necessary for Tenant to conduct its review.  If any records are maintained at a location other than the management office for the Building, Tenant may either inspect the records at such other location or pay for the reasonable cost of copying and shipping the records.  If Tenant retains an agent to review Landlord’s records, the agent must be with a CPA firm licensed to do business in the state or commonwealth where the Property is located.  Tenant shall be solely responsible for all costs, expenses and fees incurred for the audit. However, notwithstanding the foregoing, if Landlord and Tenant determine that Expenses for the Building for the year in question were less than stated by more than 5%, Landlord, within 30 days after its receipt of paid invoices therefor from Tenant, shall reimburse Tenant for the reasonable amounts paid by Tenant to third parties in connection with such review by Tenant.  Within 90 days after the records are made available to Tenant, Tenant shall have the right to give Landlord written notice (an “Objection Notice”) stating in reasonable detail any objection to Landlord’s statement of Expenses for that year.  If Tenant fails to give Landlord an Objection Notice within the 90 day period or fails to provide Landlord with a Review Notice within the 365 day period described above, Tenant shall be deemed to have approved Landlord’s statement of Expenses and shall be barred from raising any claims regarding the Expenses for that year.  If Tenant provides Landlord with a timely Objection Notice, Landlord and Tenant shall work together in good faith to resolve any issues raised in Tenant’s Objection Notice.  If Landlord

 

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and Tenant determine that Expenses for the calendar year are less than reported, Landlord shall provide Tenant with a credit against the next installment of Rent in the amount of the overpayment by Tenant.  Likewise, if Landlord and Tenant determine that Expenses for the calendar year are greater than reported, Tenant shall pay Landlord the amount of any underpayment within 30 days.  The records obtained by Tenant shall be treated as confidential. In no event shall Tenant be permitted to examine Landlord’s records or to dispute any statement of Expenses unless Tenant has paid and continues to pay all Rent when due.

 

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EXHIBIT C

 

[INTENTIONALLY OMITTED].

 

 

EXHIBIT D

 

COMMENCEMENT LETTER

 

This Exhibit is attached to and made a part of the Lease by and between CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord) and NEUROMOLECULAR PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”) for space in the Building located at 1900 Powell Street, Emeryville, California, commonly known as Emeryville Tower I.

 

(EXAMPLE)

 

	
Date
    	
 
    	
 
    
	
 
    	
 
    
	
Tenant
    	
NEUROMOLECULAR PHARMACEUTICALS, INC.
    
	
Address
    	
 
    

 

 

 

Re:                             Commencement Letter with respect to that certain Lease dated as of the                day of                  , 2006, by and between CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership, as Landlord, and NEUROMOLECULAR PHARMACEUTICALS, INC., a Delaware corporation, as Tenant, for 9,172 rentable square feet on the 10th floor of the Building located at 1900 Powell Street, Emeryville, California, commonly known as Emeryville Tower I.

 

Lease id:                            

Business Unit Number:                           

 

	
Dear
    	
 
    	
:
    

 

In accordance with the terms and conditions of the above referenced Lease, Tenant accepts possession of the Premises and agrees:

 

1.             The Commencement Date of the Lease is                                       ;

 

2.             The Termination Date of the Lease is                                          .

 

Please acknowledge your acceptance of possession and agreement to the terms set forth above by signing all 3 counterparts of this Commencement Letter in the space provided and returning 2 fully executed counterparts to my attention.  Tenant’s failure to execute and return this letter, or to provide written objection to the statements contained in this letter, within 30 days after the date of this letter shall be deemed an approval by Tenant of the statements contained herein.

 

Sincerely,

 

	
 
    	
 
    
	
Authorized Signatory
    

 

Agreed and Accepted.

 

Tenant:  NEUROMOLECULAR PHARMACEUTICALS, INC.

 

	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    
	
 
    	
 
    
	
cc:
    	
EOP Lease Administration
    
	
 
    	
EOP Leasing AA
    
	
 
    	
EOP Legal
    

 

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EXHIBIT E

 

BUILDING RULES AND REGULATIONS

 

This Exhibit is attached to and made a part of the Lease by and between CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and NEUROMOLECULAR PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”) for space in the Building located at 1900 Powell Street, Emeryville, California, commonly known as Emeryville Tower I.

 

The following rules and regulations shall apply, where applicable, to the Premises, the Building, the parking facilities (if any), the Property and the appurtenances.  In the event of a conflict between the following rules and regulations and the remainder of the terms of the Lease, the remainder of the terms of the Lease shall control.  Capitalized terms have the same meaning as defined in the Lease.

 

1.                                      Sidewalks, doorways, vestibules, hails, stairways and other similar areas shall not be obstructed by Tenant or used by Tenant for any purpose other than ingress and egress to and from the Premises.  No rubbish, litter, trash, or material shall be placed, emptied, or thrown in those areas.  At no time shall Tenant permit Tenants employees to loiter in Common Areas or elsewhere about the Building or Property.

 

2.                                      Plumbing fixtures and appliances shall be used only for the purposes for which designed and no sweepings, rubbish, rags or other unsuitable material shall be thrown or placed in the fixtures or appliances.

 

3.                                      No signs, advertisements or notices shall be painted or affixed to windows, doors or other parts of the Building, except those of such color, size, style and in such places as are first approved in writing by Landlord.  All tenant identification and suite numbers at the entrance to the Premises shall be installed by Landlord, at Tenants cost and expense, using the standard graphics for the Building.  Except in connection with the hanging of lightweight pictures and wall decorations, no nails, hooks or screws shall be inserted into any part of the Premises or Building except by the Building maintenance personnel without Landlord’s prior approval, which approval shall not be unreasonably withheld.

 

4.                                      Landlord may provide and maintain in the first floor (main lobby) of the Building an alphabetical directory board or other directory device listing tenants and no other directory shall be permitted unless previously consented to by Landlord in writing.

 

5.                                      Tenant shall not place any lock(s) on any door in the Premises or Building without Landlord’s prior written consent, which consent shall not be unreasonably withheld, and Landlord shall have the right at all times to retain and use keys or other access codes or devices to all locks within and into the Premises.  A reasonable number of keys to the locks on the entry doors in the Premises shall be furnished by Landlord to Tenant at Tenant’s cost and Tenant shall not make any duplicate keys.  All keys shall be returned to Landlord at the expiration or early termination of the Lease.

 

6.                                      All contractors, contractor’s representatives and installation technicians performing work in the Building shall be subject to Landlord’s prior approval, which approval shall not be unreasonably withheld, and shall be required to comply with Landlord’s standard rules, regulations, policies and procedures, which may be revised from time to time.

 

7.                                      Movement in or out of the Building of furniture or office equipment, or dispatch or receipt by Tenant of merchandise or materials requiring the use of elevators, stairways, lobby areas or loading dock areas, shall be restricted to hours reasonably designated by Landlord.  Tenant shall obtain Landlord’s prior approval by providing a detailed listing of the activity, which approval shall not be unreasonably withheld.  If approved by Landlord, the activity shall be under the supervision of Landlord and performed in the manner required by Landlord.  Tenant shall assume all risk for damage to articles moved and injury to any persons resulting from the activity.  If equipment, property, or personnel of Landlord or of any other party is damaged or injured as a result of or in connection with the activity, Tenant shall be solely liable for any resulting damage, loss or injury.

 

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8.                                      Landlord shall have the right to approve the weight, size, or location of heavy equipment or articles in and about the Premises, which approval shall not be unreasonably withheld.  Damage to the Building by the installation, maintenance, operation, existence or removal of Tenant’s Property shall be repaired at Tenant’s sole expense.

 

9.                                      Corridor doors, when not in use, shall be kept closed.

 

10.                               Tenant shall not:  (1) make or permit any improper, objectionable or unpleasant noises or odors in the Building, or otherwise interfere in any way with other tenants or persons having business with them; (2) solicit business or distribute or cause to be distributed, in any portion of the Building, handbills, promotional materials or other advertising; or (3) conduct or permit other activities in the Building that might, in Landlord’s sole opinion, constitute a nuisance.

 

11.                               No animals, except those assisting handicapped persons, shall be brought into the Building or kept in or about the Premises.

 

12.                               No inflammable, explosive or dangerous fluids or substances shall be used or kept by Tenant in the Premises, Building or about the Property, except for those substances as are typically found in similar premises used for general office purposes and are being used by Tenant in a safe manner and in accordance with all applicable Laws.  Tenant shall not, without Landlord’s prior written consent, use, store, install, spill, remove, release or dispose of, within or about the Premises or any other portion of the Property, any asbestos-containing materials or any solid, liquid or gaseous material now or subsequently considered toxic or hazardous under the provisions of 42 U.S.C. Section 9601 et seq. or any other applicable environmental Law which may now or later be in effect.  Tenant shall comply with all Laws pertaining to and governing the use of these materials by Tenant and shall remain solely liable for the costs of abatement and removal.

 

13.                               Tenant shall not use or occupy the Premises in any manner or for any purpose which might injure the reputation or impair the present or future value of the Premises or the Building.  Tenant shall not use, or permit any part of the Premises to be used for lodging, sleeping or for any illegal purpose.

 

14.                               Tenant shall not take any action which would violate Landlord’s labor contracts or which would cause a work stoppage, picketing, labor disruption or dispute or interfere with Landlord’s or any other tenant’s or occupant’s business or with the rights and privileges of any person lawfully in the Building (“Labor Disruption”).  Tenant shall take the actions necessary to resolve the Labor Disruption, and shall have pickets removed and, at the request of Landlord, immediately terminate any work in the Premises that gave rise to the Labor Disruption, until Landlord gives its written consent for the work to resume.  Tenant shall have no claim for damages against Landlord or any of the Landlord Related Parties nor shall the Commencement Date of the Term be extended as a result of the above actions.

 

15.                               Tenant shall not install, operate or maintain in the Premises or in any other area of the Building, electrical equipment that would overload the electrical system beyond its capacity for proper, efficient and safe operation as determined solely by Landlord.  Tenant shall not furnish cooling or heating to the Premises, including, without limitation, the use of electric or gas heating devices, without Landlord’s prior written consent. Tenant shall not use more than its proportionate share of telephone lines and other telecommunication facilities available to service the Building.

 

16.                               Tenant shall not operate or permit to be operated a coin or token operated vending machine or similar device (including, without limitation, telephones, lockers, toilets, scales, amusement devices and machines for safe of beverages, foods, candy, cigarettes and other goods), except for machines for the exclusive use of Tenant’s employees and invitees.

 

17.                               Bicycles and other vehicles are not permitted inside the Building or on the walkways outside the Building, except in areas designated by Landlord.

 

18.                               Landlord may from time to time adopt systems and procedures for the security and safety of the Building and Property, its occupants, entry, use and contents. Tenant, its

 

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agents, employees, contractors, guests and invitees shall comply with Landlord’s systems and procedures.

 

19.                               Landlord shall have the right to prohibit the use of the name of the Building or any other publicity by Tenant that in Landlord’s sole opinion may impair the reputation of the Building or its desirability.  Upon written notice from Landlord, Tenant shall refrain from and discontinue such publicity immediately.

 

20.                               Neither Tenant nor its agents, employees, contractors, guests or invitees shall smoke or permit smoking in the Common Areas, unless a portion of the Common Areas have been declared a designated smoking area by Landlord, nor shall the above parties allow smoke from the Premises to emanate into the Common Areas or any other part of the Building. Landlord shall have the right to designate the Building (including the Premises) as a non-smoking building.

 

21.                               Landlord shall have the right to designate and approve standard window coverings for the Premises and to establish rules to assure that the Building presents a uniform exterior appearance.  Tenant shall ensure, to the extent reasonably practicable, that window coverings are closed on windows in the Premises while they are exposed to the direct rays of the sun.

 

22.                               Deliveries to and from the Premises shall be made only at the times in the areas and through the entrances and exits reasonably designated by Landlord.  Tenant shall not make deliveries to or from the Premises in a manner that might interfere with the use by any other tenant of its premises or of the Common Areas, any pedestrian use, or any use which is inconsistent with good business practice.

 

23.                               The work of cleaning personnel shall not be hindered by Tenant after 5:30 P.M., and cleaning work may be done at any time when the offices are vacant. Windows, doors and fixtures may be cleaned at any time. Tenant shall provide adequate waste and rubbish receptacles to prevent unreasonable hardship to the cleaning service.

 

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EXHIBIT G

 

PARKING AGREEMENT

 

This Exhibit (the “Parking Agreement”) is attached to and made a part of the Lease by and between CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and NEUROMOLECULAR PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”) for space in the Building located at 1900 Powell Street, Emeryville, California, commonly known as Emeryville Tower I.

 

1.                                      During the initial Term, Tenant agrees to lease from Landlord and Landlord agrees to lease to Tenant a total of 33 non-reserved parking spaces and 0 reserved parking spaces in the parking facility servicing the Building (“Parking Facility”).  During the initial Term, Tenant shall pay in advance, concurrent with Tenants payment of monthly Base Rent, the prevailing monthly charges established from time to time for parking in the Parking Facility. Such charges shall be payable to Landlord or such other entity as designated by Landlord, and shall be sent to the address Landlord designates from time to time.  The initial charge for such parking spaces is $65.00 per non-reserved parking pass, per month.  Except as otherwise set forth herein below, no deductions from the monthly charge shall be made for days on which the Parking Facility is not used by Tenant.  Tenant may, from time to time request additional parking spaces, and if Landlord shall provide the same, such parking spaces shall be provided and used on a month-to-month basis, and otherwise on the following terms and provisions, and at such prevailing monthly parking charges as shall be established from time to time.

 

2.                                      Tenant shall at all times comply with all applicable ordinances, rules, regulations, codes, laws, statutes and requirements of all federal, state, county and municipal governmental bodies or their subdivisions respecting the use of the Parking Facility. Landlord reserves the right to adopt, modify and enforce reasonable rules (“Rules”) governing the use of the Parking Facility from time to time including any key-card, sticker or other identification or entrance system and hours of operation. Landlord may refuse to permit any person who violates such Rules to park in the Parking Facility, and any violation of the Rules shall subject the car to removal from the Parking Facility.  Tenant shall comply with and cause its employees to comply with all the Rules as well as all reasonable additions and amendments thereto.

 

3.                                      Unless specified to the contrary above, the parking spaces hereunder shall be provided on a non-designated “first-come, first-served” basis.  Subject to Tenant’s rights to the reserved spaces set forth above, if any, Landlord reserves the right to assign other specific parking spaces, and to reserve other parking spaces for visitors, small cars, handicapped persons and for other tenants, guests of tenants or other parties, which assignment and reservation or spaces may be relocated as determined by Landlord from time to time, and Tenant and persons designated by Tenant hereunder shall not park in any such location designated for such assigned or reserved parking spaces. Tenant acknowledges that the Parking Facility may be closed entirely or in part in order to make repairs or perform maintenance services, or to alter, modify, re-stripe or renovate the Parking Facility, or if required by casualty, strike, condemnation, act of God, governmental law or requirement or other reason beyond the operator’s reasonable control; and in such events, Landlord shall refund any prepaid parking fee hereunder, prorated on a per diem basis.

 

4.                                      Tenant shall not store or permit its employees to store any automobiles in the Parking Facility without the prior written consent of the operator.  Except for emergency repairs, Tenant and its employees shall not perform any work on any automobiles while located in the Parking Facility, or on the Property. if it is necessary for Tenant or its employees to leave an automobile in the Parking Facility overnight, Tenant shall provide the operator with prior notice thereof designating the license plate number and model of such automobile.

 

5.                                      LANDLORD SHALL NOT BE LIABLE FOR ANY LOSS, INJURY OR DAMAGE TO PERSONS USING THE PARKING FACILITY OR AUTOMOBILES OR OTHER PROPERTY THEREIN, IT BEING AGREED THAT, TO THE FULLEST EXTENT PERMITTED BY LAW, THE USE OF THE SPACES SHALL BE AT THE SOLE RISK OF TENANT AND ITS EMPLOYEES. WITHOUT LIMITING THE FOREGOING, TENANT HEREBY VOLUNTARILY RELEASES, DISCHARGES, WAIVES AND RELINQUISHES ANY AND ALL ACTIONS OR CAUSES OF ACTION FOR PERSONAL INJURY OR PROPERTY DAMAGE OCCURRING TO TENANT ARISING AS A RESULT OF

 

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PARKING IN THE PARKING FACILITY, OR ANY ACTIVITIES INCIDENTAL THERETO, WHEREVER OR HOWEVER THE SAME MAY OCCUR, AND FURTHER AGREES THAT TENANT WILL NOT PROSECUTE ANY CLAIM FOR PERSONAL INJURY OR PROPERTY DAMAGE AGAINST LANDLORD OR ANY OF THE LANDLORD RELATED PARTIES FOR ANY SAID CAUSES OF ACTION. IN ALL EVENTS, TENANT AGREES TO LOOK FIRST TO ITS INSURANCE CARRIER AND TO REQUIRE THAT TENANTS EMPLOYEES LOOK FIRST TO THEIR RESPECTIVE INSURANCE CARRIERS FOR PAYMENT OF ANY LOSSES SUSTAINED IN CONNECTION WITH ANY USE OF THE PARKING FACILITY. TENANT HEREBY WAIVES ON BEHALF OF ITS INSURANCE CARRIERS ALL RIGHTS OF SUBROGATION AGAINST LANDLORD OR LANDLORD RELATED PARTIES. Notwithstanding the foregoing, but except as provided in Section 15 of the Lease (Subrogation) and Section 20 of the Lease (Limitation of Liability) to the contrary, Tenant shall not be required to waive any claims against Landlord (other than for loss or damage to Tenants business) where such loss or damage is due to the negligence or willful misconduct of Landlord or any Landlord Related Parties.

 

6.                                      Tenant shall not assign its rights under this Parking Agreement or sublease any of the parking spaces without the consent of Landlord, except that Tenant shall have the right to assign its rights under this Parking Agreement or sublease any of the parking spaces without Landlord consent in connection with any Business Transfer under the terms of the Lease.  Landlord shall have the right to terminate this Parking Agreement with respect to any parking spaces that Tenant desires to sublet or assign its rights thereto.

 

7.                                      Landlord hereby reserves the right to enter into a management agreement or lease with another entity for the operation of the Parking Facility (“Operator”). In such event, Tenant, upon request of Landlord, shall enter into a parking agreement upon substantially the same terms hereunder with the Operator and pay the Operator the monthly charge established hereunder, and Landlord shall have no liability for claims arising through acts or omissions of the Operator.  It is understood and agreed that the identity of the Operator may change from time to time during the Term.  In connection therewith, any parking lease or agreement entered into between Tenant and any Operator shall be freely assignable by such Operator or any successors thereto.

 

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EXHIBIT F

 

ADDITIONAL PROVISIONS

 

This Exhibit is attached to and made a part of the Lease by and between CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and NEUROMOLECULAR PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”) for space in the Building located at 1900 Powell Street, Emeryville, California, commonly known as Emeryville Tower I.

 

1.                                      Asbestos Notification.  Tenant acknowledges that Tenant has received the asbestos notification letter attached to this Lease as Exhibit H hereto, disclosing the existence of asbestos in the Building.  As part of Tenant’s obligations under this Lease, Tenant agrees to comply with the California ‘Connelly Act” and other applicable Laws, including providing copies of Landlord’s asbestos notification letter to all of Tenant’s “employees’ and “owners’, as those terms are defined in the Connelly Act and other applicable Laws.

 

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EXHIBIT H

 

ASBESTOS NOTIFICATION

 

This Exhibit (the “Exhibit”) is attached to and made a part of the Lease by and between CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and NEUROMOLECULAR PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”) for space in the Building located at 1900 Powell Street, Emeryville, California, commonly known as Emeryville Tower I (the “Building”).

 

Asbestos-containing materials (“ACMs”) were historically commonly used in the construction of commercial buildings across the country.  ACMs were commonly used because of their beneficial qualities; ACMs are fire-resistant and provide good noise and temperature insulation.

 

Some common types of ACMs include surfacing materials (such as spray-on fireproofing, stucco, plaster and textured paint), flooring materials (such as vinyl floor tile and vinyl floor sheeting) and their associated mastics, carpet mastic, thermal system insulation (such as pipe or duct wrap, boiler wrap and cooling tower insulation), roofing materials, drywall, drywall joint tape and drywall joint compound, acoustic ceiling tiles, transite board, base cove and associated mastic, caulking, window glazing and fire doors.  These materials are not required under law to be removed from any building (except prior to demolition and certain renovation projects).  Moreover, ACMs generally are not thought to present a threat to human health unless they cause a release of asbestos fibers into the air, which does not typically occur unless (1) the ACMs are in a deteriorated condition, or (2) the ACMs have been significantly disturbed (such as through abrasive cleaning, or maintenance or renovation activities).

 

It is possible that some of the various types of ACMs noted above (or other types) are present at various locations in the Building.  Anyone who finds any such materials in the Building should assume them to contain asbestos unless those materials are properly tested and found to be otherwise.  In addition, under applicable law, certain of these materials are required to be presumed to contain asbestos in the Building because the Building was built prior to 1981 (these materials are typically referred to as “Presumed Asbestos Containing Materials” or “PACM”). PACM consists of thermal system insulation and surfacing material found in buildings constructed prior to 1981, and asphalt or vinyl flooring installed prior to 1981.  If any thermal system insulation, asphalt or vinyl flooring or surfacing materials are found to be present in the Building, such materials must be considered PACM unless properly tested and found otherwise.  In addition, Landlord has identified the presence of certain ACMs in the Building.  For information about the specific types and locations of these identified ACMs, please contact the Building manager.  The Building Manager maintains records of the Building’s asbestos information including any Building asbestos surveys, sampling and abatement reports.  This information is maintained as part of Landlord’s asbestos Operations and Maintenance Plan (“O&M Plan”).

 

The O&M Plan is designed to minimize the potential of any harmful asbestos exposure to any person in the Building.  Because Landlord is not a physician, scientist or industrial hygienist, Landlord has no special knowledge of the health impact of exposure to asbestos.  Therefore, Landlord hired an independent environmental consulting firm to prepare the Building’s O&M Plan.  The O&M Plan includes a schedule of actions to be taken in order to (1) maintain any building ACMs in good condition, and (2) to prevent any significant disturbance of such ACMs.  Appropriate Landlord personnel receive regular periodic training on how to properly administer the O&M Plan.

 

The O&M Plan describes the risks associated with asbestos exposure and how to prevent such exposure. The O&M Plan describes those risks, in general, as follows: asbestos is not a significant health concern unless asbestos fibers are released and inhaled.  If inhaled, asbestos fibers can accumulate in the lungs and, as exposure increases, the risk of disease (such as asbestosis and cancer) increases.  However, measures taken to minimize exposure and consequently minimize the accumulation of fibers, can reduce the risk of adverse health effects.

 

The O&M Plan also describes a number of activities which should be avoided in order to prevent a release of asbestos fibers.  In particular, some of the activities which may present a health risk (because those activities may cause an airborne release of asbestos fibers) include moving, drilling, boring or otherwise disturbing ACMs. Consequently, such activities should not be attempted by any person not qualified to handle ACMs.  In other words, the approval of Building management must be obtained prior to engaging in any such activities.  Please contact the Building manager for more information in this regard.  A copy of the written O&M Plan for the Building is located in the Building Management Office and, upon your request, will be made available to tenants for you to review and copy during regular business hours.

 

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Because of the presence of ACM in the Building, we are also providing the following warning, which is commonly known as a California Proposition 65 warning: WARNING: This building contains asbestos, a chemical known to the State of California to cause cancer.

 

Please contact the Building manager with any questions regarding the contents of this Exhibit H.

 

2Exhibit 10.8

 

FIRST AMENDMENT TO LEASE

 

THIS FIRST AMENDMENT TO LEASE (this “First Amendment”) is entered into as of the twenty-ninth day of April, 2009, by and between NOP WATERGATE LLC, a Delaware limited liability company (“Landlord”), and ADAMAS PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”).

 

RECITALS

 

This First Amendment is entered into on the basis of the following facts, understandings and intentions of the parties:

 

A.            Landlord (as successor in interest to CA-Emeryville Properties Limited Partnership, a Delaware limited partnership) and Tenant (formerly known as Neuromolecular Pharmaceuticals, Inc., a Delaware corporation) are parties to that certain Lease Agreement dated as of October 25, 2006 (the “Lease”), pursuant to which Tenant leases certain space consisting of approximately Nine Thousand One Hundred Seventy-Two (9,172) rentable square feet (the “Existing Premises”) on the tenth (10th) Floor of the commercial office building located at 1900 Powell Street, Emeryville, California (the “Building”), all as more particularly described in the Lease.

 

B.            Tenant has requested that additional space containing approximately Three Thousand Three Hundred Seventy-Six (3,376) rentable square feet (the “Expansion Premises”) on the tenth (10th) Floor of the Building and shown on Exhibit A hereto be added to the Premises.

 

C.            The Term expired on November 30, 2008.

 

D.            Landlord and Tenant now desire to amend the Lease in order to: (i) retroactively extend the Term; (ii) revise the Premises by adding the Expansion Premises to the Premises; (iii) revise the Base Rent; and (iv) supplement and/or modify certain other provisions of the Lease.

 

NOW, THEREFORE, in consideration of the mutual covenants and promises of Landlord and Tenant, Landlord and Tenant hereby agree as follows:

 

1.             Certain Definitions.  Capitalized terms used herein and not otherwise defined herein shall have the meaning or meanings given them in the Lease.

 

2.             Term.  The Term is hereby retroactively extended for a period of twenty-five (25) months (the “Extended Term”) commencing as of December 1, 2008 (the “Extension Date”) and continuing to and including December 31, 2010 (the “Extended Termination Date”), unless sooner terminated pursuant to the terms of the Lease.  On and effective as of the date of this First Amendment, all references to the (i) “Term” in the Lease shall be deemed to mean the period commencing as of the Commencement Date and continuing to and including the Extended Termination Date, unless earlier terminated pursuant to the terms of the Lease, and (ii) “Termination Date” in the Lease shall be deemed to mean the Extended Termination Date.

 

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3.             Premises.

 

(a)           Effective as of December 1, 2009 (the “Expansion Effective Date”), the Premises, as defined in the Lease, is increased from approximately Nine Thousand One Hundred Seventy-Two rentable square feet on the Tenth (10th) Floor of the Building to approximately Twelve Thousand Five Hundred Forty-Eight (12,548) rentable square feet on the Tenth (10th) Floor of the Building by the addition of the Expansion Premises.  From and after the Expansion Effective Date, all references to the Premises in the Lease shall mean, collectively, the Existing Premises and the Expansion Premises.  The Term for the Expansion Premises shall commence on the Expansion Effective Date and end on the Extended Termination Date, unless sooner terminated pursuant to the terms of the Lease.  The Expansion Premises is subject to all the terms and conditions of the Lease except as expressly modified herein and except that Tenant shall not be entitled to receive any allowances, abatements or other financial concessions granted with respect to the Existing Premises unless such concessions are expressly provided for herein with respect to the Expansion Premises.

 

(b)           Notwithstanding anything to the contrary set forth in Paragraph 3(a) above, if Landlord fails to deliver Tenant possession of the Expansion Premises on or before the Expansion Effective Date for any reason, including without limitation, holdover by prior occupants, Landlord shall not be liable for any claims, damages or liabilities as a result thereof, but the Expansion Effective Date shall be delayed to be the date upon which Landlord delivers possession of the Expansion Premises to Tenant.  Should the Expansion Effective Date be a date other than the date set forth in Paragraph 3(a), either Landlord or Tenant, at the request of the other, shall execute a declaration specifying the Expansion Effective Date; provided, however, that failure to execute, or request execution of, such declaration shall not in any way alter the Expansion Effective Date.  If the Expansion Effective Date is delayed the Extended Termination Date shall not be similarly extended.

 

4.             Base Rent.

 

(a)           Existing Premises.  Retroactively effective as of the Extension Date, subject to Paragraph 4(b) below, Tenant shall pay Base Rent with respect to the Existing Premises upon the following schedule and otherwise in accordance with the terms of the Lease:

 

	
Period
    	
 
    	
Monthly Rate Per
   Square Foot
    	
 
    	
Base Rent per Month
    	
 
    
	
12/01/2008   - 4/30/2009
    	
 
    	
$
    	
2.60
    	
 
    	
$
    	
23,847.20
    	
 
    
	
5/01/2009   - 4/30/2010
    	
 
    	
$
    	
2.50
    	
 
    	
$
    	
22,930.00
    	
 
    
	
5/01/2010   - 12/31/2010
    	
 
    	
$
    	
2.58
    	
 
    	
$
    	
23,663.76
    	
 
    

 

(b)           Provided no Default exists under the Lease (and no event or condition exists which could constitute a Default but for a requirement of notice or expiration of a period of grace) and subject to the provisions of this Paragraph 4(b), Tenant shall not be required to pay Base Rent with respect to the Existing Premises, commencing as of May 1, 2009 and continuing to and including July 31, 2009 (the “Base Rent Forgiveness Period”).  The other provisions of this Paragraph 4(b) to the contrary notwithstanding, Landlord and Tenant acknowledge that Base

 

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Rent for the Existing Premises for the Base Rent Forgiveness Period would be the sum of Twenty-Three Thousand Eight Hundred Forty-Seven and 20/100ths Dollars ($23,847.20) per month, in the absence of the forgiveness of the Base Rent for such period, and that such forgiveness is expressly conditioned on the absence of any Default existing under the Lease (and no event or condition existing which could constitute a Default but for a requirement of notice or expiration of a period of grace).  In the event of the occurrence either of any such Default hereunder or of an event or condition which could constitute a Default but for a requirement of notice or expiration of a period of grace, and without notice or demand by Landlord: (i) such forgiveness shall terminate; and (ii) the Base Rent for the Existing Premises shall immediately return to the sum of Twenty-Three Thousand Eight Hundred Forty-Seven and 20/100ths Dollars ($23,847.20) per month, from the date of the first occurrence of such event or condition.  Landlord and Tenant hereby acknowledge and agree that the requirement of the payment of such Base Rent does not constitute a penalty or forfeiture, but rather only the reinstatement of Base Rent otherwise due for the Existing Premises.

 

(c)           Expansion Premises.  Effective as of the Expansion Effective Date, Tenant shall pay Base Rent with respect to the Expansion Premises upon the following schedule and otherwise in accordance with the terms of the Lease:

 

	
Period
    	
 
    	
Monthly Rate Per
   Square Foot
    	
 
    	
Base Rent per Month
    	
 
    
	
12/01/2009   - 4/30/2010
    	
 
    	
$
    	
2.50
    	
 
    	
$
    	
8,440.00
    	
 
    
	
5/01/2010   - 12/31/2010
    	
 
    	
$
    	
2.58
    	
 
    	
$
    	
8,710.08
    	
 
    

 

5.             Expenses and Taxes.

 

(a)           Existing Premises.  For the period continuing through and including the Extended Termination Date Tenant shall continue to pay for Tenant’s Pro Rata Share of Expense Excess and Tax Excess for the Existing Premises pursuant to the terms of the Lease; provided, however, that with respect to the Extended Term, the Base Year for computation of Tenant’s Pro Rata Share of Expense Excess and Tax Excess with respect to the Existing Premises shall be the calendar year of 2009.

 

(b)           Expansion Premises.  For the period commencing on the Expansion Effective Date and continuing through and including the Extended Termination Date (i) Tenant’s Pro Rata Share applicable to the Expansion Premises shall be calculated based upon the rentable square footage attributable to the Expansion Premises, and (ii) Tenant shall pay Tenant’s Pro Rata Share of Expense Excess and Tax Excess applicable to the Expansion Premises pursuant to the terms of the Lease; provided, however, that the Base Year for computation of Tenant’s Pro Rata Share of Expense Excess and Tax Excess applicable to the Expansion Premises shall be the calendar year of 2009.

 

6.             Security Deposit.  Upon Tenant’s execution of this First Amendment, Tenant shall pay Landlord the sum of Three Thousand Eight Hundred Forty-Seven and 20/100ths Dollars ($3,847.20) which is added to and becomes part of the Security Deposit, if any, held by Landlord as provided under Sections 1.08 and 6 of the Lease as security for payment of Rent and

 

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the performance of the other terms and conditions of the Lease by Tenant.  Accordingly, simultaneously with the execution hereof, the Security Deposit is increased from Twenty Thousand Dollars ($20,000) to Twenty-Three Thousand Eight Hundred Forty-Seven and 20/100ths Dollars ($23,847.20).

 

7.             Condition of Existing Premises and Expansion Premises.

 

(a)           Tenant acknowledges that it is currently in possession of the Existing Premises and agrees to continue in possession thereof on an “AS-IS” basis without any agreements, representations, understandings or obligations on the part of Landlord to perform any alterations, repairs or improvements to the Existing Premises on account of the extension of the Term hereunder or for any other reason, purposes or cause, except the Refurbishment Work set forth in Paragraph 8 below.

 

(b)           Tenant has inspected the Expansion Premises and agrees to accept the same “AS IS” without any agreements, representations, understandings or obligations on the part of Landlord to perform any alterations, repairs or improvements to the Expansion Premises, except the Refurbishment Work set forth in Paragraph 8.  Landlord shall have no other obligation of any kind or character, express or implied, with respect to the design or condition of the Expansion Premises or the suitability thereof for Tenant’s purposes, and Tenant acknowledges that it has neither received nor relied upon any representation or warranty made by or on behalf of Landlord with respect to such matters.

 

8.             Refurbishment of the Existing Premises.

 

(a)           Description of Refurbishment Work.  Landlord shall steam clean the existing floor carpet within the Existing Premises, touch-up the paint on the existing interior walls within the Existing Premises, and perform the work described on the Space Plan attached hereto as Exhibit C in the Existing Premises and the Expansion Premises (collectively, the “Refurbishment Work”), upon the terms and conditions set forth in this Paragraph 8.  The Refurbishment Work shall be performed using Building standard methods, materials and finishes (as to quantity and quality).  Landlord shall have the right to enter into a direct contract for the Refurbishment Work with a general contractor selected by Landlord.  In addition, Landlord shall have the right to select and/or approve of any subcontractors or other service providers used in connection with the Refurbishment Work.

 

(b)           Performance of Refurbishment Work.  Tenant acknowledges that the Refurbishment Work may be performed by Landlord in the Existing Premises and the Expansion Premises during Landlord’s normal business hours, and while Tenant is in possession of the Existing Premises and/or the Expansion Premises.  Landlord and Tenant shall cooperate with each other in order to enable the Refurbishment Work to be performed in a timely manner with as little inconvenience to the operation of Tenant’s business within the Existing Premises and the Expansion Premises as is reasonably possible.  Notwithstanding anything to the contrary contained in the Lease, Landlord shall not be liable in any manner for any inconvenience, loss or interruption of business or business opportunities or other damage to person or property of Tenant or other persons, however caused, arising in connection with the performance of the Refurbishment Work, whether or not caused by or arising from the active or passive negligence

 

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of Landlord or its agents, contractors, suppliers, employees or representatives.  Landlord’s performance of the Refurbishment Work shall not be deemed to be a representation by Landlord that such Refurbishment Work complies with applicable insurance requirements, building codes, ordinances, laws or regulations or that the Refurbishment Work will be adequate for Tenant’s use.

 

(c)           Landlord’s Contribution.  The Refurbishment Work shall be performed at the sole cost and expense of Tenant, except for the amount of the Landlord’s Contribution.  Landlord shall provide a total of Ninety-One Thousand Seven Hundred Twenty Dollars ($91,720; based on $10.00 per square foot on 9,172 rentable square feet in the Existing Premises; “Landlord’s Contribution”), as provided in this Paragraph 8(c) in payment or partial payment for the costs of the performance of the Refurbishment Work (including, without limitation, design, permit, and construction costs).  Subject to the provisions of Paragraph 8(d) below, Landlord shall apply Landlord’s Contribution to the cost of performing (including, without limitation, design, permit and construction costs) the Refurbishment Work and for the other purposes specifically provided in this Paragraph 8.  If, following the substantial completion of the Refurbishment Work, any portion of the Landlord’s Contribution is unused and unapplied, following Tenant’s written request therefor, Landlord shall apply such unused and unapplied portion of the Landlord’s Contribution toward the installment of Base Rent next coming due under the Lease and subsequent installments of Base Rent, until such time as such unused and unapplied portion of the Landlord’s Contribution has been fully applied to Base Rent.  Notwithstanding anything to the contrary set forth herein: (a) the obligation of Landlord to make any one or more payments pursuant to the provisions of this Paragraph 8(c) or to proceed with the performance of the Refurbishment Work shall be suspended without further act of the parties during any such time as there exists a Default under the Lease or any event or condition which, with the passage of time or the giving of notice or both would constitute such a Default; and (b) the obligation of Landlord to pay any unexpended portion of Landlord’s Contribution shall terminate as of the first anniversary of the Extension Date.  Nothing in this Paragraph 8(c) shall affect the obligations of Tenant under the Lease with respect to any alterations, additions and improvements within the Premises, including, without limitation, any obligation to obtain the prior written consent of Landlord thereto.

 

(d)           Tenant Payments.  If Landlord estimates that the total cost of the Refurbishment Work (the “Estimated Total Cost”) will exceed the Landlord’s Contribution, Landlord shall notify Tenant in writing of Landlord’s good faith estimate of such excess (the “Estimated Excess Cost”).  Tenant shall pay to Landlord within five (5) business days of receipt of an invoice describing in reasonable detail the actual cost of the Refurbishment Work incurred in respect of the period for which such invoice is delivered (the “Periodic Invoice Cost”), its Percentage Share of such Periodic Invoice Cost.  As used herein, the term “Percentage Share” shall mean the percentage determined by: (i) dividing the Estimated Excess Cost by the Estimated Total Cost; and (ii) multiplying such number by one hundred (100).  The failure by Tenant to make such payment within such five (5) business day period shall constitute a Default under the Lease without the requirement of notice.  Such payments by Tenant shall be applied by Landlord towards such Period Invoice Cost.  Following substantial completion of the Refurbishment Work, if the total cost of the Refurbishment Work exceed the sum of Landlord’s Contribution actually disbursed or required to be disbursed by Landlord and the amounts previously paid by Tenant towards all such Periodic Invoice Costs, then Tenant shall pay to

 

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Landlord such excess within fifteen (15) days after billing by Landlord.  All other amounts payable by Tenant pursuant to the provisions of this Paragraph 8, if any, shall be paid by Tenant within fifteen (15) days after billing by Landlord.

 

9.             Right of First Opportunity.

 

(a)           Subject to the remaining provisions of this Paragraph 9, Tenant is hereby granted a one (1) time right to add to the Premises additional space located on the Tenth (10th) Floor of the Building consisting of approximately Two Thousand Four Hundred Ninety-Two (2,492) rentable square feet and more particularly shown on Exhibit B attached hereto (the “First Opportunity Space”), as and if such First Opportunity Space becomes available (the term “available” is used herein meaning (i) that Landlord has determined that a lease existing as of the date of this First Amendment has terminated, either by default, mutual agreement, or by expiration of the term of such lease and of any renewal options, rights of first refusal or options or agreements of expansion and that such First Opportunity Space has not been relet to such tenant or to a subtenant or assignee of such tenant immediately thereafter, the previous lease with respect to such First Opportunity Space renewed or an expansion right with respect to such First Opportunity Space exercised by another tenant, or (ii) if the First Opportunity Space is not under lease to a third-party as of the date of this First Amendment, Landlord has located a prospective tenant that may be interested in leasing such space), such right being referred to herein as the “Right of First Opportunity.”

 

(b)           The Right of First Opportunity shall be subject and subordinate to: (i) any renewal or extension of the term of any existing lease of First Opportunity Space; and (ii) any renewal option, extension option, expansion option, right of first refusal or right of first opportunity granted by Landlord to a third party prior to the date of this First Amendment.

 

(c)           Landlord shall notify Tenant in writing that any portion of the First Opportunity Space has become available and of the date upon which Landlord expects to be able to tender possession of such portion of the First Opportunity Space to Tenant.  The Right of First Opportunity must be exercised by Tenant as to such portion of the First Opportunity Space so identified by Landlord by written notice to Landlord within fifteen (15) days after the date of Landlord’s written notice.  Tenant’s failure to exercise the Right of First Opportunity within such time period shall cause such Right of First Opportunity to expire and be of no further force or effect for the remainder of the Term with respect to the portion of the First Opportunity Space so identified by Landlord.  Upon timely exercise of such Right of First Opportunity, such portion of the First Opportunity Space so accepted by Tenant (the “Accepted First Opportunity Space”) shall be included under the Lease and added to the Premises effective upon the date Landlord tenders possession of the Accepted First Opportunity Space to Tenant.  If Landlord fails to deliver Tenant possession of the Accepted First Opportunity Space on or before the scheduled delivery date for any reason, including without limitation, holdover by prior occupants, Landlord shall not be liable for any claims, damages or liabilities as a result thereof, but the Tenant’s lease of the Accepted First Opportunity Space shall commence upon the date upon which Landlord delivers possession of the Expansion Premises to Tenant.

 

(d)           The Base Rent applicable to the Accepted First Opportunity Space shall be at ninety-five percent (95%) of the Fair Market Rent of the Accepted First Opportunity Space as

 

6

 

of the date the Accepted First Opportunity Space becomes part of the Premises.  At the time Landlord offers such portion of the First Opportunity Space to Tenant, Landlord shall notify Tenant of Landlord’s determination of the Base Rent for such portion of the First Opportunity Space.  Within fifteen (15) days after receipt of such notice from Landlord, Tenant shall have the right to: (i) elect to accept Landlord’s determination of the Base Rent for such portion of the First Opportunity Space; or, (ii) elect to require that Fair Market Rent for such portion of the First Opportunity Space be determined by arbitration pursuant to Paragraph 12 hereof.  Failure on the part of Tenant to require arbitration of Fair Market Rent for such portion of the First Opportunity Space within such fifteen (15) day period shall constitute an election by Tenant to accept Landlord’s determination of the Base Rent for such portion of the First Opportunity Space.

 

(e)           In the event that Tenant exercises the Right of First Opportunity pursuant to the terms hereof, Tenant shall take the Accepted First Opportunity Space in its “AS IS” condition and configuration without any agreements, representations, understandings or obligations on the part of Landlord to perform any alterations, repairs or improvements to the Accepted First Opportunity Space.

 

(f)            From and after the commencement date specified in Paragraph 9(e) above with respect to the Accepted First Opportunity Space, all of the terms and provisions of the Lease shall apply to such space (provided, however, Tenant shall not be entitled to receive any allowances, abatements or other financial concessions granted with respect to any other portion of the Premises), and rentable square footage contained in such space shall be added to the rentable square footage within the Premises for all calculations of Tenant’s Pro Rata Share of Expense Excess and Tax Excess and all other purposes hereunder (with Base Rent being determined as provided in Section 9(d)).

 

10.          Extension Option.  Tenant shall have the option to extend the Term (the “Extension Option”) for one (1) period of twenty-four (24) months (the “Second Extended Term”).  The Second Extended Term, if any, shall commence on the day following the last day of the Extended Term and shall continue for a period of twenty-four (24) months thereafter.  Tenant’s Extension Option shall be both: (i) upon condition (which may be waived by Landlord in its sole discretion) that no Default exists hereunder at the time of the giving by Tenant of its notice of exercise; and, (ii) upon further condition (which may be waived by Landlord in its sole discretion) that no Default exists hereunder at the time of the commencement of the Second Extended Term.  To exercise Tenant’s Extension Option, Tenant shall give Landlord written notice of its election at least three (3) months prior to expiration of the Extended Term.  Within thirty (30) days of receipt of Tenant’s election to extend, Landlord shall notify Tenant of the Base Rent for the Second Extended Term.  Within thirty (30) days after receipt of each such notice from Landlord, Tenant shall have the right to: (i) elect to accept Landlord’s statement of the Base Rent as the Base Rent for the Second Extended Term; or, (ii) elect to pay Base Rent for the Extended Term at ninety-five percent (95%) of the Fair Market Rent (defined below), with Fair Market Rent to be determined by arbitration pursuant to Paragraph 12 below.  Failure on the part of Tenant to elect in writing to require arbitration of Fair Market Rent within the thirty (30) day period shall constitute an election by Tenant to accept Landlord’s determination of the Base Rent for the Second Extended Term.  Tenant shall have no other option, right or obligation to extend the Term or otherwise remain in the Premises after the expiration of the Extended Term.  From and after commencement of any Second Extended Term, all of the other terms, covenants

 

7

 

and conditions of the Lease shall apply, and references to the Term shall be deemed to include the Second Extended Term; provided, however, that Base Rent shall be revised as herein provided, and Tenant shall have no option or right to further extend the Term beyond the Second Extended Term.  If Tenant has elected to have the Fair Market Rent determined by arbitration and the Base Rent for the Second Extended Term has not been determined as of the commencement of the Second Extended Term, Tenant shall pay Base Rent for the Premises upon the terms and conditions in effect during the last month of the Extended Term until such time as the Base Rent for the Second Extended Term has been determined.  If the Base Rent for the Second Extended Term is determined to be less than the Base Rent for the last month of the Extended Term, Landlord shall provide Tenant with a credit against the next installment(s) of Rent in the amount of the overpayment by Tenant.  Likewise, if the Base Rent for the Second Extended Term is determined to be greater than the Base Rent for the last month of the Extended Term, Tenant shall pay Landlord the amount of such underpayment with the installment of Base Rent next due under the Lease.

 

11.          Definition of Fair Market Rent.  As used herein, “Fair Market Rent” shall mean the rate being charged by Landlord in the Building for comparable space and the rate being charged for comparable space in non-equity transactions in comparable buildings located in the City of Emeryville or downtown Oakland area, taking into consideration: location in the Building or other building, tenant improvements or allowances existing or to be provided, rental abatements, lease takeovers/assumptions, moving expenses and other forms of rental concessions, proposed term of lease, extent of service provided or to be provided, the ownership of the comparable space, whether or not the transaction is a sublease, the time the particular rate under consideration became or is to become effective and any other relevant terms or conditions.  Costs which are incurred by a landlord in connection with the negotiation and documentation of a lease transaction, and other costs incurred by a landlord which are not paid to or for the direct benefit of the tenant, shall not be considered.  Comparable transactions in which the rent for a renewal was discounted to a rate below the fair market rate, whether by the application of a percentage to the fair market rate or otherwise, shall be adjusted to reflect the fair market rate before the discount was applied.  Renewal transactions in which the rent was either established at a pre-determined amount by reason of the exercise by the tenant of an option to renew or extend at a fixed rental rate or was established due to the operation of a pre-determined minimum or maximum amount shall not be regarded as comparable transactions.

 

12.          Arbitration of Fair Market Rent.  If Tenant disputes the amount claimed by Landlord as Base Rent pursuant to Paragraph 9(d) or Paragraph 10, and such dispute cannot be resolved by mutual agreement, the dispute shall be submitted to arbitration.  The judgment or the award rendered in any such arbitration may be entered in any court having jurisdiction and shall be final and binding between the parties.  The arbitration shall be conducted and determined in the County of Alameda in accordance with the then prevailing rules of the American Arbitration Association or its successor for arbitration of commercial disputes except to the extent that the procedures mandated by said rules shall be modified as follows:

 

(a)           Tenant shall make demand for arbitration in writing within the time period required under Paragraph 9(d) or Paragraph 10, as applicable, above, specifying therein the name and address of the person to act as the arbitrator on its behalf.  The arbitrator shall be qualified as a real estate appraiser familiar with the Fair Market Rent of commercial office space in the

 

8

 

County of Alameda who would qualify as an expert witness over objection to give testimony addressed to the issue in a court of competent jurisdiction.  Failure on the part of Tenant to make a timely and proper demand for such arbitration shall constitute a waiver of the right thereto.  Within ten (10) business days after the service of Tenant’s demand for arbitration, Landlord shall have the right to give notice in writing to Tenant of Landlord’s adjusted determination of Fair Market Rent.  Within ten (10) business days following Tenant’s receipt of such notice, if Tenant and Landlord have not agreed upon Fair Market Rent, Tenant shall notify Landlord in writing that Tenant desires to renew its demand for arbitration.  Failure on the part of Tenant to give such notice shall constitute a waiver of the right to such arbitration, and Tenant shall be deemed to have accepted Landlord’s adjusted determination of Fair Market Rent.  Within ten (10) business days after the receipt of such notice, Landlord shall give notice to Tenant, specifying the name and address of the person designated by Landlord to act as arbitrator on its behalf who shall be similarly qualified.  If Landlord fails to notify Tenant of the appointment of its arbitrator, within or by the time above specified, then the arbitrator appointed by Tenant shall be the arbitrator to determine the issue.

 

(b)           If two (2) arbitrators are chosen pursuant to Paragraph 12(a) above, the arbitrators so chosen shall meet within ten (10) business days after the second arbitrator is appointed and, if within ten (10) business days after such first meeting the two (2) arbitrators shall be unable to agree promptly upon a determination of Fair Market Rent, they shall appoint a third (3rd) arbitrator, who shall be a competent and impartial person with qualifications similar to those required of the first two (2) arbitrators pursuant to Paragraph 12(a) above.  If they are unable to agree upon such appointment within five (5) business days after expiration of said ten (10) day period, the third (3rd) arbitrator shall be selected by the parties themselves, if they can agree thereon, within a further period of ten (10) business days.  If the parties do not so agree, then either party, on behalf of both, may request appointment of such a qualified person by the then Chief Judge of the United States District Court having jurisdiction over the County of Alameda, acting in his private non-judicial capacity.  Request for appointment shall be made in writing with a copy given to the other party.  Each party agrees that said Judge shall have the power to make the appointment.  The three (3) arbitrators shall decide the dispute, if it has not previously been resolved, by following the procedure set forth in 12(c) below.

 

(c)           Where the issue cannot be resolved by agreement between the two (2) arbitrators selected by Landlord and Tenant or settlement between the parties during the course of arbitration, the issue shall be resolved by the three (3) arbitrators in accordance with the following procedure.  The arbitrators selected by each of the parties shall state in writing his determination of the Fair Market Rent, supported by the reasons therefor with counterpart copies to each party.  The arbitrators shall arrange for a simultaneous exchange of such proposed resolutions.  The role of the third (3rd) arbitrator shall be to select which of the two (2) proposed resolutions most closely approximates his determination of Fair Market Rent.  The third (3rd) arbitrator shall have no right to propose a middle ground or any modification of either of the two (2) proposed resolutions.  The resolution he chooses as most closely approximating his determination shall constitute the decision of the arbitrators and be final and binding upon the parties.

 

(d)           If any arbitrator fails, refuses or is unable to act, his successor shall be appointed by him, but in the case of the third (3rd) arbitrator, his successor shall be appointed in

 

9

 

the same manner as provided for appointment of the third (3rd) arbitrator.  The arbitrators shall attempt to decide the issue within ten (10) business days after the appointment of the third (3rd) arbitrator.  Any decision in which the arbitrator appointed by Landlord and the arbitrator appointed by Tenant concur shall be binding and conclusive upon the parties.  Each party shall pay the fees and costs of its own counsel.  The losing party shall pay the fees and costs of the arbitrators and of the expert witnesses (if any) of the prevailing party as well as those of its expert witnesses.  For purposes hereof, the losing party shall be that party whose selected arbitrator’s statement of Fair Market Rent was not selected by the third (3rd) arbitrator.

 

(e)           The arbitrators shall have the right to consult experts and competent authorities with factual information or evidence pertaining to a determination of Fair Market Rent, but any such consultation shall be made in the presence of both parties with full right on their part to cross-examine.  The arbitrators shall render their decision and award in writing with counterpart copies to each party.  The arbitrators shall have no power to modify the provisions of the Lease.

 

13.          Modifications.

 

(a)           Additional Insureds.  Effective as of the date of this First Amendment, and notwithstanding anything to the contrary contained in the Lease, Tenant shall promptly cause its commercial general liability policy or policies of insurance carried pursuant to the terms of the Lease to name, as additional insureds, Landlord, Hines Interests Limited Partnership and any lender with a deed of trust encumbering the Building or the Property, of whom Landlord has notified Tenant.  Notwithstanding anything to the contrary contained in the Lease, Tenant shall provide evidence of such coverage to Landlord within thirty (30) days following written request therefor by Landlord.

 

(b)           Late Charge.  Effective as of the date of this First Amendment, the seventh (7th) sentence of Section 4 of the Lease is hereby deleted in its entirety and is replaced with the following: “Tenant shall pay Landlord an administration fee equal to 5% of all past due Rent, provided that Tenant shall be entitled to a grace period of 5 days after Landlord’s written notice to Tenant of the same for the first late payment of Rent in any 12 month period.”

 

(c)           Alterations.  Effective as of the date of this First Amendment, the eighth (8th) sentence of Section 9.03 of the Lease is hereby deleted in its entirety.

 

(d)           Relocation.  Effective as of the date of this First Amendment, Section 21 of the Lease is hereby deleted in its entirety and shall be of no further force or effect.

 

(e)           Holding Over.  Effective as of the date of this First Amendment, the second sentence of Section 22 of the Lease is hereby modified by the deletion of the words “150% of the sum of the Base Rent and Additional Rent due” and the substitution therefor of the words “(i) 150% of the Base Rent, and (ii) the Additional Rent due”.

 

(f)            Parking.  Notwithstanding anything to the contrary set forth in Section 1 of Exhibit G to the Lease, during the Term, as extended, Tenant agrees to lease from Landlord and Landlord agrees to lease to Tenant a total of 33 non-reserved parking spaces and 0 reserved parking spaces in the Parking Facility; provided, however, effective as of any future expansion

 

10

 

effective date, the number of non-reserved parking spaces in the Parking Facility Landlord agrees to lease to Tenant hereunder shall increase by Three (3) non-reserved parking spaces for every One Thousand (1,000) rentable square feet in the such expansion premises, rounded down to the nearest whole number.  During the Term, as extended, Tenant shall pay in advance, concurrent with Tenant’s payment of Base Rent, the prevailing monthly charges established from time to time for parking in the Parking Facility.  Except as set expressly forth in this Paragraph 13(f), the lease of all parking spaces and use of the Parking Facility during the Extended Term shall be subject to all the terms and conditions of Exhibit G to the Lease.

 

(g)           Casualty.  Effective as of the date of this First Amendment, the following is hereby added following the ultimate sentence of the first (1st) grammatical paragraph of Section 16.01 of the Lease:

 

“Tenant shall have the right to terminate this Lease if: (a) any portion of the Premises or any portion of the Building necessary for Tenant’s use of the Premises has been damaged by Casualty; (b) there are less than Twelve (12) months of the Term remaining on the date of the Casualty; (c) the Casualty was not caused by the negligence or willful misconduct of Tenant or its agents, employees or contractors; and (d) Tenant provides Landlord with written notice of its intent to terminate within 30 days after the date of the Casualty.”

 

14.          Brokerage Commission.

 

(a)           Landlord hereby warrants and represents to Tenant that Landlord has not voluntarily incurred, on its behalf or on behalf of Tenant or on behalf of both Landlord and Tenant, any obligation to pay a commission or finder’s fee to any real estate broker or other person or entity in connection with this First Amendment.  Landlord hereby agrees to indemnify, defend and hold Tenant harmless from claims for any commission or finder’s fee charges by any real estate broker or other person or entity arising from an agreement, whether express or implied, between Landlord and such broker or other person or entity or otherwise arising from the conduct of Landlord.

 

(b)           Tenant hereby warrants and represents to Landlord that Tenant has not voluntarily incurred, on its behalf or on behalf of Landlord or on behalf of both Landlord and Tenant, any obligation to pay a commission or finder’s fee to any real estate broker or other person or entity in connection with this First Amendment.  Tenant hereby agrees to indemnify, defend and hold Landlord harmless from claims for any commission or finder’s fee charges by any real estate broker or other person or entity arising from an agreement, whether express or implied, between Tenant and such broker or other person or entity or otherwise arising from the conduct of Tenant.

 

15.          Miscellaneous.

 

(a)           Except as modified above, the terms of the Lease shall remain unchanged and in full force and effect.  Any inconsistency between the provisions of the Lease and this First Amendment shall be resolved in favor of the provisions of this First Amendment, which shall govern and control.  This First Amendment and any attached exhibit(s), which are hereby incorporated into and made an integral part of this First Amendment, set forth the entire

 

11

 

agreement between the parties with respect to the matters set forth herein and there have been no additional oral or written representations or agreement with respect to the same.

 

(b)           Submission of this First Amendment by Landlord is not an offer to enter into this First Amendment but rather is a solicitation for such an offer by Tenant.  Landlord shall not be bound by this First Amendment until Landlord has executed and delivered the same to Tenant.

 

(c)           This First Amendment may be executed in one (1) or more counterparts with the same effect as if the parties executing several counterparts had executed one (1) counterpart and all such executed counterparts shall together constitute one (1) and the same instrument.

 

[Remainder of page left intentionally blank]

 

12

 

 

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

 

	
 
    	
LANDLORD:
    
	
 
    	
 
    
	
 
    	
NOP WATERGATE LLC,
    
	
 
    	
a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
National Office Partners Limited Partnership,
    
	
 
    	
 
    	
a Delaware limited partnership,
    
	
 
    	
 
    	
its sole member
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Hines National Office Partners
    
	
 
    	
 
    	
 
    	
Limited Partnership, a Texas
    
	
 
    	
 
    	
 
    	
limited partnership, its general partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Hines Fund Management, L.L.C.,
    
	
 
    	
 
    	
 
    	
a Delaware limited liability company,
    
	
 
    	
 
    	
 
    	
its general partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Hines Interests Limited Partnership,
    
	
 
    	
 
    	
 
    	
a Delaware limited partnership,
    
	
 
    	
 
    	
 
    	
its sole member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Hines Holdings, Inc.,
    
	
 
    	
 
    	
 
    	
a Texas corporation,
    
	
 
    	
 
    	
 
    	
its general partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ James C. Buie, Jr.
    
	
 
    	
 
    	
Name:
    	
James C. Buie, Jr.
    
	
 
    	
 
    	
Title:
    	
Executive Vice President
    
	
 
    	
 
    
	
 
    	
TENANT:
    
	
 
    	
 
    
	
 
    	
ADAMAS PHARMACEUTICALS, INC.,
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Peter Hadrovic
    	
 
    
	
 
    	
Name:
    	
Peter Hadrovic
    	
 
    
	
 
    	
Title:
    	
Chief Commercial Officer
    	
 
    
									

 

13

 

Exhibit A

 

“Expansion Premises Description”

 

 

 

14

 

Exhibit B

 

“First Opportunity Space Description”

 

 

 

15

 

Exhibit C

 

“Space Plan”

 

See Attachment

 

16

 

 

17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00227-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00227-of-00352.parquet"}]]