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STANDARD FORM INDUSTRIAL BUILDING LEASE (MULTI-TENANT)

Lease Agreement

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InSys Therapeutics, Inc

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Title: STANDARD FORM INDUSTRIAL BUILDING LEASE (MULTI-TENANT)
Date: 8/17/2007
Law Firm: Barack Ferrazzano    

STANDARD FORM INDUSTRIAL BUILDING LEASE (MULTI-TENANT), Parties: insys therapeutics  inc
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Exhibit 10.13

STANDARD FORM

INDUSTRIAL BUILDING LEASE

(MULTI-TENANT)

1. BASIC TERMS . This Section 1 contains the Basic Terms of this Lease between Landlord and Tenant, named below. Other Sections of the Lease referred to in this Section 1 explain and define the Basic Terms and are to be read in conjunction with the Basic Terms.

 

  1.1 Effective Date of Lease: March 12, 2007

 

  1.2 Landlord: First Industrial, L.P., a Delaware partnership

 

  1.3 Tenant: InSys Therapeutics, Inc., a Delaware corporation

 

 

1.4

Premises: Approximately 15,839 rentable square feet in the building commonly known as Phoenix Tech Center located at 10220 S. 51 st Street, Phoenix, Arizona 85044 (the “ Building ”).

 

  1.5 Property: See Exhibit A .

 

  1.6 Lease Term: Five (5) years, (“ Term ”), commencing November 1, 2007 (“ Rent Commencement Date ”) and ending October 31, 2012, subject to Section 5.2 below (“ Expiration Date ”).

 

  1.7 Permitted Uses: Operation of administrative and sales offices, research and development and testing of therapeutics and related uses thereof.

 

  1.8 Tenant’s Guarantor: None

 

  1.9 Brokers: (See Section 23 ): (A) Tenant’s Broker: Grubb & Ellis/BRE Commercial, LLC; and (B) Landlord’s Broker: Grubb & Ellis/BRE Commercial, LLC

 

  1.10 Security/Damage Deposit: (See Section 4.4 ): $26,719.47. Additionally, InSys Therapeutics, Inc. shall secure a letter of credit with Bank of America in accordance with the terms of Section 4.4.2 .

 

  1.11 Initial Estimated Additional Rent Payable by Tenant: $3,959.75 per month

 

  1.12 Tenant’s Proportionate Share: 69%

 

  1.13 Exhibits to Lease: The following exhibits are attached to and made a part of this Lease: A (Property); A-1 (Premises); B (Tenant Operations Inquiry Form); C (Tenant’s Work); D (Confirmation of Commencement Date); E (Broom Clean Condition and Repair Requirements); F (Rules and Regulations); and G (Employee Parking Area)

2. LEASE OF PREMISES; RENT .

2.1 Lease of Premises for Lease Term . Landlord hereby leases the Premises to Tenant, and Tenant hereby rents the Premises from Landlord, for the Term and subject to the conditions of this Lease.

 

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2.2 Types of Rental Payment . Tenant shall pay net base rent to Landlord in monthly installments, in advance, on the first day of each and every calendar month during the Term of this Lease (the “ Base Rent ”) in the amounts and for the periods as set forth below, together with all rent tax payable with respect thereto, beginning on the Rent Commencement Date:

Rental Payments

 

Months

   Monthly Base Rent      Per Sq. Ft./Per Month

11/01/07 – 06/30/09

   $ 14,730.27      $ 0.93

07/01/09 – 02/28/11

   $ 15,466.78      $ 0.9765

03/01/11 – 10/31/12

   $ 16,239.73      $ 1.0253

Tenant shall also pay (a) Tenant’s Proportionate Share (as set forth in Section 1.12 ) of Operating Expenses (as hereinafter defined), and (b) any other amounts owed by Tenant hereunder (collectively, “ Additional Rent ”). In the event any monthly installment of Base Rent or Additional Rent, or both, is not paid within 5 days after the due date thereof, a late charge in an amount equal to 5% of the then delinquent installment of Base Rent and/or Additional Rent (the “ Late Charge ”) shall be imposed with respect to the then-delinquent Rent (as defined below) payment; provided, however, that with respect to the first late payment of Rent in any twelve (12) month period, Landlord shall provide written notice to Tenant of such late payment and the Late Charge shall not be payable unless Tenant shall fail to cure such late payment within five (5) days after receipt of Landlord’s written notice. For purposes of this Lease, the Late Charge, Default Interest, as defined in Section 22.3 below, Base Rent and Additional Rent shall collectively be referred to as “ Rent .” All Rent shall be paid by Tenant to Landlord, c/o First Industrial, L.P., 21125 Network Place, Chicago IL 600673-1211 or if sent by overnight courier, Bank One 7th Floor Mailroom 525 W. Monroe Chicago IL 60661 Attn: First Industrial LP at 21125 Network Place (or such other entity designated as Landlord’s management agent, if any, and if Landlord so appoints such a management agent, the “ Agent ”), or pursuant to such other directions as Landlord shall designate in this Lease or otherwise in writing to Tenant.

2.3 Covenants Concerning Rental Payments . Commencing on the Rent Commencement Date, Tenant shall pay the Rent promptly when due, without notice or demand, and without any abatement, deduction or setoff, except as otherwise provided herein. No payment by Tenant, or receipt or acceptance by Agent or Landlord, of a lesser amount than the correct Rent shall be deemed to be other than a payment on account, nor shall any endorsement or statement on any check or letter accompanying any payment be deemed an accord or satisfaction, and Agent or Landlord may accept such payment without prejudice to its right to recover the balance due or to pursue any other remedy available to Landlord. If the Rent Commencement Date occurs on a day other than the first day of a calendar month, the Rent due for the first calendar month of the Term shall be prorated on a per diem basis (based on a 360 day, 12 month year) and paid to Landlord on the Rent Commencement Date, and the Term will be extended to terminate on the last day of the calendar month in which the Expiration Date stated in Section 1.6 occurs.

3. OPERATING EXPENSES .

3.1 Definitional Terms Relating to Additional Rent . For purposes of this Section and other relevant provisions of the Lease:

3.1.1 Operating Expenses . The term “ Operating Expenses ” shall mean all costs and expenses paid or incurred by Landlord with respect to, or in connection with, the ownership,

 

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repair, restoration, maintenance and operation of the Property. Operating Expenses may include, but are not limited to, any or all of the following: (i) services provided directly by employees of Landlord or Agent in connection with the operation, maintenance or rendition of other services to or for the Property; (ii) to the extent not separately metered, billed, or furnished, all charges for utilities and services furnished to either or both of the Property and the Premises, including, without limitation, the Common Areas (as hereinafter defined), together with any taxes on such utilities; (iii) all market-based premiums for commercial property, casualty, general liability, boiler, flood, earthquake, terrorism and all other types of insurance provided by Landlord and relating to the Property, all reasonable administrative costs incurred in connection with the procurement and implementation of such insurance policies, and all deductibles paid by Landlord pursuant to insurance policies required to be maintained by Landlord under this Lease; (iv) management fees to Landlord or Agent or other persons or management entities actually involved in the management and operation of the Property, which management fee shall not exceed 5% per annum of all Rent, collected from all tenants in the Property; (v) any capital improvements made by, or on behalf of, Landlord to the Property that are either or both (a) designed to reduce Operating Expenses and (b) required to keep the Property in compliance with all governmental laws, rules and regulations applicable thereto, from time to time, the cost of which capital improvements shall be reasonably amortized by Landlord over the useful life of the improvement, in accordance with generally accepted accounting principles; (vi) all professional fees incurred in connection with the operation, management and maintenance of the Property; (vii) Taxes, as hereinafter defined in Section 3.1.3 ; and (viii) dues, fees or other costs and expenses, of any nature, due and payable to any association or comparable entity to which Landlord, as owner of the Property, is a member or otherwise belongs and that governs or controls any aspect of the ownership and operation of the Property; and (ix) any real estate taxes and common area maintenance expenses levied against, or attributable to, the Property under any declaration of covenants, conditions and restrictions, reciprocal easement agreement or comparable arrangement that encumbers and benefits the Property and other real property (e.g., a business park).

3.1.2 Notwithstanding the foregoing, Operating Expenses shall not include the following: (i) any costs or expenses for which Landlord is reimbursed or indemnified (whether by an insurer, condemnor, tenant or otherwise); (ii) overhead and administrative costs of Landlord not directly incurred in the operation and/or maintenance of the Property; (iii) depreciation or amortization of the Building or its contents or components; (iv) capital expenditures, except to the extent provided in Section 3.1.1(v) above; (v) expenses for the preparation of space or other work which Landlord performs for any tenant or prospective tenant of the Building; (vi) expenses incurred in leasing or obtaining new tenants or retaining existing tenants, including leasing commissions, legal expenses, advertising or promotion; (vii) legal expenses incurred in enforcing the terms of any lease; (viii) interest, amortization or other costs, including legal fees, associated with any mortgage, loan or refinancing of the Building or the Common Areas; (ix) expenses incurred for any necessary replacement of any item to the extent that it is covered under warranty; (x) the cost of any item or service which Tenant separately reimburses Landlord or pays to third parties, or that Landlord provides selectively to one or more tenants of the Building, other than Tenant, whether or not Landlord is reimbursed by such other tenant(s), including the actual cost of any special electrical, heating, ventilation or air conditioning required by any tenant that exceeds normal building standards or is required during times other than the business hours stated in this Lease; (xi) accounting and legal fees relating to the ownership, construction, leasing or sale of the Common Areas; (xii) any interest or penalty incurred due to the late payment of any Operating Expense; (xiii) the cost of correcting defects in the construction of the Building or the Common Areas; provided, however, that repairs resulting from ordinary wear and tear shall not be deemed to be defects; (xiv) the initial cost of tools and small equipment used in the operation and maintenance of the Building, and the Common Areas which do not exceed the cost of $1,000 per year in the aggregate; (xv) the initial cost or the replacement cost of any permanent landscaping or the regular landscaping maintenance for any property other than the Property, unless associated with fees or charges arising from or in connection with any governing association or the vested owners for the Building; (xvi) the cost of correcting any applicable

 

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building or fire code violation(s) of any other applicable law relating to the Building, or the Common Areas, or the cost of any penalty or fine incurred for noncompliance with the same; (xvii) any costs incurred to test, survey, cleanup, contain, abate or remove any environmental or hazardous waste or materials, including asbestos containing materials from the Building or the Common Areas or to remedy any breach or violation of any environmental laws; (xviii) any personal property taxes of the Landlord for equipment or items not used directly in the operation or maintenance of the Building, nor connected therewith; (xix) all expenditures pertaining to administration of the Building or the Common Areas including payroll and payroll-related expenses associated with administrative and clerical personnel except to the extent attributable based on time actually spent on the operation and maintenance of the Property; general office expenditures; other administrative expenditures (including expenditures for travel, entertainment, dues, subscriptions, donations, data processing, errors and omissions insurance, automobile allowances, political donations and professional fees of any kind) unless specifically enumerated as Operating Expenses; (xx) rentals and other related expenses, if any, incurred in leasing capital items; (xxi) any costs or expenses for sculpture, paintings, or other works of art, including, costs incurred with respect to the purchase, ownership, leasing, repair, and/or maintenance of such works of art; (xxii) contributions to Operating Expense reserves; (xxiii) the cost of overtime or other expense to Landlord in performing work expressly provided in this Lease to be borne at Landlord’s expense; (xxiv) all expenses directly resulting from the negligence or willful misconduct of the Landlord, its agents, servants or other employees; (xxv) all bad debt loss, rent loss, or reserve for bad debt or rent loss; and (xxvi) any amount paid to an entity related to Landlord which exceeds the amount that would be paid for similar goods or services on an arms-length basis between unrelated parties.

3.1.3 Taxes . The term “ Taxes ,” as referred to in Section 3.1.1(vii) above shall mean (i) all governmental taxes, assessments, fees and charges of every kind or nature (other than Landlord’s income taxes), whether general, special, ordinary or extraordinary, due at any time or from time to time, during the Term and any extensions thereof, in connection with the ownership, leasing, or operation of the Property, or of the personal property and equipment located therein or used in connection therewith; and (ii) any reasonable expenses incurred by Landlord in contesting such taxes or assessments and/or the assessed value of the Property. For purposes hereof, Tenant shall be responsible for any Taxes that are due and payable at any time or from time to time during the Term and for any Taxes that are assessed, become a lien, or accrue during any Operating Year (defined in Section 3.1.4 below), which obligation shall survive the termination or expiration of this Lease.

3.1.4 Operating Year . The term “ Operating Year ” shall mean the calendar year commencing January 1st of each year (including the calendar year within which the Rent Commencement Date occurs) during the Term.

3.2 Payment of Operating Expenses . Tenant shall pay, as Additional Rent and in accordance with the requirements of Section 3.3 , Tenant’s Proportionate Share of the Operating Expenses as set forth in Section 3.3 . Additional Rent commences to accrue upon the Commencement Date. The Tenant’s Proportionate Share of Operating Expenses payable hereunder for the Operating Years in which the Term begins and ends shall be prorated to correspond to that portion of said Operating Years occurring within the Term. Tenant’s Proportionate Share of Operating Expenses and any other sums due and payable under this Lease shall be adjusted upon receipt of the actual bills therefor, and the obligations of this Section 3 shall survive the termination or expiration of the Lease.

3.3 Payment of Additional Rent . Landlord shall have the right to reasonably estimate the Operating Expenses for each Operating Year. Upon Landlord’s or Agent’s written notice to Tenant of such estimated amount, Tenant shall pay, on the first day of each month during that Operating Year, an amount (the “ Estimated Additional Rent ”) equal to the estimate of the Tenant’s Proportionate Share of Operating Expenses divided by 12 (or the fractional portion of the Operating Year remaining at

 

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the time Landlord delivers its notice of the estimated amounts due from Tenant for that Operating Year). If the aggregate amount of Estimated Additional Rent actually paid by Tenant during any Operating Year is less than Tenant’s actual ultimate liability for Operating Expenses for that particular Operating Year, Tenant shall pay the deficiency within 30 days of Landlord’s written demand therefor. If the aggregate amount of Estimated Additional Rent actually paid by Tenant during a given Operating Year exceeds Tenant’s actual liability for such Operating Year, the excess shall be credited against the Estimated Additional Rent next due from Tenant during the immediately subsequent Operating Year, except that in the event that such excess is paid by Tenant during the final Lease Year, then upon the expiration of the Term, Landlord or Agent shall pay Tenant the then-applicable excess promptly after determination thereof. Landlord’s accounting to Tenant shall be accompanied by an itemized written statement setting forth: (a) a reconciliation of Tenant’s impound accounts of monies collected in advance by Landlord based on Landlord’s estimate of Tenant’s Pro Rata Share, and (b) the actual Operating Expenses for the subject year broken down by component expenses.

3.4 Inspection Rights . Tenant, at Tenant’s sole cost and expense, shall have the right upon fifteen (15) days’ prior written notice to Landlord (a “ Review Notice ”), to be given only within sixty (60) days after Tenant receives Landlord’s determination of Tenant’s actual ultimate liability for Operating Expenses for any particular Operating Year, to review Landlord’s books and records relating to such determination for such immediately preceding Operating Year with respect to any specific charge or charges disputed in writing by Tenant, subject to the further terms and provisions of this Section 3.4 : (a) no review shall be conducted at any time that Tenant is in breach or default of any of the terms, covenants or provisions of this Lease; (b) any review shall be conducted only by independent certified public accountants practicing for an accounting firm of national or regional prominence, employed by Tenant on an hourly or fixed fee basis, and not on a contingency fee basis; and (c) Tenant shall not review Landlord’s books and records more than one (1) time for any Operating Year. Tenant acknowledges that Tenant’s right to review Landlord’s books and records with respect to Operating Expenses for the preceding Operating Year is for the exclusive purpose of determining whether Landlord has complied with the terms of this Lease with respect to Operating Expenses. Tenant shall have sixty (60) days after Tenant’s Review Notice to complete Tenant’s review of Landlord’s books and records concerning Operating Expenses at Landlord’s accounting office. During its review, Tenant agrees to request, in writing, all pertinent documents relating to the review. If in Landlord’s possession, Landlord will provide such documents to Tenant within ten (10) days after Landlord’s receipt of Tenant’s request and Tenant shall not remove such records from Landlord’s accounting office, but Tenant shall have the right to make copies of the relevant documents at Tenant’s sole cost and expense. Tenant shall deliver to Landlord a copy of the results of such review within fifteen (15) days after receipt by Tenant. The nature and content of any review are strictly confidential. Tenant, for itself and on behalf of Tenant’s Parties (defined in Section 9.2 ), shall not disclose the information obtained from the review to any other person or entity including, without limitation, any other tenant of the Property or any representative of any such tenant of the Property. A breach of this confidentiality agreement shall constitute a Default under this Lease. No assignee or other transferee of Tenant shall conduct a review for any period during which such transferee was not in possession of the Premises. In the event Tenant’s review shall disclose that Landlord has overstated Tenant’s actual liability for Operating Expenses for such Operating Year by seven percent (7%) or more and Tenant has paid such overstated amounts, then Landlord shall pay for the reasonable costs of the review, not to exceed, however, Four Thousand and No/100 Dollars ($4,000.00).

4. USE OF PREMISES AND COMMON AREAS; SECURITY DEPOSIT .

4.1 Use of Premises and Property .

4.1.1 The Premises shall be used by the Tenant for the purpose(s) set forth in Section 1.7 above and for no other purpose whatsoever, without the prior written consent of Landlord

 

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which shall not be unreasonably withheld or delayed. Tenant shall not, at any time, use or occupy, or suffer or permit anyone to use or occupy, the Premises, or do or permit anything to be done in the Premises or the Property, in any manner that may (a) violate any Certificate of Occupancy for the Premises or the Property, provided that a copy of the same has been provided by Landlord to Tenant; (b) cause, or be liable to cause, injury to, or in any way impair the value or proper utilization of, all or any portion of the Property (including, but not limited to, the structural elements of the Property) or any equipment, facilities or systems therein; (c) constitute a violation of the laws and requirements of any public authority or the requirements of insurance bodies or the rules and regulations of the Property, including any covenant, condition or restriction affecting the Property, provided that copies of the same have been provided by Landlord to Tenant; (d) exceed the load bearing capacity of the floor of the Premises; (e) impair or tend to impair the character, reputation or appearance of the Property; or (f) unreasonably annoy, inconvenience or disrupt the operations or tenancies of other tenants or users of the Property. On or prior to the date hereof, Tenant has completed and delivered for the benefit of Landlord a “Tenant Operations Inquiry Form” in the form attached hereto as Exhibit B describing the nature of Tenant’s proposed business operations at the Premises, which form is intended to, and shall be, relied upon by Landlord. From time to time during the Term (but no more often than once in any twelve month period unless Tenant is in default hereunder or unless Tenant assigns this Lease or subleases all or any portion of the accordance with Section 8 ), Tenant shall provide an updated and current Tenant Operations Inquiry following receipt of Landlord’s written request therefor.

4.1.2 Notwithstanding any provision of this Lease to the contrary, materials of in connection with Tenant’s research, development and testing of therapeutics shall be subject to consent, which consent shall not be unreasonably withheld or delayed, and (b) all applicable laws.

4.2 Use of Common Areas . As used herein, “ Common Areas ” shall mean all areas within the Property that are available for the common use of tenants of the Property and that are not leased or held for the exclusive use of Tenant or other tenants or licensees, including, but not limited to, parking areas, driveways, sidewalks, loading areas, access roads, corridors landscaping and planted areas. Tenant shall have the nonexclusive right to use the Common Areas for the purposes intended, subject to such reasonable, non-discriminatory rules and regulations as Landlord may uniformly establish from time to time provided the same do not conflict with the terms of this Lease. Tenant shall not unreasonably interfere with the rights of any or all of Landlord, other tenants or licensees, or any other person entitled to use the Common Areas. Without limitation of the foregoing, Tenant shall not park or store any vehicles or trailers on, or conduct truck loading and unloading activities in, the Common Areas in a manner that unreasonably disturbs, disrupts or prevents the use of the Common Areas by Landlord, other tenants or licensees or other persons entitled to use the Common Areas. Landlord, from time to time, may change any or all of the size, location, nature and use of any of the Common Areas although such changes may result in inconvenience to Tenant, so long as such changes do not materially and adversely affect Tenant’s use of, or access to, the Premises. In addition to the foregoing, Landlord may, at any time, close or suspend access to any Common Areas to perform any acts in the Common Areas as, in Landlord’s reasonable judgment, are desirable to improve or maintain either or both of the Premises and the Property, or are required in order to satisfy Landlord’s obligations under this Lease; provided, however, that Landlord shall use reasonable efforts to limit any disruption of Tenant’s use and operation of the Premises in connection therewith, and so long as such acts do not materially and adversely affect Tenant’s use of, or access to, the Premises. Landlord shall, at no cost to Tenant, provide Tenant with forty-eight (48) surface parking spaces, of which eleven (11) shall be covered, in the location identified on Exhibit G attached hereto. Notwithstanding anything contained in this Lease to the contrary, if at any time, Landlord determines, in its sole discretion, that the parking areas at the Property are or have become overburdened, Landlord may allocate parking on a proportionate basis or assign parking spaces among all tenants at the Property, provided that the number of spaces allocated to Tenant shall not be reduced below the amount of spaces identified above or changed from the type of spaces identified above.

 

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4.3 Signage . Tenant shall not affix any sign of any size or character to any portion of the Property, without prior written approval of Landlord, which approval shall not be unreasonably withheld or delayed. Tenant shall remove all signs of Tenant upon the expiration or earlier termination of this Lease and immediately repair any damage to either or both of the Property and the Premises caused by, or resulting from, such removal.

4. 4 Security/Damage Deposit; Letter of Credit .

4.4.1 Deposit . Simultaneously with the execution and delivery of this Lease, Tenant shall deposit with Landlord or Agent the sum set forth in Section 1.10 above, in cash (the “ Security ”), representing security for the performance by Tenant of the covenants and obligations hereunder. The Security shall be held by Landlord or Agent, without interest, in favor of Tenant; provided, however, that no trust relationship shall be deemed created thereby; the Security may be commingled with other assets of Landlord; and Landlord shall not be required to pay any interest on the Security. If Tenant defaults in the performance of any of its covenants hereunder, Landlord or Agent may, without notice to Tenant, apply all or any part of the Security to the cure of such default or the payment of any sums then due from Tenant under this Lease (including, but not limited to, amounts due under Section 22.2 of this Lease as a consequence of termination of this Lease or Tenant’s right to possession), in addition to any other remedies available to Landlord. In the event the Security is so applied, Tenant shall, upon demand, immediately deposit with Landlord or Agent a sum equal to the amount so used. If Tenant fully and faithfully complies with all the covenants and obligations hereunder, the Security (or any balance thereof) shall be returned to Tenant within thirty (30) days after the last to occur of (i) the date the Term expires or terminates or (ii) delivery to Landlord of possession of the Premises. Landlord may deliver the Security to any lender with a mortgage lien encumbering the Property or to any Successor Landlord (defined below), and thereupon Landlord and Agent shall be discharged from any further liability with respect to the Security.

4.4.2 Letter of Credit .

4.4.2.1 Within three (3) weeks after complete execution of this Lease, Tenant shall deliver to Landlord, as protection for the full and faithful performance by Tenant of all its obligations under this Lease and for all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default by Tenant under this Lease, an irrevocable and unconditional negotiable clean standby letter of credit (the “ Letter of Credit ”), in form and substance acceptable to Landlord in its sole discretion, containing the terms required herein, payable in the City of Phoenix, Arizona, running in favor of Landlord and issued by Bank of America (the “ Bank ”), in the amount of $100,000.00 (the “ Letter of Credit Amount ”). On or before the Commencement Date, Tenant shall provide to Landlord, for Landlord’s approval, a draft of the proposed form of the Letter of Credit. After Landlord approves the draft, Tenant shall provide to Landlord the original Letter of Credit by the deadline set forth above. The Letter of Credit shall (i) be “callable” at sight, irrevocable and unconditional, (ii) be maintained in effect, whether through automatic renewal or extension, for the period from the Commencement Date and continuing until the date (the “ LC Expiration Date ”) that is one hundred twenty (120) days after the expiration of the Lease Term, and Tenant shall deliver a new Letter of Credit or certificate of renewal or extension to Landlord at least sixty (60) days prior to the expiration of the Letter of Credit then held by Landlord, without any action whatsoever on the part of Landlord, (iii) be fully assignable by Landlord, its successors and assigns, (iv) permit partial draws and multiple presentations and drawings, and (v) be otherwise subject to the Uniform Customs and Practices for Documentary Credits (1993-Rev), International Chamber of Commerce Publication #500, or the International Standby Practices-ISP 98, International Chamber of Commerce Publication #590. In addition to the foregoing, the form and terms of the Letter of Credit shall be acceptable to Landlord, in Landlord’s sole discretion. Landlord, or its then managing agent, shall have

 

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the right to draw down an amount up to the face amount of the Letter of Credit if any of the following shall have occurred or be applicable: (1) such amount is due to Landlord under the terms and conditions of this Lease, or (2) Tenant has filed a voluntary petition under the U.S. Bankruptcy Code or any state bankruptcy code (collectively, “ Bankruptcy Code ”), or (3) an involuntary petition has been filed against Tenant under the Bankruptcy Code, or (4) the Bank has notified Landlord that the Letter of Credit will not be renewed or extended through the LC Expiration Date. The Letter of Credit will be honored by the Bank regardless of whether Tenant disputes Landlord’s rights to draw upon the Letter of Credit. Within thirty (30) days after the expiration or earlier termination of this Lease and provided Tenant has fully complied with all of its obligations under this Lease, Landlord shall promptly return the Letter of Credit to Tenant.

4.4.2.2 The Letter of Credit shall also provide that Landlord, its successors and assigns, may, at any time and without notice to Tenant and without first obtaining Tenant’s consent thereto, transfer (one or more times) all or any portion of its interest in and to the Letter of Credit to another party, person or entity in connection with a sale, transfer or financing of Landlord’s interest in the Building; provided, however, if such transfer of Landlord’s interest in and to the Letter of Credit is made in connection with a financing, such transfer may be made separate from or as a part of the assignment by Landlord of its rights and interests in and to this Lease. In the event of a transfer of Landlord’s interest in the Building, Landlord shall transfer the Letter of Credit, in whole or in part, to the transferee and thereupon Landlord shall, without any further agreement between the parties, be released by Tenant from all liability therefor, and it is agreed that the provisions hereof shall apply to every transfer or assignment of the whole or any portion of said Letter of Credit to a new landlord. In connection with any such transfer of the Letter of Credit by Landlord. Tenant shall, at Tenant’s sole cost and expense, execute and submit to the Bank such applications, documents and instruments as may be necessary to effectuate such transfer, and Tenant shall be responsible for paying the Bank’s transfer and processing fees in connection therewith and, if Landlord advances any such fees (without having any obligation to do so), Tenant shall reimburse Landlord for all such fees as Additional Rent within ten (10) days after Landlord’s written request therefor.

4.4.2.3 If, as a result of any drawing by Landlord on the Letter of Credit, the amount of the Letter of Credit shall be less than the Letter of Credit Amount, Tenant shall, within five (5) days thereafter, provide Landlord with additional letter(s) of credit in an amount equal to the deficiency, and any such additional letter(s) of credit shall comply with all of the provisions of this Section 4.4.2 , and if Tenant fails to comply with the foregoing, notwithstanding anything to the contrary contained in Section 22 below, the same shall constitute an incurable event of default by Tenant. Tenant further covenants and warrants that it will neither assign nor encumber the Letter of Credit or any part thereof and that neither Landlord nor its successors or assigns will be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance. Without limiting the generality of the foregoing, if the Letter of Credit expires earlier than the LC Expiration Date, Landlord will accept a renewal thereof (such renewal letter of credit to be in effect and delivered to Landlord, as applicable, not later than sixty [60] days prior to the expiration of the Letter of Credit), which shall be irrevocable and automatically renewable as above provided through the LC Expiration Date upon the same terms as the expiring Letter of Credit or such other terms as may be acceptable to Landlord in its sole discretion. However, if the Letter of Credit is not timely renewed, or if Tenant fails to maintain the Letter of Credit in the amount and in accordance with the terms set forth in this Section 4.4.2 , Landlord shall have the right to present the Letter of Credit to the Bank in accordance with the terms of this Section 4.4.2 , and the proceeds of the Letter of Credit may be applied by Landlord against any Base Rent, Additional Rent and other charges payable by Tenant under this Lease that are not paid when due and/or to pay for all losses and damages that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result of any breach or default by Tenant under this Lease. Any unused proceeds shall constitute the property of Landlord and need not be segregated from Landlord’s other assets. Landlord agrees to pay to Tenant

 

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within thirty (30) days after the LC Expiration Date the amount of any proceeds of the Letter of Credit received by Landlord and not applied against any Base Rent, Additional Rent and other charges payable by Tenant under this Lease that were not paid when due or used to pay for any losses and/or damages suffered by Landlord (or reasonably estimated by Landlord that it will suffer) as a result of any breach or default by Tenant under this Lease; provided, however, that if prior to the LC Expiration Date a voluntary petition is filed by Tenant, or an involuntary petition is filed against Tenant by any of Tenant’s creditors, under the Bankruptcy Code, then Landlord shall not be obligated to make such payment in the amount of the unused Letter of Credit proceeds until either all preference issues relating to payments under this Lease have been resolved in such bankruptcy or reorganization case or such bankruptcy or reorganization case has been dismissed, in each case pursuant to a final court order not subject to appeal or any stay pending appeal.

4.4.2.4 Tenant hereby acknowledges and agrees that Landlord is entering into this Lease in material reliance upon the ability of Landlord to draw upon the Letter of Credit upon the occurrence of any breach or default on the part of Tenant under this Lease. If Tenant shall breach any provision of this Lease or otherwise be in default hereunder, or if a voluntary petition is filed by Tenant, or an involuntary petition is filed against Tenant by any of Tenant’s creditors, under the Bankruptcy Code, Landlord may, but without obligation to do so, and without notice to Tenant, draw upon the Letter of Credit, in part or in whole, to cure any breach or default of Tenant and/or to compensate Landlord for any and all damages of any kind or nature sustained or which Landlord reasonably estimates that it will sustain resulting from Tenant’s breach or default. If for any reason the Letter of Credit does not permit partial draws, Landlord shall have the right to make a full draw on the Letter of Credit, notwithstanding that the full amount may not be required to cure any default by Tenant. In order to draw upon the Letter of Credit, Landlord shall submit a statement, signed by Landlord or Landlord’s managing agent or legal counsel, bearing the clause “Drawn under [name of Bank] Letter of Credit No. _____”, which statement shall be accompanied by the original Letter of Credit. The use, application or retention of the Letter of Credit, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by any applicable law, it being intended that Landlord shall not first be required to proceed against the Letter of Credit, and shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. Tenant agrees not to interfere in any way with payment to Landlord of the proceeds of the Letter of Credit, either prior to or following a “draw” by Landlord of any portion of the Letter of Credit, regardless of whether any dispute exists between Tenant and Landlord as to Landlord’s right to draw upon the Letter of Credit. No condition or term of this Lease shall be deemed to render the Letter of Credit conditional to justify the issuer of the Letter of Credit in failing to honor a drawing upon such Letter of Credit in a timely manner. Tenant agrees and acknowledges that (a) the Letter of Credit constitutes a separate and independent contract between Landlord and the Bank, (b) Tenant is not a third party beneficiary of such contract, (c) Tenant has no property interest whatsoever in the Letter of Credit or the proceeds thereof, and (d) in the event Tenant becomes a debtor under any chapter of the Bankruptcy Code, neither Tenant, any trustee, nor Tenant’s bankruptcy estate shall have any right to restrict or limit Landlord’s claim and/or rights to the Letter of Credit and/or the proceeds thereof by application of Section 502(b)(6) of the U.S. Bankruptcy Code or otherwise.

4.4.2.5 Landlord and Tenant acknowledge and agree that in no event or circumstance shall the Letter of Credit or any renewal thereof or substitute therefor or any proceeds thereof be deemed to be or treated as a “security deposit”. The parties hereto (A) recite that the Letter of Credit is not intended to serve as a security deposit and any and all laws, rules and regulations applicable to security deposits in the commercial context (“ Security Deposit Laws ”) shall have no applicability or relevancy thereto and (B) waive any and all rights, duties and obligations either party may now or, in the future, will have relating to or arising from the Security Deposit Laws. Tenant hereby waives the provisions of any Security Deposit Laws, now or hereafter in effect, which (i) establish the time frame by

 

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which Landlord must refund a security deposit under a lease, and/or (ii) provide that Landlord may claim from the security deposit only those sums reasonably necessary to remedy defaults in the payment of rent, to repair damage caused by Tenant or to clean the Premises, it being agreed that Landlord may, in addition, claim those sums specified in this Section 4.4.2 and/or those sums reasonably necessary to compensate Landlord for any loss or damage caused by Tenant’s breach of this Lease or the acts or omissions of Tenant, including any damages Landlord suffers following termination of this Lease.

5. CONDITION AND DELIVERY OF PREMISES .

5.1 Condition of Premises . Tenant agrees that Tenant is familiar with the condition of both the Premises and the Property, and Tenant hereby accepts the foregoing on an “AS-IS,” “WHERE-IS” basis, except as is otherwise expressly and specifically described on Exhibit C attached hereto and incorporated herein by this reference, it being understood that, if Landlord has agreed to perform any tenant improvements in or to the Premises in consideration of Tenant’s entry into this Lease (collectively, “ Landlord’s Work ”), all of Landlord’s Work shall be described on Exhibit C . Tenant acknowledges that neither Landlord nor Agent, nor any representative of Landlord, has made any representation as to the condition of the foregoing or the suitability of the foregoing for Tenant’s intended use. Tenant represents and warrants that Tenant has made its own inspection of the foregoing. Neither Landlord nor Agent shall be obligated to make any repairs, replacements or improvements (whether structural or otherwise) of any kind or nature to the foregoing in connection with, or in consideration of, this Lease, except as expressly and specifically set forth in this Lease, including, but not limited to, Exhibit C .

5.2 Delivery of Premises . Landlord shall deliver to Tenant, and Tenant shall accept from Landlord, possession of the Premises on or before the later of (a) the date Tenant shall have delivered to Landlord (i) the Security, (ii) all Tenant Policies or Certificates of Insurance and applicable endorsements (as required by Section 10.2 ), and (iii) the draft Letter of Credit required by Section 4.4.2 above (collectively, the “ Pre-Commencement Deliveries ”), and (b) March 19, 2007 (the “ Commencement Date ”). Notwithstanding the foregoing, if Tenant shall have delivered to Landlord the Pre-Commencement Deliveries on or before March 19, 2007, and Landlord has not delivered or attempted to deliver possession of the Premises to Tenant on or before March 19, 2007, Tenant shall have the right to terminate this Lease by written notice to Landlord on or before March 19, 2007, in which event any amounts previously paid by Tenant to Landlord shall be returned to Tenant and the parties shall have no further obligations hereunder.

5.3 Confirmation of Commencement Date . Upon Landlord’s delivery of possession, and as a condition precedent to such delivery, of the Premises to Tenant, and Tenant shall deliver to Landlord a Confirmation of Commencement Date in substantially the form attached hereto as Exhibit D .

6. SUBORDINATION; ESTOPPEL CERTIFICATES; ATTORNMENT .

6.1 Subordination and Attornment . This Lease is and shall be subject and subordinate at all times to (a) all ground leases or underlying leases that may now exist or hereafter be executed affecting either or both of the Premises and the Property and (b) any mortgage or deed of trust that may now exist or hereafter be placed upon, and encumber, any or all of (x) the Property; (y) any ground leases or underlying leases for the benefit of the Property; and (z) all or any portion of Landlord’s interest or estate in any of said items. Tenant shall execute and deliver, within ten (10) days of Landlord’s request, and in the form reasonably requested by Landlord (or its lender), any documents evidencing the subordination of this Lease. Tenant hereby covenants and agrees that Tenant shall attorn to any successor to Landlord. Notwithstanding the foregoing, upon the written request of Tenant,

 

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Landlord shall use commercially reasonable efforts to cause a future lessor, mortgagee, trustee, or holder of any such mortgage or deed of trust (collectively, a “ Lender ”), if any, to deliver to Tenant such Lender’s customary subordination, non-disturbance and attornment agreement (“ SNDA ”) in form and substance reasonably suitable to said Lender, which provides, among other things, that Tenant’s right to possession of the Premises shall not be disturbed on account of such subordination so long as Tenant has not committed a default under this Lease; provided, however, it shall not be a default by Landlord or a defense to the enforceability of this Lease in favor of Tenant if Landlord is unable to obtain delivery of such an SNDA to Tenant, and further provided that Tenant shall agree to pay all actual and reasonable fees and costs incurred by Landlord and/or its Lender in connection with procuring or attempting to procure any such SNDA.

6.2 Estoppel Certificate . Tenant agrees, from time to time and within 10 days after request by Landlord, to deliver to Landlord, or Landlord’s designee, an estoppel certificate stating such matters pertaining to this Lease as may be reasonably requested by Landlord. Failure by Tenant to timely execute and deliver such certificate shall constitute an acceptance of the Premises and acknowledgment by Tenant that the statements included therein are true and correct without exception. Notwithstanding anything to the contrary contained in this Section 6.2 , any estoppel agreement executed by Tenant pursuant to this Section 6.2 shall not include provisions which modify the provisions of this Lease, nor which result in any increase of Tenant’s obligations or decrease any of Tenant’s rights under this Lease.

6.3 Transfer by Landlord . In the event of a sale or conveyance by Landlord of the Property, the same shall operate to release Landlord from any future liability for any of the covenants or conditions, express or implied, herein contained in favor of Tenant, and in such event Tenant agrees to look solely to Landlord’s successor in interest (“ Successor Landlord ”) with respect thereto and agrees to attorn to such successor.

7. QUIET ENJOYMENT . Subject to the provisions of this Lease, so long as no Event of Default (as defined in Section 21.1 ) has occurred and is continuing, Tenant pays all of the Rent and performs all of its other obligations hereunder, Tenant shall not be disturbed in its possession of the Premises by Landlord, Agent or any other person lawfully claiming through or under Landlord; provided, however, in addition to Landlord’s rights under Section 16 and elsewhere in this Lease, Landlord and Landlord’s agents, employees, contractors and representatives shall be provided reasonable access to the Premises such that Landlord and Landlord’s agents, employees, contractors and representatives may perform the General Maintenance Services (as hereinafter defined) without undue interruption, delay or hindrance. This covenant shall be construed as a covenant running with the Property and is not a personal covenant of Landlord. Tenant shall not unreasonably interrupt, delay, prevent or hinder the performance of the General Maintenance Services by or on behalf of Landlord. Notwithstanding the foregoing, however, Tenant acknowledges and agrees that Landlord shall have the unfettered and unilateral right to use portions of the Common Areas (inclusive of the roof of the Building) for such purposes and uses as Landlord may desire; provided, however, that in all events and under all circumstances, Landlord’s use of any portion of the Common Areas shall not interfere, in any material respect, with any or all of (a) Tenant’s rights to occupy and use the Common Areas (in the manner and for the purposes contemplated hereunder); (b) Tenant’s right to utilize the vehicular parking areas located on the Common Areas; and (c) Tenant’s right of access, ingress and egress to and from the Common Areas.

8. ASSIGNMENT AND SUBLETTING . Tenant shall not (a) assign (whether directly or indirectly), in whole or in part, this Lease, or (b) allow this Lease to be assigned, in whole or in part, by operation of law or otherwise, including, without limitation, by transfer of 49% or more of stock, membership interests or partnership interests, or by dissolution, which transfer of a controlling interest, or dissolution shall be deemed an assignment for purposes of this Lease, or (c) mortgage or pledge the Lease, or (d) sublet the Premises, in whole or in part, without (in the case of any or all of (a) through (d)

 

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above) the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed. Notwithstanding the provisions of this Section 8 , Landlord hereby acknowledges and consents to Tenant’s right, without further approval from Landlord, but only after written notice to Landlord, to sublease the Premises or assign its interest in this Lease (i) to a person or entity that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with Tenant; (ii) in the event of the merger or consolidation of Tenant with another entity; (iii) in the event of a sale or transfer of all or substantially all of the stock of Tenant or all or substantially all of Tenant’s assets; or (iv) in the event Tenant has an initial public offering of its shares pursuant to the Security and Exchange Act of 1933 or any other comparable federal or state securities acts; provided that immediately following the events enumerated in clauses (i) to (iv) above, the tangible net worth of Tenant, calculated in accordance with generally accepted accounting principles, consistently applied, and the credit standing of Tenant is not less than the tangible net worth, calculated in accordance with generally accepted accounting principles, consistently applied, and credit standing of Tenant immediately prior to the events described in clauses (i) through (iv) above; and provided further that Tenant advises Landlord, in writing, in advance, and otherwise complies with the succeeding provisions of this Section 8 . In no event shall any assignment or sublease ever release Tenant or any guarantor from any obligation or liability hereunder; and in the case of any assignment, Landlord shall retain all rights with respect to the Security. Any purported assignment, mortgage, transfer, pledge or sublease made without the prior written consent of Landlord shall be absolutely null and void. No assignment of this Lease shall be effective and valid unless and until the assignee executes and delivers to Landlord any and all documentation reasonably required by Landlord in order to evidence assignee’s assumption of all obligations of Tenant hereunder. Regardless of whether or not an assignee or sublessee executes and delivers any documentation to Landlord pursuant to the preceding sentence, any assignee or sublessee shall be deemed to have automatically attorned to Landlord in the event of any termination of this Lease. If this Lease is assigned, or if the Premises (or any part thereof) are sublet or used or occupied by anyone other than Tenant, whether or not in violation of this Lease, Landlord or Agent may (without prejudice to, or waiver of its rights), collect Rent from the assignee, subtenant or occupant. In the event of an assignment of this Lease and the payment of consideration from the assignee to the Tenant in connection therewith, 50% of such consideration shall be paid to Landlord. With respect to the allocable portion of the Premises sublet, in the event that the total rent and any other considerations received under any sublease by Tenant is greater than the total Rent required to be paid, from time to time, under this Lease, Tenant shall pay to Landlord fifty percent (50%) of such excess as received from any subtenant and such amount shall he deemed a component of the Additional Rent.

9. COMPLIANCE WITH LAWS .

9.1 Compliance with Laws . Tenant shall, at its sole reasonable expense (regardless of the cost thereof), comply with all local, state and federal laws, rules, regulations and requirements now or hereafter in force and all judicial and administrative decisions in connection with the enforcement thereof (collectively, “ Laws ”), pertaining to either or both of the Premises and Tenant’s use and occupancy thereof, and including, but not limited to, all Laws concerning or addressing matters of an environmental nature. If any license or permit is required for the conduct of Tenant’s business in the Premises, Tenant, at its sole expense, shall procure such license prior to the Commencement Date, and shall maintain such license or permit in good standing throughout the Term. Tenant shall give prompt notice to Landlord of any written notice it receives of the alleged violation of any Law or requirement of any governmental or administrative authority with respect to either or both of the Premises and the use or occupation thereof.

9.2 Hazardous Materials . If, at any time or from time to time during the Term (or any extension thereof), any Hazardous Material (defined below) is generated, transported, stored, used, treated or disposed of at, to, from, on or in either or both of the Premises and the Property by, or as a

 

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result of any act or omission of, any or all of Tenant and any or all of Tenant’s Parties (defined below): (i) Tenant shall, at its own cost, at all times comply (and cause all others to comply) with all Laws relating to Hazardous Materials, and Tenant shall further, at its own cost, obtain and maintain in full force and effect at all times all permits and other approvals required in connection therewith; (ii) Tenant shall promptly provide Landlord or Agent with complete copies of all communications, permits or agreements with, from or issued by any governmental authority or agency (federal, state or local) or any private entity relating in any way to the presence, release, threat of release, or placement of Hazardous Materials on or in the Premises or any portion of the Property, or the generation, transportation, storage, use, treatment, or disposal at, on, in or from the Premises, of any Hazardous Materials; (iii) Landlord, Agent and their respective agents and employees shall have the right to either or both (x) enter the Premises upon reasonable prior written notice to Tenant and (y) conduct appropriate tests for the purposes of ascertaining Tenant’s compliance with all applicable Laws or permits relating in any way to the generation, transport, storage, use, treatment, disposal or presence of Hazardous Materials on, at, in or from all or any portion of either or both of the Premises and the Property; and (iv) upon written request by Landlord or Agent, Tenant shall provide Landlord with the results of reasonably appropriate tests of air, water or soil to demonstrate that Tenant complies with all applicable Laws or permits relating in any way to the generation, transport, storage, use, treatment, disposal or presence of Hazardous Materials on, at, in or from all or any portion of either or both of the Premises and the Property. This Section 9.1 does not authorize the generation, transportation, storage, use, treatment or disposal of any Hazardous Materials at, to, from, on or in the Premises in contravention of this Section 9 . Tenant covenants to investigate, clean up and otherwise remediate, at Tenant’s sole expense, any release of Hazardous Materials caused, contributed to, or created by any or all of (A) Tenant and (B) any or all of Tenant’s officers, directors, members, managers, partners, invitees, agents, employees, contractors or representatives (“ Tenant Parties ”) during the Term. Such investigation and remediation shall be performed only after Tenant has obtained Landlord’s prior written consent; provided, however, that Tenant shall be entitled to respond immediately to an emergency without first obtaining such consent. All remediation shall be performed in strict compliance with Laws and to the reasonable satisfaction of Landlord. Tenant shall not enter into any settlement agreement, consent decree or other compromise with respect to any claims relating to any Hazardous Materials in any way connected to the Premises without first obtaining Landlord’s written consent (which consent may be given or withheld in Landlord’s sole, but reasonable, discretion) and affording Landlord the reasonable opportunity to participate in any such proceedings. As used herein, the term, “ Hazardous Materials ,” shall mean any waste, material or substance (whether in the form of liquids, solids or gases, and whether or not airborne) that is or may be deemed to be or include a pesticide, petroleum, asbestos, polychlorinated biphenyl, radioactive material, urea formaldehyde or any other pollutant or contaminant that is or may be deemed to be hazardous, toxic, ignitable, reactive, corrosive, dangerous, harmful or injurious, or that presents a risk to public health or to the environment, and that is or becomes regulated by any Law. The undertakings, covenants and obligations imposed on Tenant under this Section 9.1 shall survive the termination or expiration of this Lease.

10. INSURANCE .

10.1 Insurance to be Maintained by Landlord . Landlord shall maintain: (a) a commercial property insurance policy covering the Property (at its full replacement cost), but excluding Tenant’s personal property; (b) commercial general public liability insurance covering Landlord for claims arising out of liability for bodily injury, death, personal injury, advertising injury and property damage occurring in and about the Property and otherwise resulting from any acts and operations of Landlord, its agents and employees; (c) rent loss insurance; and (d) any other insurance coverage deemed appropriate by Landlord or required by Landlord’s lender. All of the coverages described in (a) through (d) shall be determined from time to time by Landlord, in its sole discretion. All insurance maintained by Landlord shall he in addition to and not in lieu of the insurance required to be maintained by the Tenant.

 

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10.2 Insurance to be Maintained by Tenant . Tenant shall purchase, at its own expense, and keep in force at all times during this Lease the policies of insurance set forth below (collectively, “ Tenant’s Policies ”). All Tenant’s Policies shall (a) be issued by an insurance company with a Best rating of A or better and otherwise reasonably acceptable to Landlord and shall be licensed to do business in the state in which the Property is located; (b) provide that said insurance shall not be canceled or materially modified unless 30 days’ prior written notice shall have been given to Landlord; (c) provide for deductible amounts that are reasonably acceptable to Landlord (and its lender, if applicable) and (d) otherwise be in such form, and include such coverages, as Landlord may reasonably require. The Tenant’s Policies described in (i) and (ii) below shall (1) provide coverage on an occurrence basis; (2) name First Industrial, L.P. (and its lender, if applicable) as additional insured; (3) provide coverage, to the extent insurable, for the indemnity obligations of Tenant under this Lease; (4) contain a separation of insured parties provision; (5) be primary, not contributing with, and not in excess of, coverage that Landlord may carry; and (6) provide coverage with no exclusion for a pollution incident arising from a hostile fire, All Tenant’s Policies (or, at Landlord’s option, Certificates of Insurance and applicable endorsements, including, without limitation, an “Additional Insured-Managers or Landlords of Premises” endorsement) shall be delivered to Landlord prior to the Commencement Date and renewals thereof shall be delivered to Landlord’s Corporate and Regional Notice Addresses at least 30 days prior to the applicable expiration date of each Tenant’s Policy. In the event that Tenant fails, at any time or from time to time, to comply with the requirements of the preceding sentence, Landlord may (i) order such insurance and charge the cost thereof to Tenant, which amount shall be payable by Tenant to Landlord upon demand, as Additional Rent or (ii) impose on Tenant, as Additional Rent, a monthly delinquency fee, for each month during which Tenant fails to comply with the foregoing obligation, in an amount equal to five percent (5%) of the Base Rent then in effect. Tenant shall give prompt notice to Landlord and Agent of any bodily injury, death, personal injury, advertising injury or property damage occurring in and about the Property.

Tenant shall purchase and maintain, throughout the Term, a Tenant’s Policy(ies) of (i) commercial general or excess liability insurance, including personal injury and property damage, in the amount of not less than $2,000,000.00 per occurrence, and $5,000,000.00 annual general aggregate, per location; (ii) comprehensive automobile liability insurance covering Tenant, against any personal injuries or deaths of persons and property damage based upon or arising out of the ownership, use, occupancy or maintenance of a motor vehicle at the Premises and all areas appurtenant thereto in the amount of not less than $1,000,000, combined single limit; (iii) commercial property insurance covering Tenant’s personal property (at its full replacement cost); and (iv) workers’ compensation insurance per the applicable state statutes covering all employees of Tenant; and if Tenant handles, stores or utilizes Hazardous Materials in its business operations, (v) pollution legal liability insurance.

10.3 Waiver of Subrogation . Notwithstanding anything to the contrary in this Lease, Landlord and Tenant mutually waive their respective rights of recovery against each other and each other’s officers, directors, constituent partners, members, agents and employees, and Tenant further waives such rights against (a) each lessor under any ground or underlying lease encumbering the Property and (b) each lender under any mortgage or deed of trust or other lien encumbering the Property (or any portion thereof or interest therein), to the extent any loss is insured against or required to be insured against under this Lease, including, but not limited to, losses, deductibles or self insured retentions covered by Landlord’s or Tenant’s commercial property, general liability, automobile liability or workers’ compensation policies described above, This provision is intended to waive, fully and for the benefit of each party to this Lease, any and all rights and claims that might give rise to a right of subrogation by any insurance carrier. Each party shall cause its respective insurance policy(ies) to be endorsed to evidence compliance with such waiver.

 

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11. ALTERATIONS . Tenant may, from time to time, at its expense, make alterations or improvements in and to the Premises (hereinafter collectively referred to as “ Alterations ”), provided that Tenant first obtains the written consent of Landlord, which consent shall not be unreasonably withheld or delayed. All of the following shall apply with respect to all Alterations: (a) the Alterations are non-structural and the structural integrity of the Property shall not be affected; (b) the Alterations are to the interior of the Premises; (c) subject to the mod


 
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