Exhibit 1.1
[______________] Shares of Common Stock
and
[_____________] Warrants to Purchase an Aggregate of
[_____________] Shares of Common Stock
MABVAX THERAPEUTICS HOLDINGS, INC.
UNDERWRITING AGREEMENT
August [___], 2015
Laidlaw & Company (UK) Ltd.
as Representative of the several
Underwriters named in
Schedule I
hereto
c/o Laidlaw & Company (UK) Ltd.
546 Fifth Avenue, 5
th
Floor
New York, New York 10036
Ladies and Gentlemen:
MabVax Therapeutics Holdings, Inc., a Delaware corporation (the “
Company
”), proposes, subject to the terms and conditions contained in this agreement (this “
Agreement
”), to sell to you and the other underwriters named on
Schedule I
hereto (collectively, the “
Underwriters
”), for whom you are acting as Representative (the “
Representative
”), an aggregate of [___________] shares (the “
Firm Shares
”) of the Company’s common stock, $0.01 par value per share (the “
Common Stock
”). For every two Firm Shares issued and sold by the Company, the Company shall issue and sell to the several Underwriters one warrant to purchase one share of Common Stock at an initial exercise price of $[___] per share ([__]% of the public offering price per Firm Share in the offering), subject to adjustment as provided therein (each, a “
Warrant
” and collectively, the “
Warrants
”), or an aggregate of [________] Warrants to purchase an aggregate of [______] shares of Common Stock (the “
Firm Warrants
” and together with the Firm Shares, the “
Firm Securities
”). The Warrants shall be exercisable, at any time or from time to time, from and after the Applicable Time and at or before 5:00 p.m., Eastern time, on [_________], 20[__]. The Firm Shares and the Firm Warrants will be purchased separately and will be separately transferrable immediately upon issuance. The respective amounts of the Firm Shares and Firm Warrants to be purchased by each of the several Underwriters are set forth opposite their names on
Schedule I
hereto. In addition, the Company proposes to grant to the Underwriters an option to purchase from the Company (i) up to an additional [__________] shares of Common Stock, representing up to 15% of the Firm Shares sold in the offering (the “
Option Shares
”), for the purpose of covering over-allotments, if any, in connection with the sale of the Firm Shares, and (ii) up to an additional [________] Warrants to purchase an additional [________] shares of Common Stock, representing up to 15% of the Firm Warrants sold in the offering (the “
Option Warrants
” and together with the Option Shares, the “
Option Securities
”), for the purpose of covering over-allotments, if any, in connection with the sale of the Firm Warrants. The Firm Shares and the Option Shares are collectively referred to herein as the “
Shares
.” For the avoidance of doubt, the term “
Warrants
” includes the Firm Warrants and the Option Warrants, collectively. The shares of Common Stock underlying the Firm Warrants and the Option Warrants are collectively referred to herein as the “
Warrant Shares
.” The Firm Securities, the Option Securities and the Warrant Shares are referred to herein collectively as the “
Securities
.”
The Company has prepared and filed with the Securities and Exchange Commission (the “
Commission
”) under the Securities Act of 1933, as amended (the “
Securities Act
”), and the published rules and regulations thereunder (the “
Rules
”) adopted by the Commission, a Registration Statement (as hereinafter defined) on Form S-1 (No. 333-204803), including a Preliminary Prospectus (as hereinafter defined), and such amendments thereof as may have been required to the date of this Agreement. Copies of such Registration Statement (including all amendments thereof) and of the related Preliminary Prospectus have heretofore been delivered by the Company to you. The term “
Preliminary Prospectus
” means any preliminary prospectus included at any time as a part of the Registration Statement or filed with the Commission by the Company pursuant to Rule 424(a) of the Rules. The term “
Registration Statement
” as used in this Agreement means the initial registration statement (including all exhibits, financial schedules and all documents and information deemed to be a part of the Registration Statement), as amended at the time and on the date it becomes effective (the “
Effective Date
”), including the information (if any) contained in the form of final prospectus filed with the Commission pursuant to Rule 424(b) of the Rules and deemed to be part thereof at the time of effectiveness pursuant to Rule 430A of the Rules. If the Company has filed an abbreviated registration statement to register additional Securities pursuant to Rule 462(b) under the Rules (the “
462(b) Registration Statement
”), then any reference herein to the Registration Statement shall also be deemed to include such 462(b) Registration Statement. The term “
Prospectus
” as used in this Agreement means the prospectus in the form included in the Registration Statement at the time of effectiveness or, if Rule 430A of the Rules is relied on, the term Prospectus shall also include the final prospectus filed with the Commission pursuant to and within the time limits described in Rule 424(b) of the Rules.
The Company understands that the Underwriters propose to make a public offering of the Securities, as set forth in and pursuant to the Statutory Prospectus (as hereinafter defined) and the Prospectus, as soon after the Effective Date and the date of this Agreement as the Representative deems advisable. The Company hereby confirms that the Underwriters and dealers have been authorized to distribute or cause to be distributed each Preliminary Prospectus, and each Issuer Free Writing Prospectus (as hereinafter defined) and are authorized to distribute the Prospectus (as from time to time amended or supplemented if the Company furnishes amendments or supplements thereto to the Underwriters).
1.
Sale, Purchase, Delivery and Payment for the Firm Securities and Option Securities
. On the basis of the representations, warranties and agreements contained in, and subject to the terms and conditions of, this Agreement:
(a) The Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, (i) the number of Firm Shares set forth opposite the name of such Underwriter under the column “Total Number of Firm Shares to be Purchased” on
Schedule I
hereto, subject to adjustment in accordance with
Section 8
, at a purchase price of $[____] per Firm Share (93% of the per Firm Share public offering price) (the “
Initial Share Price
”), and (ii) the number of Firm Warrants set forth opposite the name of such Underwriter under the column “Total Number of Firm Warrants to be Purchased” on
Schedule I
hereto, subject to adjustment in accordance with
Section 8
, at a purchase price of $[____] per Firm Warrant (93% of the per Firm Warrant public offering price) (the “
Initial Warrant Price
”).
(b) The Company hereby grants to the Representative an option to purchase, severally and not jointly, (i) all or any part of the Option Shares at the Initial Share Price and (ii) all or any part of the Option Warrants at the Initial Warrant Price. Such option may be exercised only to cover over-allotments in the sales of the Firm Shares and/or Firm Warrants by the Underwriters and may be exercised in whole or in part at any time and from time to time within 30 days after the date of this Agreement, in each case upon written, facsimile transmission or e-mail notice, or verbal or telephonic notice confirmed by written, facsimile transmission or e-mail notice, by the Representative to the Company no later than 12:00 noon, New York City time, on the business day before the Firm Closing Date (as hereinafter defined) or at least two business days before the Option Closing Date (as hereinafter defined), in each case for Option Securities to be delivered on such date, setting forth the number of Option Shares and/or Option Warrants to be purchased and the time and date (if other than the Firm Closing Date) of such purchase.
(c) Payment of the purchase price for, and delivery of the Firm Securities in accordance with
Section 1(e)
, shall be made at the offices of Laidlaw & Company (UK) Ltd., 546 Fifth Avenue, 5
th
Floor, New York, New York 10036, at 10:00 a.m., New York City time, on the third (fourth, if the pricing occurs after 4:30 P.M. (New York City time) on any given day) business day following the date of this Agreement or at such time on such other date, not later than five business days after the date of this Agreement (unless postponed in accordance with the provisions of
Section 8
), as shall be agreed upon by the Company and the Representative (such time and date of delivery and payment are called the “
Firm Closing Date
”). In addition, in the event that any or all of the Option Shares and/or Option Warrants are purchased by the Underwriters, payment of the purchase price, and delivery of the Option Shares and/or Option Warrants, as applicable, in accordance with
Section 1(e)
shall be made at the above-mentioned offices, or at such other place as shall be agreed upon by the Representative and the Company, on each date of delivery as specified in the notice from the Representative to the Company (such time and date of delivery and payment are called the “
Option Closing Date
”). The Firm Closing Date and any Option Closing Date are called, individually, a “
Closing Date
” and, together, the “
Closing Dates
.”
(d) Payment shall be made to the Company by wire transfer of immediately available funds or by certified or official bank check or checks payable in New York Clearing House (same day) funds drawn to the order of the Company against delivery of the respective certificates to the Representative for the respective accounts of the Underwriters of certificates for the Shares and Warrants to be purchased by them.
(e) The Shares shall be registered in such names and shall be in such denominations as the Representative shall request at least two full business days before the Firm Closing Date or, in the case of Option Shares, on the day of notice of exercise of the option as described in
Section 1(b)
and shall be delivered by or on behalf of the Company to the Representative through the facilities of the Depository Trust Company (“
DTC
”) for the account of each Underwriter.
(f) The Warrants shall be issued pursuant to, and shall have the rights and privileges set forth in, a warrant agreement, dated on or before the Firm Closing Date, between the Company and Equity Stock Transfer, LLC, as warrant agent (the “
Warrant Agreement
”). The Warrants shall be registered in such names and shall be in such denominations as the Representative shall request at least two full business days before the Firm Closing Date or, in the case of Option Warrants, on the day of notice of exercise of the option as described in
Section 1(b)
. For so long as the Warrants are outstanding, the Company shall retain a warrant agent for the Warrants reasonably acceptable to the Representative. Equity Stock Transfer, LLC is acceptable to the Representative to act as Warrant Agent for the Warrants.
2.
Representations and Warranties of the Company
. The Company represents and warrants to each Underwriter as of the date hereof, as of the Firm Closing Date and as of each Option Closing Date (if any), as follows:
(a) On the Effective Date, the Registration Statement complied, and on the date of the Prospectus, the date any post-effective amendment to the Registration Statement becomes effective, the date any supplement or amendment to the Prospectus is filed with the Commission and each Closing Date, the Registration Statement and the Prospectus (and any amendment thereof or supplement thereto) will comply, in all material respects, with the requirements of the Securities Act and the Rules and the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), and the rules and regulations of the Commission thereunder. The Registration Statement did not, as of the Effective Date, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; and on the Effective Date and the other dates referred to above, neither the Registration Statement nor the Prospectus, nor any amendment thereof or supplement thereto, will contain any untrue statement of a material fact or will omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading. When any Preliminary Prospectus was first filed with the Commission (whether filed as part of the Registration Statement or any amendment thereto or pursuant to Rule 424(a) of the Rules) and when any amendment thereof or supplement thereto was first filed with the Commission, such Preliminary Prospectus as amended or supplemented complied in all material respects with the applicable provisions of the Securities Act and the Rules and did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading. If applicable, each Preliminary Prospectus and the Prospectus delivered to the Underwriters for use in connection with the offering of the Securities was identical to the electronically transmitted copies thereof filed with the Commission pursuant to the Commission’s Electronic Data Gathering, Analysis and Retrieval system (“
EDGAR
”), except to the extent permitted by Regulation S-T. Notwithstanding the foregoing, none of the representations and warranties in this
Section 2(a)
shall apply to statements in, or omissions from, the Registration Statement, any Preliminary Prospectus or the Prospectus made in reliance upon, and in conformity with, information herein or otherwise furnished in writing by the Representative on behalf of the several Underwriters specifically for use in the Registration Statement, any Preliminary Prospectus or the Prospectus, as the case may be. With respect to the preceding sentence, the Company acknowledges that the only information furnished in writing by the Representative on behalf of the several Underwriters for use in the Registration Statement, any Preliminary Prospectus or the Prospectus consists of the following information: (i) the names of the several Underwriters, (ii) the statements contained under the subcaptions entitled (A) “Stabilization, Short Positions and Penalty Bids” and (B) “Electronic Distribution” under the caption “Underwriting” in the Prospectus, and (iii) the concession figure appearing in the first paragraph under the subcaption “Commissions and Discounts” under the caption “Underwriting” in the Prospectus (collectively, the “
Underwriter Information
”).
(b) As of the Applicable Time (as hereinafter defined), none of (i) the information set forth on
Schedule II
hereto and the Statutory Prospectus, all considered together (collectively, the “
General Disclosure Package
”), and (ii) any individual Issuer Free Writing Prospectus, when considered together with the General Disclosure Package, included or includes as of their dates any untrue statement of a material fact or omitted, omits or will omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
provided
,
however
, that this representation and warranty shall not apply to statements in or omissions in the General Disclosure Package made in reliance upon and in conformity with
written information furnished to the Company through the Representative by or on behalf of any Underwriter specifically for inclusion therein, which information the parties hereto agree is limited to the Underwriter Information
.
Each Issuer Free Writing Prospectus, including any electronic road show (including without limitation any “bona fide electronic road show” as defined in Rule 433(h)(5) under the Securities Act) (each, a “
Road Show
”) (i) is identified in
Schedule III
hereto, and (ii) complied when issued, and complies, in all material respects with the requirements of the Securities Act, the Rules and the Exchange Act and the rules and regulations of the Commission thereunder. The Company has made at least one version of the Road Show available without restriction by means of graphic communication to any person, including any potential investor in the Securities (and if there is more than one version of a Road Show for the offering that is a written communication, the version available without restriction was made available no later than the other versions).
As used in this Section and elsewhere in this Agreement:
“
Applicable Time
” means 5:15 p.m. (Eastern time) on the date of this Agreement.
“
Statutory Prospectus
” as of any time means the Preliminary Prospectus relating to the Securities that is included in the Registration Statement immediately prior to the Applicable Time.
“
Issuer Free Writing Prospectus
” means each “free writing prospectus” (as defined in Rule 405 of the Rules) prepared by or on behalf of the Company or used or referred to by the Company in connection with the offering of the Securities, including, without limitation, each Road Show.
(c) The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of any Preliminary Prospectus, the Prospectus or any “free writing prospectus”, as defined in Rule 405 under the Rules, has been issued by the Commission and no proceedings for that purpose have been instituted or are threatened under the Securities Act. Any required filing of any Preliminary Prospectus and/or the Prospectus and any supplement thereto pursuant to Rule 424(b) of the Rules has been or will be made in the manner and within the time period required by such Rule 424(b).
The Company has not, directly or indirectly, distributed and will not distribute any offering material in connection with the offering and sale of the Securities other than any Prelimina
ry Prospectus, the Statutory Prospectus, the Prospectus and other materials, if any, permitted under the Securities Act
and consistent with Section 4(a) below.
Any material required to be filed by the Company pursuant to Rule 433(d) or Rule 163(b)(2) of the Rules has been or will be made in the manner and within the time period required by such Rules.
(d) Each Issuer Free Writing Prospectus, if any, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Securities or until any earlier date that the Company notified or notifies the Representative, as described in the next sentence, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement, the Statutory Prospectus or the Prospectus. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement, the Statutory Prospectus or the Prospectus or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances prevailing at the subsequent time, not misleading, the Company has promptly notified or will promptly notify the Representative and has promptly amended or will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
(e) The financial statements of the Company (including all notes and schedules thereto) included in the Registration Statement, the Statutory Prospectus and Prospectus present fairly the financial position of the Company at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the Company for the periods specified; and such financial statements and related schedules and notes thereto, and the unaudited financial information filed with the Commission as part of the Registration Statement, have been prepared in conformity with generally accepted accounting principles in the United States (“
GAAP
”), consistently applied throughout the periods involved. No other financial statements or supporting schedules or exhibits are required by Regulation S-X to be described or included in the Registration Statement, the General Disclosure Package or the Prospectus. The summary and selected financial data included in the Statutory Prospectus and Prospectus present fairly the information shown therein as at the respective dates and for the respective periods specified and have been presented on a basis consistent with the consolidated financial statements set forth in the Prospectus and other financial information. The pro forma financial information included in the Registration Statement, the Statutory Prospectus and the Prospectus present fairly the information shown therein, have been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma financial information and have been properly compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. All disclosures contained in the Registration Statement, the General Disclosure Package or the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission), if any, comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent applicable. Each of the Registration Statement, the General Disclosure Package and the Prospectus discloses all material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that may have a material current or, to the Company’s knowledge, future effect on the Company’s financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, (i) the Company has not incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions other than in the ordinary course of business, (ii) the Company has not declared or paid any dividends or made any distribution of any kind with respect to its capital stock, (iii) there has not been any change in the capital stock of the Company, or, other than in the ordinary course of business, any grants under any stock compensation plan, and (iv) there has not been any Material Adverse Change in the Company’s long-term or short-term debt.
(f) CohnReznick LLP (the “
Auditor
”) whose reports are filed with the Commission as a part of the Registration Statement, are and, during the periods covered by their reports, were independent public accountants as required by the Securities Act and the Rules.
(g) The Company is duly organized, validly existing and in good standing under the laws of the State of Delaware, and the Company has all requisite corporate power and authority to carry on its business as is currently being conducted as described in the Statutory Prospectus and the Prospectus, and to own, lease and operate its properties. Except as disclosed in the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus, the Company holds no equity interest in any other corporation, partnership, joint venture, association or other business organization. The Company is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the nature of the business conducted by it or location of the assets or properties owned, leased or licensed by it requires such qualification, except for such jurisdictions where the failure to so qualify individually or in the aggregate would not have a material adverse effect on the assets, properties, condition, financial or otherwise, or in the results of operations, business affairs or business prospects of the Company (a “
Material Adverse Effect
”); and to the Company’s knowledge, no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such power and authority or qualification.
(h) The Company has all requisite corporate power and authority, and all necessary authorizations, approvals, consents, orders, licenses, certificates and permits of and from all governmental or regulatory bodies or any other person or entity (collectively, the “
Permits
”), to own, lease and license its assets and properties and conduct its business, all of which are valid and in full force and effect, except where the lack of such Permits, individually or in the aggregate, would not have a Material Adverse Effect. The Company has fulfilled and performed in all material respects all of its obligations with respect to such Permits and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the Company thereunder. Except as may be required under the Securities Act and state and foreign Blue Sky laws, no other Permits are required to enter into, deliver and perform this Agreement and to issue and sell the Securities.
(i) [Reserved]
(j) Except as disclosed in the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus, the Company owns or possess adequate rights to use all patents, patent applications, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, trademark registrations, service marks, service mark registrations, trade names, mask work rights and other intellectual property necessary to carry on the business now operated by it or proposed to be operated by it as described in the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus (collectively, the “
Intellectual Property
”). Except as disclosed in the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus, there is no litigation or other proceeding pending or, to the Company’s knowledge, threatened and no claims are presently being asserted by any third party challenging or questioning the ownership, validity, or enforceability of the Company’s right to use or own any Intellectual Property or asserting that the use of the Intellectual Property by the Company or the operation of the Company’s business infringes upon or misappropriates any asserted rights of a third party, and to the Company’s knowledge, there are no facts which would form a reasonable basis for any such claim. The Company has not received a notice (written or otherwise) that any of the Intellectual Property has expired, been terminated or abandoned. To the Company’s knowledge, there is no infringement of or conflict with asserted rights of others with respect to any of the Company’s Intellectual Property or the operation of the Company’s business. To the Company’s knowledge, there are no facts or circumstances which would render any of the Company’s Intellectual Property invalid or inadequate to protect the interests of the Company therein, or with respect to the patent applications contained in the Intellectual Property, unpatentable. Except as would not, individually or in the aggregate, have a Material Adverse Effect, to the Company’s knowledge, (i) there is no infringement by third parties engaged in commercial activity of any Intellectual Property of the Company relating to the Company’s business, and (ii) except as disclosed in the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus, there are no non-commercial activities being performed by any third parties which, upon commercialization thereof, would reasonably be expected to infringe on the Intellectual Property of the Company. The Company has taken all steps reasonably necessary to perfect its ownership of and interest in the Intellectual Property. A
ll licenses for the use of the Company
’s Intellectual Property described in the General Disclosure Package and the Prospectus are valid, binding, and enforceable
,
except as enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws relating to or affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity and, with respect to equitable relief, the discretion of the court before which any proceeding therefor may be brought (regardless of whether enforcement is sought in a proceeding at law or in equity), and with respect to indemnification thereunder, except as rights may be limited by applicable law or policies underlying such law
. The Company has complied in all material respects with, and is not in breach nor has received any asserted or threatened claim of breach of any Intellectual Property license, and the Company has no knowledge of any breach or anticipated b
reach by any other person
of any Intellectual Property license. The Company has taken all reasonable actions to obtain ownership of all works of authorship and inventions made by its employees, consultants and contractors during the time they were
employed by or under contract with the Company and which relate to the Company’s business. All key employees have signed confidentiality and invention assignment agreements with the Company.
(k) The Company has good and marketable title in fee simple to all real property, or has valid and marketable rights to lease or otherwise use, all items of real and personal property and assets that are material to the business of the Company, in each case free and clear of all liens, encumbrances, claims, security interests and defects, except such as do not materially affect the value of such property or materially interfere with the use made or proposed to be made of such property by the Company. All property held under lease by the Company is held by it under valid, existing and enforceable leases, free and clear of all liens, encumbrances, claims, security interests and defects, except such as are not material or do not materially interfere with the use made or proposed to be made of such property by the Company.
(l) Since the date of the most recent financial statements of the Company included in the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus: (i) there has not been any event which would have a Material Adverse Effect; (ii) the Company has not sustained any material loss or interference with its assets, businesses or properties (whether owned or leased) from fire, explosion, earthquake, flood or other calamity, whether or not covered by insurance, or from any labor dispute or any court or legislative or other governmental action, order or decree; and (iii) the Company has not (A) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money, except such liabilities or obligations incurred in the ordinary course of business, (B) entered into any transaction not in the ordinary course of business, or (C) declared or paid any dividend or made any distribution on any shares of its stock, except in each case as disclosed in the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus.
(m) There is no document, contract or other agreement required to be described in the Registration Statement, the Statutory Prospectus or the Prospectus or to be filed as an exhibit to the Registration Statement which is not described or filed as required by the Securities Act or Rules. Each description of a contract, document or other agreement in the Registration Statement, the Statutory Prospectus or the Prospectus accurately reflects in all material respects the terms of the underlying contract, document or other agreement. Each contract, document or other agreement described in the Registration Statement, the Statutory Prospectus or the Prospectus or listed in the exhibits to the Registration Statement to which the Company is a party or to which its assets are bound is in full force and effect and is valid and enforceable by and against the Company in accordance with its terms except as enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws relating to or affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity and, with respect to equitable relief, the discretion of the court before which any proceeding therefor may be brought (regardless of whether enforcement is sought in a proceeding at law or in equity), and with respect to indemnification thereunder, except as rights may be limited by applicable law or policies underlying such law. The Company is not and, to the Company’s knowledge, no other party is, in material default in the observance or performance of any term or obligation to be performed by it under any such agreement, and no event has occurred which with notice or lapse of time or both would constitute such a material default. No material default exists, and no event has occurred which with notice or lapse of time or both would constitute a material default, in the due performance and observance of any term, covenant or condition, by the Company of any other agreement or instrument to which the Company is a party or by which the Company or its properties or business may be bound or affected.
(n) The statistical and market related data included in the Registration Statement, the Statutory Prospectus or the Prospectus are based on or derived from sources that the Company believes to be reliable and accurate.
(o) The Company is not (i) in violation of its certificate of incorporation, by-laws or other organizational documents, (ii) in default under, and, to the Company’s knowledge, no event has occurred which, with notice or lapse of time, or both, would constitute a default under, or result in the creation or imposition of any lien, charge, mortgage, pledge, security interest, claim, limitation on voting rights, equity, trust or other encumbrance, preferential arrangement, defect or restriction of any kind whatsoever, upon, any property or assets of the Company pursuant to, any bond, debenture, note, indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject, or (iii) in violation of any statute, law, rule, regulation, ordinance, directive, judgment, decree or order of any judicial, regulatory or other legal or governmental agency or body, foreign or domestic, except (in the case of clauses (ii) and (iii) above) for violations or defaults that would not have a Material Adverse Effect.
(p) The execution, delivery and performance of this Agreement, the Warrant Agreement and the Warrants have been duly and validly authorized by the Company, and the Warrant Agreement and the Warrants, when executed and delivered, will constitute, the valid and binding agreements of the Company, enforceable against the Company in accordance with their respective terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
(q) Except as disclosed in the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus, neither the execution, delivery and performance of this Agreement, the Warrant Agreement or the Warrants by the Company nor the consummation of any of the transactions contemplated hereby and thereby (including, without limitation, the issuance and sale by the Company of the Securities) will (i) give rise to a right to terminate or accelerate the due date of any payment due under, or conflict with or result in the breach of any term or provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the execution or imposition of any lien, charge or encumbrance upon any properties or assets of the Company pursuant to the terms of, any indenture, mortgage, deed of trust or other agreement or instrument to which the Company is a party or by which the Company or any of its properties or businesses is bound, or any franchise, license, permit, judgment, decree, order, statute, rule or regulation applicable to the Company, except in each case as would not have a Material Adverse Effect; or (ii) violate any provision of the charter or by-laws of the Company.
(r) The Company has authorized and outstanding capital stock as set forth under the captions “Capitalization” in the Statutory Prospectus and the Prospectus. All of the issued and outstanding shares of Common Stock have been duly and validly issued, are fully paid and nonassessable and are not subject to any statutory preemptive or other similar rights that have not been duly waived or satisfied. The Common Stock conforms in all material respects to all statements in relation thereto contained in the Registration Statement, the Statutory Prospectus and the Prospectus. The Shares, when issued and paid for by the Underwriters pursuant to this Agreement, will be duly and validly issued, fully paid and nonassessable and none of them will be issued in violation of any preemptive or other similar right. The Shares conform in all material respects to all statements with respect thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus. All corporate action required to be taken for the authorization, issuance and sale of the Warrants has been duly and validly taken. The Warrants, when issued and paid for by the Underwriters pursuant to this Agreement, will be duly and validly issued and none of them will be issued in violation of any preemptive or other similar right. The Warrant Agreement and the Warrants conform in all material respects to all statements with respect thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus. The Warrant Shares have been duly authorized and reserved for issuance by all necessary corporate action on the part of the Company and, when paid for and issued in accordance with the Warrants and the Warrant Agreement, the Warrant Shares will be duly and validly issued, fully paid and nonassessable and none of them will be issued in violation of any preemptive or other similar right. Except as disclosed in or expressly contemplated by the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus, there is no outstanding option, warrant or other right calling for the issuance of, and there is no commitment, plan or arrangement to issue, any share of stock of the Company or any security convertible into, or exercisable or exchangeable for, such stock. All grants of options to acquire Common Stock outstanding as of the date hereof (each, a “
Company Stock Option
”) were validly issued and properly approved by the Board of Directors of the Company in compliance in all material respects with all applicable laws and the terms of the plans under which such Company Stock Options were issued and were recorded on the Company’s financial statements, in accordance with GAAP.
(s) Except as disclosed in the Registration Statement, the Statutory Prospectus and the Prospectus, no holder of any security of the Company has any right, which has not been waived, to have any security owned by such holder included in the Registration Statement or to demand registration of any security owned by such holder for a period of 180 days after the date of this Agreement.
(t) Except as disclosed in the Registration Statement, the Statutory Prospectus and the Prospectus,
there is no legal or governmental proceeding to which the Company is a party or of which any property or asset
s of the Company is the subject, including any proceeding before the
FDA or comparable federal, state, local or foreign governmental bodies (it being understood that the interaction between the Company and the FDA and such comparable governmental bodies relating to the clinical development and product approval process shall n
ot be deemed proceedings for purposes of this representation), which is required to be described in the Registration Statement, the General Disclosure Package or the Prospectus and is not described therein, or which, singularly or in the aggregate, if determined adversely to the Company, would have a Material Adverse Effect; and to the Company’s knowledge, no such proceedings are threatened, by governmental authorities or others.
(u) All necessary corporate action has been duly and validly taken by the Company to authorize the execution, delivery and performance of this Agreement, the Warrant Agreement and the Warrants by the Company and the issuance and sale of the Securities by the Company.
(v) The Company is not involved in any labor dispute nor, to the knowledge of the Company, is any such dispute threatened, which dispute would have a Material Adverse Effect. To the Company’s knowledge, there is no existing or imminent labor disturbance by the employees of any of its principal suppliers or contractors which would have a Material Adverse Effect. To the Company’s knowledge, there is no threatened or pending litigation between the Company and any of its executive officers which, if adversely determined, would have a Material Adverse Effect and has no reason to believe that such officers will not remain in the employment of the Company.
(w) No transaction has occurred between or among the Company and any of its officers or directors, shareholders or any affiliate or affiliates of any such officer or director or shareholder that is required to be described in and is not described in the Registration Statement, the Statutory Prospectus and the Prospectus.
(x) The Company has not taken, directly or indirectly, any action designed to or which might reasonably be expected to cause or result in the stabilization or manipulation of the price of the Common Stock to facilitate the sale of any of the Securities.
(y) The Company has filed all Federal, state, local and foreign tax returns which are required to be filed through the date hereof, or has received timely extensions thereof, and has paid all taxes shown on such returns and all assessments received by it to the extent that the same are material and have become due, except assessments against which appeals have been or will be promptly taken and as to which adequate reserves in conformity with GAAP have been provided and except as would not have a Material Adverse Effect. There are no tax audits or investigations pending, which if adversely determined would have a Material Adverse Effect; nor are there any material proposed additional tax assessments against the Company. The accruals and reserves on the books and records of the Company in respect of tax liabilities for any taxable period not yet finally determined are adequate to meet any assessments and related liabilities for any such period.
(z) The Shares and the Warrant Shares have been approved for listing on the OTCQB operated by OTC Markets Group, Inc., subject to official notice of issuance. The shares of Common Stock are registered pursuant to Section 12(b) or 12(g) under the Exchange Act. The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the shares of Common Stock under the Exchange Act, nor has the Company received any notification that the Commission is contemplating terminating such registration.
(aa) The books, records and accounts of the Company accurately and fairly reflect the transactions in, and dispositions of, the assets of, and the results of operations of, the Company. Except as disclosed in the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus, the Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(bb) Except as disclosed in the Registration Statement, the Statutory Prospectus and the Prospectus, the Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15 under the Exchange Act) which: (i) are designed to ensure that material information relating to the Company is made known to the Company’s principal executive officer and its principal financial officer by others within the Company, particularly during the periods in which the periodic reports required under the Exchange Act are required to be prepared; (ii) provide for the periodic evaluation of the effectiveness of such disclosure controls and procedures at the end of the periods in which the periodic reports are required to be prepared; and (iii) are effective in all material respects to perform the functions for which they were established.
(cc) Except as disclosed in the Registration Statement, the Statutory Prospectus and the Prospectus, based on the evaluation of its disclosure controls and procedures, to the Company’s knowledge, there is no (i) material weakness or significant deficiency in the design or operation of internal controls which would adversely affect the Company’s ability to record, process, summarize and report financial data or any material weaknesses in internal controls; or (ii) fraud, whether or not material, that involves management or other employees who have a role in the Company’s internal controls.
Since the end of the latest audited fiscal year, there has been no change in the Company
’s internal control over financing reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
(dd) Except as described in the Statutory Prospectus and the Prospectus, and as preapproved in accordance with the requirements set forth in Section 10A of the Exchange Act, the Auditor has not been engaged by the Company to perform any “prohibited activities” (as defined in Section 10A of the Exchange Act).
(ee) Except as disclosed in the Registration Statement, the Statutory Prospectus and the Prospectus, there are no material off-balance sheet arrangements (as defined in Item 303 of Regulation S-K) that have or are reasonably likely to have a material current or future effect on the Company’s financial condition, revenues or expenses, changes in financial condition, results of operations, liquidity, capital expenditures or capital resources.
(ff) [Reserved]
(gg) The Company is in compliance with all applicable provisions of the Sarbanes-Oxley Act of 2002, as amended (the “
Sarbanes-Oxley Act
”), any related rules and regulations promulgated by the Commission. There is and has been no failure on the part of the Company or any of its directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act, including, without limitation, Section 402 related to loans and Sections 302 and 906 related to certifications.
(hh) The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are customary in the businesses in which they are engaged or propose to engage after giving effect to the transactions described in the Statutory Prospectus and the Prospectus; and the Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its business.
All policies of insurance owned by the Company are, to the Company
’s knowledge, in full force and effect and the Company is in compliance in all material respects with the terms of such policies
.
The Company has not been denied any insurance coverage which it has sought or for which it has applied.
(ii) Each approval, consent, order, authorization, designation, declaration or filing of, by or with any regulatory, administrative or other governmental body necessary in connection with the execution and delivery by the Company of this Agreement and the consummation of the transactions herein contemplated required to be obtained or performed by the Company (except such additional steps as may be required by the Financial Industry Regulatory Authority, Inc. (“
FINRA
”) or may be necessary to qualify the Securities for public offering by the Underwriters under the state securities or Blue Sky laws) has been obtained or made and is in full force and effect.
(jj) To the Company’s knowledge, there are no affiliations with FINRA among the Company’s officers, directors or any five percent or greater stockholder of the Company, except as set forth in the Registration Statement or otherwise disclosed in writing to the Representative.
(kk) (i) The Company is in compliance in all material respects with all rules, laws and regulations relating to the use, treatment, storage and disposal of toxic substances and protection of health or the environment (“
Environmental Laws
”) which are applicable to its business; (ii) the Company has not received any notice from any governmental authority or third party of an asserted claim under Environmental Laws; (iii) the Company has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its business and is in compliance in all material respects with all terms and conditions of any such permit, license or approval; and (iv) to the Company’s knowledge, no facts currently exist that will require the Company to make future material capital expenditures to comply with Environmental Laws.
(ll) The Company is not and, after giving effect to the offering and sale of the Shares and Warrants and the application of proceeds thereof as described in the Statutory Prospectus and the Prospectus, will not be an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
(mm) Neither the Company nor, to the Company’s knowledge, any other person associated with or acting on behalf of the Company including, without limitation, any director, officer, agent or employee of the Company, has not, directly or indirectly, while acting on behalf of the Company (i) used any Company funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any other unlawful payment.
(nn) The operations of the Company are and have been conducted at all times in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “
Money Laundering Laws
”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(oo) Neither the Company nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“
OFAC
”); and the Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
(pp) The Company has fulfilled its obligations, if any, under the minimum funding standards of Section 302 of the U.S. Employee Retirement Income Security Act of 1974 (“
ERISA
”) and the regulations and published interpretations thereunder with respect to each “plan” as defined in Section 3(3) of ERISA and such regulations and published interpretations in which its employees are eligible to participate and each such plan is in compliance in all material respects with the presently applicable provisions of ERISA and such regulations and published interpretations. No “Reportable Event” (as defined in 12 ERISA) has occurred with respect to any “Pension Plan” (as defined in ERISA) for which the Company would have any liability.
(qq) None of the Company, its directors or its officers has distributed nor will distribute prior to the later of (i) the Firm Closing Date or the Option Closing Date, and (ii) completion of the distribution of the Shares and the Warrants, any offering material in connection with the offer and sale of the Shares and the Warrants other than any Preliminary Prospectus, the Statutory Prospectus, the Prospectus, the Registration Statement, the General Disclosure Package and other materials, if any, permitted by the Securities Act.
(rr) [Reserved]
(ss) [Reserved]
(tt) Except as set forth in the Registration Statement, the Company has such permits, licenses, certificates, approvals, clearances, authorizations or amendments thereto (the “
Regulatory Permits
”) issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business of the Company as described in the Registration Statement; including, without limitation, any Investigational New Drug Application (“
IND
”) as required by the U.S. Food and Drug Administration (the “
FDA
”) or other authorizations issued by federal, state, local or foreign agencies or bodies engaged in the regulation of pharmaceuticals such as those being developed by the Company (collectively, “
Governmental Authorities
,” and each, a “
Governmental Authority
”), except for any of the foregoing that would not, individually or in the aggregate, have a Material Adverse Effect. The Company is in compliance in all material respects with the requirements of the Regulatory Permits, and all of the Regulatory Permits are valid and in full force and effect, in each case in all material respects; except as set forth in the Registration Statement, the Statutory Prospectus and the Prospectus, the Company has not received any notice of proceedings relating to the revocation, termination, modification or impairment of rights of any of the Regulatory Permits that, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would not have a Material Adverse Effect. The Company and, to the Company’s knowledge, its respective directors, officers, employees or agents, are and have been in compliance in all material respects with applicable federal, state, local and foreign health care regulatory laws, including, without limitation, laws related to fraud and abuse, payment transparency, and privacy and security of protected health information (collectively, “
Health Care Laws
”). The Company has not received written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any court, arbitrator or governmental or regulatory authority or third party alleging that the Company or its personnel has violated any applicable Health Care Law, nor to the Company’s knowledge has any such claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action been threatened.
(uu) The preclinical studies and clinical trials (collectively, the “
Studies
”) that are being conducted by or, to the Company’s knowledge, on behalf of the Company, and which are described in the Registration Statement, or the results of which are referred to in the Registration Statement, were and, if still pending, are being conducted in all material respects in accordance with the protocols, procedures and controls designed and approved for such Studies and with standard medical and scientific research procedures; each description of the results of such Studies contained in the Registration Statement is, to the Company’s knowledge, accurate and complete in all material respects and fairly presents the data derived from such Studies, and, except to the extent disclosed in the Registration Statement, the General Disclosure Package, the Statutory Prospectus, the Prospectus and any individual Issuer Free Writing Prospectus, the Company is not aware of any other studies the results of which the Company believes are inconsistent with, or otherwise reasonably call into question, the results described or referred to in the Registration Statement; except as set forth in the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus, the Company has not received any notice of, or correspondence from, any Governmental Authority requiring the termination or suspension of any clinical trials or other Studies conducted by or on behalf of the Company that are described or referred to in the Registration Statement, other than ordinary course communications with respect to modifications in connection with the design and implementation of such Studies.
Except as set forth in the Registration Statement, the Statutory Prospectus and the Prospectus, the Company has complied in all material respects with all applicable laws and regulatory rules or requirements, including, without limitation, the Health Insurance Portability and Accountability Act of 1996 and the rules and regulations thereunder.
(vv)
No relat
ionship, direct or indirect, exists between or among the Company on the one hand, and the directors, officers, stockholders (or analogous interest holders), customers or suppliers of the Company or any of its affiliates on the other hand, which is required to be described in the General Disclosure Package and the Prospectus and which is not so described.
(ww)
No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in either the General
Disclosure Package or the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
(xx)
If applicable, all of the information provided to the Underwriters or to counsel for the Underwriters by the Company
, its officers and directors in connection with letters, filings or other supplemental information provided to FINRA pursuant to FINRA Rule 5110 or 5121 is, to the Company’s knowledge with respect to all other persons except for the Company, true, correct and complete in all material respects as of the date hereof
.
(yy)
There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of a
ny of the officers or directors of the Company or any of their respective family members, except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus.
All transactions by the Company with office holders or control
persons of the Company have been duly approved by the board of directors of the Company, or duly appointed committees or officers thereof, if and to the extent required under U.S. law.
(zz)
Neither the Company nor, to the Company
’s knowledge, any of its affiliates (within the meaning of FINRA Rule 5121(f)(1)) directly or indirectly controls, is controlled by, or is under common control with, or is an associated person (within the meaning of Article I, Section 1(ff) of the By-laws of FINRA) of, any of the Underwriters
.
Any certificate signed by or on behalf of the Company and delivered to the Representative or to counsel for the Underwriters shall be deemed to be a representation and warranty by the Company to each Underwriter as to the matters covered thereby.
3.
Conditions of the Underwriters’ Obligations
. The obligations of the Underwriters under this Agreement are several and not joint. The respective obligations of the Underwriters to purchase the Shares and the Warrants are subject to each of the following terms and conditions:
(a) Notification that the Registration Statement has become effective shall have been received by the Representative and the Prospectus shall have been timely filed with the Commission in accordance with Section 4(a) and any material required to be filed by the Company pursuant to Rule 433(d) of the Rules shall have been timely filed with the Commission in accordance with such rule.
(b) No order preventing or suspending the use of any Preliminary Prospectus, the Prospectus or any “free writing prospectus” (as defined in Rule 405 of the Rules), shall be in effect and no order suspending the effectiveness of the Registration Statement shall be in effect and no proceedings for such purpose shall be pending before or threatened by the Commission, and any requests for additional information on the part of the Commission (to be included in the Registration Statement or the Prospectus or otherwise) shall have been complied with to the satisfaction of the Commission and the Representative. If the Company has elected to rely upon Rule 430A, Rule 430A information previously omitted from the effective Registration Statement pursuant to Rule 430A shall have been transmitted to the Commission for filing pursuant to Rule 424(b) within the prescribed time period and the Company shall have provided evidence satisfactory to the Underwriters of such timely filing, or a post-effective amendment providing such information shall have been promptly filed and declared effective in accordance with the requirements of Rule 430A.
(c) The representations and warranties of the Company contained in this Agreement and in the certificates delivered pursuant to
Section 3(d)
shall be true and correct when made and on and as of each Closing Date as if made on such date. The Company shall have performed all covenants and agreements and satisfied all the conditions contained in this Agreement required to be performed or satisfied by it at or before such Closing Date.
(d) The Representative shall have received on each Closing Date a certificate, addressed to the Representative and dated such Closing Date, of the chief executive officer or chief operating officer and the chief financial officer or chief accounting officer of the Company, in such capacity, to the effect that: (i) the representations, warranties and agreements of the Company in this Agreement were true and correct in all material respects when made and are true and correct as of such Closing Date; (ii) the Company has performed all covenants and agreements and satisfied all conditions contained herein; (iii) such officers have examined the Registration Statement, the Prospectus, the General Disclosure Package and any individual Issuer Free Writing Prospectus and, in their opinion, since the Effective Date, no event has occurred which should have been set forth in a supplement or otherwise required an amendment to the Registration Statement, the Statutory Prospectus or the Prospectus and which event is not described in the Registration Statement, the Statutory Prospectus or the Prospectus; (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and, to their knowledge, no proceedings for that purpose have been instituted or are pending under the Securities Act; and (v) there has not occurred any Material Adverse Effect.
(e) The Representative shall have received: (i) simultaneously with the execution of this Agreement a signed letter from the Auditor addressed to the Representative and dated the date of this Agreement, in form and substance reasonably satisfactory to the Representative, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the General Disclosure Package, and (ii) on each Closing Date, a signed bringdown letter from the Auditor addressed to the Representative and dated the date of such Closing Date(s), in form and substance reasonably satisfactory to the Representative containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus.
(f) The Representative shall have received on each Closing Date from Sichenzia Ross Friedman Ference LLP, counsel for the Company, an opinion and written negative assurances statement, addressed to the Representative and dated such Closing Date, in form and substance reasonably satisfactory to the Representative and its legal counsel.
(g) The Representative shall have received on each Closing Date from Jones Day LLP, intellectual property counsel to the Company, an opinion, addressed to the Representative and dated such Closing Date, in form and substance reasonably satisfactory to the Representative and their legal counsel.
(h) The Representative shall have received on each Closing Date from Greenberg Traurig, LLP, counsel for the Representative, an opinion, addressed to the Representative and dated such Closing Date, with respect to such matters as the Representative may reasonably require, and the Company shall have furnished or provided access to such counsel of such documents as they reasonably request for enabling them to pass upon such matters.
(i) All proceedings taken in connection with the sale of the Firm Securities and the Option Securities as herein contemplated shall be reasonably satisfactory in form and substance to the Representative and its legal counsel.
(j) The Representative shall have received enforceable written lock-up agreements in the form attached to this Agreement as
Exhibit A
attached hereto (“
Lock-Up Agreement
”) executed by all directors, officers and certain holders of more than 5% of the outstanding equity securities of the Company which have been agreed upon by the Company and the Representative.
(k) The Shares and the Warrant Shares shall have been approved for listing on the OTCQB operated by OTC Markets Group, Inc., subject only to official notice of issuance.
(l) Since the date of the most recent financial statements of the Company included in the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus, (i) there shall not have been any material change in the capital stock of the Company or any material change in the indebtedness (other than in the ordinary course of business) of the Company; (ii) except as set forth or contemplated by the Registration Statement, the Statutory Prospectus, the General Disclosure Package or the Prospectus, no material oral or written agreement or other transaction shall have been entered into by the Company that is not in the ordinary course of business or that would reasonably be expected to result in a material reduction in the future earnings of the Company; (iii) no loss or damage (whether or not insured) to the property of the Company shall have been sustained that would have a Material Adverse Effect; (iv) no legal or governmental action, suit or proceeding affecting the Company or any of its properties that is material to the Company or that materially affects or would reasonably be expected to materially affect the transactions contemplated by this Agreement shall have been instituted or threatened; and (v) there shall not have been any material change in the assets, properties, condition (financial or otherwise), or in the results of operations, business affairs or business prospects of the Company that makes it impractical or inadvisable in the Representative’s reasonable judgment to proceed with the purchase or offering of the Securities as contemplated hereby.
(m) As of the date hereof, FINRA shall have confirmed that it has not raised any unresolved objection with respect to the fairness and reasonableness of the underwriting terms and agreements in connection with the offering of the Securities.
(n)
No action shall have been taken and no law, statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency or body which would prevent the issuance or sale of the Securities or materially and
adversely affect the business or operations of the Company; and no injunction, restraining order or order of any other nature by any federal or state court of competent jurisdiction shall have been issued which would prevent the issuance or sale of the Securities or materially and adversely affect the business or operations of the Company.
(o)
As of each Closing Date, the Representative shall have received a certificate of the Company signed by the Secretary of the Company, certifying: (i) that the Certificate of I
ncorporation and bylaws, each as amended, of the Company are true and complete, have not been modified and are in full force and effect; (ii) that the resolutions relating to the offering are in full force and effect and have not been modified; and (i
ii) as to the incumbenc
y of the officers of the Company
to execute and deliver this Agreement and the Registration Statement.
(p) The Representative shall have received (i) on the Firm Closing Date, executed copies of the Firm Warrants and the Warrant Agreement and (ii) on the Option Closing Date, executed copies of the Option Warrants.
(q) The Company shall have furnished or caused to be furnished to the Representative such further customary certificates or documents as the Representative shall have reasonably requested.
4.
Covenants and other Agreements of the Company and the Underwriters
.
(a) The Company covenants and agrees as follows:
(i) The Company will use its best efforts to cause the Registration Statement, if not effective at the time of execution of this Agreement, and any amendments thereto, to become effective as promptly as possible. The Company shall prepare the Prospectus in a form approved by the Representative and file such Prospectus pursuant to Rule 424(b) under the Securities Act within the applicable time period prescribed for filing under the Securities Act and the Rules. The Company will file with the Commission all Issuer Free Writing Prospectuses in the time and manner required under Rules 433(d) or 163(b)(2), as the case may be.
(ii) The Company shall use its best efforts to cause the Registration Statement to remain effective with a current prospectus for at least nine (9) months after the Applicable Time and shall use its commercially reasonable efforts to cause the Registration Statement to remain effective until such time as all of the Warrants have been exercised or terminated. The Company shall promptly advise the Representative in writing (A) when any post-effective amendment to the Registration Statement shall have become effective or any supplement to the Prospectus shall have been filed, (B) of any request by the Commission for any amendment of the Registration Statement or the Prospectus or for any additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any Preliminary Prospectus or any “free writing prospectus”, as defined in Rule 405 of the Rules, or the institution or threatening of any proceeding for that purpose, and (D) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. The Company shall not file any amendment of the Registration Statement or supplement to the Prospectus or any Issuer Free Writing Prospectus unless the Company has furnished the Representative a copy for its review prior to filing and shall not file any such proposed amendment or supplement to which the Representative reasonably objects. The Company shall use its best efforts to prevent the issuance of any such stop order and, if issued, to obtain as soon as possible the withdrawal thereof.
(iii) If, at any time when a prospectus relating to the Securities (or, in lieu thereof, the notice referred to in Rule 173(a) of the Rules) is required to be delivered under the Securities Act, any event occurs as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or if it shall be necessary to amend or supplement the Prospectus to comply with the Securities Act or the Rules, the Company promptly shall prepare and file with the Commission, subject to the second sentence of paragraph (ii) of this
Section 4(a)
, an amendment or supplement which shall correct such statement or omission or an amendment which shall effect such compliance.
(iv) If at any time following issuance of an Issuer Free Writing Prospectus there occurs an event or development as a result of which such Issuer Free Writing Prospectus would conflict with the information contained in the Registration Statement or would include an untrue statement of a material fact or would omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances prevailing at the subsequent time, not misleading, the Company will promptly notify the Representative and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
(v) The Company shall make generally available to its security holders and to the Representative as soon as practicable an earnings statement (which need not be audited) of the Company, covering such 12-month period, which shall satisfy the provisions of Section 11(a) of the Securities Act or Rule 158 of the Rules;
provided that
the Company will be deemed to have furnished such statements to its security holders and the Representative to the extent they are filed on EDGAR.
(vi) The Company shall furnish to the Representative and counsel for the Underwriters, without charge, three signed copies of the Registration Statement (including all exhibits thereto and amendments thereof) and to each other Underwriter a copy of the Registration Statement (without exhibits thereto) and all amendments thereof and, so long as delivery of a prospectus by an Underwriter or dealer may be required by the Securities Act or the Rules, as many copies of any Preliminary Prospectus, any Issuer Free Writing Prospectus and the Prospectus and any amendments thereof and supplements thereto as the Representative may reasonably request. If applicable, the copies of the Registration Statement, Preliminary Prospectus, any Issuer Free Writing Prospectus and Prospectus and each amendment and supplement thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(vii) The Company shall cooperate with the Representative and its counsel in endeavoring to qualify the Securities for offer and sale in connection with the offering under the laws of such jurisdictions as the Representative may reasonably request and shall maintain such qualifications in effect so long as required for the distribution of the Securities;
provided
,
however
, that the Company shall not be required in connection therewith, as a condition thereof, to qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, or to execute a general consent to service of process in any such jurisdiction or to subject itself to taxation as doing business in any such jurisdiction.
(viii) The Company, during the period when the Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) of the Rules) is required to be delivered in connection with sales of the Securities under the Securities Act and the Rules or the Exchange Act, will file all reports and other documents required to be filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange Act within the time periods required by the Exchange Act and the regulations promulgated thereunder.
(ix) Without the prior written consent of the Representative, for a period of 90 days after the date of this Agreement, the Company shall not issue, sell or register with the Commission, or otherwise dispose of, directly or indirectly, any equity securities of the Company (or any securities convertible into, or exercisable or exchangeable for, equity securities of the Company), except for (a) the Securities to be sold hereunder; (b) any shares of capital stock of the Company issued upon the exercise of options granted under the Company’s stock incentive plan or upon exercise or conversion of convertible securities issued on or prior to the date of this Agreement, all as described as outstanding in the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus; (c) any options and other awards granted under a Company stock incentive plan described in the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus; (d) the filing by the Company of (i) any registration statement on Form S-8 or a successor form thereto relating to a Company stock incentive plan described in the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus or (ii) any registration statement to register the issuance or resale of the Warrant Shares; (e) shares of capital stock of the Company or other securities of the Company issued in connection with a transaction with an unaffiliated third party that includes a bona fide commercial relationship (including joint ventures, marketing or distribution arrangements, collaboration agreements or intellectual property license agreements) or any acquisition of assets or acquisition of not less than a majority or controlling portion of the equity of another entity; or (f) securities required to be registered by the Company pursuant to the registration rights agreements entered into between March 31, 2015 and April 10, 2015;
provided that
, other than with respect to shares issuable to holders of outstanding convertible notes of the Company, in each case as described in the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus, the aggregate number of securities of the Company issued pursuant to
subsection (e)
shall not exceed 5% of the Company’s outstanding common stock as of the Firm Closing; and
provided further that
as a condition to any transfer pursuant to
subsection (e)
, any recipient of such shares of capital stock shall first execute and deliver to the Representative an agreement substantially in the form of the Lock-Up Agreement. In the event that during this period, (I) any shares are issued pursuant to the Company’s stock incentive plan that are exercisable during such 90 day period or (II) any registration is effected on Form S-8 or on any successor form relating to shares that are exercisable during such 90 day period, the Company shall obtain the written agreement of such grantee, purchaser or holder of such registered securities that, for a period of 90 days after the date of this Agreement, such person will not, without the prior written consent of the Representative, offer for sale, sell, distribute, grant any option for the sale of, or otherwise dispose of, directly or indirectly, or exercise any registration rights with respect to, any shares of Common Stock (or any securities convertible into, or exercisable or exchangeable for, any shares of Common Stock) owned by such person. Notwithstanding the foregoing, the Company represents and warrants that each such grantee or purchaser or holder of such registered securities shall be subject to similar lock-up restrictions as set forth on
Exhibit A
attached hereto and the Company shall enforce such rights and impose stop-transfer restrictions on any such sale or other transfer or disposition of such shares until the end of the applicable period.
(x) If the Representative agrees to release or waive the restrictions set forth in any Lock-Up Agreement for an officer or director of the Company and provide the Company with notice of the impending release or waiver at least three business days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of
Exhibit B
attached hereto through a major news service at least two business days before the effective date of the release or waiver.
(xi) On or before completion of the offering of the Securities, the Company shall make all filings required under applicable securities laws and by the OTCQB (including any required registration under the Exchange Act).
(xii) Prior to the latest of the Closing Dates, the Company will issue no press release or other communications directly or indirectly and hold no press conference with respect to the Company, the condition, financial or otherwise, or the earnings, business affairs or business prospects of any of them, or the offering of the Securities without the prior written consent of the Representative unless in the judgment of the Company and its counsel, and after notification to the Representative, such press release or communication is required by law.
(xiii) The Company will apply the net proceeds from the offering of the Securities in the manner set forth under “Use of Proceeds” in the Prospectus.
(xiv) If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the issuance or resale of the Warrant Shares underlying such Warrant, the Warrant Shares issued pursuant to any such exercise shall be issued free of all restrictive legends. If at any time following the date hereof, the Registration Statement (or any subsequent registration statement registering the issuance or resale of the Warrant Shares) is not effective or is not otherwise available for the issuance or resale of the Warrant Shares, the Company shall immediately notify the holders of the Warrants, as applicable, in writing that such registration statement is not then effective and thereafter shall promptly notify such holders when the registration statement is effective again and available for the issuance or resale of the Warrant Shares (it being understood and agreed that the foregoing shall not limit the ability of the Company to issue, or any holder thereof to sell, any Warrant Shares in compliance with applicable federal and state securities laws).
(xv) The Company shall take all action necessary to at all times have authorized and reserved for the purpose of issuance, free of preemptive rights, not less than the maximum number of Warrant Shares issuable upon exercise of the Firm Warrants and the Option Warrants (without taking into account any limitations on the exercise of the Warrants set forth therein).
(xvi)
The Company represents and agrees that, unless it obtains the prior consent of the Representativ
e, and each Underwriter represents and agrees that, unless it obtains the prior consent of the Company and the Representative, it has not made and will not, make any offer relating to the Securities that would constitute a “free writing prospectus” as defined in Rule 405 of the Rules and Regulations (each, a “
Permitted Free Writing Prospectus
”
);
provided
that the prior written consent of the Representative shall be deemed to have been given in respect of the Issuer Free Writing Prospectuses included in
Schedule
III
hereto. The Company represents that it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and comply with the requirements of Rules 164 and 433 of the Rules and Regulations applicable to
any Issuer Free Writing Prospectus, including the requirements relating to timely filing with the Commission, legending and record keeping. The Company will satisfy the condition in Rule 433 of the Rules and Regulations to avoid a requirement to file with the Commission any electronic
road show.
(xvii) The Company shall use its commercially reasonable efforts to maintain the inclusion of the Shares and the Warrant Shares for trading on the OTCQB. If the Company applies to have the Common Stock listed or quoted on any other trading market, it will then include in such application all of the Shares and the Warrant Shares, and will take such other action as is necessary to cause all of the Shares and the Warrant Shares to be listed or quoted on such other trading market as promptly as possible.
(xviii) As of the later of the Closing Dates, the Company shall have retained a financial public relations firm reasonably acceptable to the Representative and the Company, which firm shall be experienced in assisting issuers in public offerings of securities and in their relations with their security holders, and shall retain such firm or another firm reasonably acceptable to the Representative for a period of not less than two (2) years after the date of this Agreement.
(b) The Company agrees to pay, or reimburse if paid by the Representative, whether or not the transactions contemplated hereby are consummated or this Agreement is terminated, all of the Company’s costs and expenses incident to the public offering of the Securities and the performance of the obligations of the Company under this Agreement, including those relating to: (i) all filing fees relating to the registration of the Securities to be sold in the offering with the Commission; (ii) all actual Corporate Finance Filing System filing fees associated with the review of the offering by FINRA; (iii) all fees and expenses relating to the inclusion of the Shares and the Warrant Shares for trading on the OTCQB; (iv) all actual fees, expenses and disbursements relating to background checks of the Company’s officers and directors; (v) all actual fees, expenses and disbursements relating to the registration or qualification of the Securities under the “blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees); (vi) all actual fees, expenses and disbursements relating to the registration, qualification or exemption of the Securities under the securities laws of such foreign jurisdictions as the Representative may reasonably designate; (vii) the costs of all mailing and printing of the underwriting documents (including, without limitation, the Underwriting Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney), Registration Statements, Prospectuses and all amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the Representative may reasonably deem necessary; (viii) the costs of preparing, printing and delivering certificates representing the Securities; (ix) fees and expenses of the transfer agent for the Common Stock and the warrant agent for the Warrants; (x) stock transfer and/or stamp taxes, if any, payable upon the transfer of Securities from the Company to the Underwriters; (xi) the fees and expenses of the Company’s accountants; (xii) the fees and expenses of the Company’s legal counsel and other agents and representatives; and (xiii) the fees and expenses of the Underwriters’ legal counsel, not to exceed $100,000 in the aggregate. Notwithstanding the foregoing, the Company’s obligations to pay or reimburse the Representative for any out-of-pocket expenses actually incurred as specifically set forth in this Section 4(b) shall not exceed $125,000 in the aggregate, inclusive of the underwriter’s counsel fees and expenses and background check expenses. The Representative may deduct from the net proceeds of the Offering payable to the Company on the Firm Closing Date, or the Option Closing Date, if any, the expenses set forth herein to be paid by the Company to the Underwriters, less the Advance contemplated by Section 7(b) hereof;
provided, however
, that in the event that the Offering is terminated for the reasons set forth in Section 7(b) hereof, the Company agrees to reimburse the Underwriters pursuant to Section 7(b) hereof.
(c) The Company acknowledges and agrees that each of the Underwriters has acted and is acting solely in the capacity of a principal in an arm’s length transaction between the Company, on the one hand, and the Underwriters, on the other hand, with respect to the offering of Securities contemplated hereby (including in connection with determining the terms of the offering) and not as a financial advisor, agent or fiduciary to the Company or any other person. Additionally, the Company acknowledges and agrees that the Underwriters have not and will not advise the Company or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Company has consulted with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and the Underwriters shall have no responsibility or liability to the Company or any other person with respect thereto, whether arising prior to or after the date hereof. Any review by the Underwriters of the Company, the transactions contemplated hereby or other matters relating to such transactions have been and will be performed solely for the benefit of the Underwriters and shall not be on behalf of the Company. The Company agrees that it will not claim that the Underwriters, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary duty to the Company or any other person in connection with any such transaction or the process leading thereto.
5.
Indemnification
.
(a) The Company agrees to indemnify and hold harmless each Underwriter, its officers and employees and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all losses, claims, damages and liabilities, joint or several (including any reasonable investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted), to which they, or any of them, may become subject under the Securities Act, the Exchange Act or other Federal or state law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement, the Statutory Prospectus, the Prospectus, any Issuer Free Writing Prospectus or any “issuer-information” filed or required to be filed pursuant to Rule 433(d) of the Rules, any amendment thereof or supplement thereto, or arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading;
provided
,
however
, that such indemnity shall not inure to the benefit of any Underwriter (or any person controlling such Underwriter) on account of any losses, claims, damages or liabilities arising from the sale of the Shares or Warrants to any person by such Underwriter if such untrue statement or omission or alleged untrue statement or omission was made in such Preliminary Prospectus, the Registration Statement, the Statutory Prospectus, the Prospectus, any Issuer Free Writing Prospectus or such amendment or supplement thereto in reliance upon and in conformity with the Underwriter Information, or if such losses, claims, damages or liabilities are found in a final non-appealable judgment by a court of competent jurisdiction to have resulted solely from the gross negligence or willful misconduct of such Underwriter or any person controlling such Underwriter. This indemnity agreement will be in addition to any liability which the Company may otherwise have pursuant to this Agreement.
(b) Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, each director of the Company, and each officer of the Company who signs the Registration Statement, against any losses, claims, damages or liabilities to which such party may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement, the Statutory Prospectus, the Prospectus, any Issuer Free Writing Prospectus or such amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, the Registration Statement, the Statutory Prospectus, the Prospectus, any Issuer Free Writing Prospectus or such amendment or supplement thereto in reliance upon and in conformity with the Underwriter Information;
provided
,
however
, that the obligation of each Underwriter to indemnify the Company (including any controlling person, director or officer thereof) shall be limited to the amount of the underwriting discount and commissions applicable to the Shares and Warrants to be purchased by such Underwriter hereunder.
(c) Any party that proposes to assert the right to be indemnified under this Section will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section, notify each such indemnifying party of the commencement of such action, suit or proceeding, enclosing a copy of all papers served. No indemnification provided for in
Section 5(a)
or
5(b)
shall be available to any party who shall fail to give notice as provided in this
Section 5(c)
if the party to whom notice was not given was unaware of the proceeding to which such notice would have related and was prejudiced by the failure to give such notice but the omission to so notify such indemnifying party of any such action, suit or proceeding shall not relieve it from any liability that it may have to any indemnified party for contribution or otherwise under this Section. In case any such action, suit or proceeding shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and the approval by the indemnified party of such counsel, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses, except as provided below and except for the reasonable costs of investigation subsequently incurred by such indemnified party in connection with the defense thereof. The indemnified party shall have the right to employ its counsel in any such action, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the employment of counsel by such indemnified party has been authorized in writing by the indemnifying parties, (ii) the indemnified party shall have been advised in writing by counsel that there may be one or more legal defenses available to it which are different from or in addition to those available to the indemnifying party (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the indemnified party), or (iii) the indemnifying parties shall not have employed counsel to assume the defense of such action within a reasonable time after notice of the commencement thereof, in each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying parties. An indemnifying party shall not be liable for any settlement of any action, suit, and proceeding or claim effected without its written consent, which consent shall not be unreasonably withheld or delayed.
6.
Contributio
n. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in
Section 5(a)
or
5(b)
is due in accordance with its terms but for any reason is unavailable to or insufficient to hold harmless an indemnified party in respect to any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate losses, liabilities, claims, damages and expenses (including any investigation, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claims asserted, but after deducting any contribution received by any person entitled hereunder to contribution from any person who may be liable for contribution) incurred by such indemnified party, as incurred, in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Securities pursuant to this Agreement or, if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to above but also the relative fault of the Company on the one hand and the Underwriters on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters on the other, shall be deemed to be in the same respective proportions as the net proceeds (before deducting expenses) received by the Company from the sale of the Shares and Warrants and the total underwriting discounts and commissions received by the Underwriters in connection therewith, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate offering price of the Shares and Warrants. The relative fault of the Company, on the one hand, and the Underwriters on the other, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this
Section 6
were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this
Section 6
, no Underwriter (except as may be provided in any Agreement Among Underwriters) shall be required to contribute any amount in excess of the underwriting discounts and commissions applicable to the Shares and Warrants purchased by such Underwriter. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 6
, each person, if any, who controls an Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as such Underwriter, and each director of the Company, including any person who, with his or her consent, is named in the Registration Statement as about to become a director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of the Section 15 of the Securities Act or Section 20 of the Exchange Act, shall have the same rights to contribution as the Company. Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party or parties under this
Section 6
, notify such party or parties from whom contribution may be sought, but the omission so to notify such party or parties from whom contribution may be sought shall not relieve the party or parties from whom contribution may be sought from any other obligation it or they may have hereunder or otherwise than under this
Section 6
. No party shall be liable for contribution with respect to any action, suit, proceeding or claim settled without its written consent. The Underwriters’ obligations to contribute pursuant to this
Section 6
are several in proportion to their respective underwriting commitments and not joint.
7.
Termination
.
(a) This Agreement may be terminated with respect to the Shares and Warrants to be purchased on a Closing Date by the Representative by notifying the Company at any time subsequent to the execution of this Agreement and at or before a Closing Date in the absolute discretion of the Representative if: (i) there has occurred any material adverse change in the securities markets or any event, act or occurrence that has materially disrupted the securities markets or there shall be such a material adverse change in general financial, political or economic conditions or the effect of international conditions on the financial markets in the United States is such as to make it, in the reasonable judgment of the Representative, inadvisable or impracticable to market the Shares and/or Warrants or enforce contracts for the sale of the Shares and/or Warrants; (ii) there has occurred any outbreak or material escalation of hostilities or acts of terrorism or other calamity or crisis the effect of which on the financial markets of the United States is such as to make it, in the reasonable judgment of the Representative, inadvisable or impracticable to market the Shares and/or Warrants or enforce contracts for the sale of the Shares and/or Warrants; (iii) trading in the Shares, Warrant Shares or any securities of the Company has been suspended or materially limited by the Commission or trading generally on the New York Stock Exchange, Inc. or Nasdaq has been suspended or materially limited, or minimum or maximum ranges for prices for securities shall have been fixed, or maximum ranges for prices for securities have been required, by any of said exchanges or by such system or by order of the Commission, FINRA or any other governmental or regulatory authority; (iv) a banking moratorium has been declared by any state or Federal authority; or (v) in the reasonable judgment of the Representative, there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the Prospectus, any material adverse change in the assets, properties, condition, financial or otherwise, or in the results of operations, business affairs or business prospects of the Company, whether or not arising in the ordinary course of business.
(b) If this Agreement is terminated pursuant to any of its provisions, the Company shall not be under any liability to any Underwriter, and no Underwriter shall be under any liability to the Company, except that (i) if this Agreement is terminated by the Representative or the Underwriters because of any failure, refusal or inability on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, the Company will reimburse the Underwriters for all reasonable, actual and documented expenses (including the reasonable, actual and documented fees and disbursements of their counsel) incurred by them in connection with the proposed purchase and sale of the Shares and Warrants or in contemplation of performing their obligations hereunder, in an aggregate amount not to exceed $100,000, inclusive of the $25,000 advance (the “
Advance
”) for accountable expenses previously paid by the Company to the Representative;
provided that
, it is understood that the Company shall not pay or reimburse any costs, fees or expenses incurred by an Underwriter that defaults on its obligations to purchase the Shares and Warrants; and (ii) no Underwriter who shall have failed or refused to purchase the Shares and Warrants agreed to be purchased by it under this Agreement, without some reason sufficient hereunder to justify cancellation or termination of its obligations under this Agreement, shall be relieved of liability to the Company or to the other Underwriters for damages occasioned by its failure or refusal. Notwithstanding the foregoing, such expense cap of $100,000 shall not limit or impair the indemnification and contribution provisions of this Agreement and any advance received by the Representative will be reimbursed to the Company to the extent not actually incurred in compliance with FINRA Rule 5110(f)(2)(C).
8.
Substitution of Underwriters
. If any Underwriter shall default in its obligation to purchase on any Closing Date the Firm Securities or Option Securities agreed to be purchased hereunder on such Closing Date, the Representative shall have the right, within 36 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase such Firm Securities or Option Securities on the terms contained herein. If, however, the Representative shall not have completed such arrangements within such 36-hour period, then the Company shall be entitled to a further period of 36 hours within which to procure another party or other parties reasonably satisfactory to the Underwriters to purchase such Firm Securities or Option Securities on such terms. If, after giving effect to any arrangements for the purchase of the Firm Securities or Option Securities of a defaulting Underwriter or Underwriters by the Representative and the Company as provided above, the aggregate number of Firm Securities or Option Securities which remains unpurchased on such Closing Date does not exceed one-eleventh of the aggregate number of all the Firm Securities or Option Securities that all the Underwriters are obligated to purchase on such date, then the Company shall have the right to require each non-defaulting Underwriter to purchase the number of Firm Securities or Option Securities which such Underwriter agreed to purchase hereunder at such date and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the number of Firm Securities or Option Securities which such Underwriter agreed to purchase hereunder) of the Firm Securities or Option Securities of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default. In any such case, either the Representative or the Company shall have the right to postpone the applicable Closing Date for a period of not more than seven days in order to effect any necessary changes and arrangements (including any necessary amendments or supplements to the Registration Statement or Prospectus or any other documents), and the Company agrees to file promptly any amendments to the Registration Statement or the Prospectus which in the opinion of the Company and the Underwriters and their counsel may thereby be made necessary.
If, after giving effect to any arrangements for the purchase of the Firm Securities or Option Securities of a defaulting Underwriter or Underwriters by the Representative and the Company as provided above, the aggregate number of such Firm Securities or Option Securities which remains unpurchased exceeds one-eleventh of the aggregate number of all the Firm Securities or Option Securities to be purchased at such date, then this Agreement or, with respect to a Closing Date which occurs after the first Closing Date, the obligations of the Underwriters to purchase and of the Company, as the case may be, to sell the Option Securities to be purchased and sold on such date, shall terminate, without liability on the part of any non-defaulting Underwriter to the Company, and without liability on the part of the Company, except as provided in
Sections 4(b)
,
5
,
6
and
7
. The provisions of this
Section 8
shall not in any way affect the liability of any defaulting Underwriter to the Company or the non-defaulting Underwriters arising out of such default. The term “
Underwriter
” as used in this Agreement shall include any person substituted under this
Section 8
with like effect as if such person had originally been a party to this Agreement with respect to such Firm Securities or Option Securities.
9.
Miscellaneous
. The respective agreements, representations, warranties, indemnities and other statements of the Company and the several Underwriters, as set forth in this Agreement or made by or on behalf of them pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or the Company or any of their respective officers, directors or controlling persons referred to in
Sections 5
and
6
, and shall survive delivery of and payment for the Shares and Warrants. In addition, the provisions of
Sections 4(b)
,
5
,
6
and
7
shall survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the Underwriters, the Company and their respective successors and assigns, and, to the extent expressed herein, for the benefit of persons controlling any of the Underwriters, or the Company, and the directors and officers of the Company, and their respective successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. The term “successors and assigns” shall not include any purchaser of Securities from any Underwriter merely because of such purchase.
This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior or contemporaneous written or oral agreements, understandings, promises and negotiations with respect to the subject matter hereof. This Agreement may only be amended by a written instrument executed by each of the parties hereto.
The invalidity or unenforceability of any section, paragraph, clause or provision of this Agreement shall not affect the validity or enforceability of any other section, paragraph, clause or provision. If any term or provision of this Agreement or the performance thereof shall be invalid or unenforceable to any extent, such invalidity or unenforceability shall not affect or render invalid or unenforceable any other provision of this Agreement and this Agreement shall be valid and enforced to the fullest extent permitted by law.
All notices, consents and other communications under this Agreement must be in writing and will be deemed given (i) upon delivery, when delivered personally, (ii) on the fifth business day after being mailed by certified mail, return receipt requested, (iii) the next business day after delivery to a recognized overnight courier, or (iv) upon transmission and confirmation of receipt if sent by facsimile transmission or e-mail, to the parties at the following addresses or facsimile numbers (or to such other address or facsimile number as such party may have specified by notice given to the other party pursuant to this provision): (a) if to the Representative, (I) c/o Laidlaw & Company (UK) Ltd., 546 Fifth Avenue, 5
th
Floor, New York, New York 10036, Attention: Hugh Regan, Executive Director, Investment Banking, Fax Number: (212) 354-8783, with a copy (which shall not constitute notice) to Greenberg Traurig, LLP, 200 Park Avenue, New York, New York 10166, Attention: Anthony J. Marsico, Esq., e-mail (marsicoa@gtlaw.com) and (b) if to the Company, to its agent for service as such agent’s address appears on the cover page of the Registration Statement with a copy (which shall not constitute notice) to Sichenzia Ross Friedman Ference LLP, 61 Broadway, 32
nd
Floor, New York, New York 10006, Attention: Harvey Kesner, Esq., e-mail (hkesner@srff.com).
This Agreement shall be deemed to have been executed and delivered in New York City, New York, United States of America, and both this Agreement and the transactions contemplated hereby shall be governed as to validity, interpretation, construction, effect, and in all other respects by the laws of the State of New York, United States of America, without regard to the conflicts of laws principals thereof (other than Section 5-1401 of The New York General Obligations Law).
Each of the Underwriters and the Company: (i) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement and/or the transactions contemplated hereby shall be instituted exclusively in the Supreme Court of the State of New York, New York County, or in the United States District Court for the Southern District of New York, (ii) waives any objection which it may have now or hereafter to the venue of any such suit, action or proceeding, and (iii) irrevocably consents to the jurisdiction of the Supreme Court of the State of New York, New York County, or the United States District Court for the Southern District of New York in any such suit, action or proceeding. Each of the Underwriters and the Company further agrees to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the Supreme Court of the State of New York, New York County, or in the United States District Court for the Southern District of New York and agrees that service of process upon the Company mailed by certified mail to the Company’s address or delivered by Federal Express via overnight delivery shall be deemed in every respect effective service of process upon the Company, in any such suit, action or proceeding, and service of process upon the Underwriters mailed by certified mail to the Underwriters’ address or delivered by Federal Express via overnight delivery shall be deemed in every respect effective service process upon the Underwriter, in any such suit, action or proceeding.
This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original and all such counterparts shall together constitute one and the same instrument. Execution and delivery of a signed counterpart of this Agreement by facsimile or e-mail/.pdf transmission shall constitute valid and sufficient execution and delivery thereof.
The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision hereof or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.
[Signature Page Follows]
Please confirm that the foregoing correctly sets forth the agreement among us.
Very truly yours,
MABVAX THERAPEUTICS HOLDINGS, INC.
By
Name: J. David Hansen
Title: Chief Executive Officer
Confirmed:
Acting severally on behalf of itself
and as Representative of the several
Underwriters named in
Schedule I
annexed hereto.
LAIDLAW & COMPANY (UK) LTD.
By
Name: Hugh Regan
Title: Executive Director, Investment Banking
SCHEDULE I
Underwriter
|
|
Total Number of
Firm Shares to
be Purchased
|
|
Total
Number of Option Shares to be Purchased if Over-Allotment Option is Fully
Exercised
|
|
Total Number of Firm Warrants to
be Purchased
|
|
Total
Number of Option Warrants to be Purchased if Over-Allotment Option is Fully
Exercised
|
Laidlaw & Company (UK) Ltd.
|
|
|
|
|
|
|
|
|
TOTAL…………….
|
|
|
|
|
|
|
|
|
SCHEDULE II
Pricing Information
The initial public offering price per Share is $______.
The initial public offering price per Warrant is $_______.
The number of Firm Shares to be purchased by the Underwriters is __________.
The number of Firm Warrants to be purchased by the Underwriters is _________.
The number of Option Shares to be purchased by the Underwriters is _________.
The number of Option Warrants to be purchased by the Underwriters is _______.
The underwriting discount per Share is $_________.
The underwriting discount per Warrant is $______.
The proceeds to the Company per Share is $_________.
The proceeds to the Company per Warrant is $________.
The Warrant exercise price is $_________.
The settlement date is [____________], 2015.
SCHEDULE III
Issuer Free Writing Prospectuses
None.
EXHIBIT A
Form of Lock-Up Agreement
_________________, 2015
Laidlaw & Company (UK) Ltd.
As Representative of the Several Underwriters
c/o Laidlaw & Company (UK) Ltd.
546 Fifth Avenue, 5
th
Floor
New York, New York 10036
Re:
Public Offering of MabVax Therapeutics Holdings, Inc.
Ladies and Gentlemen:
The undersigned understands that you, as Representative (the “
Representative
”) of the several underwriters, propose to enter into an Underwriting Agreement (the “
Underwriting Agreement
”) with MabVax Therapeutics Holdings, Inc. (the “
Company
”), providing for the public offering (the “
Public Offering
”) by the several Underwriters named in
Schedule I
to the Underwriting Agreement (the “
Underwriters
”), of shares of the Company’s common stock, par value $0.01 per share (the “
Common Stock
”).
In consideration of the Underwriters’ agreement to enter into the Underwriting Agreement and to proceed with the Public Offering, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the undersigned hereby agrees for the benefit of the Company, you and the other Underwriters that, without the prior written consent of the Representative on behalf of the Underwriters, the undersigned will not, during the period ending 90 days (the “
Lock-Up Period
”) after the date of the final prospectus relating to the Public Offering (the “
Prospectus
”), directly or indirectly (1) offer, pledge, assign, encumber, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock owned either of record or beneficially (as defined in the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”)) by the undersigned on the date hereof or hereafter acquired (such shares, the “
Beneficially Owned Shares
”), (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Beneficially Owned Shares, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise, or publicly announce an intention to do either of the foregoing, or (3) engage in any short selling of the Common Stock. Notwithstanding the foregoing, the undersigned may transfer securities of the Company (i) as a
bona fide
gift or gifts;
provided
that the donee or donees thereof agree in writing to be bound by the restrictions set forth herein,
provided further
that any such transfer shall not involve a disposition for value, and
provided further
that no filing under Section 16(a) of the Exchange Act, or the rules promulgated thereunder, shall be required or shall be voluntarily made in connection therewith, (ii) pursuant to a valid domestic order or divorce decree or settlement or by will, other testamentary document or intestate succession upon the death of the undersigned;
provided
that the transferee agrees in writing to be bound by the restrictions set forth herein, (iii) to any family member or any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned,
provided
that such family member or the trustee of the trust agrees to be bound in writing by the restrictions set forth herein,
provided further
that any such transfer shall not involve a disposition for value, and
provided further
that no filing under Section 16(a) of the Exchange Act, or the rules promulgated thereunder, shall be required or shall be voluntarily made in connection therewith, (iv) if the undersigned is a corporation, limited liability company, partnership, trust or other business entity, a transfer as part of a transfer or distribution by the undersigned to its stockholders, members, partners, beneficiaries or other equity holders;
provided
that the transferee agrees in writing to be bound by the restrictions set forth herein,
provided further
that any such transfer or distribution shall not involve a disposition for value, and
provided further
that no filing under Section 16(a) of the Exchange Act, or the rules promulgated thereunder, shall be required or shall be voluntarily made in connection therewith, (v) to the Company pursuant to the vesting of or exercise by the undersigned of any equity incentive awards issued pursuant to the Company’s stock option or incentive plans as disclosed in the Prospectus, on a “cashless” or “net exercise” basis (which, for the avoidance of doubt shall not include “cashless” exercise programs involving a broker or third party);
provided
that the Common Stock received upon such exercise shall remain subject to the restrictions set forth herein, and
provided further
that no filing under Section 16(a) of the Exchange Act, or the rules promulgated thereunder, shall be required or shall be voluntarily made in connection with such vesting or exercise, (vi) to the Company pursuant to any contractual arrangement that provides for the repurchase of the undersigned’s Common Stock or such other securities by the Company or in connection with the termination of the undersigned’s employment or other service relationship with the Company, or (vii) pursuant to a
bona fide
third party tender offer, merger, consolidation or other similar transaction made to all holders of the Company’s capital stock involving a change of control of the Company,
provided
that in the event that the tender offer, merger, consolidation or other such transaction is not completed, the undersigned’s Common Stock shall remain subject to the restrictions set forth herein, and
provided further
that the consideration per share of Common Stock paid in such transaction shall be no less than the public offering price per share paid in the Public Offering.
Subject to the restrictions set forth in FINRA Rule 2711(f)(4), if (i) the Company issues an earnings release or material news or a material event relating to the Company occurs during the last 17 days of the Lock-Up Period, or (ii) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the Lock-Up Period, the Lock-Up Period shall be extended and the restrictions imposed by this Agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. Notwithstanding the foregoing, if the Company has “actively traded securities” within the meaning of Rule 139 under the Securities Act of 1933, as amended (the “
Securities Act
”), or otherwise satisfies the requirements set forth in Rule 139 under the Securities Act that would permit the Representatives or any underwriter to publish issuer-specific research reports pursuant to Rule 139 under the Securities Act, the Lock-Up Period shall not be extended upon the occurrence of (i) or (ii) above.
In addition, the restrictions set forth herein shall not prevent the undersigned from entering into a sales plan pursuant to Rule 10b5-1 under the Exchange Act after the date hereof,
provided that
(i) a copy of such plan is provided to the Representative promptly upon entering into the same and (ii) no sales or transfers may be made under such plan until the Lock-Up Period ends or this Agreement is terminated in accordance with its terms.
If the undersigned is an officer or director of the Company, the undersigned further agrees that the foregoing restrictions shall be equally applicable to any issuer-directed shares of Common Stock the undersigned may purchase in the Public Offering.
If the undersigned is an officer or director of the Company: (1) this letter agreement is being delivered in reliance on the agreement of the Representative that, at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection with a proposed transfer of shares of Common Stock by the undersigned, the Representative will notify the Company of the impending release or waiver, and (2) the undersigned acknowledges that the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted by the Representative hereunder to any such officer or director shall only be effective two business days after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described in this letter agreement to the extent and for the duration that such terms remain in effect at the time of the transfer.
In furtherance of the foregoing, the Company and any duly appointed transfer agent for the registration or transfer of the securities of the Company subject to this letter agreement are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this letter agreement.
The undersigned further agrees that (i) it will not, during the Lock-Up Period (as the same may be extended as described above), make any demand or request for or exercise any right with respect to the registration under the Securities Act of any shares of Common Stock or other Beneficially Owned Shares or any securities convertible into or exercisable or exchangeable for Common Stock or other Beneficially Owned Shares, and (ii) the Company may, with respect to any Common Stock or other Beneficially Owned Shares or any securities convertible into or exercisable or exchangeable for Common Stock or other Beneficially Owned Shares owned or held (of record or beneficially) by the undersigned, cause the transfer agent or other registrar to enter stop transfer instructions and implement stop transfer procedures with respect to such securities during the Lock-Up Period (as the same may be extended as described above).
The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this letter agreement. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the parent, successors, assigns, heirs or personal Representative of the undersigned.
The undersigned understands that, if (1) the Underwriting Agreement is not entered into on or prior to October 31, 2015, (2) the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Common Stock to be sold thereunder, (3) the Company submits or files and later withdraws the Registration Statement relating to the Public Offering, or (4) the Representative, on the one hand, or the Company, on the other hand, informs the other, prior to the execution of the Underwriting Agreement, that it has determined not to proceed with the Public Offering, the undersigned shall be released immediately from all obligations under this letter agreement.
The undersigned, whether or not participating in the Public Offering, understands that the Underwriters are entering into the Underwriting Agreement and proceeding with the Public Offering in reliance upon this letter agreement.
[Signature Page Follows]
This letter agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof. Delivery of a signed copy of this letter agreement by facsimile or e-mail/.pdf transmission shall be effective as delivery of the original hereof.
Very truly yours,
FOR INDIVIDUALS
:
_______________________________
Name:
FOR ENTITIES
:
By: ____________________________
Name:
Title:
Address:
EXHIBIT B
FORM OF PRESS RELEASE
MabVax Therapeutics Holdings, Inc.
[Date]
MabVax Therapeutics Holdings, Inc. (the “Company”) announced today that Laidlaw & Company (UK) Ltd., the sole book-running manager in the Company’s recent public sale of _________ shares of common stock, is [waiving] [releasing] a lock-up restriction with respect to ____ shares of the Company’s common stock held by [certain officers or directors] [an officer or director] of the Company. The [waiver] [release] will take effect on ______________, 20__ , and the shares may be sold on or after such date.
This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.
Exhibit 4.10
MABVAX THERAPEUTICS HOLDINGS, INC.
WARRANT AGENCY AGREEMENT
WARRANT AGENCY AGREEMENT (this “
Warrant Agreement
”) made as of [
·
], 2015 (the “
Issuance Date
”), between MabVax Therapeutics Holdings, Inc., a Delaware corporation, with offices at 11588 Sorrento Valley Road, Suite 20, San Diego, CA 92121 (the “
Company
”), and Equity Stock Transfer LLC, a Nevada limited liability company, with offices at 237 W 37
th
Street, New York, NY 10018, (“
Warrant Agent
”).
WHEREAS, the Company is engaged in a public offering (the “
Offering
”) of Common Stock and Warrants and, in connection therewith, has determined to issue and deliver up to [
·
] Warrants (the “
Warrants
”) to the public investors, with each such Warrant evidencing the right of the holder thereof to purchase one share of the Company’s common stock, par value $0.01 per share (the “
Common Stock
”), for $[
·
], subject to adjustment as described herein; and
WHEREAS, the Company has filed with the U.S. Securities and Exchange Commission (the “
Commission
”) a Registration Statement, No. 333-204803 on Form S-1 (as the same may be amended from time to time, the “
Registration Statement
”) for the registration, under the Securities Act of 1933, as amended (the “
Securities Act
”) of, among other securities, the Warrants and the Common Stock issuable upon exercise of the Warrants (the “
Warrant Shares
”), and such Registration Statement was declared effective on [
·
], 2015; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange and exercise of the Warrants; and
WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants (each, a “
Holder
”); and
WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as provided herein, the valid and binding obligations of the Company, and to authorize the execution and delivery of this Warrant Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
1.
Appointment of Warrant Agent
. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Warrant Agreement.
2.
Warrants
.
2.1.
Form of Warrant
. Each Warrant shall be issued in registered form only, shall be in substantially the form of
Exhibit A
hereto, the provisions of which are incorporated herein, and shall be signed by, or bear the facsimile signature of, the Chief Executive Officer, President, Chief Financial Officer or Treasurer, Secretary or Assistant Secretary of the Company. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance. All of the Warrants shall initially be represented by one or more book-entry certificates (each a “
Book-Entry Warrant Certificate
”).
2.2.
Effect of Countersignature
. Unless and until countersigned by the Warrant Agent pursuant to this Warrant Agreement, a Warrant shall be invalid and of no effect and may not be exercised by a Holder.
2.3.
Registration.
2.3.1.
Warrant Register
. The Warrant Agent shall maintain books (“
Warrant Register
”), for the registration of the original issuance and the registration of any transfer of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants in the names of the respective Holders in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company. To the extent the Warrants are DTC eligible as of the Issuance Date, all of the Warrants shall be represented by one or more Book-Entry Warrant Certificates deposited with the Depository Trust Company (the “
Depository
”) and registered in the name of Cede & Co., a nominee of the Depository. Ownership of beneficial interests in the Book-Entry Warrant Certificates shall be shown on, and the transfer of such ownership shall be effected through, records maintained (i) by the Depository or its nominee for each Book-Entry Warrant Certificate; (ii) by institutions that have accounts with the Depository (such institution, with respect to a Warrant in its account, a “
Participant
”); or (iii) directly on the book-entry records of the Warrant Agent with respect only to owners of beneficial interests that represent such direct registration.
If the Warrants are not DTC Eligible as of the Issuance Date or the Depository subsequently ceases to make its book-entry settlement system available for the Warrants, the Company may instruct the Warrant Agent to make other arrangements for book-entry settlement within ten (10) Business Days after the Depository ceases to make its book-entry settlement available. In the event that the Company does not make alternative arrangements for book-entry settlement within ten (10) Business Days or the Warrants are not eligible for, or it is no longer necessary to have the Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depository to deliver to the Warrant Agent for cancellation each Book-Entry Warrant Certificate, and the Company shall instruct the Warrant Agent to deliver to the Depository definitive Warrant Certificates in physical form evidencing such Warrants. Such definitive Warrant Certificates shall be in substantially the form annexed hereto as
Exhibit A
.
As used herein, the term “
Business Day
” means any day other than Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by law or executive order to remain closed.
2.3.2.
Beneficial Owner; Registered Holder
. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such Warrant shall be registered upon the Warrant Register (“registered holder”), as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on the Warrant Certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Any person in whose name ownership of a beneficial interest in the Warrants evidenced by a Book-Entry Warrant Certificate is recorded in the records maintained by the Depository or its nominee shall be deemed the “beneficial owner” thereof;
provided
, that all such beneficial interests shall be held through a Participant which shall be the registered holder of such Warrants. As used herein, the term “Holder” refers only to a registered holder of the Warrants.
2.4.
Uncertificated Warrants
. Notwithstanding the foregoing and anything else herein to the contrary, the Warrants may be issued in uncertificated form.
3.
Terms and Exercise of Warrants.
3.1.
Exercise Price
. Each Warrant shall, when countersigned by the Warrant Agent, entitle the Holder, subject to the provisions of such Warrant and of this Warrant Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $[
·
] per whole share, subject to the subsequent adjustments provided in Section 4 hereof. The term “Exercise Price” as used in this Warrant Agreement refers to the price per share at which Common Stock may be purchased at the time a Warrant is exercised.
3.2.
Duration of Warrants
. A Warrant may be exercised only during the period (“
Exercise Period
”) commencing on the Issuance Date and terminating at 5:00 P.M., New York City time on [
·
], 20[
·
] (“
Expiration Date
”). Each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Warrant Agreement shall cease at the close of business on the Expiration Date.
3.3.
Exercise of Warrants
.
3.3.1.
Exercise and Payment
. A Holder may exercise a Warrant by delivering, not later than 5:00 P.M., New York City time, on any Business Day during the Exercise Period (the “
Exercise Date
”) to the Warrant Agent at its corporate trust department (i) the Warrant Certificate evidencing the Warrants to be exercised, or, in the case of a Book-Entry Warrant Certificate, the Warrants to be exercised (the “
Book-Entry Warrants
”) shown on the records of the Depository to an account of the Warrant Agent at the Depository designated for such purpose in writing by the Warrant Agent to the Depository from time to time, (ii) an election to purchase the Warrant Shares underlying the Warrants to be exercised (an “
Election to Purchase
”), properly completed and executed by the Holder on the reverse of the Warrant Certificate or, in the case of a Book-Entry Warrant Certificate, properly delivered by the Participant in accordance with the Depository’s procedures, and (iii) the Exercise Price for each Warrant to be exercised in lawful money of the United States of America by certified or official bank check or by bank wire transfer in immediately available funds.
If any of (A) the Warrant Certificate or the Book-Entry Warrants, (B) the Election to Purchase, or (C) the Exercise Price therefor, is received by the Warrant Agent after 5:00 P.M., New York City time, on the specified Exercise Date, the Warrants will be deemed to be received and exercised on the Business Day next succeeding the Exercise Date. If the date specified as the Exercise Date is not a Business Day, the Warrants will be deemed to be received and exercised on the next succeeding day that is a Business Day. If the Warrants are received or deemed to be received after the Expiration Date, the exercise thereof will be null and void and any funds delivered to the Warrant Agent will be returned to the Holder. In no event will interest accrue on funds deposited with the Warrant Agent in respect of an exercise or attempted exercise of Warrants. If there is a dispute as to whether a Warrant delivered for exercise on the Expiration Date is valid, the Warrant Agent shall have the right to rely on the Company’s determination as to whether such exercise is valid. Neither the Company nor the Warrant Agent shall have any obligation to inform a Holder of the invalidity of any exercise of any Warrants.
The Warrant Agent shall promptly deposit all funds received by it in payment of the Exercise Price in the account of the Company maintained with the Warrant Agent for such purpose and shall advise the Company via telephone at the end of each day on which funds for the exercise of the Warrants are received of the amount so deposited to its account. The Warrant Agent shall promptly confirm such telephonic advice to the Company in writing.
3.3.2.
Issuance of Certificates
. The Warrant Agent shall, by 11:00 A.M. New York City time on the Business Day following the Exercise Date of any Warrant, advise the Company or the transfer agent and registrar for the Company’s Common Stock, in respect of (a) the number of Warrant Shares issuable upon such exercise in accordance with the terms and conditions of this Warrant Agreement, (b) the instructions of each Holder with respect to delivery of the Warrant Shares issuable upon such exercise, and the delivery of definitive Warrant Certificates, as appropriate, evidencing the balance, if any, of the Warrants remaining after such exercise, (c) in case of a Book-Entry Warrant Certificate, the notation that shall be made to the records maintained by the Depository, its nominee for each Book-Entry Warrant Certificate, or a Participant, as appropriate, evidencing the balance, if any, of the Warrants remaining after such exercise and (d) such other information as the Company or such transfer agent and registrar shall reasonably require.
The Company shall, by 5:00 P.M., New York City time, on the third Business Day next succeeding the Exercise Date of any Warrant and the clearance of the funds in payment of the aggregate Exercise Price, execute, issue and deliver to the Warrant Agent, the Warrant Shares to which such Holder is entitled, in fully registered form, registered in such name or names as may be directed by such Holder. Upon receipt of such Warrant Shares, the Warrant Agent shall, by 5:00 P.M., New York City time, on the third Business Day next succeeding such Exercise Date, transmit such Warrant Shares to, or upon the order of, such Holder.
In lieu of delivering physical certificates representing the Warrant Shares issuable upon exercise of any Warrants, provided the Company’s transfer agent is participating in the Depository’s Fast Automated Securities Transfer program, the Company shall use its commercially reasonable efforts to cause its transfer agent to electronically transmit the Warrant Shares issuable upon exercise to the Depository by crediting the account of the Depository or of the Participant, as the case may be, through its Deposit Withdrawal Agent Commission system. The time periods for delivery described in the immediately preceding paragraph shall apply to the electronic transmittals described herein.
3.3.3.
Valid Issuance
. All Warrant Shares issued upon the proper exercise of a Warrant in conformity with this Warrant Agreement shall be validly issued, fully paid and nonassessable.
3.3.4.
No Fractional Exercise
. Warrants may be exercised only in whole numbers of Warrant Shares. No fractional Warrant Shares are to be issued upon the exercise of a Warrant, but rather the number of Warrant Shares to be issued shall be rounded up or down, as applicable, to the nearest whole number. If fewer than all of the Warrants evidenced by a Warrant Certificate are exercised, a new Warrant Certificate for the number of unexercised Warrants remaining shall be executed by the Company and countersigned by the Warrant Agent as provided in Section 2 of this Warrant Agreement, and delivered to the Holder at the address specified on the books of the Warrant Agent or as otherwise specified by such Holder. If fewer than all of the Warrants evidenced by a Book-Entry Warrant Certificate are exercised, a notation shall be made to the records maintained by the Depository, its nominee for each Book-Entry Warrant Certificate, or a Participant, as appropriate, evidencing the balance of the Warrants remaining after such exercise.
3.3.5.
No Transfer Taxes
. The Company shall not be required to pay any stamp or other tax or governmental charge required to be paid in connection with any transfer involved in the issue of the Warrant Shares upon the exercise of Warrants; and in the event that any such transfer is involved, the Company shall not be required to issue or deliver any Warrant Shares until such tax or other charge shall have been paid or it has been established to the Company’s satisfaction that no such tax or other charge is due.
3.3.6.
Date of Issuance
. Each person in whose name any such certificate for Warrant Shares is issued shall for all purposes be deemed to have become the holder of record of such shares on the date on which the applicable Warrant was surrendered and payment of the Exercise Price was made, irrespective of the date of delivery of any such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of record of such shares at the close of business on the next succeeding date on which the stock transfer books are open.
3.3.7.
Intentionally Omitted
.
3.3.8.
Disputes
. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the applicable Holders the number of Warrant Shares that are not disputed.
4.
Adjustments.
4.1.
Adjustment upon Subdivision or Combination of Common Stock
. If the Company at any time after the Issuance Date subdivides (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time after the Issuance Date combines (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 4.1 shall become effective at the close of business on the date the subdivision or combination becomes effective. The Company shall promptly notify Warrant Agent of any such adjustment and give specific instructions to Warrant Agent with respect to any adjustments to the Warrant Register.
4.2.
Adjustment for Other Distributions
. In the event the Company shall fix a record date for the making of a dividend or distribution to all holders of Common Stock of any evidences of indebtedness or assets or subscription rights or warrants (excluding those referred to in Section 4.1 or other dividends paid out of retained earnings), then in each such case the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the VWAP determined as of the record date mentioned above, and of which the numerator shall be such VWAP on such record date less the then per share fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors in good faith. In either case the adjustments shall be described in a statement provided to each Holder of the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above. For purposes of this Section 4.2, “
VWAP
” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on NYSE AMEX, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market or the New York Stock Exchange (each, a “
Trading Market
”), the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a trading day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time) on any day that the Trading Market on which the Common Stock is then listed is open for trading), (b) the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board or the OTCQB, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board or the OTCQB and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
4.3.
Reclassification, Consolidation, Purchase, Combination, Sale or Conveyance
. If, at any time while the Warrants are outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another person whereby such other person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other person or other persons making or party to, or associated or affiliated with the other persons making or party to, such stock or share purchase agreement or other business combination) (each a “
Fundamental Transaction
”), then, upon any subsequent exercise of a Warrant, each Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, the same amount and kind of securities, cash or property, if any, of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “
Alternate Consideration
”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which each Warrant is exercisable immediately prior to such Fundamental Transaction. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as
to the Alternate Consideration that such Holder receives upon any exercise of each Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “
Successor Entity
”) and for which stockholders received any equity securities of the Successor Entity, to assume in writing all of the obligations of the Company under this Warrant Agreement in accordance with the provisions of this Section 4.3 pursuant to written agreements and shall, upon the written request of such Holder, deliver to such Holder in exchange for the applicable Warrants created by this Warrant Agreement a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Warrants which are exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity), if any, plus any Alternate Consideration, receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which the Warrants are exercisable immediately prior to such Fundamental Transaction, and with an exercise price which applies the Exercise Price hereunder to such shares of capital stock, if any, plus any Alternate Consideration (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of such Warrant immediately prior to the consummation of such Fundamental Transaction). Upon the occurrence of any such Fundamental Transaction the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant Agreement and the Warrants referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant Agreement and the Warrants with the same effect as if such Successor Entity had been named as the Company herein and therein.
The Company shall instruct the Warrant Agent to mail, by first class mail, postage prepaid, to each Holder, written notice of the execution of any such amendment, supplement to this Warrant Agreement and/or the Warrants or other agreement. Any such amendment, supplement or other agreement entered into by the Successor Entity shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 4. The Warrant Agent shall be under no responsibility to determine the correctness of any provisions contained in such amendment, supplement or other agreement relating either to the kind or amount of securities or other property receivable upon exercise of the Warrants or with respect to the method employed and provided therein for any adjustments and shall be entitled to rely upon the provisions contained in any such amendment, supplement or other agreement. The provisions of this Section 4.3 shall similarly apply to successive reclassifications, changes, consolidations, mergers, sales and conveyances of the kind described above.
4.4.
Other Events
. If any event occurs of the type contemplated by the provisions of Section 4.1, 4.2 or 4.3 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features to all holders of Common Stock for no consideration), then the Company’s Board of Directors will in good faith make an adjustment in the Exercise Price and the number of Warrant Shares so as to protect the rights of each Holder. Notwithstanding the foregoing, no adjustment to the Exercise Price shall be made in connection with the issuance of securities by the Company at a per share price that is lower than the Exercise Price of this Warrant then in effect.
4.5.
Notices of Changes in Warrant
. Upon every adjustment of the Exercise Price or the number of Warrant Shares, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Exercise Price resulting from such adjustment and the increase or decrease, if any, in the number of Warrant Shares purchasable upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified in Sections 4.1, 4.2 or 4.3, then, in any such event, the Company shall give written notice to each Holder, at the last address set forth for such Holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.
4.6.
No Fractional Shares
. Notwithstanding any provision contained in this Warrant Agreement to the contrary, the Company shall not issue fractional shares upon exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, a Holder would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round up or down, as applicable, to the nearest whole number the number of Warrant Shares to be issued to such Holder.
4.7.
Form of Warrant
. The form of Warrant annexed hereto as
Exhibit A
need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Exercise Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Warrant Agreement. However, the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.
5.
Transfer and Exchange of Warrants
.
5.1.
Registration of Transfer
. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, properly endorsed with signatures medallion signature guaranteed and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.
5.2.
Procedure for Surrender of Warrants
. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer reasonably acceptable to Warrant Agent, duly executed by the Holder thereof, or by a duly authorized attorney, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the Holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that except as otherwise provided herein or in any Book-Entry Warrant Certificate, each Book-Entry Warrant Certificate may be transferred only in whole and only to the Depository, to another nominee of the Depository, to a successor depository, or to a nominee of a successor depository; provided further, however, that in the event that a Warrant surrendered for transfer bears a restrictive legend, the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange therefor until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new Warrants must also bear a restrictive legend. Upon any such registration of transfer, the Company shall execute, and the Warrant Agent shall countersign and deliver, in the name of the designated transferee a new Warrant Certificate or Warrant Certificates of any authorized denomination evidencing in the aggregate a like number of unexercised Warrants.
5.3.
Fractional Warrants
. The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the issuance of a Warrant Certificate for a fraction of a Warrant.
5.4.
Service Charges
. A service charge shall be made for any exchange or registration of transfer of Warrants, as negotiated between Company and Warrant Agent.
5.5.
Warrant Execution and Countersignature
. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Warrant Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.
6.
Limitations on Exercise
. Except as provided in the last sentence of this Section 6, neither the Warrant Agent nor the Company shall effect any exercise of any Warrant, and no Holder shall have the right to exercise any portion of a Warrant, to the extent that after giving effect to the issuance of shares of Common Stock after exercise as set forth on the applicable Election to Purchase, such Holder (together with such Holder’s Affiliates (as defined in Rule 405 under the Securities Act), and any other persons acting as a group together with such Holder or any of such Holder’s Affiliates), would beneficially own in excess of 4.99% of the Company’s Common Stock. For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by a Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of the Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon exercise of the remaining, nonexercised portion of any Warrant beneficially owned by such Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 6, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”) and the rules and regulations promulgated thereunder, it being acknowledged by
each Holder that neither the Warrant Agent nor the Company is representing to such Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and such Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 6 applies, the determination of whether a Warrant is exercisable (in relation to other securities owned by a Holder together with any Affiliates) and of which portion of a Warrant is exercisable shall be in the sole discretion of a Holder, and the submission of an Election to Purchase shall be deemed to be such Holder’s determination of whether such Warrant is exercisable (in relation to other securities owned by such Holder together with any Affiliates) and of which portion of a Warrant is exercisable, and neither the Warrant Agent nor the Company shall have any obligation to verify or confirm the accuracy of such determination and neither of them shall have any liability for any error made by such Holder. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 6, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. The provisions of this Section 6 shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 6 to correct this subsection (or any portion hereof) which may be defective or inconsistent with the intended beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this Section 6 shall apply to a successor Holder.
7.
Other Provisions Relating to Rights of Holders of Warrants
.
7.1.
No Rights as Stockholder
. Except as otherwise specifically provided herein, a Holder, solely in its capacity as an owner of a Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant Agreement be construed to confer upon a Holder, solely in its capacity as the owner of a Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of a Warrant. For the avoidance of doubt, ownership of a Warrant does not entitle the Holder or any beneficial owner thereof to any of the rights of a stockholder.
7.2.
Lost, Stolen, Mutilated, or Destroyed Warrants
. If any Warrant is lost, stolen, mutilated, or destroyed, the Company will either (i) authorize the Warrant Agent to instruct the Holder to file documents with the Warrant Agent’s insurance company as reasonably required to obtain an open penalty bond necessary for the replacement of the Warrant Certificate or (ii) indemnify the Warrant Agent and provide instructions to the Warrant Agent to replace such Warrant Certificate. Thereafter, the Warrant Agent shall issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.
7.3.
Reservation of Common Stock
. The Company shall request that the Warrant Agent at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Warrant Agreement.
8.
Concerning the Warrant Agent and Other Matters
.
8.1.
Concerning the Warrant Agent. The Warrant Agent
:
a) shall have no duties or obligations other than those set forth herein and no duties or obligations shall be inferred or implied;
b) may rely on and shall be held harmless by the Company in acting upon any certificate, statement, instrument, opinion, notice, letter, facsimile transmission, telegram or other document, or any security, that may be delivered to it by the Company, and reasonably believed by it to be genuine and to have been made or signed by the proper party or parties;
c) may rely on and shall be held harmless by the Company in acting upon written or oral instructions or statements from the Company with respect to any matter relating to its acting as Warrant Agent;
d) solely shall make the final determination as to whether or not a Warrant received by Warrant Agent is duly, completely and correctly executed, and Warrant Agent shall be held harmless by the Company in respect of any action taken, suffered or omitted by Warrant Agent hereunder in good faith and in accordance with its determination;
e) shall not be obligated to take any legal or other action hereunder which might, in its judgment, subject or expose it to any expense or liability unless it shall have been furnished with an indemnity satisfactory to it; and
f) shall not be liable or responsible for any failure of the Company to comply with any of the Company’s obligations relating to the Registration Statement or this Warrant Agreement, including without limitation obligations under applicable regulation or law.
8.2.
Payment of Taxes
. The Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuance or delivery of Warrant Shares upon the exercise of Warrants, but the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such Warrant Shares. The Warrant Agent shall not register any transfer or issue or deliver any Warrant Certificate(s) or Warrant Shares unless or until the persons requesting the registration or issuance shall have paid to the Warrant Agent for the account of the Company the amount of such tax, if any, or shall have established to the reasonable satisfaction of the Company that such tax, if any, has been paid.
8.3.
Resignation, Consolidation, or Merger of Warrant Agent
.
8.3.1.
Appointment of Successor Warrant Agent
. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving 60 days’ prior written notice to the Company. The Warrant Agent may be removed by the Company by written notice to the Warrant Agent and the holders of the Warrants. If the Warrant Agent shall resign or be removed or shall otherwise become incapable of acting as Warrant Agent, the Company shall appoint a successor to the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of the Warrant (who shall, with such notice, submit his Warrant for inspection by the Company), then the holder of any Warrant may apply to the courts of the State of Delaware for the appointment of a successor Warrant Agent at the Company’s cost. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation organized and existing under the laws of the State of Delaware, in good standing and having its principal office in the State of Delaware, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the records, property, authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations. Failure to file or mail any notice provided for in this Section, however, or any defect therein, shall not affect the validity of the resignation or removal of the Warrant Agent or the appointment of the successor Warrant Agent, as the case may be.
8.3.2.
Notice of Successor Warrant Agent
. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any such appointment.
8.3.3.
Merger or Consolidation of Warrant Agent
. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Warrant Agreement without any further act.
8.4.
Fees and Expenses of Warrant Agent
.
8.4.1.
Remuneration
. The Company agrees to pay the Warrant Agent reasonable remuneration in an amount separately agreed to between Company and Warrant Agent for its services as Warrant Agent hereunder and will reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.
8.4.2.
Further Assurances
. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Warrant Agreement.
8.5.
Liability of Warrant Agent
.
8.5.1.
Reliance on Company Statement
. Whenever in the performance of its duties under this Warrant Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the President, Chief Executive Officer or Chief Financial Officer of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Warrant Agreement.
8.5.2.
Indemnity
. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, claims, losses, damages, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Warrant Agreement except as a result of the Warrant Agent’s gross negligence, willful misconduct, or bad faith.
8.5.3.
Exclusions
. The Warrant Agent shall have no responsibility with respect to the validity of this Warrant Agreement or with respect to the validity or execution of any Warrant (except its countersignature hereof and thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Warrant Agreement or in any Warrant; nor shall it be responsible to make any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Warrant Shares to be issued pursuant to this Warrant Agreement or any Warrant or as to whether any Warrant Shares will, when issued, be validly issued and fully paid and nonassessable.
8.6.
Acceptance of Agency
. The Warrant Agent hereby accepts the agency established by this Warrant Agreement and agrees to perform the same upon the terms and conditions herein set forth and, among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of Warrant Shares through the exercise of Warrants.
9.
Miscellaneous Provisions
.
9.1.
Successors
. All the covenants and provisions of this Warrant Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.
9.2.
Notices
. Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by a Holder to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) Business Days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:
MabVax Therapeutics Holdings, Inc.
11588 Sorrento Valley Road, Suite 20
San Diego, CA 92121
Attn: J. David Hansen, Chief Executive Officer
with a copy to:
Sichenzia Ross Friedman Ference LLP
61 Broadway, 32nd Fl.
New York, NY 10006
Attn: Harvey Kesner, Esq.
Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the a Holder or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) Business Days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows:
Equity Stock Transfer, LLC.
237 W. 37
th
Street
New York, NY 10018
Attn:
Nora Marckwordt, Senior Operations Specialist
9.3.
Applicable Law
. The validity, interpretation, and performance of this Warrant Agreement and of the Warrants shall be governed in all respects by the laws of the State of Delaware, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.
9.4.
Persons Having Rights under this Warrant Agreement
. Nothing in this Warrant Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties hereto and the Holders of the Warrants and, for purposes of Sections 3.3, 9.3 and 9.8, the Underwriter, any right, remedy, or claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. The Underwriters shall be deemed to be an express third-party beneficiary of this Warrant Agreement with respect to Sections 3.3, 9.3 and 9.8 hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Warrant Agreement shall be for the sole and exclusive benefit of the parties hereto (and the Underwriters with respect to the Sections 3.3, 9.3 and 9.8 hereof) and their successors and assigns and of the Holders.
9.5.
Examination of this Warrant Agreement
. A copy of this Warrant Agreement shall be available at all reasonable times at the office of the Warrant Agent in New York, New York for inspection by any Holder. The Warrant Agent may require any such Holder to submit his Warrant for inspection by it.
9.6.
Counterparts
. This Warrant Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
9.7.
Effect of Headings
. The Section headings herein are for convenience only and are not part of this Warrant Agreement and shall not affect the interpretation thereof.
9.8.
Amendments
. This Warrant Agreement may be amended by the parties hereto without the consent of any Holder for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions with respect to matters or questions arising under this Warrant Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the interest of the Holders. All other modifications or amendments, including any amendment to increase the Exercise Price or shorten the Exercise Period, shall require the written consent of the Underwriter and the Holders of a majority of the then outstanding Warrants.
9.9.
Severability
. This Warrant Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Warrant Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Warrant Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
9.10.
Force Majeure
. In the event either party is unable to perform its obligations under the terms of this Warrant Agreement because of acts of God, strikes, failure of carrier or utilities, equipment or transmission failure or damage that is reasonably beyond its control, or any other cause that is reasonably beyond its control, such party shall not be liable for damages to the other for any damages resulting from such failure to perform or otherwise from such causes. Performance under this Warrant Agreement shall resume when the affected party or parties are able to perform substantially that party’s duties.
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IN WITNESS WHEREOF, this Warrant Agency Agreement has been duly executed by the parties hereto as of the day and year first above written.
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MABVAX THERAPEUTICS HOLDINGS, INC.
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EQUITY STOCK TRANSFER LLC
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By:
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Exhibit A
[FORM OF WARRANT CERTIFICATE]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
AGENT AS PROVIDED HEREIN.
Warrant Certificate Evidencing Warrants to Purchase
Common Stock, par value of $0.01 per share, as described herein.
MABVAX THERAPEUTICS HOLDINGS, INC.
VOID AFTER 5:00 P.M., NEW YORK CITY TIME, ON _______ __, 20
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This certifies that ________________________ or registered assigns is the registered holder (the “
Holder
”) of _____________________ warrants to purchase certain securities (each a “
Warrant
”). Each Warrant entitles the Holder, subject to the provisions contained herein and in the Warrant Agreement (as defined below), to purchase from MabVax Therapeutics Holdings, Inc., a Delaware corporation (the “
Company
”), one share (collectively, the “
Warrant Shares
”) of Common Stock, par value $0.01 per share, of the Company (“
Common Stock
”), at the Exercise Price set forth below. The price per share at which each Warrant Share may be purchased at the time each Warrant is exercised (the “
Exercise Price
”) is $[
·
] initially, subject to adjustments as set forth in the Warrant Agreement (as defined below).
This Warrant Certificate is issued under and in accordance with the Warrant Agency Agreement, dated as of [
·
], 2015 (the “
Warrant Agreement
”), between the Company and the Warrant Agent (as defined below), and is subject to the terms and provisions contained in the Warrant Agreement, to all of which terms and provisions the Holder of this Warrant Certificate and the beneficial owners of the Warrants represented by this Warrant Certificate consent by acceptance hereof. Copies of the Warrant Agreement are on file and can be inspected at the below-mentioned office of the Warrant Agent and at the office of the Company at 11588 Sorrento Valley Road, Suite 20, San Diego, CA 92121. Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Warrant Agreement.
Subject to the terms of the Warrant Agreement, each Warrant evidenced hereby may be exercised in whole but not in part at any time, as specified herein, on any Business Day (as defined below) occurring during the period (the “
Exercise Period
”) commencing on the Issuance Date and terminating at 5:00 P.M., New York City time, on [
·
], 20[
·
] (the “
Expiration Date
”). Each Warrant remaining unexercised after 5:00 P.M., New York City time, on the Expiration Date shall become void, and all rights of the Holder of this Warrant Certificate evidencing such Warrant shall cease.
The Holder of the Warrants represented by this Warrant Certificate may exercise any Warrant evidenced hereby by delivering, not later than 5:00 P.M., New York City time, on any Business Day during the Exercise Period (the “
Exercise Date
”) to Equity Stock Transfer, LLC (the “
Warrant Agent
”, which term includes any successor warrant agent under the Warrant Agreement described below) at it offices at 237 W 37
th
Street, New York, NY 10018, (i) this Warrant Certificate or, in the case of a Book-Entry Warrant Certificate (as defined in the Warrant Agreement), the Warrants to be exercised (the “
Book-Entry Warrants
”) as shown on the records of The Depository Trust Company (the “
Depository
”) to an account of the Warrant Agent at the Depository designated for such purpose in writing by the Warrant Agent to the Depository, (ii) an election to purchase (“
Election to Purchase
”), properly executed by the Holder hereof on the reverse of this Warrant Certificate or properly executed by the institution in whose account the Warrant is recorded on the records of the Depository (the “
Participant
”), and substantially in the form included on the reverse of this Warrant Certificate and (iii) the Exercise Price for each Warrant to be exercised in lawful money of the United States of America by certified or official bank check or by bank wire transfer in immediately available funds, in each case payable to the order of the Company.
As used herein, the term “
Business Day
” means any day other than Saturday, Sunday or other day on which commercial banks are authorized or required by law or executive order to remain closed.
Warrants may be exercised only in whole numbers of Warrants. No fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather the number of Warrant Shares to be issued shall be rounded up or down, as applicable, to the nearest whole number. If fewer than all of the Warrants evidenced by this Warrant Certificate are exercised, a new Warrant Certificate for the number of Warrants remaining unexercised shall be executed by the Company and countersigned by the Warrant Agent as provided in Section 2 of the Warrant Agreement, and delivered to the Holder of this Warrant Certificate at the address specified on the books of the Warrant Agent or as otherwise specified by such Holder.
The Company shall provide to the Holder prompt written notice of any time that the Company is unable to issue the Warrant Shares via DTC transfer or otherwise (without restrictive legend), because (A) the Commission has issued a stop order with respect to the Registration Statement, (B) the Commission otherwise has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, (C) the Company has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, or (D) otherwise (each a “
Restrictive Legend Event
”). To the extent that a Restrictive Legend Event occurs after the Holder has exercised a Warrant in accordance with the terms of the Warrants but prior to the delivery of the Warrant Shares, the Company shall, at the election of the Holder to be given within five (5) Business Days of receipt of notice of the Restrictive Legend Event, rescind the previously submitted Election to Purchase and the Company shall return all consideration paid by the Holder for such shares upon such rescission.
The Exercise Price and the number of Warrant Shares purchasable upon the exercise of each Warrant shall be subject to adjustment as provided pursuant to Section 4 of the Warrant Agreement.
Upon due presentment for registration of transfer or exchange of this Warrant Certificate to the Warrant Agent, the Company shall execute, and the Warrant Agent shall countersign and deliver, as provided in Section 5 of the Warrant Agreement, in the name of the designated transferee one or more new Warrant Certificates of any authorized denomination evidencing in the aggregate a like number of unexercised Warrants, subject to the limitations provided in the Warrant Agreement.
Neither this Warrant Certificate nor the Warrants evidenced hereby entitles the Holder to any of the rights of a stockholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter.
The Warrant Agreement and this Warrant Certificate may be amended as provided in the Warrant Agreement including, under certain circumstances described therein, without the consent of the Holder of this Warrant Certificate or the Warrants evidenced thereby.
THIS WARRANT CERTIFICATE AND ALL RIGHTS HEREUNDER AND UNDER THE WARRANT AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS FORMED AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF TO THE EXTENT SUCH PRINCIPLES OR RULES WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
This Warrant Certificate shall not be entitled to any benefit under the Warrant Agreement or be valid or obligatory for any purpose, and no Warrant evidenced hereby may be exercised, unless this Warrant Certificate has been countersigned by the manual signature of the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
Dated as of ________ __, 2015
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MABVAX THERAPEUTICS HOLDINGS, INC.
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By:
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Name:
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Title:
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EQUITY STOCK TRANSFER, LLC, as Warrant Agent
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By:
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Name:
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Title:
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[REVERSE]
Instructions for Exercise of Warrant
To exercise the Warrants evidenced hereby, the Holder must, by 5:00 P.M., New York City time, on the specified Exercise Date, deliver to the Warrant Agent at its stock transfer division, a certified or official bank check or a bank wire transfer in immediately available funds, in each case payable to the Company, in an amount equal to the Exercise Price in full for the Warrants exercised. In addition, the Holder must provide the information required below and deliver this Warrant Certificate to the Warrant Agent at the address set forth below and the Book-Entry Warrants to the Warrant Agent in its account with the Depository designated for such purpose. The Warrant Certificate and this Election to Purchase must be received by the Warrant Agent by 5:00 P.M., New York City time, on the specified Exercise Date.
ELECTION TO PURCHASE
TO BE EXECUTED IF WARRANT HOLDER DESIRES
TO EXERCISE THE WARRANTS EVIDENCED HEREBY
The undersigned hereby irrevocably elects to exercise, on __________, ____ (the “
Exercise Date
”), __________ Warrants, evidenced by this Warrant Certificate, to purchase, __________ shares (the “
Warrant Shares
”) of Common Stock, par value of $0.01 per share (the “
Common Stock
”) of MabVax Therapeutics Holdings, Inc., a Delaware corporation (the “
Company
”), and represents that on or before the Exercise Date:
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·
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such Holder has tendered payment for such Warrant Shares by certified or official bank check payable to the order of the Company c/o Equity Stock Transfer, LLC, 237 W. 37
th
Street, New York, NY 10018, or by bank wire transfer in immediately available funds payable to the Company at Account No. [
·
], in each case in the amount of $[
·
] in accordance with the terms hereof.
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The undersigned requests that said number of Warrant Shares be in fully registered form, registered in such names and delivered, all as specified in accordance with the instructions set forth below.
If said number of Warrant Shares is less than all of the Warrant Shares purchasable hereunder, the undersigned requests that a new Warrant Certificate evidencing the remaining balance of the Warrants evidenced hereby be issued and delivered to the Holder of the Warrant Certificate unless otherwise specified in the instructions below.
The undersigned hereby represents and warrants that after giving effect to the exercise of the Warrants contemplated by this Exercise Notice, such holder will not be in violation of the beneficial ownership limits specified in Section 6 of this Warrant Certificate.
Dated: ________ __, ____
/ / / / - / / / - / / / / /
(Insert Social Security or Other Identifying Number of Holder)
This Warrant may only be exercised by presentation to the Warrant Agent at one of the following locations:
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By hand at:
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Equity Stock Transfer, LLC.
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237 W. 37
th
Street
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New York, NY 10018
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By mail at:
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Equity Stock Transfer, LLC.
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237 W. 37
th
Street
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New York, NY 10018
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The method of delivery of this Warrant Certificate is at the option and risk of the exercising Holder and the delivery of this Warrant Certificate will be deemed to be made only when actually received by the Warrant Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.
(Instructions as to form and delivery of Warrant Shares and/or Warrant Certificates)
Name in which Warrant Shares are to be registered if other than in the name of the Holder of this Warrant Certificate:
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Address to which Warrant Shares are to be mailed if other than to the address of the Holder of this Warrant Certificate as shown on the books of the Warrant Agent:
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(Street Address)
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(City and State) (Zip Code)
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Name in which Warrant Certificate evidencing unexercised Warrants, if any, is to be registered if other than in the name of the Holder of this Warrant Certificate:
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Address to which certificate representing unexercised Warrants, if any, is to be mailed if other than to the address of the Holder of this Warrant Certificate as shown on the books of the Warrant Agent:
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(Street Address)
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(City and State) (Zip Code)
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Dated:
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Signature
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Signature must conform in all respects to the name of the Holder as specified on the face of this Warrant Certificate. If Warrant Shares, or a Warrant Certificate evidencing unexercised Warrants, are to be issued in a name other than that of the Holder hereof or are to be delivered to an address other than the address of such Holder as shown on the books of the Warrant Agent, the above signature must be guaranteed by a an Eligible Guarantor Institution (as that term is defined in Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended).
SIGNATURE GUARANTEE
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Name of Firm
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Address
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Area Code and Number
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Authorized Signature
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Name
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Title
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Dated:
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, 20__
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ASSIGNMENT
(FORM OF ASSIGNMENT TO BE EXECUTED IF WARRANT HOLDER
DESIRES TO TRANSFER WARRANTS EVIDENCED HEREBY)
FOR VALUE RECEIVED, ____________ HEREBY SELL(S), ASSIGN(S) AND TRANSFER(S) UNTO
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(Please print name and address
including zip code of assignee)
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(Please insert social security or
other identifying number of assignee)
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the rights represented by the within Warrant Certificate and does hereby irrevocably constitute and appoint ____________ Attorney to transfer said Warrant Certificate on the books of the Warrant Agent with full power of substitution in the premises.
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Dated:
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Signature
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(Signature must conform in all respects to the name of the Holder as specified on the face of this Warrant Certificate and must bear a signature guarantee by an Eligible Guarantor Institution (as that term is defined in Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended).
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SIGNATURE GUARANTEE
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Name of Firm
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Address
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Area Code and Number
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Authorized Signature
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Name
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Title
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Dated:
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, 20__
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Exhibit 10.37
[FORM OF PROPOSED]
LEASE
by and between
AGP SORRENTO BUSINESS COMPLEX, L.P.,
a Delaware limited partnership
and
MABVAX THERAPEUTICS HOLDINGS, INC.,
a Delaware corporation
LEASE
THIS LEASE (this "
Lease
") is entered into effective as of the ____ day of, August, 2015 (the "
Execution Date
"), by and between
AGP SORRENTO BUSINESS COMPLEX, L.P.,
a Delaware limited partnership ("
Landlord
"), and
MABVAX THERAPEUTICS HOLDINGS, INC.
, a Delaware corporation ("
Tenant
").
RECITALS
A.
Landlord owns certain real properly (the "
Property
") and the improvements on the Property located at 11535 – 11585 Sorrento Valley Road, San Diego, California 92121, including the five (5) buildings located thereon (each, a "
Building
" and, collectively, the "
Buildings
" or "
Project
"); and
B.
Landlord wishes to lease to Tenant, and Tenant desires to lease from Landlord, certain premises (the "
Premises
") located in the Buildings, pursuant to the terms and conditions of this Lease, as detailed below.
AGREEMENT
NOW, THEREFORE, Landlord and Tenant, in consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, agree as follows:
1.
Lease of Premises
. Effective on the Term Commencement Date, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises (as shown on
Exhibit A
attached hereto) for use by Tenant in accordance with the Permitted Use (as defined below). The Property and all landscaping, parking facilities, private drives and other improvements and appurtenances related thereto, including the Buildings, are hereinafter collectively referred to as the "
Project
." All portions of the Project that are for the non-exclusive use of tenants of the Buildings, including driveways, sidewalks, parking areas, landscaped areas, service corridors, stairways, elevators, public restrooms and public lobbies, are hereinafter referred to as "
Common Area
." Subject to casualty, eminent domain and
Article 13
, Tenant shall have access to the Premises twenty-four (24) hours a day, seven (7) days a week. The parties hereto agree that the lease of the Premises is upon and subject to the terms, covenants and conditions herein set forth, and Landlord and Tenant covenant as a material part of the consideration for this Lease to keep and perform each and all of such terms, covenants and conditions by it to be kept and performed and that this Lease is made upon the condition of such performance. The parties hereto acknowledge that the purpose of
Exhibit A
is to show the approximate location of the Premises in the Building only, and such exhibit is not meant to constitute an agreement, representation or warranty as to the construction of the Premises, the precise area thereof or the specific location of the Common Areas or the elements thereof or of the accessways to the Premises or the Project.
2.
Basic Lease Provisions
. For convenience of the parties, certain basic provisions of this Lease are set forth herein. The provisions set forth herein are subject to the remaining terms and conditions of this Lease and are to be interpreted in light of such remaining terms and conditions.
2.1 This Lease shall take effect upon the Execution Date and, except as specifically otherwise provided within this Lease, each of the provisions hereof shall be binding upon and inure to the benefit of Landlord and Tenant from the date of execution and delivery hereof by all parties hereto; provided that Tenant will have no obligation to pay Rent or to perform any of its obligations hereunder until the Term Commencement Date.
2.2 In the definitions below, each current Rentable Area (as defined in
Section 6.1
below) is expressed in rentable square footage. Rentable Area and "
Tenant's Pro Rata Share
" are all subject to adjustment as provided in this Lease only in the event of a change in the physical size of the Premises, Building or Project (and not solely due to a remeasurement):
2.2.1 Premises: Approximately 14,971 rentable square feet of space in the Building located at 11535 Sorrento Valley Road, as set forth in
Exhibit A
attached hereto, known as Suite 400.
2.2.2 Tenant's Pro Rata Share: 69.31% for the Building and 11.79% for the Project (
i.e.
, 14,971 rentable square feet within the Premises/21,600 rentable square feet within the Building and 126,985 rentable square feet within the Project) (See Section 8 of Lease).
2.3 Initial monthly and annual installments of Base Rent for the Premises ("
Base Rent
") as of the Term Commencement Date (as defined in
Section 2.4
below):
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Monthly Installment
of Base Rent
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Monthly Base
Rental Rate per Rentable Square Foot
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1 – 12
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$427,571.76
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$35,630.98
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$2.38
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13 – 24
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$440,398.92
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$36,699.91
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$2.45
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25 – 36
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$453,610.92
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$37,800.91
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$2.52**
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37 – 48
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$467,219.28
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$38,934.94
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$2.60**
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49 – 60
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$481,235.88
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$40,102.99
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$2.68**
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61 – 72
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$495,672.96
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$41,306.08
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$2.76**
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* The initial Monthly Installment of Base Rent amount was calculated by multiplying the initial Monthly Rental Rate per Rentable Square Foot amount by the number of rentable square feet of space in the Premises, and the Annual Base Rent amount was calculated by multiplying the initial Monthly Installment of Base Rent amount by twelve (12). In all subsequent Base Rent payment periods during the Lease Term commencing on the first (1
st
) day of the full calendar month that is Lease Month 13, the calculation of each Monthly Installment of Base Rent amount reflects an annual increase of three percent (3%) and each Annual Base Rent amount was calculated by multiplying the corresponding Monthly Installment of Base Rent amount by twelve (12).
**The amounts identified in the column entitled "Monthly Rental Rate per Rentable Square Foot" are rounded amounts provided for informational purposes only.
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2.4 Term Commencement Date: The date that the Premises are Ready For Occupancy (as defined in
Exhibit D
attached hereto), which Term Commencement Date is anticipated to be August 1, 2015. In the event Landlord fails to deliver the Premises to Tenant with the Tenant Improvements Substantially Complete on or before November 1, 2015 ("
First Outside Date
") as such First Outside Date shall be extended due to Force Majeure delays and Tenant Delays, Tenant will be entitled to one day of free Monthly Base Rent, to be applied after the Term Commencement Date, for each day after such First Outside Date that the Premises are not delivered to Tenant as required hereunder. In the event fails to deliver the Premises to Tenant with the Tenant Improvements Substantially Complete on or before December 1, 2015 ("
Second Outside Date
"), as such Second Outside Date shall be deemed extended due to Force Majeure delays and Tenant Delays, Tenant may terminate this Lease by delivery of written notice to Landlord no later than that date which is five (5) business days after such Second Outside Date, in which case Landlord will immediately refund all amounts paid by Tenant pursuant to this Lease and Tenant shall have no further obligations to Landlord pursuant to this Lease except for those obligations which expressly survive the expiration or sooner termination of this Lease.
2.5 Term Expiration Date: The last day of the month in which the seventy-second (72
nd
) month anniversary of the Term Commencement Date occurs.
2.6 Security Deposit: $126,654.66.
2.7 Permitted Use: Office and/or laboratory use, together with all research and development in connection with such laboratory use and life sciences and biotechnology manufacturing, in conformity with all federal, state, municipal and local laws, codes, ordinances, rules and regulations of Governmental Authorities (as defined below) now or hereafter in force relating to or affecting the use and occupancy of the Premises and Tenant's Alterations to the Premises, including, without limitation, the provisions of the Americans with Disabilities Act ("
ADA
") as it pertains to the condition, use, occupancy, improvement and alteration (including unforeseen and/or extraordinary alterations or improvements to the extent required by a governmental authority pertaining to Tenant's use and occupancy and Tenant's Alterations to the Premises, and regardless of the period of time remaining in the Lease Term) of the Premises, committees, associations, or other regulatory committees, agencies or governing bodies having jurisdiction over the Premises, the Buildings, the Property, the Project, Landlord or Tenant, including both statutory and common law and hazardous waste rules and regulations and including the provisions of the ADA, as defined below (collectively, "
Applicable Laws
").
2.8 Address for Rent Payment:
AGP SORRENTO BUSINESS COMPLEX, L.P.
PO Box 30308
Department 0115
Los Angeles, CA 90030-0308
2.9 Address for Notices to Landlord:
AGP SORRENTO BUSINESS COMPLEX, L.P.
c/
o Parallel Capital Partners, Inc.
4105 Sorrento Valley Boulevard
San Diego, CA 92121
Attention: Matthew Root
2.10 Addresses for Notices to Tenant:
Prior to the Term Commencement Date:
Mabvax Therapeutics Holdings, Inc.
11585 Sorrento Valley Road, Suite 20
San Diego, California 92121
Attention: Gregory Hanson, CFO
With a copy to:
Mabvax Therapeutics Holdings, Inc.
11585 Sorrento Valley Road, Suite 20
San Diego, California 92121
Attention: David Hansen, CEO
After the Term Commencement Date:
Mabvax Therapeutics Holdings, Inc.
11535 Sorrento Valley Road, Suite 400
San Diego, CA 92121
Attention: Gregory Hanson, CFO
With a copy to:
Mabvax Therapeutics Holdings, Inc.
11535 Sorrento Valley Road, Suite 400
San Diego, CA 92121
Attention: David Hansen, CEO
2.11 Lease Guarantor: None
2.12 The following Exhibits are attached hereto and incorporated herein by reference:
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A.
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Floor Plan of Premises
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2.13 Number of Parking Spaces: Thirty-seven (37) unreserved parking passes; provided, however, that Tenant, at its sole cost, shall have the right to designate up to ten (10) of such parking passes as visitor/reserved parking located near the primary entrance to the Premises in the location depicted on Exhibit F attached hereto. Parking shall be free throughout the Term of this Lease.
3.
Term; Tenant's Early Cancellation Right and Right of First Offer
.
3.1
Term
. The actual term of this Lease (the "
Lease Term
") shall commence on the Term Commencement Date and will end at 11:59 p.m. on the Term Expiration Date, subject to earlier termination of this Lease as provided herein. At any time during the Lease Term, Landlord may deliver to Tenant a factually correct amendment to this Lease confirming the Lease Commencement Date and Lease Expiration Date, in the form as set forth in Exhibit C, attached hereto, which Tenant shall execute and return to Landlord within five (5) days of receipt thereof .
3.2
Tenant's Early Cancellation Right
. Provided Tenant fully and completely satisfies each of the conditions set forth in this Section 3.2, Tenant shall have the one-time option ("
Termination Option
") to terminate this Lease effective as of the last day of the sixtieth (60
th
) month of the initial Lease Term (the "
Termination Date
"). In order to exercise the Termination Option, Tenant must fully and completely satisfy each and every one of the following conditions: (i) Tenant must give Landlord written notice ("
Termination Notice
") of its exercise of the Termination Option, which Termination Notice must be delivered to Landlord at least nine (9) months prior to the Termination Date, (ii) at the time of the Termination Notice, Tenant shall not be in Default under this Lease (after notice and the expiration of applicable cure periods), and (iii) concurrently with Tenant's delivery of the Termination Notice to Landlord, Tenant shall pay to Landlord the "Termination Consideration". As used herein, the "
Termination Consideration
" shall mean an amount equal to the sum of: (A) the unamortized portion of the brokerage commissions paid or incurred by Landlord in connection with this Lease; plus (B) the unamortized portion of any Tenant Improvement costs paid by Landlord for the Premises; plus (C) an amount equal to three (3) months of Base Rent (i.e., an amount equal to One Hundred Twenty-Two Thousand Three Hundred Fifty-Six and 20/100 Dollars ($122,356.20)). The brokerage commissions, Tenant Improvement costs and the Allowance shall all be amortized in monthly installments on a straight-line basis over the scheduled initial seventy-two (72) month Lease Term, together with interest at the rate of eight percent (8%) per annum, and the unamortized portion thereof shall be determined based upon the unexpired portion of such initial seventy-two (72) month Lease Term as of the Termination Date. If Tenant properly and timely exercises its termination option in this Section 3.2 in strict accordance with the terms hereof, this Lease shall expire at midnight on the Termination Date, and Tenant shall be required to surrender the Premises to Landlord on or prior to the Termination Date in accordance with the applicable provisions of this Lease. The termination right set forth in this Section 3.2 is personal to the original Tenant executing this Lease ("
Original Tenant
") and may only be exercised by the Original Tenant (and not any assignee sublessee or other transferee of Original Tenant's interest in this Lease). Upon termination of this Lease pursuant to this Section 3.2, the parties shall be relieved of all further obligations under this Lease except for those obligations under this Lease which expressly survive the expiration or sooner termination of this Lease, and Landlord will return the Security Deposit to Tenant in accordance with Article 10 below.
3.3
Right of First Offer
. Commencing as of the Execution Date and continuing during the first thirty-six (36) months of the initial Lease Term only ("
Right of First Offer Period
"), Tenant shall have a one-time right of first offer with respect to the balance of the available space in the Building (the "
First Offer Space
"). Notwithstanding the foregoing (i) the lease term for Tenant's lease of the First Offer Space pursuant to Tenant's exercise of such first offer right of Tenant shall commence only following the expiration or earlier termination of any existing lease pertaining to the First Offer Space, including any renewal or extension of any such existing lease, whether or not such renewal or extension is pursuant to an express written provision in such lease, and regardless of whether any such renewal or extension is consummated pursuant to a lease amendment or a new lease, and (ii) such first offer right shall be subordinate and secondary to all rights of expansion, first refusal, first offer or similar rights granted to (x) the tenant of any such existing lease and (y) any other tenant of the Project as of the date hereof (the rights described in items (i) and (ii), above to be known collectively as "
Superior Rights
"). As of the date hereof, there are no Superior Rights affecting the First Offer Space other than an existing tenant in a portion of such space. Tenant's right of first offer shall be on the terms and conditions set forth in this
Section 3.3
.
3.3.1
Procedure for Offer
. Landlord shall notify Tenant (the "
First Offer Notice
") from time to time when Landlord receives a bona fide offer to lease the First Offer Space on terms which Landlord is willing to accept, where no holder of a Superior Right desires to lease such space, which First Offer Notice will set out the terms of such third party offer. The economic terms and conditions of Tenant's lease of such First Offer Space shall be as provided in Landlord's First Offer Notice ("
First Offer Economic Terms
").
3.3.2
Procedure for Acceptance
. If Tenant wishes to exercise Tenant's right of first offer with respect to the space described in the First Offer Notice, then within seven (7) business days after delivery of the First Offer Notice to Tenant ("
Election Date
"), Tenant shall deliver notice to Landlord of Tenant's exercise of its right of first offer with respect to the entire space described in the First Offer Notice and on the First Offer Economic Terms contained therein. If Tenant does not exercise its right of first offer within the seven (7) business day period (on all of the First Offer Economic Terms), then Landlord shall be free to lease the space described in the First Offer Notice to anyone to whom Landlord desires on any terms Landlord desires and Tenant's right of first offer shall thereupon automatically terminate and this Section 3.3 shall be deemed null and void and of no further force or effect unless such First Offer Space becomes available during the First Offer Period. Notwithstanding anything to the contrary contained herein, Tenant must elect to exercise its right of first offer, if at all, with respect to all of the space comprising the First Offer Space offered by Landlord to Tenant at any particular time, and Tenant may not elect to lease only a portion thereof or object to any of the First Offer Economic Terms.
3.3.3
Construction of First Offer Space
. Tenant shall take the First Offer Space in its "As-Is" condition (except as otherwise provided in the First Offer Notice), and Tenant shall be entitled to construct improvements in the First Offer Space at Tenant's expense, in accordance with and subject to the provisions of Article 16 of this Lease.
3.3.4
Lease of First Offer Space
. If Tenant timely exercises Tenant's right to lease the First Offer Space as set forth herein, Landlord and Tenant shall execute an amendment adding such First Offer Space to this Lease upon the First Offer Economic Terms set forth in Landlord's First Offer Notice and upon the same non-economic terms and conditions as applicable to the Premises. Tenant shall commence payment of rent for the First Offer Space and the Lease Term of the First Offer Space shall commence upon the date of delivery of such First Offer Space to Tenant (or as otherwise set forth in the First Offer Economic Terms). The Lease Term for the First Offer Space shall be provided in the First Offer Economic Terms.
3.3.5
No Defaults
. The rights contained in this Section 3.3 shall be personal to the Original Tenant or an Affiliate Assignee, and may only be exercised by the Original Tenant or such Affiliate Assignee (and not any other assignee, sublessee or other transferee of the Original Tenant's interest in this Lease) if the Original Tenant or such Affiliate Assignee actually occupies at least seventy-five percent (75%) of the entire Premises then leased by Original Tenant or such Affiliate Assignee as of the date of Tenant's exercise of its right of first offer. In addition, at Landlord's option and in addition to Landlord's other remedies set forth in this Lease, at law and/or in equity, Tenant shall not have the right to lease the First Offer Space as provided in this
Section
3.3
if, as of the date of the First Offer Notice, or, at Landlord's option, as of the scheduled date of delivery of such First Offer Space to Tenant, Tenant is in Default under this Lease (beyond the expiration of all applicable notice and cure periods).
4. Renewal Option.
4.1
Option Right
. Landlord hereby grants the originally named Tenant herein or any Affiliate Assignee, one (1) option to extend the Lease Term for a period of five (5) years (the "
Option Term
"), which option shall be exercisable only by written notice delivered by Tenant to Landlord as provided below, provided that, as of the date of delivery of such notice, Tenant is not in Default under this Lease after any applicable notice and cure period. Upon the proper exercise of such option to extend, and provided that, at Landlord's option, as of the end of the initial Lease Term, Tenant is not in Default under this Lease after the expiration of any applicable notice and cure period, the Lease Term shall be extended for a period of five (5) years. The rights contained in this
Section 4
shall be personal to the Original Tenant or an Affiliate Assignee and may only be exercised by the Original Tenant or an Affiliate Assignee (and not any other assignee, sublessee or other transferee of Original Tenant's interest (or Affiliate Assignee's interest) in this Lease)).
4.2
Base Rent During Option Term
. The Base Rent payable by Tenant during the Option Term shall be equal to the Fair Market Rent for the Premises as of the commencement date of the Option Term. The "
Fair Market Rent
" shall be equal to the rent, including all escalations, at which tenants, as of the commencement of the Option Term are leasing non-sublease, non-encumbered, non-equity space comparable in size, location and quality to the Premises, for a similar lease term, in an arm's length transaction, which comparable space is located in the Project and in the "Comparable Buildings," as that term is defined hereinbelow (collectively, the "
Comparable Transactions
"), and which Comparable Transactions have been entered into within the twelve (12) month period prior to Landlord's delivery of the "
Rent Notice
," as that term is defined in Section 4.3 below, taking into consideration only the following concessions (the "
Concessions
"): (i) rental abatement concessions, if any, being granted such tenants in connection with such comparable space, and (ii) tenant improvements or allowances provided or to be provided for such comparable space, such value to be based upon the age, condition, design, quality of finishes, and layout of the improvements ; provided, however, that notwithstanding anything to the contrary herein, no consideration shall be given to (x) the fact that Landlord is or is not required to pay a real estate brokerage commission in connection with Tenant's exercise of its right to lease the Premises during the Option Term or the fact that the Comparable Transactions do or do not involve the payment of real estate brokerage commissions, and (y) any period of rental abatement, if any, granted to tenants in Comparable Transactions in connection with the design, permitting and construction of tenant improvements in such comparable spaces. If in determining the Base Rent a tenant improvement allowance is granted under item (ii) above, Landlord may, at Landlord's sole option, elect any or a portion of the following: (A) to grant some or all of the tenant improvement allowance to Tenant in the form as described above (i.e., as an improvement allowance), and (B) to adjust the rental rate component of the Base Rent to be an effective rental rate which takes into consideration the total dollar value of the tenant improvement allowance (in which case the tenant improvement allowance evidenced in the effective rental rate shall not be granted to Tenant). For purposes of this Lease, the term "
Comparable Buildings
" shall mean other first-class buildings which are comparable to the Building in terms of age (based upon the date of completion of construction or major renovation as to the building containing the portion of the premises in question), tenant mix, quality of construction, institutional ownership, level of services and amenities, and size and appearance, to the extent located in the Sorrento Valley and Sorrento Mesa area of San Diego, California.
4.3
Exercise of Option
. The option contained in this
Section 4
shall be exercised by Tenant, if at all, only in the following manner: (i) Tenant shall deliver written notice ("
Interest Notice
") to Landlord no sooner than nine (9) months and no later than six (6) months prior to the expiration of the then current Lease Term, stating that Tenant is interested in exercising its option; (ii) Landlord, within thirty (30) days after receipt of the Interest Notice, shall deliver notice (the "
Rent Notice
") to Tenant setting forth Landlord's determination of the Base Rent; and (iii) if Tenant wishes to exercise such option, Tenant shall, within the later to occur of thirty (30) days after Tenant's receipt of the Rent Notice or five (5) months prior to the expiration of the then current Lease Term, exercise the option by delivering written notice thereof (the "
Option Notice
") to Landlord and upon, and concurrent with, such exercise, Tenant may, at its option, object to the Base Rent determined by Landlord. If Tenant exercises the option to extend but objects to the Base Rent contained in the Rent Notice, then the Base Rent shall be determined as set forth in
Section 4.4
below. Failure of Tenant to deliver the Interest Notice to Landlord on or before the date specified in (i) above or to deliver the Option Notice to Landlord on or before the date specified in (iii) above shall be deemed to constitute Tenant's failure to exercise its option to extend. If Tenant timely and properly exercises its option to extend, the Lease Term shall, subject to
Section 4.4
below, be extended for the Option Term upon all of the terms and conditions set forth in this Lease, except that the Base Rent shall be as indicated in the Rent Notice or as determined in accordance with
Section 4.4
, as applicable, and all references herein to the Lease Term shall include the Option Term.
4.4
Determination of Base Rent
. In the event Tenant exercises its option to extend but objects to Landlord's determination of the Base Rent concurrently with its exercise of the option to extend (in the case where Landlord's determination of Base Rent is based on Fair Market Rent), Landlord and Tenant shall attempt to agree in good faith upon the Base Rent. If Landlord and Tenant fail to reach agreement within twenty (20) days following Tenant's delivery of the Option Notice (the "
Outside Agreement Date
"), then each party shall make a separate determination of the Base Rent, within five (5) business days after the Outside Agreement Date, concurrently exchange such determinations and such determinations shall be submitted to arbitration in accordance with
Sections 4.4(a)
through
(g)
below.
(a) Landlord and Tenant shall each appoint one arbitrator who shall by profession be a real estate broker who shall have been active over the five (5) year period ending on the date of such appointment in the leasing of office space in Comparable Buildings. The determination of the arbitrators shall be limited solely to the issue of whether Landlord's or Tenant's submitted Base Rent is the closest to the actual Fair Market Rent, as determined by the arbitrators, taking into account the requirements of
Section 4
of this Lease. Each such arbitrator shall be appointed within fifteen (15) business days after the applicable Outside Agreement Date.
(b) The two (2) arbitrators so appointed shall within five (5) days of the date of the appointment of the last appointed arbitrator agree upon and appoint a third arbitrator who shall be qualified under the same criteria set forth hereinabove for qualification of the initial two (2) arbitrators.
(c) The three (3) arbitrators shall within five (5) days of the appointment of the third arbitrator reach a decision as to whether the parties shall use Landlord's or Tenant's submitted Base Rent and shall notify Landlord and Tenant thereof.
(d) The decision of the majority of the three (3) arbitrators shall be binding upon Landlord and Tenant.
(e) If either Landlord or Tenant fails to appoint an arbitrator within fifteen (15) business days after the applicable Outside Agreement Date, the arbitrator appointed by one of them shall reach a decision, notify Landlord and Tenant thereof, and such arbitrator's decision shall be binding upon Landlord and Tenant.
(f) If the two (2) arbitrators fail to agree upon and appoint a third arbitrator, or both parties fail to appoint an arbitrator, then the appointment of the third arbitrator or any arbitrator shall be dismissed and the Base Rent to be decided shall be forthwith submitted to arbitration under the provisions of the American Arbitration Association, but subject to the instruction set forth in this
Section 4
.
(g) The cost of arbitration shall be paid by Landlord and Tenant equally.
(h) In the event that the new Base Rent is not established prior to end of the then current Term of this Lease, the Base Rent immediately payable at the commencement of such Option Term shall be the Base Rent payable in the immediately preceding month. Notwithstanding the above, once the fair market rental is determined in accordance with this Section 4.4, the parties shall settle any underpayment or overpayment on the next Base Rent payment date falling not less than thirty (30) days after such determination.
5.
Condition of Premises
. Except as set forth in this Lease, Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the condition of the Premises, the Buildings or the Project, or with respect to the suitability of the Premises, the Buildings or the Project for the conduct of Tenant's business. Except as set forth in this Lease, Tenant acknowledges that Tenant agrees to accept the Premises in its condition "as is" as of the Execution Date, subject to the provisions of this
Section 5
, the Work Letter and Landlord’s ongoing repair and maintenance obligations. For purposes of Section 1938 of the California Civil Code, Landlord hereby discloses to Tenant, and Tenant hereby acknowledges, that the Premises have not undergone inspection by a Certified Access Specialist (CASp). Notwithstanding anything above to the contrary, during the first twelve (12) months of the Lease Term, Landlord will ensure that the base, shell and core of the Building serving the Premises (including the mechanical, electrical, HVAC and plumbing systems), based solely on a typical, legally compliant occupancy of the Premises based on Tenant's Permitted Use of the Premises, is in good condition, and in the event of any breach of the foregoing warranty, Landlord shall be responsible, at its sole cost and expense, which shall not be included in Operating Expenses, for correcting such defects as soon as reasonably possible after receiving notice thereof from Tenant’ provided, however, that if Tenant fails to give Landlord written notice of any items described above within twelve (12) months after the Term Commencement Date, then the correction of any such items shall, subject to Landlord’s repair obligations in this Lease, be Tenant’s responsibility at Tenant’s sole cost and expense; provided, however, that with respect to any HVAC units which Landlord is not replacing (as described below) then such warranty shall apply to the entire seventy-two (72) month initial Lease Term. As part of the Tenant Improvement work, Landlord shall replace eight (8) of the existing HVAC units serving the Premises (all as described on Exhibit G attached hereto) ensure that the remaining units are in good working order as of the Term Commencement Date.
6.
Rentable Area
.
6.1 The term "
Rentable Area
" shall reflect such areas as reasonably calculated by Landlord's architect, as the same may be reasonably adjusted from time to time by Landlord in consultation with Landlord's architect to reflect changes to the physical size of the Premises, the Buildings or the Project, as applicable.
6.2 The term Rentable Area, when applied to the Premises, is that area equal to the usable area of the Premises, plus an equitable allocation of Rentable Area within each Building that is not then utilized or expected to be utilized as usable area, including that portion of the Building devoted to corridors, equipment rooms, restrooms, elevator lobby, atrium and mailroom.
6.3 The Rentable Area of the Project is the total Rentable Area of all buildings within the Project.
6.4 Review of allocations of Rentable Areas as between tenants of the Building and the Project shall be made as frequently as Landlord deems appropriate, including in order to facilitate an equitable apportionment of Operating Expenses (as defined below); provided that Tenant’s Pro Rata Share will not increase unless there is a change in the physical size of the Premises, Building or Project.
7.
Rent
.
7.1 Tenant shall pay to Landlord as Base Rent for the Premises, commencing on the Term Commencement Date, the sums set forth in
Section 2.3
. Base Rent shall be paid in equal monthly installments as set forth in
Section 2.3
, each in advance on the first day of each and every calendar month during the Lease Term.
7.2 In addition to Base Rent, commencing on the Term Commencement Date, Tenant shall pay to Landlord as additional rent ("
Additional Rent
") at times hereinafter specified in this Lease (a) Tenant's Share (as defined below) of Operating Expenses (as defined below), (b) the Property Management Fee (as defined below) and (c) any other amounts that Tenant expressly assumes or agrees to pay under the provisions of this Lease that are owed to Landlord. Without limitation on other obligations of Tenant which survive the expiration of the Lease Term, the obligations of Tenant to pay Additional Rent shall survive the expiration of the Lease Term.
7.3 Landlord and Tenant hereby agree that it is their intent that all Base Rent, Additional Rent and other rent and charges payable to the Landlord under this Lease (hereinafter individually and collectively referred to as "
Rent
") shall qualify as "rents from real property" within the meaning of Section 856(d) of the Internal Revenue Code of 1986, as amended, (the "
Code
") and the Department of the U.S. Treasury Regulations promulgated thereunder (the "
Regulations
"). Should the Code or the Regulations, or interpretations thereof by the Internal Revenue Service contained in revenue rulings or other similar public pronouncements, be changed so that any Rent no longer so qualifies as "rent from real property" for purposes of Section 856(d) of the Code and the Regulations promulgated thereunder, such Rent shall be adjusted in such manner as the Landlord may require so that it will so qualify; provided, however, that any adjustments required pursuant to this Section 7.3 shall be made so as to produce the equivalent (in economic terms) Rent as payable prior to such adjustment. Rent shall be paid to Landlord, without abatement, deduction or offset, in lawful money of the United States of America at the office of Landlord as set forth in
Section 2.8
or to such other person or at such other place as Landlord may from time designate in writing. In the event the Lease Term commences or ends on a day other than the first day of a calendar month, then the Rent for such fraction of a month shall be prorated for such period on the basis of a thirty (30) day month and shall be paid at the then-current rate for such fractional month.
8.
Operating Expenses
.
8.1 As used herein, the term "
Operating Expenses
" shall include:
(a) Government impositions including property tax costs consisting of real and personal property taxes and assessments, it being acknowledged by Tenant and Landlord that Proposition 13 was adopted by the voters of the State of California in the June 1978 election ("
Proposition 13
") and that assessments, taxes, fees, levies and charges may be imposed by governmental agencies for such services as fire protection, street, sidewalk and road maintenance, refuse removal and for other governmental services formerly provided without charge to property owners or occupants, and, in further recognition of the decrease in the level and quality of governmental services and amenities as a result of Proposition 13, Operating Expenses shall also include any governmental or private assessments or the Project's contribution towards a governmental or private cost-sharing agreement for the purpose of augmenting or improving the quality of services and amenities normally provided by governmental agencies. It is the intention of Tenant and Landlord that all such new and increased assessments, taxes, fees, levies, and charges and all similar assessments, taxes, fees, levies and charges payable hereunder, including, without limitation, any business or gross income tax or excise tax with respect to the receipt of such rent, or upon or with respect to the possession, leasing, operating, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or any portion thereof, and any assessment, tax, fee, levy or charge, upon this transaction or any document to which Tenant is a party, creating or transferring an interest or an estate in the Premises, be included within the definition of Operating Expenses for the purposes of this Lease, including amounts due under any improvement bond upon the Buildings or the Project, including the parcel or parcels of real property upon which the Buildings and areas serving the Buildings are located or assessments in lieu thereof imposed by any federal, state, regional, local or municipal governmental authority, agency or subdivision (each, a "
Governmental Authority
") are levied; taxes on or measured by gross rentals received from the rental of space in the Project; taxes based on the square footage of the Premises, the Buildings or the Project, as well as any parking charges, utilities surcharges or any other costs levied, assessed or imposed by, or at the direction of, or resulting from Applicable Laws or interpretations thereof promulgated by any Governmental Authority in connection with the use or occupancy of the Project or the parking facilities serving the Project; taxes on this transaction or any document to which Tenant is a party creating or transferring an interest in the Premises; any fee for a business license to operate an office building; and any expenses, including the reasonable cost of attorneys or experts, reasonably incurred by Landlord in seeking reduction by the taxing authority of the applicable taxes, less tax refunds obtained as a result of an application for review thereof. Notwithstanding the foregoing, “Operating Expenses” shall not include (i) Landlord’s general income taxes, inheritance, estate, succession, transfer, gift, franchise, or capital stock tax, or any income taxes arising out of or related to ownership or operation of income-producing real estate, or any excise taxes imposed upon Landlord based upon rentals or income received by it, (ii) any taxes attributable to any time prior to the Term Commencement Date or after the expiration date of this Lease, or (iii) any assessments, charges, taxes, rents, fees, rates, levies, excises, license fees, permit fees, inspection fees, impact fees, concurrency fees or other fees or charges to the extent allocable to or caused by the development or installation of on- or off-site improvements or utilities (including without limitation street and intersection improvements, roads, rights of way, lighting and signalization) necessary for the initial construction of the Project or any past or future phases thereof, or any past, present or future system development reimbursement schedule or sinking fund related to any of the foregoing. Operating Expenses shall not include any net income, franchise, capital stock, estate or inheritance taxes, or taxes that are the personal obligation of Tenant or of another tenant of the Project; and
(b) All other costs of any kind paid or incurred by Landlord in connection with the operation or maintenance of the Buildings and the Project, including costs of repairs and replacements to improvements within the Project as appropriate to maintain the Project as required hereunder; costs of utilities furnished to the Common Areas; sewer fees; cable television; trash collection; cleaning, including windows; heating; ventilation; air-conditioning; maintenance of landscaping and grounds; maintenance of drives and parking areas; maintenance of the roof membrane (but not structure); security services and devices; building supplies; maintenance or replacement of equipment utilized for operation and maintenance of the Project; license, permit and inspection fees; sales, use and excise taxes on goods and services purchased by Landlord in connection with the operation, maintenance or repair of the Buildings or Project systems and equipment; telephone, postage, stationery supplies and other expenses incurred in connection with the operation, maintenance or repair of the Project; accounting, legal, property management and other professional fees and expenses incurred to the extent directly attributable to the operation and maintenance of the Project (or prorated if not directly attributable); costs of furniture, draperies, carpeting, landscaping and other customary and ordinary items of personal property provided by Landlord for use in Common Areas; Project office rent or rental value for a commercially reasonable amount of space, to the extent an office used solely for Project operations is maintained at the Project, plus customary expenses for such office; the cost of capital improvements or other costs incurred in connection with the Project (A) which reduce economies in the operation or maintenance of the Project, or any portion thereof, or reduce current or future Operating Expenses, or (B) that are required under any governmental law or regulation in effect after the Term Commencement Date; provided, however, that any capital expenditure shall be amortized (including interest on the amortized cost) over its useful life as Landlord shall reasonably determine; amortization (including interest on the unamortized cost) over such period of time as Landlord shall reasonably determine, of the cost of acquiring or the rental expense of personal property used in the maintenance, operation and repair of the Project, or any portion thereof; costs to keep the Project in compliance with, or fees otherwise required under, any easement, license, operating agreement, declaration, restrictive covenant, or instrument pertaining to the sharing of costs by the Building, affecting the Project (if any), and reciprocal easement agreements affecting the property, any parking licenses, and any agreements with transit agencies affecting the Project; insurance premiums, including premiums for public liability, property casualty, earthquake, terrorism and environmental coverages; portions of insured losses paid by Landlord as part of the deductible portion of a loss pursuant to the terms of insurance policies (provided such deductible shall in no event exceed a commercially reasonable deductible); service contracts; costs of services of independent contractors retained to do work of a nature referenced above; and costs of compensation (including employment taxes and fringe benefits) of all persons at or below the level of property manager to the extent such persons perform regular and recurring duties connected with the day-to-day operation and maintenance of the Project, its equipment, the adjacent walks, landscaped areas, drives and parking areas, including janitors, floor waxers, window washers, watchmen, gardeners, sweepers and handymen. Notwithstanding anything to the contrary contained in the foregoing, if, pursuant to the terms of this Lease, Tenant performs any of the foregoing maintenance, repairs or replacements in lieu of Landlord (i.e., janitorial for the Premises, HVAC maintenance, including retaining a qualified, first-class service company for a maintenance service contract, and replacement of lighting tubes, lamps, bulbs and ballasts), such that Tenant directly bears the cost of such expenses, such expenses shall not be included in Operating Expenses; provided, however, that if such maintenance or repair is deemed by Landlord (at its reasonable discretion) to be unacceptable, Landlord may perform such maintenance or repair and include such costs as Operating Expenses.
Notwithstanding the foregoing, Operating Expenses shall not include any leasing commissions; attorneys' fees, costs, disbursements and other expenses incurred in connection with negotiations or disputes with other tenants, or in connection with leasing space in the Project, including the cost of tenant improvements or other rent concessions that Landlord provides to another tenant of the Project and the cost of improving a particular rental space for occupancy by another tenant of the Project; expenses related to the development and construction of the Project prior to the date hereof, including grading, paving of parking lot areas, architectural expenses, landscaping and decorating (as distinguished from maintenance, repair and replacement of the foregoing); costs of repairs to the extent reimbursed by payment of insurance proceeds received by Landlord; interest upon loans to Landlord or secured by a mortgage or deed of trust covering the Project or a portion thereof (provided that interest upon a government assessment or improvement bond payable in installments shall constitute an Operating Expense under
Subsection 8.1(a)
); depreciation claimed by Landlord for tax purposes (provided that this exclusion of depreciation is not intended to delete from Operating Expenses actual costs of repairs and replacements that are provided for in
Subsection 8.1(b)
); and taxes that are excluded from Operating Expenses by
Subsection 8.1(a)
; any depreciation on the Buildings or Project; all rental and other payables due under any ground or underlying lease; advertising and promotional expenditures; any costs, fines, or penalties incurred due to violations by Landlord of any governmental rule or authority; or any reserves for capital improvements at the Project; the cost of providing any service directly to and paid directly by any tenant (outside of such tenant's Operating Expense payments); the cost of any items for which Landlord is reimbursed by condemnation awards, a tenant of the Building, or otherwise; ground lease payments (if any); costs of items considered capital repairs, replacements, improvements and equipment under generally accepted accounting principles consistently applied except as expressly included in Operating Expenses pursuant to the definition above or which relate to replacements of major Building systems; costs incurred by Landlord due to the violation by Landlord or any tenant of the terms and conditions of any lease of space in the Building or any law, code, regulation, ordinance or the like that would not have been incurred but for such violation; Landlord's general corporate overhead, including, without limitation, costs of consultants, accountants or attorneys to advise or represent Landlord or its affiliates with respect to the structure of leases, purchase or sale of real property, tax implications or financial reporting of leases or in preparing tax returns, financial statements or other documents relating to the foregoing types of issues; any compensation paid to clerks, attendants or other persons in commercial concessions operated by Landlord; bad debt expenses and interest, principal, points and fees on debts or amortization on any ground lease, mortgage or mortgages or any other debt instrument encumbering the Building (including the real property on which the Building is situated); marketing costs, including leasing commissions and attorneys' fees in connection with the negotiation and preparation of letters, deal memos, letters of intent, leases, subleases and/or assignments, space planning costs, and other costs and expenses incurred in connection with lease, sublease and/or assignment negotiations and transactions with present or prospective tenants or other occupants of the Project; costs, including permit, license and inspection costs, incurred with respect to the installation of other tenants' or occupants' improvements made for tenants or other occupants in the Project; any costs expressly excluded from Operating Expenses elsewhere in this Lease; rentals and other related expenses for leasing an HVAC system, elevators, or other items (except when needed in connection with normal repairs and maintenance of the Building) which if purchased, rather than rented, would constitute a capital improvement not included in Operating Expenses pursuant to this Lease; depreciation, amortization and interest payments, except as specifically included in Operating Expenses pursuant to the terms of this Lease and except on materials, tools, supplies and vendor-type equipment purchased by Landlord to enable Landlord to supply services Landlord might otherwise contract for with a third party, where such depreciation, amortization and interest payments would otherwise have been included in the charge for such third party's services, all as determined in accordance with generally accepted accounting principles, consistently applied, and when depreciation or amortization is permitted or required, the item shall be amortized over its reasonably anticipated useful life; expenses in connection with services or other benefits which are not offered to Tenant or for which Tenant is charged for directly but which are provided to another tenant or occupant of the Project, without charge; electric power costs or other utility costs for which any tenant directly contracts with the local public service company; costs (including in connection therewith all attorneys' fees and costs of settlement, judgments and/or payments in lieu thereof) arising from claims, disputes or potential disputes in connection with potential or actual claims, litigation or arbitrations pertaining to another tenant of the Project; costs of correcting defects in or inadequacy of the initial design or construction of the Project or any future expansion of the Building or Project; costs incurred to comply with laws relating to the removal of Hazardous Materials (as defined below) or to remove, remedy, treat or contain any Hazardous Material; structural repairs or replacements, including without limitation to the roof structure; advertising and promotional expenses; travel expenses; charitable or political contributions, and art work. Landlord will equitably allocate Operating Expenses amongst the various buildings within the Project to the building(s) which benefit from such Operating Expenses such that Tenant’s Operating Expenses will not include items solely attributable to other buildings within the Project. To the extent that Tenant uses more than Tenant's Pro Rata Share of any item of Operating Expenses, Tenant shall pay Landlord the amount of such excess use as reasonably calculated by Landlord and based on reasonable documentation of such excess use which will be provided to Tenant, in addition to Tenant's obligation to pay Tenant's Pro Rata Share of Operating Expenses (such excess, together with Tenant's Pro Rata Share, "
Tenant's Share
").
8.2 Tenant shall pay to Landlord on the first day of each calendar month of the Lease Term, as Additional Rent, Landlord's estimate of Tenant's Share of Operating Expenses with respect to the Buildings and the Project, as applicable, for such month.
(a) Within ninety (90) days after the conclusion of each calendar year (or such other period as may be reasonably required by Landlord), Landlord shall furnish to Tenant a statement showing in reasonable detail the actual Operating Expenses and Tenant's Share of Operating Expenses for the previous calendar year. Any additional sum due from Tenant to Landlord shall be due and payable within ten (10) days. If the amounts paid by Tenant pursuant to this Section exceed Tenant's Share of Operating Expenses for the previous calendar year, then Landlord shall credit the difference against the Rent next due and owing from Tenant; provided that, if the Lease Term has expired, Landlord shall accompany said statement with payment for the amount of such difference.
(b) Any amount due under this Section for any period that is less than a full month shall be prorated (based on a thirty (30)-day month) for such fractional month.
8.3 Landlord may, from time to time, modify Landlord's calculation and allocation procedures for Operating Expenses, so long as such modifications produce results substantially consistent with Landlord's then-current practice at the Project and Landlord gives Tenant written notice of any such modifications, including, without limitation, the right to equitably allocate some or all of the Operating Expenses for the Project among different portions or occupants of the Project (the "
Cost Pools
"), in Landlord’s reasonable discretion. Such Cost Pools may include, but shall not be limited to, a Cost Pool for the Building and a Cost Pool for the overall Project, as reflected by the separate Pro Rata Share percentages set forth in
Section 2.2.2
. The Operating Expenses within any such Cost Pool shall be allocated and charged to the tenants within such Cost Pool in an equitable manner.
8.4 Tenant's responsibility for Tenant's Share of Operating Expenses shall continue to the later of (a) the date of termination of the Lease or (b) the date Tenant has fully vacated the Premises.
8.5 Operating Expenses for the calendar year in which Tenant's obligation to share therein commences and for the calendar year in which such obligation ceases shall be prorated on a basis reasonably determined by Landlord. Expenses such as taxes, assessments and insurance premiums that are incurred for an extended time period shall be prorated based upon the time periods to which they apply so that the amounts attributed to the Premises relate in a reasonable manner to the time period wherein Tenant has an obligation to share in Operating Expenses.
8.6 In the event that the Buildings or Project is less than fully occupied, Tenant acknowledges that Landlord may extrapolate Operating Expenses that vary depending on the occupancy of the Buildings or Project, as applicable, by dividing (a) the total cost of Operating Expenses by (b) the Rentable Area of the Buildings or Project (as applicable) that is occupied, then multiplying (y) the resulting quotient by (z) ninety-five percent (95%) of the total Rentable Area of the Buildings or Project (as applicable). Tenant shall pay Tenant's Share of the product of (y) and (z), subject to adjustment as reasonably determined by Landlord;
provided
,
however
, that Landlord shall not recover more than one hundred percent (100%) of Operating Expenses actually incurred by Landlord.
8.7
Audit Rights
. Tenant shall have the right, at Tenant's cost, after reasonable notice to Landlord, to have Tenant's authorized employees or agents inspect, at Landlord's California office during normal business hours, Landlord's books, records and supporting documents concerning the Operating Expenses set forth in any statement delivered by Landlord to Tenant for a particular calendar year pursuant to Section 8.2(a) above; provided, however, Tenant shall have no right to conduct such inspection or object to or otherwise dispute the amount of the Operating Expenses set forth in any such statement, unless Tenant notifies Landlord of such inspection request, completes such inspection, and demands an audit as set forth below within nine (9) months immediately following Landlord's delivery of the particular statement in question (the "Review Period"); provided, further, that notwithstanding any such timely inspection, objection, dispute, and/or audit, and as a condition precedent to Tenant's exercise of its right of inspection, objection, dispute, and/or audit as set forth in this Section 8.7, Tenant shall not be permitted to withhold payment of, and Tenant shall timely pay to Landlord, the full amounts as required by the provisions of this Article 8 in accordance with such statement. However, such payment may be made under protest pending the outcome of any audit. In connection with any such inspection by Tenant, Landlord and Tenant shall reasonably cooperate with each other so that such inspection can be performed pursuant to a mutually acceptable schedule, in an expeditious manner and without undue interference with Landlord's operation and management of the Project. If after such inspection and/or request for documentation, Tenant disputes the amount of the Operating Expenses set forth in the statement, Tenant shall have the right, but not the obligation, within the Review Period, to cause an independent certified public accountant which is not paid on a contingency basis and which is mutually approved by Landlord and Tenant (the "Accountant") to complete an audit of Landlord's books and records to determine the proper amount of the Operating Expenses incurred and amounts payable by Tenant for the calendar year which is the subject of such statement. Such audit by the Accountant shall be final and binding upon Landlord and Tenant. If Landlord and Tenant cannot mutually agree as to the identity of the Accountant within thirty (30) days after Tenant notifies Landlord that Tenant desires an audit to be performed, then the Accountant shall be one of the "Big 4" accounting firms selected by Landlord, which is not paid on a contingency basis. If such audit reveals that Landlord has over-charged Tenant, then within thirty (30) days after the results of such audit are made available to Landlord, Landlord shall reimburse to Tenant the amount of such over-charge. If the audit reveals that the Tenant was under-charged, then within thirty (30) days after the results of such audit are made available to Tenant, Tenant shall reimburse to Landlord the amount of such under-charge. Tenant agrees to pay the cost of such audit unless it is subsequently determined that Landlord's original statement which was the subject of such audit was in error to Tenant's disadvantage by five percent (5%) or more of the total Operating Expenses which was the subject of such audit. The payment by Tenant of any amounts pursuant to this Article 8 shall not preclude Tenant from questioning the correctness of any statement provided by Landlord at any time during the Review Period, but the failure of Tenant to object thereto, conduct and complete its inspection and have the Accountant conduct and complete the audit as described above prior to the expiration of the Review Period shall be conclusively deemed Tenant's approval of the statement in question and the amount of Operating Expenses shown thereon. In connection with any inspection and/or audit conducted by Tenant pursuant to this Section 8.7, Tenant agrees to keep, and to cause all of Tenant's employees and consultants and the Accountant to keep, all of Landlord's books and records and the audit, and all information pertaining thereto and the results thereof, strictly confidential (except to the extent disclosure is required in accordance with applicable law), and in connection therewith, Tenant shall cause such employees, consultants and the Accountant to execute such reasonable confidentiality agreements as Landlord may require prior to conducting any such inspections and/or audits.
9.
Taxes on Tenant's Property
.
9.1 Tenant shall be liable for and shall pay prior to delinquency any and all taxes levied against Tenant's equipment, furniture, fixtures and any other personal property or trade fixtures placed by Tenant in or about the Premises.
9.2 If any such taxes on Tenant's equipment, furniture, fixtures and any other personal property or trade fixtures are levied against Landlord or Landlord's property or, if the assessed valuation of the Buildings, the Property or the Project is increased by inclusion therein of a value attributable to Tenant's equipment, furniture, fixtures and any other personal property or trade fixtures, and if Landlord, after written notice to Tenant, pays the taxes based upon any such increase in the assessed value of the Buildings, the Property or the Project, then Tenant shall, upon demand, repay to Landlord the taxes so levied against Landlord or the proportion of such taxes resulting from such increase in the assessment, as the case may be.
9.3 If any improvements in or alterations to the Premises, whether installed and/or paid for by Landlord or Tenant and whether or not affixed to the real property so as to become a part thereof; are assessed for real property tax purposes at a valuation higher than the valuation at which improvements conforming to Landlord's building standards (the "
Building Standard
") in other spaces in the Buildings are assessed, then the real property taxes and assessments levied against Landlord or the Buildings, the Property or the Project by reason of such excess assessed valuation shall be deemed to be taxes levied against personal property of Tenant and shall be governed by the provisions of
Section 9.2
. Any such excess assessed valuation due to improvements in or alterations to space in the Project leased by other tenants at the Project shall not be included in Operating Expenses. If the records of the County Assessor are available and sufficiently detailed to serve as a basis for determining whether said Tenant improvements or alterations are assessed at a higher valuation than the Building Standard, then such records shall be binding on both Landlord and Tenant. Landlord acknowledges that the Improvements to be constructed in the Premises pursuant to Exhibit B are not above Building Standard.
9.4 Notwithstanding any contrary provision herein and to the extent applicable, Tenant shall pay prior to delinquency any (i) rent tax or sales tax, service tax, transfer tax or value added tax, or any other applicable tax on the rent or services herein or otherwise respecting this Lease, (ii) taxes assessed upon or with respect to the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion of the Project, including the Project parking facility; or (iii) taxes assessed upon this transaction or any document to which Tenant is a party creating or transferring an interest or an estate in the Premises.
10.
Security Deposit
.
10.1 Tenant shall deposit with Landlord on or before the Term Commencement Date the sum set forth in
Section 2.6
(the "
Security Deposit
"), which sum shall be held by Landlord as security for the faithful performance by Tenant of all of the terms, covenants and conditions of this Lease to be kept and performed by Tenant during the period commencing on the Execution Date and ending upon the expiration or termination of this Lease. If Tenant defaults with respect to any provision of this Lease, including any provision relating to the payment of Rent, then Landlord may (but shall not be required to) use, apply or retain all or any part of the Security Deposit for the payment of any Rent or any other sum in Default, or to compensate Landlord for any other loss or damage that Landlord may suffer by reason of Tenant's Default. If any portion of the Security Deposit is so used or applied, then Tenant shall, within ten (10) days following demand therefor, deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount, and Tenant's failure to do so shall be a material breach of this Lease. The provisions of this Article shall survive the expiration or earlier termination of this Lease. TENANT HEREBY WAIVES THE REQUIREMENTS OF SECTION 1950.7 OF THE CALIFORNIA CIVIL CODE, AS THE SAME MAY BE AMENDED FROM TIME TO TIME. Notwithstanding anything to the contrary contained in this
Article 10
, in the event that Tenant, at the expiration of the thirty-sixth (36
th
) month of the initial Lease Term, is not in Default of any of its obligations under this Lease, Landlord shall reduce the amount of the Security Deposit by the amount of the monthly Base Rent and estimated Operating Expenses due and payable to Landlord for the thirty-seventh (37
th
) month of the initial Lease Term and Landlord shall apply such amount against Tenant's monthly Base Rent and estimated Operating Expenses obligation for the thirty-seventh (37
th
) month of the initial Lease Term.
10.2 In the event of bankruptcy or other debtor-creditor proceedings against Tenant, the Security Deposit shall be deemed to be applied first to the payment of Rent and other charges due Landlord for all periods prior to the filing of such proceedings.
10.3 Landlord may deliver to any purchaser of Landlord's interest in the Premises the funds deposited hereunder by Tenant, and thereupon Landlord shall be discharged from any further liability with respect to such deposit. This provision shall also apply to any subsequent transfers.
10.4 If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, then the Security Deposit, or any balance thereof, shall be returned to Tenant (or, at Landlord's option, to the last assignee of Tenant's interest hereunder) within thirty (30) days after the expiration or earlier termination of this Lease.
10.5 Landlord shall hold the Security Deposit in an account at a banking organization selected by Landlord;
provided
,
however
, that Landlord shall not be required to maintain a separate account for the Security Deposit, but may intermingle it with other funds of Landlord. Landlord shall be entitled to all interest and/or dividends, if any, accruing on the Security Deposit. Landlord shall not be required to credit Tenant with any interest for any period during which Landlord does not receive interest on the Security Deposit.
11.
Use
.
11.1 Tenant shall use the Premises for the purpose set forth in
Section 2.7
, and shall not use the Premises, or permit or suffer the Premises to be used, for any other purpose without Landlord's prior written consent, which consent Landlord may withhold in its sole but reasonable discretion.
11.2 Tenant shall not use or occupy the Premises in violation of Applicable Laws; zoning ordinances; or the certificate of occupancy issued for the Buildings or the Project, and shall, upon five (5) days' written notice from Landlord, discontinue any use of the Premises that is declared or claimed by any Governmental Authority having jurisdiction to be a violation of any of the above. Tenant shall comply with any direction of any Governmental Authority having jurisdiction that shall, by reason of the nature of Tenant's use or occupancy of the Premises, impose any duty upon Tenant or Landlord with respect to the Premises or with respect to the use or occupation thereof. Notwithstanding the foregoing, Tenant shall not be obligated to comply with any declaration, direction or other governmental rule or governmental action (a) whose application or validity is being contested by Tenant diligently and in good faith by appropriate proceedings in accordance with Applicable Laws if Tenant's failure to comply therewith neither creates any risk of any financial liability or criminal sanction against Landlord or the Premises, nor creates any risk of damage to the Premises, nor creates any risk to Landlord's title to or rights in the Premises, or (b) compliance with which shall have been excused or exempted by a nonconforming use permit, waiver, extension or forbearance exempting it from such declaration, direction or other governmental rule or governmental action.
11.3 Tenant shall not do or permit to be done anything that will invalidate or increase the cost of any fire, environmental, extended coverage or any other insurance policy covering the Buildings or the Project, and shall comply with all rules, orders, regulations and requirements of the insurers of the Buildings and the Project, and Tenant shall promptly, upon demand, reimburse Landlord for any additional premium charged for such policy by reason of Tenant's failure to comply with the provisions of this Article.
11.4 Tenant shall keep all doors opening onto public corridors closed, except when in use for ingress and egress.
11.5 No additional locks or bolts of any kind shall be placed upon any of the doors or windows by Tenant, nor shall any changes be made to existing locks or the mechanisms thereof without Landlord's prior written consent. Tenant shall, upon termination of this Lease, return to Landlord all keys to offices and restrooms either furnished to or otherwise procured by Tenant. In the event any key so furnished to Tenant is lost, Tenant shall pay to Landlord the cost of replacing the same or of changing the lock or locks opened by such lost key if Landlord shall deem it necessary to make such change.
11.6 No awnings or other projections shall be attached to any outside wall of the Buildings without prior written consent from Landlord. No curtains, blinds, shades or screens shall be attached to or hung in, or used in connection with, any window or door of the Premises visible from the exterior of the Building other than Landlord's standard window coverings without Landlord's prior written approval, which approval shall not be unreasonably withheld. Neither the interior nor exterior of any windows shall be coated or otherwise screened without Landlord's prior written consent, which approval shall not be unreasonably withheld, nor shall any bottles, parcels or other articles be placed on the windowsills. No equipment, furniture or other items of personal property shall be placed on any exterior balcony without Landlord's prior written consent, which approval shall not be unreasonably withheld.
11.7 Subject to the approval of all applicable governmental and quasi-governmental entities, and subject to any covenants, conditions and restrictions and all applicable governmental and quasi-governmental laws, rules, regulations and codes, (i) Landlord hereby grants Tenant the non-exclusive right to install one (1) exterior sign on the face of the Building ("
Tenant's Fascia Sign
"), and (ii) the non-exclusive right to install Tenant's name ("
Tenant's Name Sign
") on the top or most prominent, available panel on the existing monument sign serving the Project. Tenant's Name Sign and Tenant's Fascia Sign may collectively be referred to herein as "
Tenant's Exterior Signage
." The design, size, specifications, graphics, materials, manner of affixing, exact location, colors and lighting (if applicable) of Tenant's Exterior Signage shall be (i) consistent with the quality and appearance of the Project, (ii) subject to the approval of all applicable governmental and quasi-governmental authorities, and subject to any covenants, conditions and restrictions and all applicable governmental and quasi-governmental laws, rules, regulations and codes, and (iii) subject to Landlord's reasonable approval. Tenant's Exterior Signage shall be installed at Tenant's sole cost and expense. In addition, Tenant shall be responsible for all other costs attributable to the fabrication, insurance, lighting (if applicable), maintenance, repair and removal of Tenant's Exterior Signage. The signage rights granted to Tenant under this
Section 11.7
is personal to the Original Tenant and any Affiliate Assignee and may not be exercised or used by or assigned to any other person or entity (unless Landlord reasonably consents to the assignment of such rights in connection with its approval of an assignment of this Lease). In addition, Original Tenant or such Affiliate Assignee shall no longer have any right to Tenant's Name Sign if at any time during the Term the Original Tenant, such Affiliate Assignee does not lease and occupy the entire Premises. Upon the expiration or sooner termination of this Lease, or upon the earlier termination of Tenant's signage rights under this
Section 11.7
, Landlord shall have the right to permanently remove Tenant's Exterior Signage, and to repair all damage to the Project resulting from such removal, and Tenant shall reimburse Landlord for the actual out-of-pocket costs thereof. Interior signs on doors and the directory tablet shall be inscribed, painted or affixed for Tenant by Landlord at Tenant's sole cost and expense (provided Landlord will charge its actual out-of-pocket cost for such signage), and shall be of a size, color and type and be located in a place reasonably acceptable to Landlord. The directory tablet shall be provided exclusively for the display of the name and location of tenants only. Tenant shall not place anything on the exterior of the corridor walls or corridor doors other than Landlord's standard lettering.
11.8 Tenant shall only place equipment within the Premises with floor loading consistent with the Buildings' structural design, and such equipment shall be placed in a location designed to carry the weight of such equipment.
11.9 Tenant shall cause any equipment or machinery to be installed in the Premises so as to reasonably prevent or minimize sounds or vibrations therefrom from extending into the Common Areas or other offices in the Project.
11.10 Tenant shall not (a) do or permit anything to be done in or about the Premises that shall in any way unreasonably obstruct or interfere with the rights of other tenants or occupants of the Project, (b) use or allow the Premises to be used for immoral, unlawful or objectionable purposes (provided that scientific research of any kind will not be deemed immoral or objectionable for purposes of this section), or (c) cause, maintain or permit any nuisance or waste in, on or about the Project.
11.11 Notwithstanding any other provision herein to the contrary, from and after the date of Substantial Completion of the Improvements, Tenant shall be responsible for all liabilities, costs and expenses arising out of or in connection with the compliance of the Premises with the Americans with Disabilities Act, 42 U.S.C. § 1210 I, et seq., and any state and local accessibility laws, codes, ordinances and rules (collectively, and together with regulations promulgated pursuant thereto, the "
ADA
").
11.12 Subject to Landlord's prior approval of all plans and specifications, which approval shall not be unreasonably withheld and Tenant's compliance with all applicable laws and any covenants, conditions and restrictions affecting the Project, Landlord shall permit Tenant to install and maintain, at Tenant's sole cost and expense, a backup diesel-powered generator at a location designated by Landlord. Such backup generator shall be used by Tenant only during (i) testing and regular maintenance, and (ii) any period of electrical power outage in the Project, which generator may be a "plug in" portable type generator. Tenant shall be entitled to operate the generator for testing and regular maintenance only upon notice to Landlord and at times reasonably approved by Landlord. Tenant shall submit the specifications for design, operation, installation and maintenance of the backup generator for Landlord's consent, which consent shall not be unreasonably withheld or delayed and may be conditioned on Tenant complying with such reasonable requirements imposed by Landlord, based on the advice of Landlord's structural and mechanical engineers, so that the Project's systems and equipment are not adversely affected. In addition, Tenant shall ensure that the backup generator does not result in any Hazardous Materials being introduced to the Project, and
Article 20
will apply to Tenant's use of the backup generator. In the event another tenant of the Project or of a neighboring project complains of problems caused by the generator, Tenant shall take reasonable steps as necessary to remedy the problem complained of. Tenant shall ensure that the design and installation of the backup generator is performed in a manner so as to minimize or eliminate any noise or vibration cause by such generator. The vent for the generator must be higher than the roof line of the Project. Any repairs and maintenance of such generator shall be the sole responsibility of Tenant and Landlord makes no representation or warranty with respect to such generator. If Tenant is so notified by Landlord, Tenant shall, at Tenant's sole cost and expense, remove such generator upon the expiration or earlier termination of the Lease Term and repair all damage to the Project resulting from such removal; provided that Tenant will at all times have the right to remove the generator if the generator is rented from or otherwise owned by a third party. Such generator shall be deemed to be a part of the Premises for purposes of
Articles 22
and
27
of this Lease.
12.
Rules and Regulations, CC&Rs, Parking Facilities and Common Areas
.
12.1 Tenant shall have the non-exclusive right, in common with others, to use the Common Areas, subject to the rules and regulations adopted by Landlord and attached hereto as
Exhibit B
, together with such other reasonable and nondiscriminatory rules and regulations as are hereafter promulgated by Landlord in its sole and absolute discretion (the "
Rules and Regulations
"). During the Lease Term, except as may be reasonably necessary to comply with Applicable Laws, Landlord shall not promulgate new rules and regulations that (a) have a material adverse effect on Tenant's Permitted Use of the Premises or (b) increase (other than a deminimus amount) Tenant's costs under this Lease, without Tenant's prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Tenant shall faithfully observe and comply with the Rules and Regulations. Landlord shall not be responsible to Tenant for the violation or non-performance by any other tenant or any agent, employee or invitee thereof of any of the Rules and Regulations. The manner in which the Common Areas are maintained and operated shall be at the sole discretion of Landlord and the use thereof shall be subject to the Rules and Regulations, as Landlord may make from time to time.
12.2 This Lease is subject to any recorded covenants, conditions or restrictions on the Project or Property (the "
CC&Rs
"), as the same may be amended, amended and restated, supplemented or otherwise modified from time to time; provided that any such amendments, restatements, supplements or modifications do not materially modify Tenant's rights or obligations hereunder. Tenant shall comply with the CC&Rs. Landlord acknowledges and agrees that there are no CC&Rs affecting the Building as of the date hereof.
12.3 Tenant shall have a non-exclusive, irrevocable license to use throughout the Lease Term the number of unreserved parking passes set forth in
Section 2.13
above in at such locations in the parking facilities serving the Buildings as may be determined by Landlord from time to time in common with the other occupants of the Buildings, on an unreserved basis, and subject to the designation of reserved spaces as set forth in
Section 2.13,
at no cost to Tenant.
12.4 Tenant agrees not to unreasonably overburden the parking facilities and agrees to cooperate with Landlord and other tenants in the use of the parking facilities. Landlord reserves the right to determine that parking facilities are becoming overcrowded and to limit Tenant's use thereof to the number of parking passes allocated to Tenant by this Lease. Landlord may reasonably allocate parking spaces among Tenant and other tenants of the Buildings or the Project and Tenant shall be entitled to use throughout the Lease Term the number of unreserved parking passes set forth in
Section 2.13
above. Nothing in this Section, however, is intended to create an affirmative duty on Landlord's part to monitor parking.
12.5 Landlord reserves the right to modify the Common Areas, including the right to add or remove exterior and interior landscaping and to subdivide real property, in accordance with the terms and conditions of this Lease. Landlord reserves the right to close temporarily, make alterations or additions to, or change the location of elements of the Project and the Common Areas; provided that Tenant’s use and occupancy of the Premises is not adversely and materially impacted.
13.
Project Control by Landlord
.
13.1 Landlord reserves full control over the Buildings and the Project to the extent not inconsistent with Tenant's enjoyment of the Premises and parking as provided by this Lease. This reservation includes Landlord's right to subdivide the Project; convert the Buildings to condominium units; change the size of the Project by selling all or a portion of the Project or adding real property and any improvements thereon to the Project; grant assessments and licenses to third parties; maintain or establish ownership of the Buildings separate from fee title to the Property; make additions to or reconstruct portions of the Buildings and the Project; install, use, maintain, repair, replace and relocate for service to the Premises and other parts of the Buildings or the Project pipes, ducts, conduits, wires and appurtenant fixtures, wherever located in the Premises, the Buildings or elsewhere at the Project; and alter or relocate any other Common Area or facility, including private drives, lobbies and entrances. Landlord's right pursuant to this
Section 13.1
, including without limitation the rights to construct, maintain, relocate, alter, improve, or adjust the Buildings or the Project shall be subject to the condition that (i) the exercise of any of such rights shall not materially and adversely interfere with Tenant's use of the Premises or materially decrease the number of Tenant's parking spaces, (ii) Landlord shall provide reasonable prior notice to Tenant before exercising any such rights which may materially and adversely interfere with Tenant's use of the Premises, provided that such business is in accordance with the Permitted Use, and (iii) Landlord shall use its reasonable efforts to minimize to the extent possible any significant interference with Tenant's business, provided that such business is in accordance with the Permitted Use, including, when reasonable, scheduling such work after business hours or on weekends; provided, however, that Landlord agrees to use good faith efforts to avoid performing work in the lab portion of the Premises.
13.2 Possession of areas of the Premises necessary for utilities, services, safety and operation of the Buildings is reserved to Landlord to the extent necessary for Landlord to perform its obligations hereunder.
13.3 Tenant shall, at Landlord's request, promptly execute such further documents as may be reasonably appropriate to assist Landlord in the performance of its obligations hereunder;
provided
that Tenant need not execute any document that creates additional liability for Tenant or that deprives Tenant of the quiet enjoyment and use of the Premises as provided for in this Lease.
13.4 Landlord may, at any and all reasonable times during non-business hours (or during business hours if Tenant so requests), and upon twenty-four (24) hours' prior notice (provided that no time restrictions shall apply or advance notice be required if an emergency necessitates immediate entry), and subject to compliance with Tenant’s commercially reasonable safety and security measures, enter the Premises to (a) inspect the same and to determine whether Tenant is in compliance with its obligations hereunder, (b) supply any service Landlord is required to provide hereunder, (c) show the Premises to prospective purchasers or tenants during the final year of the Lease Term, (d) post notices of nonresponsibility, (c) access the telephone equipment, electrical substation and fire risers and (f) alter, improve or repair any portion of the Buildings other than the Premises for which access to the Premises is reasonably necessary. In connection with any such alteration, improvement or repair as described in this
Section 13.4
, Landlord may erect in the Premises or elsewhere in the Project scaffolding and other structures reasonably required for the alteration, improvement or repair work to be performed. In no event shall Tenant's Rent abate as a result of Landlord's activities pursuant to this Section; provided, however, that all such activities shall be conducted in such a manner so as to cause as little interference to Tenant as is reasonably possible. Landlord shall at all times retain a key with which to unlock all of the doors in the Premises. If an emergency necessitates immediate access to the Premises, Landlord may use whatever force is necessary to enter the Premises, and any such entry to the Premises shall not constitute a forcible or unlawful entry to the Premises, a detainer of the Premises, or an eviction of Tenant from the Premises or any portion thereof. Tenant will at all times be permitted to have a representative accompany Landlord during any entry into the Premises and may designate certain areas of the Premises which contain sensitive equipment or information as “Secured Areas” and restrict access to such Secured Areas except in the case of an emergency.
14.
Quiet Enjoyment
. So long as Tenant is not in Default under this Lease, Landlord or anyone acting through or under Landlord shall not disturb Tenant's occupancy of the Premises.
15.
Utilities and Services
.
15.1 Tenant shall pay for all water (including the cost to service, repair and replace reverse osmosis, de-ionized and other treated water), gas, heat, light, power, telephone, internet service, cable television, other telecommunications and other utilities supplied to the Premises, together with any fees, surcharges and taxes thereon. If any such utility is not separately metered to Tenant, Tenant shall pay Tenant's Pro Rata Share of all charges of such utility jointly metered with other premises as Additional Rent; provided, however, that Landlord acknowledges and agrees that electricity is, as of the date hereof, separately metered and water is included in Operating Expenses.
15.2 Except as set forth below, Landlord shall not be liable for, nor shall any eviction of Tenant result from, the failure to furnish any utility or service, whether or not such failure is caused by accident; breakage; repair; strike, lockout or other labor disturbance or labor dispute of any character; act of terrorism; shortage of materials; governmental regulation, moratorium or other governmental action, inaction or delay; or other causes beyond Landlord's control (collectively, "
Force Majeure
"). In the event of such failure, Tenant shall not be entitled to termination of this Lease or any abatement or reduction of Rent, nor shall Tenant be relieved from the operation of any covenant or agreement of this Lease; provided, however, if such interruption is the result of Landlord's negligence or willful misconduct and continues for five (5) consecutive business days, Tenant shall be entitled to an abatement or reduction of rent proportionate to the portion of the Premises as to which Tenant's use is interrupted (or as to all of the Premises if so much thereof is unusable that the entire Premises is unusable for Tenant’s intended use), to the extent such interruption persists. The foregoing abatement will also apply to interruptions in Tenant’s ability to use the Premises or portions thereof due to repairs, maintenance or construction work being performed by or on behalf of Landlord at the Building or Project.
15.3 Tenant shall pay for, prior to delinquency of payment therefor, any services that may be furnished to the Premises beyond those provided by Landlord, including telephone, internet service, cable television and other telecommunications, together with any fees, surcharges and taxes thereon.
15.4 Tenant shall not, without Landlord's prior written consent, use any device in the Premises (including data processing machines) that will in any way (a) increase the amount of ventilation, air exchange, gas, steam, electricity or water required or consumed in the Premises based upon Tenant's Pro Rata Share of the Building or Project (as applicable) beyond the existing capacity of the Building or the Project usually furnished or supplied for the use set forth in
Section 2.7
or (b) exceed Tenant's Pro Rata Share of the Buildings' or Project's (as applicable) capacity to provide such utilities or services.
15.5 Utilities and services provided to the Premises that are separately metered shall be paid by Tenant directly to the supplier of such utility or service.
15.6 As part of Operating Expenses, Landlord shall provide water to the Premises, which water shall be from the local municipal or similar source;
provided
,
however
, that if Landlord determines that Tenant requires, uses or consumes water beyond that normally required for customary laboratory purposes, Landlord may install a water meter and thereby measure Tenant's water consumption for all purposes. Tenant shall pay Landlord for the costs of such meter and the installation thereof and, throughout the duration of Tenant's occupancy of the Premises, Tenant shall keep said meter and installation equipment in good working order and repair at Tenant's sole cost and expense. If Tenant fails to so maintain such meter and equipment, Landlord may repair or replace the same and shall collect the costs therefor from Tenant. Tenant agrees to pay for water consumed, as shown on said meter, as and when bills are rendered. If Tenant fails to timely make such payments, Landlord may pay such charges and collect the same from Tenant. Any such costs or expenses incurred, or payments made by Landlord for any of the reasons or purposes hereinabove stated, shall be deemed to be Additional Rent payable by Tenant and collectible by Landlord as such.
15.7 Landlord reserves the right, upon reasonable, prior written notice to Tenant absent exigent circumstances in which the giving of such notice is not reasonably possible, to stop service of the elevator, plumbing, ventilation, air conditioning and electric systems, when Landlord deems reasonably necessary, due to accident, emergency or the need to make repairs, alterations or improvements, until such repairs, alterations or improvements shall have been completed, and Landlord shall further have no responsibility or liability for failure to supply elevator facilities, plumbing, ventilation, air conditioning or electric service when prevented from doing so by Force Majeure or Landlord's negligence; a failure by a third party to deliver gas, oil or another suitable fuel supply; or Landlord's inability by exercise of reasonable diligence to obtain gas, oil or another suitable fuel. If any such repairs, alterations or improvements might require or cause an interruption in electrical service to the Premises or any portion thereof, Landlord will give to Tenant at least three (3) business days prior written notice whenever practicable. Landlord will minimize the time required for any interruption and will use commercially reasonable efforts to have any work requiring interruption in any utility or service to be performed outside of customary business hours. Without limiting the foregoing, it is expressly understood and agreed that any covenants on Landlord's part to furnish any service pursuant to any of the terms, covenants, conditions, provisions or agreements of this Lease, or to perform any act or thing for the benefit of Tenant, shall not be deemed breached if Landlord is unable to furnish or perform the same by virtue of Force Majeure.
15.8 For the Premises, Tenant shall (a) maintain and operate the heating, ventilating and air conditioning systems used for the Permitted Use only ("
'HVAC
") and (b) subject to clause (a) above, furnish HVAC as reasonably required for the permitted use (which may be up to twenty-four (24) hours a day, every day during the Lease Term), subject to casualty, eminent domain or as otherwise specified in this Article. Notwithstanding anything to the contrary in this Section, Landlord shall have no liability, and Tenant shall have no right or remedy, on account of any interruption or impairment in HVAC services. If requested in writing by Landlord, Tenant shall provide Landlord copies of HVAC maintenance contracts and HVAC maintenance reports on a quarterly basis. In the event Landlord determines that Tenant is not properly maintaining the HVAC, Landlord may take over the responsibilities in (a) and (b) above. In the event that Tenant’s HVAC service provider reasonably determines that any HVAC unit requires repairs that would cost in excess of fifty percent (50%) of the cost to replace such HVAC unit, Tenant shall deliver written notice to Landlord (an “
HVAC Replacement Notice
”) requesting that Landlord replace such HVAC unit (which notice shall include reasonably detailed information from Tenant’s HVAC service provider supporting its determination). Upon receipt of an HVAC Replacement Notice, Landlord shall, if Landlord, in its reasonable, good faith discretion, agrees with such determination, replace the HVAC unit at Landlord’s sole cost and expense.
15.9 For any utilities serving the Premises for which Tenant is billed directly by such utility provider, Tenant agrees to furnish to Landlord (a) any invoices or statements for such utilities within thirty (30) days after Tenant's receipt thereof and (b) within thirty (30) days after Landlord's request, any other utility usage information reasonably requested by Landlord which Tenant has in its possession in the form requested. Tenant shall retain records of utility usage at the Premises, including invoices and statements from the utility provider, for at least sixty (60) months, or such other shorter period of time as may be requested by Landlord. Tenant acknowledges that any utility information for the Premises, the Buildings and the Project may be shared with third parties, including Landlord's consultants and Governmental Authorities. In the event that Tenant fails to comply with this Section, Tenant hereby authorizes Landlord to collect utility usage information directly from the applicable utility providers.
15.10 Subject to the provisions of this Article, Landlord shall furnish the electric energy that Tenant shall reasonably require in the Premises for the purposes permitted under this Lease. Except for electric energy required to operate motors on the air handlers providing HVAC (the "
HVAC Electric
"), such electric energy shall be furnished through the existing electricity meters and related equipment , serviced and maintained by Landlord, in each case at Tenant's expense. Tenant shall pay for electric energy (for which it is liable for payment under this Article) in accordance with
Sections 15.1
and
15.9
within ten (10) days after receipt of any bills related thereto.
15.11 Tenant, at its sole cost, shall furnish and install all replacement lighting tubes, lamps, bulbs and ballasts required in the Premises after the date of Substantial Completion and Landlord will ensure that upon delivery of the Premises to Tenant, all lighting is code compliant and all tubes, lamps and ballasts are in good working order.
15.12 Tenant's use of electric energy in the Premises shall not at any time exceed the capacity of any of the electrical conductors and equipment in or otherwise serving the Premises. In order to ensure that such capacity is not exceeded, and to avert a possible adverse effect upon the Project's distribution of electricity via the Project's electric system, Tenant shall not, without Landlord's prior written consent in each instance (which consent Landlord may condition upon the availability of electric energy in the Project as allocated by Landlord to various areas of the Project) connect any fixtures, appliances or equipment (other than laboratory equipment necessary for the conduct of Tenant’s business in the Premises) to the Buildings' or Project's electric system or make any alterations or additions to the electric system of the Premises existing on the date hereof. Should Landlord grant such consent, all additional risers, distribution cables or other equipment required therefor shall be provided by Landlord and the cost thereof shall be paid by Tenant to Landlord on demand (or, at Tenant's option, shall be provided by Tenant pursuant to plans and contractors approved by Landlord, and otherwise in accordance with the provisions of this Lease). Landlord shall have the right to require Tenant to pay sums on account of such cost prior to the installation of any such risers or equipment.
15.13 Tenant shall be responsible for employing a janitorial and maintenance service for the Premises, at Tenant's sole cost and expense, which janitorial contractor shall provide services five (5) days per week and which janitorial contractor (and janitorial contract) shall be subject to Landlord's reasonable approval. Tenant hereby acknowledges that Landlord shall have no obligation whatsoever to provide such services in the Premises.
15.14 Notwithstanding anything to the contrary contained herein, Landlord and Tenant hereby acknowledge that Tenant shall be authorized, during the Lease Term, to install a security system in the Premises pursuant to the terms and conditions of
Article 16
below. In connection therewith, Landlord and Tenant hereby agree that any such installation by Tenant shall be at Tenant's sole cost and expense, shall be in accordance with the terms and conditions of
Section 16
below and that Tenant shall furnish to Landlord specifications regarding such system for Landlord's prior written approval. At Landlord's option, upon the expiration or earlier termination of this Lease, Tenant shall remove such security system and repair any damage to the Premises resulting from such removal. Landlord shall, in no event, be obligated to monitor or respond to such security system. Landlord and Tenant agree and acknowledge that nothing contained in this
Section 15.14
shall be construed to limit the rights of Landlord under this Lease. In connection therewith, Tenant shall provide to Landlord, within five (5) days of installation of such alarm system in the Premises, the telephone number(s) of an authorized representative of Tenant to whom Landlord shall give reasonable prior notice (as determined by Landlord, given the circumstances, emergency or otherwise) in the event Landlord must enter the Premises, but in no event shall Landlord, following Landlord's provision of such reasonable notice to Tenant's authorized representative, be obligated to delay Landlord's entry into the Premises or to monitor or otherwise operate the alarm system while inside the Premises.
16.
Alterations
.
16.1 Tenant shall make no alterations, additions or improvements in or to the Premises or engage in any construction, demolition, reconstruction, renovation, or other work (whether major or minor) of any kind in, at, or serving the Premises (collectively, "
Alterations
") without Landlord's prior written approval, which approval Landlord shall not unreasonably withhold; provided, however, that in the event any proposed Alteration affects (a) any structural portions of a Building, including exterior walls, roof; foundation, foundation systems (including barriers and subslab systems), or core of a Building, (b) the exterior of a Building or (c) any Building systems which are shared with other tenants, including elevator, plumbing, air conditioning, heating, electrical, security, life safety and power, then Landlord may withhold its approval with respect thereto in its sole and absolute discretion. Tenant shall, in making any such Alterations, use only those architects, contractors, suppliers and mechanics of which Landlord has given prior written approval, which approval shall be in Landlord's reasonable discretion. In seeking Landlord's approval, Tenant shall provide Landlord, at least fourteen (14) days in advance of any proposed construction, with the following as appropriate given the scope of work: plans, specifications, bid proposals, certified stamped engineering drawings and calculations by Tenant's engineer of record or architect of record, (including connections to the Building's structural system, modifications to the Building's envelope, non-structural penetrations in slabs or walls, and modifications or tie-ins to life safety systems), work contracts, requests for laydown areas and such other information concerning the nature and cost of the Alterations as Landlord may reasonably request. In no event shall Tenant use or Landlord be required to approve any architects, consultants, contractors, subcontractors or material suppliers that Landlord reasonably believes could cause labor disharmony; provided the foregoing will not require Tenant to use union labor. Notwithstanding the foregoing to the contrary, Landlord's prior consent shall not be required with respect to any interior Alterations to the Premises which (i) are not Alterations described in clauses (a), (b) and (c) above, (ii) cost less than Thirty Thousand Dollars ($30,000.00) for any one (1) job, and (iii) do not require a permit of any kind, as long as (A) Tenant delivers to Landlord notice and a copy of any final plans, specifications and working drawings for any such Alterations at least ten (10) days prior to commencement of the work thereof, and (B) the other conditions of this
Article 16
are satisfied including, without limitation, conforming to Landlord's rules, regulations and insurance requirements which govern contractors.
16.2 Tenant shall not construct or permit to be constructed partitions or other obstructions that might interfere with free access to mechanical installation or service facilities of a Building or with other tenants' components located within a Building, or interfere with the moving of Landlord's equipment to or from the enclosures containing such installations or facilities.
16.3 Tenant shall accomplish any work performed on the Premises or the Buildings in such a manner as to permit, to the extent reasonably practicable, any life safety systems to remain fully operable at all times.
16.4 Any work performed on the Premises, the Buildings or the Project by Tenant or Tenant's contractors shall be done at such times and in such manner as Landlord may from time to time reasonably designate. Tenant covenants and agrees that all work done by Tenant or Tenant's contractors shall be performed in full compliance with Applicable Laws, including, without limitation, Title III of the ADA. Within thirty (30) days after completion of any Alterations, Tenant shall provide Landlord, to the extent applicable, with complete "as-built" drawing print sets and electronic CADD files on disc (or files in such other current format in common use as Landlord reasonably approves or requires) showing any changes in the Premises. Without limiting the foregoing, Tenant shall be required to provide Landlord with CADD drawings for all mechanical and electrical Alterations.
16.5 Before commencing any Alterations or Tenant Improvements, Tenant shall give Landlord at least fourteen (14) days' prior written notice of the proposed commencement of such work.
16.6 All Alterations, additions and improvements, subject to
Section 16.8
, attached to or built into the Premises, made by either of the Parties, including all floor and wall coverings, built-in cabinet work and paneling, sinks and related plumbing fixtures, affixed laboratory benches, exterior venting fume hoods and walk-in freezers and refrigerators, ductwork, conduits, electrical panels and circuits, shall (unless, prior to such construction or installation, Landlord elects otherwise and except for equipment such as freestanding fume hoods paid for solely by Tenant and which can be removed from the Premises without damage to the Premises) become the property of Landlord upon the expiration or earlier termination of the Lease Term. All Tenant Improvements, Alterations and Signage installed by or at the direction of Tenant shall be the property of Landlord. Furthermore, Landlord may require that Tenant remove any improvement (but not any Tenant Improvements) upon the expiration or early termination of the Lease Term, and repair any damage to the Premises and Building caused by such removal so long as Landlord notified Tenant in writing at the time Landlord approved such Alterations (or with respect to Alterations not requiring Landlord's consent, at the time Tenant notified Landlord of such Alterations) that Landlord will require the removal of any such Alterations but only if Tenant requested (in writing) that Landlord make such removal determination at the time Tenant requested Landlord's consent to any such Alterations (or at the time Tenant provided Landlord with written notice of Alterations not requiring Landlord's consent).
16.7 Tenant shall repair any damage to the Premises caused by Tenant's removal of any property from the Premises. During any such restoration period, Tenant shall pay Rent to Landlord as provided herein as if said space were otherwise occupied by Tenant even if such repairs occur following the expiration or other termination of the Lease Term. The provisions of this Section shall survive the expiration or earlier termination of this Lease.
16.8 All business and trade fixtures, unattached equipment, movable lab benches, unattached machinery and equipment, installed in and upon the Premises by Tenant shall be and remain the property of Tenant and may be removed by Tenant at any time during the Lease Term. If Tenant shall fail to remove any of its effects from the Premises prior to termination of this Lease, then Landlord may, at its option, remove the same in any manner that Landlord shall choose and store said effects without liability to Tenant for loss thereof or damage thereto, and Tenant shall pay Landlord, upon demand, any costs and expenses incurred due to such removal and storage or Landlord may, at its sole option and without notice to Tenant, sell such property or any portion thereof at private sale and without legal process for such price as Landlord may obtain and apply the proceeds of such sale against any (a) amounts due by Tenant to Landlord under this Lease and (b) any expenses incident to the removal, storage and sale of said personal property.
16.9 Notwithstanding any other provision of this Article to the contrary, in no event shall Tenant remove any improvement from the Premises as to which Landlord contributed payment, including the Tenant Improvements, without Landlord's prior written consent, which consent Landlord may withhold in its sole and absolute discretion.
16.10 Tenant shall pay to Landlord an amount equal to two and one-half percent (2.5%) of the cost to Tenant of all Alterations, Tenant Improvements, installations or other changes installed or made by Tenant or its contractors or agents to cover Landlord's overhead and expenses for plan review, coordination, scheduling and supervision thereof. For purposes of payment of such sum, Tenant shall submit to Landlord copies of all bills, invoices and statements covering the costs of such charges, accompanied by payment to Landlord of the fee set forth in this Section. Tenant shall reimburse Landlord for any extra expenses incurred by Landlord by reason of faulty work done by Tenant or its contractors, or by reason of delays caused by such work, or by reason of inadequate clean-up.
16.11 Within sixty (60) days after final completion of the Tenant Improvements, to the extent Tenant expends any amounts for such Tenant Improvements, or any other Alterations performed by Tenant with respect to the Premises, Tenant shall submit to Landlord documentation showing the amounts expended by Tenant with respect to such Tenant Improvements (or any other Alterations performed by Tenant with respect to the Premises), together with supporting documentation reasonably acceptable to Landlord.
16.12 Tenant shall take, and shall cause its contractors to take, commercially reasonable steps to protect the Premises during the performance of any Alterations, including covering or temporarily removing any window coverings so as to guard against dust, debris or damage.
16.13 Tenant shall require its contractors and subcontractors performing work on the Premises to name Landlord and its affiliates and Lenders as additional insureds on their respective insurance policies.
17.
Repairs and Maintenance
.
17.1 Landlord shall repair and maintain and repair any defects in the structural and exterior portions and Common Areas of the Buildings and the Project, including roofing and covering (structure and membrane) materials; foundations; slabs; exterior walls; exterior utilities; plumbing; fire sprinkler systems (if any); heating, ventilating, air conditioning systems; elevators; and electrical systems installed or furnished by Landlord.
17.2 Except for services of Landlord, if any, required by
Section 17.1
, Tenant shall at Tenant's sole cost and expense maintain and keep the Premises and every part thereof in good condition and repair, damage thereto from ordinary wear and tear excepted. Tenant shall, upon the expiration or sooner termination of the Lease Term, surrender the Premises to Landlord in as good a condition as when received, ordinary wear and tear and casualty damage excepted; and shall, at Landlord's request, remove all telephone and data systems, wiring and equipment installed by Tenant from the Premises, and repair any damage to the Premises caused thereby. Landlord shall have no obligation to alter, remodel, improve, repair, decorate or paint the Premises or any part thereof; other than as expressly provided in this Lease.
17.3 Landlord shall not be liable for any failure to make any repairs or to perform any maintenance that is an obligation of Landlord unless such failure shall persist for an unreasonable time after Tenant provides Landlord with written notice of the need of such repairs or maintenance. Tenant waives its rights under Applicable Laws now or hereafter in effect to make repairs at Landlord's expense. Notwithstanding anything to the contrary set forth in this Article 17, if Tenant provides written notice to Landlord of the need for repairs and/or maintenance with respect to the Premises which are Landlord's obligation to perform under
Section 17.1
above, and Landlord fails to commence such repairs and/or maintenance within a reasonable period of time, given the circumstances, after receipt of such notice (but in no event earlier than fifteen (15) days after receipt of such notice except in cases where there is an immediate threat of material and substantial property damage or immediate threat of bodily injury, in which case such shorter period of time as is reasonable under the circumstances), then Tenant may, at its option, proceed to undertake such repairs and/or maintenance upon delivery of an additional five (5) business days' notice to Landlord that Tenant is taking such required action (provided, however, that no additional notice shall be required in the event of an emergency which threatens life or where there is imminent danger to property). If such repairs and/or maintenance were required under the terms of this Lease to be performed by Landlord and Landlord has not commenced such repair or maintenance prior to the expiration of such five (5) business day period (or the initial notice and repair period set forth in the first sentence of this
Section 17.3
in the event of emergencies where no second notice is required) ("Outside Repair Period"), then Tenant shall be entitled to reimbursement by Landlord of Tenant's actual, reasonable, and documented costs and expenses in performing such maintenance and/or repairs. Such reimbursement shall be made within thirty (30) days after Landlord's receipt of Tenant's invoice of such costs and expenses, and if Landlord fails to so reimburse Tenant within such 30-day period, then Tenant shall be entitled to offset against the Rent payable by Tenant under this Lease the amount of such invoice; provided, however, that notwithstanding the foregoing to the contrary, if (i) Landlord delivers to Tenant prior to the expiration of the Outside Repair Period described above, a written objection to Tenant's right to receive any such reimbursement based upon Landlord's good faith claim that such action did not have to be taken by Landlord pursuant to the terms of this Lease, or (ii) Landlord delivers to Tenant, within thirty (30) days after receipt of Tenant's invoice, a written objection to the payment of such invoice based upon Landlord's good faith claim that such charges are excessive (in which case, Landlord shall reimburse Tenant, within such 30-day period, the amount Landlord contends would not be excessive), then Tenant shall not be entitled to such reimbursement or offset against Rent, but Tenant, as its sole remedy, may proceed to claim a default by Landlord. In the event Tenant undertakes such repairs and/or maintenance, and such work will affect the Base, Shell and Core, any structural portions of the Premises or Building, Tenant shall use only those third party contractors used by Landlord in the Project for such work unless such contractors are unwilling or unable to perform such work at competitive prices, in which event Tenant may utilize the services of any other qualified contractor which normally and regularly performs similar work in comparable first-class buildings in the general vicinity of the Building. Tenant shall comply with the other terms and conditions of this Lease if Tenant takes the required action, except that Tenant is not required to obtain Landlord's consent for such repairs.
17.4 If any excavation shall be made upon land adjacent to or under the Buildings, or shall be authorized to be made, Tenant shall afford to the person causing or authorized to cause such excavation, license to enter the Premises for the purpose of performing such work as said person shall deem necessary or desirable to preserve and protect the Buildings from injury or damage and to support the same by proper foundations, without any claim for damages or liability against Landlord and without reducing or otherwise affecting Tenant's obligations under this Lease to the extent Tenant's Permitted Use of the Premises is not materially disrupted; provided that Landlord will ensure that any person entering the Premises acts in a manner which minimizes unreasonable interference with Tenant’s use and occupancy of the Premises and any work must be completed as expeditiously as commercially reasonably possible.
17.5 This Article relates to repairs and maintenance arising in the ordinary course of operation of the Buildings and the Project. In the event of a casualty described in
Article 23,
Article 23
shall apply in lieu of this Article. In the event of eminent domain,
Article 24
shall apply in lieu of this Article.
17.6 Costs incurred by Landlord pursuant to this Article shall constitute Operating Expenses except as otherwise provided herein, unless such costs are incurred due in whole or in part to any act, neglect, fault or omissions of Tenant or its employees, agents, contractors or invitees, in which case Tenant shall pay to Landlord the cost of such repairs and maintenance.
18.
Liens
.
18.1 Tenant shall keep the Premises, the Buildings and the Project free from any liens arising out of work performed, materials furnished or obligations incurred by Tenant. Tenant further covenants and agrees that any mechanic's lien filed against the Premises, the Buildings or the Project for work claimed to have been done for, or materials claimed to have been furnished to Tenant, shall be discharged or bonded by Tenant within ten (10) business days after the filing thereof, at Tenant's sole cost and expense.
18.2 Should Tenant fail to discharge or bond against any lien of the nature described in
Section 18.1
, Landlord may, at Landlord's election, pay such claim or post a bond or otherwise provide security to eliminate the lien as a claim against title, and Tenant shall immediately reimburse Landlord for the costs thereof as Additional Rent. Tenant shall indemnify, save, defend (at Landlord's option and with counsel reasonably acceptable to Landlord) and hold Landlord Indemnitees harmless from and against any Claims arising from any such liens, including any administrative, court or other legal proceedings related to such liens.
18.3 In the event that Tenant leases or finances the acquisition of office equipment, furnishings or other personal property of a removable nature utilized by Tenant in the operation of Tenant's business, Tenant warrants that any Uniform Commercial Code financing statement shall, upon its face or by exhibit thereto, indicate that such financing statement is applicable only to removable personal property of Tenant located within the Premises. In no event shall the address of the Premises, the Buildings or the Project be furnished on a financing statement without qualifying language as to applicability of the lien only to removable personal property located in an identified suite leased by Tenant. Should any holder of a financing statement record or place of record a financing statement that appears to constitute a lien against any interest of Landlord or against equipment that may be located other than within an identified suite leased by Tenant, Tenant shall, within ten (10) days after filing such financing statement, cause (a) a copy of the Lender security agreement or other documents to which the financing statement pertains to be furnished to Landlord to facilitate Landlord's ability to demonstrate that the lien of such financing statement is not applicable to Landlord's interest and (b) Tenant's Lender to amend such financing statement and any other documents of record to clarify that any liens imposed thereby are not applicable to any interest of Landlord in the Premises, the Buildings or the Project.
19.
Estoppel Certificate
. Within ten (10) business days following a request in writing by Landlord, Tenant shall execute, acknowledge and deliver to Landlord an estoppel certificate which, as submitted by Landlord, shall be substantially in the form of
Exhibit E
, attached hereto (or such other reasonable form as may be required by any prospective mortgagee or purchaser of the Building or Project or any portion thereof), indicating therein any exceptions thereto that may exist at that time, and shall also contain any other information reasonably requested by Landlord or Landlord's mortgagee or prospective mortgagee or purchasers. Any such certificate may be relied upon by any prospective mortgagee or purchaser of all or any portion of the Project. Tenant shall execute and deliver whatever other commercially reasonable instruments may be reasonably required for such purposes. At any time during the Lease Term, Landlord may require Tenant to provide Landlord with a current financial statement and financial statements of the two (2) years prior to the current financial statement year. Such statements shall be prepared in accordance with generally accepted accounting principles and, if such is the normal practice of Tenant, shall be audited by an independent certified public accountant. Tenant will not be required to deliver financial statements if such statements are publicly available. Failure of Tenant to timely execute and deliver such estoppel certificate or other instruments shall constitute an acceptance of the Premises and an acknowledgment by Tenant that statements included in the estoppel certificate are true and correct, without exception. Failure by Tenant to so deliver such estoppel certificate shall be a material Default of the provisions of this Lease.
20.
Hazardous Materials
.
20.1 Tenant shall not cause or permit any Hazardous Materials (as defined below) to be brought upon, kept or used in or about the Premises, the Buildings or the Project in violation of Applicable Laws by Tenant or its employees, agents, contractors or invitees. If Tenant breaches such obligation, or if the presence of Hazardous Materials as a result of such a breach results in contamination of the Project, any portion thereof, or any adjacent property, then Tenant shall indemnify, save, defend (at Landlord's option and with counsel reasonably acceptable to Landlord) and hold the Landlord Indemnitees harmless from and against any and all Claims, including sums paid in settlement of Claims that arise during or after the Lease Term as a result of such breach or contamination. This indemnification by Tenant includes costs incurred in connection with any investigation of site conditions or any clean-up, remedial, removal or restoration work required by any Governmental Authority because of Hazardous Materials present in the air, soil or groundwater above, on or under or about the Project. Without limiting the foregoing, if the presence of any Hazardous Materials in, on, under or about the Project, any portion thereof or any adjacent property caused or permitted by Tenant results in any contamination of the Project, any portion thereof or any adjacent property, then Tenant shall promptly take all actions at its sole cost and expense as are necessary to remediate such contamination;
provided
that Landlord's written approval of such action shall first be obtained, which approval Landlord shall not unreasonably withhold; and
provided
, further, that it shall be reasonable for Landlord to withhold its consent if such actions could have a material adverse long-term effect on the Project, any portion thereof or any adjacent property.
20.2 Landlord acknowledges that it is not the intent of this Article to prohibit Tenant from operating its business for the Permitted Use. Tenant may operate its business according to the custom of Tenant's industry so long as the use or presence of Hazardous Materials is strictly and properly monitored in accordance with Applicable Laws. As a material inducement to Landlord to allow Tenant to use Hazardous Materials in connection with its business, Tenant agrees to deliver to Landlord prior to the Term Commencement Date a list identifying each type of Hazardous Material to be present at the Project and setting forth any and all governmental approvals or permits required in connection with the presence of such Hazardous Material at the Project (the "
Hazardous Materials List
"). Tenant shall deliver to Landlord an updated Hazardous Materials List before any material new Hazardous Materials are brought to the Project. Tenant shall deliver to Landlord true and correct copies of the following documents (hereinafter referred to as the "
Documents
") relating to the handling, storage, disposal and emission of Hazardous Materials prior to the Term Commencement Date or, if unavailable at that time, concurrently with the receipt from or submission to any Governmental Authority: permits; approvals; reports and correspondence; storage and management plans; notices of violations of Applicable Laws; plans relating to the installation of any storage tanks to be installed in, on, under or about the Project (provided that installation of storage tanks shall only be permitted after Landlord has given Tenant its written consent to do so, which consent Landlord may withhold in its sole and absolute discretion); and all closure plans or any other documents required by any and all Governmental Authorities for any storage tanks installed in, on, under or about the Project for the closure of any such storage tanks. Tenant shall not be required, however, to provide Landlord with any portion of the Documents containing information of a proprietary nature, which Documents, in and of themselves, do not contain a reference to any Hazardous Materials or activities related to Hazardous Materials.
20.3 At any time, and from time to time, prior to the expiration of the Lease Term, Landlord shall have the right to conduct appropriate tests of the Project or any portion thereof to demonstrate that Hazardous Materials are present or that contamination has occurred due to Tenant or Tenant's employees, agents, contractors or invitees. Tenant shall pay all reasonable costs of such tests if such tests reveal that Hazardous Materials exist at the Project in violation of this Lease.
20.4 If underground or other storage tanks storing Hazardous Materials are located on the Premises or are hereafter placed on the Premises by Tenant, Tenant shall monitor the storage tanks, maintain appropriate records, implement reporting procedures, properly close any underground storage tanks, and take or cause to be taken all other steps necessary or required under the Applicable Laws.
20.5 Tenant shall promptly report to Landlord any actual or suspected presence of mold or water intrusion at the Premises and Landlord will remediate such mold or water intrusion unless the cause of such issue was the act or omission of Tenant.
20.6 Tenant's obligations under this Article shall survive the expiration or earlier termination of the Lease. During any period of time needed by Tenant or Landlord after the termination of this Lease to complete the removal from the Premises of any such Hazardous Materials, Tenant shall be deemed a holdover tenant and subject to the provisions of
Article 26
below.
20.7 As used herein, the term "
Hazardous Material(s)
" means any hazardous or toxic substance(s), material(s) or waste(s) that is or becomes regulated by any Governmental Authority.
20.8 Notwithstanding anything to the contrary in this Lease, Landlord shall have sole control over the equitable allocation of fire control areas (as defined in the Uniform Building Code as adopted by the city or municipality(ies) in which the Project is located (the "
UBC
")) within the Project for the storage of Hazardous Materials. Notwithstanding anything to the contrary in this Lease, the quantity of Hazardous Materials allowed by this
Section 20.8
is specific to Tenant and shall not run with the Lease in the event of a Transfer (as defined in
Article 28
). In the event of a Transfer, if the use of Hazardous Materials by such new tenant ("
New Tenant
") is such that New Tenant utilizes fire control areas in the Project in excess of New Tenant's Pro Rata Share of the Buildings or the Project, as applicable, then New Tenant shall, at its sole cost and expense and upon Landlord's written request, establish and maintain a separate area of the Premises classified by the UBC as an "H" occupancy area for the use and storage of Hazardous Materials, or take such other action as is necessary to ensure that its share of the fire control areas of the Buildings and the Project is not greater than New Tenant's Pro Rata Share of the Buildings or the Project, as applicable.
20.9 Landlord acknowledges and agrees that, as of the Execution Date, to its knowledge, no Hazardous Materials exist in the Project, Premises or Building in violation of Applicable Laws. Landlord shall handle Hazardous Materials, at the Project in accordance with Applicable Laws. Landlord shall indemnify, defend, protect and hold Tenant harmless from and against any and all Claims arising from (a) any Hazardous Materials that exist at the Project, Building or the Premises as of the date hereof, (b) Landlord’s gross negligence or willful misconduct with respect to the handling of Hazardous Materials at the Project or (c) Landlord’s breach of its warranty provided in this
Section 20.9
. Nothing in this Article 20 is intended, or will be construed to impose any liability on Tenant for any Hazardous Material(s) which were not brought onto the Premises or Project by Tenant, its employees or agents.
21.
Odors and Exhaust
. Tenant acknowledges that Landlord would not enter into this Lease with Tenant unless Tenant assures Landlord that under no circumstances will any other occupants of the Buildings or the Project (including persons legally present in any outdoor areas of the Project) be subjected to odors or fumes (whether or not noxious), and that the Buildings and the Project will not be damaged by any exhaust, in each case from Tenant's operations. Landlord and Tenant therefore agree as follows:
21.1 Tenant shall not cause or permit (or conduct any activities that would cause) any release of any odors or fumes of any kind from the Premises.
21.2 If a Building has a ventilation system that, in Landlord's judgment, is adequate, suitable, and appropriate to vent the Premises in a manner that does not release odors affecting any indoor or outdoor part of the Project, Tenant shall vent the Premises through such system. If Landlord at any time determines that any existing ventilation system is inadequate, or if no ventilation system exists, Tenant shall in compliance with Applicable Laws vent all fumes and odors from the Premises (and remove odors from Tenant's exhaust stream) as Landlord reasonably approves. The placement and configuration of all ventilation exhaust pipes, louvers and other equipment shall be subject to Landlord's approval. Tenant acknowledges Landlord's legitimate desire to maintain the Project (indoor and outdoor areas) in an odor-free manner, and Landlord may require Tenant to abate and remove all odors in a manner that goes beyond the requirements of Applicable Laws.
21.3 Tenant shall, at Tenant's sole cost and expense, provide odor eliminators and other devices (such as filters, air cleaners, scrubbers and whatever other equipment may in Landlord's judgment be necessary or appropriate from time to time) to completely remove, eliminate and abate any odors, fumes or other substances in Tenant's exhaust stream that, in Landlord's judgment, emanate from Tenant's Premises. Any work Tenant performs under this Section shall constitute Alterations.
21.4 Tenant's responsibility to remove, eliminate and abate odors, fumes and exhaust shall continue throughout the Lease Term. Landlord's approval of the Tenant Improvements shall not preclude Landlord from requiring additional measures to eliminate odors, fumes and other adverse impacts of Tenant's exhaust stream (as Landlord may designate in Landlord's discretion). Tenant shall install additional equipment as Landlord requires from time to time under the preceding sentence. Such installations shall constitute Alterations.
21.5 If Tenant fails to install satisfactory odor control equipment within ten (10) business days after Landlord's demand made at any time, then Landlord may, without limiting Landlord's other rights and remedies, require Tenant to cease and suspend any operations in the Premises that cause odors, fumes or exhaust. For example, if Landlord determines that Tenant's production of a certain type of product causes odors, fumes or exhaust, and Tenant does not install satisfactory odor control equipment within ten (10) business days after Landlord's request, then Landlord may require Tenant to stop producing such type of product in the Premises unless and until Tenant has installed odor control equipment satisfactory to Landlord; provided that if more than ten (10) days is required to install such equipment, Tenant will be permitted additional time so long as Tenant is diligently pursuing the installation of such equipment.
22.
Insurance; Waiver of Subrogation
.
22.1
Landlord's Insurance
. At all times during the Term of the Lease, Landlord will purchase and maintain, as part of Operating Expenses, Commercial General Liability Insurance, Umbrella Liability Insurance and Commercial Property Insurance covering the Project and Building and Landlord's equipment necessary to service the building and furnishings in such commercially reasonable amounts and with such commercially reasonable coverages as determined by Landlord but at all times substantially consistent with the insurance carried by other landlords of projects comparable to the Project. Tenant acknowledges that it shall not be a named insured on such policies and that it has no right to receive any proceeds from any such insurance policies carried by Landlord. Tenant further acknowledges that Landlord shall not be required to carry insurance covering (1) Tenant's property; (2) Business Income Insurance against, or be responsible for, any loss suffered by Tenant due to interruption of Tenant's business from any cause; or (3) loss to Building or Project resulting from Flood, Earthquake, Windstorm or Terrorism. However, if Landlord does carry such insurance, it shall be considered part of Operating Expenses. Tenant shall reasonably cooperate with Landlord's insurance companies in the adjustment of any claims for any damage to the Building or Project. Tenant shall, at Tenant's expense, comply with all insurance company requirements pertaining to the use of the Premises. If Tenant's conduct or use of the Premises causes any increase in the premium for such insurance policies then Tenant shall reimburse Landlord for any such increase.
22.2
Tenant's Insurance
. Tenant will purchase and maintain at all times during the Term of this Lease, at Tenant's sole expense, the following insurance, in amounts not less than those specified below or such other amounts as Landlord may from time to time reasonably request, with insurance companies and on forms satisfactory to Landlord.
(a) Commercial General Liability Insurance written on an Insurance Service Office ("
ISO
") "occurrence" form or its equivalent covering the Tenant and Landlord against claims for bodily injury and property damage arising out of the Tenant's operations and Tenant's use, occupancy and operations in, upon or about the Premises and the Project, including incidental pollution coverage. Such coverage shall at a minimum include endorsements covering (i) Premises - Operations; (ii) Independent Contractors; (iii) Products (alternatively, Tenant may carry a separate policy covering Products); (iv) Contractual Liability; (v) Fire Legal Liability; (vi) Employees included as Insureds; (vii) Liquor Liability if Tenant serves or sells alcohol; and (viii) Severability.
Limits for such coverage shall be at least:
Bodily Injury and Property Damage Combined Single Limit:
|
$1,000,000 per Occurrence
$4,000,000 General Aggregate
$4,000,000 Products Aggregate
|
Fire Legal Liability:
|
$500,000 Any One Occurrence
|
The policy shall contain a provision or an endorsement which specifically names AGP SORRENTO BUSINESS COMPLEX, L.P., Parallel Capital Partners, Inc., and their officers, directors, partners, members and employees, any lenders of Landlord and their successors and/or assigns as additional insureds ("
Additional Insureds
"), as respects claims arising out of the Tenant's operations, use, occupancy or maintenance of the Premises. Further, if requested by Landlord, Tenant shall name Landlord's Property Manager and any mortgagee of Landlord as an additional insured.
Notwithstanding anything herein to the contrary, Landlord and Tenant intend that their respective property loss risks shall be borne by reasonable insurance carriers to the extent above provided, and Landlord and Tenant hereby agree to look solely to, and seek recovery only from, their respective insurance carriers in the event of a property loss to the extent that such coverage is agreed to be provided hereunder. Notwithstanding anything herein to the contrary, the parties each hereby waive all rights and claims against each other for such losses, and waive all rights of subrogation of their respective insurers, provided such waiver of subrogation shall not affect the right to the insured to recover under its insurance policy. The parties agree that their respective insurance policies are now, or shall be, endorsed such that the waiver of subrogation shall not affect the right of the insured to recover thereunder.
(b) Umbrella or Excess Liability Insurance to be excess over the Commercial General Liability. The Umbrella or Excess Liability policy shall be written on an "occurrence" form with a limit of liability of $3,000,000 and a Self-Insured Retention no greater than $10,000.
Further, such policy shall contain clauses, provisions or endorsements which (1) cause it to be "following form" the underlying Commercial General Liability policy; (2) cause the policy to provide liability insurance for the Additional Insureds to be paid out prior to any contribution by Landlord's insurance; and (3) provide that the insurer waives any right of recovery they may have against such Additional Insureds because of payments made under this policy relevant to the Tenant's obligations under this Agreement.
The requirements contained in this paragraph may be met by increasing the limits otherwise required on the Tenant's Commercial General Liability policy to equal the sum of the limits required for both the Commercial General Liability policy and the Umbrella or Excess policy.
(c) Workers' Compensation coverage for statutory limits shall be carried as required by law in the State in which the Premises is located or in which the employees are hired and Employers' Liability with limits of $500,000 Each Accident; $500,000 Disease Policy Limit; and $500,000 Disease Each Employee.
(d) Commercial Property Insurance covering all tenant property and equipment in the Premises, in an amount equal to their full replacement cost without deduction for depreciation. At a minimum, such policy shall insure against destruction or damage by fire and other perils covered on an ISO Causes of Loss - Special Form including wind, hurricane, and sprinkler leakage. Such policy shall further provide Replacement Cost Coverage. Such policy shall not contain a per occurrence deductible greater than $5,000 except for wind or hurricane which may contain a deductible not to exceed 2% of the total values of all property which Tenant is responsible to insure.
(e) Business Income and/or Extra Expense Insurance in an amount equal to Five Hundred Thousand Dollars ($500,000), due to any interruption of Tenant's business by reason of the Premises or personal property being damaged by fire or other perils covered on an ISO Causes of Loss - Special Form or its equivalent.
Further, the policy shall contain an ISO Loss Payable endorsement specifically naming the following as a loss payee as its interest may appear: AGP SORRENTO BUSINESS COMPLEX, L.P.
22.3
General Requirements for All Insurance
.
(a) Certificates of Insurance and Evidence of Property Insurance evidencing all such insurance and acceptable to the Landlord shall be filed with Landlord prior to occupancy of the Premises and prior to the expiration of the term of each policy thereafter. Such Certificates of Insurance must specifically show all the special policy conditions required in this Section including "additional insured", "waiver of subrogation", and "primary insurance" wording applicable to each policy.
(b) All coverage shall be written by an insurer admitted to write insurance in the State in which the Premises is located with a current A. M. Best Rating of A:7 or better; otherwise, such insurance may be written by a qualified non-admitted insurer with a current A. M. Best rating of A:10 or better.
(c) All insurance policies shall provide that coverages afforded under the policies will not be cancelled for any reason until at least 30 days' prior written notice has been given to Tenant by the insurer. Tenant will notify Landlord within five (5) business days after its receipt of a notice of cancellation. The mailing address for the notice of cancellation shall be as noted in
Section 2.9
.
(d) If the limits of available liability coverage required herein become substantially reduced as a result of claim payments, Tenant shall immediately, at its own expense, purchase insurance to reinstate the limits of liability coverage required by this Lease.
(e) Tenant shall not settle any claim or accept any proceeds in satisfaction of any claim involving damage to the Premises or liability of Landlord without Landlord's prior written consent.
(f) Tenant may maintain the insurance required under this Section under blanket or umbrella policies, as applicable, issued to Tenant covering other properties owned or leased by Tenant provided that the policies otherwise comply with this Section and afford to the Premises the coverage specified by this Section. Landlord retains the right to disallow the use of a blanket or umbrella policy if the coverage provided by the blanket or umbrella policy is inadequate either as to limits or scope of coverage.
22.4 Landlord, its agents and employees, make no representation that the limits of liability required to be carried by Tenant pursuant to this Section are adequate to protect Tenant. If Tenant believes that any of such insurance coverage is inadequate, Tenant shall obtain such additional insurance coverage as Tenant deems adequate, at Tenant's sole expense.
23.
Damage or Destruction
.
23.1 In the event of a partial destruction of (a) the Premises or (b) Common Areas of the Buildings or the Project ((a) and (b) together, the "
Affected Areas
") by fire or other perils covered by extended coverage insurance not exceeding twenty-five percent (25%) of the full insurable value thereof, and provided that (x) the damage thereto is such that the Affected Areas may be repaired, reconstructed or restored within a period of one hundred twenty (120) days from the date of the happening of such casualty, (y) Landlord shall receive insurance proceeds sufficient to cover the cost of such repairs (except for any deductible amount provided by Landlord's policy, which deductible amount, if paid by Landlord, shall constitute an Operating Expense) and (z) such casualty was not intentionally caused by Tenant or its employees, agents or contractors, then Landlord shall commence and proceed diligently with the work of repair, reconstruction and restoration of the Affected Areas and this Lease shall continue in full force and effect.
23.2 In the event of any damage to or destruction of the Buildings or the Project other than as described in
Section 23.1
, Landlord may elect to repair, reconstruct and restore the Buildings or the Project, as applicable, in which case this Lease shall continue in full force and effect (subject to Tenant's right to terminate this Lease as described in
Section 23.10
below). If Landlord elects not to repair the Buildings or the Project, as applicable, then this Lease shall terminate as of the date of such damage or destruction.
23.3 Landlord shall give written notice to Tenant within sixty (60) days following the date of damage or destruction of its election not to repair, reconstruct or restore the Buildings or the Project, as applicable. Within sixty (60) days after the date Landlord learns of the necessity for repairs as a result of damage, Landlord shall notify Tenant ("
Damage Repair Estimate
") of Landlord's estimated assessment of the period of time in which the repairs will be completed, which assessment shall be based upon the opinion of a contractor reasonably selected by Landlord and experienced in comparable repairs of comparable buildings. If Landlord does not elect to terminate this Lease pursuant to Landlord's termination right as provided above, and the Damage Repair Estimate indicates that repairs cannot be completed within one hundred eighty (180) days after being commenced, Tenant may elect, not later than thirty (30) days after Tenant's receipt of the Damage Repair Estimate, to terminate this Lease by written notice to Landlord effective as of the date specified in Tenant's notice. Notwithstanding the foregoing, if the restoration of the Premises and/or Building is not completed within one hundred eighty (180) days from commencement of repairs as such date shall be extended due to Force Majeure delays and Tenant delays, Tenant may cancel the Lease at any time after the one hundred eightieth (180
th
) day.
23.4 Upon any termination of this Lease under any of the provisions of this Article, the parties shall be released thereby without further obligation to the other from the date possession of the Premises is surrendered to Landlord, except with regard to (a) items occurring prior to the damage or destruction and (b) provisions of this Lease that, by their express terms, survive the expiration or earlier termination hereof.
23.5 In the event of repair, reconstruction and restoration as provided in this Article, all Rent to be paid by Tenant under this Lease shall be abated proportionately based on the extent to which Tenant's use of the Premises is impaired during the period of such repair, reconstruction or restoration, unless Landlord provides Tenant with other space during the period of repair that is suitable for the temporary conduct of Tenant's business.
23.6 Notwithstanding anything to the contrary contained in this Article, should Landlord be delayed or prevented from completing the repair, reconstruction or restoration of the damage or destruction to the Premises after the occurrence of such damage or destruction by Force Majeure, then the time for Landlord to commence or complete repairs shall be extended on a day-for-day basis;
provided
,
however
, that, at Landlord's election, Landlord shall be relieved of its obligation to make such repair, reconstruction or restoration, in which case this Lease shall terminate.
23.7 If Landlord is obligated to or elects to repair, reconstruct or restore as herein provided, then Landlord shall be obligated to make such repair, reconstruction or restoration only with regard to (a) those portions of the Premises that were originally provided at Landlord's expense and (b) the Common Area portion of the Affected Areas. The repair, reconstruction or restoration of improvements not originally provided by Landlord or at Landlord's expense shall be the obligation of Tenant. In the event Tenant has elected to upgrade certain improvements from the Building Standard, Landlord shall, upon the need for replacement due to an insured loss, provide only the Building Standard, unless Tenant again elects to upgrade such improvements and pay any incremental costs related thereto, except to the extent that excess insurance proceeds, if received, are adequate to provide such upgrades, in addition to providing for basic repair, reconstruction and restoration of the Premises, the Buildings and the Project. Landlord confirms that the Premises, as improved by the Tenant Improvements, does not exceed the Building Standard.
23.8 Notwithstanding anything to the contrary contained in this Article, Landlord shall not have any obligation whatsoever to repair, reconstruct or restore the Premises if the damage resulting from any casualty covered under this Article occurs during the last twelve (12) months of the Term or any extension hereof, or to the extent that insurance proceeds are not available therefor.
23.9 Landlord's obligation, should it elect or be obligated to repair or rebuild, shall be limited to the Affected Areas. Tenant shall, at its expense, replace or fully repair all of Tenant's personal property and any Alterations installed by Tenant existing at the time of such damage or destruction (subject, however, to any modifications to such Alterations with Tenant having the right to modify the scope and extent of the Alterations restoration requirement as reasonably approved by Landlord). If Affected Areas are to be repaired in accordance with the foregoing, Landlord shall make available to Tenant any portion of insurance proceeds it receives that are allocable to the Alterations constructed by Tenant pursuant to this Lease;
provided
Tenant is not then in Default under this Lease, and subject to the requirements of any Lender of Landlord.
23.10 Notwithstanding anything to the contrary contained in this Article, in the event that Tenant's Permitted Use of the Premises is substantially impaired during the last six (6) months of the Term as a direct result of any damage or destruction covered by this Article, then, Tenant shall have the right to terminate this Lease by written notice to Landlord within ten (10) business days following such substantial impairment.
23.11 The provisions of this Lease, including this Article 23, 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, the Building or the Project, and any statute or regulation of the State of California, 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 other statute or regulation, now or hereafter in effect, shall have no application to this Lease or any damage or destruction to all or any part of the Premises, the Building or the Project.
24.
Eminent Domain
.
24.1 In the event (a) the whole of all Affected Areas or (b) such part thereof as shall substantially interfere with Tenant's use and occupancy of the Premises for the Permitted Use shall be taken for any public or quasi-public purpose by any lawful power or authority by exercise of the right of appropriation, condemnation or eminent domain, or sold to prevent such taking, Tenant or Landlord may terminate this Lease effective as of the date possession is required to be surrendered to said authority, except with regard to (y) items occurring prior to the damage or destruction and (z) provisions of this Lease that, by their express terms, survive the expiration or earlier termination hereof.
24.2 In the event of a partial taking of (a) the Buildings or the Project or (b) drives, walkways or parking areas serving the Buildings or the Project for any public or quasi-public purpose by any lawful power or authority by exercise of right of appropriation, condemnation, or eminent domain, or sold to prevent such taking, then, without regard to whether any portion of the Premises occupied by Tenant was so taken, Landlord may elect to terminate this Lease (except with regard to (a) items occurring prior to the taking and (b) provisions of this Lease that, by their express terms, survive the expiration or earlier termination hereof) as of such taking if such taking is, in Landlord's sole opinion, of a material nature such as to make it uneconomical to continue use of the unappropriated portion for purposes of renting office or laboratory space. If more than twenty-five percent (25%) of the rentable square feet of the Premises is taken or if portions of the Premises and/or Building required for parking or access to the Premises, are taken and such taking, in the reasonable opinion of Tenant, materially interferes with Tenant’s ability to continue its business operations in substantially the same manner and space, or if access to the Premises is substantially impaired, Tenant shall have the option to terminate this Lease upon ninety (90) days' notice, provided such notice is given no later than sixty (60) days after the date of such taking.
24.3 Tenant shall be entitled to any award that is specifically awarded as compensation for (a) the taking of Tenant's personal property that was installed at Tenant's expense and (b) the costs of Tenant moving to a new location. Except as set forth in the previous sentence, any award for such taking shall be the property of Landlord.
24.4 If, upon any taking of the nature described in this Article, this Lease continues in effect, then Landlord shall promptly proceed to restore the Affected Areas to substantially their same condition prior to such partial taking. To the extent such restoration is infeasible, as determined by Landlord in its sole and absolute discretion, the Rent shall be decreased proportionately to reflect the loss of any portion of the Premises no longer available to Tenant.
25.
Surrender
.
25.1 At least ten (10) days prior to Tenant's surrender of possession of any part of the Premises, Tenant shall provide Landlord with (a) a facility decommissioning and Hazardous Materials closure plan for the Premises ("
Exit Survey
") prepared by an independent third party reasonably acceptable to Landlord, and (b) written evidence of all appropriate governmental releases obtained by Tenant in accordance with Applicable Laws, including laws pertaining to the surrender of the Premises. In addition, Tenant agrees to remain responsible after the surrender of the Premises for the remediation of any recognized environmental conditions set forth in the Exit Survey which were caused by Tenant, its agents or employees and compliance with any recommendations set forth in the Exit Survey. Tenant's obligations under this Section shall survive the expiration or earlier termination of the Lease.
25.2 No surrender of possession of any part of the Premises shall release Tenant from any of its obligations hereunder, unless such surrender is accepted in writing by Landlord.
25.3 The voluntary or other surrender of this Lease by Tenant shall not effect a merger with Landlord's fee title or leasehold interest in the Premises, the Buildings, the Property or the Project, unless Landlord consents in writing, and shall, at Landlord's option, operate as an assignment to Landlord of any or all subleases.
25.4 The voluntary or other surrender of any ground or other underlying lease that now exists or may hereafter be executed affecting the Buildings or the Project, or a mutual cancellation thereof or of Landlord's interest therein by Landlord and its lessor shall not effect a merger with Landlord's fee title or leasehold interest in the Premises, the Buildings or the Property and shall, at the option of the successor to Landlord's interest in the Buildings or the Project, as applicable, operate as an assignment of this Lease.
25.5 Notwithstanding anything to the contrary contained in this Lease, the following provisions shall govern Tenant's surrender of the Premises:
(a) Landlord has no ownership interest in Tenant owned Tenant's furniture, fixtures and equipment and may remove or transfer the same in its discretion; and
(b) Tenant shall not be required to remove or restore at the expiration of the Term or otherwise any Alterations, fixtures (whether or not trade fixtures), machinery or equipment made to or installed in the Premises prior to the Execution Date of this Lease.
(c) Tenant will not be required to remove the Tenant Improvement.
26.
Holding Over
.
If Tenant holds over after the expiration of the Lease Term, with or without the express or implied consent of Landlord, such tenancy shall be from month-to-month only, and shall not constitute a renewal hereof or an extension for any further term, and in such case Monthly Base Rent shall be payable at a monthly rate equal to one hundred fifty percent (150%) of the Monthly Base Rent applicable during the last rental period of the Lease Term under this Lease (provided that for the first month of any holdover, Monthly Base Rent will be payable at the rate of 125% of the Monthly Base Rent applicable during the last rental period of the Lease Term under this Lease). Such month-to-month tenancy shall be subject to every other applicable term, covenant and agreement contained herein. Nothing contained in this
Article 26
shall be construed as consent by Landlord to any holding over by Tenant, and Landlord expressly reserves the right to require Tenant to surrender possession of the Premises to Landlord as provided in this Lease upon the expiration or other termination of this Lease. The provisions of this
Article 26
shall not be deemed to limit or constitute a waiver of any other rights or remedies of Landlord provided herein or at law. Tenant acknowledges that if Tenant holds over without Landlord's consent, such holding over may compromise or otherwise affect Landlord's ability to enter into new leases with prospective tenants regarding the Premises. Therefore, if Tenant fails to surrender the Premises upon the termination or expiration of this Lease and if such holdover continues for thirty (30) days after the expiration of the Term, in addition to any other liabilities to Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord harmless from and against all claims resulting from such failure, including, without limiting the generality of the foregoing, any claims made by any succeeding tenant founded upon such failure to surrender, and any losses suffered by Landlord, including lost profits, resulting from such failure to surrender.
27.
Indemnification and Exculpation
.
27.1 Tenant agrees to indemnify, save, defend (at Landlord's option and with counsel reasonably acceptable to Landlord) and hold the Landlord and Landlord Indemnities harmless from and against any and all Claims arising from injury or death to any person or damage to any property occurring within or about the Premises, the Buildings, the Property or the Project arising directly or indirectly out of Tenant's or Tenant's employees', agents', contractors' or invitees' negligence or willful misconduct or a breach or Default by Tenant in the performance of any of its obligations hereunder, except to the extent caused by Landlord's negligence or willful misconduct. Landlord shall be liable for, and shall indemnify, defend, protect and hold Tenant and Tenant’s partners, officers, directors, employees, agents, successors and assigns (collectively,
“
Tenant Indemnified Parties
”
) harmless from and against any and all Claims arising or resulting from (a) any negligent or willful misconduct of Landlord or any of Landlord’s agents, employees, contractors or licensees in or about the Premises, the Building or the Property (collectively,
“Landlord Parties
”); and/or (b) any default by Landlord of any obligations on Landlord’s part to be performed under the terms of this Lease; provided, however, that Landlord's indemnity obligations shall not extend to loss of business, loss of profits or any other consequential damages which may be suffered by Tenant.
27.2 Notwithstanding any provision of
Section 27.1
to the contrary, Landlord shall not be liable to Tenant for, and Tenant assumes all risk of, damage to personal property or scientific research, including loss of records kept by Tenant within the Premises and damage or losses caused by fire, electrical malfunction, gas explosion or water damage of any type (including broken water lines, malfunctioning fire sprinkler systems, roof leaks or stoppages of lines), unless any such loss is due to Landlord's willful disregard of written notice by Tenant of need for a repair that Landlord is responsible to make for an unreasonable period of time. Tenant further waives any claim for injury to Tenant's business or loss of income relating to any such damage or destruction of personal property as described in this Section.
27.3 Landlord shall not be liable for any damages arising from any act, omission or neglect of any other tenant in the Buildings or the Project, or of any other third party.
27.4 Tenant acknowledges that security devices and services, if any, while intended to deter crime, may not in given instances prevent theft or other criminal acts. Landlord shall not be liable for injuries or losses caused by criminal acts of third parties, and Tenant assumes the risk that any security device or service may malfunction or otherwise be circumvented by a criminal. If Tenant desires protection against such criminal acts, then Tenant shall, at Tenant's sole cost and expense, obtain appropriate insurance coverage.
27.5 Notwithstanding anything contained in this Lease to the contrary and except as provided in
Section 26
, neither party will be liable to the other for any business interruption, loss of profit or other punitive or consequential damages arising out of this Lease or any Default hereunder.
27.6 The provisions of this Article shall survive the expiration or earlier termination of this Lease.
28.
Assignment or Subletting
.
28.1 Except as hereinafter expressly permitted, Tenant shall not, either voluntarily or by operation of Applicable Laws, directly or indirectly sell, hypothecate, assign, pledge, encumber or otherwise transfer this Lease, or sublet the Premises (each, a "
Transfer
"), without Landlord's prior written consent. Notwithstanding the foregoing, Tenant shall have the right to Transfer, upon ten (10) days prior written notice to Landlord but without obtaining Landlord's prior written consent, (a) to a corporation or other entity which is a successor in interest to Tenant by way of merger, consolidation or corporate reorganization, or (b) by the purchase of all or substantially all of the assets or the controlling ownership interest of Tenant provided that such merger or consolidation or such acquisition or assumption, as the case may be, is not principally for the purpose of transferring this Lease, (c) to any person that as of the date of determination controls, is controlled by or is under common control with Tenant ("
Tenant's Affiliate
") or (d) to any persons in connection with any secondary offering of the Tenant's stock or in connection with any bona fide financing or capitalization for the benefit of Tenant, and otherwise comply with the requirements of this Lease regarding such Transfer (the foregoing described Transfers, or any one of them, may be referred to as an "
Exempt Transfer
"); provided, however, that (i) the overall net worth of the resulting tenant is not materially less than the overall net worth of Tenant as of the date of this Lease; (ii) Landlord receives satisfactory evidence of the satisfaction of such net worth requirements set forth in the preceding subsections (i) not less than five (5) business days prior to the date of such Exempt Transfer. For purposes of Exempt Transfers, "control" requires both (A) owning (directly or indirectly) more than fifty percent (50%) of the stock or other equity interests of another person (unless such Transfers relate to any corporation whose shares are publicly traded) and (B) possessing, directly or indirectly, the power to direct or cause the direction of the management and policies of such person. In no event shall Tenant perform a Transfer to or with an entity that is a tenant at the Project or that is in discussions or negotiations with Landlord where Landlord, in each such case, has space available in the Project for such proposed transferee to lease to such transferee. The assignee of Tenant’s entire interest hereunder in accordance with an Exempt Transfer may be referred to herein as an “
Affiliate Assignee
.”
28.2 In the event Tenant desires to effect a Transfer, then, at least thirty (30) but not more than ninety (90) days prior to the date when Tenant desires the assignment or sublease to be effective (the "
Transfer Date
") Tenant shall provide written notice to Landlord (the "
Transfer Notice
") containing information reasonably requested by Landlord (including references) concerning the character of the proposed transferee, assignee or sublessee; the Transfer Date; any ownership or commercial relationship between Tenant and the proposed transferee, assignee or sublessee; and the consideration and all other material terms and conditions of the proposed Transfer, all in such detail as Landlord shall reasonably require.
28.3 Landlord, in determining whether consent should be given to a proposed Transfer, may give consideration to (a) the financial strength of such transferee, assignee or sublessee (notwithstanding Tenant remaining liable for Tenant's performance), (b) any change in use that such transferee, assignee or sublessee proposes to make in the use of the Premises and (c) Landlord's desire to exercise its rights under
Section 28.8
to cancel this Lease. In no event shall Landlord be deemed to be unreasonable for declining to consent to a Transfer to a transferee, assignee or sublessee of poor reputation, lacking financial qualifications or seeking a change in the Permitted Use, or jeopardizing directly or indirectly the status of Landlord or any of Landlord's affiliates as a Real Estate Investment Trust under the Internal Revenue Code of 1986 (as the same may be amended from time to time, the "
Revenue Code
"). Notwithstanding anything contained in this Lease to the contrary, (w) no Transfer shall be consummated on any basis such that the rental or other amounts to be paid by the occupant, assignee, manager or other transferee thereunder would be based, in whole or in part, on the income or profits derived by the business activities of such occupant, assignee, manager or other transferee; (x) Tenant shall not furnish or render any services to an occupant, assignee, manager or other transferee with respect to whom transfer consideration is required to be paid, or manage or operate the Premises or any capital additions so transferred, with respect to which transfer consideration is being paid; (y) Tenant shall not consummate a Transfer with any person in which Landlord owns an interest, directly or indirectly (by applying constructive ownership rules set forth in Section 856(d)(5) of the Revenue Code); and (z) Tenant shall not consummate a Transfer with any person or in any manner that could cause any portion of the amounts received by Landlord pursuant to this Lease or any sublease, license or other arrangement for the right to use, occupy or possess any portion of the Premises to fail to qualify as "rents from real property" within the meaning of Section 856(d) of the Revenue Code, or any similar or successor provision thereto or which could cause any other income of Landlord to fail to qualify as income described in Section 856(c)(2) of the Revenue Code.
28.4 As conditions precedent to Tenant subleasing the Premises or to Landlord considering a request by Tenant to Tenant's transfer of rights or sharing of the Premises, Landlord may require any or all of the following:
(a) Tenant shall remain fully liable under this Lease during the unexpired Term;
(b) Tenant shall reimburse Landlord for Landlord's actual out of pocket costs and expenses, including reasonable attorneys' fees, charges and disbursements incurred in connection with the review, processing and documentation of such request;
(c) If Tenant's transfer of rights or sharing of the Premises provides for the receipt by, on behalf of or on account of Tenant of any consideration of any kind whatsoever on account of the leasehold interest being transferred (including a premium rental for a sublease or lump sum payment for an assignment, but excluding Tenant's reasonable costs in marketing and subleasing the Premises) in excess of the rental and other charges due to Landlord under this Lease, Tenant shall pay fifty percent (50%) of all of such excess to Landlord, after making deductions for any reasonable marketing expenses, tenant improvement funds expended by Tenant, alterations, cash concessions, brokerage commissions, attorneys' fees and free rent actually paid by Tenant; provided, however, Landlord shall not have any right to any sums or other economic consideration resulting from an Exempt Transfer. If said consideration consists of cash paid to Tenant, payment to Landlord shall be made upon receipt by Tenant of such cash payment;
(d) The proposed transferee, assignee or sublessee shall agree that, in the event Landlord gives such proposed transferee, assignee or sublessee notice that Tenant is in Default under this Lease, such proposed transferee, assignee or sublessee shall thereafter make all payments otherwise due Tenant directly to Landlord, which payments shall be received by Landlord without any liability being incurred by Landlord, except to credit such payment against those due by Tenant under this Lease, and any such proposed transferee, assignee or sublessee shall agree to attorn to Landlord or its successors and assigns should this Lease be terminated for any reason;
provided
, however, that in no event shall Landlord or its Lenders, successors or assigns be obligated to accept such attornment;
(e) Landlord's consent to any such Transfer shall be effected on Landlord's reasonable forms;
(f) Such proposed transferee, assignee or sublessee's use of the Premises shall be substantially the same as the Permitted Use;
(g) Landlord shall not be bound by any provision of any agreement pertaining to the Transfer, except for Landlord's written consent to the same;
(h) Tenant shall pay all transfer and other taxes (including interest and penalties) assessed or payable by any Governmental Authority for any Transfer;
(i) Landlord's consent (or waiver of its rights) for any Transfer shall not waive Landlord's right to consent to any later Transfer;
(j) Tenant shall deliver to Landlord one executed copy of any and all written instruments evidencing or relating to the Transfer; and
(k) A list of Hazardous Materials certified by the proposed transferee, assignee or sublessee to be true and correct, that the proposed transferee, assignee or sublessee intends to use or store in the Premises. Additionally, Tenant shall deliver to Landlord, on or before the date any proposed transferee, assignee or sublessee takes occupancy of the Premises, all of the items relating to Hazardous Materials of such proposed transferee, assignee or sublessee as described in
Section 20.2
.
28.5 Any Transfer that is not in compliance with the provisions of this Article shall be void and shall, at the option of Landlord, terminate this Lease.
28.6 The consent by Landlord to a Transfer shall not relieve Tenant or proposed transferee, assignee or sublessee from obtaining Landlord's consent to any further Transfer, nor shall it release Tenant or any proposed transferee, assignee or sublessee of Tenant from full and primary liability under this Lease.
28.7 Notwithstanding any Transfer, Tenant shall remain fully and primarily liable for the payment of all Rent and other sums due or to become due hereunder, and for the full performance of all other terms, conditions and covenants to be kept and performed by Tenant. The acceptance of Rent or any other sum due hereunder, or the acceptance of performance of any other term, covenant or condition thereof: from any person or entity other than Tenant shall not be deemed a waiver of any of the provisions of this Lease or a consent to any Transfer.
28.8 If Tenant delivers to Landlord a Transfer Notice indicating a desire to transfer this Lease to a proposed transferee, assignee or sublessee for the remainder of the Term of this Lease other than any Exempt Transfer or as provided within
Section 28.4
, then Landlord shall have the option, exercisable by giving notice to Tenant at any time within ten (10) days after Landlord's receipt of such Transfer Notice, to terminate this Lease as of the date specified in the Transfer Notice as the Transfer Date, except for those provisions that, by their express terms, survive the expiration or earlier termination hereof. If Landlord exercises such option, then Tenant shall have the right to withdraw such Transfer Notice by delivering to Landlord written notice of such election within five (5) days after Landlord's delivery of notice electing to exercise Landlord's option to terminate this Lease. In the event Tenant withdraws the Transfer Notice as provided in this Section, this Lease shall continue in full force and effect. No failure of Landlord to exercise its option to terminate this Lease shall be deemed to be Landlord's consent to a proposed Transfer.
28.9 If Tenant sublets the Premises or any portion thereof, Tenant hereby immediately and irrevocably assigns to Landlord, as security for Tenant's obligations under this Lease, all rent from any such subletting, and appoints Landlord as assignee and attorney-in-fact for Tenant, and Landlord (or a receiver for Tenant appointed on Landlord's application) may collect such rent and apply it toward Tenant's obligations under this Lease;
provided
that, until the occurrence of a Default (as defined below) by Tenant, Tenant shall have the right to collect such rent.
29.
Subordination and Attornment
.
29.1 This Lease shall be subject and subordinate to the lien of any mortgage, deed of trust or other encumbrance, or lease in which Landlord is tenant now or hereafter in force against the Buildings or the Project and to all advances made or hereafter to be made upon the security thereof without the necessity of the execution and delivery of any further instruments on the part of Tenant to effectuate such subordination; provided Landlord will use commercially reasonable efforts to provide Tenant with a commercially reasonable subordination, non-disturbance and attornment agreement from any current lender on the Building.
29.2 Notwithstanding the foregoing, Tenant shall execute and deliver upon demand such further instrument or instruments evidencing such subordination of this Lease to the lien of any such mortgage or mortgages or deeds of trust or lease in which Landlord is tenant as may be reasonably required by Landlord; provided that such agreement contains commercially reasonable non-disturbance protection in favor of Tenant. If any such mortgagee, beneficiary or landlord under a lease wherein Landlord is tenant (each, a "
Mortgagee
") so elects, however, this Lease shall be deemed prior in lieu to any such lease, mortgage, or deed of trust upon or including the Premises regardless of date and Tenant shall execute a statement in writing to such effect at Landlord's request.
29.3 Upon written request of Landlord and opportunity for Tenant to review, Tenant agrees to execute any Lease amendments not materially altering the terms of this Lease, if required by a mortgagee or beneficiary of a deed of trust encumbering real property of which the Premises constitute a part incident to the financing of the real property of which the Premises constitute a part.
29.4 In the event any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by Landlord covering the Premises, Tenant shall at the election of the purchaser at such foreclosure or sale attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as Landlord under this Lease so long as such purchaser agrees not to disturb Tenant’s quiet enjoyment of the Premises. Tenant waives the provisions of any current or future statute, rule or law which may give or purport to give Tenant any right or election to terminate or otherwise adversely affect this Lease and the obligations of the Tenant hereunder in the event of any foreclosure proceeding or sale.
30.
Defaults and Remedies
.
30.1 Late payment by Tenant to Landlord of Rent and other sums due shall cause Landlord to incur costs not contemplated by this Lease, the exact amount of which shall be extremely difficult and impracticable to ascertain. Such costs include processing and accounting charges and late charges that may be imposed on Landlord by the terms of any mortgage or trust deed covering the Premises. Therefore, if any installment of Rent due from Tenant is not received by Landlord within four (4) business days after the date such payment is due, Tenant shall pay to Landlord (a) an additional sum of five percent (5%) of the overdue Rent as a late charge plus (b) interest at an annual rate (the "
Default Rate
") equal to the lesser of (a) twelve percent (12%) and (b) the highest rate permitted by Applicable Laws. The parties agree that this late charge represents a fair and reasonable estimate of the costs that Landlord shall incur by reason of late payment by Tenant and shall be payable as Additional Rent to Landlord due with the next installment of Rent or within five (5) business days after Landlord's demand, whichever is earlier. Landlord's acceptance of any Additional Rent (including a late charge or any other amount hereunder) shall not be deemed an extension of the date that Rent is due or prevent Landlord from pursuing any other rights or remedies under this Lease, at law or in equity. Landlord will waive the first late payment in any twelve month period so long as Tenant pays the amounts due within five (5) days after notice the same is late.
30.2 No payment by Tenant or receipt by Landlord of a lesser amount than the Rent payment herein stipulated shall be deemed to be other than on account of the Rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such Rent or pursue any other remedy provided in this Lease or in equity or at law.
30.3 If Tenant fails to pay any sum of money required to be paid by it hereunder, or shall fail to perform any other act on its part to be performed hereunder, in each case within the applicable cure period (if any) described in
Section 30.4
, then Landlord may, without waiving or releasing Tenant from any obligations of Tenant, but shall not be obligated to, make such payment or perform such act;
provided
that such failure by Tenant unreasonably interfered with the use of the Buildings or the Project by any other tenant or with the efficient operation of the Buildings or the Project, or resulted or could have resulted in a violation of Applicable Laws or the cancellation of an insurance policy maintained by Landlord. Notwithstanding the foregoing, in the event of an emergency, Landlord shall have the right to enter the Premises and act in accordance with its rights as provided elsewhere in this Lease. In addition to the late charge described in
Section 30.1
, Tenant shall pay to Landlord as Additional Rent all sums so paid or incurred by Landlord, together with interest at the Default Rate, computed from the date such sums were paid or incurred.
30.4 The occurrence of any one or more of the following events shall constitute a "
Default
" hereunder by Tenant:
(a) Tenant abandons all or a substantial portion of the Premises;
(b) Tenant fails to make any payment of Rent, as and when due, or to satisfy its obligations under
Article 18
, where such failure shall continue for a period of three (3) days after written notice thereof from Landlord to Tenant;
(c) Tenant fails to observe or perform any obligation or covenant contained herein (other than described in
Subsections 30.4(a)
and
30.4(b)
) to be performed by Tenant, where such failure continues for a period of thirty (30) days after written notice thereof from Landlord to Tenant;
provided
that, if the nature of Tenant's default is such that it reasonably requires more than thirty (30) days to cure, Tenant shall not be deemed to be in Default if Tenant commences such cure within said thirty (30) day period and thereafter diligently prosecutes the same to completion;
(d) Tenant makes an assignment for the benefit of creditors;
(e) A receiver, trustee or custodian is appointed to or does take title, possession or control of all or substantially all of Tenant's assets;
(f) Tenant files a voluntary petition under the United States Bankruptcy Code or any successor statute (as the same may be amended from time to time, the "
Bankruptcy Code"
) or an order for relief is entered against Tenant pursuant to a voluntary or involuntary proceeding commenced under any chapter of the Bankruptcy Code;
(g) Any involuntary petition is filed against Tenant under any chapter of the Bankruptcy Code and is not dismissed within one hundred twenty (120) days;
(h) Tenant fails to deliver an estoppel certificate in accordance with Article 12;
(i) Tenant's interest in this Lease is attached, executed upon or otherwise judicially seized and such action is not released within one hundred twenty (120) days of the action; or
The notice periods provided herein are in lieu of, and not in addition to, any notice periods provided by law. Notices given under this Section shall specify the alleged Default and shall demand that Tenant perform the provisions of this Lease or pay the Rent that is in arrears, as the case may be, within the applicable period of time, or quit the Premises. No such notice shall be deemed forfeiture or a termination of this Lease unless Landlord elects otherwise in such notice.
30.5 In the event of a Default by Tenant, and at any time thereafter, with or without additional notice or demand and without limiting Landlord in the exercise of any right or remedy that Landlord may have, Landlord has the right to do any or all of the following:
(a) Halt any Tenant Improvements and Alterations and order Tenant's contractors, subcontractors, consultants, designers and material suppliers to stop work;
(b) Terminate Tenant's right to possession of the Premises by any lawful means, in which case Tenant shall immediately surrender possession of the Premises to Landlord. In such event, Landlord shall have the immediate right to re-enter and remove all persons and property, and such property may be removed and stored in a public warehouse or elsewhere at the cost and for the account of Tenant, all without service of notice or resort to legal process and without being deemed guilty of trespass or becoming liable for any loss or damage that may be occasioned thereby; and
(c) Terminate this Lease, in which event Tenant shall immediately surrender possession of the Premises to Landlord. In such event, without prejudice to any other remedy which Landlord may have for possession or arrearages in Rent, Landlord shall have the immediate right to re-enter and remove Tenant and any all other persons and property, and such property may be removed and stored in a public warehouse or elsewhere at the cost and for the account of Tenant, all without service of notice or resort to legal process and without being deemed guilty of trespass or becoming liable for any loss or damage that may be occasioned thereby. In the event that Landlord shall elect to so terminate this Lease, then Landlord shall be entitled to recover from Tenant all damages incurred by Landlord by reason of Tenant's Default, including:
(i) The worth at the time of award of any unpaid Rent that had accrued at the time of such termination; plus
(ii) The worth at the time of award of the amount by which the unpaid Rent that would have accrued during the period commencing with termination of the Lease and ending at the time of award exceeds the then reasonable rental value of the Premises during such period; plus
(iii) The worth at the time of award of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds the reasonable rental value of the Premises for that period; plus
(iv) Any other amount necessary to compensate Landlord for all the detriment caused by Tenant's failure to perform its obligations under this Lease or that in the ordinary course of things would be likely to result therefrom, including, without limitation, the cost of restoring the Premises to the condition required under the terms of this Lease; plus
(v) At Landlord's election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by Applicable Laws.
As used in
Subsections 30.5(c)(i)
and
30.5(c)(ii)
, "worth at the time of award" shall be computed by allowing interest at the Default Rate. As used in Subsection 30.5(c)(iii), the "worth at the time of the award" shall be computed by taking the present value of such amount, using the discount rate of the Federal Reserve Bank of San Francisco at the time of the award plus one (1) percentage point.
30.6 In addition to any other remedies available to Landlord at law or in equity and under this Lease, Landlord shall have the remedy described in California Civil Code Section 1951.4 and may continue this Lease in effect after Tenant's Default and abandonment and recover Rent as it becomes due. For purposes of this Section, the following acts by Landlord will not constitute the termination of Tenant's right to possession of the Premises:
(a) Acts of maintenance or preservation or efforts to relet the Premises, including alterations, remodeling, redecorating, repairs, replacements or painting as Landlord shall consider advisable for the purpose of reletting the Premises or any part thereof; or
(b) The appointment of a receiver upon the initiative of Landlord to protect Landlord's interest under this Lease or in the Premises.
Notwithstanding the foregoing, in the event of a Default by Tenant, Landlord may elect at any time to terminate this Lease and to recover damages to which Landlord is entitled.
30.7 If Landlord does not elect to terminate this Lease as provided in
Section 30.5
, then Landlord may, from time to time, recover all Rent as it becomes due under this Lease. At any time thereafter, Landlord may elect to terminate this Lease and to recover damages to which Landlord is entitled.
30.8 In the event Landlord elects to terminate this Lease and relet the Premises, Landlord may execute any new lease in its own name. Tenant hereunder shall have no right or authority whatsoever to collect any Rent from such tenant. The proceeds of any such reletting shall be applied as follows:
(a) First, to the payment of any indebtedness other than Rent due hereunder from Tenant to Landlord, including storage charges or brokerage commissions owing from Tenant to Landlord as the result of such reletting;
(b) Second, to the payment of the costs and expenses of reletting the Premises, including (i) alterations and repairs that Landlord deems reasonably necessary and advisable and (ii) reasonable attorneys' fees, charges and disbursements incurred by Landlord in connection with the retaking of the Premises and such reletting;
(c) Third, to the payment of Rent and other charges due and unpaid hereunder; and
(d) Fourth, to the payment of future Rent and other damages payable by Tenant under this Lease.
30.9 All of Landlord's rights, options and remedies hereunder shall be construed and held to be nonexclusive and cumulative. Landlord shall have the right to pursue any one or all of such remedies, or any other remedy or relief that may be provided by Applicable Laws, whether or not stated in this Lease. No waiver of any Default of Tenant hereunder shall be implied from any acceptance by Landlord of any Rent or other payments due hereunder or any omission by Landlord to take any action on account of such Default if such Default persists or is repeated, and no express waiver shall affect Defaults other than as specified in said waiver. Notwithstanding any provision of this Lease to the contrary, in no event shall Landlord be required to mitigate its damages with respect to any Default by Tenant, except as may be required by applicable law.
30.10 Landlord's termination of (a) this Lease or (b) Tenant's right to possession of the Premises shall not relieve Tenant of any liability to Landlord that has previously accrued or that shall arise based upon events that occurred prior to the later to occur of (i) the date of Lease termination or (ii) the date Tenant surrenders possession of the Premises.
30.11 To the extent permitted by Applicable Laws, Tenant waives any and all rights of redemption granted by or under any present or future Applicable Laws if Tenant is evicted or dispossessed for any cause, or if Landlord obtains possession of the Premises due to Tenant's Default hereunder or otherwise.
30.12 Landlord shall not be in default or liable for damages under this Lease unless Landlord fails to perform obligations required of Landlord within a reasonable time, but in no event shall such failure continue for more than thirty (30) days after written notice from Tenant specifying the nature of Landlord's failure;
provided
, however, that if the nature of Landlord's obligation is such that more than thirty (30) days are required for its performance, then Landlord shall not be in default if Landlord commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion. Except as otherwise provided in this Lease, in no event shall Tenant have the right to withhold or abate rent or to set off any Claims against Rent as a result of any default or breach by Landlord of any of its covenants, obligations, representations, warranties or promises hereunder, except as may otherwise be expressly set forth in this Lease.
30.13 In the event of any default by Landlord, Tenant shall, to the extent Tenant has received notice of the existence of the following parties and their address(es), give notice by registered or certified mail to any (a) beneficiary of a deed of trust or (b) mortgagee under a mortgage covering the Premises, the Buildings or the Project and to any landlord of any lease of land upon or within which the Premises, the Buildings or the Project is located, and shall offer such beneficiary, mortgagee or landlord a reasonable opportunity to cure the default.
30.14 Whether or not Landlord elects to terminate this Lease on account of any Default by Tenant, as set forth in this Article 30, Landlord shall have the right to terminate any and all subleases, licenses, concessions or other consensual arrangements for possession entered into by Tenant and affecting the Premises or may, in Landlord’s sole discretion, succeed to Tenant’s interest in such subleases, licenses, concessions or arrangements. In the event of Landlord’s election to succeed to Tenant’s interest in any such subleases, licenses, concessions or arrangements, Tenant shall, as of the date of notice by Landlord of such election, have no further right to or interest in the rent or other consideration receivable thereunder.
30.15 No re-entry or repossession, repairs, maintenance, changes, alterations and additions, reletting, appointment of a receiver to protect Landlord’s interests hereunder, or any other action or omission by Landlord shall be construed as an election by Landlord to terminate this Lease or Tenant’s right to possession, or to accept a surrender of the Premises, nor shall same operate to release Tenant in whole or in part from any of Tenant’s obligations hereunder, unless express written notice of such intention is sent by Landlord to Tenant. Tenant hereby irrevocably waives any right otherwise available under any law to redeem or reinstate this Lease.
31.
Bankruptcy
. In the event a debtor, trustee or debtor in possession under the Bankruptcy Code, or another person with similar rights, duties and powers under any other Applicable Laws, proposes to cure any default under this Lease or to assume or assign this Lease and is obliged to provide adequate assurance to Landlord that (a) a default shall be cured, (b) Landlord shall be compensated for its damages arising from any breach of this Lease and (c) future performance of Tenant's obligations under this Lease shall occur, then such adequate assurances shall include any or all of the following, as designated by Landlord in its sole and absolute discretion:
31.1 Those acts specified in the Bankruptcy Code or other Applicable Laws as included within the meaning of "adequate assurance," even if this Lease does not concern a shopping center or other facility described in such Applicable Laws;
31.2 A prompt cash payment to compensate Landlord for any monetary defaults or actual damages arising directly from a breach of this Lease;
31.3 A cash deposit in an amount at least equal to the then-current amount of the Security Deposit; or
31.4 The assumption or assignment of all of Tenant's interest and obligations under this Lease.
32.
Brokers
.
32.1 Tenant represents and warrants that it has had no dealings with any real estate broker or agent in connection with the negotiation of this Lease other than Cushman & Wakefield ("
Tenant's Broker
"), and that it knows of no other real estate broker or agent that is or might be entitled to a commission in connection with this Lease. Landlord shall compensate Tenant's Broker and DTZ, Inc. ("
Landlord's Broker
") in relation to this Lease pursuant to separate agreements between Landlord and Tenant's Broker and Landlord's Broker, respectively. Landlord represents and warrants that it knows of no other real estate broker or agent other than Tenant's Broker and Landlord's Broker that is or might be entitled to a commission in connection with this Lease.
32.2 Tenant represents and warrants that no broker or agent has made any representation or warranty relied upon by Tenant in Tenant's decision to enter into this Lease, other than as contained in this Lease.
32.3 Tenant acknowledges and agrees that the employment of brokers by Landlord is for the purpose of solicitation of offers of leases from prospective tenants and that no authority is granted to any broker to furnish any representation (written or oral) or warranty from Landlord unless expressly contained within this Lease. Landlord is executing this Lease in reliance upon Tenant's representations, warranties and agreements contained within
Sections 32.1
and
32.2
.
32.4 Tenant agrees to indemnify, save, defend (at Landlord's option and with counsel reasonably acceptable to Landlord) and hold the Landlord Indemnities harmless from any and all cost or liability for compensation claimed by any broker or agent, other than Tenant’s Broker, employed or engaged by it or claiming to have been employed or engaged by it.
33.
Definition of Landlord
. With regard to obligations imposed upon Landlord pursuant to this Lease, the term "Landlord," as used in this Lease, shall refer only to Landlord or Landlord's then-current successor-in-interest. In the event of any transfer, assignment or conveyance of Landlord's interest in this Lease or in Landlord's fee title to or leasehold interest in the Property, as applicable, Landlord herein named (and in case of any subsequent transfers or conveyances, the subsequent Landlord) shall be automatically freed and relieved, from and after the date of such transfer, assignment or conveyance, from all liability for the performance of any covenants or obligations contained in this Lease thereafter to be performed by Landlord and, without further agreement, the transferee, assignee or conveyance of Landlord's interest in this Lease or in Landlord's fee title to or leasehold interest in the Property, as applicable, shall be deemed to have assumed and agreed to observe and perform any and all covenants and obligations of Landlord hereunder during the tenure of its interest in the Lease or the Property. Landlord or any subsequent Landlord may transfer its interest in the Premises or this Lease without Tenant's consent.
34.
Limitation of Liability
.
34.1 If Landlord is in default under this Lease and, as a consequence, Tenant recovers a monetary judgment against Landlord, the judgment shall be satisfied only out of (a) the proceeds of sale received on execution of the judgment and levy against the right, title and interest of Landlord in the Buildings and the Project, (b) rent or other income from such real property receivable by Landlord or (c) the consideration received by Landlord from the sale, financing, refinancing or other disposition of all or any part of Landlord's right, title or interest in the Buildings or the Project.
34.2 Landlord shall not be personally liable for any deficiency under this Lease. If Landlord is a partnership or joint venture, then the partners of such partnership shall not be personally liable for Landlord's obligations under this Lease, and no partner of Landlord shall be sued or named as a party in any suit or action, and service of process shall not be made against any partner of Landlord except as may be necessary to secure jurisdiction of the partnership or joint venture. If Landlord is a corporation, then the shareholders, directors, officers, employees and agents of such corporation shall not be personally liable for Landlord's obligations under this Lease, and no shareholder, director, officer, employee or agent of Landlord shall be sued or named as a party in any suit or action, and service of process shall not be made against any shareholder, director, officer, employee or agent of Landlord. If Landlord is a limited liability company, then the members of such limited liability company shall not be personally liable for Landlord's obligations under this Lease, and no member of Landlord shall be sued or named as a party in any suit or action, and service of process shall not be made against any member of Landlord except as may be necessary to secure jurisdiction of the limited liability company. No partner, shareholder, director, employee, member or agent of Landlord shall be required to answer or otherwise plead to any service of process, and no judgment shall be taken or writ of execution levied against any partner, shareholder, director, employee, member or agent of Landlord.
34.3 Each of the covenants and agreements of this Article shall be applicable to any covenant or agreement either expressly contained in this Lease or imposed by Applicable Laws and shall survive the expiration or earlier termination of this Lease.
34.4 If Tenant is a corporation, then the shareholders, directors, officers, employees and agents of such corporation shall not be personally liable for Tenant's obligations under this Lease, and no shareholder, director, officer, employee or agent of Tenant shall be sued or named as a party in any suit or action, and service of process shall not be made against any shareholder, director, officer, employee or agent of Tenant. In no event will Tenant be liable for any consequential, speculative or punitive damages arising out of this Lease or a breach thereof by Tenant.
35.
Joint and Several Obligations
. If more than one person or entity executes this Lease as Tenant, then:
35.1 Each of them is jointly and severally liable for the keeping, observing and performing of all of the terms, covenants, conditions, provisions and agreements of this Lease to be kept, observed or performed by Tenant; and
35.2 The term "Tenant," as used in this Lease shall mean and include each of them, jointly and severally. The act of; notice from, notice to, refund to, or signature of any one or more of them with respect to the tenancy under this Lease, including any renewal, extension, expiration, termination or modification of this Lease, shall be binding upon each and all of the persons executing this Lease as Tenant with the same force and effect as if each and all of them had so acted, so given or received such notice or refund, or so signed.
36.
Representations
. Landlord and Tenant guarantee, warrant and represent, each to the other, that (a) it is duly incorporated or otherwise established or formed and validly existing under the laws of its state of incorporation, establishment or formation, (b) it has and is duly qualified to do business in the state in which the Property is located, (c) it has full corporate, partnership, trust, association or other appropriate power and authority to enter into this Lease and to perform all of its obligations hereunder, (d) each person (and all of the persons if more than one signs) signing this Lease on behalf of such party is duly and validly authorized to do so and (e) neither (i) the execution, delivery or performance of this Lease nor (ii) the consummation of the transactions contemplated hereby will violate or conflict with any provision of documents or instruments under which it is constituted or to which it is a party. In addition, Landlord and Tenant guarantee, warrant and represent, each to the other, that none of (x) it, (y) its affiliates or partners nor (z) to the best of its knowledge, its members, shareholders or other equity owners or any of their respective employees, officers, directors, representatives or agents is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control ("
OFAC
") of the Department of the Treasury (including those named on OFAC's Specially Designated and Blocked Persons List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism) or other similar governmental action.
37.
Intentionally Omitted
.
38.
Notices
. Any notice, consent, demand, bill, statement or other communication required or permitted to be given hereunder shall be in writing and shall be given by personal delivery, overnight delivery with a reputable nationwide overnight delivery service, or certified mail (return receipt requested), and if given by personal delivery, shall be deemed delivered upon receipt; if given by overnight delivery, shall be deemed delivered one (1) day after deposit with a reputable nationwide overnight delivery service; and, if given by certified mail (return receipt requested), shall be deemed delivered three (3) business days after the time the notifying party deposits the notice with the United States Postal Service. Any notices given pursuant to this Lease shall be addressed to Tenant at the Premises, or to Landlord or Tenant at the addresses shown in
Sections 2.9
and
2.10
, respectively. Either party may, by notice to the other given pursuant to this Section, specify additional or different addresses for notice purposes.
39.
Miscellaneous
.
39.1 Landlord reserves the right to change the name of the Buildings or the Project and to install, affix and maintain any and all signs on the exterior and on the interior of the Buildings or Project, as Landlord may, in Landlord's sole discretion, desire.
39.2
Intentionally Omitted
.
39.3 Where applicable in this Lease, the singular includes the plural and the masculine or neuter includes the masculine, feminine and neuter. The words "include," "includes," "included" and "including" shall mean "'include,' etc., without limitation." The section headings of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part hereof.
39.4 If either party commences an action against the other party arising out of or in connection with this Lease, then the substantially prevailing party shall be reimbursed by the other party for all reasonable costs and expenses, including reasonable attorneys' fees and expenses, incurred by the substantially prevailing party in such action or proceeding and in any appeal in connection therewith. Notwithstanding the foregoing, if Landlord uses the services of an attorney in connection with the collection of Rent or any amounts owed by Tenant to Landlord under this Lease, Tenant shall reimburse Landlord upon demand for any attorneys' fees and expenses so incurred by Landlord whether or not Landlord commences an action against Tenant.
39.5 Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or option for a lease, and shall not be effective as a lease or otherwise until execution by and delivery to both Landlord and Tenant.
39.6 Time is of the essence with respect to the performance of every provision of this Lease in which time of performance is a factor.
39.7 Each provision of this Lease performable by Tenant shall be deemed both a covenant and a condition.
39.8 Whenever consent or approval of either party is required, that party shall not unreasonably withhold such consent or approval, except as may be expressly set forth to the contrary.
39.9 The terms of this Lease are intended by the parties as a final expression of their agreement with respect to the terms as are included herein, and may not be contradicted by evidence of any prior or contemporaneous agreement.
39.10 Any provision of this Lease that shall prove to be invalid, void or illegal shall in no way affect, impair or invalidate any other provision hereof, and all other provisions of this Lease shall remain in full force and effect and shall be interpreted as if the invalid, void or illegal provision did not exist.
39.11 Landlord may, but shall not be obligated to, record a short form or memorandum hereof without Tenant's consent. Within ten (10) days after receipt of written request from Landlord, Tenant shall execute a termination of any short form or memorandum of lease recorded with respect hereto. Tenant shall not record this Lease or any short form or memorandum of lease.
39.12 The language in all parts of this Lease shall be in all cases construed as a whole according to its fair meaning and not strictly for or against either Landlord or Tenant.
39.13 Each of the covenants, conditions and agreements herein contained shall inure to the benefit of and shall apply to and be binding upon the parties hereto and their respective heirs; legatees; devisees; executors; administrators; and permitted successors, assigns, sublessees. Nothing in this Section shall in any way alter the provisions of this Lease restricting assignment or subletting.
39.14 This Lease shall be governed by, construed and enforced in accordance with the Laws of the state in which the Premises are located, without regard to such state's conflict of law principles.
39.15
Intentionally Omitted
.
39.16 This Lease may be executed in one or more counterparts, each of which, when taken together, shall constitute one and the same document.
39.17 No provision of this Lease may be modified, amended or supplemented except by an agreement in writing signed by Landlord and Tenant. The waiver by either party of any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition herein contained.
39.18 To the extent permitted by Applicable Laws, the parties waive trial by jury in any action, proceeding or counterclaim brought by the other party hereto related to matters arising out of or in any way connected with this Lease; the relationship between Landlord and Tenant; Tenant's use or occupancy of the Premises; or any claim of injury or damage related to this Lease or the Premises.
39.19
Intentionally Omitted
.
39.20 No provision of this Lease shall be deemed waived by either party hereto unless expressly waived in a writing signed thereby. The waiver by either party hereto of any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of any subsequent breach of same or any other term, covenant or condition herein contained. 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 receipt of monies by Landlord from Tenant after the termination of this Lease shall in any way alter the length of the Lease Term or of Tenant’s right of possession hereunder, or after the giving of any notice shall reinstate, continue or extend the Lease Term or affect any notice given Tenant prior to the receipt of such monies, it being agreed that after the service of notice or the commencement of a suit, or after final judgment for possession of the Premises, Landlord may receive and collect any Rent due, and the payment of said Rent shall not waive or affect said notice, suit or judgment.
39.21 Tenant acknowledges that Landlord may be required to obtain from utility providers and disclose certain information concerning the Premise's recent historical energy use data pursuant to California Public Resources Code Section 25402.10 and the regulations promulgated pursuant thereto (collectively, "
Energy Disclosure Requirements
"). Landlord shall not be liable to Tenant for the accuracy or content of the information provided by utility providers pursuant to the Energy Disclosure Requirements. Tenant acknowledges prior receipt of the Disclosure Summary Sheet, Statement of Energy Performance, Data Checklist and Facility Summary (all as defined the Energy Disclosure Requirements) and agrees that Landlord has timely complied with the Energy Disclosure Requirements and further agrees to provide Landlord with a separate written acknowledgment of such receipt and compliance upon request by Landlord.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date first above written:
LANDLORD:
AGP SORRENTO BUSINESS COMPLEX, L.P.,
a Delaware limited partnership
By:
|
Parallel Capital Partners, Inc.,
|
By:
Name:
Title:
TENANT:
MABVAX THERAPEUTICS HOLDINGS, INC.,
a Delaware corporation
By:
Name:
Title:
By:
Name:
Title: