THIRD AMENDMENT TO LEASE
This Third Amendment (the 'AMENDMENT') to Lease Agreement is made as of
August 14, 1998, by and between SPIEKER PROPERTIES, L.P., a California limited
partnership ('SPIEKER'), as successor in interest to WCB SEVENTEEN LIMITED
PARTNERSHIP, a Delaware limited partnership and GILEAD SCIENCES, INC., a
Delaware limited corporation ('GILEAD').
WHEREAS, Spieker, as Landlord, and Gilead, as Tenant, have entered into
that certain Lease dated March 27, 1992, amended by Amendment No. 1, dated
October 11, 1993, and amended by Amendment No. 2, dated June 24, 1996 with
respect to space in the Building commonly known as 331, 344B, 346, and 353
Lakeside Drive, Foster City, California.
NOW, THEREFORE, the parties hereto agree as follows:
1. AMENDMENT OF BASIC LEASE INFORMATION. Those portions, as set forth below,
are hereby added to the Basic Lease Information:
PREMISES AND BUILDING:
355 Lakeside Drive, Suites 200 & 210 Approximately 17,371 rentable
square feet ('Additional
Premises'), as outlined on
Exhibit A to this Amendment
355 Lakeside Drive, Suites 200 & 210 General office use only
355 Lakeside Drive, Suites 200 & 210 4/1,000 rentable square feet
355 Lakeside Drive, Suites 200 & 210 4/1,000 rentable square feet
355 Lakeside Drive, Suites 200 & 210 November 1, 1998, or as soon
as Landlord can deliver
Premises, whichever occurs
355 Lakeside Drive, Suites 200 & 210 March 31, 2006
355 Lakeside Drive, Suites 200 & 210 $39,953.30 per month
The Base Rent for the Additional Premises shall be increased annually on
each anniversary of the Term Commencement of this Third Amendment to an
amount equal to $39,953.30 multiplied by a fraction, the numerator of which
is the Consumer Price Index, All Urban Consumers, San Francisco, Oakland,
and San Jose, published by the United States Department of Labor, Bureau of
Statistics (1982-84=100) as of the month immediately preceding the current
Adjustment Date, and the denominator of which is the index as of the month
immediately preceding the Commencement Date. There will be a minimum
annual increase of 3% and a maximum annual increase of 5%. Adjustment Date
is defined as the anniversary date of the Term Commencement.
INITIAL ESTIMATED MONTHLY OPERATING
EXPENSES AND PROPERTY TAXES:
355 Lakeside Drive, Suites 200 & 210 $12,854.54 per month
TENANT'S PERCENTAGE SHARE:
355 Lakeside Drive, Suites 200 & 210 31.45%
LANDLORD'S ADDRESS FOR NOTICE:
Spieker Properties, L.P.
393 Vintage Park Drive, Suite 200
Foster City, CA 94404
2. ADDITION TO PREMISES. Tenant shall accept the Additional Premises in its
Third Amendment to Lease, dated 8/14/98
3. TENANT IMPROVEMENTS. Per the terms and conditions as outlined in Exhibit
B - Lease Improvement Agreement, Tenant shall receive a one time tenant
improvement allowance not to exceed $100,000. The tenant improvement
allowance shall only be used for improvements to the Additional Premises.
4. SECURITY DEPOSIT. Notwithstanding anything to the contrary contained in
Paragraph 15 of the Lease, the security deposit shall not be less than
$300,000 during the term of this Lease.
5. Except as modified by this Amendment, all provisions of the Lease, First
Amendment to Lease and Second Amendment to Lease shall remain in full force
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first written above.
GILEAD SCIENCES, INC. SPIEKER PROPERTIES, L.P.
a Delaware corporation a California limited partnership
BY: /s/ Mark L. Perry By: Spieker Properties, Inc.
-------------------------- a Maryland corporation,
Mark L. Perry its general partner
Its: Sr. Vice President, Chief By: /s/ Peter H. Schnugg
Financial Officer and -----------------------------
General Counsel Peter H. Schnugg
Its: Senior Vice President
LEASE IMPROVEMENT AGREEMENT
This Lease Improvement Agreement ('IMPROVEMENT AGREEMENT') sets forth the
terms and conditions relating to construction of the initial tenant improvements
described in the Plans to be prepared and approved as provided below (the
'TENANT IMPROVEMENTS') in the Premises.
1. PLANS AND SPECIFICATIONS.
1.1 Tenant shall retain the services of a space planner (the 'SPACE
PLANNER'), to be determined a later date, to prepare a detailed space plan (the
'SPACE PLAN') mutually satisfactory to Landlord and Tenant for the construction
of the Tenant Improvements in the Premises. Tenant shall submit the Space Plan
and any proposed revisions thereto to Landlord for Landlord's approval.
1.2 Based on the approved Space Plan, Tenant shall cause the Space Planner
to prepare detailed plans, specifications and working drawings mutually
satisfactory to Landlord and Tenant for the construction of the Tenant
Improvements (the 'PLANS'). Landlord and Tenant shall diligently pursue the
preparation of the Plans. Tenant shall submit the Plans and any proposed
revisions thereto, including the estimated cost of the Tenant Improvements. All
necessary revisions to the Space Plan and the Plans shall be made within two (2)
business days after Landlord's response thereto. This procedure shall be
repeated until Landlord ultimately approves the Space Plan and Plans.
1.3 Tenant shall be responsible for ensuring that the Plans are compatible
with the design, construction and equipment of the Building, comply with
applicable Regulations and the Standards (defined below), and contain all such
information as may be required to show locations, types and requirements for all
heat loads, people loads, floor loads, power and plumbing, regular and special
HVAC needs, telephone communications, telephone and electrical outlets,
lighting, light fixtures and related power, and electrical and telephone
switches, B.T.U. calculations, electrical requirements and special receptacle
requirements. The Plans shall also include mechanical, electrical, plumbing,
structural and engineering drawings mutually satisfactory to Landlord and Tenant
which shall be prepared by the mechanical contractor or contractors, to be
determined at a later date. Notwithstanding Landlord's preparation, review and
approval of the Space Plan and the Plans and any revisions thereto, Landlord
shall have no responsibility or liability whatsoever for any errors or omissions
contained in the Space Plan or Plans or any revisions thereto, or to verify
dimensions or conditions, or for the quality, design or compliance with
applicable Regulations of any improvements described therein or constructed in
accordance therewith. Tenant hereby waives all claims against Landlord relating
to, or arising out of the design or construction of, the Tenant Improvements.
1.4 Landlord may approve or disapprove the Space Plan or Plans or any
proposed revision thereto submitted to Landlord in Landlord's reasonable
discretion. Landlord shall not be deemed to have approved the Space Plan, the
Plans, or any proposed revisions thereto, unless approved by Landlord in
writing. Landlord shall approve or disapprove any Space Plan, Plans or proposed
revisions thereto submitted to Landlord for Landlord's approval within five (5)
business days after Landlord's receipt thereof.
2. SPECIFICATIONS FOR STANDARD TENANT IMPROVEMENTS.
2.1 Specifications and quantities of standard building components which
will comprise and be used in the construction of the Tenant Improvements
('STANDARDS') are set forth in SCHEDULE 1 to this EXHIBIT B. As used herein,
'STANDARDS' or 'BUILDING STANDARDS' shall mean the standards for a particular
item selected from time to time by Landlord for the Building, including those
set forth on SCHEDULE 1 of this EXHIBIT B, or such other standards of equal or
better quality as may be mutually agreed between Landlord and Tenant in writing.
2.2 No deviations from the Standards are permitted.
3. TENANT IMPROVEMENT COST.
3.1 The cost of the Tenant Improvements shall be paid for by Tenant,
including, without limitation, the cost of: Standards; space plans and studies;
architectural and engineering fees; permits, approvals and other governmental
fees; labor, material, equipment and supplies; construction fees and other
amounts payable to contractors or subcontractors; taxes; off-site improvements;
remediation and preparation of the Premises for construction of the Tenant
Improvements; taxes; filing and recording fees; premiums for insurance and
bonds; attorneys' fees; financing costs; and all other costs expended or to be
expended in the construction of the Tenant Improvements. Tenant shall reimburse
Landlord for actual expenses, estimated to be approximately $1,500, which
Landlord may incur in connection with the Tenant Improvements.
3.2 Provided Tenant is not in material default under the Lease, including
this Improvement Agreement, Landlord shall contribute a one-time tenant
improvement allowance not to exceed $100,000 ('TENANT IMPROVEMENT ALLOWANCE')
toward the cost of the initial Tenant Improvements. Provided Tenant is not then
in material default under the Lease, including this Improvement Agreement,
Landlord shall disburse the Tenant Improvement Allowance to Tenant upon
completion of construction of the Tenant Improvements and expiration of the time
for filing of any mechanics' liens claimed or which might be filed on account of
any work ordered by Tenant or its contractor or any subcontractor, and upon
receipt by Landlord of a certificate of completion executed by the Space Planner
and Tenant's contractor, and unconditional mechanics' lien releases (which
mechanics' lien releases shall be executed by the subcontractors, labor
suppliers and materialmen in addition to Tenant's contractor), in each case in
form and substance reasonably satisfactory to Landlord, and all appropriate
bills and supporting documentation for the work ordered by Tenant or its
contractor or any subcontractor.
3.3 No credit shall be given to Tenant if the cost of the Tenant
Improvements is less than the Tenant Improvement Allowance.
4. CONSTRUCTION OF TENANT IMPROVEMENTS.
4.1 Within ten (10) days after Tenant's and Landlord's approval of the
Plans including the estimate of the cost of the Tenant Improvements and
Landlord's receipt of payment of any such estimated cost exceeding the amount
of the Tenant Improvement Allowance, Tenant shall cause the contractor to
proceed to secure a building permit and commence construction of the Tenant
Improvements provided that the Building has in Landlord's reasonable
discretion reached the stage of construction where it is appropriate to
commence construction of the Tenant Improvements in the Premises.
4.2 Tenant shall be responsible for obtaining all governmental
approvals to the full extent necessary for the construction and installation
of the Tenant Improvements and for Tenant's occupancy of the Premises, in
compliance with all applicable Regulations.
Tenant shall employ a contractor or contractors, to be approved by Landlord in
writing, to construct the Tenant Improvements in conformance with the approved
Space Plan and Plans. The construction contracts between Tenant and the
approved contractor shall be subject to Landlord's prior reasonable approval and
shall provide for progress payments. The contractor(s) shall be duly licensed
and Landlord's approval of the contractor(s) shall be conditioned, among other
things, upon the contractor's reputation for quality of work, timeliness of
performance, integrity and Landlord's prior experience with such contractor.
4.3 Landlord shall not be liable for any direct or indirect damages
suffered by Tenant as a result of delays in construction beyond Landlord's
reasonable control, including, but not limited to, delays due to strikes or
unavailability of materials or labor, or delays caused by Tenant (including
delays by the Space Planner, the contractor or anyone else performing services
on behalf of Tenant).
4.4 All work to be performed on the Premises by Tenant or Tenant's
contractor or agents shall be subject to the following conditions:
(a) Such work shall proceed upon Landlord's written approval of
Tenant's contractor, and public liability and property damage insurance
carried by Tenant's contractor, and shall further be subject to the
provisions of Paragraph 8 of the Lease.
(b) All work shall be done in conformity with a valid building
permit when required, a copy of which shall be furnished to Landlord before
such work is commenced, and in any case, all such work shall be performed in
a good and workmanlike and first-class manner, and in accordance with all
applicable Regulations and the requirements and standards of any insurance
underwriting board, inspection bureau or insurance carrier insuring the
Premises pursuant to the Lease. Notwithstanding any failure by Landlord to
object to any such work, Landlord shall have no responsibility for Tenant's
failure to comply with all applicable Regulations. Tenant shall be
responsible for ensuring that construction and installation of the Tenant
Improvements will not affect the structural integrity of the Building.
(c) If required by Landlord or any lender of Landlord, all work by
Tenant or Tenant's contractor shall be done with union labor in accordance
with all union labor agreements applicable to the trades being employed.
(d) Landlord or Landlord's agents shall have the right to inspect
the construction of the Tenant Improvements by Tenant during the progress
thereof. If Landlord shall give notice of faulty construction or any other
deviation from the approved Space Plan or Plans, Tenant shall cause its
contractor to make corrections promptly. However, neither the privilege
herein granted to Landlord to make such inspections, nor the making of such
inspections by Landlord, shall operate as a waiver of any right of Landlord
to require good and workmanlike construction and improvements erected in
accordance with the approved Space Plan or Plans.
(e) Tenant shall cause its contractor to complete the Tenant
Improvements as soon as reasonably possible.
(f) Tenant's construction of the Tenant Improvements shall comply
with the following: (i) the Tenant Improvements shall be constructed in
strict accordance with the approved Space Plan or Plans; (ii) Tenant's and
its contractor shall submit schedules of all work relating to the Tenant
Improvements to Landlord for Landlord's approval within fifteen (15)
business days following the selection of the contractor and the approval of
the Plans. Landlord shall within five (5) business days after receipt thereof
inform Tenant of any changes which are necessary and Tenant's contractor
shall adhere to such corrected schedule; and (iii) Tenant shall abide by all
rules made by Landlord with respect to the use of freight, loading dock, and
service elevators, storage of materials, coordination of work with the
contractors of other tenants, and any other matter in connection with this
Improvement Agreement, including, without limitation, the construction of the
(g) Tenant or Tenant's contractor or agents shall arrange for
necessary utility, hoisting and elevator service with Landlord's contractor
and shall pay such reasonable charges for such services as may be charged by
Tenant's or Landlord's contractor.
(h) Tenant's entry to the Premises for any purpose, including,
without limitation, inspection or performance of Tenant construction by
Tenant's agents, prior to the date Tenant's obligation to pay rent commences
shall be subject to all the terms and conditions of the Lease except the
payment of Rent. Tenant's entry shall mean entry by Tenant, its officers,
contractors, licensees, agents, servants, employees, guests, invitees, or
(i) Tenant shall promptly reimburse Landlord upon demand for any
reasonable expense actually incurred by the Landlord by reason of faulty work
done by Tenant or its contractors or by reason of any delays caused by such
work, or by reason of inadequate clean-up.
(j) Tenant hereby indemnifies and holds Landlord harmless with
respect to any and all costs, losses, damages, injuries and liabilities
relating in any way to any act or omission of Tenant or Tenant's contractor
or agents, or anyone directly or indirectly employed by any of them, in
connection with the Tenant Improvements and any breach of Tenant's
obligations under this Improvement Agreement, or in connection with Tenant's
non-payment of any amount arising out of the Tenant Improvements. Such
indemnity by Tenant, as set forth above, shall also apply with respect to any
and all costs, losses, damages, injuries, and liabilities related in any way
to Landlord's performance or any ministerial acts reasonably necessary (i) to
permit Tenant to complete the Tenant Improvements, and (ii) to enable Tenant
to obtain any building permit or certificate of occupancy for the Premises.
(k) Tenant shall use its best efforts to contractually require its
contractor and the subcontractors utilized by Tenant's contractor to
guarantee to Tenant and for the benefit of Landlord that the portion of the
Tenant Improvements for which it is responsible shall be free from any
defects in workmanship and materials for a period of not less than one (1)
year from the date of completion thereof. Pursuant to such guarantee, each of
Tenant's contractor and the subcontractors utilized by Tenant's contractor
shall be responsible for the replacement or repair, without additional
charge, of all work done or furnished in accordance with its contract that
shall become defective within one (1) year after the later to occur of (i)
completion of the work performed by such contractor of subcontractors and
(ii) the Term Commencement Date. The correction of such work shall include,
without additional charge, all additional expenses and damages incurred in
connection with such removal or replacement of all or any part of the Tenant
Improvements, and/or the Building and/or common areas that may be damaged or
disturbed thereby. Tenant shall use its best efforts to ensure that all such
warranties or guarantees as to materials or workmanship of or with respect to
the Tenant Improvements shall be contained in the construction contract or
subcontract and shall be written such that such guarantees or warranties
shall inure to the benefit of both Landlord and Tenant, as their repective
interests may appear, and can be directly enforced by either. Tenant
covenants to give to Landlord any assignment or other assurances which may be
necessary to effect such rights of direct enforcement.
5. INSURANCE REQUIREMENTS.
5.1 All of Tenant's contractors shall carry worker's compensation
insurance covering all of their respective employees, and shall also carry
public liability insurance, including property damage, all with limits, in
form and with companies as are required to be carried by Tenant as set forth
in the Lease.
5.2 Tenant shall carry 'Builder's All Risk' insurance in an amount
approved by Landlord covering the construction of the Tenant Improvements, and
such other insurance as Landlord may reasonably require, it being understood and
agreed that the Tenant Improvements shall be insured by Tenant pursuant to the
Lease immediately upon completion thereof. Such insurance shall be in amounts
and shall include such extended coverage endorsements as may be reasonably
required by Landlord including, but not limited to, the requirement that all of
Tenant's contractors shall carry excess liability and Products and Completed
Operation coverage insurance, each in amounts not less than $500,000 per
incident, $1,000,000 in aggregate, and in form and with companies as are
required to be carried by Tenant as set forth in the Lease.
5.3 Certificates for all insurance carried pursuant to this Improvement
Agreement must comply with the requirements of the Lease and shall be delivered
to Landlord before the commencement of construction of the Tenant Improvements
and before the contractor's equipment is moved onto the site. In the event the
Tenant Improvements are damaged by any cause during the course of the
construction thereof, Tenant shall promptly repair the same at Tenant's sole
cost and expense. Tenant's contractors shall maintain all of the foregoing
insurance coverage in force until the Tenant Improvements are fully completed
and accepted by Landlord, except for any Product and Completed Operation
Coverage insurance required by Landlord, which is to be maintained for the
remaining Lease Term following completion of the work and acceptance by Landlord
and Tenant. All policies carried under this Paragraph 5 shall name Landlord and
Tenant as 'Additional Insureds'. All insurance maintained by Tenant's
contractors shall preclude subrogation claims by the insurer against anyone
insured thereunder. Such insurance shall provide that it is primary insurance
as respects the owner and that any other insurance maintained by owner is excess
and noncontributing with the insurance required hereunder.
6. COMPLETION AND RENTAL COMMENCEMENT DATE.
6.1 Tenant's obligation to pay Rent under the Lease shall commence on the
Scheduled Term Commencement Date and the Scheduled Term Commencement Date shall
be the Term Commencement Date notwithstanding anything to the contrary contained
in the Basic Lease Information, provided that Landlord shall have provided
Tenant with full access to the premises on such date. However, Landlord Delays
(as defined below) shall extend the Term Commencement Date, but only in the
event that substantial completion of the Tenant Improvements is delayed despite
Tenant's reasonable efforts to adapt and compensate for such delays. In
addition, no Landlord Delays shall be deemed to have occurred unless Tenant has
provided notice, in compliance with the Lease, to Landlord specifying that a
delay shall be deemed to have occurred because of actions, inactions or
circumstances specified in the notice in reasonable detail. If such actions,
inactions or circumstances are not cured by Landlord within one (1) business day
after receipt of such notice ('COUNT DATE'), and if such actions, inaction or
circumstances otherwise qualify as a Landlord Delay, then a Landlord Delay shall
be deemed to have occurred commencing as of the Count Date. The Term
Commencement Date shall be extended by one day for each day from the Count Date
that a Landlord Delay has occurred, as calculated as provided above. The term
'Landlord Delays,' as such term may be used in this Improvement Agreement, shall
mean any delays in the completion of the Tenant Improvements which are due to
any act or omission of Landlord, its agents or contractors. Landlord Delays
shall include, but shall not be limited to: (i) delays in the giving of
authorizations or approvals by Landlord, (ii) delays due to the acts or failures
to act, of Landlord, its agents or contractors, where such acts or failures to
act delay the completion of the Tenant Improvements, provided that Tenant acts
in a commercially reasonable manner to mitigate any such delay, (iii) delays due
to the interference of Landlord, its agents or contractors with the completion
of the Tenant Improvements or the failure or refusal of any party to permit
Tenant, its agents and contractors, access to and use of the Building or any
Building facilities or services, including elevators and loading docks, which
access and use are necessary to complete the Tenant Improvements, and (iv)
delays due to Landlord's failure to allow Tenant sufficient access to the
Building and/or the Premises during Tenant's move into the Premises.
6.2 Within ten (10) days after completion of construction of the Tenant
Improvements, Tenant shall cause a Notice of Completion to be recorded in the
office of the Recorder of the county in which the Building is located in
accordance with Section 3093 of the Civil Code of the State of California or any
successor statute, and shall furnish a copy thereof to Landlord upon such
recordation. If Tenant fails to do so, Landlord may execute and file the same
on behalf of Tenant as Tenant's agent for such purpose, at Tenant's sole cost
and expense. At the conclusion of construction, (i) Tenant shall cause the
Space Planner and the contractor (i) to update the approved working drawings as
necessary to reflect all changes made to the approved working drawings during
the course of construction, (ii) to certify to the best of their knowledge that
the 'record-set' of as-built drawings are true and correct, which certification
shall survive the expiration or termination of the Lease, and (c) to deliver to
Landlord two (2) sets of copies of such record set of drawings within ninety
(90) days following issuance of a certificate of occupancy for the Premises, and
(iii) Tenant shall deliver to Landlord a copy of all warranties, guarantees, and
operating manuals and information relating to the improvements, equipment, and
systems in the Premises.
6.3 A material default under this Improvement Agreement shall constitute a
default under the Lease, and the parties shall be entitled to all rights and
remedies under the Lease in the event of a material default hereunder by the
other party (notwithstanding that the Term thereof has not commenced).
6.4 Without limiting the 'as-is' provisions of the Amendment, except
for the Tenant Improvements, if any, to be constructed by Landlord pursuant
to this Improvement Agreement, Tenant accepts the Premises in its 'as-is'
condition and acknowledges that it has had an opportunity to inspect the
Premises prior to signing the Amendment.
TO EXHIBIT B
The following constitutes the Building Standard tenant improvements
('STANDARDS') in the quantities specified:
1. Doors (existing) Light Oak
2. Ceiling Tiles (existing) 2' X 2' - Armstrong Cortega Minaboard
3. Window Treatment (existing) Manufacturer: Bali
Quality: 1' Blind
4. Hardware Sets (existing) Stainless Steel
5. Window Mullions (existing) Existing Color