Exhibit 10.1

 

STANDARD INDUSTRIAL LEASE

(NET)

 

FENTON TECHNOLOGY PARK (PHASE II)

9810 Summers Ridge Road

 

H.G. FENTON PROPERTY COMPANY,

a California corporation

 

“Landlord”

 

and

 

ONCOSEC MEDICAL INCORPORATED,

a Nevada corporation

 

“Tenant”

 

The parties acknowledge that double underlined text and lined-through text are
intentional changes in language and incorporated as a part of this Lease.

 

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TABLE OF CONTENTS

 

SECTION

 

PAGE

 

 

 

 

 

1.

 

BASIC LEASE PROVISIONS

 

1

2.

 

DEFINITIONS

 

2

3.

 

PREMISES

 

4

4.

 

TERM; DELIVERY OF PREMISES

 

5

5.

 

RENT

 

6

6.

 

SECURITY DEPOSIT

 

6

7.

 

USE

 

7

8.

 

MAINTENANCE, REPAIRS AND ALTERATIONS

 

8

9.

 

TAXES

 

9

10.

 

UTILITIES

 

9

11.

 

INSURANCE

 

9

12.

 

WAIVER AND INDEMNITY

 

11

13.

 

DAMAGE AND DESTRUCTION

 

11

14.

 

CONDEMNATION

 

12

15.

 

ASSIGNMENT AND SUBLETTING

 

13

16.

 

DEFAULT BY TENANT; REMEDIES

 

14

17.

 

TENANT’S INSOLVENCY

 

16

18.

 

DEFAULT BY LANDLORD

 

17

19.

 

SUBORDINATION AND ESTOPPEL

 

17

20.

 

HAZARDOUS MATERIALS

 

18

21.

 

NOTICE

 

19

22.

 

OTHER TERMS AND CONDITIONS

 

19

23.

 

GENERAL PROVISIONS

 

20

24.

 

ADDENDUM

 

24

 

EXHIBITS

 

A

 

Site Plan

B

 

Premises and Improvements to Premises

C

 

Rules and Regulations

D

 

Signage Criteria

E

 

Environmental Questionnaire

F

 

Guaranty Agreement [INTENTIONALLY OMITTED]

 

 

Initials:

    PD/VV

 

    KH/MN

 

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STANDARD INDUSTRIAL LEASE - NET

 

THIS STANDARD INDUSTRIAL LEASE - NET (“Lease”), dated for reference purposes
only as of May 21, 2013,, is made at San Diego, California, between H. G. FENTON
PROPERTY COMPANY, a California corporation (“Landlord”), and ONCOSEC MEDICAL
INCORPORATED, a Nevada corporation (“Tenant”).

 

1.                                      BASIC LEASE PROVISIONS. The words and
figures set forth in this Section 1 are used as defined terms in this Lease.

 

1.1                               Premises: The real property and improvements
which are the subject of this Lease. The Premises consist of approximately 6,840
rentable square feet (rsf) as depicted on Exhibit A. The address for the
Premises is 9810 Summers Ridge Road, Suites 100-120, San Diego, California
92121.

 

1.2                               Building: The single story building addressed
at 9810 Summers Ridge Road, San Diego, California 92108.

 

1.3                               Project: The five (5) Buildings in Phase 2 of
the Business Park, including all appurtenances and common area thereto, located
at 9810, 9820, 9830, 9940 and 9950 Summers Ridge Road, San Diego, California,
consisting of approximately 83,089 rentable square feet.

 

1.4                               Business Park: The planned industrial
development of which the Project is a part. The Business Park consists of lots 1
through 6 of the Fenton Technology Park in the City of San Diego, County of San
Diego, State of California, according to Map thereof No. 14555 on file in the
Office of the County Recorder of San Diego County.

 

1.5

Term:

Thirty-eight (38) full calendar months

 

1.6                               Commencement and Expiration Dates:

 

 

(a)

Commencement Date:

 

July 1, 2013 (estimated)

 

 

 

 

 

 

(b)

Expiration Date:

 

August 31, 2016 (subject to actual Commencement Date)

 

 

 

 

 

 

(c)

Delivery of the Premises:

 

June 1, 2013 (estimated, subject to the provisions of Section 4.5)

 

 

 

 

 

1.7

Extension Option Period:

Subject to the provisions of Section 25

 

 

 

1.8

Initial Monthly Base Rent (NNN):

$8,140.00 ($1.19 per sf x 6,840 rsf)

 

 

 

1.9

Prepaid Base Rent:

$8,140.00

 

 

 

1.10

Periodic Increase In Base Rent (NNN):

 

 

Months of Term

 

Base Rent

2

$8,140.00

(conditionally abated, subject to the provisions of Section 24)

3 — 12

$8.140.00

 

13

$8,384.00

(conditionally abated, subject to the provisions of Section 24)

14 — 24

$8,384.00

25 — 36

$8,636.00

37 — 38

$8,895.00

 

1.11

Security Deposit Amount:

$26,685.00

 

 

 

1.12

Tenant Improvement Allowance:

$61,562.18 (subject to the provisions of Exhibit B)

 

 

 

1.13

Tenant’s Share of Operating Expenses:

 

 

 

 

 

(a)

Real Property Taxes:

8.23%

 

 

 

 

 

(b)

Other Operating Expenses:

8.23%

 

 

 

1.14

Permitted Use:

The Premises shall be used and occupied as general office and research and
development for a biotech company developing treatments for advanced-stage skin
cancer.

 

 

 

1.15

Tenant’s Guarantor(s):

Not applicable

 

 

Initials:

    PD/VV

 

    KH/MN

 

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1.16

Broker(s):

Voit Real Estate Services (Tenant & Landlord)

 

 

 

1.17

Parking:

Twenty-four (24) unreserved spaces

 

 

 

1.18

Landlord’s Address for Notice:

H. G. Fenton Company

 

 

7577 Mission Valley Road, Suite 200

 

 

San Diego, California 92108

 

 

Tel: (619) 400-0120

 

 

Fax: (619) 400-0111

 

 

Attention: Property Manager

 

 

 

1.19

Tenant’s Address for Notice:

OncoSec Medical Incorporated

 

 

9810 Summers Ridge Road, Suites 100-120

 

 

San Diego, California 92121

 

 

Tel: (858) 210-7333

 

 

Fax: (858) 430-3832

 

 

Attention: Veronica Vallejo

 

 

 

1.20

Addendum:

Sections 24, 25, 26 and 27

 

2.                                      DEFINITIONS. The captions appearing in
this Section 2 are used as defined terms in this Lease.

 

2.1                               Additional Rent. All sums payable by Tenant
hereunder other than Base Rent, including without limitation: Tenant’s Share of
Operating Expenses; late charges; interest on past due amounts; attorneys’ fees;
and reimbursements to Landlord of sums advanced by Landlord to cure any default
or discharge any obligation of Tenant hereunder.

 

2.2                               Base Rent. The basic monthly rent payable by
Tenant for the use and occupancy of the Premises, in accordance with Section 5
of this Lease.

 

2.3                               Business Day.  Any weekday, Monday through
Friday, except holidays on which United States post offices are closed.

 

2.4                               Commencement Date. The first day of the Term,
as determined in accordance with Section 4.1 below.

 

2.5                               Common Areas. All areas and facilities outside
the Premises and within the Building and Project that Tenant is permitted to
use, as provided and designated by the Landlord from time to time for the
general non-exclusive use of Landlord, Tenant and other tenants of the Building
and Project and their respective employees, suppliers, shippers, customers,
invitees, licensees or other visitors, including without limitation hallways,
entryways, common rest rooms on multi-tenant floors, elevators, stairways,
common pipes, conduits, wires and appurtenant equipment serving the Premises,
parking areas, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, driveways and landscaped areas.

 

2.6                               Declaration. The recorded Declaration of
Covenants, Conditions and Restrictions for the Business Park, as the same may be
amended from time to time. A copy of the Declaration, if any, is available for
review at the Landlord’s Office, and a copy will be provided to Tenant upon
request.

 

2.7                               Delivery of the Premises. The date of the
inspection and acceptance (or deemed acceptance) of the Premises by Tenant,
following Landlord’s notice that Landlord’s Delivery Work has been substantially
completed in accordance with Exhibit B attached hereto.

 

2.8                               Hazardous Materials. Any and all materials or
substances which have been determined to be nuisance or dangerous, toxic or
hazardous or a pollutant or contaminant, including but not limited to any
hydrocarbon material, flammable explosives, asbestos, urea formaldehyde,
radioactive materials or waste, or other hazardous, toxic, contaminating or
polluting materials, substances or wastes, including, without limitation, any
“hazardous substances”, “hazardous wastes”, “hazardous materials” or “toxic
substances” under any Hazardous Materials Laws.

 

2.9                               Hazardous Materials Laws. All federal, state
and local laws, ordinances and regulations, including, but not limited to, the
Federal Water Pollution Control Act (33 U.S.C. §1251, et seq.), Resource
Conservation & Recovery Act (42 U.S.C. §6901, et seq.), Safe Drinking Water Act
(42 U.S.C. §3000f, et seq.), Toxic Substances Control Act (15 U.S.C. §2601, et
seq.), the Clean Air Act (42 U.S.C. §7401, et seq.), Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. §9601, et seq.), California
HEALTH & SAFETY CODE (§25100, et seq., §39000, et seq.), California Safe
Drinking Water & Toxic Enforcement Act of 1986 (California HEALTH & SAFETY CODE
§25249.5, et seq.), California WATER CODE (§13000, et seq.), and other
comparable federal, state or local law, regulation or interpretation thereof,
whether currently in force or enacted in the future, together with any licenses,
permits, plans or approvals generated pursuant to or as a result of any such
law, which regulates or proscribes the use, storage, disposal, cleanup,
transportation, release or threatened release into the environment or presence
of Hazardous Materials.

 

2.10                        Lease Year. A period of twelve (12) consecutive full
calendar months. The first Lease Year shall begin on the Commencement Date if
the Commencement Date is the first day of a calendar month; otherwise, the

 

 

Initials:

    PD/VV

 

    KH/MN

 

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first Lease Year shall begin on the first day of the first full calendar month
after the month in which the Commencement Date occurs. Each succeeding Lease
Year shall begin on the anniversary of the beginning of the first Lease Year. If
Tenant should extend the Term pursuant to any extension option granted herein,
the first day of the Extension Term shall also be deemed to be the first day of
a Lease Year for all purposes of this Lease.

 

2.11                        Tenant’s Work. The improvements and other work, if
any, to be accomplished by Tenant in accordance with Exhibit B.

 

2.12                        Landlord’s Delivery Work. All items of Landlord’s
Work except those which Landlord reasonably cannot complete prior to the
Commencement Date, e.g., Landlord’s Work that cannot be performed by Landlord
until Tenant (i) provides Landlord with plans and specifications therefor, or
(ii) obtains a building permit, or (iii) completes those items of Tenant’s Work
that are necessarily completed prior to a particular item of Landlord’s Work.

 

2.13                        Landlord’s Work. The improvements and other work, if
any, to be accomplished by Landlord in accordance with Exhibit B.

 

2.14                        Mortgage. Any mortgage, trust deed or other
encumbrance, and all renewals, extensions or replacements thereof, now or
hereafter imposed by Landlord upon the real property which includes the
Premises.

 

2.15                        Mortgagee. The holder of a Mortgage.

 

2.16                        Operating Expenses. All costs incurred by Landlord,
if any, for any of the following:

 

(a)                                 The operation, repair and maintenance, in
neat, clean and good order and condition of (i) the Common Areas of the Project,
including without limitation all parking areas, loading and unloading areas,
trash areas, roadways, sidewalks, walkways, parkways, driveways, landscaped
areas, striping, bumpers, and irrigation systems, common area lighting
facilities, and fences and gates; (ii) fire detection in the Project, including
sprinkler system maintenance and repair; and (iii) unless allocated directly to
Tenant pursuant to Section 8.1(b), the Building’s heating, ventilation and air
conditioning (“HVAC”) systems.

 

(b)                                 To the extent any of the following services
are provided for the Project, such as trash disposal (provided, however that
Tenant pay for trash disposal specific to its use of the Premises if such use
results in a disproportionately heavy use of the trash facilities for the
Project), janitorial service, security services, gardening, painting, plumbing,
electrical, carpentry, window washing, signage and equipment rental expenses,
and any other service to be provided by Landlord that is elsewhere in the Lease
stated to be an item of Operating Expenses.

 

(c)                                  Any deductible portion of an insured loss
concerning any of the items or matters described in this Section.

 

(d)                                 Premiums for any insurance policies
maintained by Landlord pursuant to Section 11 below.

 

(e)                                  Real Property Taxes to be paid by Landlord.

 

(f)                                   Utilities not separately metered to Tenant
or other tenants of the Project.

 

(g)                                  Independent contractors for services
(excluding capital improvements), and compensation (including employment taxes
and fringe benefits) of all persons who perform regular and recurring duties
connected with day-to-day operation, maintenance and repair of the Project,
provided such compensation is commercially reasonable.

 

(h)                                 Maintenance and repair of roofs, building
walls, foundations, and all sewer and water facilities.

 

(i)                                     A property management fee in the amount
of fifteen percent (15%) of the preceding items of Operating Expenses.

 

(j)                                    Dues and assessments payable to the
Project’s property owners association (if any).

 

(k)                                 Upon completion of the future common areas
of the Business Park, the costs and expenses of operation and maintenance
thereof.

 

The inclusion of the improvements, facilities and services set forth in the
foregoing definition shall not be deemed Landlord’s representation that such
improvements or facilities exist, nor shall it impose on Landlord any obligation
either to have those improvements or facilities or to provide those services,
unless the improvements or facilities already exist in the Project or Landlord
already provides the services as of the Commencement Date, or unless Landlord
has agreed to do so elsewhere in the Lease.  Capital improvements, as defined by
Generally Accepted Accounting Practice (GAAP), are not included in Operating
Expenses, except (i) as otherwise provided in this Lease, or (ii) for those that
directly reduce other Operating Expenses as defined in this Section 2.16.

 

2.17                        Real Property Taxes. All general property and
improvement taxes and all forms of assessment, special assessment or
reassessment, license fee, license tax, business license tax, commercial rental
tax, in lieu tax, levy, charge, penalty (to the extent not imposed as a result
of Landlord’s negligence) or similar imposition, imposed by any authority having
the direct power to tax, including any city, county, state or federal
government, or any school,

 

 

Initials:

    PD/VV

 

    KH/MN

 

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agricultural, lighting, drainage or other improvement or special assessment
district thereof, or any agency or public body, as against any legal or
equitable interest of Landlord in the Premises and all improvements thereon and
thereto as they presently exist or as they may be expanded, developed,
constructed or altered from time to time, including but not limited to: (a) any
tax on Landlord’s rent, right to rent or other income from the Premises or all
or any portion of the Project or as against Landlord’s business of leasing the
Premises, but specifically excluding Landlord’s federal, state or city income,
franchise, corporate, personal property, stock transfer, revenues, inheritance
or estate taxes; (b) any assessments, taxes, fees, levies or charges in addition
to, or in substitution, partially or totally, for any assessment, tax, fee, levy
or charge previously included within the definition of real property tax before
adoption of Proposition 13 by the voters of the State of California in the
June 1978 election, it being acknowledged by Tenant and Landlord 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 that were before
Proposition 13 provided without charge to property owners or occupants; and
(c) any assessment, tax, fee, levy or charge upon this transaction or any
document to which Tenant is a party which is imposed on the creation or transfer
of an interest or an estate in the Premises. It is the intention of Tenant and
Landlord that all new and increased assessments, taxes, fees, levies and
charges, and all similar assessments, taxes, fees, levies and charges be
included within the definition of Real Property Taxes for the purposes of this
Lease. Real Property Taxes for the first year of the Term shall be calculated as
if the Premises and related improvements were fully assessed. If at any time
during the Term the laws concerning the methods of real property taxation
prevailing at the commencement of the Lease Term are changed so that a tax or
excise on rents or any other tax, however described, is levied or assessed
against Landlord as a substitution in whole or in part for any real property
taxes, then Real Property Taxes shall include, but not be limited to, any such
assessment, tax, fee, levy or charge allocable to or measured by the area of the
Premises or the rent payable hereunder, including, without limitation, any gross
income 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. With respect
to any assessments that may be levied against or upon the Premises, the Building
or all or any portion of the Project and that under the laws then in force may
be evidenced by improvement or other bonds, or may be paid in annual
installments, there shall be included within the definition of Real Property
Taxes with respect to any tax fiscal year only the amount currently payable on
such tax, bond or assessment, including interest, for such tax fiscal year or
the current annual installment for such tax fiscal year.

 

3.                                      PREMISES.

 

3.1                               Lease of Premises. In consideration of the
rent and covenants set forth below, Landlord hereby leases the Premises to
Tenant, and Tenant hires the Premises from Landlord, for the term, at the
rental, and upon all of the conditions set forth herein. Except as otherwise
provided herein, this Lease is subject to: (i) all covenants, conditions,
restrictions, easements, mortgages, deeds of trust, rights of way, reciprocal
easement agreements to which Landlord is a party which affect the Project and
all other matters now or hereafter affecting the Project or the Premises; and
(ii) all zoning laws, ordinances and building codes now or hereafter affecting
the Project or the Premises. In the event Landlord has a leasehold interest in
the Project or the Premises, this Lease shall terminate upon the termination of
such leasehold interest whether such termination is voluntary, involuntary, or
by operation of law, without liability of Landlord (unless otherwise
specifically set forth herein).

 

3.2                               Landlord’s Reserved Rights. Landlord reserves
to itself the absolute rights: (i) to use the roof, exterior walls and area
beneath the Premises, and (ii) to install, use, maintain and replace equipment,
machinery, pipes, conduits and wiring located within the Premises which serve
other parts of the Project, in a manner and in locations that do not
unreasonably interfere with Tenant’s use of the Premises.

 

3.3                               Condition of Premises. Tenant acknowledges
that except to the extent expressly set forth in this Lease or in a written
addendum or amendment hereto, neither Landlord nor its agents have made (i) any
promise to alter, remodel or otherwise improve, or (ii) any representation or
warranty with respect to the condition of, the Premises, the Building or any
part of the Project or improvements thereon or therein. Tenant’s taking
possession of the Premises shall be deemed acceptance of the Premises by Tenant,
and shall be deemed conclusively to establish that the Premises are in good and
satisfactory condition as of the date Tenant takes possession. Subject to the
completion of any Landlord’s Work, Tenant accepts possession of the Premises in
their current, “as is”, condition, and acknowledges that it has inspected the
Premises before signing this Lease and is fully aware of the condition of the
Premises.  Notwithstanding the foregoing, and prior to Landlord’s Delivery of
the Premises, Landlord shall inspect any existing HVAC system (consisting of any
air distribution duct work, compressors and any other related components or
equipment); electrical system (consisting of wall and floor outlets, fluorescent
lighting and distribution panel[s]); and plumbing system (consisting of water
supply, sinks, drains, restroom facilities, water heater[s] and sprinkler
system, if any) collectively “Existing Utility Systems” located in or on the
Premises to ensure that each Existing Utility System and any related components
are in proper working order and condition. In addition Landlord shall ensure
that the Premises are thoroughly cleaned.

 

3.4                               Rights in Common Areas. Landlord grants to
Tenant and to Tenant’s employees, invitees and licensees a non-exclusive license
during the Term to use the Common Areas, subject to the terms and conditions of
this Lease. Tenant acknowledges that others, including without limitation
Landlord and other tenants of the Building and Project, and their respective
employees, invitees and visitors, and other persons authorized by Landlord, will
also be entitled to use the Common Areas. Without advance notice to Tenant and
without any liability to Tenant in any respect, Landlord shall have the right
to:

 

(a)                                 Establish and enforce reasonable rules and
regulations concerning the maintenance, management, use and operation of the
Common Areas.

 

 

Initials:

    PD/VV

 

    KH/MN

 

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(b)                                 Close off any of the Common Areas to
whatever extent required in the opinion of Landlord and its counsel to prevent a
dedication of any of the Common Areas or the accrual of any rights by any person
or the public to the Common Areas, provided such closure does not deprive Tenant
of the substantial benefit and enjoyment of the Premises.

 

(c)                                  Temporarily close any of the Common Areas
for maintenance, alteration or improvement purposes.

 

(d)                                 Select, appoint or contract with any person
for the purpose of operating and maintaining the Common Areas, subject to such
terms and at such rates as Landlord deems reasonable and proper.

 

(e)                                  Change the size, use, shape or nature of
any portions of the Common Areas, provided such change does not deprive Tenant
of the reasonable benefit and enjoyment of the Premises. So long as Tenant is
not thus deprived of the reasonable use and benefit of the Premises, Landlord
will also have the right at any time to change the arrangement or location of,
or both, or to regulate or eliminate the use of, any concourse, parking spaces,
garage, or any elevators, stairs, toilets or other public conveniences in the
Project, without incurring any liability to Tenant or entitling Tenant to any
abatement of rent, and such action will not constitute an actual or constructive
eviction of Tenant.

 

(f)                                   Erect one or more additional buildings on
the Common Areas, expand the existing buildings or other buildings to cover a
portion of the Common Areas, convert Common Areas to a portion of the Building
or other buildings, or convert any portion of such other buildings to Common
Areas. Upon erection of any additional buildings or change in the Common Areas,
the portion of the Project upon which buildings or structures have been erected
will no longer be deemed to be a part of the Common Areas. In the event of any
such changes in the size or use of the Common Areas of the Project, Landlord may
make an appropriate adjustment in the Building’s or any other buildings’ pro
rata share of exterior Common Areas of the Project as appropriate, and a
corresponding adjustment to Tenant’s Share of Operating Expenses.

 

4.                                      TERM; DELIVERY OF PREMISES.

 

4.1                               Term. The Term shall be for the number of
months set forth at Section 1.5 above, beginning on the Commencement Date and
ending on the Expiration Date. Notwithstanding the foregoing, if Delivery of the
Premises has not occurred by the Commencement Date, then the Commencement Date
shall be the actual date of Delivery of the Premises, as advanced day-for-day
for each day’s delay therein that is Tenant Delay. Landlord shall not be liable
for any damage incurred by Tenant as a result of any delay in Delivery of the
Premises, and this Lease shall not thereby become void or voidable. “Tenant
Delay” means delay in the Delivery of the Premises caused by any of the
following: (i) non-compliance by Tenant with matters to be performed by Tenant
or Tenant’s agents as specified in Exhibit B; (ii) Tenant’s failure to respond
within a reasonable time during the design or construction periods to requests
for approval, consent, explanation or interpretation of anything relating to the
construction of Landlord’s Work; (iii) the effect of any change orders or other
revisions of any items of Landlord’s Work initiated or necessitated by Tenant or
its agents; or (iv) any other cause within Tenant’s exclusive control that
adversely affects the date of Delivery of the Premises.

 

4.2                               Delivery of the Premises. Upon completion of
Landlord’s Delivery Work, the parties shall jointly inspect the Premises. If any
defects in Landlord’s Delivery Work exist at the time of such inspection, Tenant
shall notify Landlord thereof in writing upon its inspection of the Premises and
Landlord shall correct such defects; provided, however, that Delivery of the
Premises to Tenant shall be delayed only if the existence of any such defects
would materially adversely affect Tenant’s occupancy of the Premises, in which
case the date of Delivery of the Premises shall be the date upon which Landlord
notifies Tenant that such defects have been substantially corrected. Upon
inspection and Delivery of the Premises to Tenant, Tenant shall at Landlord’s
request sign a written statement acknowledging Tenant’s inspection and
acceptance of the Premises. If Tenant shall fail to contact Landlord and inspect
the Premises within five (5) days after notice from Landlord that Landlord’s
Delivery Work has been substantially completed, Landlord’s notice shall be
conclusive and binding and Delivery of the Premises shall be deemed to have
occurred on the last day of the five-day period. If a dispute shall arise
between Landlord and Tenant as to the completion of any of Landlord’s Work, the
certificate of Landlord’s architect shall be binding and conclusive upon all
parties. Notwithstanding the foregoing, unless otherwise agreed to, if Tenant
shall begin Tenant’s Work or shall otherwise occupy the Premises prior to
substantial completion of Landlord’s Delivery Work, Delivery of the Premises
shall be deemed to have been the date of such commencement of Tenant’s Work or
other occupancy of the Premises.

 

4.3                               Termination for Non-Commencement.
Notwithstanding the foregoing, in the event that Delivery of the Premises has
not occurred within six (6) months after the Commencement Date set forth in
Section 1.6(a), then for a period of ten (10) days after the expiration of such
six (6)-month period either party not in default hereunder may cancel and
terminate this Lease, without any liability to the other party, upon written
notice to the other party; and provided further, however, that if such written
notice of termination is not delivered by either party within the ten (10)-day
period, the foregoing right to terminate this Lease shall itself terminate and
be of no further force or effect.

 

4.4                               Memorandum of Commencement Date. Following the
Delivery of the Premises, Landlord shall prepare and forward to Tenant two
copies of a written Memorandum of Commencement Date, signed by Landlord,
confirming the Commencement Date and the date on which the Term will expire.
Within ten (10) days after receipt thereof, Tenant shall sign and return one
copy of the Memorandum of Commencement Date, indicating either Tenant’s
agreement with the matters set forth therein or any areas of disagreement.
Tenant’s failure to return a copy of the Memorandum of Commencement Date within
such ten (10)-day period shall be conclusively deemed Tenant’s

 

 

Initials:

    PD/VV

 

    KH/MN

 

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agreement with all matters set forth therein. Any dispute or disagreement on
Tenant’s part as to the Commencement Date set forth in such memorandum shall, at
the election of either party, be submitted to final, binding arbitration in San
Diego, California under the Commercial Arbitration Rules of the American
Arbitration Association.

 

4.5                               Early Possession.  Subject to completion of
Landlord’s Work (if any), Landlord agrees to grant Delivery of the Premises to
Tenant on or about the date set forth in Section 1.6 (c) above.  If the
Commencement Date occurs prior to the estimated Commencement Date specified in
Section 1.6 (c) above, Such occupancy shall be subject to all provisions of this
Lease including excluding payment of monthly Base Rent and Tenant’s Share of
Operating Expenses from Delivery of the Premises to the actual Commencement
Date. Delivery of the Premises shall be conditioned upon the occurrence of 1)
full execution and delivery of this Lease, 2) Landlord’s receipt of all Prepaid
Base Rent and Security Deposit, and 3) Landlord’s receipt of certificate(s) of
insurance for all insurance required to be maintained by Tenant hereunder, as
further described in Section 11

 

5.                                      RENT.

 

5.1                               General. From and after the Commencement Date,
Tenant agrees to pay Landlord, in advance, on the first day of each and every
calendar month during the Term, Base Rent and Additional Rent as specified in
this Section. Payment of all such rent shall be without offset or demand, shall
be in lawful money of the United States of America and shall be made at the
address set forth for Landlord herein or at such other place as Landlord may
direct.

 

5.2                               Base Rent. Base Rent shall initially be in the
amount per month set forth in Section 1.8.

 

5.3                               Annual Adjustment to Base Rent. Base Rent
shall be increased during the Term in accordance with the schedule set forth in
Section 1.10.

 

5.4                               Operating Expenses. The parties intend that,
subject only to the specific exceptions set forth herein, this Lease be
absolutely net to Landlord. Accordingly, in addition to Base Rent and subject to
the provisions of this Section, Tenant shall pay, as Additional Rent, Tenant’s
Share of Operating Expenses incurred by Landlord during each calendar year of
the Term, pursuant to the following terms and conditions:

 

(a)                                 Landlord shall provide to Tenant, at or
before the Commencement Date, a good faith estimate of Tenant’s Share of
Operating Expenses that Landlord anticipates will actually be incurred for the
calendar year in which the Commencement Date occurs. Landlord shall also provide
to Tenant, as soon as possible following the first day of each succeeding
calendar year, a good faith estimate of Tenant’s Share of Operating Expenses
with respect to such succeeding calendar year of the Term.

 

(b)                                 Each annual estimate of Tenant’s Share of
Operating Expenses determined by Landlord pursuant to this Section shall be
divided into twelve (12) equal monthly installments. Tenant shall pay to
Landlord such monthly installment of Tenant’s Share of Operating Expenses with
each monthly payment of Base Rent. In the event the estimated amount of Tenant’s
Share of Operating Expenses has not yet been determined for any calendar year,
Tenant shall pay the monthly installment in the estimated amount determined for
the preceding calendar year until the estimate for the current calendar year has
been provided to Tenant, at which time Tenant shall pay any shortfall for the
preceding months of the calendar year and shall thereafter make the monthly
installment payment in accordance with the current estimate.

 

(c)                                  Within sixty (60) days following the end of
each calendar year of the Term, Landlord shall determine and provide to Tenant a
statement setting forth the amount of Operating Expenses actually incurred with
respect to such calendar year. In the event that Tenant’s Share of such actual
Operating Expenses exceeds the sum of the monthly installments actually paid by
Tenant for such calendar year, Tenant shall pay the difference to Landlord,
within thirty (30) days following receipt of such statement. In the event the
sum of such installments exceeds Tenant’s Share of such Operating Expenses
actually incurred, the difference shall be applied as a credit to future
installments of Tenant’s Share of Operating Expenses.

 

(d)                                 Upon written request of Tenant, Landlord
shall provide an accounting of the Operating Expenses for the preceding calendar
year. Landlord shall keep at its home office full, accurate and separate books
of account with backup documentation of Operating Expenses for a period of three
(3) full years after the end of each calendar year, which Tenant shall have the
right to examine and copy at no expense to Landlord, at reasonable times and
upon reasonable notice. Tenant shall have the right, upon twenty (20) days’
prior notice to Landlord, not more frequently than annually and at Tenant’s sole
cost and expense, to conduct an audit of Landlord’s books and records regarding
such Operating Expenses to confirm the accuracy of Landlord’s accounting;
provided, however, that such audit shall not unreasonably interfere with the
conduct of Landlord’s business.

 

5.5                               Late Charges. Tenant acknowledges that late
payment by Tenant to Landlord of Base Rent or Additional Rent due hereunder will
cause Landlord to incur costs not contemplated by this Lease, the exact amount
of which is extremely difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges, and late charges which may be
imposed upon Landlord by the terms of any mortgage or deed of trust covering the
Premises. Therefore, if any payment of Base Rent or Additional Rent is not paid
within five (5) days after the date due, Tenant shall pay to Landlord ten
percent (10%) of the amount due or Two Hundred Fifty Dollars ($250.00),
whichever is greater. The parties agree that such late charge represents a fair
and reasonable estimate of the costs that Landlord will incur by reason of the
late payment by Tenant. The late charge shall be deemed Additional Rent and the
right to require it shall be in addition to all of Landlord’s other rights and
remedies hereunder or at law and shall not be construed as limiting Landlord’s
remedies in any manner.

 

 

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6.                                      SECURITY DEPOSIT. Tenant shall pay to
Landlord, immediately upon execution of this Lease, a security deposit in the
amount (or if a security deposit is currently held by Landlord, then any
additional amount as the case may be) set forth at Section 1.11 (“Security
Deposit”). The Security Deposit 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. If Tenant defaults with respect
to any provision of this Lease, including, but not limited to, the provisions
relating to the payment of rent, 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 for the payment of any other amount
which Landlord may spend or become obligated to spend by reason of Tenant’s
default or to compensate Landlord for any other loss or damage which Landlord
may suffer by reason of Tenant’s default. If any portion of the Security Deposit
is so used or applied, Tenant shall, upon demand therefor, deliver cash to
Landlord in an amount sufficient to restore the Security Deposit to its original
amount, and Tenant’s failure to do so shall be a material breach of this Lease.
Landlord shall not be required to keep the Security Deposit separate from its
general funds, and Tenant shall not be entitled to interest thereon. If Tenant
shall fully and faithfully perform every provision of this Lease to be performed
by it, the Security Deposit or any balance thereof shall be returned to Tenant
(or at Landlord’s option, to the last assignee of Tenant’s interests hereunder)
at the expiration of the Term, provided that Landlord may retain the Security
Deposit until such time as any amount due from Tenant under this Lease has been
determined and paid in full.

 

7.                                      USE.

 

7.1                               Permitted Use. The Premises shall be used and
occupied only for the purposes and activities set forth in Section 1.14 above,
and for no other uses or purposes whatsoever. If any governmental license or
permit shall be required for the proper and lawful conduct of Tenant’s business
or other activity carried on in the Premises, or if a failure to procure such a
license or permit might or would in any way affect Landlord or the Project, then
Tenant, at Tenant’s expense, shall (i) duly procure and thereafter maintain such
license or permit and submit the same for inspection by Landlord, (ii) install
and pay for any improvements, changes or alterations in the Premises, required
by any governmental authority, as a result of its proposed use of the Premises
or its manner of operation, and (iii) at all times, comply with the requirements
of each such license or permit. Tenant warrants that it has investigated whether
its proposed use of the Premises and its proposed manner of operation will
comply with, and Tenant assumes the risk that its proposed use of the Premises
and its proposed manner of operation are and will continue to be in compliance
with, all applicable land use approvals, laws and regulations, including without
limitation all zoning laws regulating the use of and enjoyment of the Premises.
Tenant agrees that under no circumstances shall Tenant be released in whole or
in part from any of its obligations under this Lease as a result of any
governmental authority’s disallowing or limiting Tenant’s proposed use of the
Premises or its manner of operation.

 

7.2                               Condition of Premises. Landlord warrants to
Tenant, but without regard either to any Tenant’s Work or to the use for which
Tenant will use the Premises, that as of the date of Delivery of the Premises,
the Premises do not violate the Declaration or any other covenants or
restrictions of record in effect on the date of this Lease. In the event it
should be determined that this warranty has been violated, then after written
notice from Tenant, Landlord shall promptly, at its sole cost and expense,
rectify any such violation. In the event Tenant does not give Landlord any such
written notice of violation within three (3) months after the Commencement Date,
the correction of such violation shall thereafter be Tenant’s obligation, to be
performed at Tenant’s sole cost and expense. The foregoing warranty shall be of
no force or effect if, prior to the date of this Lease, Tenant was the owner or
occupant of the Premises, in which event Tenant shall correct any such
violation, whenever determined to exist, at Tenant’s sole cost and expense.

 

7.3                               Compliance With Requirements. Subject to
Section 7.2 above, Tenant shall, at Tenant’s expense, promptly comply with all
applicable statutes, ordinances, rules, regulations, applicable covenants and
restrictions of record, and requirements of any fire insurance underwriters or
rating bureaus, now in effect or which may hereafter come into effect during the
Term, whether or not they reflect a change in policy from that now existing,
relating in any manner to the Premises and the occupation and use by Tenant of
the Premises. Tenant shall not use or permit the use of the Premises in any
manner that will tend to create waste or a nuisance or shall tend to disturb
other occupants of the Project. Without limiting the generality of the
foregoing, Tenant shall, at its sole cost and expense, comply promptly with all
Hazardous Materials Laws and with all environmental laws and ordinances
applicable to the conduct of Tenant’s business, including all air quality and
air pollution regulations of the regional air pollution control district. If at
any time it reasonably appears to Landlord that Tenant is not fulfilling its
obligations under this Section, Landlord may cause to be performed, at Tenant’s
sole cost, an audit or inspection of the Premises to evaluate Tenant’s
compliance herewith.

 

7.4                               Compliance With Americans With Disabilities
Act. The parties acknowledge that the design and construction of certain areas
of the Building and/or the Common Areas and Premises may not presently be in
compliance with Title III of the Americans With Disabilities Act (“ADA”) and
other applicable laws and regulations that relate to access by the disabled or
handicapped. For any non-compliance that exists prior to the Commencement Date,
Landlord shall be responsible, at its sole expense, for any necessary
alterations or improvements to the Building or the Common Areas to the extent
necessary to correct any such non-compliance.  Landlord agrees that no cost or
expense related to such alterations or improvements required as a result of
accessibility requirements imposed by the ADA (or comparable state laws) that
are in effect on the Commencement Date shall be included in Operating Expenses. 
After the Commencement Date, Tenant shall be responsible for compliance with the
ADA and related statutes with respect to any alterations or improvements to the
Premises made by Tenant and the operation of any businesses conducted from the
Premises; Landlord shall have no responsibility or liability with respect
thereto. In the event of any changes to the ADA or other applicable statutes, or
any rules or regulations promulgated pursuant thereto, that become effective
after the Commencement Date of this Lease, Tenant shall be responsible, at its
sole expense, for any necessary alterations or improvements to the Premises, and
Landlord shall be responsible for any

 

 

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necessary alterations or improvements to the Building or any Common Areas;
provided, however, that Landlord’s costs and expenses incurred in connection
with any such alterations or improvements shall be conclusively deemed to be
Operating Expenses, notwithstanding the classification of such costs and
expenses as capital items and shall be amortized in accordance with generally
accepted accounting practice; provided, however, that Landlord shall not include
in Operating Expenses amortization of any ADA cost incurred solely for
improvements to the leased premises of another tenant in the Project.

 

7.5                               Rules and Regulations. Tenant shall at all
times comply with the Declaration and with the rules and regulations for the
Project. A copy of the rules and regulations in existence on the date of this
Lease is attached hereto as Exhibit C, but Landlord reserves the right to amend
the rules and regulations at any time by giving notice of amendment to Tenant,
if Landlord determines such amendments to be to the best interests of the
Building and its tenants. Tenant shall not be bound by any such amended
rules and regulations until Tenant has received a written copy thereof. Landlord
agrees that the rules and regulations shall be enforced in a uniform and
non-discriminatory manner; provided, however, that Landlord shall not be liable
to Tenant for Landlord’s failure to enforce the rules and regulations against
any other tenants of the Project.

 

8.                                      MAINTENANCE, REPAIRS AND ALTERATIONS.

 

8.1                               Tenant’s Obligations.

 

(a)                                 Tenant shall keep and maintain in good,
sanitary order, condition, and repair (including replacement of parts and
equipment if necessary) the Premises and every part thereof and any and all
appurtenances thereto wherever located, including, without limitation, the
interior surfaces of the exterior wall, the exterior and interior portion of all
doors, door frames, door checks, windows (including window sashes, casements and
frames), plate glass, storefront, Tenant’s signs, all plumbing and sewage
facilities within the Premises (including free flow up to the main sewer line),
fixtures, heating and air conditioning, and electrical systems (whether or not
located in the Premises), sprinkler system, walls, floor and ceilings, and all
other repairs, replacements, renewals and restorations, interior and exterior,
ordinary and extraordinary, foreseen and unforeseen, and all other work
performed, and additions, alterations, and improvements installed by or on
behalf of Tenant. Any glass broken shall promptly be replaced by Tenant with
glass of the same quality, size and kind. If Tenant shall fail to replace same
within seventy-two (72) hours after such glass is broken, Landlord shall have
the right, but shall not be obligated, to replace such glass, in which event
Tenant shall, promptly upon demand therefor by Landlord, reimburse Landlord for
expenses incurred by Landlord in connection therewith.

 

(b)                                 Landlord elects to maintain the HVAC system
through a maintenance contract which will be procured by Landlord. Tenant shall
reimburse Landlord, upon demand and as Additional Rent, for Landlord’s costs
thereof. The parties acknowledge that throughout the initial Term and any
Extension Term, Tenant shall be responsible for payment to Landlord upon demand
and as Additional Rent, of any part or component that may need repair or
replacement for the HVAC System(s) which serve only the Premises.

 

(c)                                  Tenant shall, at Tenant’s sole cost and
expense, comply with all laws, rules, orders, ordinances, directions,
regulations and legal requirements of federal, state, county or municipal
governmental authorities now or hereafter affecting or applying to the Premises,
including, without limitation, the Americans With Disabilities Act.

 

8.2                               Condition on Termination. On the last day of
the Term, or on any sooner termination, Tenant shall surrender the Premises to
Landlord in the same condition as received, ordinary wear and tear excepted,
clean and free of debris. Any damage or deterioration of the Premises shall not
be deemed ordinary wear and tear if the same could have been prevented by good
maintenance practices. Tenant shall repair any damage to the Premises occasioned
by the installation or removal of Tenant’s trade fixtures, alterations,
furnishings and equipment, and shall leave all air lines, power panels,
electrical distribution systems, lighting fixtures, HVAC systems, plumbing and
fencing in good operating condition.

 

8.3                               Landlord’s Rights. If Tenant fails to perform
Tenant’s obligations under Section 8.1 or 8.2 or under any other provision of
this Lease, Landlord may enter the Premises after three (3) days’ prior written
notice to Tenant (except in the case of emergency, in which case no notice shall
be required) and perform such obligations on Tenant’s behalf and put the
Premises in good order, condition and repair, and the cost thereof together with
interest thereon from the date incurred at the maximum rate then allowed by law
shall be due and payable as Additional Rent to Landlord together with Tenant’s
next Base Rent installment.

 

8.4                               Landlord’s Obligations.  Except for any
Landlord’s Work set forth in Exhibit B, if any, and Sections 13 and 14 relating
to damage and condemnation, the parties intend that Landlord shall have no
obligation whatsoever to repair and maintain the Premises or the equipment
therein. Notwithstanding the foregoing, Landlord shall keep in good condition
and repair the foundations, exterior walls, structural condition of interior
bearing walls, and roof of the Building, as well as the Common Areas, and all
costs and expenses incurred by Landlord in connection therewith shall be
included within Operating Expenses. Landlord shall have no obligation to make
repairs under this Section until a reasonable time after receipt of written
notice from Tenant of the need for such repairs.

 

8.5                               Waiver. Tenant expressly waives all rights to
make repairs at the expense of Landlord or deduct any amounts from rent as
provided in any statute or law in effect during the Term of this Lease,
including its rights under the provisions of §1941 and §1942 of the CIVIL CODE
of the State of California.

 

 

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8.6                               Alterations and Additions.

 

(a)                                 Tenant shall not, without Landlord’s prior
written consent which shall not be unreasonably withheld, make any alterations,
improvements, additions, or Utility Installations in, to or about the Premises.
Tenant shall make no change or alteration to the exterior of the Building
without Landlord’s prior written consent, which consent may be withheld for any
reason in Landlord’s sole discretion and which may at Landlord’s discretion be
conditioned upon Tenant’s providing Landlord, at Tenant’s sole cost and expense,
a lien and completion bond in an amount equal to one and one-half (1½) times the
cost of the work. As used in this Section, the term “Utility Installations”
shall mean carpeting, window coverings, air lines, power panels, electrical
distribution systems, lighting fixtures, space heaters, air conditioning,
plumbing and fencing. Landlord may require that Tenant remove at the expiration
of the Term any or all alterations, improvements, additions or Utility
Installations which were not part of the original Tenant Improvements, and
restore the Premises and the Common Areas to their prior condition. Should
Tenant make any alterations, improvements, additions or Utility Installations
without the prior approval of Landlord, Landlord may, at any time during the
Term of this lease, require that Tenant remove any or all of the same.

 

(b)                                 Except for improvements to be accomplished
by Landlord at its expense, if any, Tenant shall pay, when due, all claims for
labor or materials furnished or alleged to have been furnished to or for Tenant
at or for use in the Premises, which claims are or may be secured by any
mechanic’s or materialmen’s lien against the Building or any interest therein.
Tenant shall give Landlord not less than ten (10) days’ notice prior to the
commencement of any work in the Premises, and Landlord shall have the right to
post notices of non-responsibility in or on the Premises or the Building as
provided by law. If Tenant shall, in good faith, contest the validity of any
such lien, claim or demand, then Tenant shall, at its sole expense, defend
itself and Landlord against the same and shall pay and satisfy any adverse
judgment that may be rendered thereon before the enforcement thereof against the
Landlord or the Building, upon the condition that if Landlord shall require,
Tenant shall furnish to Landlord a surety bond satisfactory to Landlord in an
amount equal to one and one-half (1½) times the amount of such contested lien,
claim or demand, indemnifying Landlord against liability for such claim or lien
and for all costs of defense thereof, of obtaining the release of any lien, and
of making the Building free from the effect of such lien or claim. In addition,
Landlord may require Tenant to pay Landlord’s attorneys’ fees and costs in
participating in such action if Landlord shall decide it is in Landlord’s best
interest to do so. In any event, Landlord may pay the lien claim prior to the
enforcement thereof, in which event Tenant shall reimburse Landlord in full,
including attorneys’ fees for any such expense, as Additional Rent, with the
next due rents.

 

(c)                                  All alterations, improvements, additions
and Utility Installations (exclusive of all trade fixtures of Tenant) which may
be made on the Premises, shall be the property of Landlord and shall remain upon
and be surrendered with the Premises at the expiration of the Lease term, unless
Landlord requires their removal. Notwithstanding the provisions of this
Section 8.6, Tenant’s machinery and equipment (other than Utility
Installations), other than that which is affixed to the Premises so that it
cannot be removed without material damage to the Premises or the Building, shall
remain the property of Tenant and may be removed by Tenant subject to the
provisions of Section 8.2.

 

9.                                      TAXES.

 

9.1                               Real Property Taxes. Landlord shall pay all
Real Property Taxes with respect to the Building and the Project, which shall be
included in Operating Expenses. If the Premises are separately assessed, or
included within an assessor’s parcel that does not encompass the entire Project,
Landlord shall adjust Tenant’s Share of Operating Expenses as it relates to Real
Property Taxes, to reflect the proportion between the area of the Premises and
the total area of the assessor’s parcel encompassing the Premises.

 

9.2                               Personal Property Taxes. Tenant shall pay
prior to delinquency all taxes assessed against and levied upon trade fixtures,
furnishings, equipment and all other personal property of Tenant contained in
the Premises or elsewhere. When possible, Tenant shall cause said trade
fixtures, furnishings, equipment and all other personal property to be assessed
and billed separately from the real property of Landlord. If any of Tenant’s
said personal property shall be assessed with Landlord’s real property, Tenant
shall pay to Landlord the taxes attributable to Tenant within ten (10) days
after a receipt of a written statement setting forth the taxes applicable to
Tenant’s property.

 

10.                               UTILITIES. Tenant shall be solely responsible
for, shall arrange for, and shall promptly pay all charges, including meter and
connection fees, for water, gas, electricity, sewer, and any other utility used
upon or furnished to the Premises. In the event any such utility is not
separately metered, Tenant shall pay its share of the cost thereof, as equitably
determined by Landlord, as Additional Rent, as part of Operating Expenses. In
this regard, Tenant acknowledges and agrees that if Tenant’s use of the Premises
results in a disproportionately heavy use of water or other commonly metered
utilities, then Landlord, at Landlord’s discretion, and in a reasonable and
equitable manner, may adjust Tenant’s Share of Operating Expenses to reflect
such disproportionately heavy use. Landlord does not warrant that any services
Landlord supplies will not be interrupted, e.g., because of accidents, repairs,
alterations, improvements or any reason beyond the reasonable control of
Landlord, and no such interruption shall: (i) be considered an eviction or
disturbance of Tenant’s use and possession of the Premises; (ii) entitle Tenant
to terminate this Lease; (iii) make Landlord liable to Tenant for damages;
(iv) abate Base Rent, Additional Rent or any other sums due hereunder; or
(v) relieve Tenant from performing its obligations hereunder.

 

11.                               INSURANCE.

 

11.1                        Liability Insurance—Tenant. Prior to the earlier of
the Commencement Date or Tenant’s occupancy of the Premises, Tenant, at its own
expense, shall obtain from and shall thereafter keep in force with companies

 

 

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reasonably acceptable to Landlord, commercial general liability insurance
applying to the use and occupancy of the Premises, or any areas adjacent
thereto, and the business operated by Tenant or any other occupant on the
Premises. Such insurance shall:

 

(a)                                 be with a good and solvent insurance company
authorized to do business in the State of California, having a minimum rating of
A:X in Best’s Insurance Guide;

 

(b)                                 include broad form contractual liability
coverage specifically insuring all of Tenant’s indemnity obligations under this
Lease;

 

(c)                                  have a minimum combined single limit of at
least $1,000,000 for any one occurrence and $2,000,000 aggregate;

 

(d)                                 be written to apply to all bodily injury,
property damage, personal injury and other covered loss, however occasioned,
occurring during the policy term, and afford coverage for all claims based on
acts, omissions, injury and damage, which claims occurred or arose (or the onset
of which occurred or arose) in whole or in part during the policy period;

 

(e)                                  provide for severability of interests or a
cross-liability provision or endorsement;

 

(f)                                   name Landlord as additional insured and
provide that coverage is primary and non-contributing with any insurance carried
by Landlord;

 

(g)                                  be endorsed to delete any liquor liability
exclusion if Tenant will sell liquor on the Premises;

 

(h)                                 include an endorsement stating that the
policy limits apply “per location” if Tenant has more than one location;

 

(i)                                     be endorsed to provide that it shall not
be canceled without thirty (30) days prior written notice to Landlord.

 

(j)                                    In addition, Tenant shall maintain
automobile liability insurance with limits of not less than $1,000,000 per
occurrence for any owned, non-owned or hired automobile exposures of the Tenant,
if applicable.

 

Such insurance may be furnished by Tenant under a blanket policy, provided that
such blanket policy references the Premises and guarantees that a minimum limit
equal to the insurance amounts required by this Lease will be available
specifically for the Premises. No policy of insurance under this Section 11.1
shall provide for a deductible in excess of Ten Thousand Dollars ($10,000.00),
which deductible amount shall be and remain the obligation of the Tenant.  The
policy limits herein specified shall be increased from time to time upon written
demand from Landlord, if circumstances reasonably justify such increases. Tenant
shall furnish Landlord with a certificate of such insurance prior to the first
to occur of the Commencement Date or Tenant’s Occupancy of the Premises, and,
whenever requested, shall satisfy Landlord that such policy is in full force and
effect.  In the event Tenant fails to provide or keep in force any of the
insurance required pursuant to this Section 11, then Landlord, in its discretion
and without waiving any of its rights under this Lease, may provide such
insurance, in which event the cost thereof shall be payable by Tenant to
Landlord as Additional Rent on the first day of the calendar month immediately
following demand therefor from Landlord.

 

11.2                        Liability Insurance—Landlord. Landlord shall obtain
and keep in force during the Term commercial general liability insurance,
insuring against liability for injury to or death of persons and loss of or
damage to property occurring in or on the Common Areas. Landlord’s liability
insurance shall be in amount of not less than $2,000,000 combined single limit
per occurrence for bodily and personal injury and property damage.

 

11.3                        Property Insurance—Landlord.

 

(a)                                 Landlord shall maintain in full force and
effect at all times a standard policy or policies insuring against “all risk”
perils (also known as “special perils”) covering the Building and other
improvements owned by Landlord in the Project in an amount at least sufficient
to avoid the effects of coinsurance provisions of the policy or policies (i.e.,
not less than ninety percent [90%] of the actual replacement cost of the
Building and other improvements, without deduction for depreciation and
excluding foundations, excavation costs and the cost of underground flues, pipes
and drains, if such costs are properly excludable under coinsurance
requirements). Such insurance shall include (i) a standard form of lender’s loss
payable endorsement, issued to the holder or holders of a mortgage or deed of
trust secured in whole or in part by the Building and the other property on
which the insured improvements are located; (ii) at Landlord’s sole option,
coverage for flood or earthquake or both; and (iii) rental income insurance
equal to Base Rent and Operating Expenses for up to one year. In addition,
Landlord shall obtain and keep in force during the Term such other insurance as
Landlord deems advisable.

 

(b)                                 Tenant shall pay for any increase in the
property insurance of the Building or such other building or buildings if the
increase is caused by Tenant’s acts, omissions, use or occupancy of the
Premises. Tenant shall not do or permit to be done anything which shall
invalidate the insurance policies referred to in this Section 11.3. If Tenant
does or permits to be done anything which shall increase the cost of the
insurance policies referred to in this Section 11.3, then Tenant shall within
thirty (30) days after demand therefor by Landlord reimburse Landlord for any
additional premiums attributable to any act or omission or operation of Tenant
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insurance. Landlord shall deliver to Tenant a written statement setting forth
the amount of any such insurance cost increase and showing in reasonable detail
the manner in which it has been computed.

 

11.4                        Property Insurance—Tenant. Tenant shall pay for and
shall maintain in full force and effect at all times, a standard policy insuring
against “all risk” perils (also known as “special perils”), covering all
exterior glass, whether plate or otherwise, and all interior glass, stock in
trade, merchandise, trade fixtures, equipment and other personal property
located in the Premises and used by Tenant in connection with its business.
Tenant shall furnish Landlord with a duly executed certificate evidencing such
coverage at the commencement of the Term and not less than thirty (30) days
before the expiration of the term of such coverage.

 

11.5                        Waiver of Subrogation. Each party hereby waives any
and all rights of recovery against the other party hereto and its officers,
agents, employees, or representatives, and Tenant hereby waives any rights it
may have against any trust deed holder, for the loss, damage, or injury to
property arising from any event which is covered by insurance against fire,
vandalism, malicious mischief, and extended coverage, and such other perils as
are from time to time included in the “all risk” insurance policy(ies) carried
by Landlord and Tenant pursuant to this Section 11, provided that such waiver
shall apply only to the extent of any recovery by the injured party under such
insurance. In the event the other party is a self-insurer (as may be permitted
herein), such waiver shall be to the limit of that insurance required to be
carried hereunder. Each party hereto, on behalf of its respective insurance
companies hereby waives, to the extent of any recovery under any such insurance
policies, any right of subrogation that one may have against the other, and
Tenant, on behalf of its insurance companies, hereby waives any right of
subrogation which such insurer may have against any trust deed holder. Each
party hereto shall cause its respective insurance policies to contain
endorsements evidencing such waivers of subrogation. The foregoing releases and
waivers of subrogation shall be operative only so long as same shall neither
preclude the obtaining of insurance nor diminish, reduce or impair the liability
of any insurer. In the event that a waiver of subrogation cannot be obtained,
the other party is relieved of the obligation to obtain a waiver of subrogation
rights with respect to the particular insurance involved.

 

12.                               WAIVER AND INDEMNITY.

 

12.1                        Waiver and Exemption of Landlord From Liability.
Tenant hereby agrees that except for damage or injury resulting from Landlord’s
sole active negligence or willful misconduct, Landlord shall not be liable for
injury to Tenant’s business or any loss of income, including damage to the
goods, wares, merchandise or other property of Tenant or of Tenant’s employees,
invitees, customers, or any other person in or about the Premises, or the Common
Areas. Landlord shall not be liable, except when the damage or injury is a
result of Landlord’s sole active negligence or willful misconduct, for injury to
the person of Tenant, Tenant’s employees, agents or contractors, whether such
damage or injury is caused by or results from fire, steam, electricity, gas,
water or rain, or from the breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures or from any other cause, whether said damage or injury results from
conditions arising upon the Premises, or the Common Areas or from other sources
or places and regardless of whether the cause of such damage or injury or the
means of repairing the same is inaccessible to Tenant. Landlord shall not be
liable for any damages arising from any act or neglect of any other tenant,
occupant or use of the Project or from the failure of Landlord to enforce the
provisions of any other lease in the Project. Tenant, as a material part of the
consideration to Landlord, hereby assumes all risk of damage to property of
Tenant or injury to persons, in, upon or about the Premises and elsewhere
arising from the above or any other causes, and Tenant hereby waives all claims
in respect thereof against Landlord.

 

12.2                        Tenant’s Indemnity. Tenant shall indemnify, protect,
defend, and hold Landlord and Landlord’s officers, directors, employees and
agents (collectively, “representatives”) harmless from and against any and all
claims, actions, demands, proceedings, losses, damages, costs of any kind or
character (including reasonable attorneys’ fees and court costs), expenses,
liabilities, judgments, fines, penalties, or interest (collectively, “Losses”),
arising from or out of Tenant’s use of the Premises, or from the conduct of
Tenant’s business or from any activity, work or things done, permitted or
suffered by Tenant in or about the Premises or elsewhere. Tenant shall also
indemnify, protect, defend, and hold Landlord and Landlord’s representatives
harmless from and against any and all Losses arising from any breach or default
in the performance of any obligation on Tenant’s part to be performed under the
terms of this Lease, or arising from any act or omission of Tenant, or any of
Tenant’s agents, contractors, or employees, and from and against all costs,
attorneys’ fees, expenses and liabilities reasonably incurred in the defense of
any such claim or any action or proceeding brought thereon; and in case any
action or proceeding be brought against Landlord or any of Landlord’s
representatives by reason of any such claim, Tenant upon notice from Landlord
shall defend the same at Tenant’s expense by counsel reasonably satisfactory to
Landlord and Landlord shall cooperate with Tenant in such defense. Neither
termination of this Lease nor completion of the acts to be performed under this
Lease shall release Tenant from its obligations to defend or indemnify Landlord
as required hereunder so long as the event upon which any such Loss is
predicated shall have occurred prior to the effective date of any such
termination or completion.

 

12.3                        Landlord’s Indemnity. Landlord shall defend,
indemnify and hold Tenant and Tenant’s representatives harmless from and against
any and all Losses arising in any way from (i) the sole active negligence or
willful misconduct of Landlord; or (ii) any breach or default in the performance
of any obligation on Landlord’s part to be performed under this Lease. Landlord
shall defend any such action or proceeding brought against Tenant or its
representatives at Landlord’s expense with counsel reasonably satisfactory to
Tenant. Neither termination of this Lease nor completion of the acts to be
performed under this Lease shall release Landlord from its obligations to defend
or indemnify Tenant as required hereunder so long as the event upon which any
such Loss is predicated shall have occurred prior to the effective date of any
such termination or completion.

 

 

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13.                               DAMAGE AND DESTRUCTION.

 

13.1                        Definitions.

 

(a)                                 “Partial Damage” shall mean if the Premises
are damaged or destroyed to the extent that the cost of repair is less than
fifty percent (50%) of the then replacement cost of the Premises.

 

(b)                                 “Total Destruction” shall mean if the
Premises are damaged or destroyed to the extent that the cost of repair is fifty
percent (50%) or more of the then replacement cost of the Premises.

 

(c)                                  “Insured Loss” shall mean damage or
destruction which was covered by an event required to be covered by the
insurance described in Section 11.3. The fact that an Insured Loss has a
deductible amount shall not make the loss an uninsured loss.

 

(d)                                 “Replacement Cost” shall mean the amount of
money necessary to be spent in order to repair or rebuild the damaged area to
the condition that existed immediately prior to the damage occurring, excluding
all improvements made by tenants.

 

13.2                        Partial Damage.

 

(a)                                 Insured Loss: Subject to the provisions of
Sections 13.4 and 13.5, if at any time during the Term there is damage which is
an Insured Loss and which falls into the classification of Partial Damage, then
Landlord shall, at Landlord’s expense, repair such damage to the Premises, but
not Tenant’s fixtures or equipment, as soon as reasonably possible and this
Lease shall continue in full force and effect. In no event, however, shall
Landlord be obligated to spend for such repairs more than the amount of
available insurance proceeds, plus the amount of any deductible elected by
Landlord.

 

(b)                                 Uninsured Loss: Subject to the provisions of
Sections 13.4 and 13.5, if at any time during the Term there is damage which is
not an Insured Loss and which falls within the classification of Partial Damage,
unless caused by a negligent or willful act of Tenant (in which event Tenant
shall make the repairs at Tenant’s expense), which damage causes substantial
interference with the normal conduct of Tenant’s business, Landlord may at
Landlord’s option either (i) repair such damage as soon as reasonably possible
at Landlord’s expense, in which event this Lease shall continue in full force
and effect, or (ii) give written notice to Tenant within thirty (30) days after
the date of the occurrence of such damage of Landlord’s intention to cancel and
terminate this Lease as of the date of the occurrence of such damage. In the
event Landlord elects to give such notice of Landlord’s intention to cancel and
terminate this Lease, Tenant shall have the right within ten (10) days after the
receipt of such notice to give written notice to Landlord of Tenant’s intention
to repair such damage at Tenant’s expense, without reimbursement from Landlord,
in which event this Lease shall continue in full force and effect, and Tenant
shall proceed to make such repairs as soon as reasonably possible. If Tenant
does not give such notice within such ten (10)-day period this Lease shall be
canceled and terminated as of the date of the occurrence of such damage.

 

13.3                        Total Destruction. Subject to the provisions of
Sections 13.4 and 13.5, if at any time during the Term there is damage, whether
or not it is an Insured Loss, which falls into the classification of Total
Destruction, then Landlord may at Landlord’s option either (i) repair such
damage or destruction, but not Tenant’s fixtures, equipment or tenant
improvements (except for tenant improvements owned by Landlord), as soon as
reasonably possible at Landlord’s expense, and this Lease shall continue in full
force and effect, or (ii) give written notice to Tenant within thirty (30) days
after the date of occurrence of such damage of Landlord’s intention to cancel
and terminate this Lease, in which case this Lease shall be canceled and
terminated as of the date of the occurrence of such damage.

 

13.4                        Damage Near End of Term. Subject to the following
sentence, if at any time during the last year of the Term of this Lease as
extended from time to time there is substantial damage, whether or not an
Insured Loss, which falls within the classification of Partial Damage, Landlord
may at its option cancel and terminate this Lease as of the date of occurrence
of such damage by giving written notice to Tenant, within thirty (30) days after
the date of occurrence of such damage, of Landlord’s election to terminate.
Notwithstanding the foregoing, in the event that Tenant has an option to extend
or renew this Lease, and the time within which said option may be exercised has
not yet expired, Tenant shall exercise such option, if it is to be exercised at
all, no later than thirty (30) days after the occurrence of an Insured Loss
falling within the classification of Partial Damage during the last year of the
Term. If Tenant duly exercises such option during the thirty (30)-day period,
Landlord shall, at Landlord’s expense, repair such damage, but not Tenant’s
fixtures, equipment or tenant improvements, as soon as reasonably possible and
this Lease shall continue in full force and effect; provided, however, that in
no event shall Landlord be obligated to spend for such repairs more than the
amount of available insurance proceeds, plus the amount of any deductible
elected by Landlord. If Tenant fails to exercise such option during the thirty
(30)-day period, then Landlord may at Landlord’s option terminate and cancel
this Lease as of the date of the occurrence of such damage.

 

13.5                        Abatement of Rent. In the event Landlord repairs or
restores the Premises pursuant to the provisions of this Section 13, the rent
payable hereunder for the period during which such damage, repair or restoration
continues shall be abated in proportion to the degree to which Tenant’s normal
and customary use of the Premises is impaired. Except for abatement of rent, if
any, Tenant shall have no claim against Landlord for any damage suffered by
reason of any such damage, destruction, repair or restoration.

 

13.6                        Waiver. Landlord and Tenant waive the provisions of
any statutes which relate to termination of leases when leased property is
destroyed and agree that such event shall be governed by the terms of this
Lease.

 

 

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14.                               CONDEMNATION.

 

14.1                        Total Condemnation of Premises. If the whole of the
Premises shall be taken by any public authority under condemnation, the power of
eminent domain, or by a sale in lieu thereof under threat of condemnation
(collectively “taking” or “taken” as the case may be), then the Term shall cease
as of the day of possession pursuant to such taking, and the Rent shall be paid
up to that day. Landlord shall refund such rent as may have been paid in advance
for the period subsequent to the date of such possession.

 

 

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14.2                        Partial Condemnation.

 

(a)                                 If less than the whole but more than twenty
percent (20%) of the Premises shall be taken, Tenant shall have the right to
terminate this Lease or, subject to Landlord’s right of termination as set forth
in Section 14.2(b), to continue in possession of the remainder of the Premises
and shall notify Landlord in writing within ten (10) days after notice of such
taking of Tenant’s intention. If twenty percent (20%) or less of the Premises
shall be so taken, the Term shall cease with respect to the part so taken as of
the day possession shall be taken, and Tenant shall pay rent up to that day for
the part so taken.

 

(b)                                 If more than twenty percent (20%) of the
Building or more than twenty percent (20%) of the Premises shall be taken,
Landlord may, by notice to Tenant delivered on or before the date surrendering
possession, terminate this Lease.

 

(c)                                  In the event this Lease is not so
terminated, Tenant shall remain in the portion of the Premises not so taken, and
all of the terms, provisions, covenants, conditions, and agreements contained
herein shall continue in effect with respect to the portion not so taken, except
that Base Rent shall be reduced in proportion to the amount of the Premises
taken, and Landlord shall, to the extent of severance damages received by
Landlord in connection with such condemnation, repair any damage to the Premises
caused by such condemnation except to the extent that Tenant has been reimbursed
therefor by the condemning authority. Tenant shall pay any amount in excess of
such severance damages required to complete such repair.

 

14.3                        Landlord’s and Tenant’s Damages.  Any award for the
taking of all or any part of the Premises under the power of eminent domain or
any payment made under threat of the exercise of such power shall be the
property of Landlord, whether such award shall be made as compensation for
diminution in value of the leasehold or for the taking of the fee, or as
severance damages; provided, however, that Tenant shall be entitled to any award
for loss of or damage to Tenant’s trade fixtures, moving costs and removable
personal property to the extent separately awarded. Without limiting the
foregoing, provided the same are the subject of a separate award to Tenant,
Tenant shall have the right to any award which compensates Tenant for (i) any of
Tenant’s own personal property, tenant fixtures or tenant improvements so taken
or acquired, (ii) Tenant’s status as a “displaced person” pursuant to California
GOVERNMENT CODE §7262, and (iii) any loss of goodwill as the owner of a business
pursuant to California CODE OF CIVIL PROCEDURE §1263.510. Tenant shall have the
right to negotiate its award separately with the condemning authority; provided,
however, that Tenant’s right to pursue its claim shall be subordinate to the
right of Landlord’s first lien mortgagee to the extent required to discharge the
first lien mortgage after application of Landlord’s award.

 

14.4                        Waiver. This Article 14 is in lieu of, and Tenant
hereby expressly waives any rights it may have under, any statute governing the
condemnation of the Premises, including §1932 and §1933 of the California CIVIL
CODE and §1265.130 of the California CODE OF CIVIL PROCEDURE.

 

15.                               ASSIGNMENT AND SUBLETTING.

 

15.1                        Landlord’s Consent Required. Tenant shall not
voluntarily or by operation of law assign, transfer, mortgage, sublet, or
otherwise transfer or encumber all or any part of Tenant’s interest in the Lease
or in the Premises, without Landlord’s prior written consent, which shall not be
unreasonably withheld. Any attempted assignment, transfer, mortgage, encumbrance
or sublease without such consent shall be void, and shall constitute a breach of
this Lease without the need for notice to Tenant. The sale or transfer of more
than twenty-five percent (25%) of the ownership of Tenant (unless Tenant is a
publicly traded corporation) shall be deemed an assignment for purposes of this
provision.

 

15.2                        Procedure. In the event Tenant wishes to sublet or
assign the Premises, or any portion thereof, Tenant shall submit in writing to
Landlord (i) the name of the proposed sublessee or assignee, (ii) a statement
describing the nature of the business to be carried on in the Premises, (iii) a
copy of the proposed sublease or assignment, including all terms and conditions
thereof, (iv) Landlord’s lease application form, completed by the proposed
assignee or sublessee, (v) financial statements for the proposed assignee or
sublessee, which shall include, at a minimum, prior year and year to date
(current to within six months) balance sheets, income and expense statements and
sources and uses of cash statements, and (vi) such other financial information
regarding such sublessee or assignee as Landlord shall reasonably request.
Tenant shall also submit an application fee of Five Hundred Dollars ($500.00)
toward handling administrative costs in reviewing and processing the requested
transfer.

 

15.3                        Provisions Applicable to Both Assignment and
Subletting.

 

(a)                                 No sublessee or assignee shall further
assign or sublet all or any part of the Premises without Landlord’s prior
written consent.

 

(b)                                 The consent by Landlord to any assignment or
sublease shall not constitute a consent to any subsequent assignment or sublease
by Tenant or to any assignment or sublease by the sublessee. However, Landlord
may consent to subsequent subleases and assignments of the sublease or any
amendments or modifications thereto, provided Landlord notifies Tenant or anyone
else liable on the Lease or sublease and Landlord shall obtain their consent
thereto.

 

(c)                                  If Tenant subleases the Premises or any
part of it or assigns any of its rights under this Lease in and to the Premises,
all rents paid by the sublessee or assignee which are in excess of the amount of
Base

 

 

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Rent and Additional Rent then payable by Tenant under this Lease shall be the
property of and shall be paid to Landlord. Any attempt on the part of Tenant to
enter into a sublease or assignment which does not provide for the payment of
such excess rent to Landlord shall be deemed to be a material breach of this
Lease. The parties acknowledge that the provisions of this Section are a
material inducement for Landlord’s execution of this Lease and that Tenant has
represented and warranted that its sole purpose for entering into this Lease is
to obtain possession of the Premises and not to generate revenues from the
leasing or subleasing of any portion of the Premises.

 

(d)                                 In the event of any default under this
Lease, Landlord may proceed directly against Tenant, any guarantors or any one
else responsible for the performance of this Lease, including the sublessee,
without first exhausting Landlord’s remedies against any other person or entity
responsible therefor to Landlord, or any security held by Landlord or Tenant.

 

15.4                        Provisions Applicable to Subletting. Regardless of
Landlord’s consent, the following terms and conditions shall apply to any
sublease by Tenant of all or any part of the Premises and shall be included in
subleases.

 

(a)                                 Tenant hereby assigns and transfers to
Landlord all of Tenant’s interest in all rentals and income arising from any
sublease made by Tenant, and Landlord may collect such rent and income and apply
the same toward Tenant’s obligations under this Lease; provided, however, that
until a default shall occur in the performance of Tenant’s obligations under
this Lease, Tenant may receive, collect and enjoy the rents accruing under such
sublease. Landlord shall not, by reason of any assignment of such sublease to
Landlord or by reason of the collection of the rents from a sublessee, be deemed
liable to the sublessee for any failure of Tenant to perform and comply with any
of Tenant’s obligations to such sublessee under such sublease. Tenant hereby
irrevocably authorizes and directs any such sublessee, upon receipt of a written
notice from Landlord stating that a default exists in the performance of
Tenant’s obligations under this Lease, to pay to Landlord the rents due and to
become due under the sublease. Tenant agrees that such sublessee shall have the
right to rely upon any such statement and request from Landlord, and that such
sublessee shall pay such rents to Landlord without any obligation or right to
inquire as to whether such default exists and notwithstanding any notice from or
claim from Tenant to the contrary. Tenant shall have no right or claim against
such sublessee or Landlord for any such rents so paid by said sublessee to
Landlord.

 

(b)                                 No sublease entered into by Tenant shall be
effective unless and until it has been approved in writing by Landlord. By
entering into a sublease, any sublessee shall be deemed, for the benefit of
Landlord, to have assumed and agreed to comply with all of Tenant’s obligation
hereunder, except to the extent such obligations are contrary to or inconsistent
with provisions contained in a sublease to which Landlord has expressly
consented in writing.

 

(c)                                  Landlord’s written consent to any sublease
of the Premises by Tenant shall not constitute an acknowledgment that no default
then exists under this Lease of the obligations to be performed by Tenant nor
shall such consent be deemed a waiver of any then existing default, except as
may be otherwise stated by Landlord at the time in writing.

 

(d)                                 With respect to any sublease to which
Landlord has consented, Landlord agrees to deliver a copy of any notice of
default by Tenant to the sublessee. Such sublessee shall have the right to cure
a default of Tenant within ten (10) days after service of said notice of default
upon such sublessee, and the sublessee shall have a right of reimbursement and
offset from and against Tenant for any such defaults cured by the sublessee.

 

(e)                                  If Tenant’s obligations under this Lease
have been guaranteed by third parties, then a sublease, and Landlord’s consent
thereto, shall not be effective unless said guarantors give their written
consent to such sublease and the terms thereof.

 

(f)                                   The consent by Landlord to any sublease
shall not release Tenant from its obligations or alter the primary liability of
Tenant to pay the rent and perform and comply with all of the obligations of
Tenant to be performed under this Lease.

 

(g)                                  In the event Tenant shall default in the
performance of its obligations under this Lease, Landlord, at its option and
without any obligation to do so, may require any sublessee to attorn to
Landlord, in which event Landlord shall undertake the obligations of Tenant
under such sublease from the time of the exercise of said option to the
termination of such sublease; provided, however, Landlord shall not be liable
for any prepaid rents or security deposit paid by such sublessee to Tenant or
for any other prior defaults of Tenant under such sublease.

 

(h)                                 Each and every consent required of Tenant
under a sublease shall also require the consent of Landlord.

 

15.5                        Attorneys’ Fees. In the event Tenant shall assign or
sublet the Premises or request the consent of Landlord to any assignment or
sublease or if Tenant shall request the consent of Landlord for any act Tenant
proposes to do (for which Landlord actually incurs attorneys’ fees), then Tenant
shall pay Landlord’s reasonable attorneys’ fees incurred in connection
therewith, such attorneys’ fees not to exceed $500.00 for each such request.

 

15.6                        Continuing Liability of Tenant. No transfer
permitted by this Section shall release Tenant or change Tenant’s primary
liability to pay the rent and to perform all other obligations of Tenant under
this Lease. Landlord’s acceptance of rent from any other person is not a waiver
of any provision of this Section. Consent to one transfer is not a consent to
any subsequent transfer. If Tenant’s transferee defaults under this Lease,
Landlord may proceed directly against Tenant without pursuing remedies against
the transferee. Landlord may consent to subsequent assignments or modifications
of this Lease by Tenant’s transferee, without notifying Tenant or obtaining its
consent. Such action shall not relieve Tenant of its liability under this Lease.

 

 

Initials:

    PD/VV

 

    KH/MN

 

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15.7                        Effect of Termination. In the event of Tenant’s
surrender of this Lease or the termination of this Lease in any other manner,
Landlord may, at its option, either terminate any or all subtenancies or succeed
to the interest of Tenant as sublessor thereunder. No merger shall result from
Tenant’s sublease of the Premises under this Section, Tenant’s surrender of this
Lease or the termination of this Lease in any other manner.

 

16.                               DEFAULT BY TENANT; REMEDIES.

 

16.1                        Events of Default. The occurrence of any of the
following (each, a “Default”) shall constitute a material breach or default by
Tenant of its obligations hereunder:

 

(a)                                 Failure by Tenant to pay rent when due if
the failure continues for three (3) days after notice has been given to Tenant
that the rent is delinquent.

 

(b)                                 Failure by Tenant to perform any provision
of this Lease required of it other than clause (a) above if the failure is not
cured within ten (10) business days after notice has been given to Tenant. If,
however, the failure cannot reasonably be cured within the cure period, Tenant
shall not be in default of this Lease if Tenant commences to cure the failure
within the cure period and diligently and in good faith continues to cure the
failure.

 

(c)                                  To the extent permitted by law, a general
assignment by Tenant or any Guarantor of the Lease for the benefit of creditors,
or the filing by or against Tenant or any Guarantor of any proceeding under any
insolvency or bankruptcy law, unless in the case of a proceeding filed against
Tenant or any Guarantor the same is dismissed within sixty (60) days, or the
appointment of a trustee or receiver to take possession of all or substantially
all of the assets of Tenant or any Guarantor, unless possession is restored to
Tenant or such Guarantor within thirty (30) days, or any execution or other
judicially authorized seizure of all or substantially all of Tenant’s assets
located upon the Premises or of Tenant’s interest in this Lease, unless such
seizure is discharged within thirty (30) days (each, an “Insolvency Event”).

 

16.2                        Default Notices. Notices given under this
Section will specify the alleged failure or breach and the applicable Lease
provisions; and shall demand that Tenant perform the provisions of this Lease or
pay the rent that is delinquent, as the case may be, within the applicable
period of time or quit the Premises. No such notice shall be deemed a forfeiture
or a termination of this Lease unless Landlord so elects in the notice. The
purpose of the notice requirements in this Section is to extend the notice
requirements of the unlawful detainer statutes. Such notice shall, however, be
in lieu of and not in addition to any notice required under the unlawful
detainer statutes.

 

16.3                        Landlord’s Remedies. Landlord shall have the below
listed remedies if Tenant commits a default. These remedies are not exclusive;
they are cumulative to any remedies now or later allowed by law.

 

(a)                                 Landlord may terminate Tenant’s right to
possession of the Premises at any time. No act by Landlord other than giving
notice of termination to Tenant shall terminate this Lease. Acts of maintenance,
efforts to relet the Premises or the appointment of a receiver on Landlord’s
initiative to protect Landlord’s interest under this Lease shall not constitute
a termination of Tenant’s right to possession. On termination, Landlord shall
have the right to recover from Tenant:

 

(i)                                     The worth at the time of the award of
the unpaid rent that had been earned at the time of termination of this Lease;

 

(ii)                                  The worth at the time of the award of the
amount by which the unpaid rent that would have been earned after the date of
termination of this Lease until the time of award exceeds the amount of the loss
of rent that Tenant proves could have been reasonably avoided;

 

(iii)                               The worth at the time of the award of the
amount by which unpaid rent for the balance of the Term after the time of award
exceeds the amount of the loss of rent that Tenant proves could have been
reasonably avoided; and

 

(iv)                              Any other amount, including reasonable
attorneys’ fees and court costs, necessary to compensate Landlord for all
detriment proximately caused by Tenant’s default or which in the ordinary course
of things would be likely to result therefrom.

 

The phrase “worth at the time of the award” as used in clauses (i) and
(ii) above is to be computed by allowing interest at the rate of twelve percent
(12%) per annum, but not to exceed the then legal rate of interest. The same
phrase as used in clause (iii) above is to be computed by discounting the amount
at the discount rate of the Federal Reserve Bank of San Francisco at the time of
the award, plus one percent (1%).

 

(b)                                 Landlord may exercise the remedy provided in
California CIVIL CODE §1951.4, that is, Landlord may continue this Lease in full
force and effect, and collect Base Rent and Operating Expenses as they become
due, so long as Landlord does not terminate Tenant’s right to possession
pursuant to Section 16.3(a) above. During the period that Tenant is in default,
Landlord may enter the Premises and relet them or any part of them, to third
parties for Tenant’s account, for a shorter or longer term than the Term of this
Lease, and for such rental and on such other terms as Landlord, in its sole
discretion, shall deem advisable and Tenant shall be immediately liable to
Landlord for all costs which Landlord incurs in reletting the Premises,
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commissions, advertising expenses, the cost of remodeling the Premises which may
be required for reletting, and all such similar costs. No act by Landlord
pursuant to this Section shall terminate this Lease unless Landlord shall notify
Tenant that it elects to terminate this Lease. After Tenant’s default and for as
long as Landlord does not terminate Tenant’s right to possession of the
Premises, Tenant shall have the right to assign its interest in the Lease upon
the reasonable prior consent of Landlord; provided, however, that Tenant shall
not be released from any liability under this Lease as a result of such
assignment.

 

(c)                                  Landlord may, after expiration of any
applicable cure period, unless there is an emergency (in which case Landlord
need not wait), correct or remedy any failure of Tenant not timely cured. The
reasonable cost paid by Landlord to correct or remedy any such default will
immediately become due and payable to Landlord as additional rent.

 

(d)                                 Nothing contained in this Lease shall limit
Landlord to the remedies specifically set forth in this Section 16.3. Upon
Tenant’s default or breach, Landlord shall be entitled to exercise any right or
remedy then provided by law, including without limitation the right to obtain
injunctive relief and the right to recover all damages caused by Tenant’s
default or breach in the performance of any of its obligations under this Lease.

 

16.4                        Interest.  Any amount owed to Landlord under the
terms and provisions of this Lease which is not paid when due shall bear
interest at the highest rate allowed by applicable law from the date the same
becomes due and payable by the terms and provisions of this Lease until paid,
unless otherwise specifically provided in this Lease.

 

16.5                        Mitigation. Efforts by Landlord to mitigate damages
caused by Tenant’s breach shall not be construed as a waiver of Landlord’s right
to recover damages.

 

16.6                        Right of Landlord to Re-Enter. In the event of any
termination of this Lease, Landlord shall have the immediate right to enter upon
and repossess the Premises, and any personal property of Tenant may be removed
from the Premises and stored in any public warehouse at the risk and expense of
Tenant.

 

16.7                        Recapturable Expenses. Tenant acknowledges that
Landlord has undertaken or may undertake certain expenses in connection with the
Lease, including payment of some or all of the following: brokerage commissions,
the costs of any Landlord’s Work, moving expenses or other categories of cost or
expense (“Recapturable Expenses”). Notwithstanding any provision or implication
to the contrary in this Lease, in the event of premature termination of the Term
of this Lease pursuant to Section 16.3(a) following Tenant’s default, there
shall be immediately due and payable from Tenant, as Additional Rent which has
been fully earned at the time of termination, the unamortized portion of the
Recapturable Expenses actually incurred by Landlord. For purposes of this
Section, the unamortized portion of the Recapturable Expenses shall be
determined by multiplying the total Recapturable Expenses actually incurred by
Landlord by a fraction, the numerator of which is the number of months remaining
in the Term following premature termination in which unabated Base Rent would
have been payable to Landlord pursuant to the Lease, and the denominator of
which is the total number of months in the Term, both before and after the
premature termination, in which unabated Base Rent was paid or would have been
payable to Landlord had the Lease not been terminated. Any Recapturable Expenses
due to Landlord in accordance with this Section shall be in addition to any sums
otherwise recoverable pursuant to Section 16.3(a) of this Lease.

 

17.                               TENANT’S INSOLVENCY.

 

17.1                        Applicability of Section. In addition to any rights
or remedies of Landlord under the terms of this Lease, the following provisions
shall specifically apply upon the occurrence of an Insolvency Event (as defined
in Section 16.1(c) above).

 

17.2                        Assumption Or Rejection Of Lease.

 

(a)                                 Notwithstanding anything to the contrary
contained herein, Tenant as debtor in possession and any receiver or trustee in
bankruptcy for Tenant (collectively, “Tenant’s Trustee”) shall either assume or
reject this Lease within sixty (60) days following the entry of an order for
relief or within such earlier time as may be provided by applicable law.

 

(b)                                 Notwithstanding anything to the contrary
contained herein, in the event that this Lease is attempted to be assumed under
the Bankruptcy Code by Tenant’s Trustee during the existence of any Default by
Tenant, no such attempted assumption shall be effective unless and until
Tenant’s Trustee: (i) cures, or provides adequate assurance that it will
promptly cure, such Default; and (ii) compensates, or provides adequate
assurance that it will promptly compensate, Landlord for any actual pecuniary
loss to Landlord resulting from such Default; and (iii) provides adequate
assurance of future performance of Tenant’s obligations and covenants under this
Lease.  Landlord shall be entitled to reimbursement from the estate of Tenant
for all actual costs incurred by Landlord in considering any proposed assignee
of the Lease pursuant to this Section 17.

 

(c)                                  Tenant’s Trustee may assign this Lease
pursuant to the provisions of the Bankruptcy Code only if: (A) Tenant’s Trustee
assumes the Lease in accordance with the above provisions of this Section 17.2;
and (B) the assignee of Tenant’s Trustee assumes all of the obligations arising
under this Lease and provides adequate assurance of its future performance of
Tenant’s obligations and covenants under this Lease (whether or not a Default
has occurred under the Lease). Any such assignee shall, upon demand, execute and
deliver to Landlord, an instrument confirming such assumption.

 

 

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(d)                                 For purposes of Section 17.2(b) and (c), the
term “adequate assurance of future performance” shall include, without
limitation, at least the following:

 

(i)                                     Any proposed assignee must have, as
demonstrated to Landlord’s satisfaction, a net worth (as defined in accordance
with generally accepted accounting principles consistently applied) in an amount
sufficient to assure that the proposed assignee will have the resources to meet
the financial responsibilities under this Lease, including the payment of all
rent. The financial condition and resources of Tenant and any Guarantor(s) are
material inducements to Landlord entering into this Lease.

 

(ii)                                  In entering into this Lease, Landlord
considered extensively Tenant’s permitted use and determined that such permitted
business would add substantially to the tenant balance in the Project, and were
it not for Tenant’s agreement to operate only Tenant’s permitted business on the
Premises, Landlord would not have entered into this Lease. Landlord’s
anticipated benefits from the lease of the Premises may be materially impaired
if a trustee in bankruptcy or any assignee of this Lease operates any business
other than Tenant’s permitted business.

 

(iii)                               Any assumption of this Lease by a proposed
assignee shall not adversely affect Landlord’s relationship with any of the
remaining tenants in the Premises, taking into consideration any and all other
“use” clauses and/or “exclusivity” clauses which may then exist under their
leases with Landlord.

 

(iv)                              Any proposed assignee must not be engaged in
any business or activity which it will conduct on the Premises and which will
subject the Premises to contamination by any Hazardous Materials.

 

(v)                                 The percentage rent, if any, due under this
Lease shall not decline substantially.

 

(vi)                              Any assumption or assignment of this Lease
shall not breach substantially any provision in any other lease, financing
agreement, or master agreement relating to the Project;

 

(vii)                           Any assumption or assignment of this Lease shall
not alter or affect materially any other obligation or duty of Tenant nor be
used to circumvent the remainder of the provisions of this Lease.

 

18.                               DEFAULT BY LANDLORD.

 

18.1                        Landlord’s Default. Landlord shall be in default if
Landlord fails to perform any provision of this Lease required of it and the
failure is not cured within thirty (30) days after notice has been given to
Landlord. If, however, the failure cannot reasonably be cured within the cure
period, Landlord shall not be in default of this Lease if Landlord commences to
cure the failure within the cure period and diligently and in good faith
continues to cure the failure. Notices given under this Section shall specify
the alleged breach and the applicable Lease provisions. If Landlord shall at any
time default beyond the applicable notice and cure period, Tenant shall have the
right to cure such default on Landlord’s behalf.  Any sums expended by Tenant in
doing so, and all reasonably necessary incidental costs and expenses incurred in
connection therewith, shall be payable by Landlord to Tenant within thirty (30)
days following demand therefor by Tenant; provided, however, that Tenant shall
not be entitled to any deduction or setoff against any rent otherwise payable to
Landlord under this Lease.

 

18.2                        Notice to Mortgagee(s). Whenever Tenant serves
notice on Landlord of Landlord’s default, written notice shall also be served at
the same time upon the Mortgagee under any first- or second-priority Mortgage;
provided, however, that Tenant shall have no obligation to provide such notice
unless and until Tenant has received written notice of the Mortgagee’s existence
and address. Such Mortgagee shall have the periods of time within which to cure
Landlord’s defaults as are provided in Section 18.1, which periods shall
commence to run thirty (30) days after the commencement of the periods within
which Landlord must cure its defaults under Section 18.1. In this connection,
any representative of the Mortgagee shall have the right to enter upon the
Premises for the purpose of curing Landlord’s default. Such Mortgagee shall
notify Landlord and Tenant of the address of such Mortgagee to which such notice
shall be sent, and the agreements of Tenant under this Section are subject to
prior receipt of such notice. If the nature of the default is such that the
Mortgagee’s possession is required to cure the default, then Tenant will not
terminate the Lease so long as such Mortgagee commences proceedings to obtain
possession of the Premises within the period of time afforded to the Mortgagee
to cure such default, and once the Mortgagee has obtained possession, diligently
proceeds to cure the default. Nothing contained in this Lease shall be construed
to impose any obligation on any Mortgagee to cure any default by Landlord under
the Lease.

 

19.                               SUBORDINATION AND ESTOPPEL.

 

19.1                        Subordination. Subject to the provisions of this
Section 19, at the option and upon written declaration of Landlord, this Lease
and the leasehold estate created hereby shall be subject, subordinate and
inferior to the lien and charge of any Mortgage; provided, however, that this
Lease shall not be subordinate to any Mortgage arising after the date of this
Lease, or any renewal, extension or replacement thereof, unless and until
Landlord provides Tenant with an agreement from the Mortgagee of the type
normally provided by commercial lenders in southern California (“Non-Disturbance
Agreement”), setting forth that so long as Tenant is not in default hereunder,
Landlord’s and Tenant’s rights and obligations hereunder shall remain in force
and Tenant’s right to possession shall be upheld. Subject to the foregoing
condition, (i) Landlord hereby expressly reserves the right, at its option and
declaration, to place Mortgages upon and against the Premises and/or any part
thereof, superior in lien and effect to this Lease and the estate created
hereby, and (ii) Landlord shall be entitled to sign, acknowledge and record in
the Office of the County Recorder of the County in which the Premises are
situated, a declaration that this Lease and leasehold estate are subject,
subordinate and inferior to any Mortgage placed or to be placed by Landlord upon
or against the Premises and/or any part thereof (in favor of any Mortgagee,
trustee or title insurance company insuring

 

 

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the interest of any such Mortgagee), recordation of which shall, of and by
itself and without further notice to or act or agreement of Tenant, make this
Lease and the estate created hereby subject, subordinate and inferior thereto.
Notwithstanding the foregoing, Tenant shall, promptly following a request by
Landlord and after receipt of the Non-Disturbance Agreement, execute and
acknowledge any subordination agreement or other documents required to establish
of record the priority of any such Mortgage over this Lease, so long as such
agreement does not otherwise increase Tenant’s obligations or diminish Tenant’s
rights hereunder.

 

19.2                        Attornment. In the event of foreclosure of any
Mortgage, whether superior or subordinate to this Lease, then (a) this Lease
shall continue in force; (b) Tenant’s quiet possession shall not be disturbed if
Tenant is not in default hereunder; (c) Tenant shall attorn to and recognize the
Mortgagee or purchaser at foreclosure sale (“New Owner”) as Tenant’s landlord
for the remaining term of this Lease; and (d) the New Owner shall not be bound
by (i) any payment of rent for more than one month in advance, (ii) any
amendment, modification or ending of this Lease without the New Owner’s consent
after the New Owner’s name is given to Tenant, unless the amendment,
modification or ending is specifically authorized by the original Lease and does
not require Landlord’s prior agreement or consent, or (iii) any liability for
any act or omission of a prior Landlord. At the request of the New Owner, Tenant
shall execute a new lease for the Premises, setting forth all of the provisions
of this Lease except that the term of the new lease shall be for the balance of
the Term.

 

19.3                        Estoppel Certificate. Tenant shall execute and
deliver to Landlord, within ten (10) days after receipt of Landlord’s request,
any estoppel certificate or other statement to be furnished to any prospective
purchaser of or any lender against the Premises. Such estoppel certificate shall
acknowledge and certify each of the following matters, to the extent each may be
true: that the Lease is in effect and not subject to any rental offsets, claims
or defenses to its enforcement; the commencement and termination dates of the
Term; that Tenant is paying rent on a current basis; that any Landlord’s Work
required to be furnished under the Lease has been completed in all respects;
that the Lease constitutes the entire agreement between Tenant and Landlord
relating to the Premises; that Tenant has accepted the Premises and is in
possession thereof; that the Lease has not been modified, altered or amended
except in specified respects by specified instruments; and that Tenant has no
notice of any prior assignment, hypothecation or pledge of rents or the Lease.
Tenant shall also, upon request of Landlord, certify and agree for the benefit
of any Mortgagee against the Premises or the Building that Tenant will not look
to such Mortgagee: as being liable for any act or omission of Landlord; as being
obligated to cure any defaults of Landlord under the Lease which occurred prior
to the time Mortgagee, its successors or assigns, acquired Landlord’s interest
in the Premises by foreclosure or otherwise; as being bound by any payment of
Base Rent or Additional Rent by Tenant to Landlord for more than one month in
advance; or as being bound by Landlord to any amendment or modification of the
Lease without Mortgagee’s written consent.

 

19.4                        Remedies. Failure of the Tenant to sign any
statement or instrument delivered by Landlord or Mortgagee to effectuate the
provisions of this Section 19 within ten (10) days after request to do so by
Landlord shall constitute a material breach of this Lease, and Landlord shall
have the right, by not less than ten (10) days’ notice to Tenant, to declare
this Lease terminated and the Term ended; in which event, this Lease shall cease
and terminate on the date specified in such notice with the same force and
effect as though the date set forth in such notice were the date originally set
forth herein and fixed as the Expiration Date, and Tenant shall vacate and
surrender the Premises but shall remain liable as hereinafter provided. The
foregoing shall be in addition to, rather than in lieu of, any remedies or
rights Landlord may now or hereafter have hereunder or at law or in equity.

 

20.                               HAZARDOUS MATERIALS.

 

20.1                        Tenant’s Environmental Questionnaire. Tenant
warrants and represents, and acknowledges that this Lease was entered into by
Landlord in material reliance upon, the information set forth in the
environmental questionnaire, in the form attached as Exhibit E, that was
previously delivered by Tenant to Landlord.

 

20.2                        Tenant’s Obligations.

 

(a)                                 Tenant shall at all times and in all
respects comply with all Hazardous Materials Laws, and shall, at its own
expense, procure, maintain in effect and comply with all conditions of any and
all permits, licenses, and other governmental and regulatory approvals required
for Tenant’s use of the Premises, including, without limitation, discharge of
(appropriately treated) materials or wastes into or through any sanitary sewer
serving the Premises. Except as discharged into the sanitary sewer in strict
accordance and conformity with all applicable Hazardous Materials Laws, Tenant
shall cause any and all Hazardous Materials removed from the Premises to be
removed and transported solely by duly licensed haulers to duly licensed
facilities for final disposal of such materials and wastes. Tenant shall in all
respects handle, treat, deal with and manage any and all Hazardous Materials in,
on, under or about the Premises in total conformity with all applicable
Hazardous Materials Laws and prudent industry practices regarding management of
such Hazardous Materials.

 

(b)                                 Upon expiration or earlier termination of
the Term, Tenant shall cause all Hazardous Materials to be removed from the
Premises and transported for use, storage or disposal in accordance with and
compliance with all applicable Hazardous Materials Laws.

 

(c)                                  Except in the event of an emergency, Tenant
shall not take any remedial action in response to the presence of any Hazardous
Materials in or about the Premises, nor enter into any settlement agreement,
consent decree or other compromise in respect to any claims relating to any
Hazardous Materials in any way connected with the Premises, without first
notifying Landlord of Tenant’s intention to do so and affording Landlord ample
opportunity to appear, intervene or otherwise appropriately assert and protect
Landlord’s interest with respect thereto.

 

 

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(d)                                 Tenant shall immediately notify Landlord in
writing of: (i) any enforcement, cleanup, removal or other governmental or
regulatory action instituted, completed or threatened pursuant to any Hazardous
Materials Laws; (ii) any claim made or threatened by any person against Tenant
or the Premises relating to damage, contribution, cost recovery compensation,
loss or injury resulting from or claimed to result from any Hazardous Materials;
and (iii) any reports made to any environmental agency arising out of or in
connection with any Hazardous Materials in or removed from the Premises,
including any complaints, notices, warnings or asserted violations in connection
therewith. Tenant shall also supply to Landlord as promptly as possible, and in
any event within five business days after Tenant first receives or sends the
same, copies of all claims, reports, complaints, notices, warnings or asserted
violations, relating in any way to the Premises or Tenant’s use thereof. Tenant
shall promptly deliver to Landlord copies of hazardous waste manifests
reflecting the legal and proper disposal of all Hazardous Materials removed from
the Premises.

 

20.3                        Indemnity. With respect to Tenant’s use and
occupancy of the Premises and Common Areas, Tenant shall indemnify, defend (by
counsel reasonably acceptable to Landlord), protect, and hold Landlord and each
of Landlord’s officers, directors, shareholders, employees, agents, attorneys,
successors and assigns, free and harmless from and against any and all claims,
liabilities, penalties, forfeitures, losses or expenses (including attorneys’
fees), for death of or injury to any person or damage to any property
whatsoever, arising from or caused in whole or in part, directly or indirectly,
by (a) the presence in, on, under or about the Premises, or discharge in or from
the Premises, of any Hazardous Materials excluding Hazardous Materials used,
released or discharged by any previous tenant of the Premises during Tenant’s
occupancy thereof; (b) Tenant’s use, analysis, storage, transportation,
disposal, release, threatened release, discharge or generation of Hazardous
Materials to, in, on, under, about or from the Premises; or (c) Tenant’s failure
to comply with any Hazardous Materials Law. Tenant’s obligations hereunder shall
include, without limitation, and whether foreseeable or unforeseeable, all costs
of any required or necessary repair, cleanup or detoxification or
decontamination of the Premises, or the preparation and implementation of any
closure, remedial action or other required plans in connection therewith, and
shall survive the expiration or earlier termination of the Term. For purposes of
the release and indemnity provisions hereof, any acts or omissions of Tenant, or
by employees, agents, assignees, subtenants, contractors or subcontractors of
Tenant or others acting for or on behalf of Tenant (whether or not they are
negligent, intentional, willful or unlawful) shall be strictly attributable to
Tenant.

 

21.                               NOTICE. All notices, demands or requests from
one party to the other shall be in writing. Notices may be personally delivered,
sent by Federal Express or other reputable express delivery service, sent by
telecopier with first-class mail backup, or sent by certified mail, postage
prepaid, to the addresses set forth at Section 1.18 or 1.19, as applicable.
Notices shall be deemed received upon actual delivery to the addressee with
respect to personal or express delivery service or telecopier, and three
(3) days after deposit in the mails with respect to mailing. Each party shall
have the right, from time to time, to designate a different address by notice
given in conformity with this Section to the other party.

 

22.                               OTHER TERMS AND CONDITIONS.

 

22.1                        Signage. Tenant shall not place or permit to be
placed, any sign, advertisement, notice or other similar matter on the doors,
windows, exterior walls, roof or other areas of the Premises which are open to
the view of persons outside the Premises, except in accordance with Landlord’s
signage plan which is attached as Exhibit D.

 

22.2                        Parking. In connection with its use and occupancy of
the Premises, Tenant shall have the right to park in the parking area of the
Project, at no additional charge and on a non-reserved basis and on terms and
conditions to be established by the Landlord from time to time during the Term,
no more than the number of vehicles set forth in Section 1.17. The parking
authorized by this Section shall be for personal transportation to and from the
Premises, and not for long-term storage of automobiles or for short- or
long-term storage of boats, trailers or recreational vehicles. Landlord reserves
the right to designate certain parking areas in the Project as being for the
exclusive use of other tenants of the Project.

 

22.3                        Site Plan. The site plan attached hereto as
Exhibit A shows the approximate location of the Premises within the Project.

 

22.4                        Easements. Landlord reserves to itself the right,
from time to time, to grant such easements, rights and dedications as Landlord
deems necessary or desirable, and to cause the recordation of parcel maps and
restrictions, so long as such easements, rights, dedications, maps and
restrictions do not unreasonably interfere with Tenant’s normal conduct of its
business on the Premises. Tenant shall sign any of the aforementioned documents
upon request of Landlord and failure to do so shall constitute a material
default of this Lease by Tenant without the need for further notice to Tenant.

 

22.5                        No Light, Air or View Easements. No diminution or
shutting off of light, air or view by any structure which may be erected on
lands adjacent to the Building shall in any way affect this Lease or impose any
liability on Landlord.

 

22.6                        Security Measures. Tenant acknowledges that Landlord
does not intend to provide guard service or other security measures for the
benefit of the Premises. Tenant assumes all responsibility for the protection of
Tenant, its agents, and invitees and the property of Tenant and of Tenant’s
agents and invitees from acts of third parties, and assumes all risk in
connection with any failure to provide or lack of such security measures. Tenant
hereby waives any and all claims for damages to persons or property sustained by
Tenant, or by any other person or entity, arising from, out of or in connection
with, or alleged to arise from, out of or in connection with, Landlord’s not

 

 

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providing any security measure for the Premises or Project. Nothing herein
contained shall prevent Landlord, at Landlord’s sole option, from providing
security protection for the Premises, in which event the costs thereof shall be
included within Operating Expenses.

 

22.7                        Holding Over By Tenant. Tenant agrees upon the
expiration or termination of this Lease, immediately and peaceably to yield up
and surrender the Premises; notice to quit or vacate is hereby expressly waived.
Tenant shall be liable to Landlord for any and all damages incurred by Landlord
as the result of any failure by Tenant to timely surrender possession of the
Premises as required herein. If Tenant shall hold over after the expiration of
this Lease for any cause, such holding over shall be deemed a tenancy at
sufferance or, at the sole discretion of Landlord, a tenancy from
month-to-month, in which event such month-to-month tenancy shall be upon the
same terms, conditions and provisions set forth in this Lease, at one and
one-half (1½) times the Base Rent that was in effect immediately prior to the
termination.

 

22.8                        Landlord’s Right of Entry. Landlord and Landlord’s
agents may enter upon the Premises at any reasonable time and upon reasonable
notice (except no notice shall be required in an emergency) to make such
repairs, additions or improvements as Landlord shall deem necessary; to post
such notices as Landlord may deem necessary to exempt Landlord and Landlord’s
interest in the Building and Premises from responsibility on account of any work
or repairs done by Tenant upon or in connection with the Premises; to inspect
and examine the Premises and see that the covenants hereof are being kept and
performed; or to exhibit the Premises to prospective tenants or purchasers.

 

22.9                        Relocation. Tenant acknowledges that, upon not less
than thirty (30) days’ prior written notice from Landlord, Landlord shall have
the right to relocate Tenant to another premises within the Fenton Technology
Park II Project. Tenant acknowledges that such relocation right reserved to
Landlord shall be exercisable in Landlord’s sole discretion, for purposes of
accomplishing Landlord’s plan for the delicate Tenant mix and harmony within the
Project; provided, however, that any such relocation shall be at Landlord’s
expense but only to the extent necessary to insure that upon such relocation
Tenant shall occupy a Premises of substantially the same square footage, have
similar views, utility capacity, and basic amenities as were provided to Tenant
as part of the Premises leased hereunder. The parties acknowledge that the
nature of Tenant’s business may require Tenant to obtain certain licenses,
approvals and/or permits from regulatory authorities (which are
location-specific) in order to operate its business. Landlord agrees to bear all
reasonable costs of obtaining such licenses, approvals and permits for the
alternate premises. In addition, Landlord shall bear all reasonable direct
expenses of relocating Tenant’s furnishings, trade fixtures and equipment, to
the new premises. The relocation will take place over a weekend to minimize
disruption to Tenant’s business. Upon the completion of such relocation, all
references in this Lease to the Premises shall refer to the new premises. Tenant
shall, upon request by Landlord, execute an amendment to this Lease reflecting
the substitution of the other premises pursuant hereto.

 

22.10                 Furnishing of Financial Statements.  Tenant acknowledges
that Landlord entered into this Lease in reliance upon receiving current and
periodic financial reports documenting the progress of Tenant’s business
operations. Accordingly, if requested by Landlord or Landlord’s Mortgagee or
prospective Mortgagees for purposes of financing the Project, Tenant shall
deliver to Landlord, within ten (10) days after request therefor, financial
statements reflecting Tenant’s current financial condition and financial
statements for each of the two (2) years prior to the then-current fiscal year
statement. Such statements shall be prepared in accordance with generally
accepted accounting principles and certified by an officer or owner of Tenant,
or, if such is the normal practice of Tenant, shall be audited by an independent
certified public accountant. Landlord shall keep all such financial statements
and the information contained therein confidential.

 

22.11                 Auctions. Tenant shall not conduct, nor permit to be
conducted, either voluntarily or involuntarily, any auction upon the Premises,
without first having obtained Landlord’s prior written consent. Notwithstanding
anything to the contrary in this Lease, Landlord shall not be obligated to
exercise any standard of reasonableness in determining whether to grant such
consent.

 

22.12                 Keys. Two (2) keys to the Premises will be furnished by
Landlord. Additional keys will be furnished upon Tenant paying Landlord the cost
thereof. No additional lock or locks shall be placed by Tenant on any door in
the Building unless written consent of Landlord shall have been first obtained;
and, should such consent be so obtained, Landlord shall be supplied with keys to
each such lock and no other than the employees of Landlord or those it has
authorized in writing shall work on or modify any lock which is part of the
Premises. Tenant shall not cause or allow the duplication of any keys to be
made, and Tenant shall not cause or allow any keys to be possessed by any person
other than an authorized agent of Tenant. Tenant agrees, at the termination of
the tenancy, to return all keys of all doors.

 

22.13                 Other Tenancies. Landlord reserves the absolute right to
effect such other tenancies in the Project as Landlord, in the exercise of its
sole business judgment, shall determine to promote the best interest thereof.
Tenant does not rely on the fact, nor does Landlord represent, that any specific
tenants shall, during the Term of this Lease, occupy any space in the Project.

 

22.14                 Brokers’ Fees. Landlord has agreed to pay a fee for
brokerage services rendered in this transaction to the broker(s) identified in
Section 1.16. Such brokerage commission shall be payable in accordance with the
separate written agreement between Landlord and such broker(s), which alone
shall govern such brokers’ entitlement to any commission. Landlord and Tenant
each represent and warrant to the other that no broker, agent or finder,
licensed or otherwise, has been engaged by it, respectively, in connection with
the transaction contemplated by this Agreement, other than the broker(s) named
above. In the event of any other claim for broker’s, agent’s or finder’s fee or
commission in connection with this transaction, the party upon whose alleged
statement, representation or agreement such claim or liability arises shall
indemnify, save, hold harmless and defend the other party from and against such
claim and liability.

 

 

Initials:

    PD/VV

 

    KH/MN

 

21

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23.                               GENERAL PROVISIONS.

 

23.1                        Exculpation. The obligations of Landlord under this
Lease do not constitute personal obligations of Landlord’s directors, officers,
shareholders or employees, and Tenant shall look solely to the Landlord for
satisfaction of any liability with respect to this Lease, and agrees not to seek
recourse against the directors, officers, shareholders or employees of Landlord,
nor against any of their personal assets, for such satisfaction.

 

23.2                        Conveyance By Landlord. Landlord shall be free at
all times, without need of consent or approval by Tenant, to assign its interest
in this Lease and/or to convey fee title to the Premises. Each conveyance by
Landlord of Landlord’s interest in the Lease or the Premises prior to expiration
or termination hereof shall be subject to this Lease and shall relieve the
grantor of any further obligations or liability as Landlord, and Tenant shall
look solely to Landlord’s successor in interest for all future obligations of
Landlord. Tenant hereby agrees to attorn to Landlord’s successors in interest,
whether such interest is acquired by sale, transfer, foreclosure, deed in lieu
of foreclosure or otherwise. The term “Landlord” as used in this Lease, so far
as covenants and obligations on the part of Landlord are concerned, shall be
limited to mean and include only the owner at the time in question of the fee
title of the Premises. Without further agreement, the transferee of such title
shall be deemed to have assumed and agreed to observe and perform any and all
obligations of Landlord hereunder during its ownership of the Premises.

 

23.3                        Quiet Enjoyment. Landlord agrees that so long as
Tenant is not in default hereunder Tenant shall have the quiet enjoyment of the
Premises without hindrance on the part of Landlord. Landlord further agrees that
Landlord will warrant and defend Tenant in the peaceful and quiet enjoyment of
the Premises against the lawful claims of all persons claiming by, through or
under Landlord.

 

23.4                        No Accord and Satisfaction. No payment by Tenant or
receipt by Landlord of a lesser amount than the rent herein stipulated shall be
deemed to be other than on account of the earliest stipulated 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 shall
accept such check or payment without prejudice to Landlord’s right to recover
the balance of such rent or pursue any other remedy in this Lease provided.

 

23.5                        Waiver. No delay or omission in the exercise of any
right or remedy of Landlord for any Default by Tenant hereunder shall impair
such right or remedy or be construed as a waiver thereof. One or more waivers of
any covenant or condition by Landlord shall not be construed as a waiver of a
subsequent breach of the same covenant or condition, and the consent or approval
by Landlord to or of any act by Tenant requiring Landlord’s consent or approval
shall not be deemed to render unnecessary Landlord’s consent or approval to or
of any subsequent similar act by Tenant. No breach of a covenant or condition of
this Lease shall be deemed to have been waived by Landlord unless such waiver is
in writing signed by Landlord. The acceptance of any rent or other charges
hereunder shall not be deemed a waiver of any breach or Default hereunder other
than the payment of the amount accepted by Landlord.

 

23.6                        Cumulative Rights. The various rights, options,
elections, powers and remedies contained in this Lease shall be construed as
cumulative and no one of them shall be exclusive of any of the others, or of any
other legal or equitable remedy which either party might otherwise have in the
event of breach or default in the terms hereof, and the exercise of one right or
remedy by such party shall not impair its right to any other right or remedy
until all obligations imposed upon the other party have been fully performed.

 

23.7                        Independent Covenants. This Lease shall be construed
as though the covenants herein between Landlord and Tenant are independent and
not dependent, and Tenant hereby expressly waives the benefit of any statute to
the contrary and agrees that if Landlord fails to perform its obligations set
forth herein, Tenant shall not be entitled to make any repairs or perform any
acts hereunder at Landlord’s expense or to any setoff of the rent or other
amounts owing hereunder against Landlord; provided, however, the foregoing shall
in no way impair the right of Tenant to commence a separate action against
Landlord for any violation by Landlord of the provisions hereof so long as
notice is first given to Landlord and any Mortgagee (of whose address Tenant has
theretofore been notified) and an opportunity is granted to Landlord and such
holder to correct such violation as provided above.

 

23.8                        Relationship of the Parties. Nothing contained
herein shall be deemed or construed by the parties hereto, nor by any third
party, as creating the relationship of principal and agent or of partnership or
of joint venture between the parties hereto, it being understood and agreed that
neither the method of computation of rent, nor any other provision contained
herein, nor any acts of the parties hereto, shall be deemed to create any
relationship between the parties hereto other than the relationship of landlord
and tenant.

 

23.9                        Force Majeure. If either party is delayed in the
performance of any covenant of this Lease because of any of the following
causes, then such performance shall be excused for the period of the delay and
the period for such performance shall be extended for a period equivalent to the
period of such delay: acts of the other party; action of the elements; war, riot
or civil insurrection; building moratoria, trip generation restrictions or other
similar action by the City of San Diego or other governmental agency or entity;
labor disputes; inability to procure or a general shortage of labor or materials
in the normal channels of trade; delay in transportation; delay in inspections;
or any other cause beyond the reasonable control of the party so obligated,
whether similar or dissimilar to the foregoing, financial inability excepted;
provided, however, that except as specifically set forth elsewhere in this
Lease, no such events shall affect Tenant’s obligation to pay Base Rent,
Additional Rent or any other amount payable under this Lease, nor shall such
events affect the length of the Term (except to the extent expressly provided
herein).

 

 

Initials:

    PD/VV

 

    KH/MN

 

22

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23.10                 Consents. With respect to any provision of this Lease
which either provides or is held to provide that Landlord shall not unreasonably
withhold or unreasonably delay any consent or approval, Tenant shall not be
entitled to make any claim for, and Tenant hereby expressly waives, any claim
for damages, it being understood and agreed that Tenant’s sole remedy therefor
shall be an action for specific performance.

 

23.11                 Counterparts. This Lease may be executed in two or more
counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument.

 

23.12                 Authority. Each individual executing this Lease on behalf
of such entity represents and warrants that he or she is duly authorized to
execute and deliver this Lease on behalf of said entity. Upon the request of the
other party, any such party shall, at the time of the execution of this Lease,
deliver to the other party evidence of such authority satisfactory to the other
party.

 

23.13                 Recording. Tenant shall not record this Lease or any short
form or memorandum version hereof without the prior written consent of Landlord,
which may be withheld at Landlord’s sole discretion.

 

23.14                 Interpretation and Use of Pronouns. Wherever herein the
singular number is used, the same shall include the plural, and the masculine
gender shall include the feminine and the neuter genders. All conditions
contained herein shall be deemed covenants. The words “breach” or “default” are
used interchangeably herein and each shall be deemed to include the other.

 

23.15                 Captions and Interpretations. Section titles or captions
contained in this Lease are inserted as a matter of convenience and for
reference and in no way define, limit, extend or describe the scope of this
Lease or any provision hereof. No provision in this Lease is to be interpreted
for or against either party because that party or its legal representative
drafted such provision.

 

23.16                 Severability. If any term, covenant, condition or
provision of this Lease is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the provisions shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

 

23.17                 Applicable Law. This Lease shall be governed by, and
construed in accordance with, the laws of the State of California,
notwithstanding the fact that Landlord or Tenant may be located in another State
or that this Lease may be executed in another State. If any provision of this
Lease or the application thereof to any person or circumstances shall, to any
extent, be invalid or unenforceable, the remainder of this Lease shall not be
affected thereby, and each provision of this Lease shall be valid and
enforceable to the fullest extent permitted by law. Any action brought to
enforce or nullify this Lease or the provisions hereof shall be brought in San
Diego County, California, and in no other forum.

 

23.18                 Waiver of Right of Redemption. Tenant hereby waives for
Tenant and for all those claiming under Tenant all right now or hereafter
existing to redeem, by statute or by order or judgment of any court or by any
legal process or writ, Tenant’s right of occupancy of the Premises after any
termination of this Lease. Tenant hereby waives its rights under California CODE
OF CIVIL PROCEDURE §1179.

 

23.19                 Attorneys’ Fees. In case suit shall be brought for any
unlawful detainer of the Premises, for the recovery of any rent due under the
provisions of this Lease, or because of the breach or alleged breach of any
other covenant herein contained, the prevailing party shall recover from the
non-prevailing party all costs and expenses incurred therein, including
reasonable attorneys’ fees and expenses incurred in enforcing any judgment. If
Landlord, through no fault of its own, is made a party to any litigation
relating to the subject matter covered by this Lease instituted by or against
Tenant, then Tenant shall defend, indemnify and hold Landlord harmless from and
against all costs and expenses, including reasonable attorneys’ fees, incurred
by Landlord in connection therewith. In addition thereto, Tenant agrees to pay
Landlord’s costs, expenses and reasonable attorneys’ fees with respect to:
(i) each request to Landlord for permission or consent to assign or sublet the
Premises, as provided in Section 15.5 above; (ii) each request made by Tenant to
modify, amend or supplement this Lease; (iii) any breach or default by Tenant
which is cured prior to litigation; and (iv) any request by Tenant which causes
Landlord to actually incur attorney fees. Landlord shall notify Tenant of the
amount of such attorneys’ fees, and Tenant shall pay the same (as Additional
Rent) within fifteen (15) days after such notice.

 

23.20                 Joint and Several Obligations. If there shall be more than
one Tenant, they shall all be bound jointly and severally by the terms,
provisions, covenants, conditions, and agreements herein. No rights, however,
shall inure to the benefit of any assignee of Tenant unless the assignment to
such assignee has been approved by Landlord in writing as required hereunder.

 

23.21                 Successors and Assigns. The covenants and conditions
herein contained shall, subject to the provisions as to assignments, apply to
and bind the heirs, successors, executors, administrators and assigns of the
respective parties hereof. If this Lease is signed by more than one person as
Tenant, their obligation shall be joint and several.

 

23.22                 Time of the Essence. Time is expressly declared to be of
the essence of this Lease, and of all covenants and conditions herein contained.

 

23.23                 No Third-Party Beneficiaries. The provisions of this Lease
are solely for the benefit of the parties hereto, and no broker or other third
party shall be entitled to any benefits hereof or hereunder.

 

 

Initials:

    PD/VV

 

    KH/MN

 

23

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23.24                 Entire Agreement. This Lease and the exhibits, and the
Addendum, if any, attached hereto and forming a part hereof, set forth all the
terms, provisions, covenants, conditions, promises, agreements and
understandings between Landlord and Tenant concerning the Premises. There are no
warranties, representations, covenants, promises, agreements, conditions or
understandings, either oral or written, between them other than set forth
herein. No alteration, amendment, change or addition to this Lease shall be
binding upon Landlord or Tenant unless reduced to writing and signed by each
party.

 

23.25                 No Option By Landlord. Preparation of this Lease by
Landlord or Landlord’s agent and submission of same to Tenant shall not be
deemed an option or offer to lease the Premises on the terms and conditions
contained herein or a reservation of the Premises in favor of Tenant. This Lease
shall become binding upon Landlord only upon Landlord’s execution and delivery
of this Lease to Tenant. The receipt (which shall include the cashing, deposit
or other negotiation of checks, money orders and the like) of any moneys by
Landlord which are tendered by Tenant along with a Tenant-executed copy of this
Lease, or at any time prior to Landlord’s delivery of a fully executed copy of
this Lease to Tenant, shall not constitute an acceptance of Tenant’s offer to
lease as contained herein. Tenant acknowledges that Landlord will not deliver a
fully executed copy of this Lease until Landlord has received both any
Guaranties required hereunder, and such corporate resolutions or other
information as reasonably satisfies Landlord as to the incumbency and authority
to sign of each individual signing this Lease or any Guaranty. Tenant also
acknowledges that the fully executed Lease will not be delivered by Landlord to
Tenant unless and until approved by Landlord’s lender, and that in determining
whether to approve, Landlord’s lender will consider Tenant’s lease application,
credit information, biographical data on Tenant’s key officers or principals,
and financial statements relating to Tenant’s business. Notwithstanding the
foregoing, delivery of this Lease by Tenant to Landlord after signature by
Tenant shall constitute an option which can be accepted by Landlord at any time
until two (2) weeks after delivery of the signed Lease by Tenant.

 

23.26                 Exhibits. All exhibits described herein, if any, are part
of this Lease and by this reference are expressly incorporated herein. This
Lease contains the following Exhibits:

 

Exhibit A                                             Project Site Plan

Exhibit B                                             Premises and Improvements
to Premises

Exhibit C                                             Rules and Regulations

Exhibit D                                             Signage Criteria

Exhibit E                                              Environmental
Questionnaire

Exhibit F                                               Guaranty Agreement
[INTENTIONALLY OMITTED]

 

23.27                 Addendum. The attached Addendum, if any, is specified in
Section 1.20 above, is part of this Lease and by this reference is expressly
incorporated herein.

 

IN WITNESS WHEREOF, the parties hereto have executed this Lease on the
date(s) set forth by their respective signatures.

 

Landlord:

 

Date:

May 31, 2013

 

H.G. FENTON PROPERTY COMPANY, a California corporation

 

 

 

 

 

 

 

BY:

H.G. FENTON COMPANY, a California corporation,

 

 

 

 

Authorized Agent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By

/s/ Kevin Hill

 

 

 

 

 

Kevin D. Hill, Vice President,

 

 

 

 

 

Leasing and Commercial Acquisitions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By

/s/ Michael Neal

 

 

 

 

 

Michael P. Neal

 

 

 

 

 

President & CEO

 

 

 

 

 

 

 

 

 

 

 

 

Tenant:

 

 

 

 

 

 

 

 

 

Date:

May 22, 2013

 

ONCOSEC MEDICAL INCORPORATED, a Nevada corporation

 

 

 

 

 

 

 

 

 

 

 

By

/s/ Veronica Vallejo

 

 

 

 

Veronica Vallejo, CPA

 

 

 

 

CFO

 

 

 

 

 

 

 

 

 

 

 

 

 

By

/s/ Punit Dhillon

 

 

 

 

Punit Dhillon

 

 

 

 

President & CEO

 

 

Initials:

    PD/VV

 

    KH/MN

 

24

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ADDENDUM TO LEASE

 

The following additional provisions are a part of, and incorporated in, the
Lease to which this Addendum is attached. In the event of any conflict between
the provisions of this Addendum and the body of the Lease, this Addendum shall
control.

 

24.                               CONDITIONAL ABATEMENT OF MONTHLY BASE RENT.
Subject to the satisfaction of the conditions precedent set forth below, the
obligation of Tenant to pay monthly Base Rent pursuant to Section 2.2 of the
Lease shall be conditionally abated for the second (2nd) full calendar month in
the amount of $8,140.00, and for the thirteenth (13th) full calendar month in
the amount of $8,384.00 on the terms and conditions set forth below. The
conditional abatement of Base Rent shall not include abatement of any Additional
Rent as such term is defined in Section 2.1 of the Lease.

 

(a)                                 The Lease shall be in effect and Tenant
shall not be in default of any material provision thereof; and

 

(b)                                 In the event that Landlord elects to
terminate this Lease pursuant to Section 16 following Tenant’s default, the
monthly Base Rent so abated shall be deemed an element of Recapturable Expenses
for purposes of Section 16.7 of the Lease.

 

25.                               OPTION TO EXTEND. Subject to satisfaction of
the conditions precedent set forth below, Tenant shall have one (1) option to
extend the Term (“Extension Option”) for one (1) period of thirty-six (36)
months (“Extension Term”), on the following terms and conditions:

 

25.1                        Tenant’s Extension Option shall be subject to
satisfaction of each of the following conditions precedent, which are solely for
the benefit of, and may be waived unilaterally by, Landlord:

 

(a)                                 The Extension Option shall be exercised by
written notice delivered by Tenant to Landlord not earlier than nine (9) months
and not later than six (6) months prior to the end of the Term or the prior
Extension Term, as applicable;

 

(b)                                 Tenant shall be in occupancy of at least one
hundred percent (100%) of the area of the Premises directly or through a wholly
owned subsidiary (at any tier), and not through an unaffiliated assignee or
sublessee; and

 

(c)                                  The Lease shall be in effect and Tenant
shall not be in default of any material provision thereof both on the day such
written notice is delivered to Landlord and on the last day of the Term;
provided, however, if Tenant is in default but the cure period has not run, this
condition shall be deemed satisfied if Tenant cures the default within the
applicable cure period.

 

25.2                        In the event the Term shall be extended following
exercise by Tenant of the Extension Option, then all of the terms, covenants and
conditions of this Lease shall remain in full force and effect during the
Extension Term, except that the initial monthly Base Rent (including subsequent
annual increases in Base Rent) during the Extension Term shall be adjusted to
the then-effective market rate as reasonably determined by Landlord for new
leases for comparable space in the Sorrento Mesa area provided, however, that in
no event shall the Base Rent payable for any Lease Year be less than the Base
Rent payable for the immediately preceding Lease Year.

 

25.3                        The increase in Base Rent provided by this
Section shall be in addition to any increase in Operating Expenses as described
in Section 5.4 of the Lease

 

26.                               TERMINATION OF EXISTING LEASE WITH OCÉ NORTH
AMERICA, INC. Landlord entered into that certain lease dated August 15, 2006
with OCÉ NORTH AMERICA, INC., a Delaware corporation (“Existing Tenant”) in
which Landlord leased to Existing Tenant the Premises commonly known as 9810
Summers Ridge Road, Suite 100-120, San Diego, California 92121 (“Existing
Lease”). The Existing Lease is scheduled to expire on November 30, 2013. The
parties acknowledge that in addition to the provisions expressly set forth in
Section 23.25, this Lease shall be contingent upon Landlord executing an
agreement with the Existing Tenant (“Termination Agreement”) which allows for
the vacation of the Premises on or before the Commencement Date of this Lease.

 

27.                               NONDISCLOSURE OF TERMS. Tenant acknowledges
and agrees that the terms of this Lease are confidential and constitute
proprietary information of Landlord.  Disclosure of the terms could adversely
affect the ability of Landlord to negotiate other leases and impair Landlord’s
relationship with other tenants.  Accordingly, Tenant agrees that it, and its
partners, officers, directors, employees, agents and attorneys, shall not
intentionally and voluntarily disclose the terms and conditions of this Lease to
any newspaper or other publication or any other tenant or apparent prospective
tenant of the Building or other portion of the Project, or real estate agent,
either directly or indirectly, without the prior written consent of Landlord,
provided, however, that Tenant may disclose the terms to prospective subtenants
or assignees under this Lease.  Tenant’s breach of the provisions of this
Section shall entitle Landlord to increase Tenant’s Base Rent, effective as of
the date of such breach and continuing for the remainder of the Lease and shall
also entitle Landlord to enforce all rights and remedies Landlord has under the
Lease, at law or in equity for such breach.

 

 

Initials:

    PD/VV

 

    KH/MN

 

25

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Landlord:

 

Date:

 May 31, 2013

 

H.G. FENTON PROPERTY COMPANY, a California corporation

 

 

 

 

 

 

 

BY:

H.G. FENTON COMPANY, a California corporation, Authorized Agent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By

/s/ Kevin Hill

 

 

 

 

 

Kevin D. Hill, Vice President,

 

 

 

 

 

Leasing and Commercial Acquisitions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By

/s/ Michael Neal

 

 

 

 

 

Michael P. Neal

 

 

 

 

 

President & CEO

 

 

 

 

 

 

 

 

 

 

 

 

Tenant:

 

 

 

 

 

 

 

 

 

 

 

Date:

May 22, 2013

 

ONCOSEC MEDICAL INCORPORATED, a Nevada corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

By

/s/ Veronica Vallejo

 

 

 

 

Veronica Vallejo, CPA

 

 

 

 

CFO

 

 

 

 

 

 

 

 

 

 

 

 

 

By

/s/ Punit Dhillon

 

 

 

 

Punit Dhillon

 

 

 

 

President & CEO

 

 

Initials:

    PD/VV

 

    KH/MN

 

26

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