LEASE AGREEMENT

Exhibit 10.15

PLAZA WEST

SUMMERLIN

LAS VEGAS, NEVADA

LEASE AGREEMENT

between

HOWARD HUGHES PROPERTIES,

LIMITED PARTNERSHIP

and

CARDIOVASCULAR BIOTHERAPEUTICS, INC.

Dated November 1, 2005

 

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LEASE AGREEMENT

TABLE OF CONTENTS

 

 

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LIST OF EXHIBITS

 

 

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PLAZA WEST

LEASE AGREEMENT

THIS LEASE AGREEMENT (the “Lease”), is made and entered into as of the 1 ^st day of November, 2005, between HOWARD HUGHES PROPERTIES, LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”), and CARDIOVASCULAR BIOTHERAPEUTICS, INC, a Delaware corporation (“Tenant”).

W I T N E S S E T H :

ARTICLE 1

DEFINITIONS

1.1 Intentionally omitted.

1.2 “Allowance” shall mean an amount equal to Ten and 00/100 Dollars ($10.00) per square foot of Usable Area in the Premises. The Premises are stipulated for all purposes to contain six thousand three hundred twenty-five (6,325) square feet of Usable Area.

1.3 “Base Rent” shall be determined as follows:

(i) During months one (1) through twelve (12) of the Lease Term, the Base Rent shall be Twenty-Eight and 20/100 Dollars ($2850) per year for each square foot of Rentable Area of the Premises, which is equal to Two Hundred Two Thousand Seven Hundred Fifty-Eight and 00/100 Dollars ($202,758.00) per annum.

(ii) During months thirteen (13) through twenty-four (24) of the Lease Term, the Base Rent shall Twenty-Nine and 05/100 Dollars ($29.05) per year for each square foot of Rentable Area of the Premises, which is equal to Two Hundred Eight Thousand Eight Hundred Sixty-Nine and 50/100 Dollars ($208,869.50) per annum.

(iii) During months twenty-five (25) through thirty-six (36) of the Lease Term, the Base Rent shall be Twenty-Nine and 92/100 Dollars ($29.92) per year for each square foot of Rentable Area of the Premises, which is equal to Two Hundred Fifteen Thousand One Hundred Twenty-Four and 80/100 Dollars ($215,124.80) per annum.

(iv) During months thirty-seven (37) through forty-eight (48) of the Lease Term, the Base Rent shall be Thirty and 82/100 Dollars ($30.82) per year for each square foot of Rentable Area of the Premises, which is equal to Two Hundred Twenty-One Thousand Five Hundred Ninety-Five and 80/100 Dollars ($221,595.80) per annum.

(v) During months forty-nine (49) through sixty (60) of the Lease Term, the Base Rent shall be Thirty-One and 74/100 Dollars ($31.74) per year for each square foot of Rentable Area of the Premises, which is equal to Two Hundred Twenty-Eight Thousand Two Hundred Ten and 60/100 Dollars ($228,210.60) per annum.

The Base Rent due for the first full calendar month during the Lease Term has been paid to Landlord by Tenant contemporaneously with Tenant’s execution hereof.

1.4 “Building” shall mean (a) the parcel of real property described in Exhibit “A” attached hereto and incorporated herein, (b) the office building and parking structure built or to be built on such parcel of real property, and (c) any and all other improvements thereon and appurtenances thereto. The street address of the Building is 1635 Village Center Circle, Las Vegas, Nevada, 89134; such street address may be modified by Landlord from time to time during the Lease Term.

1.5 “Building Core” shall mean the area within the outermost finish face of that portion of the Building that incorporates those areas that provide service to the tenants of that floor and to the Building. These areas of service include: restroom facilities for men and women along with the vestibule and access, electrical, mechanical, and telephone rooms, janitor closets, elevators and service elevators along with lobby and stairs, vestibules, and all vertical floor penetrations for mechanical/electrical/plumbing for the Building.

1.6 “Building Shell” shall mean the condition of the Building completed with the following improvements: (a) outside walls (not including drywall), core walls, and elevator lobby areas completed to building standard condition for public areas; (b) unfinished concrete floors throughout the Premises,

 

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broom clean; (c) building standard 110 volt 220 amp. power supplied to the Building Core along with 277/480 volt fluorescent lighting power supplied to the Building Core; (d) men’s and ladies’ restroom facilities with building standard finished located on each floor on which the Premises are located; (e) building standard voice communication speakers and smoke detectors in accordance with applicable building codes and provided only at the core; and (f) mechanical, electrical, plumbing, life safety, heating, air conditioning and ventilation in Building Core area as required to connect to and service the Premises.

1.7 “Commencement Date” shall mean the earlier of the date that Tenant actually commences any business operations from the Premises, or December 1, 2005, except as the same may be delayed pursuant to Section 3.3 hereof. Even though the Lease Term commences on the Commencement Date, Tenant shall be permitted to occupy the Premises fifteen (15) days prior to the Commencement Date for purposes of installing fixtures and equipment, without the obligation to pay Base Rent or any other Rent for the period prior to the Commencement Date, provided Tenant’s early occupancy of the Premise is conditioned upon Tenant’s agreement to be responsible for all other obligations existing under the Lease. Any early entry will be at Tenant’s sole risk and subject to all the terms and provisions of this Lease as though the Commencement Date had occurred, except for the payment of Rent, which will commence on the Commencement Date.

1.8 “Expense Stop” shall mean the amount (per square foot of Rentable Area of the Premises) Landlord herewith agrees to expend as its share of Operating Expense (which shall be a credit for Tenant to apply to offset Operating Expenses charged to the Premises), not to exceed the total amount of Operating Expenses for calendar year 2006 (the “Base Year”) (per square foot of Rentable Area in the Building); provided, however, that if occupancy of the Building during the Base Year is less than ninety five percent (95%), Operating Expenses for the Base Year shall be “grossed up” to that amount of Operating Expenses that, using reasonable projections, would normally be expected to be incurred if the Building were ninety-five percent (95%) occupied during the Base Year. With respect to Real Property Taxes included in Operating Expenses for the Base Year, such amount shall be determined under the assumption that the Building is fully assessed as a completed and occupied unit

1.9 “Index” shall mean the Consumer Price Index, Urban Wage Earners and Clerical Workers for Los Angeles, Anaheim and Riverside Area, all items (1982-1984=100), as published by the Bureau of Labor Statistics of the United States Department of Labor. In the event that the Index is discontinued or is revised to substantially alter the calculations under Section 5.2, Landlord shall select such other government index which provides substantially the same result as would have been obtained if the Index had not been so discontinued or revised.

1.10 “Laws” shall mean all applicable statutes, regulations, ordinances, requirements and orders promulgated by any federal, state, local or regional governmental authority now in force or in force after the Commencement Date.

1.11 “Lease Interest Rate” shall mean the lesser of (a) that fluctuating rate of interest equal to two percentage points (2%) over the rate of interest announced from time to time by the Bank of America National Trust and Savings Association as its prime or reference commercial lending rate (or in the event such bank ceases to announce such rate, then by such other federally regulated banking institution as Landlord shall determine), or (b) the maximum interest rate permitted by law.

1.12 “Lease Term” shall mean the term commencing on the Commencement Date and continuing until sixty (60) months after the first day of the first full calendar month following the Commencement Date, unless extended pursuant to Exhibit “F” attached hereto.

1.13 “Mortgagee” shall mean Teachers Insurance Annuity Association (“First Mortgagee”).

1.14 “Operating Expenses” shall mean all costs of any kind paid or incurred by Landlord in owning, operating, cleaning, equipping, protecting, lighting, repairing, replacing, heating, air-conditioning and maintaining the Building as a first class office project, and a proration of Operating Expenses for all common areas within Plaza West as provided in the REA or as otherwise determined by Landlord, including by way of illustration but not limitation, all of the following:, (a) all amounts charged to the Building pursuant to the REA; (b) Real Property Taxes; (c) all costs, charges and surcharges for utilities, water, sewage, janitorial, waste disposal and refuse removal and all other utilities and services provided to the Building; (d) insurance costs for which Landlord is responsible under this Lease or which Landlord or any Mortgagee deems necessary or prudent; (e) any costs levied, assessed or imposed pursuant to any applicable Laws; (f) the cost (amortized over such period as Landlord reasonably determines together with interest at the Lease Interest Rate on the unamortized balance) of any capital improvements to the Building or equipment replacements made by Landlord after the Commencement Date that are intended to reduce other Operating Expenses or are required by any Laws or are necessary in order to operate the Building at the same quality level as prior to such replacement; (g) costs and expenses of operation, repair and maintenance of all structural and mechanical portions and components of the Building including, without limitation, plumbing, communication, heating, ventilating and air-conditioning (“HVAC”),

 

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elevator, and electrical and other common Building systems; (h) a pro rata portion of the cost of the management office rental for Plaza West; (i) all costs incurred in the management and operation of the Building including, without limitation, gardening and landscaping, maintenance of all parking areas, structures and garages, maintenance of signs, resurfacing and repaving, painting, lighting, cleaning, and provision of Building security; (j) all personal property taxes levied on or attributable to personal property used in connection with the Building; (k) depreciation on personal property owned by Landlord which is consumed in the operation or maintenance of the Building; (I) rental or lease payments paid by Landlord for rented or leased personal property used in the operation or maintenance of the Building; (m) management fees, wages, salaries and other labor costs incurred in the management and operation of the Building; (n) fees for required licenses and permits; (o) reasonable legal, accounting and other professional fees; (p) reasonable and appropriate reserves for repair and replacement; and (q) a reasonable allowance to Landlord for supervision of all of the foregoing not to exceed five percent (5%) of the total of all other Operating Expenses. If the Building is not ninety-five percent (95%) occupied during any portion of the Lease Term, Landlord shall make an appropriate adjustment to Operating Expenses for such period employing sound accounting and management principles, to determine the amount of Operating Expenses that would have been incurred had the Building been ninety-five percent (95%) occupied during such period (collectively referred to as “Grossed-Up”). Operating Expenses shall not include depreciation of the Building or equipment therein, commissions of real estate brokers and leasing agents, nor any amounts expended for tenant improvements.

1.15 “Premises” shall mean that space outlined on the floor plan attached to this Lease as Exhibit “B” and incorporated herein. The Premises are stipulated for all purposes to contain seven thousand one hundred ninety (7,190) square feet of Rentable Area. Such square footage may be increased pursuant to the Right of First Offer attached hereto as Exhibit “G.”

1.16 “REA” shall mean that certain Hills Village Center’s Covenants, Conditions and Restrictions recorded with the Clark County Recorder on April 20,1993 in Book 930420 and Instrument No. 00070 as supplemented by the Notice of Annexation recorded with the Clark County Recorder on October 7, 1993, in Book 931007 and Instrument No. 00530, as such documents may be further amended or supplemented from time to time; provided, however, that no such further amendment or supplement shall in any event decrease Tenant’s rights, materially increase Tenant’s financial obligations, or increase Tenant’s non-financial obligations under this Lease.

1.17 “Real Property Taxes” shall mean and include any form of tax, assessment, license fee, license tax, business license fee, commercial rental tax, levy, charge, penalty, tax or similar imposition, imposed by any authority having the direct power to tax, including any city, county, state or federal government, or any school, lighting, drainage, transportation, air pollution, environmental or other improvement or special assessment district thereof, as against any legal or equitable interest of Landlord in the Building and/or the Premises, including, but not limited to, the following: (a) any tax on Landlord’s “right” to rent or “right” to other income from the Premises or as against Landlord’s business of leasing the Premises; (b) any assessment, tax, fee, levy or charge in substitution, partially or totally, of any assessment, tax, fee, levy or charge previously included within the definition of Real Property Taxes (it is the intention of Tenant and Landlord that all such new and increased assessments, taxes, fees, levies and charges be included within the definition of “Real Property Taxes” for the purposes of this Lease); (c) any 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 or excise tax levied by the state, county, city or federal government, or any political subdivision thereof, 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 of the Building, or any portion thereof; (d) any assessment, tax, fee, levy or charge upon this transaction creating or transferring an interest or an estate in the Premises; (e) any assessment, tax, fee, levy or charge based upon the number of people employed, working at, or using the Premises or the Building, or utilizing public or private transportation to commute to the Premises or the Building; and (f) reasonable legal and other professional fees, costs and disbursements incurred in connection with proceedings to contest, determine or reduce Real Property Taxes.

Real Property Taxes shall not include federal or state income, franchise, inheritance or estate taxes of Landlord or any of the parties which comprise Landlord.

1.18 “Rentable Area” of the Premises shall mean the total of the following measurements to be determined by Landlord: (a) the entire area included within the Premises, being the area bounded by the inside surface of any exterior glass walls (or the inside surface of the permanent exterior wall where there is no glass) of the Building bounding the Premises, the exterior of all walls separating the Premises from any public corridors or other public areas, and the centerline of all walls separating the Premises from other areas leased or to be leased to other tenants, (b) a pro rata portion based on the space occupied on the floor or floors on which the Premises is located (the “Floor(s)”) of the areas covered by the elevator lobbies, corridors, restrooms, and by mechanical rooms, electrical rooms and telephone closets situated on the Floor(s) (such pro rata portion shall be the same percentage that the amount of Rentable Area in the Premises bears to the Rentable Area on the Floods) on which the Premises is located), other than those

 

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servicing the entire Building, and (c) a pro rata portion of the lobby area on the ground floor of the Building and of the area of the Building containing the electrical/emergency equipment, fire pump equipment, electrical switching gear, telephone equipment, mail delivery room and other facilities serving the Building (such pro rata portion shall be the same percentage that the amount of Rentable Area of the Premises bears to the total Rentable Area in the entire Building). The Building is stipulated for all purposes to contain thirty-eight thousand five hundred thirty-nine (38,539) square feet of Rentable Area.

1.19 “Security Deposit” shall mean the sum of Sixteen Thousand Eight Hundred Ninety-Six and 50/100 Dollars ($16,896.50).

1.20 ‘Tenant’s Share” shall be a fraction of which the numerator is the Rentable Area of the Premises as set forth in Section 1.15 and the denominator is the Rentable Area in the Building as set forth in Section 1.18.

1.21 “Usable Area” for the Premises shall mean the Rentable Area for the Premises, minus the following reductions as determined by Landlord: (a) the Premises pro rata portion of the lobby area on the ground floor and electrical/emergency equipment, fire pump equipment, electrical switching gear, telephone equipment, mail delivery facilities, elevator penthouse, security rooms, trash rooms and other areas which service the entire Building as specified in the definition of Rentable Area, and (b) the Premises’ pro rata portion of the space occupied on the Floor(s) of the Premises covered by the elevator lobbies, corridors, restrooms, mechanical rooms, electrical rooms and telephone closets situated on such Floors as specified in the definition of Rentable Area.

1.22 “Commencement Memorandum” shall mean a document similar to Exhibit “H” attached hereto. The Commencement Memorandum, among other things, shall contain a reference to the Rentable Area of the Premises and Useable Area of the Premises. Tenant agrees that the Rentable Area and Useable Area of the Premises stated in the Commencement Memorandum shall be binding throughout the Lease Term.

ARTICLE 2

LEASE GRANT

Subject to and upon the terms and conditions herein set forth, Landlord leases to Tenant and Tenant leases from Landlord the Premises.

ARTICLE 3

LEASE TERM

3.1 Delivery of Possession.

Landlord will be deemed to have delivered possession of the Premises to Tenant on the Commencement Date, as it may be adjusted pursuant to Section 33 and the Work Letter. Landlord will construct or install in the Premises the Improvements (hereinafter defined) to be constructed or installed by Landlord according to the Work Letter. Tenant acknowledges that neither Landlord nor its agents or employees have made any representations or warranties as to the suitability or fitness of the Premises for the conduct of Tenant’s business or for any other purpose, nor has Landlord or its agents or employees agreed to undertake any alterations or construct any tenant improvements to the Premises except as expressly provided in this Lease and the Work Letter. If for any reason Landlord cannot deliver possession of the Premises to Tenant on or before the fixed date component of the Commencement Date, this Lease will not be void or voidable, and Landlord will not be liable to Tenant for any resultant loss or damage.

 

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3.2 Substantial Completion of Premises.

If, by the fixed date specified in Section 1.7, the Premises have not been substantially completed pursuant to the Work Letter due to any cause other than Landlord’s default, Landlord shall have no liability therefor, and the Lease Term (including without limitation, Tenant’s obligation to pay Rent) shall nonetheless commence as of said fixed date.

3.3 Landlord Delays.

If the Premises are not substantially completed by the fixed date specified in Section 1.7 due to default on the part of Landlord (as determined in accordance with Article 26 below), then as Tenant’s sole remedy for the delay in Tenant’s occupancy of the Premises, the fixed date component of the definition of the Commencement Date shall be delayed for the period of delay in substantial completion of the Premises resulting from Landlord’s default. The Premises shall be deemed “substantially completed” when (i) Landlord has provided reasonable access to the Premises to Tenant, (ii) Landlord has completed the work covered by the Work Letter other than details of construction which do not materially interfere with Tenant’s use of the Premises, and (iii) Landlord has obtained a permanent or temporary certificate of occupancy for the Premises (or its equivalent).

ARTICLE 4

USE OF PREMISES AND COMMON AREAS

4.1 Premises.

The Premises shall be used for general office purposes and for no other purposes. Tenant will use the Premises in a careful, safe, and proper manner. Tenant agrees not to use or permit the use of the Premises for any purpose which is illegal or prohibited by any applicable Laws, or which, in Landlord’s opinion, creates a nuisance or would increase the cost of insurance coverage with respect to the Building. Tenant shall not use or occupy the Premises in violation of such rules and regulations described in Article 15 below nor in violation of the REA or any other recorded covenants, conditions or restrictions affecting the Building. Tenant shall not place a load upon the Premises exceeding the average pounds live load per square foot of floor area specified for the Building by Landlord’s architect, with the partitions to be considered part of the live load. Landlord reserves the right to prescribe the weight and position of all safes, files and heavy equipment which Tenant desires to place in the Premises so as to distribute properly the weight thereof.

4.2 Common Areas of Building.

Tenant shall have the nonexclusive right to use in common with other tenants in the Building, and subject to the rules of the Building referred to in Article 15 below, the following areas (“Common Areas”) appurtenant to the Premises:

(i) The common entrances, lobbies, restrooms, elevators, stairways and accessways, loading docks, ramps, drives and platforms and any passageways and serviceways thereto, and the common pipes, conduits, wires and appurtenant equipment serving the Premises;

(ii) Parking areas (subject to the provisions of the Parking Agreement attached hereto as Exhibit “C”), loading and unloading areas, trash areas, roadways, sidewalks, walkways, parkways, driveways and landscaped areas appurtenant to the Building.

4.3 Landlord’s Rights in Common Areas.

Landlord reserves the right from time to time without unreasonable interference with Tenant’s use:

(i) To install, use, maintain, repair and replace pipes, ducts, conduits, wires and appurtenant meters and equipment for service to other parts of the Building above the ceiling surfaces, below the floor surfaces, within the walls and in the central core areas, and to relocate any pipes, ducts, conduits, wires and appurtenant meters and equipment included in the Premises which are located in the Premises or located elsewhere outside the Premises, and to expand the Building;

(ii) To make changes to the Common Areas, including, without limitation, changes in the location, size, shape and number of driveways, entrances, loading and unloading areas, ingress, egress, direction of traffic, landscaped areas and walkways and, subject to the Parking Agreement, parking spaces and parking areas;

 

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(iii) To close temporarily any of the Common Areas for maintenance purposes so long as reasonable access to the Premises remains available;

(iv) To use the Common Areas while engaged in making additional improvements, repairs or alterations to the Building, or any portion thereof; and

(v) To do and perform such other acts and make such other changes in, to or with respect to the Common Areas and Building as Landlord may, in the exercise of sound business judgment, deem to be appropriate.

ARTICLE 5

BASE RENT AND ADDITIONAL RENT

5.1 Base Rent

Tenant agrees to pay to Landlord during the Lease Term, without any setoff or deduction whatsoever the Base Rent, and all such other sums of money as shall become due hereunder as Additional Rent. Should Tenant fail to pay any Additional Rent in a timely manner, Landlord shall be entitled to exercise all such rights and remedies as are herein provided in the case of the nonpayment of Base Rent. The annual Base Rent for each calendar year or portion thereof daring the Lease Term, together with estimated Additional Rent pursuant to Article 6 hereof then in effect, shall be due and payable in advance, in lawful money of the United States of America which shall be legal tender at the time of payment, in twelve (12) equal installments on the first day of each calendar month during the initial term of this Lease and any extensions or renewals thereof, and Tenant hereby agrees to pay such Base Rent and Additional Rent to Landlord at Landlord’s address provided herein (or such other address as may be designated by Landlord in writing from time to time) monthly, in advance, and without demand. If the Lease Term commences on a day other than the first day of a month or terminates on a day other than the last day of a month, then the installments of Base Rent and Additional Rent for such month or months shall be prorated, based on the number of days in such month.

5.2 Intentionally Omitted.

5.3 Additional Rent

All charges payable by Tenant hereunder other than Base Rent (including, without limitation, Operating Expenses payable pursuant to Article 6 below) are called “Additional Rent.” Unless this Lease provides otherwise, all Additional Rent shall be paid with the next monthly installment of Base Rent. Base Rent and Additional Rent are sometimes referred to collectively as “Rent.”

5.4 Interest on Late Payments.

All installments of Rent not paid when due and payable shall bear interest at the Lease Interest Rate from the date due until paid. In addition, if any installment of Rent is not received by Landlord within five (5) days after notice that said amount is past due from Landlord to Tenant, Tenant shall pay to Landlord, as Additional Rent, five percent (5%) of the overdue amount as a late charge. Landlord’s acceptance of any late charge or interest shall not constitute a waiver of Tenant’s default with respect to the overdue amount nor prevent Landlord from exercising any of the other lights and remedies available to Landlord under this Lease or any law now or hereafter in effect.

ARTICLE 6

BASE RENT ADJUSTMENT

The Base Rent payable hereunder shall be adjusted upward from time to time in accordance with the following provisions:

(a) Tenant shall pay to Landlord as an adjustment to Rent, an amount equal to the excess the “Excess”) from time to time of total annual Operating Expenses per square foot of Rentable Area of the Premises, as Grossed-Up, over and above the Expense Stop. The Excess shall be obtained by multiplying (i) the difference between the annual Operating Expense per square foot of Rentable Area in the Premises and the Expense Stop, by (ii) the total Rentable Area of the Premises as set forth in Section 1.15. Such amount shall be paid in advance in monthly installments on the same dates as Base Rent is due and payable hereunder based on Landlord’s notice delivered to Tenant from time to time setting forth Landlord’s good faith estimate of the Operating Expenses for the current calendar year. Landlord shall have the right to adjust such amount no more than once a year to reflect any changes in Landlord’s estimate of Operating Expenses.

 

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(b) By April 1 of each calendar year during the Lease Term, or as soon thereafter as practicable but no later than May 1, Landlord shall furnish to Tenant a statement (“Actual Statement”) of Landlord’s annual Operating Expenses, as Grossed-Up, for the previous calendar year. If for any calendar year the amounts collected from Tenant for the prior year, as a result of Landlord’s estimate of Operating Expenses, exceeds the amount of the Excess actually due during such prior year, then Landlord shall refund to Tenant any overpayment (or at Landlord’s option, apply such amount against Rent due or to become due hereunder). Likewise, Tenant shall pay to Landlord, on demand, any underpayment with respect lo the prior year.

ARTICLE 7

SERVICES TO BE FURNISHED BY LANDLORD

Landlord agrees to furnish Tenant the following services as an Operating Expense for the Building (except as specifically provided below):

(a) Hot and cold water at those points of supply provided for general use of other tenants in the Building, central heat and air conditioning in season, at such temperatures and in such amounts as are considered by Landlord to be standard or as required by governmental authority; provided, however, heating and air conditioning service (“HVAC”) at times other than “Normal Business Hours” for the Building (which are 8:00 a.m. to 6:00 p.m. on Mondays through Fridays and 8:00 a.m. to 1:00 p.m. on Saturdays, exclusive of federally recognized holidays), shall be furnished upon receipt of a phone request by Tenant utilizing Landlord’s computer which permits Tenant to make phone requests for such HVAC. Tenant shall bear the entire cost of such additional service as such costs are determined by Landlord from time to time. Notwithstanding the foregoing, Tenant shall receive twenty (20) hours of HVAC at no charge (“Free HVAC Hours”) each month of the initial Lease Term. Any unused Free HVAC Hours shall not be carried over to the next month.

(b) Routine maintenance and electric lighting service for all Common Areas and service areas of the Building in the manner and to the extent deemed by Landlord to be standard.

(c) Janitorial service, five (5) days a week, exclusive of federally recognized holidays; provided, however, if Tenant’s floor covering or other improvements require special treatment, Tenant shall pay the additional cleaning cost attributable thereto as Additional Rent upon presentation of a statement therefor by Landlord.

(d) Subject to the provisions of Article 13, facilities to provide all electrical current required by a typical office user, as determined by Landlord, in its use and occupancy of the Premises.

(e) All Building Standard fluorescent bulb replacement in the Premises and fluorescent and incandescent bulb replacement in the Common Areas of the Building.

(f) Security in the form of limited access to the Building during other than Normal Business Hours shall be provided in such form as Landlord deems appropriate. Landlord may charge a fee for card keys or other security devices. Landlord, however, shall have no liability to Tenant, its employees, agents, invitees or licensees for losses due to theft or burglary, or for damages resulting from the actions of unauthorized persons on the Premises or in the Building and Landlord shall not be required to insure against any such losses. Tenant shall cooperate fully in Landlord’s efforts to maintain security in the Building and shall follow all regulations promulgated by Landlord which respect thereto.

The failure by Landlord to any extent to furnish, or the interruption or termination of these defined services in whole or part, resulting from causes beyond the reasonable control of Landlord shall not render Landlord liable in any respect nor be construed as an eviction of Tenant, nor work an abatement of Rent, nor relieve Tenant from the obligation to fulfill any covenant or agreement hereof. Should any of the equipment or machinery used in the provision of such services for any cause cease to function properly, Tenant shall have no claim for offset or abatement or rent or damages on account of an interruption in service resulting therefrom.

 

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ARTICLE 8

IMPROVEMENTS TO BE MADE BY LANDLORD

Except as otherwise provided in the Work Letter attached hereto as Exhibit “D”, all installations and improvements now or hereafter placed on the Premises shall be for Tenant’s account and at Tenant’s cost (and Tenant shall pay ad valorem taxes and the cost of any increased insurance premiums thereon or attributable thereto), which cost shall be payable by Tenant to Landlord upon demand as Additional Rent.

ARTICLE 9

MAINTENANCE AND REPAIR OF PREMISES BY LANDLORD

Except as otherwise expressly provided herein, Landlord shall not be required to perform any maintenance or to make any repairs to the Premises.

ARTICLE 10

GRAPHICS

Landlord shall provide and install, at Tenant’s cost, all letters or numerals on doors in the Premises; all such letters and numerals shall be in the standard graphics for the Building and no others shall be used or permitted on the Premises without Landlord’s prior written consent. Tenant shall have the right lo designate two (2) names on the directory board in the lobby of the Building. Landlord shall have the option to maintain, in place of the directory board in the lobby of the Building, a computerized directory with display screen which has the capacity to accommodate Tenant’s name designation.

ARTICLE 11

CARE OF THE PREMISES BY TENANT

Tenant agrees not to commit or allow any waste to be committed on any portion of the Premises, and at the termination of this Lease agrees to deliver up the Premises to Landlord in as good condition as at the Commencement Date of this Lease, ordinary wear and tear excepted.

ARTICLE 12

REPAIRS AND ALTERATIONS BY TENANT

Tenant covenants and agrees that Tenant shall be responsible, at Tenant’s own cost and expense, for costs incurred by Landlord to repair or replace any damage done to the Building, or any part thereof, caused by Tenant or Tenant’s agents, employees, invitees, or visitors, to as good a condition as it was in prior to such damage. Tenant shall, when and if needed or whenever requested by Landlord to do so, at Tenant’s sole cost and expense, maintain and make all repairs to the Premises and the improvements therein, to keep, maintain and preserve the Premises in first-class condition, excepting ordinary wear and tear. Any such maintenance and repairs shall be performed by a contractor approved by Landlord. If Tenant fails to make such repairs or replacements promptly, Landlord may, at its option, make repairs or replacements, and Tenant shall pay the cost thereof to Landlord on demand as Additional Rent Tenant agrees with Landlord not to make or allow to be made any alterations to the Premises, install any vending machines on the Premises, or place signs on the Premises which are visible from outside the Premises, without first obtaining the written consent of Landlord in each such instance, which consent may be given on such conditions as Landlord may elect. Tenant shall deliver to Landlord, for Landlord’s approval prior to the construction of any alterations, a complete set of plans and specifications for the proposed alterations, additions or improvements, copies of contracts with general contractors, evidence of contractor’s insurance and bonds, and all necessary permits for such construction. Landlord may require Tenant to provide demolition and/or lien and completion bonds in form and amount satisfactory to Landlord. All alterations, additions, and improvements will be accomplished in a good and workmanlike manner, in conformity with all applicable laws, and by a contractor approved by Landlord. Landlord’s approval of the plans, specifications and working drawings for Tenant’s alterations shall create no responsibility or liability on the part of Landlord for their completeness, design, sufficiency, or compliance with all laws, rules and regulations of governmental agencies or authorities. Upon completion of any such work, Tenant shall provide Landlord with “as built” plans, copies of all construction contracts, and proof of payment for all labor and materials. Any and all alterations to the Premises shall become the property of Landlord upon termination of this Lease (except for movable equipment or furniture owned by Tenant). Landlord may, nonetheless, require Tenant to remove any and all fixtures, equipment and other improvements installed on the Premises. In the event that Landlord so elects, and Tenant fails to remove such improvements, Landlord may remove such improvements at Tenant’s cost, and Tenant shall pay Landlord on demand the cost of restoring the Premises to the condition that existed immediately prior to the construction of such improvements.

 

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ARTICLE 13

USE OF ELECTRICAL SERVICES BY TENANT

Tenant’s use of electrical services furnished by Landlord shall be subject to the following:

(a) Landlord agrees to furnish to the Premises five (5) watts of electric current, connected load, per square foot of Usable Area during Normal Business Hours within the Premises on an annualized basis for normal lighting, normal fractional horsepower office machines, and HVAC as required in Landlord’s judgment for the use and occupation of the Premises.

(b) In the event that Tenant requires or uses more electric power than specified in Section 13(a) above, Landlord may, at Landlord’s option, require Tenant to pay the cost as reasonably determined by Landlord of such extraordinary usage as Additional Rent. In addition, Landlord may install checkmeters in or for the Premises, at Tenant’s sole cost and expense, and Tenant shall thereafter pay all charges of the utility company providing electric service and Landlord shall make an appropriate adjustment to Tenant’s obligation to pay a proportionate share of the Operating Expenses to account for the fact that Tenant is directly paying such metered charges.

ARTICLE 14

LAWS AND REGULATIONS

14.1 General.

At its sole cost and expense, Tenant will promptly comply with all Laws, statutes, ordinance, and governmental rules, regulations, or requirements now in force or in force after the Commencement Date, with the requirements of any board of fire underwriters or other similar body constituted now or after the date, with any direction or occupancy certificate issued pursuant to any law by any public office or officers, as well as with the provisions of all recorded documents affecting the Premises, insofar as they relate to the condition, use, or occupancy of the Premises.

14.2 Hazardous Materials.

(a) For purposes of this Lease, “Hazardous Materials” means any explosives, radioactive materials, hazardous wastes or hazardous substances, including without limitation substances defined as “hazardous substances” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. ## 9601-9657; the Hazardous Materials Transportation Act of 1975, 49 U.S.C. ## 1801-1812; the Resource Conservation and Recovery Act of 1976, 42 U.S.C. ## 6901- 6987; or any other federal, state, or local statute, law, ordinance, code, role, regulation, order, or decree regulating, relating to, or imposing liability or standards of conduct concerning hazardous materials, waste, or substances now or at any time hereafter in effect (collectively, “Hazardous Materials Laws”).

(b) Tenant will not cause or permit the storage, use, generation, or disposition of any Hazardous Materials in, on, or about the Premises or the project by Tenant, its agents, employees, or contractors. Tenant will not permit the Premises to be used or operated in a manner that may cause the Premises or the project to be contaminated by any Hazardous Materials in violation of any Hazardous Materials Laws. Tenant will immediately advise Landlord in writing of (1) any and all enforcement, cleanup, remedial, removal, or other governmental or regulatory actions instituted, completed, or threatened pursuant to any Hazardous Materials Laws relating to any Hazardous Materials affecting the Premises; and (2) all claims made or threatened by any third party against Tenant, Landlord, or the Premises relating to damage, contribution, cost recovery, compensation, loss, or injury resulting from any Hazardous Materials on or about the Premises. Without Landlord’s prior written consent, Tenant will not take any remedial action or enter into any agreements or settlements in response to die presence of any Hazardous Materials in, on, or about the Premises.

(c) Tenant will be solely responsible for and will defend, indemnify and hold Landlord, its agents, and employees harmless from and against all claims, costs, and liabilities, including attorneys’ fees and costs, arising out of or in connection with Tenant’s breach of its obligations in this Article 14. Tenant will be solely responsible for and will defend, indemnify, and hold Landlord, its agents, and employees harmless from and against any and all claims, costs, and liabilities, including attorneys’ fees and costs, arising out of or in connection with the removal, cleanup, and restoration work and materials necessary to return the Premises and any other property of whatever nature located in, on, or about the Building, to their condition existing prior to the introduction of Hazardous Materials by Tenant, its agents, employees or contractors. Tenant’s obligations under this Article 14 will survive the expiration or other termination of this Lease.

 

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14.3 Certain Insurance Risks.

Tenant will not do or permit to be done any act or thing upon the Premises or the Building which would (i) jeopardize or be in conflict with fire insurance policies covering the Building or covering any fixtures and property in the Building; (ii) increase the rate of fire insurance applicable to the Building to an amount higher than it otherwise would be for general office use of (he Building; or (iii) subject Landlord to any liability or responsibility for injury to any person or persons or to property by reason of any business or operation being carried on upon the Premises.

ARTICLE 15

BUILDING RULES

Tenant will comply with the rules of the Building adopted and altered by Landlord from time to time and will cause all of its agents, employees, invitees and visitors to do so; all changes to such rules will be sent by Landlord to Tenant in writing.

ARTICLE 16

ENTRY BY LANDLORD

Tenant agrees to permit Landlord or its agents or representatives to enter into and upon any part of the Premises at all reasonable hours (and in emergencies at all times) to inspect the same, or to show the Premises to prospective purchasers, Mortgagees, tenants or insurers, to clean or make repairs, alterations or additions thereto, and Tenant shall not be entitled to any abatement or reduction of rent by reason thereof.

ARTICLE 17

ASSIGNMENT AND SUBLETTING

17.1 Tenant shall not assign, sublease, transfer or encumber this Lease or any interest therein. Any attempted assignment or sublease by Tenant in violation of the terms and covenants of this Article 17 shall be void. Notwithstanding anything to the contrary contained in this Article 17, an assignment or subletting of all or a portion of the Premises to an “Affiliate” of Tenant shall not be deemed a transfer under this Article 17, provided that (a) Tenant notifies Landlord of any such assignment or sublease within fifteen (15) after its effective date and promptly supplies Landlord with any documents or information reasonably requested by Landlord regarding such assignment or sublease or such “Affiliate,” and (b) such assignment or sublease is not a subterfuge by Tenant to avoid its obligations under this Lease. The term “Affiliate” of Tenant shall mean an entity which is controlled by, controls, or is under common control with Tenant. The term control” or “controlled” as used in this Section 17.1 shall mean the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities of, or more than fifty percent (50%) of the voting interest in, any entity. In no event shall a transfer, assignment or subletting of all or a portion of the Premises to an Affiliate release Tenant from the payment and performance of its obligations in the Lease, but rather Tenant and its assignee will be jointly and severally primarily liable for such payment and performance.

17.2 If Tenant requests Landlord’s consent to an assignment of this Lease or subletting of all or part of the Premises, Landlord shall have the option (without limiting Landlord’s other rights hereunder) of terminating this Lease upon thirty (30) days notice. Landlord may then, at Landlord’s option, lease space to the prospective assignee or subtenant. If Landlord should fail to notify Tenant in writing of its decision within a thirty (30) day period after Landlord is notified in writing of the proposed assignment or sublease, Landlord shall be deemed to have refused to consent to such proposed assignment or sublease, and to have elected to keep this Lease in full force and effect.

17.3 Fifty percent (50%) of all cash or other proceeds of any assignment, sale or sublease of Tenant’s interest in (his Lease, whether consented to by Landlord or nol, shall be paid to Landlord notwithstanding the fact that such proceeds exceed the Rent called for hereunder, unless Landlord agrees to the contrary in writing, and Tenant hereby assigns all rights it might have or ever acquire in any such proceeds to Landlord. This covenant and assignment shall run with the land and shall bind Tenant and Tenant’s heirs, executors, administrators, personal representatives, successors and assigns. Any assignee, sublessee or purchaser of Tenant’s interest in this Lease (all such assignees, sublessees and purchasers being hereinafter referred to as “Successors”), by assuming Tenant’s obligations hereunder, shall assume liability to Landlord for all amounts paid to persons other than Landlord by such Successor in consideration of any such sale, assignment or subletting, in violation of the provisions hereof.

17.4 No assignment, sublease or other transfer consented to by Landlord, shall release Tenant or change Tenant’s primary liability to pay the rent and to perform all other obligations of Tenant under this Lease. Upon die occurrence of any default under (his Lease, Landlord may proceed directly against Tenant without the necessity of exhausting any remedies against any subtenant or assignee. Upon termination of this Lease, any permitted subtenant shall, at Landlord’s option, attorn to Landlord and shall

 

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pay all Rent directly to Landlord. Landlord’s acceptance of Rent from any other person shall not constitute a waiver of any provision of this Article 17. Consent to one transfer shall not constitute a consent to any subsequent transfer. 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.

17.5 No merger shall result from Tenant’s sublease of the Premises under this Article 17, Tenant’s surrender of this Lease or the termination of this Lease in any other manner. In any such event. Landlord may terminate any or all subtenancies or succeed to the interest of Tenant as sublandlord thereunder.

17.6 Landlord’s consent to an assignment or sublease will not be effective until; a fully executed copy of the instrument of assignment or sublease has been delivered to Landlord; in the case of an assignment, Landlord has received a written instrument in which the assignee has assumed and agreed to perform all of Tenant’s obligations in the Lease, and Landlord has been reimbursed the amount of Two Thousand Five Hundred and 00/100 Dollars ($2,500.00) for its fees and costs incurred in connection with both determining whether to give its consent and giving its consent.

ARTICLE 18

LIENS

Tenant will not permit any mechanic’s lien(s) or other liens to be placed upon the Premises or the Building and nothing in this Lease shall be deemed or construed in any way as constituting the consent or request of Landlord, express or implied, by inference or otherwise, to any person for the performance of any labor or the furnishing of any materials to the Premises, or any part thereof, nor as giving Tenant any right, power, or authority to contract for or permit the rendering of any services or the furnishing of any materials that would give rise to any mechanics or other liens against the Premises. In the event any such lien is attached to the Premises, then, in addition to any other right or remedy of Landlord, Landlord may, but shall not be obligated to, discharge the same. Any amount paid by Landlord for any of the aforesaid purposes shall be paid by Tenant to Landlord on demand as Additional Rent.

ARTICLE 19

INSURANCE

19.1 Property Insurance.

Landlord shall maintain property coverage insurance on the Building Shell and appurtenant structures in the Common Areas in such amounts as Landlord and any Mortgagees may deem necessary or appropriate. Such insurance shall be maintained at the expense of Landlord (as a part of Operating Expenses), and payments for losses thereunder shall be made solely to Landlord or the Mortgagees as their respective interests shall appear. Tenant shall obtain and keep in force at all times during the Lease Term, a policy or policies of insurance covering loss or damage to all of the improvements, betterments, income and business contents located within the Premises other than the Building Shell (including all improvements constructed pursuant to Exhibit “D”) in the amount of the full replacement value thereof as ascertained by the Tenant’s insurance carrier, as the same may exist from time to time, against all perils normally covered in an “all risk” policy (including the perils of flood and surface waters), as such term is used in the insurance industry; provided, however, that Tenant shall have no obligation to insure against earthquake.

19.2 Liability Insurance.

Tenant shall, at Tenant’s expense, maintain a policy of Commercial General Liability insurance insuring Landlord and Tenant against liability arising out of the ownership, use, occupancy or maintenance of the Premises. Such insurance shall be on an occurrence basis providing single-limit coverage in an amount not less than Two Million Dollars ($2,000,000.00) per occurrence. The initial amount of such insurance shall be subject to periodic increase upon reasonable demand by Landlord based upon inflation, increased liability awards, recommendation of professional insurance advisers, and other relevant factors. However, the limits of such insurance shall not limit Tenant’s liability nor relieve Tenant of any obligation hereunder. Landlord shall be named as an additional insured on said policies and the policies shall contain the following provision: “Such insurance as afforded by this policy for the benefit of Landlord shall be primary as respects any claims, losses or liabilities arising out of the use of Premises by the Tenant or by Tenant’s operation and any insurance carried by Landlord shall be excess and non-contributing,” The policy shall insure Tenant’s performance of the indemnity provisions of Articles 14 and 20.

 

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19.3 Requirements for Insurance Policies.

Insurance required to be maintained by Tenant hereunder shall be in companies holding a “General Policyholders’ Rating” of A or better and a “financial rating” of 10 or better, as set forth in the most current issue of “Best’s Insurance Guide.” Tenant shall promptly deliver to Landlord, within thirty (30) days of the Commencement Date, original certificates evidencing the existence and amounts of such insurance. No such policy shall be cancelable or subject to reduction of coverage except after sixty (60) days prior written notice to Landlord. Tenant shall, within thirty (30) days prior to the expiration, cancellation or reduction of such policies, furnish Landlord with renewals or “binders” thereof. Tenant shall not do or permit to be done anything which shall invalidate the insurance policies required under this Lease.

19.4 Waiver of Subrogation Rights.

Tena