Exhibit 10.1
TRIPLE NET SPACE
LEASE
(MULTI-TENANT)
between
BERNARDO SUMMIT
LLC,
a California limited liability
company,
as
LANDLORD
and
LIONBRIDGE TECHNOLOGIES,
INC.,
a Delaware
corporation,
as
TENANT
for
PREMISES
At
The Summit
SUITE B, BUILDING 5
SAN DIEGO, CALIFORNIA
TABLE OF CONTENTS
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Page
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ARTICLE
I
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SUMMARY OF
BASIC LEASE INFORMATION
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1
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ARTICLE II
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PREMISES
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4
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Section 2.01
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Demise of
Premises
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4
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Section 2.02
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Common
Area
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4
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Section 2.03
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Parking
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5
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ARTICLE III
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TERM
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5
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Section 3.01
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Lease
Term
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5
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Section 3.02
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Option to
Extend.
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5
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ARTICLE IV
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RENT; TRIPLE
NET LEASE
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7
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Section 4.01
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Base
Rent
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7
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Section 4.02
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First Payment
of Rent
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8
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Section 4.03
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Absolute Triple
Net Lease
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8
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Section 4.04
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Additional
Rent
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8
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Section 4.05
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Operating
Expenses; Insurance Expenses
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9
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Section 4.06
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Tenant’s
Right to Review Supporting Data
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12
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Section 4.07
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Security
Deposit
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14
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ARTICLE
V
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USE
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15
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Section 5.01
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Permitted Use
and Limitations on Use
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15
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Section 5.02
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Compliance with
Laws
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15
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Section 5.03
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Delivery of
Premises
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16
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Section 5.04
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Building
Security
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17
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Section 5.05
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Rules and
Regulations
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17
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Section 5.06
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Defective
Condition at Delivery Date
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17
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Page
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ARTICLE VI
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MAINTENANCE, REPAIRS AND ALTERATIONS
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18
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Section 6.01
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Maintenance of
Premises and Building
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18
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Section 6.02
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Maintenance of
Project Common Areas
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19
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Section 6.03
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Alterations,
Additions and Improvements
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20
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Section 6.04
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Covenant
Against Liens
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21
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ARTICLE VII
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INSURANCE
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Section 7.01
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Property/Rental
Insurance for Premises
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21
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Section 7.02
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Property
Insurance for Fixtures and Inventory
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22
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Section 7.03
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Landlord’s Liability Insurance
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22
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Section 7.04
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Tenant’s
Liability Insurance
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22
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Section 7.05
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Evidence of
Insurance
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23
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Section 7.06
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Mutual Waiver
of Claims and Subrogation Rights
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Section 7.07
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Indemnification
and Exculpation
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23
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ARTICLE VIII
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DAMAGE OR DESTRUCTION
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24
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Section 8.01
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Destruction of
the Premises
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24
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Section 8.02
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Waiver of Civil
Code Remedies
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26
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Section 8.03
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No Abatement of
Rentals
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26
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Section 8.04
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No Liability
for Tenant’s Alterations or Personal Property
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26
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ARTICLE IX
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REAL PROPERTY TAXES
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26
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Section 9.01
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Payment of
Taxes
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26
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Section 9.02
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Proration for
Partial Years
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28
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Section 9.03
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Personal
Property Taxes
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28
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ARTICLE X
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UTILITIES
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ARTICLE XI
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ASSIGNMENT AND SUBLETTING
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29
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Page
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Section 11.01
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Landlord’s Consent Required
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29
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Section 11.02
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Tenant
Affiliates
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29
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Section 11.03
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No Release of
Tenant
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29
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Section 11.04
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Excess
Rent
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30
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Section 11.05
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Information to
be Provided
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30
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ARTICLE XII
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DEFAULTS; REMEDIES
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30
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Section 12.01
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Defaults
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30
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Section 12.02
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Remedies
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31
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Section 12.03
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Default by
Landlord
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32
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Section 12.04
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Late
Charges
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33
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Section 12.05
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Landlord’s Right to Perform Tenant’s
Obligations
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33
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ARTICLE XIII
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CONDEMNATION OF PREMISES
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33
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Section 13.01
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Total
Condemnation
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33
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Section 13.02
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Partial
Condemnation
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33
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Section 13.03
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Award to
Tenant
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34
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ARTICLE XIV
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ENTRY BY LANDLORD
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34
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ARTICLE XV
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ESTOPPEL CERTIFICATE
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35
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Section 15.01
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Tenant’s
Statement
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35
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ARTICLE XVI
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LIMITATIONS ON LANDLORD’S
LIABILITY
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35
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ARTICLE XVII
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GENERAL PROVISIONS
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36
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Section 17.01
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Severability
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36
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Section 17.02
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Agreed Rate
Interest on Past-Due Obligations
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36
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Section 17.03
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Time of
Essence
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36
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Section 17.04
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Submission of
Lease
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36
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Section 17.05
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Incorporation
of Prior Agreements and Exhibits
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36
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Page
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Section 17.06
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Notices
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37
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Section 17.07
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Waivers
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37
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Section 17.08
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Recording
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37
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Section 17.09
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Surrender of
Possession; Holding Over
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38
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Section 17.10
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Cumulative
Remedies
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39
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Section 17.11
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Covenants and
Conditions
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39
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Section 17.12
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Binding Effect;
Choice of Law
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39
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Section 17.13
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Lease to be
Subordinate
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39
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Section 17.14
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Attorneys’ Fees
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40
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Section 17.15
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Signs
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40
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Section 17.16
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Merger
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41
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Section 17.17
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Quiet
Possession
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41
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Section 17.18
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Easements
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41
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Section 17.19
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Authority
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42
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Section 17.20
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Force Majeure
Delays
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42
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Section 17.21
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Hazardous
Materials
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42
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Section 17.22
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Modifications
Required by Landlord’s Lender.
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44
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Section 17.23
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Brokers
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44
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Section 17.24
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Survival
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44
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Section 17.25
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List of
Exhibits
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44
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This Triple Net Space Lease (the
“ Lease ”), dated as of the date first written
in the Summary of Basic Lease Information set forth in Article I
below (the “ Summary ”), is made by and between
BERNARDO SUMMIT LLC, a California limited liability company
(“ Landlord ”) and LIONBRIDGE TECHNOLOGIES,
INC., a Delaware corporation (“ Tenant
”).
ARTICLE I
SUMMARY OF BASIC LEASE INFORMATION
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Date:
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February 25,
2009
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Premises
(Article II).
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Premises:
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An
approximately 43,768 rentable square feet of space comprising of
Suite B of the Building, as further set forth in
Exhibit A .
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Building:
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That certain
Building commonly known as Building 5 located at 16550 West
Bernardo Drive in San Diego, California 92127.
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Lease Term
(Article III).
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Initial Term:
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Thirty-six (36)
months, commencing on the Commencement Date and ending on the
Expiration Date, unless extended or terminated as provided for
herein.
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Commencement Date:
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April 1,
2009.
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Expiration Date:
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The day before
the third anniversary of the Commencement Date.
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Option(s) to Extend:
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Tenant is given
one (1) option to extend the Lease Term (“ Option to
Extend ”) for a period of thirty-six (36) months
(the “ Extended Term ”) immediately following
the date on which the initial Lease Term would otherwise
expire.
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Base Rent
(Section 4.01):
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Annual Base Rent
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Monthly Installment
of Base Rent
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Monthly Base Rent
Rate per Square Foot
of Rentable Area
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1
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$
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498,955.20
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$
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41,579.60
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$
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0.95
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2
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$
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514,711.68
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$
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42,892.64
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$
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0.98
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3
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$
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530,468.16
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$
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44,205.68
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$
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1.01
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4-6
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Fair Market
Rent (as defined in Section 3.02 below)
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Tenant’s Share
(Section 4.05).
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Tenant’s
Building Share: 43.4%
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Tenant’s
Project Share: 8.74%
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Security Deposit:
(Section 4.07):
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$62,150.56
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Permitted Use
(Article V):
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General office
and testing use only, consistent with an industrial
building.
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Parking Spaces
(Section 2.03):
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Four (4)
parking spaces per one thousand (1,000) square feet of
Rentable Area within the Premises
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Broker(s)
(Section 17.23):
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Representing Landlord:
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CBRE.
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Representing Tenant:
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CresaPartners.
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Tenant
Improvement Allowance
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(Section 2
of Exhibit C ):
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Landlord shall
provide a Tenant Improvement Allowance of up to $706,520.00 (i.e.
$15 per square foot of Rentable Area plus an additional
$50,000.00). Subject to the terms of Section 2.2 of the Work Letter
Agreement attached hereto as Exhibit C , Tenant may request
an “Additional Tenant Improvement Allowance” in the
amount of $218,840.00 (i.e. $5 per square foot of Rentable Area in
the Premises. This “additional Tenant Improvement
Allowance,” together with interest thereon at
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the rate of
seven percent (7%) per annum, shall be amortized over the Lease
Term and added to the Base Rent.
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Tenant’s Representative
(Section 5.1 of
Exhibit C ):
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Mike Labonte of
CresaPartners.
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Landlord’s Representative
(Section 5.2 of
Exhibit C ):
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Janette
Sammartino.
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ARTICLE II
PREMISES
Section 2.01
Demise of Premises
Landlord hereby leases to Tenant and
Tenant leases from Landlord for the Lease Term, at the rental, and
upon all of the terms and conditions set forth herein, certain
space consisting of approximately Forty-Tree Thousand Seven Hundred
Sixty-Eight (43,768) rentable square feet of space (“
Premises ”), which Premises, commonly referred to as
Suite B, comprise a portion that certain Building sometimes known
as “Building 5” located at 16550 West Bernardo Drive,
San Diego, California 92127 (“ Building ”) which
is one of a number of free standing , office and research
and development Project Buildings (“ Project Buildings
”) on real property situated in the City of San Diego, County
of San Diego, State of California and commonly known as The Summit.
The Premises are more particularly described and depicted herein in
Exhibit “A .” Landlord reserves the right
to access and use the restrooms and janitor, telephone and
electrical closets (as well as the space above any dropped
ceilings) for cabling, wiring, pipes and other Building system
elements. The rentable square footage of the Premises, Building and
other Project Buildings (the “ Rentable Area ”)
has been determined and certified by Landlord’s architect
pursuant to BOMA standards ANSIZ65.1-1996. The Premises, the
Project Buildings and appurtenances described herein, including
Common Area (defined below), and all other improvements at The
Summit together with the land on which the same are located are
together designated as the project (“ Project
”).
Section 2.02
Common Area
During the Lease Term, Tenant shall
have the non-exclusive right to use those portions of the Common
Area which are provided, from time to time, for use in common by
Landlord, Tenant and/or other tenants of the Project. Landlord
reserves the right, in its sole discretion, to modify the Common
Area (including, without limitation, increasing or reducing the
size thereof, adding additional or removing building structures,
facilities or other improvements, or changing the use,
configuration and elements thereof), to designate certain areas for
the exclusive use of Landlord and/or certain tenants of the
Project, and to close or restrict access of certain areas from time
to time for repair, maintenance or construction or to prevent a
dedication thereof; provided that (i) Tenant nevertheless
shall have reasonable access to the Premises and to parking areas
serving the Building, and (ii) any such modifications, when
completed, shall not unreasonably interfere with or restrict
Tenant’s access to or possession or use of the Premises.
Landlord further reserves the right to establish, repeal and amend
from time to time rules and regulations for the use of the Common
Area and to grant easements or other rights to use the Common Area
to others; provided that no amendment to the rules and regulations
shall unreasonably interfere with or restrict Tenant’s access
to or possession or use of the Premises or unreasonably and
materially increase Tenant’s Share of Operating Expenses; and
provided further that, to the extent of any conflict between an
express provision of this Lease (other than the attached Rules and
Regulations) and such Common Area rules and regulations, this Lease
shall control. The “ Common Area ” shall consist
of Project Common Area and Building Common Area (as defined below).
The “Project Common Area” shall mean all
portions of the Project other than the Project Buildings, including
landscaping, sidewalks, walkways, driveways, curbs, parking lots
(including striping), roadways within the Project, sprinkler
systems, lighting, surface water
drainage systems, as well as additional or
different facilities as Landlord in its sold discretion may from
time to time designate or install or make available for the use by
Tenant in common with others. The “Building Common
Area” shall mean those portions of the Building
designated as such from time to time by Landlord in its sole
discretion, including, without limitation, all mechanical areas,
pipe, cabling and wiring shafts, together with their respective
enclosing walls, as well as, to the extent not leased to any tenant
or occupant of the Building, all entrances, other lobbies, common
corridors and hallways, restrooms, janitor closets, telephone
closets, electric closets and other public or common areas located
in the Building.
Section 2.03
Parking
Landlord shall provide Tenant with
the number of parking spaces set forth in the Summary at no
additional charge, except to the extent included in Operating
Expenses pursuant to Section 4.05 below. The parties
acknowledge that the parking spaces shall not be designated for
Tenant’s use but shall instead be available to Tenant and
Tenant’s customers on an unreserved, non-designated
non-exclusive first come-first serve basis. Landlord shall have no
liability for the use of any such parking spaces by anyone (besides
Landlord) other than Tenant or Tenant’s visitors. In the
event Landlord elects or is required by any law to limit or control
parking at the Building or the Project, whether by validation of
parking tickets or any other method of assessment, Tenant, at its
cost, agrees to participate in such validation or assessment
program under such reasonable rules and regulations as are from
time to time established by Landlord. Except as otherwise expressly
provided herein, all costs and expenses associated with parking
areas serving the Project shall be included in Operating
Expenses.
ARTICLE III
TERM
Section 3.01
Lease Term
The term of this Lease (the “
Lease Term ”) shall commence on the Commencement Date
set forth in the Summary (the “ Commencement Date
”), and shall expire, unless sooner terminated as provided
for herein, on the Expiration Date set forth in the Summary (the
“ Expiration Date ”). At any time following the
Commencement Date, Landlord may deliver to Tenant a Memorandum of
Commencement of Lease Term substantially in the form attached
hereto as Exhibit B as a confirmation of the
information set forth therein, which Tenant shall execute and
return to Landlord within fifteen (15) business days after
receipt thereof.
Section 3.02
Option to Extend.
(a) Exercise
The Option(s) to Extend set forth in
the Basic Lease Information, if any, may be exercised by Tenant, if
at all, only by delivery of irrevocable written notice (the “
Option Notice ”) to Landlord given not more than
twelve (12) months nor less than six (6) months prior to
the end of the initial Lease Term; provided, however, if, as of the
date of delivery of the Option Notice or any day thereafter on or
before the last day of the initial Lease Term, Tenant (i) is
in default under this Lease (beyond the expiration of any
applicable notice period provided under this Lease), (ii) has
assigned this Lease to anyone other than an Affiliate (as defined
in
Section 11.02 below) or (iii) has
sublet more than fifty percent (50%) of the Premises to anyone
other than an Affiliate, then, at the sole option of Landlord, the
Option Notice shall be totally ineffective, and this Lease shall
expire on the last day of the initial Lease Term, if not sooner
terminated.
(b) Extended Term
Rent
In the event Tenant exercises its
Option to Extend set forth herein, all the terms and conditions of
this Lease shall continue to apply during the Extended Term, except
that the Base Rent payable by Tenant during the Extended Term shall
be equal to one hundred percent (100%) of Fair Market Rent (as
defined below), as determined pursuant to Section 3.03(c)
below. “ Fair Market Rent ” shall mean the
effective rental rate, determined on a per rentable square foot
basis, being charged (including periodic adjustments thereto as
applicable during the period of the Extended Term, to the extent
such adjustments are determined to be part of the Fair Market Rent)
in transactions entered into within the twelve (12) month
period immediately preceding the Negotiation Period, for comparable
space in similar buildings in the vicinity of the Building in the
Rancho Bernardo/Carmel Mountain Ranch market area (i.e., building s
of a similar age and quality considering any recent renovations or
modernization), with similar floor plate size and with similar
amenities, or, if such comparable space is not available, then
making adjustments in the determination of Fair Market Rent to
reflect the age, quality, layout and amenities of the Premises and
the Building, as contrasted to spaces in other buildings used for
comparison purposes, in all instances taking into consideration:
size; location; floor level; leasehold improvements or allowances
provided or to be provided; lease term; extent of services to be
provided; the time that the particular rate under consideration
became or is to become effective; and any other relevant terms or
conditions applicable to both new and renewing tenants, including
tenant concessions and inducements such as (i) the amount of
protection received by tenants in connection with the payment of
operating and tax expenses (i.e., base year or expense stop),
(ii) rental abatement concessions being given such tenants, if
any, in connection with such comparable space and in connection
with the period of construction of such space, and (iii) all
other tenant inducements and landlord concessions and payments
including, but not limited to, lease takeover payments, if any,
being granted such tenants in connection with such comparable
space, and real estate brokerage commissions (which shall be paid
to the applicable broker or to Tenant if Tenant does not utilize
the services of a broker in connection with such extension). The
intent of the parties is that Tenant will obtain the same rent and
other economic benefits that landlords would otherwise give in
comparable transactions and that Landlord will make and receive the
same economic payments and concessions that landlords would
otherwise make and receive in comparable transactions.
(c) Determination of Fair Market
Rent
(i) Negotiation . If Tenant
timely and properly exercises the Option to Extend, then, within
the first thirty (30) days following the date of delivery of
the Option Notice (the “ Negotiation Period ”),
the parties shall meet in good faith to negotiate the Base Rent for
the Premises during the Extended Term. If, during the Negotiation
Period, the parties agree on the Base Rent for the Premises during
the Extended Term, then such agreed amount shall be the Base Rent
payable by Tenant during the Extended Term.
(ii) Arbitration . In the
event that Tenant exercises Tenant’s Option to Extend in
accordance with this Lease and if the parties are unable to agree
on the Base Rent for the Premises within the Negotiation Period,
then within ten (10) days after the expiration of the
Negotiation Period, each party shall separately designate to the
other in writing an appraiser to make this determination. Each
appraiser designated shall be a member of the Appraisal Institute
and shall have at least ten (10) years experience in
appraising commercial real property in San Diego County. The
failure of either party to appoint an appraiser within the time
allowed shall be deemed equivalent to appointing the appraiser
appointed by the other party, who shall then determine the Fair
Market Rent for the Premises for the Extended Term. Within
five (5) business days of their appointment, the two
designated appraisers shall jointly designate a third similarly
qualified appraiser. The third similarly qualified appraiser will
not have worked in any capacity for either party over the
immediately preceding five (5) full years. Within
thirty (30) days after their appointment, each of the two
appointed appraisers shall submit to the third appraiser a sealed
envelope containing such appointed appraiser’s good faith
determination of the Fair Market Rent for the Premises for the
Extended Term; concurrently with such delivery, each such appraiser
shall deliver a copy of his or her determination to the other
appraiser. The third appraiser shall within ten (10) days
following receipt of such submissions, then determine which of the
two appraisers’ determinations most closely reflects Fair
Market Rent. The determination most closely reflecting the third
appraiser’s determination shall be deemed to be the Fair
Market Rent for the Premises during the Extended Term; the third
appraiser shall have no rights to adjust, amend or otherwise alter
the determinations made by the appraisers selected by the parties,
but must select one or the other of such appraisers’
submissions. The determination by such third appraiser shall be
final and binding upon the parties. Said third appraiser shall,
upon selecting the determination which most closely resembles Fair
Market Rent, concurrently notify both parties hereto in writing.
The parties shall share the appraisal expenses equally. If the
Extended Term begins prior to the determination of Fair Market
Rent, Tenant shall pay monthly installments of Base Rent equal to
one hundred percent (100%) of the monthly installment of Base
Rent in effect for the last year of the initial Lease Term. Once a
determination is made, any over payment or under payment shall be
reimbursed as a credit against, or paid by adding to, the monthly
installment of Base Rent next falling due.
ARTICLE IV
RENT; TRIPLE NET LEASE
Section 4.01
Base Rent
(a) Monthly Base Rent
.
Commencing on the Commencement Date
and continuing throughout the Lease Term, Tenant shall pay to
Landlord, without prior notice or demand, base rent (“
Base Rent ”) as set forth in the Summary, which shall
be payable in monthly installments, in advance, on or before the
first day of each calendar month of the Lease Term in which Base
Rent is due. For purposes hereof, “ Lease Year ”
shall mean each consecutive twelve (12) month period during
the Lease Term; provided, however, the first Lease Year shall
commence on the Commencement Date and end on the last day of the
calendar month immediately preceding the first anniversary of the
Commencement Date, and the second and each succeeding Lease Year
shall commence on the first day of the next calendar month. In the
event that any Lease Year
contains more or less than twelve (12) full
calendar months, the annual Base Rent for such Lease Year shall be
multiplied by a fraction, the numerator of which shall be the
number of months in such Lease Year and the denominator of which
shall be twelve (12). In the event that any month in any Lease
Year is less than a full calendar month, the Base Rent and
Additional Rent for such month shall be multiplied by a fraction,
the numerator of which shall be the number of days in such month
during the Lease Term and the denominator of which shall be number
of days in such calendar month (e.g., if the Lease Term commences
September 14, the fraction for such month shall be
14/30).
Section 4.02
First Payment of
Rent
Tenant shall pay to Landlord Base
Rent for the first full calendar month of the Lease Term, together
with Landlord’s estimate of Additional Rent due hereunder for
the first full calendar month of the Lease Term, upon
Tenant’s execution of this Lease.
Section 4.03
Absolute Triple Net
Lease
This Lease is what is commonly
called an “Absolute Triple Net Lease,” it being
understood that Landlord shall receive the Base Rent set forth in
Section 4.01 free and clear of, and in addition to, any and
all expenses, costs, impositions, taxes, assessments, liens or
charges of any nature whatsoever, subject to the exclusions set
forth in Section 4.05 below. Tenant shall pay all Rent in
lawful money of the United States of America to Landlord at the
notice address stated herein or to such other persons or at such
other places as Landlord may designate in writing on or before the
due date specified for same without prior demand, set-off or
deduction of any nature whatsoever. It is the intention of the
parties hereto that this Lease shall not be terminable for any
reason by Tenant, except as expressly set forth in this Lease, and
that Tenant shall in no event be entitled to any abatement of or
reduction in Rent payable under this Lease, except as herein
expressly provided in Articles VIII and XIII. Any present or future
law to the contrary shall not alter this agreement of the
parties.
Section 4.04
Additional Rent
In addition to the Base Rent
reserved by Section 4.01, commencing on the Commencement Date
and continuing throughout the Lease Term, Tenant shall pay
(i) Tenant’s Share of Operating Expenses;
(ii) Tenant’s Share of Insurance Expenses;
(iii) Tenant’s Share of Real Estate Taxes; and
(iv) a management fee (the “ Management Fee
”), payable on a monthly basis, in advance, at the same time
and in the same manner applicable to monthly installments of Base
Rent, in an amount equal to three percent (3%) of the then
applicable monthly installment of Base Rent. All of the foregoing
payments, together with any and all other amounts (other than Base
Rent), whether or not contemplated, payable by Tenant pursuant to
the terms of this Lease are referred to herein, collectively, as
“ Additional Rent ,” and Base Rent and
Additional Rent are referred to herein, collectively, as “
Rent .”
Section 4.05
Operating Expenses; Insurance
Expenses
(a) Definitions
“ Operating Expenses
” shall mean all expenses, costs and amounts of every kind
and nature which Landlord pays or accrues (whether obligated to do
so or undertaken at Landlord’s discretion) during any
calendar year during the Lease Term because of or in connection
with the ownership, operation, management, maintenance, security,
repair, replacement and restoration of the Project, the Building,
or any portion thereof, other than Insurance Expenses and Real
Property Taxes. Without limiting the generality of the foregoing,
Operating Expenses shall specifically include any and all of the
following: costs and expenses of cleaning, lighting, maintaining,
repairing and replacing all Project Common Area improvements and
elements (including, without limitation, light poles and fixtures,
storm and sanitary sewers, parking lots, driveways and roads) and
all Building Common Area improvements and elements (including,
without limitation, elevators, stairways, floors, exterior and
interior walls, roof, roof membrane and other elements of the
Building which are the responsibility of Landlord to maintain,
repair and replace under this Lease); costs of snow removal; costs
of parking lot striping; costs of removal of trash, rubbish,
garbage and other refuse; costs of painting of exterior and
interior walls; costs of removal of graffiti; costs of landscaping;
costs of providing security systems and personnel to the extent
Landlord determines in its sole discretion to do so; fire
protection and fire hydrant charges (including fire protection
system signaling devices now or hereafter required, and the costs
of maintaining of same); water and sewer charges; utility charges;
license and permit fees necessary to operate and maintain the
Building and the Project; costs of supplies, tools and materials
used in the operation and maintenance of the Building, the Project
and the Common Area; the cost (or the reasonable depreciation of
the cost) of equipment used in the operation and maintenance of the
Building, the Project and the Common Area (which shall be expensed
or amortized, respectively, by Landlord in its good faith
discretion using commercial real estate management principles,
consistently applied) and rent paid for leasing any such equipment;
reasonable cost of on-site or off-site space for the storage of any
and all items used in conjunction with the operation, management,
maintenance and repair of the Project (including, without
limitation, tools, machinery, records, decorations, tables,
benches, supplies and meters); the cost of making all improvements
which are intended to reduce Operating Expenses or to increase
public safety, or which may be then required by governmental
authority, laws, statutes, ordinances and/or regulations; the cost
of all licenses, certificates, permits and inspections; the cost of
contesting any governmental enactments which may affect Operating
Expenses; costs incurred to comply with any transportation system
management program, any present or anticipated conservation program
or any other governmental program; payments under any easement,
license, operating agreement, declaration, restrictive covenant, or
instrument pertaining to the sharing of costs by the Building or
the Project; costs, fees, charges or assessments imposed by, or
resulting from any mandate imposed on Landlord by, any federal,
state or local government for fire and police protection, trash
removal, community services, or other services which do not
constitute Real Property Taxes hereunder; total compensation and
benefits (including premiums for workers’ compensation and
other insurance, except to the extent such premiums are included in
Insurance Expenses) paid to or on behalf of Landlord’s
employees, agents, consultants and contractors, including, without
limitation, full or part time on-site management or maintenance
personnel. In addition, if, during any Lease Year,
(i) Landlord is not furnishing a particular service or work
(the costs of which, if furnished by
Landlord, would be included in Operating
Expenses) to a tenant (other than Tenant) that has undertaken to
perform such service or work in lieu of receiving it from Landlord,
or (ii) in Landlord’s commercially reasonable judgment,
Tenant is using a disproportionate amount of any particular service
or work (the cost of which is included in Operating Expenses), then
Operating Expenses for that Lease Year shall be considered to be
increased by an amount equal to the additional Operating Expenses
that Landlord would reasonably have incurred during this period if
Landlord had furnished such service or work to that tenant, or an
amount equal to the cost of such increased, disproportionate by
Tenant, as relevant Notwithstanding the above, if Tenant’s
Share of the cost of any particular capital expenditure to the
Building or Common Area exceeds Fifteen Thousand Dollars ($15,000),
then such cost, together with interest thereon at the rate actually
charged Landlord by any lender or, if no such interest is relevant,
with interest thereon at an interest rate equal to the Agreed Rate
(as defined in Section 17.02 below), shall be amortized over
its useful life, and the amount includible in Operating Expenses
shall be limited to the monthly amortized cost thereof. The
determination of what constitutes a capital expenditure and the
useful life applicable thereto shall be made by Landlord in its
good faith discretion using accounting practices commonly utilized
in the commercial real estate industry, consistently
applied.
“ Insurance Expenses
” shall mean all expenses, costs and amounts of every kind
and nature which Landlord pays or accrues (whether obligated to do
so or undertaken at Landlord’s discretion) during any
calendar year during the Lease Term because of or with respect to
insurance carried by Landlord in connection with the Building or
the Project, including, without limitation, all insurance described
in Sections 7.01 and 7.03 below.
(b) Exclusions
For purposes of this Lease, the term
Operating Expenses shall not include (and Tenant shall have no
liability for) any of the following:
(i) Landlord’s non-cash
charges, such as depreciation (except for the amortization of
capital items as described in Section 4.05(a)
above),
(ii) any payments of points,
interest or principal relating to any debt secured by the
Premises,
(iii) costs associated with the
operation of the business of the ownership or entity which
constitutes “Landlord,” as distinguished from the costs
of Premises operations, including, but not limited to, partnership
accounting and legal matters, costs of defending any lawsuits with
any mortgagee (except as the actions of Tenant may be in issue),
costs of selling syndicating, financing, mortgaging or
hypothecating any of Landlord’s interest in the Premises,
costs of any disputes between Landlord and its employee (if any)
not engaged in Premises operation, or outside fees paid in
connection with disputes with other tenants,
(iv) legal fees, space
planners’ fees, real estate brokers’ leasing
commissions, and advertising expenses incurred in connection with
leasing of the Premises,
(v) costs for which Landlord has
been reimbursed by its insurance carrier or any tenant’s
insurance carrier,
(vi) any bad debt loss, rent loss or
reserves for bad debts or rent loss,
(vii) any interest or late fee
resulting from any failure of Landlord to pay any item of Operating
Expense when it would have been due without such interest or late
fee, provided, however, that nothing herein shall be deemed from
precluding Landlord from passing through to Tenant as an Operating
Expense any cost associated with paying Operating Expenses on any
permitted installment or other periodic basis, even if such payment
basis results in an increase in the Operating Expense in
question,
(viii) overhead and profit increment
paid to Landlord or to subsidiaries or affiliates of Landlord for
such services in the Premises to the extent the same exceeds the
costs of such services rendered by unaffiliated third parties on a
competitive basis,
(ix) costs of repairs or rebuilding
necessitated by condemnation,
(x) expenses for repairs,
replacements or improvements to the extent such expenses have been
reimbursed to Landlord through warranties from contractors or
suppliers,
(xi) costs incurred due to
Landlord’s violation of any terms and conditions of this
Lease or of any law,
(xiv) costs of repairs or other work
occasioned by fire, earthquake, windstorm or other casualty, except
for a reasonable deductible under any insurance policy, and costs
of remediating Hazardous Materials (except to the extent that any
such costs arise in the course of ordinary maintenance or result
from Tenant’s acts or omissions), provided that nothing
herein shall be deemed to release Tenant from any of Tenant’s
obligations pursuant to Section 17.21 of this
Lease,
(xv) reserves of any
kind,
(xvi) ground lease rents,
(xvii) transfer taxes, brokerage
commissions, title insurance premiums and escrow fees associated
with the sale of the Project,
(xviii) any management fee other
than the Management Fee, and
(xix) any costs which are otherwise
charged to Tenant as an Insurance Expense or a Real Property Tax
pursuant to the terms of this Lease.
(xx) any costs associated with
correcting any improvements at the Premises which were in violation
of any law in effect as of the date such improvement was
built.
(c) Tenant’s
Share
For purposes hereof, “
Tenant’s Building Share ” shall mean the
percentage derived by the quotient of the Rentable Area of the
Premises divided by the Rentable Area of the Building, which
Landlord and Tenant acknowledge and agree shall be the
percentage
set forth in the Summary. “
Tenant’s Project Share ” shall mean the
percentage derived by the quotient of the Rentable Area of the
Premises divided by the Rentable Area of the Project Buildings,
which Landlord and Tenant acknowledge and agree shall be the
percentage set forth in the Summary. The term “
Tenant’s Share ” shall refer to either
Tenant’s Building Share or Tenant’s Project Share, as
applicable. Notwithstanding the foregoing, Tenant’s Share
shall be subject to increase or reduction (in an amount Landlord
shall, in good faith, determine), based upon any increase or
reduction in the Rentable Area of the Building or Project
Buildings.
(d) Payment
Commencing on the Commencement Date,
and continuing through the Lease Term, Tenant shall pay, on the
first day of each calendar month, monthly installments of
Tenant’s Share of Operating Expenses, Tenant’s Share of
Insurance Expenses and Tenant’s Share of Real Property Taxes
in amounts set forth in a written estimate by Landlord. Landlord
shall have the right to revise its estimate from time to time
during a particular calendar year, in which event, commencing with
Tenant’s next installment of Base Rent due, Tenant thereafter
shall pay such amounts set forth in such revised estimate (which
may include an additional monthly amount based upon any shortfall
in Landlord’s previous estimate). Landlord shall furnish to
Tenant a statement (hereinafter referred to as “
Landlord’s Statement ”), within ninety (90)
days after the end of each calendar year, which shall set forth the
actual amounts of Tenant’s Share of Operating Expenses,
Tenant’s Share of Insurance Expenses and Tenant’s Share
of Real Property Taxes for such preceding calendar year. In the
event that the actual amounts of Tenant’s Share of Operating
Expenses, Tenant’s Share of Insurance Expenses and
Tenant’s Share of Real Property Taxes for such preceding
calendar year, in the aggregate, exceed the estimated amounts paid
by Tenant with respect thereto during such preceding calendar year,
then Tenant shall pay to Landlord, as Additional Rent, the entire
amount of such excess within thirty (30) days after receipt of
Landlord’s Statement. In the event that the actual amounts of
Tenant’s Share of Operating Expenses, Tenant’s Share of
Insurance Expenses and Tenant’s Share of Real Property Taxes
for such preceding calendar year, in the aggregate, are less than
the estimated amounts paid by Tenant with respect thereto during
such preceding calendar year, then Landlord shall apply such
difference as a credit to Additional Rent next falling due (or if
the Lease Term has expired or terminated and there remains no money
due to Landlord, then Landlord shall remit to Tenant the amount of
such difference within thirty (30) days after the date of the
Landlord’s Statement). Tenant’s Share of Operating
Expenses for the ensuing estimation period shall be adjusted upward
or downward based upon Landlord’s Statement.
Section 4.06
Tenant’s Right to Review
Supporting Data
(a) Exercise of Right by
Tenant
Provided that Tenant is not in
default under this Lease, and provided further that Tenant strictly
complies with the provisions of this Section 4.06, Tenant
shall have the right upon thirty (30) days written notice to
Landlord to reasonably review supporting data for any portion of a
Landlord’s Statement that Tenant claims is incorrect.
Landlord shall maintain at all times duri