Exhibit 10.59
***Certain identified information has been
omitted from this exhibit because it is both (i) not material and (ii) information that the Registrant treats as private or
confidential. Such omitted information is indicated by brackets (“[...***...]”) in this exhibit. ***
OFFICE
LEASE
(Full Service)
This Office Lease (“Lease”)
is made and entered into as of August 8, 2019 (“Effective Date”), by and between 960 SAN ANTONIO LLC, a California
limited liability company (“Landlord”), and SCILEX PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”)
(collectively the “Parties”, or individually a “Party”).
Landlord hereby leases to
Tenant and Tenant hereby leases from Landlord the premises located and addressed at 000 Xxx Xxxxxxx Xxxx, Xxxxx 000, Xxxx Xxxx,
Xxxxxxxxxx, as described in Exhibit A attached hereto and incorporated by reference consisting of the approximately 3,490
rentable square feet (“Premises”), located on the ground floor of the building (“Building”) (the
Premises, the Building, the Common Areas (as defined below), the land upon which they are located, along with all other buildings and
improvements thereon, are herein collectively referred to as the “Project”), for the Term and upon the terms and conditions
hereinafter set forth, and Landlord and Tenant hereby agree as follows:
1. Basic
Lease Provisions.
1.1 Term:
Approximately 62 months (“Original Term”) commencing on the earlier of (i) the date Tenant commences
business in the Premises and (ii) the date of Substantial Completion of Landlord’s Work (defined below), estimated to be September 1,
2019 (“Commencement Date”) and ending on the last day of the 62nd full calendar month thereafter, estimated to
be October 31, 2024 (“Expiration Date”). The term of the Must Take Space (defined below) shall commence on July 1,
2020.
1.2 Base
Rent:
Commencement Date – June 30, 2020 |
$[…***…]/month* |
July 1, 2020 – August 31, 2020 |
$[…***…]/month |
September 1, 2020 – August 31, 2021 |
$[…***…]/month |
September 1, 2021 – August 31, 2022 |
$[…***…]/month |
September 1, 2022 – August 31, 2023 |
$[…***…]/month |
September 1, 2023 – August 31, 2024 |
$[…***…]/month |
September 1, 2024 – October 31, 2024 |
$[…***…]/month |
*Provided that Tenant is not in default,
Base Rent applicable only to the initial Premises for the first two (2) months of the Original Term shall be abated. Tenant acknowledges
and agrees, however, that if this Lease shall terminate due to a default by Tenant hereunder or if this Lease shall be rejected in the
case of a bankruptcy, any Base Rent so abated shall be immediately due and payable and any future abatement shall be null and void and
of no further force and effect.
1.3 Security
Deposit: $[…***…]
1.4 Premises:
Suite 100
Must
Take Space: Suite 101
1.5 Permitted
Use: General office use, subject to applicable Laws.
1.6 Brokers:
None
1.7 Tenant’s
Share: 28.5% for the initial Premises, and 20.5% for the Must Take Space
1.8 Exhibits.
Exhibit A – Description of Premises; Exhibit B – Guaranty of Lease
1.9 Guarantor:
Sorrento Therapeutics, Inc., a Delaware corporation
2. Premises.
2.1 Letting.
Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises, for the term, at the rental, and upon all of the
terms, covenants and conditions set forth in this Lease. While the approximate square footage of the Premises may have been used in the
marketing of the Premises for purposes of comparison, the Base Rent stated herein is NOT tied to square footage and is not subject to
adjustment should the actual size be determined to be different. NOTE: Tenant is advised to verify the actual size prior to executing
this Lease.
2.2 Must
Take Space. In addition to the initial Premises, Tenant shall lease, for a term equal to the then unexpired portion of the Term of
this Lease, Suite No. 101 comprising approximately 2,510 rentable square feet as described on the attached Exhibit A
(the “Must Take Space”), whereupon the Must Take Space shall be deemed a part of the Premises as defined herein. Tenant’s
leasing of the Must Take Space shall be subject to all of the terms of this Lease except that: (i) the term of the Must Take Space
(the “Commencement Date for the Must Take Space”) shall commence on July 1, 2020, and shall expire on the Expiration
Date; (ii) the Base Rent shall be paid as set forth in Section 1.2 of the Basic Lease Provisions; (iii) effective as of
the Commencement Date for the Must Take Space, Tenant shall have the non-exclusive use of an additional 10 unreserved parking stalls
at the Project; and (iv) Tenant accepts the Must Take Space in its as-is condition, except Landlord shall convert the kitchen in
the Must Take Space into an office. In the event Landlord is unable to deliver possession of the Must Take Space on or before the Commencement
Date for the Must Take Space or any other date, Landlord shall not be liable for any damage caused thereby, nor shall this Lease be void
or voidable, nor shall the Original Term be extended by such delay. Tenant shall not be liable for Rent for the Must Take Space until
Landlord offers possession of the Must Take Space to Tenant. Landlord shall not be required to tender possession of, or access to, the
Must Take Space to Tenant until Tenant complies with its obligation to provide evidence of insurance as required pursuant to Section 9
below. Pending delivery of such evidence, Tenant shall be required to perform all of its obligations under this Lease with respect to
the Must Take Space from and after the Commencement Date for the Must Take Space, including the payment of Rent for the Must Take Space,
notwithstanding Landlord’s election to withhold possession pending receipt of such evidence of insurance. Tenant shall have the
right to expand into the Must Take Space prior to July 1, 2020, provided that (x) Tenant gives Landlord at least 60 days’
advance notice of Tenant’s desire to expand into the Must Take Space early, (y) Landlord terminates the existing lease with
the tenant of the Must Take Space on terms and conditions acceptable to Landlord in its sole discretion, and (z) Tenant and Landlord
execute an amendment to this Lease, on terms and conditions acceptable to Landlord in its sole discretion, adding the Must Take Space
to the initial Premises for a term commencing prior to the initially scheduled Commencement Date for the Must Take Space.
2.3 Condition
of Premises. Except as expressly set forth in this Section 2.3., Tenant hereby acknowledges agrees that the Premises shall be
taken “as is” as of the Commencement Date, “without any representations or warranties”, and Tenant hereby agrees
and warrants that it has investigated and inspected the condition of the Premises and the suitability of same for Tenant’s purposes,
and Tenant does hereby waive and disclaim any objection to, cause of action based upon, or claim that its obligations hereunder should
be reduced or limited because of the condition of the Premises or the Project or the suitability of same for Tenant’s purposes.
Tenant further agrees that no tenant improvements are to be made by Landlord under this Lease except as expressly set forth herein. Tenant
acknowledges that neither Landlord nor any agent nor any employee of Landlord has made any representations or warranty with respect to
the Premises or the Project or with respect to the suitability of either for the conduct of Tenant’s business and Tenant expressly
warrants and represents that Tenant has relied solely on its own investigation and inspection of the Premises and the Project in its decision
to enter into this Lease and let the Premises in the above-described condition. The taking of possession of the Premises by Tenant shall
conclusively establish that the Premises and the Project were at such time in satisfactory and good condition. Notwithstanding the foregoing,
Landlord shall (i) build one (1) conference room and two offices in the initial Premises and (ii) demise the small conference
room in the initial Premises into two offices (“Landlord’s Work”). “Substantial Completion”
of Landlord’s Work shall be defined as the date upon which Landlord determines that Landlord’s Work has been substantially
completed. If there shall be a delay or there are delays in the Substantial Completion of Landlord’s Work, as a direct, indirect,
partial, or total result of any act or omission of Tenant or any of its employees, managers, officers, directors, agents, contractors
or invitees (a “Tenant Delay”), then, notwithstanding anything to the contrary set forth in the Lease and regardless
of the actual date of the Substantial Completion of Landlord’s Work, the date of Substantial Completion of Landlord’s Work
shall be deemed to be the date the Substantial Completion of Landlord’s Work would have occurred if no Tenant Delay had occurred.
Absent any Tenant Delay, Substantial Completion shall occur not later than the Commencement Date.
2.4 Parking.
Tenant shall have the non-exclusive use of 13 unreserved parking stalls at the Project. Tenant shall not assign, transfer, or license
any of the parking spaces.
2.5 Common
Areas - Definition. The term “Common Areas” is defined as all areas and facilities outside the Premises and within
the exterior boundary line of the Project and interior utility raceways and installations within the Premises that are provided and designated
by the Landlord from time to time for the general non-exclusive use of Landlord, Tenant and other tenants of the Project and their respective
employees, suppliers, shippers, customers, contractors and invitees, including loading and unloading areas, trash areas, roadways, walkways,
driveways and landscaped areas. The fenced area next to the emergency exit to the Building is not a Common Area and is to be used solely
for emergency egress from the Building.
2.6 Common
Areas - Tenant’s Rights. Landlord grants to Tenant, for the benefit of Tenant and its employees, suppliers, shippers, contractors,
customers and invitees, during the term of this Lease, the non-exclusive right to use, in common with others entitled to such use, the
Common Areas as they exist from time to time, subject to any rights, powers, and privileges reserved by Landlord under the terms hereof
or under the terms of any rules and regulations or restrictions governing the use of the Project. Under no circumstances shall the
right herein granted to use the Common Areas be deemed to include the right to store any property, temporarily or permanently, in the
Common Areas. Any such storage shall be permitted only by the prior written consent of Landlord or Landlord’s designated agent,
which consent may be revoked at any time. In the event that any unauthorized storage shall occur then Landlord shall have the right, without
notice, in addition to such other rights and remedies that it may have, to remove the property and charge the cost to Tenant, which cost
shall be immediately payable upon demand by Landlord.
2.7 Common
Areas - Rules and Regulations. Landlord or such other person(s) as Landlord may appoint shall have the exclusive control
and management of the Common Areas and shall have the right, from time to time, to establish, modify, amend and enforce reasonable rules and
regulations (“Rules and Regulations”) for the management, safety, care, and cleanliness of the grounds, the
unloading of vehicles and the preservation of good order, as well as for the convenience of other occupants or tenants of the Building
and the Project and their invitees. Tenant agrees to abide by and conform to all such Rules and Regulations, and shall use its commercially
reasonable efforts to cause its employees, suppliers, shippers, customers, contractors and invitees to so abide and conform. Landlord
shall not be responsible to Tenant for the non-compliance with said Rules and Regulations by other tenants of the Project.
2.8 Common
Areas - Changes. Landlord shall have the right, in Landlord’s sole discretion, from time to time:
2.8.1 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, walkways and utility raceways;
2.8.2 To
close temporarily any of the Common Areas for maintenance purposes so long as reasonable access to the Premises remains available;
2.8.3 To
add additional buildings and improvements to the Common Areas;
2.8.4 To
use the Common Areas while engaged in making additional improvements, repairs or alterations to the Project, or any portion thereof; and
2.8.5 To
do and perform such other acts and make such other changes in, to or with respect to the Common Areas and Project as Landlord may, in
the exercise of sound business judgment, deem to be appropriate.
3. Term.
3.1 Term.
The Commencement Date, Expiration Date and Original Term of this Lease are as specified in Section 1.1. The Commencement Date for
the Must Take Space is as specified in Section 2.2. Upon the determination of the Commencement Date, Tenant shall, upon demand, sign
a letter agreement memorializing the Commencement Date and Expiration Date in form provided by Landlord.
3.2 Delay
in Possession. In the event Landlord is unable to deliver possession of the Premises on or before the Commencement Date or any other
date, Landlord shall not be liable for any damage caused thereby, nor shall this Lease be void or voidable. Tenant shall not be liable
for Rent until Landlord offers possession of the Premises to Tenant. Tenant agrees that any delay in possession of the initial Premises
will extend all dates set forth in this Lease (other than the Commencement Date for the Must Take Space) by a time equal to such delay.
3.3 Tenant
Compliance. Landlord shall not be required to tender possession of, or access to, the Premises to Tenant until Tenant complies with
its obligation to provide evidence of insurance as required pursuant to Section 9 below. Pending delivery of such evidence, Tenant
shall be required to perform all of its obligations under this Lease from and after the Commencement Date, including the payment of Rent,
notwithstanding Landlord’s election to withhold possession pending receipt of such evidence of insurance.
4. Rent.
4.1 Base
Rent. Commencing on the Commencement Date, Base Rent shall be payable by Tenant on the first day of each month, except that the Base
Rent for the fourth month of the Term shall be payable by Tenant upon Tenant’s execution of this Lease, without notice, offset or
demand pursuant to Section 1.2 of the Basic Lease Provisions. Rent shall be paid to the Landlord at its notice address noted herein,
or at any other place Landlord may from time to time designate by written notice mailed or delivered to Tenant. Base Rent for any partial
month at the beginning of the Term shall be prorated based on the number of days in such month.
4.2 Additional
Rent. Tenant shall pay as additional rent, and within 30 days of invoice from Landlord, personal property taxes on any Tenant
property or equipment not timely paid by Tenant, or any other sums due Landlord per the terms of this Lease other than Base Rent, including
without limitation, Increased Operating Expenses as set forth herein.
4.3 Operating
Expenses. In addition to the payment of Base Rent, during each calendar year of the Term following the calendar year 2019 (“Base
Year”) Tenant shall pay to Landlord as additional rent Tenant’s Share of any increase in Operating Expenses paid or incurred
by Landlord during such calendar year (“Increased Operating Expenses”) which are in excess of the Operating Expenses
paid or incurred by Landlord for the Base Year. Landlord may, at or after the start of any calendar year subsequent to the Base Year,
notify Tenant of the amount which Landlord estimates will be Tenant’s Share of the Increased Operating Expenses for such calendar
year, and Tenant shall pay to Landlord monthly in advance, at the time and place that monthly Base Rent is payable under this Lease, one-twelfth
(1/12) of such estimate. Landlord may, from time to time, reasonably revise Landlord’s estimate of Increased Operating Expenses
by written notice to Tenant and Tenant shall pay Tenant’s Share based upon such revised estimate. Landlord shall provide Tenant
with an annual Statement (“Statement”) of the actual Increased Operating Expenses incurred or paid by Landlord
for each calendar year subsequent to the Base Year within one hundred twenty (120) days after the end of each calendar year, or as
soon thereafter as reasonably practical. If Tenant’s Share of Increased Operating Expenses as shown on such Statement is greater
or less than the total estimated amounts actually paid by Tenant with respect to the calendar year covered by such Statement, then within
thirty (30) days after receipt of the Statement, Tenant shall pay in cash any sums owed to Landlord or, if applicable, Tenant shall
receive a credit against Tenant’s Share of Increased Operating Expenses next accruing for any sum overpaid by Tenant. Following
expiration of the calendar year in which the Term expires or during which this Lease is terminated, Landlord shall give a final Statement
to Tenant for such portion of the calendar year within one hundred twenty (120) days after the end of the Term. If Tenant’s
Share of any Increased Operating Expenses as shown on the final Statement is greater or less than the total amount of Increased Operating
Expenses actually paid by Tenant with respect to the calendar year covered by the final Statement, then within thirty (30) days after
the delivery of the Statement to Tenant the appropriate party shall pay to the other party any sums owed. Landlord may invoice Tenant
monthly and Tenant shall pay its pro rata share of such Increased Operating Expenses within ten (10) days of invoice. The obligations
of Landlord and Tenant under this Section shall survive the expiration or sooner termination of this Lease.
4.4 Definition
of Operating Expenses. The term “Operating Expenses” shall include all costs, charges and expenses incurred in connection
with the ownership, management, operation, maintenance, repair, restoration and replacement of the Project, including, without limitation:
(1) the cost of service, maintenance and inspection contracts, including, but not limited to, contracts for landscaping, janitorial,
window cleaning, rubbish removal, exterminating, elevator, plumbing, electrical, mechanical, HVAC and life safety equipment and systems
provided to the Project; (2) the cost of purchasing or renting equipment, supplies, tools, materials and uniforms used at the Project;
(3) premiums and other charges for the insurance policies to be maintained by Landlord under this Lease and for such other insurance
policies as Landlord shall elect to maintain with respect to the Project, and insurance deductibles and the amount of self-insured or
retained coverage; (4) costs of electricity, water, gas, sewer and other utility services provided to the Project that are not billed
directly to lessees, including, but not limited to, surcharges, assessments or impositions levied, assessed or imposed upon the Project
or upon the use and occupancy of the Project, as a result of any rationing of utility services or restriction on the use or quality of
utility services supplied to the Project; (5) Real Property Taxes; (6) sales, use and excise taxes on goods and services purchased
by Landlord and supplied to the Project; (7) fees for management services provided to the Project, whether provided by an independent
management company, Landlord, or an affiliate of Landlord; (8) the cost of the following capital improvements, equipment or devices
(as distinguished from replacement parts or components installed in the ordinary course of business which shall be expensed and included
in Operating Expenses) incurred or paid for by Landlord with respect to the Project or applicable part thereof: (A) capital improvements
required to be constructed in order to comply with any laws, regulations, codes or ordinances not in effect or applicable to the Project
as of the date of this Lease or to comply with any rules, regulations or requirements of any board of fire underwriters or similar insurance
body, (B) modification of existing or construction of additional capital improvements or building service equipment for the purpose
of reducing the consumption of utility services or Operating Expenses of the Project, or to effect a labor saving, energy saving or other
economy of utility costs, or (C) replacement of capital improvements or building service equipment existing as of the date of this
Lease when required because of normal wear and tear, which cost shall be amortized over the useful life of such capital improvement, equipment
or device as reasonably determined by Landlord, together with interest on the unamortized balance; (9) rental and purchase cost of
parts, supplies, tools and equipment leased or rented by Landlord to enable Landlord to supply services to the Project which Landlord
might otherwise contract for with a third party.
4.5 Definition
of Real Property Taxes. The term “Real Property Taxes” shall include all taxes, assessments, charges and surcharges (including
costs and expenses of contesting the amount or validity thereof by appropriate administrative or legal proceedings) levied or assessed
upon or with respect to the Project, or the interest of Landlord in the Project, and any personal property of Landlord used in connection
with the Project, including, without limitation, all so-called ad valorem real property taxes and general and special assessments (including,
without limitation, increases in real property taxes and/or assessments arising from a change in ownership or new construction); charges,
fees, levies or assessments for transit, housing, police, fire or other services or purported benefits to the Project; service payments
in lieu of taxes; and any tax, fee or charge on the act of entering into this Lease or any other lease of space in the Project, on the
use or occupancy of the Project or any part thereof, or on the rent payable under any lease of the Project or in connection with the business
of renting space in the Project (but excluding income taxes), which may now or hereafter be levied or assessed against Landlord by the
United States of America, the State of California, or any governmental or quasi-governmental entity holding the power of taxation, and
any other tax, fee, levy or other charge, however described, that may be levied or assessed as a substitute for, or as an addition to
(in whole or in part), any other item included as taxes, whether or not now customary or in the contemplation of Landlord and Tenant on
the date of this Lease. “Real Property Taxes” shall also include legal and consultants’ fees, costs and disbursements
incurred in connection with proceedings to contest, determine or reduce taxes, Landlord specifically reserving the right, but not the
obligation, to contest by appropriate legal proceedings the amount or validity of any Real Property Taxes.
5. Security
Deposit. Upon Tenant’s execution hereof, Tenant shall deposit with Landlord the sum set forth in Section 1.3 of the Basic
Lease Provisions as security for the full and faithful performance of every provision of this Lease to be performed by Tenant. If Tenant
breaches any provision of this Lease, including but not limited to the payment of rent, Landlord may use all or any part of this security
deposit for the payment of any rent or any other sums in default, or to compensate Landlord for any other loss or damage which Landlord
may suffer by reason of Tenant’s default. If any portion of said deposit is so used or applied, Tenant shall, within five (5) days
after written demand therefor, deposit cash with Landlord in an amount sufficient to restore the security deposit to its full amount.
Tenant agrees that Landlord shall not be required to keep the security deposit in trust, segregate it or keep it separate from Landlord’s
general funds but Landlord may commingle the security deposit with its general funds and Tenant shall not be entitled to interest on such
deposit. At the expiration of the Term, and provided there exists no default by Tenant hereunder, the security deposit or any balance
thereof shall be returned to Tenant, provided that subsequent to the expiration of this Lease, Landlord may retain from said security
deposit any and all amounts reasonably estimated by Landlord to cover the anticipated costs to be incurred by Landlord to remove any signage
provided to Tenant under this Lease, to remove cabling and other items required to be removed by Tenant under Section 29(b) below
and to repair any damage caused by such removal, any other costs to perform any surrender obligations of Tenant not performed by the termination
date, and any other damages or costs that Landlord reasonably determines is due Landlord from Tenant (in which case any excess amount
so retained by Landlord shall be returned to Tenant within thirty (30) days after such removal, repair, or satisfaction of the damage
or cost amount), and any and all amounts permitted by law or this Section 5. Tenant hereby waives the provisions of California Civil
Code Section 1950.7 and any successor law.
6. Use.
6.1 Permitted
Use. Tenant shall use and occupy the Premises only for the Permitted Use and for no other purpose, without the prior written consent
of Landlord, which consent may be withheld in its sole discretion. Tenant shall not use or permit the use of the Premises in a manner
that is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of or causes damage to neighboring premises or properties.
Other than guide, signal and seeing-eye dogs, Tenant shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles.
Landlord may withhold its consent for any reason to any written request for a modification of the Permitted Use. Tenant shall pay for
any increase in the premiums for the property insurance of the Building and for the Common Areas or other buildings in the Project if
said increase is caused by Tenant’s acts, omissions, use or occupancy of the Premises contrary to the Permitted Use. Under no circumstance
are the Premises to be used for manufacturing, repair, restaurant, retail, personal service or medical purposes.
6.2 Compliance
with Laws. Tenant shall, at its sole cost and expense, promptly comply with all laws, statutes, ordinances, codes, regulations and
requirements now in force or which may hereafter be in force (“Laws”) relating to or affecting (i) the condition,
use or occupancy of the Premises by Tenant (excluding structural upgrades, enhancements, alterations or improvements to the Project not
related to Tenant’s particular use of, or Alterations to, the Premises), and (ii) Alterations installed or constructed in the
Premises by or for the benefit of Tenant.
7. Hazardous
Substances.
7.1 Except
for Hazardous Material (as defined below) contained in products used by Tenant for ordinary cleaning and office purposes in quantities
not violative of applicable Environmental Requirements, Tenant shall not permit or cause any party to bring any Hazardous Material upon
the Premises and/or the Project or transport, store, use, generate, manufacture, dispose, or release any Hazardous Material on or from
the Premises and/or the Project without Landlord’s prior written consent. Tenant, at its sole cost and expense, shall operate its
business in the Premises in strict compliance with all Environmental Requirements (as defined below) and all requirements of this Lease.
Tenant shall complete and certify to disclosure statements as requested by Landlord from time to time relating to Tenant’s transportation,
storage, use, generation, manufacture, or release of Hazardous Materials on the Premises, and Tenant shall promptly deliver to Landlord
a copy of any notice of violation relating to the Premises or the Project of any Environmental Requirement.
7.2 The
term “Environmental Requirements” means all applicable present and future statutes, regulations, ordinances, rules, codes,
judgments, permits, authorizations, orders, policies or other similar requirements of any governmental authority, agency or court regulating
or relating to health, safety, or environmental conditions on, under, or about the Premises or the environment, including without limitation,
the following: the Comprehensive Environmental Response, Compensation and Liability Act; the Resource Conservation and Recovery Act; the
Clean Air Act; the Clean Water Act; the Toxic Substances Control Act and all state and local counterparts thereto; all applicable California
requirements, including, but not limited to, Sections 25115, 25117, 25122.7, 25140, 25249.8, 25281, 25316 and 25501 of the California
Health and Safety Code and Title 22 of the California Code of Regulations, Division 4.5, Chapter 11, and any policies or
rules promulgated thereunder as well as a n y C o u n t y or City ordinances that may operate independent of, or in conjunction with,
the State programs, and any common or civil law obligations including, without limitation, nuisance or trespass, and any other requirements
of Article 3 of this Lease. The term “Hazardous Materials” means and includes any substance, material, waste, pollutant,
or contaminant that is or could be regulated under any Environmental Requirement or that may adversely affect human health or the environment,
including, without limitation, any solid or hazardous waste, hazardous substance, asbestos, petroleum (including crude oil or any fraction
thereof, natural gas, synthetic gas, polychlorinated biphenyls (PCBs), and radioactive material). For purposes of Environmental Requirements,
to the extent authorized by law, Tenant is and shall be deemed to be the responsible party, including without limitation, the “owner”
and “operator” of Tenant’s “facility” and the “owner” of all Hazardous Materials brought on
the Premises by Tenant, its agents, employees, contractors or invitees, and the wastes, by-products, or residues generated, resulting,
or produced therefrom.
7.3 Tenant,
at its sole cost and expense, shall remove all Hazardous Materials stored, disposed of or otherwise released by Tenant, its assignees,
subtenants, agents, employees, contractors or invitees onto or from the Premises, in a manner and to a level satisfactory to Landlord
in its reasonable discretion, but in no event to a level and in a manner less than that which complies with all Environmental Requirements
and does not limit any future uses of the Premises or require the recording of any deed restriction or notice regarding the Premises.
Tenant shall perform such work at any time during the Term of the Lease upon written request by Landlord or, in the absence of a specific
request by Landlord, before Tenant’s right to possession of the Premises terminates or expires. If Tenant fails to perform such
work within the time period specified by Landlord or before Tenant’s right to possession terminates or expires (whichever is earlier),
Landlord may at its discretion, and without waiving any other remedy available under this Lease or at law or equity (including without
limitation an action to compel Tenant to perform such work), perform such work at Tenant’s cost. Tenant shall pay all costs incurred
by Landlord in performing such work within ten (10) days after Landlord’s request therefor. Such work performed by Landlord
is on behalf of Tenant and Tenant remains the owner, generator, operator, transporter, and/or arranger of the Hazardous Materials for
purposes of Environmental Requirements. Tenant agrees not to enter into any agreement with any person, including without limitation any
governmental authority, regarding the removal of Hazardous Materials that have been disposed of or otherwise released onto or from the
Premises without the written approval of Landlord.
7.4 Tenant
shall indemnify, defend, and hold Landlord harmless from and against any and all losses (including, without limitation, diminution in
value of the Premises or the Project and loss of rental income from the Project), claims, demands, actions, suits, damages (including,
without limitation, punitive damages), expenses (including, without limitation, remediation, removal, repair, corrective action, or cleanup
expenses), and costs (including, without limitation, actual attorneys’ fees, consultant fees or expert fees and including, without
limitation, removal or management of any asbestos brought into the Premises or disturbed by Tenant in breach of the requirements of this
Section 7, regardless of whether such removal or management is required by law) which are brought or recoverable against, or suffered
or incurred by Landlord as a result of any release of Hazardous Materials by Tenant or any breach of the requirements under this Section 7
by Tenant, its agents, employees, contractors, subtenants, assignees or invitees, regardless of whether Tenant had knowledge of such noncompliance.
The obligations of Tenant under this Section 7 shall survive any termination of this Lease.
7.5 Landlord
shall have access to, and a right to perform inspections and tests of, the Premises to determine Tenant’s compliance with Environmental
Requirements, its obligations under this Section 7, or the environmental condition of the Premises. Access shall be granted to Landlord
upon Landlord’s prior notice to Tenant and at such times so as to minimize, so far as may be reasonable under the circumstances,
any disturbance to Tenant’s operations. Such inspections and tests shall be conducted at Landlord’s expense, unless such inspections
or tests reveal that Tenant has not complied with any Environmental Requirement, in which case Tenant shall reimburse Landlord for the
reasonable cost of such inspection and tests. Landlord’s receipt of or satisfaction with any environmental assessment in no way
waives any rights that Landlord holds against Tenant. Tenant shall promptly notify Landlord of any communication or report that Tenant
makes to any governmental authority regarding any possible violation of Environmental Requirements or release or threat of release of
any Hazardous Materials onto or from the Premises. Tenant shall, within five (5) days of receipt thereof, provide Landlord with a
copy of any documents or correspondence received from any governmental agency or other party relating to a possible violation of Environmental
Requirements or claim or liability associated with the release or threat of release of any Hazardous Materials onto or from the Premises.
7.6 In
addition to all other rights and remedies available to Landlord under this Lease or otherwise, Landlord may, in the event of a breach
of the requirements of this Section 7 that is not cured within thirty (30) days following notice of such breach by Landlord,
require Tenant to provide financial assurance (such as insurance, escrow of funds or third party guarantee) in an amount and form reasonably
satisfactory to Landlord. The requirements of this Section 7 are in addition to and not in lieu of any other provision in the Lease.
8. Maintenance;
Repairs, Alterations.
8.1 Tenant’s
Obligations.
8.1.1 In
General. Tenant shall, at Tenant’s sole expense, keep the Premises and all improvements thereon in good order, condition and
repair (whether or not the portion of the Premises requiring repairs, or the means of repairing the same, are reasonably or readily accessible
to Tenant, and whether or not the need for such repairs occurs as a result of Tenant’s use, any prior use, the elements or the age
of such portion of the Premises), including, but not limited to, all equipment or facilities within the Premises, such as plumbing, HVAC
equipment servicing only the Premises or portion thereof, electrical, lighting facilities, boilers, pressure vessels, fixtures, kitchen
appliances and plumbing, interior walls, interior surfaces of exterior walls, ceilings, floors, windows, doors, plate glass, and skylights
but excluding any items which are the responsibility of Landlord pursuant to Section 8.2. Tenant’s obligations shall include
restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order,
condition and state of repair.
8.1.2 Failure
to Perform. If Tenant fails to perform Tenant’s obligations under this Section 8.1.1, Landlord may enter upon the
Premises after 10 days’ prior written notice to Tenant (except in the case of an emergency, in which case no notice shall
be required), perform such obligations on Tenant’s behalf, and put the Premises in good order, condition and repair, and Tenant
shall promptly pay to Landlord a sum equal to 110% of the cost thereof.
8.2 Landlord’s
Obligations. Subject to a casualty or condemnation event, Landlord, shall keep in good order, condition and repair the foundations,
exterior walls, structural condition of interior bearing walls, exterior roof, fire sprinkler system, Common Areas including but not limited
to fire alarm and/or smoke detection systems, fire hydrants, parking lots, walkways, parkways, driveways, landscaping, fences, signs and
utility systems serving the Common Areas and all parts thereof. Subject to Section 2.2 above, Landlord shall not be obligated to
paint the exterior or interior surfaces of exterior walls nor shall Landlord be obligated to maintain, repair or replace windows, doors
or plate glass of the Premises. Landlord shall not be required to make any repairs to the Project or Common Area unless and until Tenant
notifies Landlord of the need of such repairs.
8.3 Alterations.
8.3.1 Generally.
Tenant shall make no alterations, improvements installations, changes or additions in or to the Premises or the Project (collectively,
“Alterations”) without Landlord’s prior written consent, which consent shall not be unreasonably withheld for non-structural
Alterations; provided, however, Tenant may, without Landlord’s prior written consent, make non-structural Alterations to the Premises
that (i) do not affect the Building systems, (ii) are not visible from the exterior of the Building and (iii) do not cost
more than $10,000 in total during any calendar year. Any Alterations approved by Landlord must be performed in accordance with the terms
hereof, using only contractors reasonably approved by Landlord in writing and upon the approval by Landlord in writing of fully detailed
and dimensioned plans and specifications pertaining to the Alterations in question, to be prepared and submitted by Tenant at its sole
cost and expense. Tenant shall at its sole cost and expense obtain all necessary approvals and permits pertaining to any Alterations approved
by Landlord. Tenant shall cause all Alterations to be performed in a good and workmanlike manner, in conformance with all applicable federal,
state, county and municipal laws, rules and regulations, pursuant to a valid building permit, and in conformance with Landlord’s
construction rules and regulations. If Landlord, in approving any Alterations, specifies a commencement date therefor in order for
Landlord to post timely notices of non-responsibility, Tenant shall not commence any work with respect to such Alterations prior to such
date. Tenant hereby agrees to indemnify, defend, and hold Landlord free and harmless from all liens and claims of lien, and all other
liability, claims and demands arising out of any work done or material supplied to the Premises by or at the request of Tenant in connection
with any Alterations.
8.3.2 Insurance;
Liens. Prior to the commencement of any Alterations, Tenant shall provide Landlord with evidence that Tenant carries “Builder’s
All Risk” insurance in an amount covering the construction of such Alterations, and such other insurance as Landlord may reasonably
require, it being understood that all such Alterations shall be insured by Tenant pursuant to Section 9.2 of this Lease immediately
upon completion thereof. In addition, Landlord may, in its discretion, require Tenant to obtain a lien and completion bond or some alternate
form of security satisfactory to Landlord in an amount sufficient to ensure the lien-free completion of such Alterations and naming Landlord
as a co-obligee.
8.3.3 Costs
and Fees; Removal. If permitted Alterations are made, they shall be made at Tenant’s sole cost and expense and shall be and
become the property of Landlord, except that Landlord may, by written notice to Tenant, require Tenant at Tenant’s expense at Lease
Termination or immediately on notice if not installed with Landlord’s written consent, to remove Alterations from the Premises installed
by Tenant, and to repair any damage to the Premises and the Project caused by such removal. Any and all costs attributable to or related
to the applicable building codes of the city in which the Project is located (or any other authority having jurisdiction over the Project)
arising from Tenant’s plans, specifications, improvements, Alterations or otherwise shall be paid by Tenant at its sole cost and
expense. With regard to Alterations, Landlord shall be entitled to receive an administrative/coordination fee (which fee shall not exceed 2%
of the cost of the Alterations) sufficient to compensate Landlord for all overhead, general conditions, fees and other costs and expenses
arising from Landlord’s involvement with such Alteration.
8.4 Liens.
Tenant shall keep the Premises and the Project free from any mechanics’ liens, vendors liens or any other liens arising out of any
work performed, materials furnished or obligations incurred by Tenant, and Tenant agrees to defend, indemnify and hold Landlord harmless
from and against any such lien or claim or action thereon, together with costs of suit and reasonable attorneys’ fees and costs
incurred by Landlord in connection with any such claim or action. Before commencing any work of alteration, addition or improvement to
the Premises, Tenant shall give Landlord at least ten (10) business days’ written notice of the proposed commencement of such
work (to afford Landlord an opportunity to post appropriate notices of non-responsibility). In the event that there shall be recorded
against the Premises or the Project or the property of which the Premises is a part any claim or lien arising out of any such work performed,
materials furnished or obligations incurred by Tenant and such claim or lien shall not be removed or discharged within ten (10) days
of filing, Landlord shall have the right but not the obligation to pay and discharge said lien without regard to whether such lien shall
be lawful or correct (in which case Tenant shall reimburse Landlord for any such payment made by Landlord within ten (10) days following
written demand), or to require that Tenant promptly deposit with Landlord in cash, lawful money of the United States, one hundred twenty-five
percent (125%) of the amount of such claim, which sum may be retained by Landlord until such claim shall have been removed of record
or until judgment shall have been rendered on such claim and such judgment shall have become final, at which time Landlord shall have
the right to apply such deposit in discharge of the judgment on said claim and any costs, including attorneys’ fees and costs incurred
by Landlord, and shall remit the balance thereof to Tenant.
8.5 Surrender;
Restoration. Tenant shall surrender the Premises by the Expiration Date or any earlier termination date with all of the improvements,
parts and surfaces thereof broom clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and
tear excepted. “Ordinary wear and tear” shall not include any damage or deterioration that would have been prevented by good
maintenance practice. Tenant shall repair any damage occasioned by the installation, maintenance or removal of Alterations, furnishings,
fixtures and equipment. Tenant shall also completely remove from the Premises any and all Hazardous Substances brought onto the Premises
by or for Tenant, or any third party (except Hazardous Substances which were deposited via underground migration from areas outside of
the Project) even if such removal would require Tenant to perform or pay for work that exceeds statutory requirements. Any personal property
of Tenant not removed on or before the Expiration Date or any earlier termination date shall be deemed to have been abandoned by Tenant
and may be disposed of or retained by Landlord as Landlord may desire. The failure by Tenant to timely vacate the Premises pursuant to
this Section 8.5 without the express written consent of Landlord shall constitute a holdover under the provisions of Section 16
below.
8.6 Taxes.
Tenant pay to Landlord within 30 days of invoice, the entirety of any increase in real property taxes if assessed solely by
reason of Alterations placed upon the Premises by Tenant or at Tenant’s request or by reason of any alterations or improvements
to the Premises made by Landlord subsequent to the execution of this Lease by the Parties during the term hereof.
9. Insurance;
Indemnity.
9.1 Liability
Insurance. Tenant shall obtain and keep in force a Commercial General Liability policy of insurance protecting Tenant and Landlord
as an additional insured against claims for bodily injury, personal injury and property damage based upon or arising out of the ownership,
use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing
single limit coverage in an amount not less than $2,000,000 per occurrence with an annual aggregate of not less than $3,000,000.
Tenant shall add Landlord and any other party reasonably designated by Landlord as an additional insured by means of an endorsement at
least as broad as the Insurance Service Organization’s “Additional Insured-Managers or Landlords of Premises” Endorsement.
The policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for
liability assumed under this Lease as an “insured contract” for the performance of Tenant’s indemnity obligations
under this Lease. The limits of said insurance shall not, however, limit the liability of Tenant nor relieve Tenant of any obligation
hereunder. Tenant shall provide an endorsement on its liability policy(ies) which provides that its insurance shall be primary to and
not contributory with any similar insurance carried by Landlord, whose insurance shall be considered excess insurance only.
9.2 Property
Damage. Tenant shall obtain and maintain insurance coverage on all of Tenant’s personal property, Trade Fixtures, and Tenant
Owned Alterations and Utility Installations. Such insurance shall be full replacement cost coverage with a deductible of not to exceed
$5,000 per occurrence. The proceeds from any such insurance shall be used by Tenant for the replacement of personal property, furniture
fixtures, equipment and Alterations. Tenant shall provide Landlord with written evidence that such insurance is in force.
9.3 Business
Interruption. Tenant shall obtain and maintain loss of income and extra expense insurance for one year in amounts as will reimburse
Tenant for direct or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees in the business
of Tenant or attributable to prevention of access to the Premises as a result of such perils.
9.4 Worker’s
Compensation Insurance; Auto Liability Insurance. Tenant shall obtain and maintain Worker’s Compensation Insurance in such amount
as may be required by Laws. Tenant shall obtain and maintain Commercial Automobile Liability Insurance covering all Owned (if any), Hired,
or Non-owned vehicles with limits not less than $1,000,000 combined single limit for bodily injury and property damage.
9.5 No
Representation of Adequate Coverage. Landlord makes no representation that the limits or forms of coverage of insurance specified
herein are adequate to cover Tenant’s property, business operations or obligations under this Lease.
9.6 Insurance
Policies. Insurance required herein shall be by companies maintaining during the policy term a “General Policyholders Rating”
of at least A-, VIII, as set forth in the most current issue of “Best’s Insurance Guide”, or such other rating as may
be required by a Lender. Tenant shall not do or permit to be done anything which invalidates the required insurance policies. Tenant shall,
prior to Tenant entering the Premises, deliver to Landlord certified copies of policies of such insurance or certificates with copies
of the required endorsements evidencing the existence and amounts of the required insurance. No such policy shall be cancelable or subject
to modification except after 30 days prior written notice to Landlord. Tenant shall, at least 10 days prior to the
expiration of such policies, furnish Landlord with evidence of renewals or “insurance binders” evidencing renewal thereof,
or Landlord may order such insurance and charge the cost thereof to Tenant, which amount shall be payable by Tenant to Landlord upon demand.
Such policies shall be for a term of at least one year, or the length of the remaining term of this Lease, whichever is less. If Tenant
shall fail to procure and maintain the insurance required to be carried by it, Landlord may, but shall not be required to, procure and
maintain the same at Tenant’s expense.
9.7 Waiver
of Subrogation. Without affecting any other rights or remedies, Tenant and Landlord each hereby release and relieve the other, and
waive their entire right to recover damages against the other, for loss of or damage to its property arising out of or incident to the
perils required to be insured against herein. The effect of such releases and waivers is not limited by the amount of insurance carried
or required, or by any deductibles applicable hereto. The Parties agree to have their respective property damage insurance carriers waive
any right to subrogation that such companies may have against Landlord or Tenant, as the case may be, so long as the insurance is not
invalidated thereby.
9.8 Indemnity;
Waiver. Except for Landlord’s gross negligence or willful misconduct, Tenant shall indemnify, protect, defend and hold harmless
the Premises, Landlord and its members, managers, officers, directors, employees, representatives, agents, partners, lenders, and successors
and assigns, from and against any and all claims, loss of rents and/or damages, liens, judgments, penalties, attorneys’ and consultants’
fees, expenses and/or liabilities arising out of, involving, or in connection with, the use and/or occupancy of the Premises by Tenant
or anything occurring on or at the Premises, and/or any breach of this Lease by Tenant. If any action or proceeding is brought against
Landlord by reason of any of the foregoing matters, Tenant shall upon notice defend the same at Tenant’s expense by counsel reasonably
satisfactory to Landlord and Landlord shall cooperate with Tenant in such defense. Landlord need not have first paid any such claim in
order to be defended or indemnified. The foregoing indemnity shall survive the expiration or earlier termination of this Lease. Notwithstanding
the negligence or breach of this Lease by Landlord or its agents, neither Landlord nor its members, managers, officers, directors, employees,
representatives, agents, partners, lenders, or successors and assigns shall be liable under any circumstances for: (i) injury or
damage to the person or goods, wares, merchandise or other property of Tenant or its employees, contractors, invitees, customers, or any
other person in or about the Premises, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water
or rain, indoor air quality, the presence of mold or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers,
wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether the said injury or damage results from conditions
arising upon the Premises or upon other portions of the building of which the Premises are a part, or from other sources or places, (ii) any
damages arising from any act or neglect of any other tenant of Landlord or from the failure of Landlord or its agents to enforce the provisions
of any other lease in the Building, or (iii) injury to Tenant’s business or for any loss of income or profit therefrom. Instead,
it is intended that Tenant’s sole recourse in the event of such damages or injury be to file a claim on the insurance policies that
Tenant is required to maintain pursuant to the provisions of this Lease.
10. Damage
or Destruction.
10.1 Definitions.
10.1.1 “Premises
Partial Damage” shall mean damage or destruction to the improvements on the Premises, other than Alterations, which can reasonably
be repaired in 9 months. Landlord shall notify Tenant in writing within 60 days from the date of the damage or destruction
as to whether or not the damage is Partial or Total. Notwithstanding the foregoing, Premises Partial Damage shall not include damage to
windows, doors, and/or other similar items which Tenant has the responsibility to repair or replace pursuant to the provisions of Section 8.1.
10.1.2 “Premises
Total Destruction” shall mean damage or destruction to the improvements on the Premises, other than Alterations, which cannot
reasonably be repaired in 9 months or less from the date of the damage or destruction. Landlord shall notify Tenant in writing
within 60 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.
10.1.3 “Insured
Loss” shall mean damage or destruction to improvements on the Premises, other than Alterations, which was caused by an event
insured by Landlord (excluding earthquake or flood regardless if such events are insured by Landlord), irrespective of any deductible
amounts or coverage limits involved.
10.1.4 “Replacement
Cost” shall mean the cost to repair or rebuild the improvements owned by Landlord at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Laws, and without
deduction for depreciation.
10.2 Partial
Damage - Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then Landlord shall, at Landlord’s expense,
repair such damage (but not Tenant’s personal property or Alterations) as soon as reasonably possible and this Lease shall continue
in full force and effect. Notwithstanding the foregoing, if the required insurance was not in force or the insurance proceeds are not
sufficient to affect such repair, Landlord shall have the right to terminate this Lease upon written notice to Tenant. Such termination
shall be effective 30 days following the date of such notice.
10.3 Partial
Damage - Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss occurs, unless caused by a negligent or willful
act of Tenant (in which event Tenant shall make the repairs at Tenant’s expense), Landlord may either: (i) repair such damage
as soon as reasonably possible at Landlord’s expense, in which event this Lease shall continue in full force and effect, or (ii) terminate
this Lease by giving written notice to Tenant within 60 days after receipt by Landlord of knowledge of the occurrence of such
damage. Such termination shall be effective 60 days following the date of such notice. In the event Landlord elects to terminate
this Lease, Tenant shall have the right within 10 days after receipt of the termination notice to give written notice to Landlord
of Tenant’s commitment to pay for the repair of such damage without reimbursement from Landlord. Tenant shall provide Landlord with
said funds or satisfactory assurance thereof within 30 days after making such commitment. In such event this Lease shall continue
in full force and effect, and Landlord shall proceed to make such repairs as soon as reasonably possible after the required funds are
available. If Tenant does not make the required commitment, this Lease shall terminate as of the date specified in the termination notice.
10.4 Total
Destruction. Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, either Landlord or Tenant may terminate
this Lease. Such termination shall be effective 60 days following the date of such notice. Provided, however, if the damage
or destruction was caused by Tenant then the Tenant shall have no right to terminate this Lease.
10.5 Damage
near End of Term. If at any time during the last 12 months of this Lease there is damage for which the cost to repair exceeds
one month’s Base Rent, whether or not an Insured Loss, either Landlord or Tenant may terminate this Lease effective 60 days
following the date of occurrence of such damage by giving a written termination notice to the other party within 30 days after
the date of occurrence of such damage. Notwithstanding the foregoing, if Tenant at that time has an exercisable option to extend this
Lease or to purchase the Premises, then Tenant may preserve this Lease by, (a) exercising such option and (b) providing Landlord
with any shortage in insurance proceeds (or adequate assurance thereof) needed to make the repairs on or before the earlier of (i) the
date which is 10 days after Tenant’s receipt of Landlord’s written notice purporting to terminate this Lease, or
(ii) the day prior to the date upon which such option expires. If Tenant duly exercises such option during such period and provides
Landlord with funds (or adequate assurance thereof) to cover any shortage in insurance proceeds, Landlord shall, at Landlord’s commercially
reasonable expense, repair such damage as soon as reasonably possible and this Lease shall continue in full force and effect. If Tenant
fails to exercise such option and provide such funds or assurance during such period, then this Lease shall terminate on the date specified
in the termination notice and Tenant’s option shall be extinguished.
10.6 Abatement
of Rent. In the event of Premises Partial Damage or Premises Total Destruction for which Tenant is not responsible under this Lease,
the Rent payable by Tenant for the period required for the repair, remediation or restoration of such damage shall be abated in proportion
to the degree to which Tenant’s use of the Premises is impaired. Premises Partial Destruction of more than 70% shall be treated
as if Premises Total Destruction unless Tenant is able to effectively utilize the undamaged portion of the Premises. All other obligations
of Tenant hereunder shall be performed by Tenant, and Landlord shall have no liability for any such damage, destruction, remediation,
repair or restoration except as provided herein.
10.7 Termination;
Advance Payments. Upon termination of this Lease pursuant to this Section 10, an equitable adjustment shall be made concerning
advance Base Rent and any other advance payments made by Tenant to Landlord. Landlord shall, in addition, return to Tenant so much of
Tenant’s Security Deposit as has not been, or is not then required to be, used by Landlord.
11. Utilities
and Services.
11.1 Landlord
shall pay for all utilities and Building services except for any HVAC use beyond Business Hours as herein defined or extraordinary utility
use beyond normal office use, which determination and cost shall be made by Landlord in its reasonable determination. The charge for HVAC
use beyond the Business Hours will be at a cost per hour of use as reasonable determined by Landlord to cover the extra utility use and
wear and tear on the HVAC system. The Business Hours are from 8 am to 6 pm Monday thru Friday except national holidays.
12. Assignment
and Subletting.
12.1 Landlord’s
Consent Required. Tenant shall not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively, “assign
or assignment”) or sublet all or any part of Tenant’s interest in this Lease or in the Premises without Landlord’s
prior written consent, which consent shall not be unreasonably withheld. An assignment or subletting without consent shall be a noncurable
Breach without the necessity of any notice and grace period. Tenant’s remedy for any breach of Section 12.1 by Landlord shall
be limited to compensatory damages and/or injunctive relief. Landlord may reasonably withhold consent to a proposed assignment or subletting
if Tenant is in Default at the time consent is requested. It shall not be unreasonable for Landlord to withhold its consent to any sublease
or assignment if the proposed use of the subtenant or assignee would be considered manufacturing, repair, retail, personal services, restaurant,
medical or any other use whereby the City of Palo Alto could make the determination that the Premises or the Building would no longer
be able to support future office uses.
12.2 Terms
and Conditions Applicable to Assignment and Subletting.
12.2.1 Regardless
of Landlord’s consent, no assignment or subletting shall: (i) be effective without the express written assumption by such assignee
or subtenant of the obligations of Tenant under this Lease, (ii) release Tenant of any obligations hereunder, or (iii) alter
the primary liability of Tenant for the payment of Rent or for the performance of any other obligations to be performed by Tenant.
12.2.2 Landlord
may accept Rent or performance of Tenant’s obligations from any person other than Tenant pending approval or disapproval of an assignment.
Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute a waiver
or estoppel of Landlord’s right to exercise its remedies for Tenant’s Default or Breach.
12.2.3 Landlord’s
consent to any assignment or subletting shall not constitute consent to any subsequent assignment or subletting.
12.2.4 In
the event of any Default or Breach by Tenant, Landlord may proceed directly against Tenant, any Guarantors or anyone else responsible
for the performance of Tenant’s obligations under this Lease, including any assignee or subtenant, without first exhausting Landlord’s
remedies against any other person or entity responsible therefore to Landlord, or any security held by Landlord.
12.2.5 Each
request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Landlord’s determination
as to the financial and operational responsibility and appropriateness of the proposed assignee or subtenant, including but not limited
to the intended use and/or required modification of the Premises, if any, together with a fee of $500 as consideration for Landlord’s
considering and processing said request. Tenant agrees to provide Landlord with such other or additional information and/or documentation
as may be reasonably requested.
12.2.6 Tenant
shall reimburse Landlord upon demand for its reasonable attorney’s cost and fees relating to any request for consent to an assignment
or sublease not to exceed $1,250 per standard request.
12.2.7 Any
assignee of, or subtenant under, this Lease shall, by reason of accepting such assignment, entering into such sublease, or entering into
possession of the Premises or any portion thereof, be deemed to have assumed and agreed to conform and comply with each and every term,
covenant, condition and obligation herein to be observed or performed by Tenant during the term of said assignment or sublease, other
than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Landlord has specifically
consented to in writing.
12.2.8 Landlord’s
consent to any assignment or subletting shall not transfer to the assignee or subtenant any Option granted to the original Tenant by this
Lease unless such transfer is specifically consented to by Landlord in writing.
12.3 Additional
Terms and Conditions Applicable to Subletting. The following terms and conditions shall apply to any subletting by Tenant of all or
any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein:
12.3.1 Tenant
hereby assigns and transfers to Landlord all of Tenant’s interest in all Rent payable on any sublease, and Landlord may collect
such Rent and apply same toward Tenant’s obligations under this Lease; provided, however, that until a Breach shall occur in the
performance of Tenant’s obligations, Tenant may collect said Rent. In the event that the amount collected by Landlord exceeds Tenant’s
then outstanding obligations any such excess shall be refunded to Tenant. Landlord shall not, by reason of the foregoing or any assignment
of such sublease, nor by reason of the collection of Rent, be deemed liable to the subtenant for any failure of Tenant to perform and
comply with any of Tenant’s obligations to such subtenant. Tenant hereby irrevocably authorizes and directs any such subtenant,
upon receipt of a written notice from Landlord stating that a Breach exists in the performance of Tenant’s obligations under this
Lease, to pay to Landlord all Rent due and to become due under the sublease. Subtenant shall rely upon any such notice from Landlord and
shall pay all Rents to Landlord without any obligation or right to inquire as to whether such Breach exists, notwithstanding any claim
from Tenant to the contrary.
12.3.2 In
the event of a Breach by Tenant, Landlord may, at its option, require subtenant to attorn to Landlord, in which event Landlord shall undertake
the obligations of the sublandlord under such sublease from the time of the exercise of said option to the expiration of such sublease;
provided, however, Landlord shall not be liable for any prepaid rents or security deposit paid by such subtenant to such sublandlord or
for any prior Defaults or Breaches of such sublandlord.
12.3.3 Any
matter requiring the consent of the sublandlord under a sublease shall also require the consent of Landlord.
12.3.4 No
subtenant shall further assign or sublet all or any part of the Premises without Landlord’s prior written consent.
12.3.5 Without
limitation as to other reasonable grounds for withholding consent, the parties hereby agree that it shall be reasonable under this Lease
and under any applicable law for Landlord to withhold consent to any proposed assignment, sublease or other transfer where one or more
of the following apply: (i) The assignee, sublessee or other transferee (collectively, “Transferee”) is of a character
or reputation or engaged in a business which is not consistent with the quality of the Building or the Project; (ii) The Transferee
intends to use the proposed space for purposes which are not permitted under this Lease; (iii) The Transferee is either a governmental
agency or instrumentality thereof; (iv) such Transferee is not a party of reasonable financial worth and/or financial stability in
light of the responsibilities to be undertaken in connection with the assignment, sublease or other transfer on the date consent is requested;
(v) The proposed Transfer would cause a violation of another lease for space in the Project, or would give an occupant of the Project
a right to cancel its lease; (vi) The terms of the proposed assignment, sublease or other transfer will allow the Transferee to exercise
a right of renewal, right of expansion, right of first offer, or other similar right held by Tenant (or will allow the Transferee to occupy
space leased by Tenant pursuant to any such right); (vii) Either the proposed Transferee, or any person or entity which directly
or indirectly, controls, is controlled by, or is under common control with, the proposed Transferee, (A) occupies space in the Project
at the time of the request for consent, or (B) is negotiating with Landlord to lease space at such time, or (C) has negotiated
with Landlord during the six (6)-month period immediately preceding the request for consent; or (viii) Landlord has, or will have
within three (3) months of the request for consent, available and comparable space in the Building.
12.4 Bonus
Rent. As part of the consideration for Landlord’s consent to a sublease or an assignment of this Lease, Tenant shall pay to
pay to Landlord, as additional rental hereunder, 50% of any and all rentals to be paid by such sublessee or assignee in excess of the
rental paid to Landlord hereunder, less reasonable leasing commissions and attorney’s fees paid by the Tenant on account of the
assignment or sublease. Landlord shall have the right to audit Tenant’s books and records to confirm the calculation of excess rent
and Tenant shall, upon demand, make all such books and records available to Landlord.
12.5 Recapture.
In addition to Landlord’s right to approve any subtenant or assignee, Landlord shall have the option, in its sole discretion, in
the event of any proposed sublease of twenty five percent (25%) or more of the Premises or an assignment of this Lease to terminate
this Lease (or to recapture, at Landlord’s sole option, only the portion of the Premises subject to the proposed sublease) effective
as of the date the proposed assignment or subletting is to be effective. The option shall be exercised, if at all, by Landlord giving
Tenant written notice within thirty (30) days following Landlord’s receipt of Tenant’s written request for consent as
required above. If this Lease shall be terminated with respect to the entire Premises pursuant to this Section, the Term of this Lease
shall end on the date stated in Tenant’s notice as the effective date of the sublease or assignment as if that date had been originally
fixed in this Lease for the expiration of the Term. Tenant shall, at Tenant’s own cost and expense, discharge in full any outstanding
commission obligation which may be due and owing as a result of any proposed assignment or subletting, whether or not the Premises are
recaptured pursuant to this Section 12.5 and rented by Landlord to the proposed tenant or any other tenant.
12.6 Permitted
Transfer. Notwithstanding anything to the contrary in this Lease and after ten (10) days’ prior written notice to Landlord,
Tenant may, without Landlord’s prior written consent and not subject to any recapture or bonus rent provisions, sublet the Premises
or assign the Lease to: (i) a subsidiary, affiliate, division or corporation controlling, controlled by or under common control with
the Tenant; (ii) a successor corporation related to Tenant by merger, consolidation, nonbankruptcy reorganization, or government
action; or (iii) a purchaser of Tenant and/or of all or substantially all of the Tenant’s assets. In the event of either (ii) or
(iii) above, the sublessee or assignee must have a net worth equal to or greater than that of the Tenant just prior to the merger
or acquisition, subject to verification by Landlord. Any of the above are referenced hereafter as “Permitted Transfer” and
the transferee is referenced as “Permitted Transferee.”
13. Default;
Breach; Remedies.
13.1 Default;
Breach. A “Default” is defined as a failure by the Tenant to comply with or perform any of the terms, covenants,
conditions or Rules and Regulations under this Lease. A “Breach” is defined as the occurrence of one or more of
the following Defaults, and the failure of Tenant to cure such Default within any applicable grace period:
13.1.1 The
abandonment of the Premises.
13.1.2 The
failure of Tenant to make any payment of Rent or any Security Deposit required to be made by Tenant hereunder, whether to Landlord or
to a third party, when due, to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation under this Lease
which endangers or threatens life or property, where such failure continues for a period of 3 business days following written notice
to Tenant. THE ACCEPTANCE BY LANDLORD OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LANDLORD’S
RIGHTS, INCLUDING LANDLORD’S RIGHT TO RECOVER POSSESSION OF THE PREMISES.
13.1.3 The
failure of Tenant to allow Landlord and/or its agents access to the Premises or the commission of waste, act or acts constituting public
or private nuisance, and/or an illegal activity on the Premises by Tenant, where such actions continue for a period of 3 business
days following written notice to Tenant.
13.1.4 The
failure by Tenant to provide (i) reasonable written evidence of compliance with Laws, (ii) the service contracts, (iii) the
rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested
subordination, (vi) any document requested under this Lease, or (viii) any other documentation or information which Landlord
may reasonably require of Tenant under the terms of this Lease, where any such failure continues for a period of 5 days following
written notice to Tenant.
13.1.5 A
Default by Tenant as to the terms, covenants, conditions or provisions of this Lease, or of the rules and regulations, other than
those described in Sections 13.1.1, 13.1.2, 13.1.3 and 13.1.4 above where such Default continues for a period of 15 days
after written notice; provided, however, that if the nature of Tenant’s Default is such that more than 15 days are reasonably
required for its cure (not to exceed 60 days), then it shall not be deemed to be a Breach if Tenant commences such cure within
said 15 day period and thereafter diligently prosecutes such cure to completion.
13.1.6 The
occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of creditors;
(ii) becoming a “debtor” as defined in 11 U.S.C. § 101 or any successor statute thereto (unless, in
the case of a petition filed against Tenant, the same is dismissed within 60 days); (iii) the appointment of a trustee
or receiver to take possession of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in
this Lease, where possession is not restored to Tenant within 30 days; or (iv) the attachment, execution or other judicial
seizure of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease, where such
seizure is not discharged within 30 days; provided, however, in the event that any provision of this Section is contrary
to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions.
13.1.7 The
discovery that any financial statement of Tenant given to Landlord was materially false.
13.1.8 If
Tenant’s obligations under this Lease are guaranteed: (i) the death of a guarantor, (ii) the termination of a guarantor’s
liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a guarantor’s becoming
insolvent or the subject of a bankruptcy filing, (iv) a guarantor’s refusal to honor the guaranty, (v) a guarantor’s
breach of its guaranty obligation on an anticipatory breach basis or (vi) if the guarantor is a corporation, limited liability company
or partnership, the dissolution of the guarantor or the termination of the guarantor’s existence.
13.2 Remedies.
In the event of a Breach, Landlord may, with or without further notice or demand, and without limiting Landlord in the exercise of any
right or remedy which Landlord may have by reason of such Breach:
13.2.1 Terminate
Tenant’s right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Tenant shall immediately
surrender possession to Landlord. In such event Landlord shall be entitled to recover from Tenant: (i) the unpaid Rent which had
been earned at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would have
been earned after termination until the time of award exceeds the amount of such rental loss that the Tenant proves could have been reasonably
avoided; (iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that the Tenant proves could be reasonably avoided; and (iv) any other amount necessary
to compensate Landlord for all the detriment proximately caused by the Tenant’s failure to perform its obligations under this Lease
or which in the ordinary course of things would be likely to result therefrom, including but not limited to the cost of recovering possession
of the Premises, expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorneys’ fees,
and that portion of any leasing commission paid by Landlord in connection with this Lease applicable to the unexpired term of this Lease.
The worth at the time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed
by discounting such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the
time of award plus one percent. Efforts by Landlord to mitigate damages caused by Tenant’s Breach of this Lease shall not waive
Landlord’s right to recover damages under Section 13. If termination of this Lease is obtained through the provisional remedy
of unlawful detainer, Landlord shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein,
or Landlord may reserve the right to recover all or any part thereof in a separate suit. If a notice and grace period required under Section 13.1
was not previously given, a notice to pay rent or quit, or to perform or quit given to Tenant under the unlawful detainer statute shall
also constitute the notice required by Section 13.1. In such case, the applicable grace period required by Section 13.1 and
the unlawful detainer statute shall run concurrently, and the failure of Tenant to cure the Default within the greater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Landlord to the remedies provided for in
this Lease and/or by said statute.
13.2.2 Continue
the Lease and Tenant’s right to possession and recover the Rent as it becomes due, in which event Tenant may sublet or assign, subject
only to reasonable limitations. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Landlord’s
interests, shall not constitute a termination of the Tenant’s right to possession.
13.2.3 Perform
such duty or obligation on Tenant’s behalf, including but not limited to the obtaining of reasonably required bonds, insurance policies,
or governmental licenses, permits or approvals. Tenant shall pay to Landlord an amount equal to 115% of the costs and expenses incurred
by Landlord in such performance upon receipt of an invoice therefor.
13.2.4 Pursue
any other remedy now or hereafter available under the laws or judicial decisions of the state wherein the Premises are located. The expiration
or termination of this Lease and/or the termination of Tenant’s right to possession shall not relieve Tenant from liability under
any indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by reason of Tenant’s occupancy
of the Premises.
13.3 Late
Charges. Tenant hereby acknowledges that late payment by Tenant of Rent will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed upon Landlord by any Lender. Accordingly, if any Rent shall not be received
by Landlord within 5 days after such amount shall be due, then, without any requirement for notice to Tenant, Tenant shall immediately
pay to Landlord a one-time late charge equal to 10% of each such overdue amount or $100, whichever is greater. The parties hereby
agree that such late charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of such late payment.
Acceptance of such late charge by Landlord shall in no event constitute a waiver of Tenant’s Default or Breach with respect to such
overdue amount, nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is
payable hereunder, whether or not collected, for 3 consecutive installments of Base Rent, then notwithstanding any provision of this
Lease to the contrary, Base Rent shall, at Landlord’s option, become due and payable quarterly in advance.
13.4 Interest.
Any monetary payment due Landlord hereunder, other than late charges, not received by Landlord, when due as to scheduled payments (such
as Base Rent) or within 30 days following the date on which it was due for non-scheduled payment, shall bear interest from the
date when due, as to scheduled payments, or the 31st day after it was due as to non-scheduled payments. The interest (“Interest”)
charged shall be computed at the rate of 10% per annum but shall not exceed the maximum rate allowed by law. Interest is payable
in addition to the potential late charge provided for in Section 13.3.
14. Breach
by Landlord. Landlord shall not be deemed in breach of this Lease unless Landlord fails within a reasonable time to perform an obligation
required to be performed by Landlord. For purposes of this Section 14, a reasonable time shall in no event be less than 30 days
after receipt by Landlord, and any Lender whose name and address shall have been furnished Tenant in writing for such purpose, of written
notice specifying wherein such obligation of Landlord has not been performed; provided, however, that if the nature of Landlord’s
obligation is such that more than 30 days are reasonably required for its performance, then Landlord shall not be in breach
if performance is commenced within such 30 day period and thereafter diligently pursued to completion.
15. Condemnation.
If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power
(collectively “Condemnation”), this Lease shall terminate as to the part taken as of the date the condemning authority
takes title or possession, whichever first occurs. If more than 10% of the floor area of the Premises is taken by Condemnation, Tenant
may, at Tenant’s option, to be exercised in writing within 30 days after Landlord shall have given Tenant written notice
of such taking (or in the absence of such notice, within 30 days after the condemning authority shall have taken possession)
terminate this Lease as of the date the condemning authority takes such possession. If Tenant does not terminate this Lease in accordance
with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the Base
Rent shall be reduced in proportion to the reduction in utility of the Premises caused by such Condemnation. Condemnation awards and/or
payments shall be the property of Landlord, whether such award shall be made as compensation for diminution in value of the leasehold,
the value of the part taken, or for severance damages; provided, however, that Tenant shall be entitled to any compensation paid by the
condemnor for Tenant’s relocation expenses, loss of business goodwill and/or fixtures, without regard to whether or not this Lease
is terminated pursuant to the provisions of this Section 15. In the event that this Lease is not terminated by reason of the Condemnation,
Landlord shall repair any damage to the Premises caused by such Condemnation.
16. Holding
Over. Tenant shall have no right to Holdover. If Tenant does not surrender and vacate the Premises at Expiration Date of this Lease,
Tenant shall be a tenant at sufferance and the parties having agreed that the Base Rent shall be at a daily rate of one hundred fifty
percent (150%) of the Base Rent for the last month of the Term. In connection with the foregoing, Landlord and Tenant agree that
the reasonable rental value of the Premises following the Expiration Date of the Lease shall be the amounts set forth above per month.
Landlord and Tenant acknowledge and agree that, under the circumstances existing as of the date of this Lease, it is impracticable and/or
extremely difficult to ascertain the reasonable rental value of the Premises on the Expiration Date and that the reasonable rental value
established herein is a reasonable estimate of the damage that Landlord would suffer as the result of the failure of Tenant to timely
surrender possession of the Premises. The parties acknowledge that the liquidated damages established herein is not intended as a forfeiture
or penalty within the meaning of California Civil Code sections 3275 or 3369, but is intended to constitute liquidated damages
to Landlord pursuant to California Civil Code sections 1671, 1676, and 1677. Notwithstanding the foregoing, and in addition
to all other rights and remedies on the part of Landlord if Tenant fails to surrender the Premises upon the termination or expiration
of this Lease, in addition to any other liabilities to Landlord accruing therefrom, Tenant shall indemnify, defend and hold Landlord harmless
from all claims resulting from such failure, including, without limitation, any claims by any third parties based on such failure to surrender
and any lost profits to Landlord resulting therefrom.
17. Brokers.
Tenant and Landlord each represent and warrant to the other that it has had no dealings with any person, firm, broker or finder (other
than the Brokers, if any, listed in Section 1.6) in connection with this Lease, and that no one other than said named Brokers is
entitled to any commission or finder’s fee in connection herewith. Tenant and Landlord do each hereby agree to indemnify, protect,
defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker,
finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys’
fees reasonably incurred with respect thereto. Landlord shall pay the Brokers a commission pursuant to a separate written agreement. Tenant
acknowledges that some of the principals of Landlord are licensed real estate brokers.
18. Estoppel
Certificates. Tenant shall within 10 business days after written notice from Landlord execute, acknowledge and deliver to Landlord
an estoppel certificate in form provided by Landlord warrantying such additional information, confirmation and/or statements as may be
requested by Landlord or any Lender or perspective purchaser. If Tenant shall fail to execute or deliver the estoppel certificate within
such 10 business day period, Landlord may execute such estoppel certificate stating that: (i) the Lease is in full force and
effect without modification except as may be represented by Landlord, (ii) there are no uncured defaults in Landlord’s performance,
and (iii) not more than one month’s rent has been paid in advance. Prospective purchasers and encumbrancers may rely upon the
estoppel certificate, and Tenant shall be estopped from denying the truth of the facts contained in such estoppel certificate.
19. Financial
Statements. At Landlord’s request (but not more than once per calendar year except in connection with a sale or financing of
the Building), Tenant shall deliver to Landlord a copy, certified by an officer of Tenant as being a true and correct copy, of Tenant’s
most recent audited financial statement, or, if unaudited, certified by Tenant’s chief financial officer as being true, complete
and correct in all material respects. Tenant hereby authorizes Landlord to obtain one or more credit reports on Tenant at any time, and
shall execute such further authorizations as Landlord may reasonably require in order to obtain a credit report.
20. Definition
of Landlord. The term “Landlord” as used herein shall mean the owner or owners at the time in question of the fee
title to the Premises, or, if this is a sublease, of the Tenant’s interest in the prior lease. In the event of a transfer of Landlord’s
title or interest in the Premises or this Lease, Landlord shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Landlord. Upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Landlord
shall be relieved of all liability with respect to the obligations and/or covenants under this Lease thereafter to be performed by the
Landlord. Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Landlord shall be binding only
upon the Landlord as hereinabove defined.
21. Limitation
on Liability. The obligations of Landlord under this Lease shall not constitute personal obligations of Landlord, or its partners,
managers, members, directors, officers or shareholders, and Tenant shall look to the Premises, and to no other assets of Landlord, for
the satisfaction of any liability of Landlord with respect to this Lease, and shall not seek recourse against Landlord’s partners,
members, managers, directors, officers or shareholders, or any of their personal assets for such satisfaction. Notwithstanding any contrary
provision herein, neither Landlord nor its directors, members, managers, partners, officers, employees or agents shall be liable under
any circumstances for any indirect or consequential damages or any injury or damage to, or interference with, Tenant’s business,
including but not limited to, loss of profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill or loss
of use, in each case, however occurring.
22. Notices.
22.1 Notice
Requirements. All notices required or permitted by this Lease or applicable law shall be in writing and may be delivered in person
(by hand or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage
prepaid, or by facsimile transmission, and shall be deemed sufficiently given if served in a manner specified in this Section 22
to the following addresses:
Landlord:
960 San Antonio LLC
000 Xx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000 |
Tenant:
SCILEX Pharmaceuticals Inc.
000 Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
With a copy to:
SCILEX Pharmaceuticals Inc.
000 Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attn: General Counsel |
Either Party may by written notice to the other
specify a different address for notice, except that upon Tenant’s taking possession of the Premises, the Premises shall constitute
Tenant’s address for notice. A copy of all notices to Landlord shall be concurrently transmitted to such party or parties at such
addresses as Landlord may from time to time hereafter designate in writing. When this Lease requires service of a notice, that notice
shall replace rather than supplement any equivalent or similar statutory notice, including any notices required by Code of Civil Procedure
Section 1161 or any similar or successor statute. When a statute requires service of a notice in a particular manner, service of
that notice (or a similar notice required by this Lease) shall replace and satisfy the statutory service-of-notice procedures, including
those required by Code of Civil Procedure Section 1162 or any similar or successor statute.
22.2 Date
of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery
shown on the receipt card, or if no delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed given
three (3) business days after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United
States Express Mail or overnight courier that guarantees next day delivery shall be deemed given 24 hours after delivery of the same
to the Postal Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone
confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery or mail.
If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.
23. Subordination;
Attornment.
23.1 Subordination.
This Lease shall be subject and subordinate to any ground lease, mortgage, deed of trust, or other hypothecation or security device (collectively,
“Security Device”), now or hereafter placed upon the Premises, to any and all advances made on the security thereof,
and to all renewals, modifications, and extensions thereof. Tenant agrees that the holders of any such Security Devices (in this Lease
together referred to as “Lender”) shall have no liability or obligation to perform any of the obligations of Landlord
under this Lease. Any Lender may elect to have this Lease and/or any Option granted hereby superior to the lien of its Security Device
by giving written notice thereof to Tenant, whereupon this Lease and such Options shall be deemed prior to such Security Device, notwithstanding
the relative dates of the documentation or recordation thereof.
23.2 Attornment.
In the event that Landlord transfers title to the Premises, or the Premises are acquired by another upon the foreclosure or termination
of a Security Devise to which this Lease is subordinated (i) Tenant shall, attorn to such new owner, and upon request, enter into
a new lease, containing all of the terms and provisions of this Lease, with such new owner for the remainder of the term hereof, or, at
the election of the new owner, this Lease will automatically become a new lease between Tenant and such new owner, and (ii) Landlord
shall thereafter be relieved of any further obligations hereunder and such new owner shall assume all of Landlord’s obligations,
except that such new owner shall not: (a) be liable for any act or omission of any prior Landlord or with respect to events occurring
prior to acquisition of ownership; (b) be subject to any offsets or defenses which Tenant might have against any prior Landlord,
(c) be bound by prepayment of more than one month’s rent, or (d) be liable for the return of any security deposit paid
to any prior Landlord which was not paid or credited to such new owner.
23.3 Self-Executing.
The agreements contained in this Section 23 shall be effective without the execution of any further documents; provided, however,
that, upon written request from Landlord or a Lender in connection with a sale, financing or refinancing of the Premises, Tenant and Landlord
shall execute such further writings as may be reasonably required to separately document any subordination and attornment provided for
herein.
24. Landlord’s
Access; Showing Premises; Repairs. Landlord and Landlord’s agents shall have the right to enter the Premises at any time, in
the case of an emergency, and otherwise at reasonable times after at least 24 hours’ prior notice for the purpose of showing
the same to prospective purchasers, lenders, or tenants, and making such alterations, repairs, improvements or additions to the Premises
as Landlord may deem necessary or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through
the Premises and/or other premises as long as there is no material adverse effect on Tenant’s use of the Premises. All such activities
shall be without abatement of rent or liability to Tenant.
25. Quiet
Possession. Subject to payment by Tenant of the Rent and performance of all of the covenants, conditions and provisions on Tenant’s
part to be observed and performed under this Lease, Tenant shall have quiet possession and quiet enjoyment of the Premises during the
term hereof.
26. Miscellaneous.
26.1 Severability.
The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity
of any other provision hereof.
26.2 Days.
Unless otherwise specifically indicated to the contrary, the word “days” as used in this Lease shall mean and refer
to calendar days.
26.3 Time
of Essence. Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under
this Lease.
26.4 No
Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with respect to any matter mentioned
herein, and no other prior or contemporaneous agreement or understanding shall be effective. Landlord and Tenant each represents and warrants
to the Brokers that it has made, and is relying solely upon, its own investigation as to the nature, quality, character and financial
responsibility of the other Party to this Lease and as to the use, nature, quality and character of the Premises. Brokers have no responsibility
with respect thereto or with respect to any default or breach hereof by either Party.
26.5 Waivers.
No waiver by Landlord of the Default or Breach of any term, covenant or condition hereof by Tenant, shall be deemed a waiver of any other
term, covenant or condition hereof, or of any subsequent Default or Breach by Tenant of the same or of any other term, covenant or condition
hereof. Landlord’s consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Landlord’s
consent to, or approval of, any subsequent or similar act by Tenant, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent. The acceptance of Rent by Landlord shall not be a waiver of any Default or Breach
by Tenant. Any payment by Tenant may be accepted by Landlord on account of moneys or damages due Landlord, notwithstanding any qualifying
statements or conditions made by Tenant in connection therewith, which such statements and/or conditions shall be of no force or effect
whatsoever unless specifically agreed to in writing by Landlord at or before the time of deposit of such payment.
26.6 Cumulative
Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies
at law or in equity.
26.7 Covenants
and Conditions; Construction of Agreement. All provisions of this Lease to be observed or performed by Tenant are both covenants and
conditions. In construing this Lease, all headings and titles are for the convenience of the Parties only and shall not be considered
a part of this Lease. Whenever required by the context, the singular shall include the plural and vice versa. This Lease shall not be
construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it.
26.8 Binding
Effect; Choice of Law. This Lease shall be binding upon the parties, their personal representatives, successors and assigns and be
governed by the laws of the State in which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall
be initiated in the county in which the Premises are located.
26.9 Attorneys’
Fees. If any Party brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare
rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to
reasonable attorneys’ fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action
or proceeding is pursued to decision or judgment. The term, “Prevailing Party” shall include, without limitation, a
Party who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the
abandonment by the other Party of its claim or defense. The attorneys’ fees award shall not be computed in accordance with any court
fee schedule, but shall be such as to fully reimburse all attorneys’ fees reasonably incurred.
26.10 Auctions.
Tenant shall not conduct, nor permit to be conducted, any auction upon the Premises without Landlord’s prior written consent. Landlord
shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction.
26.11 Signs.
Landlord may place on the Premises ordinary “For Sale” signs at any time and ordinary “For Lease” signs during
the last 12 months of the term hereof. Subject to Landlord’s prior written consent and applicable Laws, Tenant, at Tenant’s
cost, may install suite door signage according to Building standards. Any signage granted to Tenant herein is personal to the original
Tenant named herein and the rights to such signage may not be assigned or transferred without Landlord’s prior written consent,
which consent may be withheld in Landlord’s sole discretion. Tenant shall not place any other signs on or about or visible through
the windows of the Premises or within, on or near to the Building without Landlord’s prior written consent. All approved signs shall
be at Tenant’s sole cost and all signs shall comply with all local, federal and state rules, regulations, statutes, and ordinances
at all times during the Term and comply with Landlord’s signage criteria. Tenant, at Tenant’s cost, shall remove all such
signs and graphics prior to the termination of this Lease and repair any damage caused by such removal. In the event Tenant fails to remove
such signs or repair any damage resulting therefrom at the termination of this Lease, Landlord may remove said signs and make such repairs
at Tenant’s sole cost and expense.
26.12 Termination;
Merger. Unless specifically stated otherwise in writing by Landlord, the voluntary or other surrender of this Lease by Tenant, the
mutual termination or cancellation hereof, or a termination hereof by Landlord for Breach by Tenant, shall automatically terminate any
sublease or lesser estate in the Premises; provided, however, that Landlord may elect to continue any one or all existing subtenancies.
Landlord’s failure within 10 days following any such event to elect to the contrary by written notice to the holder of
any such lesser interest, shall constitute Landlord’s election to have such event constitute the termination of such interest.
26.13 Security
Measures. Tenant hereby acknowledges that the Rent payable to Landlord hereunder does not include the cost of guard service or other
security measures, and that Landlord shall have no obligation whatsoever to provide same. Tenant assumes all responsibility for the protection
of the Premises, Tenant, its agents and invitees and their property from the acts of third parties.
26.14 Reservations.
Landlord reserves the right: (i) to grant, without the consent or joinder of Tenant, such easements, rights and dedications that
Landlord deems necessary, (ii) to cause the recordation of parcel maps and restrictions, and (iii) to create and/or install
new utility raceways, so long as such easements, rights, dedications, maps, restrictions, and utility raceways do not unreasonably interfere
with the use of the Premises by Tenant. Tenant agrees to sign any documents reasonably requested by Landlord to effectuate such rights.
26.15 Performance
Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make payment “under
protest” and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party
to institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said Party to pay
such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay.
A Party who does not initiate suit for the recovery of sums paid “under protest” within 6 months shall be deemed
to have waived its right to protest such payment.
26.16 Authority;
Multiple Parties; Execution.
26.16.1 If
either Party hereto is a corporation, trust, limited liability company, partnership, or similar entity, each individual executing this
Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on its behalf.
Each Party shall, within 30 days after request, deliver to the other Party satisfactory evidence of such authority.
26.16.2 If
this Lease is executed by more than one person or entity as “Tenant”, each such person or entity shall be jointly and severally
liable hereunder. It is agreed that any one of the named Tenants shall be empowered to execute any amendment to this Lease, or other document
ancillary thereto and bind all of the named Tenants, and Landlord may rely on the same as if all of the named Tenants had executed such
document.
26.16.3 This
Lease may be executed by the Parties in counterparts, each of which shall be deemed an original and all of which together shall constitute
one and the same instrument. Delivery of a copy of a signature for this Lease may be made by electronic means, such a PDF format, and
such copy shall be deemed effective for all purposes as if it were an original.
26.17 Conflict.
Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions shall be controlled by the typewritten
or handwritten provisions.
26.18 Offer.
Preparation of this Lease by either party or their agent and submission of same to the other Party shall not be deemed an offer to lease
to the other Party. This Lease is not intended to be binding until executed and delivered by all Parties hereto.
26.19 Amendments.
This Lease may be modified only in writing, signed by the Parties in interest at the time of the modification. As long as they do not
materially change Tenant’s obligations hereunder, Tenant agrees to make such reasonable non-monetary modifications to this Lease
as may be reasonably required by a Lender in connection with the obtaining of normal financing or refinancing of the Premises.
26.20 California
Civil Code Section 1938. Pursuant to California Civil Code § 1938, Landlord hereby states that the Premises and Must Take
Space have not undergone inspection by a Certified Access Specialist (CASp) (defined in California Civil Code § 55.52). Accordingly,
pursuant to California Civil Code § 1938(e), Landlord hereby further states as follows: “A Certified Access Specialist (CASp) can
inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility
standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner
or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential
occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the
time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to
correct violations of construction-related accessibility standards within the premises”. In accordance with the foregoing, Landlord
and Tenant agree that if Tenant requests a CASp inspection of the Premises or Must Take Space, then Tenant shall pay (i) the fee
for such inspection using a CASp inspector designated by Landlord, and (ii) the cost of making any repairs necessary to correct violations
of construction-related accessibility standards identified by such CASp inspection shall be paid for solely by Tenant.
26.21 Force
Majeure. If either party is prevented from performing any obligation hereunder by any strike, act of God, fire, war, terrorist act,
shortage of labor or materials, governmental action, civil commotion or other cause beyond such party’s reasonable control (“Force
Majeure”), such obligation shall be excused during (and any time period for the performance of such obligation shall be extended
by) the period of such prevention; provided, however, that this Section 26.21 shall not (a) permit Tenant to hold over in the
Premises after the expiration or earlier termination hereof, or (b) excuse (or extend any time period for the performance of) (i) any
obligation of Tenant to remit money, security deposit or deliver credit enhancement, (ii) any obligation of Tenant under Section 9,
or (iii) any of Tenant’s obligations whose breach would interfere with another occupant’s use, occupancy or enjoyment
of its premises or the Project or result in any liability on the part of Landlord.
26.22 Waiver
of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR
ARISING OUT OF THIS AGREEMENT.
27. Right
of First Offer. Subject to the terms hereof, during the Original Term of the Lease, Tenant shall have a one-time right of first offer
(“ROFO”) to lease space on the second floor of the Building (the “Offered Space”) provided that
Tenant shall not have been in default under this Lease. If Landlord decides, in its sole discretion, to lease the Offered Space, then
Landlord shall offer to Tenant the right to lease such Offered Space on the terms and conditions upon which Landlord is willing to accept
in its sole discretion. Such offer shall be made by Landlord to Tenant in a written notice (hereinafter called the “First Offer
Notice”) which offer shall specify the terms which Landlord is willing to accept with respect to such Offered Space. Tenant
shall take the Offered Space in its “as is” condition. Within five (5) business days, time being of the essence, of Landlord’s
delivery to Tenant of the First Offer Notice, Tenant shall give Landlord a written notice either (a) exercising its ROFO and accepting
the First Offer Notice or (b) rejecting the First Offer Notice. If Tenant fails to exercise the ROFO and accept the First Offer Notice
within such 5-business day period, Tenant shall be deemed to have rejected the First Offer Notice and the ROFO shall be null and
void and of no further force or effect. If Tenant timely and validly exercises its ROFO with respect to Offered Space, then Landlord and
Tenant shall within ten (10) days thereafter execute an amendment to this Lease for such Offered Space upon the terms and conditions
as set forth in the First Offer Notice. If (1) Tenant does not execute such amendment within such 10-day period, or (2) Tenant
rejects or is deemed to have rejected the First Offer Notice, then Landlord shall have the right to lease the Offered Space to any person
or entity free and clear of Tenant’s rights under this Section 27 and the ROFO shall be null and void and of no further force
or effect. The ROFO is personal to the original Tenant, and cannot be assigned or exercised by anyone other than said original Tenant
and only while the original Tenant is in full possession of the Premises and, if requested by Landlord, with Tenant certifying that Tenant
has no intention of thereafter assigning or subletting the Premises or the Offered Space. Tenant shall have no right to exercise the ROFO
and Landlord shall have no obligation to deliver a First Offer Notice if Tenant (i) defaults under this Lease at any time, or (ii) has
subleased the Premises or any portion thereof or assigned or transferred this Lease. Notwithstanding anything to the contrary contained
herein, Tenant must elect to exercise its ROFO, if at all, with respect to all of the Offered Space offered by Landlord to Tenant at any
particular time, and Tenant may not elect to lease only a portion thereof. Tenant’s ROFO is subject and subordinate to any rights
of Superior Rights Holders (as hereinafter defined) existing as of the date of the Lease. As used herein, “Superior Rights Holders”
means, collectively, all tenants under new leases and existing leases of the Offered Space and other tenants of the Building with a right
to the Offered Space or other occupants of the Offered Space (including any renewal, extension, expansion, first offer, first negotiation
and other similar rights, regardless of whether such rights are executed strictly in accordance with their respective terms or pursuant
to lease amendments or new leases).
28. Option
to Extend.
28.1 Option.
Subject to the terms of this Section 28, Tenant shall have one (1) option (“Option to Extend”) to extend
the Original Term for the entire Premises for three (3) years (“Option Term”). Tenant may exercise its Option
to Extend by delivering written notice of exercise to Landlord no sooner than twelve (12) months and no later than nine (9) months
prior to the Expiration Date (the “Notice of Exercise”) under all of the same terms and conditions of the Lease; provided,
however that the Base Rent for the first year of the Option Term shall be 100% of the Fair Rental Value, and Tenant shall have no
further right to extend the Term. Notwithstanding any contrary provision hereof, Tenant shall have no Option to Extend if at the time
of the Notice of Exercise or any time thereafter up to the beginning of the Option Term: (i) Tenant is in default; (ii) the
Premises, or any portion thereof, is sublet, except to a Permitted Transferee; (iii) the Lease has been assigned except for a Permitted
Transfer; (iv) Tenant is not occupying the Premises; or (v) Tenant has not given the Notice of Exercise strictly within the
time frame set forth above; provided, however, that Landlord may, at its option, elect in writing to waive the foregoing conditions and
treat the option to extend as effective despite Tenant failing any such conditions. The Option to Extend is personal to the original Tenant
hereunder and may not be assigned or transferred, or exercised by any other party, except to a Permitted Transferee.
28.2 Option
Rent. The annual Base Rent payable by Tenant during the Option Term (the “Option Rent”) shall be equal to 100%
of the “Fair Rental Value,” as that term is defined below, for the Premises as of the commencement date of the Option Term,
but not less than Base Rent due during the final year of the Original Term. The “Fair Rental Value,” as used in this
Lease, shall be equal to the annual rent per rentable square foot, including all escalations, at which tenants (pursuant to leases consummated
within the twelve (12) month period preceding the first day of the Option Term), are leasing renewal, non-sublease, non-encumbered,
non-equity space which is not significantly greater or smaller in size than the subject space, for a comparable lease term, in an arm’s
length transaction, which comparable space is located in the Comparable Buildings (transactions satisfying the foregoing criteria shall
be known as the “Comparable Transactions”). The term “Comparable Buildings” shall mean the Building
and other first class office buildings located in Palo Alto, California (“Comparable Area”).
28.3 Determination
of Option Rent. In the event Tenant timely and appropriately exercises its Option to Extend, Landlord shall notify Tenant of Landlord’s
determination of the Option Rent on or before the ninetieth (90th) day preceding the Expiration Date. If Tenant, on or before the
date which is ten (10) days following the date upon which Tenant receives Landlord’s determination of the Option Rent, in good
faith objects to Landlord’s determination of the Option Rent, then Landlord and Tenant shall attempt to agree upon the Option Rent
using their good-faith efforts. If Tenant fails to respond within such 10-day period, Tenant shall be deemed to have accepted Landlord’s
determination of the Option Rent. If Landlord and Tenant fail to reach agreement within thirty (30) days following Tenant’s
objection to the Option Rent (the “Outside Agreement Date”), then each party shall make a separate determination of
the Option Rent, within ten (10) days, and such determinations shall be submitted to arbitration in accordance with this Section below.
28.3.1 Landlord
and Tenant shall each appoint one independent arbitrator who shall be a licensed commercial real estate broker or MAI appraiser that operates
from an office within Santa Xxxxx County and who shall have been active over the ten (10) year period ending on the date of such
appointment in the leasing or appraisal, as the case may be, of Comparable Buildings in the Comparable Area. The determination of the
arbitrators shall be limited solely to the issue of whether Landlord’s or Tenant’s submitted Option Rent is the closest to
the actual Option Rent, as determined by the arbitrators. Each such arbitrator shall be appointed within fifteen (15) days after
the Outside Agreement Date. Landlord and Tenant may consult with their selected arbitrators prior to appointment and may select an arbitrator
who is favorable to their respective positions. The arbitrators so selected by Landlord and Tenant shall be deemed “Advocate
Arbitrators.”
28.3.2 The
two (2) Advocate Arbitrators so appointed shall be specifically required pursuant to an engagement letter within ten (10) days
of the date of the appointment of the last appointed Advocate Arbitrator to agree upon and appoint a third arbitrator (“Neutral
Arbitrator”) who shall be qualified under the same criteria set forth hereinabove for qualification of the two Advocate Arbitrators,
except that neither the Landlord or Tenant or either parties’ Advocate Arbitrator may, directly or indirectly, consult with the
Neutral Arbitrator prior or subsequent to his or her appearance. The Neutral Arbitrator shall be retained via an engagement letter jointly
prepared by Landlord’s counsel and Tenant’s counsel.
28.3.3 The
three arbitrators shall, within thirty (30) days of the appointment of the Neutral Arbitrator, reach a decision as to whether the
parties shall use Landlord’s or Tenant’s submitted Option Rent, and shall notify Landlord and Tenant thereof.
28.3.4 The
decision of the majority of the three arbitrators shall be binding upon Landlord and Tenant. If either Landlord or Tenant fails to appoint
an Advocate Arbitrator within fifteen (15) days after the Outside Agreement Date, then either party may petition the presiding judge
of the Superior Court of Santa Xxxxx County to appoint such Advocate Arbitrator subject to the criteria in this Section, or if he or she
refuses to act, either party may petition any judge having jurisdiction over the parties to appoint such Advocate Arbitrator. If the two
(2) Advocate Arbitrators fail to agree upon and appoint the Neutral Arbitrator, then either party may petition the presiding judge
of the Superior Court of Santa Xxxxx County to appoint the Neutral Arbitrator, subject to criteria in this Section, or if he or she refuses
to act, either party may petition any judge having jurisdiction over the parties to appoint such arbitrator. The cost of the arbitration
shall be paid by Landlord and Tenant equally.
28.3.5 In
the event that the Option Rent shall not have been determined pursuant to the terms hereof prior to the commencement of the applicable
Option Term, Tenant shall be required to pay the Option Rent initially provided by Landlord to Tenant in connection with such Option Term,
and upon the final determination of the Option Rent, the payments made by Tenant shall be reconciled with the actual amounts of Option
Rent due, and the appropriate party shall make any corresponding payment (or credits) to the other party.
29. Guaranty
of Lease. Upon Tenant’s execution hereof, the Guarantor identified in Section 1.9 shall each execute a Guaranty of Lease
in the form attached hereto as Exhibit B (“Guaranty”).
IN WITNESS WHEREOF, Landlord
and Tenant have executed this Lease as of the date first written above.
LANDLORD: |
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TENANT: |
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960 SAN ANTONIO LLC, |
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SCILEX PHARMACEUTICALS INC., |
a California limited liability company |
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a Delaware corporation |
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By: |
/s/ Xxxxxxx Xxxxxxx |
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By: |
/s/ Xxxxxx Xxxx |
Name: |
Xxxxxxx Xxxxxxx |
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Name: |
Xxxxxx Xxxx |
Title: |
Manager |
|
Title: |
CEO |
Exhibit A
Description of Premises
Initial Premises:
Approximately 3,490 square feet (for reference
only) on the ground floor of 000 Xxx Xxxxxxx Xxxx, Xxxxx 000, Xxxx Xxxx, XX 00000-0000
Must Take Space:
Approximately 2,510 square feet (for reference
only) on the ground floor of 000 Xxx Xxxxxxx Xxxx, Xxxxx 000, Xxxx Xxxx, XX 00000-0000
Exhibit B
Guaranty of Lease
GUARANTY OF LEASE
This Guaranty of Lease (the “Guaranty”)
is dated August 8, 2019, and is given by Sorrento Therapeutics, Inc., a Delaware corporation (“Guarantor”),
to 960 San Antonio LLC, a California limited liability company (“Landlord”), in order to guaranty the performance
of all obligations of SCILEX Pharmaceuticals, Inc., a Delaware corporation (“Tenant”) under that certain Office
Lease (the “Lease”) entered into by Landlord and Tenant for the lease of the real property commonly known as 000
Xxx Xxxxxxx Xxxx, Xxxxx 000, Xxxx Xxxx, Xxxxxxxxxx (“Premises”). Guarantor’s address is 0000 Xxxxxxxxx
Xxxxx, Xxx Xxxxx, XX 00000.
As a material inducement to
and in consideration of Landlord’s entering into the Lease, and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Guarantor hereby covenants and agrees with Landlord as follows:
1. Scope
of Guaranty. Guarantor hereby unconditionally and irrevocably guarantees all of Tenant’s obligations under the Lease and
all extensions and modifications thereof (the “Obligations”) including but not limited to: (a) Tenant’s
payment of all rent, monies and charges payable under the Lease at the times and in the manner specified thereunder; (b) Tenant’s
performance when due of each of the covenants contained in the Lease to be kept, performed or observed by Tenant; and (c) Tenant’s
payment of all damages owing to Landlord following a default by Tenant under the Lease. Guarantor acknowledges that this is a guaranty
of payment and performance of all Obligations and not merely a guaranty of collectability.
2. Term
of Guaranty. This Guaranty and the obligations of Guarantor hereunder shall be continuing and irrevocable until Tenant has performed
all of its Obligations under the Lease, including those which survive the expiration or earlier termination of the Lease. If all or any
portion of the Obligations are paid or performed, Guarantor’s obligations hereunder shall continue and remain in full force and
effect in the event that all or any part of such payment or performance is avoided or recovered directly or indirectly from Landlord as
a preference, fraudulent transfer or otherwise.
3. Waivers.
Guarantor hereby waives its right to assert any defense to its liability under this Guaranty based on (a) Guarantor’s right
to require Landlord to proceed against Tenant or a co-guarantor or to proceed against or exhaust any security held by Landlord at any
time; (b) the expiration of any statute of limitations in any action hereunder or in any action for the performance of any Obligation;
(c) any defense that may arise by reason of the incapacity, lack of authority, death or disability of any other person or persons
or the failure of Landlord to file or enforce a claim against the estate (in administration, bankruptcy or any other proceeding) of any
other person or persons; (d) Landlord’s failure to make any demand for performance or to give a notice of nonperformance to
Tenant; (e) any defense based upon an election of remedies by Landlord, including any election which destroys or impairs any right
of subrogation, reimbursement or contribution which Guarantor may have; (f) any duty on the part of Landlord to disclose to Guarantor
any facts Landlord may now or hereafter know about Tenant, it being understood and agreed that Guarantor is fully responsible for becoming
and remaining informed of the financial condition of Tenant and of any and all circumstances bearing on the risk of nonperformance of
any Obligation; (g) any rights or benefits in favor of Guarantor under California Civil Code Sections 2787 to 2855, inclusive,
2899 and 3433 or under 11 U.S.C. Sections 364 or 1111(b), or any amendment to any of the forgoing statutes; (h) any
transfer of Landlord’s interest in the Premises or the assignment of Landlord’s interest in the Lease; (i) any transfer
of Tenant’s interest as tenant under the Lease or any portion thereof or any sublease or assignment by Tenant; (j) any merger
or consolidation of Tenant or sale of all or a substantial portion of Tenant’s assets; (k) any sale of all or any portion of
any capital stock of Tenant or partnership interest in Tenant owned by Guarantor; or (l) any prior or concurrent representation,
understanding, promise or condition concerning the subject matter hereof which is not expressed herein. Guarantor hereby waives all presentments,
protests, notices of protest, notices of dishonor and notices of acceptance of this Guaranty by Landlord, and this Guaranty shall be binding
upon Guarantor immediately upon its delivery to Landlord.
4. No
Discharge of Guarantor. Guarantor’s liability under this Guaranty shall not be deemed to have been waived, released, discharged,
limited, impaired or affected by reason of (a) the expiration or termination of the Lease; (b) the release or discharge of Tenant
in any receivership, bankruptcy or other creditors’ proceedings or the rejection, disaffirmance or disclaimer of the Lease by any
party in any such proceeding; (c) the repossession of the Premises; (d) any amendment, extension, renewal or modification of
the terms of the Lease without Guarantor’s consent; or (e) any waiver by Landlord of any provisions of the Lease or any failure
by Landlord to enforce the provisions thereof. Guarantor hereby assigns to Landlord any rights Guarantor may have to file a claim and
proof of claim in any bankruptcy or similar proceeding of Tenant and any awards or payments thereon to which Guarantor would otherwise
be entitled, to the extent of any unsatisfied Obligation.
5. Cumulative
Rights. The amount of Guarantor’s liability and all rights, powers and remedies of Landlord hereunder shall be cumulative
and not alternative and such rights, powers and remedies shall be in addition to all rights, powers and remedies available to Landlord
at law or in equity. In the event of any default hereunder, a separate action or actions may be brought and prosecuted against Guarantor,
whether or not Tenant is joined in the action and whether or not a separate action is brought against Tenant. Landlord may maintain successive
actions for other defaults.
6. Subordination
of Rights. Guarantor hereby subordinates any and all claims it may have against Tenant to Landlord’s claims under the Lease.
7. Attorneys’
Fees and Expenses. Guarantor shall pay to Landlord, upon demand, reasonable attorneys’ fees and all costs and other expenses
which Landlord expends or incurs in enforcing this Guaranty, or in connection with any insolvency, bankruptcy, reorganization, arrangement
or other similar proceedings involving Tenant, Guarantor, or either of them.
8. Interest.
Any amounts payable by Guarantor hereunder that are not paid when due shall bear interest at the lesser of (a) ten percent (10%) per
annum or (b) the maximum amount permitted by applicable law.
9. Severability.
Should any provision of this Guaranty be determined to be illegal or unenforceable by a court of competent jurisdiction, all other provisions
hereof shall nevertheless be deemed effective.
10. Time
of the Essence. Time is of the essence with respect to the performance of Guarantor’s obligations hereunder.
11. Modification.
No provision of this Guaranty or right of Landlord hereunder may be modified or waived, nor shall Guarantor be released from performance
of Guarantor’s obligations hereunder, except by a writing duly executed by Landlord.
12. Assignment
and Interpretation. This Guaranty shall inure to the benefit of and bind the heirs, legal representatives, administrators, executors,
successors and assigns of Guarantor and of Landlord. The assignment of the Guaranty by Landlord shall not extinguish or diminish Guarantor’s
liability hereunder. The use of the word Guarantor shall include the plural as well as the singular. Words used in the neuter gender shall
include the masculine and feminine gender. “Tenant” as used in this Guaranty shall include all successors or assigns of Tenant.
13. Effect
of Guarantor’s Performance of Obligations. The acceptance by Landlord of the performance of any of the Obligations under
the Lease by Guarantor, including, without limitation, the acceptance of rent payments, shall constitute neither an assignment of the
Lease to Guarantor nor Landlord’s consent to such an assignment.
14. Estoppel
Certificate. Guarantor, from time to time within ten (10) business days following Landlord’s request, shall execute
and deliver to Landlord an estoppel certificate containing such truthful information as Landlord may reasonably request, and such further
instruments or documentation as may reasonably be requested by Landlord to ratify and confirm this Guaranty and the continuing liability
of Guarantor hereunder. In addition, from time to time within ten (10) business days after Landlord’s written request, Guarantor
shall furnish to Landlord its most recent financial statement or other financial information as may be reasonably requested by Landlord.
15. Governing
Law and Venue. This Guaranty shall be governed by and construed in accordance with the laws of the State of California (without
regard to California’s conflicts of law rules). The parties hereby consent to jurisdiction and venue in any California court of
competent jurisdiction or the United States District Court for the county and federal judicial district, respectively, in which the Premises
are located, and agree that such courts shall constitute the exclusive venue for any dispute arising hereunder.
16. Entire
Agreement. This Guaranty contains all of the agreements of Landlord and Guarantor concerning the guaranty of the Lease and no
prior or contemporaneous agreement or understanding pertaining to any such matter shall be effective.
17. Notices.
Any notice given hereunder shall be in writing and may be given by certified mail, return receipt requested, personal delivery, Federal
Express or other delivery service. If notice is given by certified mail, return receipt requested, notice shall be deemed given three
(3) days after the notice has been deposited in the U.S. mail, postage pre-paid, addressed to Guarantor at the address set forth
in the first paragraph of this Guaranty and addressed to Landlord at the address for notices for Landlord set forth in the Lease. If notice
is given by personal delivery, Federal Express or other delivery service, notice shall be deemed given on the date the notice is actually
received by Landlord or Guarantor. Either party may, by written notice to the other party, specify a different address for notice purposes.
18. Authority.
Guarantor, and each individual executing this Guaranty on behalf of Guarantor, represents and warrants that such individual is duly authorized
to execute and deliver this Guaranty on behalf of Guarantor, that Guarantor is duly authorized to enter into this Guaranty, and that this
Guaranty is enforceable against Guarantor in accordance with its terms. Guarantor shall deliver to Landlord upon demand evidence of such
authority satisfactory to Landlord.
19. Joint
and Several Liability. If more than one person or entity executes this Guaranty, the obligations of each person or entity executing
this Guaranty shall be joint and several.
20. Waiver
of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, LANDLORD AND GUARANTOR HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL
BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR CROSS-COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARING BROUGHT BY EITHER LANDLORD
AGAINST GUARANTOR OR GUARANTOR AGAINST LANDLORD ON ANY MATTER WHATSOEVER ARISING OUT OF, OR IN ANY WAY CONNECTED WITH, THIS GUARANTY,
THE LEASE, THE RELATIONSHIP OF LANDLORD AND GUARANTOR, TENANT’S USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF INJURY OR DAMAGE,
OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY LAW, STATUTE, OR REGULATION, EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN EFFECT.
GUARANTOR ACKNOWLEDGES THAT
IT WAS AFFORDED THE OPPORTUNITY TO READ THIS GUARANTY AND TO REVIEW IT WITH AN ATTORNEY OF ITS CHOICE. GUARANTOR ACKNOWLEDGES HAVING READ
AND UNDERSTOOD THIS GUARANTY AND THE LEASE BEFORE SIGNING THIS GUARANTY.
IN WITNESS WHEREOF, Guarantor
has executed this Guaranty as of the date written above.
GUARANTOR:
Sorrento Therapeutics, Inc.,
a Delaware corporation
By: |
/s/ Xxxxx Xx |
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Xxxxx Xx |
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(print name) |
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Its: |
Chairman and CEO |
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(print title) |
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