GROUND LEASE TEMPLATE FOR

REAL PROPERTY DEVELOPMENT PARTNERSHIP PROJECTS

THIS GROUND LEASE (the “Lease”) is made and entered into as of

________________, 201_ (the “Effective Date”) by and between the Board of Trustees of the
California State University, on behalf of California State University, [campus] (“Landlord”),
and ______________, a ______________ (“Tenant”).

RECITALS

WHEREAS, Landlord is the owner of certain unimproved real property in the County of
__________, State of California, consisting of approximately ______________ (___) acres and
legally described in Exhibit A hereto (the “Premises”);

WHEREAS, Tenant desires to lease the Premises (together with certain appurtenant
rights and easements) from Landlord for the purpose of constructing thereon and thereafter
owning and operating a __[insert use]____________________________ and other appurtenant
facilities as more particularly described on Exhibit B hereto (the “Improvements”); and

WHEREAS, use of the Premises must be for purposes consistent with the mission of the
California State University and California State University, [campus] ;

WHEREAS, Tenant has agreed to use the Premises in a manner which is consistent with
such mission;

NOW, THEREFORE, in consideration of the mutual covenants herein contained and

incorporating by this reference the foregoing Recitals, the parties hereto hereby agree as follows:

ARTICLE I
DEFINITIONS

For purposes of this Lease, the following definitions shall apply:

“Accelerated Trial” shall mean a trial which complies with the dispute resolution
procedures set forth in Section 17.3.

“Acquisition Notice” shall have the meaning ascribed to it in Section 12.7.

“Additional Deposit” shall have the meaning set forth in Section 2.9.

“Affiliate” shall mean any person controlling, controlled by or under common control
with the person in question. As used in the foregoing, “control” and its related words means the
ability to effectively direct the management decisions of the person in question.

“Alterations” shall have the meaning ascribed to it in Section 9.1.

“Annual Base Rent” shall mean the initial amount of ___________Thousand Dollars
($________) and thereafter such amount as shall be determined in accordance with Section 4.3.

“Assessments” shall mean any and all special assessments or levies or charges made by
CSU CPDC: July 2016 1
any municipal or political subdivision for local improvements.

“Award” shall have the meaning ascribed to such term in Section 11.8.

“BOT” shall mean the Board of Trustees of the California State University.

“Building Tenant Lease” shall mean any agreement between Tenant and any person
setting forth the terms and conditions of occupancy of a portion of the Improvements by such
person. Building Tenant Leases are subject to the restrictions on subleases set forth in Article
XII below.

“Business Day” shall mean a day other than a Saturday, Sunday, scheduled federal or
state holiday or any other day on which commercial banks in the County are authorized or
required by applicable Laws to close.

“Capital Improvement Fund” shall have the meaning set forth in Section 6.8.1.

“Capital Improvement Plan” shall have the meaning set forth in Section 6.8.4.

“CEQA” means the California Environmental Quality Act.

“City” shall mean the City of [campus location], California.

“Commencement of Construction” shall mean the date on which Tenant has

Commenced Construction.

“Commenced Construction” shall have the meaning set forth in Section 3.3.4.

“Comparable Improvements” shall mean improvements similar in kind and nature to

the Improvements which are maintained in a first class manner and operated as a [permitted use].

“Completion of Construction” shall have the meaning set forth in Section 3.3.4.

“Construction Commencement Date” shall mean __________, which date is ____

months after the Effective Date.

“Construction Period” shall mean the number of days required for construction of the
Improvements as set forth in a construction schedule included and approved by the BOT as part
of the Schematic Design Package submitted to Landlord and the BOT by Tenant during the Due
Diligence Option Period. The Construction Period shall commence on the date on which Tenant
has Commenced Construction, and end on the last day for Completion of Construction as shown
in such construction schedule, extended only as permitted in (a), (b) and (c) of Section 3.3.2.

“Construction Period Rent” shall mean the rent payable during Construction Period,
and shall be an amount equal to [50%] of Annual Base Rent.

“Construction Requirements” shall mean all applicable Laws, Landlord’s construction

requirements, a copy of which are attached hereto as Exhibit C and incorporated herein, the
Design Guidelines, the Final Plans approved by the University and/or the BOT for the
Improvements, and the requirements of this Lease applicable to the construction of the
CSU CPDC: July 2016 2
Improvements.

“Construction Schedule” shall mean the construction schedule included and approved
by the BOT as part of the Schematic Design Package, or approved by delegated authority to the
Chancellor, if applicable, as it may be modified with the approval of the BOT and/or the
Chancellor, as appropriate.

“Contractor” shall have the meaning set forth in Section 3.4.

“County” shall mean the County of [campus location], State of California.

“CPI Index” shall mean the Consumer Price Index [All Urban Consumers] (base year
1982-84 = 100) for the [campus location index] published by the United States Department of
Labor, Bureau of Labor Statistics. If the CPI Index is changed so that the base is changed from
1982-84 = 100, the CPI Index shall be converted in accordance with the conversion factor
published by the United States Department of Labor, Bureau of Labor Statistics. If the CPI
Index is discontinued or revised during the Term, such other governmental index or computation
with which it is replaced shall be used in order to obtain substantially the same result as would be
obtained if the CPI Index had not been discontinued or revised. If there is no such replacement,
then Landlord and Tenant shall select another price index which is satisfactory to both.

“Demolition Account” shall mean the account established pursuant to Section 2.12.4.

“Design Guidelines” shall have the meaning set forth in Section 3.2 hereof.

“Design Professional” shall mean a qualified professional architect or engineer, licensed

in the State of California and in good standing, who may perform architectural or engineering
services, including analysis of project requirements, creation and development of the project
design, preparation of drawings, and specifications and bidding requirements.

“Development Financial Plan” shall have the meaning set forth in Section 3.2 hereof.

“Effective Date” shall mean the date set forth in the preamble of this Lease.

“Event of Default” shall have the meaning set forth in Section 15.2.

“Facilities Planning” shall mean the Facilities Planning and Management Office of the
University, or similar University office then applicable as designated by the University. If the
University does not have or designate a Facilities Planning and Management Office, then the
office of the University President shall be deemed to the Facilities Planning and Management
Office of the University until otherwise designated by the University.

“Fair Market Rent” shall mean the fair market rent for the Premises determined
pursuant to Article XVIII for the purpose set forth in Section 4.3.2.

“Final Plans” shall mean the Construction Documents prepared in accordance with the
Design Guidelines attached hereto as Exhibit D which are approved by Landlord as complete in
all respects and are ready for use in construction.

“First Rent Payment Date” shall mean (a) the Rent Commencement Date if the Rent
CSU CPDC: July 2016 3
Commencement Date falls on the first day of a calendar month, and (b) the first calendar day of
the first calendar month following the month in which the Rent Commencement Date occurs if
the Rent Commencement Date occurs on a date other than the first calendar day of a calendar
month.

“Force Majeure” shall mean a strike, act of God, inability to obtain labor or materials,
governmental restriction, enemy action, civil commotion, fire, or similar cause, provided such
similar cause is beyond the reasonable control of either Landlord or Tenant.

“Franchisor” shall have the meaning set forth in Section 2.14. [for hotel leases only]

“Franchisor Agreement Date” shall have the meaning set forth in Section 2.14.1. [for
hotel leases only]

“Gross Sales” shall have the meaning set forth in Section 4.11.2. [if applicable because
the Improvements are to be used for retailor hotel purposes]

“Gross Revenues” shall mean the gross receipts of Tenant derived from all sources
pertaining to the rental and operation of the Premises and from the Improvements, or any part
thereof, including, without limitation, gross rents (including all amounts received from any
tenants, whether denominated as room rents, gross percentage rents, parking revenues, mini-bar
sales, meeting room rent, and rent for the use of space of any kind, fees and charges, sales of
merchandise, food, beverages, services, gift or merchandise certificates, and all other receipts of
all business conducted at, in, about, from or on the Premises, including (i) mail, telephone, and
internet orders received or filled at or from the Premises; (ii) all deposits not refunded to
customers; (iii) all orders taken in or from the Premises, whether or not the orders are filled
elsewhere; (iv) receipts of sales through any mechanical or vending machines or other coin or
token operated device; (v) sales by any sublessee, concessionaire, or licensee or otherwise at,
on, in, from, or about the Premises; (vi) sales receipts occurring or arising as a result of
deliveries or solicitations off the Premises conducted by persons operating from or reporting to,
or under the supervision of any employee of Tenant; (vii) forfeited room reservation deposits and
other forfeited deposits; (viii) revenues from memberships of any kind, including without
limitation health club memberships; and (x) income from e-commerce and internet access, sales
and services from the Premises, payments from the proceeds of rent insurance or business
interruption insurance, insurance proceeds to the extent such insurance proceeds exceed the
actual amount expended on demolition, repair and restoration, interest on all tenant deposits
and on reimbursements from tenants, if any, net receipts (but not less than zero) for services or
transactions performed for tenants, and all other consideration. Gross revenues shall not
include refundable deposits made by tenants, except to the extent such deposits are retained by
Tenant; the principal balance of any construction or subsequent financing other than proceeds
in excess of the actual costs of constructing and operating the Improvements; gratuities that
were collected by Tenant for the benefit of employees of Tenant, to the extent the gratuities are
actually remitted to such employees, and any taxes payable thereon, room and sales taxes and
bad debt charges. [if applicable because the Improvements are to be used for retail or hotel
purposes]

CSU CPDC: July 2016 4

 “Ground Lease Non-Disturbance Agreement” means that certain Subordination, Non-
Disturbance and Attornment Agreement of even date herewith by and between the Landlord and
Tenant to be entered into concurrently with the execution of this Lease, and any Subordination,
Non-Disturbance and Attornment Agreements entered into with Tenant or any permitted
successor Tenant in the future.

“Guaranty” shall have the meaning set forth in Section 2.8.

“Hazardous Substance” shall mean any material or substance (a) defined as a

“hazardous waste,” “extremely hazardous waste” or “restricted hazardous waste” under sections
25115, 25117 or 25122.7, or listed pursuant to section 25140, of the California Health and Safety
Code, division 20, chapter 6.5 (Hazardous Waste Control law); (b) defined as a “hazardous
substance” under section 26316 of the California Health and Safety Code, division 20, chapter
6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act); (c) defined as a “hazardous
material,” “hazardous substance” or “hazardous waste” under section 25501 of the California
Health and Safety Code, division 20, chapter 6.95, “Hazardous Substance” under section 25281
of the California Health and Safety Code, division 20, chapter 6.7 (Underground Storage of
Hazardous Substances); (d) petroleum; (e) asbestos (f) polychlorinated biphenyls; (g) listed
under Article 9 or defined as “hazardous” or “extremely hazardous” pursuant to Article 11 of
Title 22 of the California Administrative Code, division 4, chapter 20; (h) designated as a
“hazardous substance” pursuant to section 311 of the Clean Water Act (33 U.S.C. § 1251 et seq.,
33 U.S.C. § 1321, or listed pursuant to section 307 of the Clean Water Act (33 U.S.C. § 6903);
(i) defined as a “hazardous substance” pursuant to section 101 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. § 6901 et seq.); or (k)
found to be a pollutant, contaminant, toxic or hazardous waste or toxic or hazardous substance in
any reported decision of a federal or California state court, or which may give rise to liability
under any federal or California common law theory based on nuisance or strict liability.

“Improvements” shall mean all improvements on the Premises to be constructed under

the terms of this Lease and any replacements, reconstruction or restorations thereof during the
Term.

“Indemnified Parties” means, with respect to Landlord, California State University

[campus], the State of California, the Board of Trustees of the California State University, and
each of their officers, employees, representatives, agents, and volunteers. Indemnified Parties
means, with respect to Tenant, the Tenant and each of its partners, officers, members, employees,
representatives, and agents.

“Initial Period” shall mean the period commencing on the Effective Date and ending on
the day before the date on which the Commencement of Construction occurs.

“Initial Period Rent” shall mean the rent payable during the Initial Period and shall be
the sum of [25%] of Annual Base Rent.

“Institutional Lender” shall mean any of the following entities acting on its own or in a
fiduciary capacity, so long as such entity (together with any entity directly or indirectly owning
or controlling such entity or directly or indirectly owned, controlled by or under common control
with such entity) has an aggregate combined net worth of at least $500 million: (a) a bank,
savings and loan association, savings institution, trust company or national banking association,
CSU CPDC: July 2016 5
(b) a charitable foundation, (c) an insurance company, (d) a pension, retirement or profit-sharing
trust or fund, (e) an investment company or business development company, as defined in the
Investment Company Act of 1940, as amended, (f) a broker or dealer registered under the
Securities Exchange Act of 1934, as amended, or any investment advisor registered under the
Investment Advisers Act of 1940, as amended, (g) a public employees’ pension or retirement
system or any other government agency supervising the investment of public funds, or (h) any
entity directly or indirectly owning or controlling any of the foregoing or directly or indirectly
owned, controlled by or under common control with any of the foregoing.

“Landlord” shall have the meaning ascribed to it in the preamble of this Lease and shall
include any of Landlord’s successors or assigns.

“Laws” shall mean all of the applicable statutes, ordinances, rules, codes, requirements,
permits, regulations, or the like, of any governmental authority, whether federal, state, or local,
or court.

“Lease” shall have the meaning ascribed to it in the introductory clause hereof.

“Leasehold Mortgagee” shall have the meaning ascribed to it in Section 14.2.

“Lender Recognition Agreement” shall mean an agreement in form and substance

satisfactory to the Landlord between the Landlord, Tenant and a Leasehold Mortgagee pursuant
to which the Landlord undertakes in favor of the Leasehold Mortgagee that in the event of a
default by Tenant the Landlord will recognize the Leasehold Mortgagee as a direct lessee of the
Landlord under the terms set forth in this Lease upon completion of a foreclosure or assignment
in lieu of foreclosure under the applicable Trust Deed, on the condition that said Leasehold
Mortgagee cures all defaults by Tenant under this Lease that are curable by such Leasehold
Mortgagee after such foreclosure or acquisition of title.

“Offer” shall have the meaning ascribed to it in Section 12.6.

“Official Records” shall mean the Official Records of the County Recorder of the
County.

“Partial Taking” shall have the meaning ascribed to it in Section 11.4 of this Lease.

“Percentage Rent” shall have the meaning set forth in Section 4.11.1 [or Section 4.12.1]
hereof. [if and as applicable because the Improvements are to be used for retail or hotel
purposes]

“Percentage Rent Rate” shall have the meaning set forth in Section 4.11.1. [if
applicable because the Improvements are to be used for retail or hotel purposes]

“Permitted Assignee” shall mean any Person owned or controlled by Tenant or by the
Person who owns Tenant.

“Permitted Capital Expenditure(s)” shall have the meaning set forth in Section 6.8.1.

“Permitted Uses” shall mean the use of the Premises and the Improvements for [hotel
and lodging purposes and appurtenant uses such as restaurants, bars, gift shops, meeting rooms
CSU CPDC: July 2016 6
and incidental and ancillary uses] [senior living facility] [any use permitted by applicable law]
[office or commercial or industrial use] [insert use].

“Person” shall mean any natural person, a partnership, a corporation, an association, a

joint stock company, a limited liability company, a trust, a joint venture, an unincorporated
organization and other entity.

“Premises” shall mean real property described in the first recital of this Lease.

“Quarterly Statement” shall have the meaning set forth in Section 4.12.2. [if applicable
because the Improvements include retail or hotel uses]

“Refusal Offer” shall have the meaning ascribed to it in Section 12.7.

“Rent” means Annual Base Rent, [Percentage Rent if applicable], and all other amounts
to be paid by Tenant hereunder.

“Rent Adjustment Date” shall mean the [fifth (5th)] anniversary of the First Rent
Payment Date, and each date which falls on each [four (4)] year anniversary thereof.

“Rent Commencement Date” shall mean the Effective Date.

“Reserve Account” shall have the meaning ascribed to it in Section 6.7. [for hotel
leases]

“Right of First Refusal” shall have the meaning ascribed to it in Section 12.7.

“Scheduled Completion Date” shall mean the date on which Completion of

Construction is scheduled to occur as set forth in the construction schedule included and
approved by the BOT as part of the Schematic Design Package.

“Schematic Design Package” shall mean the materials required to be submitted to the
BOT for approval pursuant to Section 3.2 hereof.

“Security Deposit” shall have the meaning set forth in Section 2.9.

“Subtenant” shall mean any lessee or tenant of any space in the Improvements pursuant
to an executed Building Tenant Lease.

“Stoppage of Construction” shall have the meaning set forth in Section 3.3.4.

“Subtenant Improvements” shall mean tenant improvements installed in any portion of

the Improvements pursuant to the provision of an executed Building Tenant Lease.

“Taking” shall have the meaning ascribed to it in Section 11.2.

“Taxes” shall mean property taxes, fees, assessments and charges, water and sewer rates
and charges and other similar governmental charges, whether general or special, ordinary or
extraordinary, which may be levied, assessed, charged or imposed, or may become a lien or
charge upon the Premises or any part or parts thereof, or upon Tenant’s estate created by this
Lease, including, without limitation, taxes on land, any buildings, any parking facilities or any
CSU CPDC: July 2016 7
other improvements now or hereafter at any time during the Term located at or on the Premises.

“Tenant” shall have the meaning ascribed to it in the preamble of this Lease and shall
include any permitted assignee of the original Tenant.

“Tenant’s Interest” shall mean Tenant’s entire interest in (a) the Premises, (b) the
Improvements, and (c) this Lease.

“Term” shall mean the term of this Lease as set forth in Section 2.4 of this Lease.

“Third Party Delay” shall mean any unanticipated delay not caused by either of the
parties and which prevents either party from achieving conditions set forth in this Lease at no
fault of their own, and shall include a delay caused by the occurrence of a Force Majeure Event.
Upon to the occurrence of any such delay, the parties shall promptly notify the other party in
writing of such delay and shall meet to agree upon the appropriate extension of any deadlines set
forth under this Lease as a result of such Delay.

“Total Taking” shall have the meaning ascribed to it in Section 11.3.

“Trust Deed” shall have the meaning ascribed to it in Section 14.2.

“University” shall mean California State University, [campus].

“University Delay” shall mean delay caused by a University Entity (other than delays
consistent with the established time frames for such University Entity to conduct reviews and/or
grant or deny discretionary approvals). In no event shall a University Entity’s rejection of an
application submitted by Tenant due to Tenant’s failure to comply with any requirement of such
University Entity’s approval process be considered University Delay.

“University Entity” shall mean the BOT, the University, and any applicable office,
department, body or agency of any of the foregoing.

ARTICLE II
GRANT AND TERM

2.1 Lease. In consideration of the covenants and agreements to be observed and

performed by Tenant, Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, the Premises, subject to: (i) all liens, encumbrances, easements, rights-of-way,
covenants, conditions, restrictions, obligations and liabilities as may appear of record as of the
Effective Date or as are made of record hereafter in accordance with the terms of this Lease, (ii)
all matters which would be revealed or disclosed in an accurate survey or physical inspection of
the Premises; (iii) the effect of all current building restrictions and regulations, current and future
applicable Laws; (iv) the condition and state of repair of the Premises on the Effective Date; and
(v) all taxes, duties, assessments, special assessments, water charges and sewer rents, and any
other impositions, accrued or unaccrued, fixed or not fixed, as provided below. Landlord
reserves unto itself a nonexclusive easement in, on, over, under and upon the Premises for the
purpose, as appropriate, of vehicular and pedestrian access, planting and landscaping, design,
construction and installation of infrastructure, and other uses consistent with the development
and operation of the Improvements in a manner consistent with this Lease. Landlord grants to
Tenant and to any Subtenants and to their respective agents, employees, licensees, and invitees a
CSU CPDC: July 2016 8
non-exclusive easement in, on, and over those streets, roads, and other pathways owned by
Landlord and intended for pedestrian or vehicular travel immediately adjacent to the Premises,
for the purposes of accessing the Premises and the Improvements.

2.2 Use of the Premises. Tenant shall use the Premises for the Permitted Uses and
no others throughout the Term, other than for construction uses during the Construction Period.
Use of the Premises for other than the Permitted Uses shall constitute an Event of Default as
hereinafter provided.

2.3 Reservation of Oil, Gas and Mineral Rights. Landlord reserves to itself the
sole and exclusive right to prospect for, drill for, produce, and take any oil, gas, or other
hydrocarbon or mineral substances and accompanying fluids, including all geothermal resources
from the Premises from below the depth of five hundred (500) feet from the surface of the
Premises, including the rights to slant drill, maintain subsurface pressures, and utilize subsurface
storage space for natural substances. This reservation does not include the right of entry or
access from or over the surface of the Premises, nor any other right not herein expressly
reserved. Landlord covenants that Tenant shall not be disturbed in its quiet enjoyment and
peaceful use of the Premises by the aforementioned drilling and production activities, and
Landlord agrees to indemnify Tenant and hold it harmless for any loss, expense, claim, liability
or damages (including, without limitation, attorneys’ fees and charges) proximately caused by or
resulting from such activities.

2.4 Term. The Term of this Lease shall commence on the Effective Date and expire,
without notice or other action by either party, at 12:00 midnight of the day preceding the fortieth
(40th) anniversary of the Effective Date, unless this Lease is sooner terminated or extended
pursuant to the terms of this Lease. [Note that the length of the lease is negotiable. If a Lessee
seeks a longer term, then there should be a rental premium associated with the longer lease
term.]

2.5 Tenant’s First Right to Negotiate. At the expiration of the Term, if Landlord
elects to continue to operate the Improvements for the Permitted Uses and intends to engage a
third party to lease the Premises or to operate the Improvements for such purposes, and if Tenant
has otherwise complied with all of the terms and conditions of this Lease, then Tenant shall have
a first right to negotiate with Landlord, for a period of three (3) months, to become the new
tenant or the operator of the Improvements on terms and conditions acceptable to Landlord and
Tenant in their sole discretion. Such three (3) month period shall commence no earlier than
twelve (12) months prior to the expiration of the Term.

2.6 Holding Over. This Lease shall expire without further notice at the expiration of
the Term, and no holding over after the termination or expiration of this Lease shall be permitted.
Any holding over by Tenant after expiration or earlier termination shall not constitute a renewal
or extension of this Lease, nor shall it give Tenant any rights in or to the Premises, or any part
thereof.

2.7 Early Termination. In addition to the remedies set forth in Article XV, Landlord
may terminate this Lease prior to expiration of the Term upon thirty (30) days’ prior written
notice in the event that:

CSU CPDC: July 2016 9

 2.7.1 Commencement of Construction of the Improvements shall not have
occurred by the Construction Commencement Date; or

2.7.2 Completion of the Improvements shall not have occurred within one
hundred twenty (120) calendar days of the Scheduled Completion Date (subject to extension for
Force Majeure or a University Delay); provided, however, that the period for Completion of the
Improvements may be extended for up to, but no more than, six (6) months provided that:

2.7.2.1 Tenant provides Landlord notice of such extension no later than

four (4) months prior to the Scheduled Completion Date;

2.7.2.2 Landlord is reasonably satisfied that the Work can be completed

before the expiration of such extension; and

2.7.2.3 Tenant pays to Landlord the sum of $___________ concurrently

with the delivery of the notice referred to in Section 2.7.2.1. Such payment shall
be in addition to Annual Base Rent and in addition to the Option Payment, shall
not be applied to any other amounts due hereunder, and shall not be refundable
under any circumstances.

2.8 Guaranty. It is a condition precedent to Landlord’s obligations under this Lease

that __________________ duly execute and deliver to Landlord a guaranty (“Guaranty”) in the
form of Exhibit E hereto of Tenant’s obligations under this Lease for Completion of the
Improvements. [guarantor should be a credit worthy entity with good liquidity]

2.9 Security Deposit. Upon the Effective Date, Tenant shall provide to Landlord, as
security for the faithful performance by Tenant of all of its obligations under this Lease,
including, without limitation, the timely Completion of Construction, the sum of
[________________ Thousand Dollars ($__0,000)] (the “Security Deposit), which sum shall be
increased by the additional amount of [__________________ Thousand Dollars ($__0,000)] (the
“Additional Deposit”) at least three (3) Business Days prior to the Commencement of
Construction. Provided that upon Completion of Construction no Event of Default has occurred
and is continuing, the Additional Deposit shall be refunded to Tenant within fifteen (15)
Business Days after Completion of Construction. If an Event of Default occurs pursuant to this
Lease, then upon notice to Tenant, Landlord may, but shall not be required to, apply all or any
part of the Security Deposit for the payment of any Annual Base Rent or other amount payable
by Tenant hereunder or to remedy any other default and Tenant shall, upon demand therefor,
restore the Security Deposit to its original amount. Any unapplied portion of the Security
Deposit shall be returned to Tenant or the last assignee of Tenant’s interest hereunder within
thirty (30) days following the expiration of the Term. Tenant shall not be entitled to any interest
on the Security Deposit. Tenant hereby irrevocably waives and relinquishes any and all rights,
benefits or protections, if any, Tenant now has, or in the future may have, under Section 1950.7
of the California Civil Code, any successor statute, and all other provisions of law, now or
hereafter in effect, including, but not limited to, any provision of law which (1) establishes the
time frame by which a landlord must refund a security deposit under a lease, or (2) provides that
a landlord may claim from a security deposit only those sums reasonably necessary to remedy
defaults in the payment of rent, to repair damage caused by a tenant, or to clean the subject
premises. Tenant acknowledges and agrees that any statutory time frames for the return of a
security deposit are superseded by the express period identified in this Article above, and that
CSU CPDC: July 2016 10
notwithstanding the provisions of Section 1950.7 of the California Civil Code, any successor
statute or any other provision of law, now or hereafter in effect to the contrary, Landlord may
claim from the Security Deposit (x) any and all sums expressly identified in this Section above,
and (y) any additional sums reasonably necessary to compensate Landlord for and all losses or
damages caused by Tenant’s default under this Lease, including, but not limited to, all damages
or rent due upon termination of this Lease pursuant to Section 1951.2 of the California Civil
Code.

2.10 Quiet Enjoyment. So long as Tenant is not in default under this Lease past any
applicable notice and cure period, and except for Landlord’s actions in the case of an emergency
for the purposes of protecting public health or safety, Tenant shall lawfully, peacefully and
quietly hold, occupy and enjoy the Premises without disturbance, interruption or hindrance by
Landlord, or any person or entity claiming by or through Landlord. Landlord shall in no event
be liable in damages or otherwise, nor shall Tenant be released from any obligation hereunder,
because of the interruption of any service, or a termination, interruption or disturbance
attributable to an event of Force Majeure, or any cause due to any act or neglect of Tenant or its
servants, agents, employees, licensees, business invitees, or any person claiming by or through
Tenant.

2.11 Condition of Premises. Tenant has accepted possession of the Premises in an

“AS-IS” condition without any representation or warranty of Landlord. By the execution of this
Lease, Tenant acknowledges that it has completed any and all due diligence that it deems
necessary in order to enter into this Lease. Tenant acknowledges that it has had the advice of
such independent professional consultants and experts as it deems necessary in connection with
its investigation and study of the Premises, and has, to the extent it deemed necessary,
independently investigated the condition of the Premises, including the soils, hydrology and
seismology thereof, and the Laws relating to the construction and operation of the
Improvements, including environmental, zoning and other land use entitlement requirements and
procedures, height restrictions, floor area coverage limitations and similar matters, and has not
relied upon any statement, representation or warranty of Landlord of any kind or nature in
connection with its decision to execute and deliver the Lease and its agreement to perform the
obligations of Tenant hereunder except as expressly set forth in this Lease. Landlord makes no
warranty as to the suitability of the Premises for Tenant’s proposed development, construction or
use, as permitted by this Lease. Landlord makes no covenants or warranties respecting the
condition of the soil, subsoil or any other condition of the Premises. Tenant acknowledges that
the soil on the Premises may or may not be suitable for the purposes intended by Tenant or be of
such character and condition so as to require special engineering for construction of the
Improvements. Landlord shall not be responsible for any land subsidence, slippage, soil
instability or damage resulting therefrom. Landlord shall not be required or obligated to make
any changes, alterations, additions, improvements or repairs in, on, under or about the Premises.
In addition, Landlord has made no representation or warranty that it will develop any of its other
property, whether or not adjoining the Premises, for any specific use. With respect to the
foregoing, and by initialing below, Tenant expressly waives the provisions of California Civil
Code Section 1542, which provides:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH

THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,

CSU CPDC: July 2016 11

 WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

It is expressly understood and agreed, however, that Tenant is not releasing, nor waiving any of
the provisions of California Civil Code Section 1542 with respect to any of the matters as to
which Landlord has made specific representations, warranties and/or covenants in the Lease.

Tenant’s initials: ______________

2.12 Ownership and Removal of Improvements.

2.12.1 Ownership of Improvements. Except as hereinafter provided, during the

Term Tenant shall be the owner of all Improvements and all furnishings, fixtures and personal
property of Tenant located thereon. Tenant shall retain all rights to depreciation deductions and
tax credits arising from its ownership of said property. Upon expiration or earlier termination of
this Lease, all such Improvements and property shall, except as provided in Section 2.12.3
below, automatically vest in, revert to, and become the property of Landlord without
compensation to, or requirement of consent or other act of, Tenant, and without the necessity of
deed, bill of sale, conveyance or other act or agreement of Tenant, and without any payment of
any kind or nature by Landlord to Tenant or to any other person, including any lender and/or
other entity who has a lien against all or any portion of Tenant’s Interest. Tenant shall thereafter
have no further rights thereto or interest therein. Except as permitted by this Lease, Tenant shall
not remove any Improvements from the Premises, nor waste nor destroy any Improvements;
provided, however, that if Landlord notifies Tenant at least five (5) years prior to the expiration
of the Term or any extended Term of its desire that Tenant remove the Improvements on the
expiration of the Term or extended Term, then promptly following the expiration date, and
within ninety (90) days after the expiration of the Term or extended Term, Tenant shall remove
or cause to be removed all the Improvements from the Premises at Tenant’s sole cost. If Tenant
is required to remove the Improvements on the expiration of the Term or any extended Term,
then Tenant shall be entitled to remain in possession of the Premises for the time reasonably
necessary to remove the Improvements, and no longer than ninety (90) days after the expiration
of the Term or extended Term, and all provisions of this Lease shall apply to the period that
Tenant remains in possession except that Tenant need not pay Landlord any rent, taxes, or other
expenses in connection with Tenant’s continued occupancy. Upon or at any time after the date
of the expiration or earlier termination of this Lease, if requested by Landlord, Tenant shall,
without charge to Landlord, promptly execute, acknowledge and deliver to Landlord a quitclaim
deed and bill of sale which (a) conveys all of Tenant’s right, title and interest in and to the
Premises; (b) assigns, without representation or warranty and to the extent assignable by the
terms of such contracts, all contracts designated by Landlord, relating to the operation,
management or maintenance of the Premises or any part thereof; and (c) conveys, without
representation or warranty and to the extent assignable by the terms of such contracts, all plans,
records, registers, permits, and all other papers and documents which may be necessary or
appropriate for the proper operation and management of the Premises, and shall deliver all of the
foregoing to Landlord. In order to effectuate the terms of this section, Tenant’s contracts with
vendors relating to the operation, management or maintenance of the Premises, or any part
thereof, shall include provisions permitting the assignment of said contracts to Landlord upon
expiration or termination of this Lease.

CSU CPDC: July 2016 12

 2.12.2 Removal of Realty Fixtures Not Permitted. Except as provided in
Section 2.12.3, Tenant shall not have the right to remove fixtures, and such fixtures shall
automatically become the property of Landlord without payment of any kind to Tenant.
However, Tenant shall remove fixtures along with the Improvements if required to remove the
Improvements pursuant to Section 2.12.1 above.

2.12.3 Tenant’s Right to Remove Personal Property. At the expiration or

earlier termination of this Lease, provided Tenant is not then in default under this Lease, Tenant
may remove any or all of Tenant’s personal property and trade fixtures from the Premises and
Improvements, so long as (a) such personal property and trade fixtures can be removed without
material damage to the Improvements, (b) such personal property and trade fixtures are removed
within thirty (30) days following such expiration or earlier termination of this Lease, and (c) all
resultant injuries to the Premises and the Improvements are promptly and substantially remedied
and Tenant takes reasonable steps necessary to preserve the appearance of the Premises and the
Improvements. Upon request of Landlord, Tenant shall remove any and all of Tenant’s personal
property from the Premises and Improvements upon expiration or earlier termination of this
Lease. Any personal property and trade fixtures remaining on the Premises after said thirty (30)
day period shall automatically vest and become the sole property of Landlord without any
payment by Landlord and without any further action or agreement required in connection
therewith, including the necessity of bill of sale, deed, conveyance or other act or agreement of
Tenant, and without payment of any kind or nature by Landlord to Tenant or to any other person.

2.12.4 Demolition Account.

(a) At least five (5) years prior to the expiration of this Lease, Landlord shall
notify Tenant if the Improvements are to remain at the expiration of the
Lease or be demolished by Tenant upon Lease expiration as set forth in
Section 2.12.1. If Landlord notifies Tenant that the Improvements are to
be demolished, then the Demolition Account shall be established by
Tenant and used to pay for Tenant’s obligations to demolish the
improvements upon expiration or earlier termination of this Lease. Tenant
shall maintain the Improvements until they are demolished in accordance
with the requirements of this Lease.

(b) Within thirty (30) days after delivery of notice that the Improvements are
to be demolished at the expiration of the Lease, Tenant shall secure bids
from three (3) licensed contractors for the demolition of the
Improvements. Tenant shall, on the first day of the second month after the
month in which Landlord gives Tenant notice of its election to have the
Improvements demolished at the end of the Term, commence making
annual payments equal to one fifth (1/5th) of the average of the three (3)
bids for the demolition, to cover the cost of Tenant’s demolition
obligations. Such payments shall be placed in an independent and
interest-bearing trust account with an Institutional Lender. Interest earned
on the account shall be applied toward the cost of demolition. Tenant
shall apply the proceeds in such trust account toward Tenant’s demolition
obligations, except to the extent insurance proceeds are to be applied to
such costs in accordance with the provisions of Section 9.2.2 hereof. The
actual amount of money in such trust account shall not limit Tenant’s
CSU CPDC: July 2016 13
 obligation to demolish the Improvements, nor Tenant’s obligation to pay
for the entire cost of such demolition. Upon expiration of the Lease and
completion of demolition of the Improvements, and restoration of the
Premises to a level, unimproved state with all debris removed and all
excavations filled in, vacant and free of liens and claims, all amounts in
such demolition trust account not expended for such demolition shall be
the property of Tenant.

(c) Tenant’s demolition of the Improvements shall be performed in a good

and workmanlike manner and in compliance with all Laws.

2.13 Surrender of Premises.

2.13.1 Surrender of Lien Free Title. Unless otherwise provided herein, upon
the expiration or earlier termination of this Lease, Tenant shall deliver possession of the
Premises, and every part thereof, to Landlord, cure all defaults and shall grant and convey all
right, title, and interest in the Improvements (unless demolished), and every part thereof, in good
and broom clean condition subject to ordinary wear and tear, free and clear of all liens and
encumbrances other than (a) those existing at the Effective Date, (b) those created by Landlord,
(c) Building Tenant Leases permitted under the terms of this Lease, and (d) those liens and
encumbrances approved in writing by Landlord with the express agreement of Landlord that
such may survive the expiration or earlier termination of this Lease. This obligation includes the
obligation to discharge all liens and encumbrances which may exist upon early termination of
this Lease. Landlord may require that Tenant perform an ASTM Phase II study to assess the
property condition upon the expiration or termination of the lease.

2.13.2 Surrender of Fixtures. Tenant’s obligation under this Section 2.13

includes the obligation to deliver lien free possession and title to all fixtures attached to the
Improvements, as provided in Section 2.12.2.

2.13.3 Failure to Surrender. If Tenant fails to surrender the Premises, or any

part thereof, as required hereunder, at the expiration or sooner termination of this Lease, Tenant
shall indemnify, defend and hold the Indemnified Parties harmless from all liability and expense
resulting from the delay or failure to surrender, including, without limitation, claims made by
any succeeding tenant, founded on or resulting from Tenant’s failure to surrender, and any direct
damages which the Indemnified Parties may incur.

2.14 Tenant Right to Terminate. [for hotel leases only] In the event that Tenant does
not reach an agreement with a national franchisor of [limited service/full service] hotels such as
[Marriot Courtyard, Hilton Garden Inn] or a similar national chain (any such party, a
“Franchisor”), on terms and conditions, and in a form, acceptable to Tenant and reasonably
acceptable to Landlord, on or before the expiration of [eight (8) months] from the Effective Date
(the actual date on which such agreement is reached (which must be on or before the expiration
of [eight (8)] months from the Effective Date) is herein called the “Franchisor Agreement
Date”), then either Landlord or Tenant shall have the right to terminate this Lease, in which
event Tenant shall reimburse Landlord for (i) all out of pocket costs incurred by Landlord in the
negotiation, enforcement, operation and documentation of this Lease, plus (ii) the sum of [One
Hundred Thousand Dollars ($100,000.00)]. Upon Landlord’s or Tenant’s delivering a notice of
termination to the other party, this Lease shall terminate and the parties hereto shall have no
CSU CPDC: July 2016 14
further rights or obligations hereunder except for the payment set forth in this Section 2.14, and
the Security Deposit shall be returned to Tenant (after subtraction of any amounts owed to
Landlord hereunder).

ARTICLE III
CONSTRUCTION OF THE IMPROVEMENTS

3.1 Tenant’s Obligation. Tenant shall, at its sole cost and expense, design and
construct, or cause to be designed and constructed, the Improvements upon the Premises strictly
in accordance with the Construction Requirements, including without limitation the provisions of
this Article III. Tenant shall be solely responsible for paying any traffic mitigation, school or
park fees, or other assessments or charges which are incurred as a result of the development of
the Premises.

3.2 Submittal of Schematic Design Package. Within ___ (__) days from the
Effective Date, Tenant shall submit to Landlord for its approval a “Schematic Design Package”
which shall contain all the information and materials for the Improvements which are required by
the Design Guidelines and Submittal Requirements as defined in Section 2.1 of the Submittal
Requirements and Procedure Guide for CSU Capital Projects, as such Design Guidelines may be
amended, modified, or restated from time to time) and attached hereto as Exhibit D (the “Design
Guidelines”) and which shall contain and be consistent with building plans and specifications
for first class [insert type of improvement such as hotel, office, etc.] in [the City or County
depending on which is the relevant comparison area] (and which shall include Trustee and
statutory requirements required of other similar buildings on a CSU University campus under the
authority and responsibility of the Trustees). The Schematic Design Package must include the
Construction Schedule for the construction of the Improvements which has been proposed by the
Tenant and approved by the Landlord. The Schematic Design Package shall be accompanied by
a “Development Financial Plan” which shall contain information and materials sufficient to
allow the Landlord to validate the viability of the construction of the Improvements and the
Tenant’s ability to make Annual Base Rent payments as contemplated in this Lease. The
Schematic Design Package shall also be accompanied by a survey of the Premises prepared by a
licensed surveyor at Tenant’s sole cost which clearly delineates the location of the proposed
Improvements. Examples of materials may include market analyses, financing arrangements,
project budgets and schedules and pro formas. The Schematic Design Package must be
complete and must be prepared in conformity with the Design Guidelines in order for it to be
considered by Landlord, and all submittals must include the complete information necessary for
preparation and public notice of an agenda item seeking approval of the Schematic Design
Package at a duly noticed meeting of the BOT.

The Improvements shall be designed in such a manner as to be compatible with the

University, including without limitation the architectural style and overall design features of the
University campus.

Landlord shall approve or disapprove the Schematic Design Package and Development
Financial Plan within ninety (90) days of receipt thereof. Any disapproval shall be accompanied
by a reasonably detailed description of the changes required to obtain Landlord approval. If such
Schematic Design Package and Development Financial Plan are disapproved, Tenant shall revise
and resubmit them until they receive Landlord approval.

CSU CPDC: July 2016 15

 In the event that Tenant fails to submit the information required by this Section 3.2 in the
required format and within the time frame required, then Landlord shall provide notice to Tenant
of such failure, and Tenant shall have thirty (30) days from the date of such notice to provide the
required information in the required format. If Tenant does not provide the required information
within such thirty (30) day period, then Landlord shall have the right to terminate this Lease
upon ten (10) days’ prior written notice at any time before the submittal of such information.

3.3 Commencement, Prosecution and Completion of Construction.

3.3.1 Commencement. Tenant shall commence construction of the

Improvements on or before the Construction Commencement Date. No work shall be
undertaken until Tenant shall have procured with due diligence and paid for, so far as the same
may be required, from time to time, all permits and authorizations required by the Laws as well
as the approvals required by Landlord for construction on University property. In addition, prior
to the Commencement of Construction, Tenant shall have provided to Landlord a duly executed
“will-serve” letter from the [applicable water supply agency] and the [City or County],
indicating that they will, respectively, provide water and sewer service to the Property, and a
receipt from the [applicable school districts] showing payment in full of all school facilities fees
owed on account of the development of the Property and construction of the Improvements. The
parties shall execute a memorandum confirming the Construction Commencement Date;
however, failure to execute such memorandum shall not extend the period in which Tenant is
required to commence construction. The date by which Tenant is required to commence
construction of the Improvements shall be extended day for day (a) during the continuance of
any Force Majeure event, provided that no such extension for any single Force Majeure event
shall exceed sixty (60) days, nor shall the aggregate extension for all Force Majeure events
exceed one hundred eighty (180) days, (b) for each day that Commencement of Construction of
the Improvements is delayed due to University Delay, and (c) for the period agreed upon by the
parties during the time Commencement of Construction is delayed due to Third Party Delay. No
construction shall be commenced until Tenant shall have obtained all permits and authorizations,
if any, required from parties other than Landlord for the construction of the Improvements and
all permits and approvals required from landlord.

3.3.2 Completion. Tenant shall cause the Completion of Construction to occur

within the Construction Period commencing from the date the Tenant has Commenced
Construction. The date by which Tenant is required to achieve the Completion of Construction
of the Improvements shall be extended day for day only (a) during the continuance of any Force
Majeure event, provided that no such extension for any single Force Majeure event shall exceed
sixty (60) days, nor shall the aggregate extension for all Force Majeure events exceed one
hundred eighty (180) days, (b) for each day that construction of the Improvements is delayed due
to University Delay, and (c) for the period agreed upon by the parties during the time
commencement is delayed due to Third Party Delay.

3.3.3 Conduct of Construction. After Tenant has Commenced Construction of

the Improvements, such construction shall be diligently prosecuted so that the affected portion of
the Premises shall not remain in a partly finished condition any longer than is reasonably
necessary. In no event shall there be a Stoppage of Construction because of any action of the
Tenant for a continuous period in excess of sixty (60) days, which sixty-day period may be
extended day for day due to the occurrence of the events described in clauses (a), (b), and (c) of
Section 3.3.1 above. In addition, no material excavation shall be made on any portion of the
CSU CPDC: July 2016 16
Premises and no material amount of sand, gravel, soil or other material shall be removed
therefrom, other than in connection with the construction or alteration of the Improvements in
accordance with the Construction Requirements. It is Tenant’s responsibility to design and
construct the Improvements in compliance with federal and state laws, codes, rules, regulations,
ordinances, and CSU construction standards. Copies of the CSU construction standards are
attached hereto as Exhibit C. Tenant shall promptly notify both Landlord and the California
Division of Oil, Gas and Geothermal Resources in the event that in the course of grading and
construction Tenant or its Contractor discover any unrecorded, abandoned oil or gas wells, or in
the event that any oil or gas wells, whether abandoned or not, are damaged or uncovered during
the course of grading and construction. Tenant shall be solely responsible for complying with all
applicable requirements of the California Division of Oil, Gas and Geothermal Resources in the
event that remediation, recapping or other work is required with respect to any oil wells on the
Property, whether abandoned or not. Tenant shall pay to the University a development fee in
the amount of two percent (2%) of all hard and soft construction costs (not including financing
costs), to reimburse the university for CSU review for compliance with: CSU seismic
requirements, construction code requirements, California Building Code requirements (including
access requirements), inspection by CSU and the State Fire Marshall for fire code compliance,
and CSU coordination.

3.3.4 Certain Definitions. For purposes of this Lease, (a) Lessee shall be
deemed to have “Commenced Construction” of the Improvements when (i) all permits, licenses
and approvals required in connection therewith have been duly issued, (ii) the Contractor for
such Improvements has been given notice by Tenant to proceed with the construction of such
Improvements, and (iii) such Contractor has actually commenced preconstruction activities on
the Premises; (b) a “Stoppage of Construction” shall be deemed to occur at any time during
which Tenant or its Contractor is not diligently and continuously prosecuting the construction
and completion of the Improvements pursuant to the Construction Requirements; (c)
“Completion of Construction” shall be deemed to occur when (i) the Improvements have been
substantially completed (that is, completed except for minor punch list work), and (ii) Landlord
has received from the Design Professional and the Contractor, in form reasonably satisfactory to
Landlord, written certification, or other evidence reasonably acceptable to Landlord, that (A) the
completed building or other improvements have been substantially completed in compliance
with the Construction Requirements, and (B) the completed building or other improvements have
been inspected and finally approved by all appropriate governmental authorities and University
Entities, and all final certificates of occupancy or similar permits or approvals required as a
condition to the occupancy or use of the Improvements for the Permitted Use have been duly
issued.

3.3.5 Approvals; Cooperation by Landlord. Tenant acknowledges that many

of the approvals or consents to be given by Landlord under the Construction Requirements are to
be given by, or are subject to approval by, other University Entities. Landlord shall reasonably
cooperate with Tenant to obtain any such required approval or consent; provided, however, that
Landlord makes no representation as to whether any such approval or consent may be granted or
that any consent or approval granted by Landlord shall indicate that the attendant approval or
consent from any other University Entity is forthcoming. Landlord shall not be in breach of any
obligation under this Lease requiring the consent, approval or other action of another University
Entity if such consent, approval or other action has not been given or completed within the
applicable period set forth herein or in the other Construction Requirements, provided that

CSU CPDC: July 2016 17

Landlord is then taking all reasonable steps to obtain the required response from the applicable
University Entity.

3.3.6 Committed Loan Funds. Tenant shall deposit with Landlord, prior to
commencement of construction, a final construction budget for construction of the Improvements
which includes all anticipated hard and soft costs to be incurred in connection with such
construction, and a written commitment to the Landlord from an Institutional Lender stating it
holds or will hold loan funds (and/or funds of Tenant) to be disbursed for the payment of the full
and complete anticipated cost of the construction of the Improvements in accordance with such
final construction budget. In the alternative, Tenant may provide other evidence of funding
acceptable to Landlord.

3.4 Tenant’s Contractor. The Improvements shall be originally constructed by, and
any subsequent material repairs, alterations, additions or improvements thereto shall be made by,
a competent general contractor or contractor and subcontractors each duly licensed by the State
of California as designated by Tenant and approved in writing by Landlord (the “Contractor”).
Tenant shall promptly pay all contractors and materialmen in accordance with its contract(s) for
construction of the Improvements with respect to work performed by or for Tenant or materials
purchased by or for Tenant so as to prevent a stop notice attaching to the Leasehold. Tenant’s
contractor shall furnish two surety bonds to Tenant. Each bond shall be in an amount equal to
one hundred percent (100%) of the awarded contract price and executed by an admitted surety
insurer licensed in the State of California and listed in the latest published United States Treasury
Department list of “Companies Holding Certificates of Authority as Acceptable Sureties on
Federal Bonds and as Acceptable Reinsuring Companies.” One of the surety bonds shall
guarantee faithful performance of the contract by the Contractor and insure that the construction
commenced by Tenant will be completed in accordance with approved plans or, at the option of
Landlord, that the uncompleted construction will be removed and the Premises restored to a
condition satisfactory to Landlord, and the other shall secure payment of all claims for the
performance of labor or services on, or the furnishing of materials for the performance of, the
construction of the Improvements. Contract bonds shall remain in full force and effect during
the term of the contract.

3.5 Compliance with Laws and University Requirements. Tenant shall construct
the Improvements in accordance with the applicable Laws of all governmental authorities having
jurisdiction over the Premises, construction of the Improvements, or the conduct of Tenant’s
business there at, including without limitation all Laws promulgated by University Entities.
Upon request of Landlord, Tenant shall furnish Landlord with copies of all certificates and
approvals resulting in any work or installation done by Tenant that may be required by any
governmental authority or by all applicable underwriters and insurers or by any lender in
connection with the construction of the Improvements, which copies Tenant shall certify as true,
correct and complete. Tenant shall furnish Landlord with a set of “as built” drawings and
specifications for all construction and subsequent improvements which accurately reflect the
nature and extent of the Improvements. Tenant shall reimburse Landlord for reasonable costs
incurred by Landlord for inspection services provided during the course of construction of the
Improvements by an inspector designated by Landlord. Such reimbursement shall be made by
Tenant within thirty (30) days after Landlord’s delivery to Tenant of an invoice which sets forth
in reasonable detail the inspection services provided. Qualifications of the inspector designated
by Landlord as well as Duties and Responsibilities During Construction shall comply with State

CSU CPDC: July 2016 18

University Administrative Manual (SUAM) Section XII, section 9792, which is incorporated
herein by this reference.

3.6 Design Professionals. All proposed Improvements and landscaping constructed

or planted on the Premises, and any subsequent major replacements, alterations, additions or
improvements to any of the foregoing, shall be approved in writing by Landlord and designed by
qualified and duly licensed Design Professionals designated by Tenant and pre-approved in
writing by Landlord.

3.7 Encumbrance of Estate. The University shall not be required to subordinate or

subject its fee or leasehold interest in the Premises to the lien of any person or entity providing
financing to Tenant in connection with the design or construction of the Improvements or the
maintenance and operation thereof. All such financing shall be the sole responsibility of Tenant;
provided, however, University shall enter into a Lender Recognition Agreement as provided in
Section 14.2 below.

3.8 Costs of Construction. Tenant shall bear all costs and expenses associated with
construction of the Improvements, which costs and expenses include without limitation: (a) all
costs of bringing utilities and infrastructure to the Premises and all utility hook up and
connection fees and all distribution facilities, conduits, pipelines and cables; (b) all design,
engineering, entitlement, financing and construction costs and expenses (i.e., all “hard” and
“soft” costs of construction); (c) all costs, fees and expenses incurred in processing and obtaining
all grading, building and like permits required to construct and operate the Improvements; (d) all
school district taxes and development or building fees or assessments, each of which may be
charged on the basis of the size and type of the Improvements; and (e) fair share of impact fees
and the cost of mitigation measures resultant from a mitigated negative declaration,
environmental impact report, or other CEQA environmental review and certification.

3.9 Infrastructure. Tenant acknowledges and agrees that the costs of bringing
utilities or infrastructure to the Premises shall be the sole responsibility of Tenant.

3.10 Cooperation. Each party hereby covenants and agrees to cooperate and assist the
other party from and after the date of this Lease and throughout the term of this Lease in
obtaining all approvals and permits that are necessary or desirable in order to develop and
construct the Improvements and any other permitted Alterations, including, without limitation,
joining in applications, filings and submittals for use, building, grading, and construction
permits, and participation in and support of the other party’s position in hearings, proceedings
and meetings relating to any such permits or other governmental applications, submittals or
approvals; provided, however, that the party that is not performing such construction shall not be
obligated to incur any expenses or liabilities in cooperating with the other party’s permitted
construction activities other than de minimis expenses such as the cost of postage, photocopying,
telephone calls and the like.

3.11 Reports. Not less than quarterly commencing from the date of commencement of
construction of the Improvements (and any subsequent material construction or reconstruction on
the Premises), Tenant shall provide Landlord with written construction status reports in the form
of AIA No. G702, augmented by oral reports when so requested by Landlord.

CSU CPDC: July 2016 19

 3.12 Insurance. Tenant shall deliver to Landlord prior to commencement of
construction certificates of insurance evidencing coverage for “builder’s risk” as specified in
Section 10.2, and evidence of worker’s compensation insurance covering all persons employed
in connection with the construction of any Improvements upon the Premises and with respect to
whom death or bodily injury claims could be asserted against Landlord, the Premises or the
Improvements. Tenant shall maintain, keep in force and pay all premiums required to maintain
and keep in force all required insurance at all times during which construction work is in
progress.

3.13 No Responsibility. Any approvals by Landlord with respect to any

Improvements shall not make Landlord responsible for the Improvements with respect to which
approval is given, or the construction thereof. Tenant shall indemnify, protect, defend (with
legal counsel reasonably acceptable to Landlord), and hold Landlord harmless from and against
all liability and all claims of liability (including, without limitation, reasonable attorneys’ fees
and costs) arising during the Term for damage or injury to persons or property or for death of
persons arising from, out of, or in connection with such Improvements or construction.

3.14 Notice of Non-Responsibility. At least thirty (30) days prior to commencement

of construction of any Improvements, Tenant shall deliver written notice of non-responsibility to
Landlord. Landlord may, from time to time, cause to be recorded and posted on the Premises, a
notice of non-responsibility in compliance with California Civil Code Section 8444 (or any
successor statute). Landlord shall not be liable for any mechanics lien or other encumbrances
placed on the Premises due to the construction or development thereon. During the course of
construction, Tenant shall obtain customary mechanics’ lien waivers and releases. Upon
completion of the construction of any Improvements, Tenant shall record a notice of completion
in accordance with applicable law. Promptly after the Improvements have been completed,
Tenant shall (or shall cause its general contractor to) record a notice of completion as defined
and provided for in California Civil Code Section 8182.

3.15 Liens. Tenant shall at all times hold Landlord free and harmless and indemnify
Landlord against all claims for labor or materials in connection with all construction work,
operations, Improvements, alterations, or repairs on or to the Premises, and the costs of
defending against such claims, including reasonable attorneys’ fees and costs. If any
construction work, Improvements, alterations or repairs are made to the Premises by Tenant or
by any party other than Landlord, and a lien or notice of lien is filed, Tenant shall within five (5)
Business Days of such filing either: (i) take all actions necessary to record a valid release of lien,
or (ii) file with Landlord a bond, cash, or other security acceptable to Landlord sufficient to pay
in full all claims of all persons seeking relief under the lien. Copies of duly executed conditional
and final waivers of mechanics’ lien rights shall be provided to Landlord concurrently with their
delivery to the construction lender or, if there is no such lender, then on a monthly basis on the
last day of each month for releases executed during such month.

If Tenant (or any contractor or subcontractor, as applicable) does not cause to be recorded
the bond described in California Civil Code Section 8424, or otherwise protect the Premises and
Improvements under any alternative or successor statute, and a final judgment has been rendered
against Tenant by a court of competent jurisdiction for the foreclosure of a mechanic’s,
materialman’s, contractor’s or subcontractor’s lien claim, and if Tenant fails to stay the
execution of judgment by lawful means or to pay the judgment, Landlord shall have the right, but
not the duty, to pay or otherwise discharge, stay or prevent the execution of, any such judgment
CSU CPDC: July 2016 20
or lien or both. Upon any such payment by Landlord, Tenant shall immediately, upon receipt of
written request therefor made by Landlord, reimburse Landlord for all sums paid by Landlord
under this paragraph, together with all Landlord’s reasonable attorneys’ fees and costs, plus
interest at the maximum allowable legal rate then in effect in California, from the date of
payment until the date of reimbursement.

3.16 Assignment. Tenant shall obtain the written agreement of the Contractor that, at
Landlord’s election and in the event that Tenant fails to perform its contract(s) with the
Contractor, the Contractor will recognize Landlord as the assignee of the contract(s) under the
same terms and conditions as pertained in Tenant’s contract with the Contractor.

3.17 Standard of Work. All of the work with respect to the Improvements shall be
designed, constructed and performed in a good, first class and workmanlike manner.

3.18 Indemnification. All contracts and subcontracts involving work on the

Improvements shall specifically provide that the Contractor(s) agree to indemnify, defend and
hold Landlord harmless from all claims, costs, liability or loss arising from personal injury, death
or property damage resulting from the negligent or willful acts, errors, or omissions of the
Contractor(s).

3.19 Tenant Indemnity. With respect to the development and construction activities
undertaken by Tenant on the Premises pursuant to this Lease, Tenant asserts that it is aware of
the requirements of Labor Code Section 1770 et seq., concerning the payment of prevailing
wages. Tenant acknowledges that Tenant shall be independently responsible for reviewing and
understanding the applicable law and regulations with respect to the payment of prevailing
wages and complying therewith. In addition to any other Tenant indemnifications of Landlord
and all University Entities identified in this Lease, Tenant shall indemnify, defend, and hold
Landlord and all University Entities harmless from and against any claims, injury, liability, loss,
damage, fine, penalty, fee, cost or expenses (including reasonable attorneys’ fees, expert witness
fees, and court costs), whether asserted, levied, or claimed by any governmental entity or by a
private party, arising from, or which are in any way related to, the failure of Tenant, its officers,
employees, agents, volunteers, Contractors or subcontractors, to pay prevailing wages in
accordance with applicable Laws.

ARTICLE IV
LEASE CONSIDERATION

4.1 Construction of Improvements. Tenant agrees to construct the Improvements

strictly in accordance with the terms and conditions set forth in Article III.

4.2 Annual Base Rent. The Annual Base Rent (at the applicable rate) shall
commence to accrue hereunder on the Rent Commencement Date. Tenant shall pay the Annual
Base Rent to Landlord in twelve (12) equal monthly installments on or before the first (1st) day
of each month commencing with the First Rent Payment Date. Annual Base Rent for any partial
month period shall be prorated and paid with the first monthly payment based on a thirty (30)
day month and actual days elapsed. No invoice shall be provided nor shall any invoice be
required from Landlord in order for Tenant to be obligated under this Section. Annual Base Rent
during the Initial Period shall be payable at the Initial Period Rent rate, and Annual Base Rent
during the Construction Period shall be paid at the Construction Period Rent rate.
CSU CPDC: July 2016 21
 4.3 Adjustment of Annual Base Rent.

4.3.1 CPI Adjustment. On each Rent Adjustment Date, the amount of the then
current Annual Base Rent shall be adjusted in the manner hereinafter set forth. On each Rent
Adjustment Date, the Annual Base Rent shall increase (but not decrease) to reflect the change in
the CPI Index between the Rent Commencement Date and the first Rent Adjustment Date (with
respect to the first such Rent Adjustment Date) or between the immediately preceding Rent
Adjustment Date and the current Rent Adjustment Date with respect to each subsequent Rent
Adjustment Date. In each instance, Monthly Base Rent shall be multiplied by a fraction, the
numerator of which is the CPI Index published most recently before the current Rent Adjustment
Date, and the denominator of which is the CPI Index published most recently before the Rent
Commencement Date or the immediately preceding Rent Adjustment Date, as the case may be.

4.3.2 Optional Appraisal Adjustment. Either party may institute this optional
appraisal adjustment for the Annual Base Rent as of a Rent Adjustment Date in lieu of the
increase provided for in Section 4.3.1 above by giving written notice to the other party at least
six (6) months prior to the ninth (9th) anniversary of the Effective Date and every four years
thereafter, at least six (6) months prior to such anniversary date. In such event, the Annual Base
Rent as of the next Rent Adjustment Date shall be equal to the Fair Market Rent for the Premises
(on an annual basis) as of said Rent Adjustment Date determined pursuant to Article XVIII
unless the parties can otherwise agree in writing on the Fair Market Rent for the Premises;
provided, however, that in no event may the Annual Base Rent determined pursuant to this
Section 4.3.2 be less than the Annual Base Rent owed as of the day prior to the Rent Adjustment
Date, nor greater than the Annual Base Rent which would have resulted if the Annual Base Rent
had been increased at each Adjustment Date as provided in Section 4.3.1. If the Annual Base
Rent has not been determined pursuant to this Section 4.3.2 by the Rent Adjustment Date, then
as of the Rent Adjustment Date, the increase pursuant to Section 4.3.1 will be effective. Once
the Annual Base Rent has been determined pursuant to this Section 4.3.2 or Section 4.3.1, it shall
be retroactive to the Rent Adjustment Date, and any additional rent shall be paid by Tenant to
Landlord within ten (10) days of the determination of the Annual Base Rent, and any
overpayment by Tenant to Landlord may be credited by Tenant against the next installment(s) of
Annual Base Rent.

4.4 Place of Payment of Rental. All rental payments shall be made in lawful money
of the United States of America and shall be paid to Landlord at Landlord’s address as set forth
in Section 19.1 or to such other parties and/or to such other address as Landlord may from time
to time designate in writing to Tenant.

4.5 Net Lease; No Rent Abatement or Reduction. The rental set forth in this
Article IV is established on the assumption that this Lease is and shall constitute an absolutely
“net, net, net” lease and that Landlord will not have to pay any expense or incur any liabilities of
any kind in any way relating to, or in connection with, the Premises or the Improvements during
or attributable to the Term, except as otherwise provided in this Lease. Accordingly, Tenant will
promptly pay all costs of every kind and description relating to or arising out of the Premises or
the Improvements or the use thereof during the Term, including, without limitation, all utility
costs, repair or maintenance costs, improvement costs, annual or special assessments allocated to
the Premises, and all school district fees/assessments, whether levied against Landlord or Tenant.
Except as expressly provided to the contrary in this Lease, Tenant shall not be entitled to any
abatement, set off or reduction in Annual Base Rent due under this Lease. It is the purpose and
CSU CPDC: July 2016 22
intention of the parties to this Lease that the Annual Base Rent due hereunder be absolutely net
to the Landlord and that this Lease shall yield, net to Landlord, the Annual Base Rent provided
in this Lease.

4.6 Other Payments. Tenant agrees to pay, as additional Rent for the Premises,
within ten (10) days after Landlord’s demand therefor, all other amounts and sums which Tenant
is obligated to pay or reimburse to Landlord under the provisions of this Lease in addition to
Annual Base Rent.

4.7 Interest. Any Annual Base Rent or additional Rent or other amount payable by
Tenant to Landlord under this Lease which is not paid when due shall bear interest at the rate of
ten percent (10%) per annum until paid.

4.8 Late Charges. Tenant acknowledges that the late payment of any Annual Base
Rent or additional Rent will cause Landlord to lose the use of such money and incur costs and
expenses not contemplated under this Lease, including, without limitation, administrative and
collection costs and processing and accounting expenses, the exact amount of which is extremely
difficult to ascertain. Therefore, if any installment of Annual Base Rent or additional Rent is not
paid within ten (10) calendar days after the due date for such Rent payment, then Tenant shall
thereafter pay to Landlord on demand a late charge equal to three and one-half percent (3.5%) of
the amount of any installment of Annual Base Rent or additional Rent not paid on the due date
plus interest as provided in Section 4.7 of this Lease. Landlord and Tenant agree that this late
charge represents a reasonable estimate of such costs and expenses and is fair compensation to
Landlord for the loss suffered from such nonpayment by Tenant.

4.9 Net Proceeds From Refinancings, Sales and Assignments. In addition to the
Annual Base Rent and other amounts payable by Tenant hereunder, Landlord shall receive from
Tenant:

4.9.1 Three percent (3%) of the net proceeds (after repayment of the then-
existing debt and subtraction from gross proceeds of all reasonable costs of refinancing) from the
Tenant’s initial refinancing and subsequent refinancing of existing debt on the Improvements or
Tenant’s interest in the Lease. Refinancings shall be subject to the terms and conditions of
Article XIV; and

4.9.2 Three percent (3%) of net proceeds (after repayment of the then-existing
debt and subtraction from gross proceeds of all reasonable costs of sale or assignment) from the
Tenant’s sale or assignment of the Improvements and Tenant’s interest in this Lease. Sales and
Assignments shall be subject to the requirements of Article XII.

4.9.3 In the event that the Improvements are constructed for all cash with no
financing, then in making the foregoing calculations of net proceeds, in lieu of subtracting from
the gross proceeds of sale, assignment or financing the amount of the then-existing debt, and in
addition to subtracting therefrom the reasonable costs of sale, assignment or financing, the
parties shall subtract from the gross proceeds the “all-in” documented (to the reasonable
satisfaction of Landlord) hard and soft costs of the initial construction of the Improvements.

4.10 Unrelated Business Income. All payments to the Landlord shall constitute
rents from real property as such terms are defined in Section 856 (d) of the Internal Revenue
CSU CPDC: July 2016 23
Code of 1954, and therefore do not include unrelated business income. If in the opinion of
Landlord’s counsel, there shall be any significant risk that any individual payment or type of
payment made by Tenant under the Lease would be taxable to Landlord, Landlord may by
written notice to Tenant modify the Lease so that no payments will, in the opinion of
Landlord’s counsel, give rise to unrelated business income. The modifications shall not result
in any additional financial burden to Tenant.

4.11 Percentage Rent. [for retail leases only]

4.11.1 In addition to the Annual Base Rent and additional Rent payable
hereunder, Tenant shall pay to Landlord, at the time and in the manner herein specified, the
dollar amount by which the “Percentage Rent Rate” of ____ percent (_%) of Tenant's Gross
Sales (as such term is defined below), exceeds the Annual Base Rent paid by Tenant to
Landlord during each calendar year (or portion thereof) of the Term (“Percentage Rent”).
Percentage Rent shall be computed and payable quarterly. Within ten (10) days after the end
of each calendar quarter (i.e., the three month periods ending on each March 31, June 30,
September 30 and December 31), Tenant shall deliver to Landlord a statement certified by
Tenant as true and correct and setting forth its Gross Sales for such calendar quarter and
shall pay to Landlord the amount by which the Percentage Rent Rate of such Gross Sales
exceeds the Annual Base Rent for such quarter. The receipt by Landlord of a statement of
Tenant’s Gross Sales shall not constitute an admission by Landlord of its correctness. For
the purpose of computing Percentage Rent, Tenant's Gross Sales for any period during which
Tenant does not continuously and uninterruptedly conduct its business shall be deemed to be
Tenant's Gross Sales for the corresponding period during the last calendar year in which
Tenant operated continuously and uninterruptedly. Within thirty (30) days after the close of
each calendar year during the Term, an accounting of Tenant’s Gross Sales during said
calendar year and the amounts paid to Landlord as Annual Base Rent and as Percentage
Rent during such calendar year shall be made by Tenant and, upon such accounting, an
adjustment shall be made with respect to said Percentage Rent as follows: If Tenant shall
have paid to Landlord an amount greater than Tenant is required to pay under the terms
hereof, Tenant shall be entitled to a credit against Tenant's next payment of Annual Base
Rent in the amount of such excess Percentage Rent paid, or, if Tenant shall have paid an
amount less than the Percentage Rent required to be paid hereunder, Tenant shall pay to
Landlord such difference within five (5) business days after such determination.

4.11.2 “Gross Sales” shall include (as of the date of the transaction) the
entire amount of the sale price of all goods and merchandise sold (including gift and
merchandise certificates when redeemed), leased, rented or licensed and the charges for all
services and all other receipts in, upon or from any part of the Premises, whether (wholly or
partially) for cash or credit, and shall include sales from vending machines (including but
not limited to mechanical and electronic machines, except telephone and postage stamp
machines); equipment leased; uncollected and uncollectible credit accounts and bank checks
and charges for bank credit cards; all deposits not refunded to purchasers; orders taken at
the Premises, although the orders may be filled elsewhere, and orders filled at the Premises,
although the orders may have been taken elsewhere (including, but not limited to, orders
which are accepted or transmitted by means of electronic, telephonic, video, computer or
other electronic or technology based system); and all monies or other things of value which
Tenant is entitled to receive. The following shall be excluded from Gross Sales, provided
such exclusions are specifically itemized: (a) sales, use, excise, retailer’s, occupation or
CSU CPDC: July 2016 24
similar taxes imposed in a specific amount, or percentage upon, or determined by, the
amount of sales; (b) interest, service, finance or sales carrying charges paid by customers for
extension of credit on sales, if not included in the merchandise sale price; (c) returns to
shippers and manufacturers; (d) sales not in the ordinary course of Tenant’s business, of
machinery or equipment which Tenant has the right to remove from the Premises; and (e) the
value of any exchange or transfer of merchandise between stores of Tenant if it is made
solely for the convenient operation of Tenant’s business and not for the purpose of
consummating a sale made in, at, or from the Premises. Further, refunds to customers, to the
extent that such refunds relate to a prior inclusion of the same transaction, shall be deducted
from Gross Sales, provided that such deductions are specifically itemized.

4.11.2 Recordation of Sales. Tenant shall record all sales in accordance with
generally accepted accounting practices (showing all of its sales separately from its other stores)
and shall maintain sufficient original records which accurately summarize all transactions
relating to the Premises (including the sales of any subtenant, licensee or concessionaire).
Original records shall include, but not be limited to, sales documents, sequentially numbered
tapes and readout totals of cash registers or point of sale devices, sales returns and allowance
detail, cash receipts, payroll journals, accounts receivable, disbursement journals, bank
statements, deposit slips, inventory records, purchase orders, receiving records, sales journals
or daily sales reports, orders accepted by means of electronic, telephonic, video, computer or
another electronic or other technology based system, state sales and use tax returns (and all
documentation used to prepare the returns), and a complete general ledger. Tenant shall also
maintain documentation and itemization of specific sales exclusions. Tenant shall preserve its
records (properly totaled) at the Premises and make such records available to Landlord at the
Premises, upon demand, for a period of at least three (3) years after the year in which the sales
occurred (provided, however, that if any audit is begun by Landlord or if there is a dispute
regarding Tenant’s Gross Sales, Tenant’s records shall be retained by Tenant until a final
resolution of the audit or dispute). If the Gross Sales are understated by three percent (3%) or
more, Tenant shall pay Landlord’s cost of inspection and audit. If Gross Sales are understated
from those reported by (i) five percent (5%) or more in any one (1) Lease Year, or (ii) three
percent (3%) or more for any two (2) Lease Years out of any five (5) Lease Years, then Landlord
shall have the right at its sole option, to terminate this Lease.

4.12 Percentage Rent [for Hotel Leases only].

4.12.1 Percentage Rent Defined. Percentage Rent shall equal [five percent
(5%)] of Gross Revenues (“Percentage Rent”). Percentage Rent shall be calculated on a
quarterly basis. The first calculation shall occur at the end of the calendar quarter during which
the Completion of Construction occurs. Thereafter, the calculation shall be made at the end of
each subsequent calendar quarter during the Term.

4.12.2 Percentage Rent Quarterly and Annual Statements. Within ten

(10) days following the last day of each calendar quarter, and within ten (10) days following
the expiration or sooner termination of this Lease, Tenant shall furnish to Landlord a
statement in writing (“Quarterly Statement”), prepared by its chief financial officer showing
(i) Tenant's Gross Revenues attributable to the preceding calendar quarter (and partial
calendar quarter with respect to the first calculation) and the calculation of Percentage Rate
based thereon, and (ii) Tenant's payments to Landlord during the preceding calendar quarter
for Annual Base Rent. Tenant shall, concurrently with the delivery of the Quarterly
CSU CPDC: July 2016 25
Statement, pay to Landlord an amount equal to the difference between the amount of Annual
Base Rent payable for such calendar quarter and the Percentage Rent shown on such Quarterly
Statement. Within thirty (30) days after the close of each calendar year during the Term, an
accounting of Tenant’s Gross Revenues during said calendar year and the amounts paid to
Landlord as Annual Base Rent and as Percentage Rent during such calendar year shall be
made by Tenant and, upon such accounting, an adjustment shall be made with respect to said
Percentage Rent as follows: If Tenant shall have paid to Landlord an amount greater than
Tenant is required to pay under the terms hereof, Tenant shall be entitled to a credit against
Tenant's next payment of Annual Base Rent in the amount of such excess Percentage Rent
paid, or, if Tenant shall have paid an amount less than the Percentage Rent required to be
paid hereunder, Tenant shall pay to Landlord such difference within five (5) business days
after such determination.

4.12.3 Recordation of Gross Revenues. Tenant shall record all business

conducted on the Premises in accordance with generally accepted accounting practices and
shall maintain sufficient original records which accurately summarize all transactions relating
to the Premises (including the revenues received from any subtenant, licensee or
concessionaire). Original records shall include, but not be limited to, sales documents,
sequentially numbered tapes and readout totals of cash registers or point of sale devices, sales
returns and allowance detail, cash receipts, payroll journals, accounts receivable, disbursement
journals, bank statements, deposit slips, inventory records, purchase orders, receiving records,
sales journals or daily sales reports, revenues accepted by means of electronic, telephonic,
video, computer or another electronic or other technology based system, state sales and use tax
returns (and all documentation used to prepare the returns), and a complete general ledger.
Tenant shall also maintain documentation and itemization of specific revenue exclusions.
Tenant shall preserve its records (properly totaled) at the Premises and make such records
available to Landlord at the Premises, upon demand, for a period of at least three (3) years after
the year in which the revenues were received (provided, however, that if any audit is begun by
Landlord or if there is a dispute regarding Tenant’s Gross Revenues, Tenant’s records shall be
retained by Tenant until a final resolution of the audit or dispute). If the Gross Revenues are
understated by three percent (3%) or more, Tenant shall pay Landlord’s cost of inspection and
audit. If Gross Revenues are understated from those reported by (i) five percent (5%) or more in
any one (1) Lease Year, or (ii) three percent (3%) or more for any two (2) Lease Years out of any
five (5) Lease Years, then Landlord shall have the right at its sole option, to terminate this Lease
upon ninety (90) days’ prior written notice.

ARTICLE V
USE

5.1 Use of Premises. Tenant shall use the Premises solely for the construction,
maintenance and operation of the Improvements (and any Alterations thereto approved pursuant
to Section 9.1) for the Permitted Use. Tenant shall ensure that the Improvements shall at all
times be constructed, maintained and operated only in a manner consistent with the Construction
Requirements and that the Improvements shall be of a type and quality consistent with the uses
contemplated by the Campus Master Plan. The use of the Improvements may, at Tenant’s
option, include entering into Building Tenant Leases [if a hotel, add for the restaurant/bar
and/or retail space within the Improvements] so long as all uses by Tenant and by any
Subtenant are subject to all applicable Laws. Tenant shall make available to Landlord contact
information with respect to the Subtenants which from time to time lease space in the
CSU CPDC: July 2016 26
Improvements. To the extent it is commercially reasonable to do so, Tenant shall consider
providing internships for University students, shall consider participating in University career
day presentations, and shall consider other forms of collaboration with the University
community.

5.2 Changed Use. Should the use of all or any portion of the Premises or the
Improvements materially change at any time during the Term of this Lease in a manner which is
inconsistent with the requirements set forth in this Lease, and should this change not be approved
in writing by Landlord, such change in use shall constitute a default hereunder and, subject to
Section 15.2 (regarding notice and opportunity to cure such default), Landlord may immediately
terminate this Lease upon delivery of notice to Tenant. Upon delivery of such notice, all right,
title and interest to the Premises, including the Improvements, shall vest solely in Landlord,
without further cost or expense to Landlord, subject only to rights of Lenders as provided in
Article XIV.

5.3 Waste; Nuisance. Tenant shall not use or permit any other person to use the
Premises, or any part thereof, nor allow any person access for any use, which constitutes a waste,
nuisance or unreasonable annoyance to Landlord. Tenant further agrees at all times during the
Term, at its sole cost and expense, to do all things necessary to maintain the Premises in good,
clean and sanitary condition and repair.

5.4 Environmental Requirements. Tenant shall not use, nor permit the use by any
other person of any Hazardous Substance in the construction, use, operation or renovation of the
Improvements in violation of any applicable Law or in quantities requiring reporting or notice to
any applicable governmental authority or agency, including, without limitation, any use, storage,
handling, release, emission, discharge, disposal, generation, abatement, disposition or
transportation of any Hazardous Substance from, on or otherwise relating to the Premises.
Tenant shall, at its own cost and expense, comply, and cause each of its subtenants, tenants of
space within the Improvements, licensees and/or concessionaires to comply, with all applicable
Laws relating to any Hazardous Substance, including, without limitation, obtaining and filing all
applicable notices, permits, licenses and similar authorizations. Should Tenant use or permit the
use by any other person of any Hazardous Substance in quantities requiring reporting or notice to
any applicable governmental authority or agency, Tenant shall provide or cause such other
person to provide any required notice to the appropriate governmental authority or agency and
simultaneously send a copy of such notice to Landlord. Tenant shall establish and maintain a
policy to assure and monitor continued compliance by Tenant and all others occupying space in
the Improvements with all such Laws. Tenant shall not use nor shall Tenant permit any other
person (including, without limitation, any Subtenant) to use, the Premises, or any part thereof,
for or in a manner which results in any release, emission, disposal, use or storage of any
Hazardous Substance in violation of, or in excess of reportable quantities pursuant to, applicable
Laws.

5.5 Environmental Remediation and Indemnification.

5.5.1 Hazardous Substances. If Tenant discovers Hazardous Substances on

the Premises which do not comply with the requirements set forth in Section 5.4, it shall
immediately report the discovery in writing to Landlord, and the parties will meet and confer in
an attempt to resolve the problem. If Hazardous Substances are released onto the Premises
during the Term as the result of Landlord’s negligent or willful acts, Landlord will remediate the
CSU CPDC: July 2016 27
presence of such Hazardous Substances in compliance with applicable Laws to the extent
necessary to permit construction of the Improvements and use of the Premises for the uses
permitted hereunder to proceed. Tenant shall not be responsible for the remediation of
Hazardous Substances released onto the Premises by any University Entity (including any
Hazardous Substances which migrate from lands owned by a University Entity) except to the
extent that Tenant exacerbates the problem due to its action or omission with regards to such
release. It shall be the responsibility of Tenant to remediate all other Hazardous Substance
conditions on the Premises; provided that Tenant shall not be required to remediate any condition
as to which the applicable governmental agency and Landlord has expressly approved leaving
such condition in place without remediation, which approval by Landlord shall not be
unreasonably withheld.

5.5.2 Tenant Indemnification. Tenant shall indemnify, defend, protect and

hold the Indemnified Parties, harmless from and against any and all liability, claims, damage,
penalties, actions, cost or expense of any kind or nature, including, without limitation, damage to
property and injury (including death) to any person, arising directly or indirectly from any breach
of Section 5.5.1 by Tenant. The foregoing indemnity includes, without limitation, remediation of
any kind and disposal of any Hazardous Substance, and any indemnified party’s reasonable
consultants’ fees and charges, attorneys’ fees and charges (including the cost of Landlord’s in-
house counsel), investigation costs and expenses and other similar costs and expenses incurred
by any indemnified party. The obligation of Tenant under this Section 5.5.2 shall survive the
expiration or earlier termination of this Lease.

5.6 Compliance with Government Regulations. Subject to Tenant’s right to contest

in accordance with Section 5.8, Tenant shall, at its sole cost and expense, at all times during the
Term, conform to, and cause all persons using or occupying any part of the Premises other than
Landlord or any of its Affiliates or Indemnified Parties to comply with, all Laws from time to
time applicable thereto, including, without limitation, all Laws relating or applicable to the
Premises, or their use and ownership. Tenant covenants and agrees to indemnify, defend and
hold the Indemnified Parties harmless from any penalties, damages or charges imposed as a
result of any violation of Laws applicable to the construction of the Improvements and to the use
and occupancy of the Premises, whether occasioned by neglect, omission or willful act of Tenant
or by any person upon the Premises by license or invitation of Tenant or holding or occupying
the same or any part thereof under or by right of Tenant but excluding Landlord or any of its
Affiliates or Indemnified Parties

5.7 Evidence of Compliance with Laws. Tenant shall deliver to Landlord, upon
Landlord’s request, and at Tenant’s expense, copies of documents and such other evidences as
are normally and customarily issued by governmental authorities with jurisdiction over the
Premises to demonstrate proof of compliance with all Laws pertaining to permits and
authorizations relating to the Premises generally and to the Improvements specifically.

5.8 Right to Contest.

5.8.1 Tenant Conduct of Proceedings. At Tenant’s sole cost and expense,

Tenant, by appropriate legal proceedings brought in good faith and diligently prosecuted in its
name, may contest the validity or applicability to the Premises, or any part thereof, of any Laws;
provided, however, that if any such contest or proceeding is, with Landlord’s prior written
consent, maintained in the names of both Tenant and Landlord, Tenant shall indemnify, defend
CSU CPDC: July 2016 28
and hold harmless the Indemnified Parties of Landlord, and protect the Premises from Tenant’s
failure to observe or comply with the contested Laws during the contest.

5.8.2 Landlord Conduct of Proceedings. At Landlord’s sole cost and expense,

Landlord, by appropriate legal proceedings brought about in good faith, reserves the right to
contest the applicability to the Premises or validity of any Laws; provided, however, that if any
such contest or proceeding is, with Tenant’s prior written consent, maintained in the names of
both Tenant and Landlord, Landlord shall indemnify, defend and hold harmless the Indemnified
Parties of Tenant and protect the Premises from the failure to observe or comply with the
contested Laws during the contest. Within five (5) days of receipt of notice of action or
proceeding claiming the applicability of, or seeking to impose, any legal requirement on the
Premises or the development of the Premises, Landlord shall give Tenant written notice of such
claims.

5.9 Landlord’s Rules and Regulations. Tenant agrees to be bound by and comply
with all policies, procedures and regulations promulgated by Landlord and University and
reasonably applied uniformly and in a non-discriminatory manner, pertaining generally to the use
of those portions of Landlord’s real property leased for non-public purposes and to activities
taking place on Landlord’s real property, including, but not limited to, those relating to health,
safety and traffic enforcement. Those policies, procedures and regulations shall include, but not
be limited to, those set forth in Exhibit F hereto.

5.10 Advertising and Signs. Tenant shall not place or allow to be placed any sign on
any portion of the Premises that does not conform to the approved signage and graphic program
set forth in the Construction Requirements. Tenant shall not place, construct or maintain on the
glass panes or supports of the windows of the Improvements, the doors, or the exterior walls or
roofs thereof or any interior portions thereof that may be visible from the exterior of the
Improvements, any signs, advertisements, names, insignia, trademarks, descriptive material, or
any other similar item, except for such items which have been authorized, either specifically or
generally in writing by Landlord, which approval shall not be unreasonably withheld, delayed or
conditioned. Landlord, at Tenant’s cost, may remove any item placed, constructed, or
maintained that does not comply with the provisions of this Section 5.10. Tenant shall not place,
construct or maintain, or allow to be placed, constructed or maintained, on the Premises any
advertising media, including, without limitation, searchlights, flashing lights, loudspeakers,
phonographs, or other similar visual or audio media. Tenant shall not solicit business in, on, or
about the exterior of the Improvements. Any sign that Tenant has the right to place, construct
and maintain shall comply with all applicable Laws, and Tenant shall obtain any approval
required by such Laws.

5.11 University Name. Tenant shall not have or acquire any property right or interest
in the name of the University or to “California State University, [campus name],” or “[campus
acronym],” or any related name or any permutation thereof that may imply any connection of
Tenant or the Improvements with the University.

5.12 Operator. [for hotel leases only] Landlord shall have the right to review and
approve the selection of any entity which is the operator or manager of the hotel included in the
Improvements (if other than Tenant) and any franchisor of the Improvements, and of any
agreement with any franchisor. Any franchise agreement shall provide that Landlord may
assume the franchise agreement upon any termination of the Lease during the Term. Tenant’s
CSU CPDC: July 2016 29
entering into a franchise agreement with [name of franchisor] pursuant to which the
Improvements are operated as a “[type of hotel such as Hilton Garden Inn, Courtyard by
Marriott]” is hereby approved, subject to Landlord approval of the form of franchise agreement
and, without limiting the foregoing, the provisions thereof which are applicable upon a Tenant
Event of Default.

ARTICLE VI
OPERATION AND MAINTENANCE

6.1 Standards of Operation. Tenant shall continuously (except for reasonable

interruption during repairs, maintenance or renovations and due to events of Force Majeure) and
diligently during the Term operate, or cause the Improvements to be operated, in a first class
manner and as otherwise required by this Lease.

6.2 Maintenance. At all times during the Term, Tenant shall, at its sole cost and
expense, keep and maintain all parts of the Premises and the Improvements in a condition of
Comparable Improvements located in the vicinity of the University, subject to ordinary wear and
tear. Such obligations shall include, without limitation, the obligation to maintain all
Improvements in a clean, sanitary, neat, tidy, orderly and attractive condition. Tenant is required
to obtain Landlord’s approval prior to construction or installation of emergency repairs or repairs
and replacements, unless the work does not exceed [Fifty Thousand Dollars ($50,000)] in cost
to Tenant and does not alter the external appearance of the Improvements in a manner materially
inconsistent with the Construction Requirements.

6.3 Management and Operation of the Premises. Tenant shall be responsible for
overall management and control of the Premises as a first class property. Tenant shall perform
its obligations under this Section 6.3, or cause them to be performed, in a manner which
demonstrates managerial skill, knowledge, judgment and practice which is standard for the
management of Comparable Improvements located in the vicinity of the University. Tenant
acknowledges Landlord’s concern that, because the Improvements are located in the University’s
campus, they must be operated, maintained and managed in first class condition, and that
Landlord, in agreeing to the terms of this Lease, is relying on the expertise, experience and
reputation of Tenant, and its constituent partners, officers and directors, to cause the
Improvements to be operated, maintained, and managed in said first class condition. Tenant
shall perform or cause to be performed, at its expense, management services which are
customarily provided at similar projects located in the vicinity of the University. These services
shall include, but are not limited to, the following:

(a) use of commercially reasonable best efforts to manage, operate and

maintain the Premises;

(b) supervision, hiring and discharge of all personnel employed at the

Premises as employees of or under the exclusive control of Tenant,
including use of reasonable care in the selection of such employees;

(c) procurement and maintenance of adequate workers’ compensation

insurance covering all of the aforesaid employees, preparation,
maintenance, and filing of all legally required statements and reports
pertaining to labor employed in or about the Premises, and provision of all
CSU CPDC: July 2016 30
 bookkeeping and clerical services with respect to all personnel employed
at the Premises;

(d) payment of all [for hotels, transient occupancy taxes and other] taxes and
charges applicable to the use of the Premises;

(e) arrangement of contracts for electricity, gas, water, steam, telephone,

cleaning, window cleaning, vermin extermination, elevator, escalator and
boiler maintenance, air conditioning maintenance, master television
antennae, electronic security and any other services as are customarily
provided in similar projects located in the vicinity of the University and as
Tenant deems advisable, and arrangement for purchase of all materials and
supplies necessary to maintain and operate the Premises;

(f) arrangement for the provision of services and facilities of any maintenance
engineering department that Tenant or its affiliates may have in
connection with the operation of all mechanical installations;

(g) rendering of statements of income and expense on a monthly and yearly

basis, and in connection therewith maintenance of customary [hospitality
or other] industry reporting systems and provision of reports required by
Tenant, this Lease and governmental agencies; and

(h) if Tenant should hire a manager for the Premises, such manager shall be
experienced in the management and operation of projects similar to the
Improvements. No such agreement with a manager to provide the services
described in this Section 6.3 shall release Tenant from any obligation
which Tenant has under this Lease.

6.4 Specific Tenant Obligations. Without limiting the provisions of Section 6.3
above, Tenant shall:

(a) assure that any contractor performing work on the Premises maintains
insurance in accordance with prudent practice prevailing in the industry
for Comparable Improvements, including, without limitation, workers’
compensation insurance, employees’ liability insurance and insurance
against liability for injury to persons and property arising out of such
contractor’s operations, any subcontractors’ operations and the use of
owned, non owned or hired automotive equipment in the pursuit of all
such operations;

(b) assure that any contractor performing work on the Premises shall provide
insurance coverage in amounts not less than those specified in Article X of
this Lease;

(c) supervise, or caused to be supervised by its manager, all matters coming

within terms of this Article VI, including, without limitation, direct
observation, inspection and supervision of all repairs, decorations,
alterations and Improvements during the progress thereof; and

CSU CPDC: July 2016 31

 (d) obtain the necessary receipts, releases, waivers, discharges and assurances
to keep the Premises free from mechanics’ and materialmen’s liens and
other claims.

6.5 Requirements of Government Agencies. At all times during the Term, Tenant
at its own cost and expense, shall:

(a) make (subject to Article IX and all other applicable terms and provisions
of this Lease) all alterations, additions or repairs to the Premises and every
part thereof, required by Laws now or hereafter in effect; and

(b) indemnify, defend and hold the Indemnified Parties and the Premises, and
every part of the Premises, free and harmless from any and all liability,
loss, damages, fines, penalties, claims and actions resulting from Tenant’s
failure to comply with and perform the requirements of this Article VI.

6.6 Meetings to Discuss Maintenance of Improvements. At least annually, a senior

member of the facilities management personnel of both parties will meet to discuss plans for the
long-term maintenance of the Improvements constructed by Tenant on the Premises, and each
party will consider in good faith the suggestions of the other party with respect to the ongoing
maintenance of the Improvements.

6.7 Replacement Reserve Fund. [for hotel leases] On the day on which the
Improvements first open for business to the public, Tenant shall establish a Replacement Reserve
Fund (the “Reserve Account”) to which Tenant will contribute monthly a sum equal to three
percent (3%) of its Gross Revenues. Once the Reserve Account is established pursuant to the
foregoing, Tenant shall contribute to the Reserve Account on the first (1st) day of each calendar
month an amount based on gross receipts for the second preceding month. By way of example,
the contribution for March 1 will equal three percent (3%) of Gross Revenues in January. Any
dispute over whether Tenant has materially failed to maintain the Premises as aforesaid may be
submitted by either party to arbitration and mediation pursuant to Article XVII. Funds from this
Reserve Account may be used by Tenant for major repair or replacement of portions of the
Improvements and may not be used for ongoing day to day or customary maintenance of the
Improvements or for financing or employee costs. The written consent of Landlord shall be
required prior to withdrawal of funds from the Reserve Account, which consent shall not be
unreasonably withheld, delayed or conditioned. Upon expiration or earlier termination of this
Lease other than as a result of an Event of Default, any funds in the Reserve Account not then
required to remedy any failure of Tenant to maintain the Premises in the manner and to the
standard set forth in this Lease shall be immediately returned to Tenant. In the event that this
Lease is terminated early as a result of an Event of Default, the Reserve Account shall remain
with the Premises and become the property of Landlord.

6.7.1 Form of Deposits in Reserve Account. Tenant may make its Reserve
Account deposits in the form of interest bearing certificates of deposit which shall be specifically
identified for the uses specified by this Section 6.7. Interest earned on said deposit and
certificates shall be retained in the Reserve Account and used for renovation and replacement
under this Section 6.7.

CSU CPDC: July 2016 32

 6.7.2 Evidence of Deposits. Tenant shall provide to the Landlord, from time to
time, at the written request of the Landlord, documentary evidence which clearly establishes that
Tenant is, and has been, maintaining the Reserve Account.

6.7.3 Report of Expenditures. Tenant shall provide Landlord, upon request

but not more often than twice annually, a report of the following:

(a) a detailed statement of the renovations and replacements made during the
year, as then covered by such report and the amount of expenditures
therefor; and

(b) the amount of money from the gross receipts for said month or year, as the
case may be, deposited in the Reserve Account or expended pursuant to
this Section 6.7.

6.7.4 Landlord’s Use of Reserve Account. In the event that Landlord

exercises its rights under Section 15.11, Landlord may elect to use funds from the Reserve
Account in order to take such actions permitted under Section 15.11.

6.8 Capital Improvement Fund. [for leases for other than hotel use]

6.8.1 Establishment of Fund. Commencing with the month during which the
fifth (5th) anniversary of the Completion of Construction occurs, and continuing until five (5)
years prior to the expiration of the Term of this Lease, Tenant shall establish and maintain a
reserve fund (the “Capital Improvement Fund”) in accordance with the provisions of this
Section 6.8.1 designated to pay for Permitted Capital Expenditures (as defined below) for the
Improvements. Tenant and Landlord agree and acknowledge that the purpose of the Capital
Improvement Fund shall be to provide sufficient funds to pay for the costs of major
replacements, renovations or significant upgrades of or to the Improvements, including without
limitation building facade or structure and major building systems (such as HVAC, mechanical,
electrical, plumbing, vertical transportation, security, communications, structural or roof) that
significantly affect the capacity, efficiency, useful life or economy of operation of the
Improvements or their major systems, after the completion of the initial Improvements
(“Permitted Capital Expenditure(s)”). The Capital Improvement Fund shall not be used to
fund any portion of the cost of the initial Improvements. In addition, Permitted Capital
Expenditures shall not include the cost of periodic, recurring or ordinary maintenance
expenditures or maintenance, repairs or replacements that keep the Improvements in an
ordinarily efficient operating condition, but that do not significantly add to their value or
appreciably prolong their useful life. Permitted Capital Expenditures must constitute capital
replacements, improvements or equipment under generally accepted accounting principles
consistently applied or constitute qualifying aesthetic improvements. Permitted Capital
Expenditures shall not include costs for any necessary repairs to remedy any broken or damaged
Improvements, all of which costs shall be separately funded by Tenant. All specific purposes
and costs for which Tenant desires to utilize amounts from the Capital Improvement Fund shall
be at Tenant’s reasonable discretion and subject to Landlord’s approval as provided for in
Section 6.8.4, below. Tenant shall furnish to Landlord applicable invoices, evidence of payment
and other back-up materials concerning the use of amounts from the Capital Improvement Fund.

CSU CPDC: July 2016 33

 6.8.2 Depository. The Capital Improvement Fund shall be held in an account
established with an Institutional Lender. Tenant shall have the right to partly or fully satisfy the
Capital Improvement Fund obligations of this Section 6.8.2 with capital improvement reserves
required by Tenant's Leasehold Mortgagee, as long as such capital improvement reserves are in
all material respects administered in accordance, and otherwise comply, with the terms,
provisions and requirements of this Section 6.8.2.

6.8.3 Amount of Deposit. Commencing on the fifteenth (15th) day of the

month during which the fifth (5th) anniversary of the Completion of Construction occurs, and
continuing on or before the fifteenth (15th) day of each month thereafter until five (5) years prior
to the expiration of the Term, Tenant shall make a monthly deposit to the Capital Improvement
Fund in an amount equal to three percent (3%) of the monthly installment of Annual Base Rent
for the previous month. All interest and earnings on the Capital Improvement Fund shall be
added to the Capital Improvement Fund, and shall be treated as a credit against the Capital
Improvement Fund deposits required to be made by Tenant pursuant to this Section 6.8.3.

6.8.4 Disbursements From Capital Improvement Fund. Disbursements shall

be made from the Capital Improvement Fund only for costs which satisfy the requirements of
this Section 6.8.4. For the purpose of obtaining the Landlord’s prior approval of any Capital
Improvement Fund disbursements, Tenant shall submit to the Landlord on an annual calendar
year basis a capital expenditure plan for the upcoming three (3) year period which details the
amount and purpose of anticipated Capital Improvement Fund expenditures (“Capital
Improvement Plan”). Landlord shall approve or disapprove such Capital Improvement Plan
within thirty (30) days of receipt, which approval shall not be unreasonably withheld,
conditioned or delayed. Any expenditure set forth in the approved Capital Improvement Plan
shall be considered pre-approved by Landlord (but only up to the amount of such expenditure set
forth in the Capital Improvement Plan) for the duration of the upcoming year. Tenant shall have
the right during the course of each year to submit to the Landlord for its approval revisions to the
then current Capital Improvement Plan, or individual expenditures not noted on the previously
submitted Capital Improvement Plan. In the event of an unexpected emergency that necessitates
a Permitted Capital Expenditure not contemplated by the Capital Improvement Plan, the Tenant
may complete such work using the funds from the Capital Improvement Fund with
contemporaneous or prior (if possible) written notice to the Landlord and provide applicable
documentation to the Landlord thereafter for Landlord approval. If the Landlord reasonably
disapproves the emergency expenditure, Tenant shall refund the amount taken from the Capital
Improvement Fund within thirty (30) days of written notice from the Landlord of its decision.

6.8.5 Expenditure of Funds. All amounts then-existing in the Capital

Improvement Fund shall be expended for Permitted Capital Expenditures not later than four (4)
years prior to the expiration of the Term unless Landlord has notified Tenant pursuant to Section
2.12.4(a) that it requires that the Improvements be demolished, in which case no expenditures are
required to be made after the date of such notice, and any remaining amounts in the Capital
Improvement Fund may be transferred to the Demolition Account.

6.8.6 Expenditure of Other Tenant Funds. Notwithstanding anything above

to the contrary, if Tenant incurs expenditures that constitute Permitted Capital Expenditures but
which are not funded out of the Capital Improvement Fund because sufficient funds are not then
available in such fund, then Tenant may credit the Permitted Capital Expenditures so funded by
Tenant out of its own funds against future Capital Improvement Fund contribution obligations of
CSU CPDC: July 2016 34
Tenant; provided, that such credit must be applied, if at all, within four (4) years after such
Permitted Capital Expenditure is incurred by the Tenant.

6.9 Vending. Tenant shall have the right to enter into all contracts for the provision
of vending services in the Improvements and may allow each Building Tenant the right to enter
into such contract with respect to such tenant’s own space in the Improvements.

ARTICLE VII
TAXES AND ASSESSMENTS

7.1 Taxes. Tenant will pay all Taxes and Assessments prior to the delinquency date
thereof. Tenant’s obligation to pay Taxes and Assessments includes, without limitation, the
obligation to pay all real estate taxes, taxes upon or measured by rents, personal property taxes,
privilege taxes, gross receipts taxes, excise taxes, parking taxes, business and occupation taxes,
gross sales taxes, transient occupancy taxes, occupational license taxes, water charges, sewer
charges, or environmental taxes or assessments of any kind and nature whatsoever, levied by the
State of California, the government of the United States, or any agency or subdivision thereof, or
any other governmental body or assessment district, during the Term, whether or not now
customary or within the contemplation of the parties hereto and regardless of whether the same
shall be foreseen or unforeseen, similar or dissimilar to any of the foregoing. Landlord
specifically calls to Tenant’s attention the fact that this Lease may create a possessory interest
subject to property taxation, and Tenant may be subject to property tax levied on such interest.
Landlord specifically calls to Tenant’s attention the fact that the County Assessor of the County
may value the possessory interest created by this lease, or any subleases. Under California
Revenue and Taxation Code Section 107, a property interest tax may be levied on that
possessory interest. The Tenant is obligated to pay this property tax, and failure to do so may be
considered a default hereunder. If the right is given to pay any of the Taxes, Assessments or
other impositions which Tenant is herein obligated to pay either in one sum or in installments,
Tenant may elect either mode of payment.

7.2 Landlord Indemnified and Held Harmless. Tenant agrees to indemnify and
hold the Landlord Indemnified Parties harmless from the payment of all Taxes and Assessments.
Subject to the provisions of Section 7.3, Tenant will prevent any Tax or Assessment from
becoming a delinquency lien upon the Premises or any part thereof. Landlord shall in no way be
obligated to pay such delinquent Taxes and Assessments, but Tenant authorizes Landlord to
make such payment, and, if Landlord makes such payment, it will become immediately due and
payable to Landlord by Tenant and shall bear interest and late charges at the rates provided for in
Sections 4.7 and 4.8 of this Lease.

7.3 Tenant’s Right to Contest. Tenant shall have the right, at its own expense, to
contest the amount or validity of any Tax or Assessment by appropriate proceedings diligently
conducted in good faith which shall operate to prevent the collection of any such Tax or
Assessment so contested or the sale of the Premises or any part thereof to satisfy the same. As a
condition precedent to Tenant’s contesting any Tax or Assessment, Tenant shall (a) comply with
all Laws respecting such contest, (b) give Landlord prior written notice of Tenant’s intent to so
contest said amount or validity, and (c) in order to protect Landlord from any sale or foreclosure
against the Premises or any part thereof, provide a good and sufficient surety bond or other
security deemed appropriate by Landlord in the amount of such Tax or Assessment plus
estimated penalties which may be imposed. Tenant shall bear any and all costs, liability or
CSU CPDC: July 2016 35
damage, including attorneys’ fees and costs arising out of such contest. Nothing in this section
relieves, modifies or extends Tenant’s covenant to pay any such Tax or Assessment at the time
and in the manner provided in this Article VII.

7.4 Landlord’s Cooperation in Tenant’s Contest. Provided Landlord incurs no

cost or liability in doing so, Landlord shall cooperate with Tenant in any proceedings brought by
Tenant to contest the validity or the amount of any Taxes or Assessments or to recover any
Taxes or Assessments paid by Tenant. If the provisions of any Law at the time in effect shall
require that such proceedings be brought by or in the name of Landlord, then provided Landlord
incurs no cost or liability in doing so, Landlord shall join any such proceedings or permit the
same to be brought in its name. If any such proceedings shall be brought by Tenant, Tenant shall
indemnify the Indemnified Parties and hold the Indemnified Parties harmless against any and all
costs or liability of any kind that may be imposed upon the Indemnified Parties in connection
therewith, including reasonable attorneys’ fees incurred by the Indemnified Parties.

7.5 Excluded Taxes. Tenant’s obligation to pay Taxes and Assessments levied and
assessed against the Premises or any part thereof shall exclude business, income or profits taxes
levied or assessed solely against Landlord by federal, state or other governmental agencies,
unless such tax or assessment is levied in lieu of Taxes or Assessments which would have been
otherwise payable by Tenant under this Lease.

7.6 Prorations. Taxes and Assessments shall be prorated at the beginning and end of
the Term to reflect periods during tax fiscal years at the commencement and expiration (or
sooner termination) of this Lease for which said taxes are paid during which this Lease is not in
effect.

7.7 Personal Property Taxes. Tenant shall pay, or cause to be paid, before
delinquency, all taxes levied against, or on account of, all fixtures, equipment and personal
property located in or upon the Premises.

7.8 Separate Assessment. Landlord and Tenant shall cooperate to the extent
necessary to obtain a separate assessment and tax bill for the Premises.

7.9 Replacement Taxes. If at any time during the Term the basis of real property
taxation prevailing at the commencement of such Term shall be altered so that in addition to, or
in lieu of, or as a substitute for, the whole or any part of the real property taxes now levied,
assessed or imposed there shall be levied, assessed or imposed upon or against Landlord a tax on
rents, a license fee measured by rents, a so-called “value added tax,” or any other tax in lieu of or
fee resulting from a revision of the present real property tax laws, then and in any such event the
same shall be included and deemed within the meaning and purview of this Article VII and
Tenant shall be responsible for that portion of any such tax or fee equal to the amount that would
have been levied, assessed or imposed on Landlord assuming only the Premises constituted
Landlord’s real property.

ARTICLE VIII
UTILITIES

8.1 Construction of Utilities. Tenant shall construct or shall arrange for the
construction of such utilities as are necessary to serve the Improvements in accordance with the
CSU CPDC: July 2016 36
Final Plans. Tenant acknowledges and agrees that all utilities and facilities to be located on the
Premises (other than temporary items used during construction) shall be placed below the grade
of the surface of the ground. Prior to approval of the Schematic Design Package, Landlord may
require increases in the capacity or size of all or any part of the utility systems proposed by
Tenant in order to accommodate existing or future demand in the general location of the
Premises. In such event, Landlord shall pay the incremental increase, but only such incremental
increase, in the cost of the construction occasioned by Landlord’s increasing the capacity or size
of a utility system.

8.2 Cost of Utilities. All costs associated with bringing required utilities from the
point of origin to the point of connection at the Improvements, including, without limitation,
related professional, engineering and consultant fees, service charges, meters, and the costs of
connections, including, without limitation, any hook-up fees or increased capacity charges
assessed by any utility company, water district and/or government agency, shall be paid by
Tenant except as provided above in Section 8.1 with respect to the common infrastructure
facilities. Tenant shall be responsible for paying all costs associated with bringing required
utilities from the point of origin to the point of connection at the Improvements (including,
without limitation, a sewer assessment charge) regardless of whether a utility company, water
district, and/or government agency imposes any related assessment on the University campus as
a whole or on Tenant directly. If any such charge is imposed on the University campus as a
whole, the University shall allocate these charges equitably among all utility users on the
campus, including Tenant, based on relative usage. In making such allocation, University agrees
to not treat the Tenant in a discriminatory manner. In no event shall Tenant be charged twice for
the same assessment.

8.3 Utility Easements. University has the right to grant to others (or itself) in the
future non-exclusive utility easements over, under, through, across or on the Premises in
locations that will not unreasonably interfere with Tenant’s use of the Premises. Any
interference arising as a result of construction of improvements related to such utility systems
and facilities shall be temporary, and all work on the Premises and/or such easement areas shall
proceed expeditiously. Tenant shall be given reasonable notice before commencement of any
work on the Premises and/or such easement areas. In the event the installation or maintenance of
such future utility lines in such easements causes any damage to the Premises and/or such
easement areas, or any portion thereof, including but not limited to, pavement, curbs and
sidewalks, Landlord shall promptly repair the same, or cause the same to be promptly repaired, at
no cost or expense to Tenant.

ARTICLE IX
ALTERATIONS, DAMAGE OR DESTRUCTION

9.1 Alteration of Improvements. Tenant may make alterations and additions to the
Improvements (“Alterations”) which affect only the interior, non-structural elements of the
Improvements or which are otherwise consented to by Landlord in writing. Tenant warrants that
all Alterations shall be constructed in accordance with and shall comply with all applicable Laws
and building codes. With respect to any Alterations which require Landlord’s prior written
consent, Tenant shall submit to Landlord, prior to commencement of any such Alterations, and at
Tenant’s sole cost, any building plans and all permits and authorizations of all municipal
departments and governmental agencies, including any University Entity, as may have
jurisdiction over the Alterations. Landlord reserves the right to grant or withhold its consent
CSU CPDC: July 2016 37
required in this Section 9.1 for any Alteration that requires Landlord’s prior written consent in its
sole and absolute discretion. However, without limiting the generality of the foregoing,
Landlord may disapprove any proposed Alteration which requires Landlord’s prior written
consent which is not in harmony with: (a) the design of existing or proposed structures in
adjacent areas of the University campus, (b) any provision of the campus master plan, (c) any
regulation or ordinance of the State of California, the City or the County or the federal
government of the United States of America if any such regulation or ordinance is applicable to
the Premises, or (d) then current good engineering practice.

9.2 Damage or Destruction of Improvements.

9.2.1 Reconstruction After Casualty. If, during the Term, the Improvements
are wholly or partially damaged or destroyed (whether or not such casualty is covered by
insurance, or required to be covered by insurance under the terms of this Lease), Tenant shall
promptly give written notice of such damage or destruction to Landlord. Except as provided in
Section 9.2.2 or 9.2.3, such damage or destruction shall not terminate this Lease, and Tenant
shall promptly repair and restore the Improvements to substantially the same floor area, size,
type, quality and nature as existed immediately prior to such damage or destruction unless
Landlord gives its prior written approval to do otherwise pursuant to Section 9.1. Tenant shall
utilize any available insurance proceeds to fund the costs of such repair and restoration and to the
extent insurance proceeds do not cover such costs, all further costs shall be at Tenant’s sole cost
and expense. Such repair and restoration shall be commenced promptly and prosecuted with due
diligence. If the Improvements are not repaired and restored and if this Lease is terminated, each
with the consent of Landlord or as provided in Section 9.2.2 or 9.2.3, then any insurance
proceeds shall be applied as follows and in the following order of priorities.

(a) first, insurance proceeds shall be applied towards demolition and removal
expenses which may be incurred by Tenant, or, upon Tenant’s failure,
Landlord. Tenant hereby acknowledges its obligation to demolish and
remove Improvements upon Landlord’s demand in the event of a
termination of the Lease as described in Section 9.2.2, and that such
demolition and removal shall be accomplished at Tenant’s sole cost to the
extent that available insurance proceeds are insufficient for such purpose;

(b) second, insurance proceeds shall be applied to payment of the principal

amount, and accrued interest then owing to a Leasehold Mortgagee, to the
extent that such principal or accrued interest is not in default as of the date
this Lease is terminated; and

(c) third, all remaining insurance proceeds shall be allocated between

Landlord and Tenant as follows:

(1) the Tenant shall be allocated a portion of such remaining

insurance proceeds equal to a fraction thereof, where the
numerator of such fraction is the number of complete
months remaining under the current term of the Lease
including all available extension periods under Section 2.4
and whose denominator is the total number of complete

CSU CPDC: July 2016 38

 months in the Lease term including all such available
extension periods; and

(2) the Landlord shall be allocated all remaining insurance

proceeds not allocated to the Tenant pursuant to
subparagraph (1) above.

9.2.2 Damage or Destruction in Last Five Years of the Term. During the last
five (5) years of the Term, Tenant may elect not to repair or restore the Improvements as
otherwise required by Section 9.2.1 if such damage or destruction is more than fifty percent
(50%). Similarly, during the last two (2) years of the Term, Tenant may elect not to repair or
restore the Improvements as otherwise required by Section 9.2.1 if such damage or destruction is
more than twenty percent (20%) of the then replacement value of the Improvements. If Tenant
makes such an election not to repair or restore the Improvements, Tenant shall automatically and
unconditionally pay all insurance proceeds to Landlord, which shall be applied as set forth in
Section 9.2.1 above, and to the extent that the insurance proceeds do not cover the then
replacement cost of the Improvements, Tenant shall pay Landlord the balance not covered by
such insurance proceeds. Landlord may, following such termination, elect to direct Tenant to
use the insurance proceeds plus, as necessary, any portion of the balance to be paid by Tenant to
Landlord to demolish the Improvements, remove all debris and grade and clean the Premises in
which case Landlord shall retain all remaining insurance proceeds, if any, plus the remaining
portion of Tenant’s contribution of the balance not covered by insurance proceeds.

9.2.3 Reconstruction at Option of Tenant on Partially Insured Loss. In the

event that damage contemplated by Section 9.2 occurs and the insured portion of the repairs is
less than sixty percent (60%) of the costs of the repairs, then Tenant may elect not to repair or
restore the Improvements as otherwise required by Section 9.2.1.

9.3 Work of Improvement. All construction and other work of making any
Alterations or repairing any damage or destruction to the Improvements shall be undertaken in a
lien-free and good and workmanlike manner, in strict conformity to the Construction
Requirements (to the extent applicable), including without limitation the requirements of Article
III; provided, however, for this purpose all references to the “Improvements” in Article III shall
be read to mean the applicable Improvements, and the dates for commencing and completing the
applicable work shall be as set forth in the Final Plans for the applicable Improvements, as
approved by the BOT.

ARTICLE X
INSURANCE

10.1 Commercial General Liability Insurance. Tenant shall, at its sole cost and
expense, procure and maintain during the entire Term of this Lease comprehensive general
liability insurance including, without limitation, insurance against claims for damages to
property or injuries to persons which may arise in connection with the construction and use of
the premises by Tenant, its agents, representatives, employees, subcontractors and Building
Tenants, with not less than the limits and of the types set forth below:

CSU CPDC: July 2016 39

 (a) business auto liability: for autos owned, hired, scheduled or non-owned
with a combined single limit no less than Two Million Dollars
($2,000,000) per occurrence;

(b) commercial general liability $2,000,000 per occurrence for initial

Improvements with a budgeted “all-in” construction cost of up to Five
Million Dollars ($5,000,000), and commercial general liability of
$5,000,000 per occurrence for initial Improvements with a budgeted “all-
in” construction cost of Five Million Dollars ($5,000,000) or more;

(c) general aggregate covering the Premises only (bodily injury, property) of
$5,000,000 that is dedicated specifically for the Premises, and general
aggregate coverage of $10,000,000 if applicable across multiple
properties;

(d) employers’ liability $1,000,000 per occurrence; and

(e) workers’ compensation insurance as required by the State of California.

The limits of liability of the insurance coverage specified in this Section 10.1 may be provided
by any combination of primary and excess liability insurance policies. The minimum policy
limits specified in this Section 10.1 shall be subject to increase from time to time at the
reasonable direction of Landlord; provided, however, that such increases shall not exceed the
amount of coverage generally carried in connection with projects and business operations of a
similar nature in the Southern California area. Any deductibles or self-insured retentions must
be declared to Landlord and will not exceed commercially reasonable levels. Notwithstanding
anything to the contrary, the minimum policy limits specified in this Section shall be subject to
increase from time to time at the reasonable direction of Landlord. Liability insurance in place
during the construction of the Initial Improvements shall include construction defect coverage
with a minimum of ten (10) years coverage for defects which are reported under the policy for
the products and completed operations of the initial Improvements.

10.2 Property Insurance During Construction. During construction of any

Improvements on the Premises, Tenant shall obtain and maintain builder’s risk insurance against
“all risk” of physical loss, including, without limitation, the perils of flood, collapse and transit,
covering the total cost of work performed, equipment, supplies and materials furnished on a
replacement cost basis. Tenant shall also maintain insurance covering the cost of delay in
completion of said construction caused by the “all risk” perils referred to above, which shall
cover not less than the rent due to Landlord hereunder and the rent which reasonably would have
been due to Landlord if the Improvements had been completed, and shall cover not less than
twelve (12) months of such payments of rent under this Lease. Landlord, University, the BOT,
and the officers, employees, and agents of each of them are to be named by endorsement as loss
payee. All contractors shall be included as additional insureds under such policies or under
policies maintained by Tenant’s general contractor or Tenant shall furnish separate certificates
and endorsements for each subcontractor to the Landlord for review and approval. All coverages
for contractors shall be subject to all of the requirements stated herein.

10.3 Property Insurance After Construction. Upon completion of construction of

the Improvements, Tenant shall obtain and maintain insurance continuously during the Term
CSU CPDC: July 2016 40
against loss or damage by fire and such other risks as may be included in standard property
insurance (formerly known as “all risk”), including, without limitation, fire, lightning, riot and
civil commotion, vandalism and malicious mischief, and loss or damage from explosion of
boilers, generators, transformers, heating apparatus and air conditioning systems. Tenant shall
also obtain and maintain earthquake insurance if such insurance is available at commercially
reasonable rates with commercially reasonable deductibles to Tenant. Such insurance shall be in
amounts not less than the full, undepreciated replacement cost of such Improvements plus loss of
rent to the Landlord. Such insurance policies shall indemnify the policyholder for losses on a
“replacement cost valuation” basis, and shall provide for reappraisal of the replacement cost not
less than every three (3) years during the Term. The Leasehold Mortgagee shall be an insured
mortgagee and Landlord, the Board of Trustees of the California State University, and the
officers, employees, and agents of each of them shall be named by endorsement as loss payee.

10.4 Escrow of Casualty Insurance Proceeds. All proceeds paid under insurance
policies maintained with respect to a casualty affecting the Premises shall be paid to an account
maintained by a third party escrow company to be disbursed (a) in the course of completion of
the repairs and/or reconstruction to the damaged Improvements, pursuant to funds requests
executed by both Landlord and Tenant to pay for goods and/or services provided in connection
with such repairs and/or reconstruction, including, if applicable, Annual Base Rent payments to
Landlord (it being understood and agreed that Tenant’s requests for funds, and Landlord’s
prompt execution of such funds requests, shall not unreasonably be submitted or denied), and (b)
thereafter, outright to Tenant as Tenant’s property. The requirements in the loan documents of
any Leasehold Mortgage regarding use of such insurance proceeds shall prevail over this Section
10.4 provided such proceeds are to be used for repair and/or reconstruction to the damaged
Improvements. Nothing in this Section 10.4 shall require use of insurance proceeds to repair or
replace damaged Improvements where only demolition or removal is required pursuant to
Section 9.2.1 above.

10.5 Workers’ Compensation Insurance. Tenant shall maintain workers’

compensation and/or employers’ liability insurance in a form and amount covering Tenant’s full
liability as required under applicable California state law.

10.6 Tenant Not Relieved. It is expressly understood that the coverage required
herein shall not in any way limit the liability of Tenant.

10.7 Additional Insureds. Coverages referred to in this Article X shall name

Landlord, State of California, the Trustees of the California State University, their officers,
employees, representatives, agents, and volunteers as additional insureds and shall not exclude
Landlord, State of California, the Trustees of the California State University, their officers,
employees, representatives, agents, and volunteers from coverage with respect to the negligent
acts or omissions of Tenant, its officers, agents, employees, or any person or persons under its
direction and control. Each policy shall further make provision for thirty (30) days advance
written notice to Landlord of any proposed modification, change or cancellation of any of the
above insurance coverages.

10.8 Basis of Insurance. The insurance required to be carried by this Article X is to

be written on an “occurrence” basis.

CSU CPDC: July 2016 41

 10.9 Proceeds. The proceeds from any insurance covering damage to property shall
be applied as set forth in Section 9.2 and Section 10.4 above.

10.10 Waiver of Subrogation Rights. Each policy of insurance procured pursuant to

this Article X shall contain either (a) a waiver by the insurer of the right of subrogation against
either party hereto for negligence of such party, or (b) a statement that the insurance shall not be
invalidated should any insured waive in writing prior to a loss any or all right of recovery against
any party for loss described in the insurance policy. Tenant hereby waives any and all rights of
recovery against Landlord, the BOT, University and its employees, faculty and students, for loss
or damage to Tenant or its property or the property of others arising from any cause insured
against under the policies required to be carried by this Article X. In consideration of Tenant’s
property insurer’s waiver of all rights of subrogation against Landlord and against Landlord’s
agents and representatives, Landlord agrees likewise to waive, or arrange for its property insurers
to waive, any right of subrogation against Tenant by reason of loss of or damage to real or
personal property of either Landlord or Tenant.

10.11 Compliance with Requirements of Carriers. Tenant shall at all times observe
and comply with the requirements of all policies of insurance in force with respect to the
Premises, or any party thereof, and Tenant shall so perform and satisfy the requirements of the
companies writing such policies so that, at all times, companies of good standing reasonably
satisfactory to Landlord shall be willing to write or to continue such insurance. Insurance shall
be placed with insurers authorized to do business in California by the state’s insurance
department and which have a current A.M. Best rating of no less than A:VI, unless otherwise
acceptable to Landlord. Notwithstanding the foregoing, if the insurer is not authorized to do
business in California by the state’s insurance department, the insurer must have a current A.M.
Best rating of no less than A:X, unless otherwise acceptable to Landlord. Tenant shall, in the
event of any violation or attempted violation, of the provisions of this Section 10.11 by any
Building Tenant, licensee or other user of any portion of the Premises take steps immediately
upon knowledge of such violation or attempted violation to remedy or prevent the same.

10.12 Non Contributing. All insurance required to be carried by this Article X shall be
non contributing with any insurance carried by any of the named or additional insureds under
said policies.

10.13 Termination Notice/Form of Policies. In no event will such insurance be

terminated or otherwise allowed to lapse prior to termination of this Lease, or such longer period
as may be specified herein. Tenant may provide the insurance required by this Article X in
whole or in part through a policy or policies covering other liabilities and properties of Tenant,
provided that any such policy or policies shall allocate to the Premises the full amount of
insurance required hereunder.

10.14 Evidence of Insurance. Tenant shall provide Landlord with certificates or other
evidence of insurance satisfactory to Landlord evidencing the maintenance of insurance required
to be carried by this Article X. Should any policy of insurance expire or be canceled and Tenant
fails immediately to procure replacement insurance as required by Article X, Landlord shall have
the right, but not the obligation, to procure such insurance and to receive payment from Tenant
for the full cost thereof. If Landlord or University is damaged by the failure to provide or
maintain the required insurance, the Tenant shall pay Landlord or University for all such
damages.
CSU CPDC: July 2016 42
 10.15 Settlement of Claims. Provided Tenant is not in default under this Lease, nor has
there occurred any event which, with the giving of notice or the passage of time or both, could
result in Tenant being in default under this Lease, if any portion of the Improvements shall be
damaged or destroyed by an insured peril or otherwise, Tenant shall have the right to settle,
adjust or compromise any claim.

10.16 Review of Insurance Requirements. Tenant and Landlord shall review the
insurance requirements set forth in this Article five (5) years after execution of this Lease, and
every five years thereafter, and make any necessary adjustments to ensure Tenant’s insurance
coverage is consistent with industry standards.

ARTICLE XI
CONDEMNATION

11.1 Lease Governs. In the event of any Taking during the Term, the rights and
obligations of the parties with respect to such appropriation and any Award in connection
therewith shall be provided in this Article XI.

11.2 Taking Defined. “Taking” shall mean any acquisition of or damage to all or any
portion of the Premises, or any interest therein or right accruing thereto, pursuant to or in
anticipation of the exercise of the power of condemnation or eminent domain, or by reason of the
temporary requisition of the use or occupancy of the Premises, or any part thereof, by any
governmental or quasi governmental authority, civil or military, or any other agency empowered
by law to take property in the State of California under the power of eminent domain.

11.3 Total Taking Defined. A “Total Taking” shall mean either (a) a Taking of all of
the Premises other than for temporary purposes or (b) a Taking of so much of the Premises as to
render, in Tenant’s reasonable judgment, the balance of the Premises unsuitable for the operation
of a [insert Permitted Uses].

11.4 Partial Taking Defined. A “Partial Taking” shall mean a Taking which does
not constitute a Total Taking.

11.5 Termination of Lease. In the event of a Total Taking, this Lease shall terminate
effective on the date of surrender of possession of the Premises, or so much thereof or interest
therein as has been taken, to the condemning authority. Tenant shall continue to pay all rent due
hereunder and, in all respects, keep, observe and perform all of the terms, covenants, agreements
and conditions of this Lease to be kept, observed and performed by Tenant until the date of such
termination.

11.6 Partial Taking; Rental Abatement. In the event of a Partial Taking, this Lease
shall remain in full force and effect with respect to that portion of the Premises not so taken, and
a fair and equitable proportion of the Base Rent shall be abated according to the nature and
extent of the Partial Taking, and the duration and extent of the interruption of Tenant’s
operations due to such taking and restoration of the Improvements. Any dispute between
Landlord and Tenant concerning the proportion of rent to be abated under this Section 11.6 shall
be resolved by mediation and arbitration in accordance with Article XVII.

11.7 Partial Taking; Restoration. In the event of a Partial Taking, Tenant will, at its
sole cost and expense, whether or not the condemnation award on account of such taking shall be
CSU CPDC: July 2016 43
sufficient for the purpose, promptly commence and proceed with due diligence (subject to Force
Majeure) to effect restoration of the Improvements on the remaining portion of the Premises as
nearly as possible to their value, condition and character immediately prior to such Taking, in
accordance with the provisions of Article IX which shall apply to such restoration.

11.8 Distribution of Award. All awards and damages received on account of any
Taking, whether partial or total (including all amounts in respect to both the Premises,
improvements constructed thereon, and personal property located thereon or thereat), including
interest received, if any, whether such award or damages are paid in respect to the Taking of the
fee or leasehold interest in the Premises (hereinafter collectively referred to as the “Award”),
shall be paid promptly by the person(s) receiving the same to an escrow agent mutually
acceptable to Landlord and Tenant, to be released as hereinafter provided upon appropriate
instruction from the parties hereto.

11.9 Allocation of Award; Partial Taking. Any Award in a Partial Taking shall be
distributed by the aforementioned escrow agent in the following order of priority:

(a) first to Landlord, Tenant and any Leasehold Mortgagees, as herein

provided, as reimbursement for all costs and expenses incurred by each of
them in the collection of the Award, including fees and expenses incurred
in the condemnation proceeding;

(b) second, to Tenant, as reimbursement for the cost and expense of

restoration of the Improvements, as such costs and expenses are incurred
by Tenant; and

(c) third, to any Leasehold Mortgagees, in the order of their respective

priorities (but not in payment of any defaulted interest or penalties).

The balance of the Award, if any, shall be deposited by the escrow agent into a court of
competent jurisdiction to be equitably allocated between Landlord and Tenant based on the
respective interests of Landlord and Tenant in the balance of said Award as determined by said
court after taking into account the interests of Landlord and Tenant previously compensated in
the distributions provided for in paragraphs (b) and (c) above.

11.10 Allocation of Award; Temporary Taking. In the event of a Taking for

temporary use or occupancy, this Lease shall continue in full force and effect without reduction
or abatement of any rent payable hereunder, and Tenant shall be entitled to claim, recover and
retain any Award made on account of such temporary Taking; provided, however, that if the
period of such temporary Taking extends beyond the Term, such Award shall be apportioned
between Landlord and Tenant as of the date of expiration of the Term.

11.11 Allocation of Award; Total Taking. Any Award in a Total Taking shall be
distributed by the aforementioned escrow agent in the following priority:

(a) first, to Landlord, Tenant and any Leasehold Mortgagees, as herein

provided, as reimbursement for all costs and expenses incurred by each of
them in the collection of the Award, including fees and expenses incurred
in the condemnation proceeding;

CSU CPDC: July 2016 44

 (b) second, to any Leasehold Mortgagees, in the order of their respective
priorities, such sum as is necessary to satisfy and discharge the liens
thereof; and

(c) the balance of the Award, if any, shall be deposited by said escrow agent
into a court of competent jurisdiction to be equitably allocated among
Landlord and Tenant based on the respective interests of Landlord and
Tenant in the balance of such Award as determined by the court after
taking into account the interests of Landlord and Tenant previously
compensated in the distribution provided for in paragraphs (a) and (b)
above.

The determination of the value of Tenant’s interest in the Premises shall be made as if the Lease
were to continue in full force and effect until the expiration of the Term including all available
extensions of the Term under Section 2.5.

11.12 Conduct of Proceedings. Subject to the rights of Landlord and any Leasehold
Mortgagee to participate therein, Tenant and Landlord shall jointly commence, appear in and
prosecute any action or proceeding involving a Taking of the Premises, or any part thereof or
interest therein, by condemnation or under the power of eminent domain, or otherwise and shall
jointly make any compromise or settlement in connection therewith. If the parties disagree
concerning such action or proceeding and there shall exist an Event of Default under this Lease,
Landlord shall be entitled at its option to commence, appear in and prosecute on its own and in
its own name any such action or proceeding and Landlord shall also be entitled to make on its
own any compromise or settlement in connection therewith, subject to the rights of Landlord and
any Leasehold Mortgagees to participate therein.

11.13 Notice. Upon any party receiving notice of or becoming aware of any
condemnation proceedings, or threats thereof, such party shall promptly give written notice to
the other party in the manner specified in Section 19.1.

ARTICLE XII
ASSIGNMENT, SUBLETTING AND
BUILDING TENANT LEASES

12.1 Assignment. Tenant may as provided in Article XIV below with respect to the
financing of the construction of the Improvements, and any refinancing thereof, assign all of
Tenant’s Interest to a Leasehold Mortgagee as security for financing of the construction of any of
the Improvements, or any refinancing thereof. Such assignment shall be permitted only with the
prior written consent of Landlord, which shall not be unreasonably withheld, conditioned or
delayed. Landlord’s approval or denial shall be provided to Tenant within twenty (20) Business
Days of Tenant’s written request, which shall contain the information regarding the assignee
delineated in the next paragraph. If Landlord does not respond to the request within twenty (20)
Business Days, the request shall be deemed approved. All assignments shall be subject to the
following conditions:

(a) Except with respect to partial assignments of Tenant’s Interest made in

connection with Building Leases pursuant to Sections 12.3 and 12.4 below
or an assignment of Tenant’s Interest to a Permitted Assignee, no other
CSU CPDC: July 2016 45
 purported assignment of Tenant’s Interest or any portion thereof, whether
voluntarily, involuntarily or by operation of law, shall be permitted nor
shall be valid without the prior written approval of Landlord, which
approval shall not be unreasonably withheld, conditioned or delayed.
Landlord shall approve or disapprove a requested assignment of Tenant’s
Interest of any portion thereof within twenty (20) Business Days of a
written request to approve the assignment provided that the written request
contains at least the following information: (a) the identity of the proposed
assignee, (b) reasonable and adequate information and documentation
regarding the proposed assignee’s (i) financial strength (including,
without limitation, current financial statements) and (ii) reputation and
experience in conducting operations of like-kind to the uses permitted
under this Lease, and representations and warranties from the proposed
assignee that (x) it is not included on the List of Specially Designated
Nationals and Blocked Persons maintained by OFAC, and that it does not
reside in, and is not organized or chartered under the laws of, (i) a
jurisdiction that has been designated by the U.S. Secretary of the Treasury
under Section 311 or 312 of the Patriot Act as warranting special measures
due to money laundering concerns, or (ii) any foreign country that has
been designated as non-cooperative with international anti-money
laundering principles or procedures by an intergovernmental group or
organization, such as the Financial Action Task Force on Money
Laundering, of which the United States is a member and with which
designation the United States representative to the group or organization
continues to concur, and (y) that it has not made a general assignment for
the benefit of creditors; filed any voluntary petition in bankruptcy;
suffered the filing of an involuntary petition by its creditors; suffered the
appointment of a receiver to take possession of substantially all of its
assets; suffered the attachment or other judicial seizure of substantially all
of its assets; admitted its inability to pay its debts as they come due; or
made an offer of settlement, extension or composition to its creditors
general.

(b) If Landlord does not respond to the request within twenty (20) Business
Days, the request shall be deemed approved.

(c) Any attempt to assign without Landlord’s prior written approval shall be
voidable by Landlord; provided, however, the consent of Landlord shall
not be required for the assignment of Tenant’s Interest to a Permitted
Assignee if written notice thereof is provided to Landlord within five (5)
days of such assignment and such Permitted Assignee assumes the
obligations of Tenant under this Lease in writing.

(d) Any assignment of Tenant’s Interest, other than to a Permitted Assignee of

Tenant, shall be subject to Landlord’s right of first offer as set forth in
Section 12.6 below and the Right of First Refusal in Section 12.7 below.

(e) In the event of any assignment of the Tenant’s complete or partial interest
in the Lease including but not limited to the sale or assignment of the
CSU CPDC: July 2016 46
 Improvements and any Alterations permitted under this Lease including an
assignment approved by Landlord, the assignee shall take its assigned
interest subject to the terms of the Lease and, as a condition to the validity
of such assignment, shall covenant that the Lease shall be faithfully
performed by the assignee as the Tenant. In the event of an approved
assignment of all of Tenant’s Interest, then after the date of said
assignment, Tenant shall have no liability for any obligations of the
Tenant under this Lease arising after the date of the assignment.

(f) Any assignment of only a portion of Tenant’s Interest, even if approved by

Landlord or otherwise permitted under the terms of this Lease, shall in no
event relieve Tenant from the full and faithful performance of Tenant’s
obligations hereunder.

(g) Tenant shall pay for Landlord’s reasonable expenses in reviewing any
proposed assignment of Tenant’s Interest, including the allocated costs of
legal counsel and auditors, in an amount not to exceed [Ten Thousand
Dollars ($10,000)].

(h) The consent by Landlord to any transfer, hypothecation, assignment or

subleasing shall not constitute a waiver of the necessity for such consent to
any subsequent assignment, transfer, hypothecation or subleasing.

(i) If at the time of any assignment there is no Security Deposit, then the
assignee shall provide to Landlord, as security for the faithful performance
by Tenant of all of its obligations under this Lease, the sum of [Three
Hundred and Fifty Thousand Dollars ($350,000)] as a Security Deposit,
to be held in an account established in accordance with the provisions of
Section 2.9 hereof.

12.2 Transfers of Interests in Tenant. The transfer of any controlling interest in

Tenant (other than to a Permitted Assignee) shall be deemed an assignment within the meaning
of this Article XII. Any transaction by which Tenant or any manager, majority shareholder, or
general partner of Tenant undergoes a merger or other reorganization, including, without
limitation, a sale of all or substantially all of its assets, wherein the stakeholders of Tenant or of
Tenant’s member, majority shareholder, or general partner, as applicable, immediately before the
merger or reorganization do not retain control of the surviving corporation, limited partnership,
limited liability company, or other entity, shall be deemed a transfer of this Lease for purposes of
this Article XII unless the resulting Tenant is a Permitted Assignee. Notwithstanding anything to
the contrary contained herein, if Tenant is a publicly traded company, any sale or other transfer
of any of the stock of, or other ownership interests in, Tenant shall not be deemed an assignment
within the meaning of this Article XII unless said sale or other transfer is made by a person or
entity (or related groups of persons or entities) owning a controlling interest in Tenant and results
in a change in the person(s) or entity/entities having control of Tenant. As used in this Section
12.2, the term “control” and related words shall have the meaning set forth in Article 1.

12.3 Building Tenant Leases. Tenant shall have the right to enter into Building
Tenant Leases with any Person without the consent of Landlord provided that the Building
Tenant Lease complies with the requirements of this Lease. So long as any such Building
CSU CPDC: July 2016 47
Tenant Lease is in full force and effect, any Subtenant shall not be made a party to any action or
proceeding to enforce any rights of Landlord, nor shall such Subtenant’s possession or right of
possession be disturbed or in any way interfered with, nor shall the leasehold estate of any such
Subtenant be terminated by reason of any default by Tenant under this Lease.

12.4 Requests for SNDAs from Subtenants. If any Subtenant enters into or intends
to enter into a Building Tenant Lease permitted by Section 12.3 and such Subtenant requests that
Landlord enter into an SNDA Agreement, Landlord will execute an SNDA Agreement in the
form attached hereto as Exhibit G within fifteen (15) Business Days of written request from
Tenant.

12.5 Subtenant’s Option to Purchase. In no event shall any Building Tenant Lease
include an option or other right for a Subtenant to acquire all or any part of the Tenant Interest,
unless such option or other provision has been approved in writing by Landlord in its sole and
absolute discretion. Any approval by Landlord of a Building Tenant Lease providing for a
Subtenant’s purchase of all or a portion of the Tenant Interest shall not constitute a waiver of
Landlord’s right to disapprove of the assignment of this Lease pursuant to such option or other
right if a material adverse condition in connection with the proposed assignee or use of the
Premises has occurred at any time prior to such assignment.

12.6 Right of First Offer. If Tenant wishes to sell, assign or transfer all of Tenant’s
Interest, Tenant will first offer Tenant’s Interest to Landlord pursuant to a written offer (the
“Offer”) setting forth all of the terms and conditions on which Tenant is willing to sell Tenant’s
Interest. Landlord shall have until thirty (30) days from the date of its receipt of the Offer to
elect to accept the Offer and purchase Tenant’s Interest on the terms and conditions set forth in
said Offer (except that a formal purchase and sale agreement shall be prepared by Tenant after
said election to document all terms and conditions and subject to Landlord’s reasonable
approval). If Landlord does not exercise its right to acquire Tenant’s Interest by notifying
Tenant in writing of its election to do so within said thirty (30) day period or if Landlord notifies
Tenant in writing before the expiration of that period that it does not elect to accept the offer,
then Tenant may, for a period of six (6) months following the expiration of said thirty (30) day
period or receipt of Landlord’s notice not to accept the offer, whichever is earlier, sell Tenant’s
Interest at a purchase price no less than that set forth in the Offer provided that Tenant first gives
Landlord the right of first refusal pursuant to Section 12.7 below. Nothing in this Section 12.6
shall serve to circumvent Landlord’s approval rights to any assignment or partial assignment of
Tenant’s Interest under Section 12.1.

12.7 Landlord’s Right of First Refusal. Tenant hereby grants to Landlord the right
to purchase all of the Tenant’s Interest on the following terms and conditions (the “Right of
First Refusal”):

(a) If Tenant should at any time receive a bona fide offer to purchase all or
any portion of Tenant’s Interest, (the “Refusal Offer”) from a third party
and Tenant desires to accept such offer, Tenant shall deliver to Landlord a
notice (the “Acquisition Notice”) setting forth the name of the prospective
purchaser and the terms and conditions of such Refusal Offer.

(b) Landlord shall have sixty (60) days from receipt of the Acquisition Notice
to exercise its Right of First Refusal by delivering notice thereof to
CSU CPDC: July 2016 48
 Tenant. Delivery of such notice shall obligate Landlord to purchase
Tenant’s Interest (or the applicable portion thereof) on the date which is
one hundred twenty (120) days after receipt of the Acquisition Notice (or
any earlier date requested by Landlord) and on the terms and conditions
set forth in the Acquisition Notice except there shall be no due diligence
or inspection period or condition. In the event Landlord shall not elect to
exercise its Right of First Refusal or fails to timely deliver notice within
the sixty (60) day period, Landlord shall conclusively be deemed to have
waived its Right of First Refusal as to the transaction described in the
Acquisition Notice in question and Tenant may thereupon proceed to sell
the Tenant’s Interest (or portion thereof) on the terms and conditions and
to the party specified in the Acquisition Notice in question, and in the
event the Tenant’s Interest (or portion thereof) is sold as set forth in the
Acquisition Notice in question, the Right of First Refusal shall not be
applicable to any future sales, and this Lease shall remain in full force and
effect. Modifications may be made in the offer outlined in the Acquisition
Notice without the necessity of resubmitting the offer to Tenant, provided
that the purchase price is not reduced, the payment terms are not changed,
and provided that the closing date is not extended for a period in excess of
one hundred eighty (180) days.

(c) In the event that Landlord exercises its right of First Refusal and thereafter
defaults in the purchase, such default shall be deemed to be a default by
Landlord under this Lease and, in addition to Tenant’s remedies on
account of Landlord’s default, Landlord shall thereafter forfeit the Right
of First Refusal in this Section 12.7.

(d) Nothing in this Section 12.7 shall serve to circumvent Landlord’s approval
rights to any assignment or partial assignment of Tenant’s Interest under
Section 12.1, or serve to circumvent or limit Landlord’s right to sell the
Premises and assign the Lease to the purchaser of the Premises.

ARTICLE XIII
LIENS AND ENCUMBRANCES

13.1 Covenant Against Encumbrances. Except as provided in Article XIV, Tenant

shall not, and shall have no right to, encumber Landlord’s interest in the Premises, and Tenant
covenants to keep the Premises and each and every part thereof at all times free and clear of any
and all liens and encumbrances of any kind whatsoever arising out of Tenant’s acts or omissions
or those acts or omissions of its agents and Building Tenants, including, without limitation, those
liens and encumbrances created by Tenant’s acts or omissions, and those created by the
performance of any work of improvement, alteration, maintenance, replacement or repair, or
labor or furnishing of any material, supplies or equipment in connection therewith. Should
Tenant fail to discharge or cause to be discharged any claim of lien within thirty (30) days after
service on Tenant, then, on written notice from Landlord, Landlord may pay, adjust, compromise
and discharge any such lien or claim of lien on such terms and manner as Landlord may deem
appropriate. In such event, Tenant shall immediately reimburse Landlord for the full amount
paid by Landlord in connection with such lien or claim of lien, including any attorneys’ fees or
costs, or other costs expended by Landlord, together with interest and late charges at the rates
CSU CPDC: July 2016 49
provided in Sections 4.7 and 4.8 from the date of payment by Landlord to date of repayment by
Tenant.

13.2 Hold Harmless. Tenant covenants and agrees to indemnify, defend and hold the
Indemnified Parties of Landlord and the Premises, and all parts thereof, free and harmless from
any liens, claims, demands, costs, damages or liability, except for the rights of Leasehold
Mortgagees as provided in Article XIV, arising out of the conduct of activities by Tenant, its
agents and/or Building Tenants on the Premises. Tenant agrees to pay reasonable attorneys’ fees
(including fees for Landlord’s in-house counsel), costs, charges and other expenses which the
Indemnified Parties may incur in negotiating, settling, defending, and otherwise protecting the
Indemnified Parties and the Premises, and every part thereof, from and against such liens or
claims.

13.3 Non Subordination. The Landlord’s reversionary interest in the Premises and
Landlord’s interest in this Lease shall be superior and prior in interest to any loans, mortgages,
deeds of trust, other leases, liens and encumbrances that may hereafter be placed on the
Premises, or any part thereof, by, against or as a result of the acts of Tenant or anyone deriving
any interest in the Premises, or any part thereof or interest therein, through Tenant. Any loan,
mortgage, deed of trust, lease, lien or encumbrance placed by Tenant on the Premises or the
Improvements, or any part thereof or interest therein, shall not adversely affect Landlord’s
interests under this Lease or Landlord’s interests in the Premises. Tenant agrees, without any
cost or expense to Landlord, to execute any instrument which is necessary or is reasonably
requested by Landlord to further confirm the non-subordination of Landlord’s reversionary
interest in the Premises and Landlord’s interest in this Lease. Nothing in the foregoing shall
obviate the provisions of Section 14.2 to provide a Lender Recognition Agreement.

13.4 Mechanics’ and Similar Liens. Ten (10) days prior to the commencement of
any “work of improvement” (as defined in California Civil Code Section 8050) on the Premises,
Tenant shall provide Landlord with written notice of the intention to commence such “work of
improvement” and Landlord shall have the right to enter the Premises in order to post a notice of
non-responsibility in accordance with California Civil Code Section 8444. If it is not practicable
to provide such notice before commencing work, such written notice shall be immediately given
upon commencement. Tenant shall pay or cause to be paid the total cost and expense of all
“work of improvement” on the Improvements. No such payment shall be construed as rent under
this Lease. Tenant shall not permit any mechanic’s, materialmen’s, contractor’s, subcontractor’s
or other lien, arising out of Tenant’s use or occupancy of the Premises, or any part thereof, to
stand against the Premises, or any part thereof. If any such lien shall be filed against the
Premises, or any part thereof, Tenant shall cause the same to be discharged within ten (10) days
after actual notice of such filing, by payment, deposit or bond. Notwithstanding the prior
sentence, if Tenant seeks to extend the pendency of such lien in order to negotiate with the
holder thereof, then Tenant is authorized to conduct such negotiations for a period not to exceed
one hundred twenty (120) days from the date of the filing of such lien, if Tenant shall have given
Landlord prior written notice of its intention to negotiate. Within the ten (10) day period referred
to above, and provided that Tenant shall furnish the release bond required by California Civil
Code Section 8424, or any comparable statute hereafter enacted providing a bond freeing the
Premises and every part thereof, or take such other action as shall be reasonably acceptable to
Landlord to protect the Premises from the effect of such lien. The satisfaction and discharge of
any such lien shall not, in any case, be delayed to the date execution is had upon any judgment,
rendered thereon, and such delay shall be a default of Tenant hereunder. Tenant shall indemnify,
CSU CPDC: July 2016 50
defend and hold the Indemnified Parties of Landlord harmless against all loss, cost, expense and
damage, including attorneys’ fees and charges, resulting from any such contest.

ARTICLE XIV
HYPOTHECATION

14.1 Lease as Security. This Lease shall be a prior lien against the Improvements and
any encumbrance on the Premises with respect to any loans, mortgages, deeds of trust, other
leases, liens and encumbrances that may hereafter be permitted to be placed on the
Improvements and the Premises under the terms of this Lease and the Ground Lease Non-
Disturbance Agreement.

14.2 Financing. Tenant may seek to obtain a loan to finance the Improvements and to
refinance the Improvements from time to time during the Term. For such purpose only, Tenant
shall have the right, with Landlord’s prior written approval, which shall not be unreasonably
withheld, conditioned or delayed, to assign all or part of Tenant’s interest under this Lease, as
security to any Institutional Lender (a “Leasehold Mortgagee”) which has advanced such funds
to Tenant pursuant to a promissory note and a trust deed or mortgage (collectively, the “Trust
Deed”). Landlord’s written approval or denial shall be provided to Tenant within twenty (20)
Business Days of Tenant’s written request, which shall contain the information regarding the
assignee’s financial strength, reputation and experience delineated in Section 12.1. If Landlord
does not respond to the request within twenty (20) Business Days, the request shall be deemed
approved.

In the event Tenant assigns all or any portion of Tenant’s Interest to secure a loan permitted
under this Section 14.2, then the following shall apply:

(a) Landlord will enter into a Lender Recognition Agreement with the
Leasehold Mortgagee;

(b) The Landlord shall not be required to sign any Trust Deed or the Note, or
otherwise become obligated thereunder;

(c) No such lien, charge or encumbrance shall constitute a lien or

encumbrance upon the Landlord’s fee title in the Premises or their
reversionary interest in the Improvements;

(d) Any interest in the Premises which the Trust Deed establishes in a trustee,
and any lien which it creates, shall expire on or before the date of
expiration of this Lease;

(e) The Trust Deed imposes no financial obligations on the Landlord,

contingent or otherwise;

(f) The Trust Deed shall neither subordinate nor affect the Landlord’s right to
convey, mortgage, encumber or otherwise hypothecate in any way the
Landlord’s fee or leasehold title (respectively) or reversionary interest in
the Improvements or the Premises;

CSU CPDC: July 2016 51

 (g) Except as otherwise provided herein, no Leasehold Mortgagee or anyone
claiming by, through or under such Leasehold Mortgagee shall, by virtue
of such claim, acquire any greater rights than Tenant then had under this
Lease;

(h) The Trust Deed shall be subject to all conditions, covenants and
restrictions of this Lease and to all rights of Landlord hereunder;

(i) The Landlord will accept performance under this Lease by any Leasehold
Mortgagee as though the same had been performed by Tenant;

(j) The time available to a Leasehold Mortgagee to initiate foreclosure

proceedings, to proceed with foreclosure proceedings, or to obtain
possession of the leasehold interest shall be deemed extended by the
number of days of delay occasioned by judicial restriction or application
or operation of law against any such initiation or occasion by other
circumstances beyond such Leasehold Mortgagee’s control;

(k) If two or more Leasehold Mortgagees exercise their rights under this
Lease, the Leasehold Mortgagee who would be senior in priority if there
were a foreclosure shall prevail;

(l) This Lease shall not be materially modified, amended or surrendered

(except upon termination pursuant to this Lease) without the prior written
consent of each Leasehold Mortgagee;

(m) The Trust Deed shall provide that, prior to the institution of any
proceedings to foreclose the Trust Deed or of negotiations to accept an
assignment in lieu of the foreclosure of the Trust Deed, the holder or
beneficiary thereof shall notify Landlord in writing that such proceedings
or negotiations are to be commenced, and Landlord shall have the right,
but not the obligation, within sixty (60) days after receiving of such notice
to purchase the Trust Deed and the indebtedness which it secures at a
purchase price equal to the full amount then owing under said Trust Deed,
including accrued interest, reasonable attorneys’ fee for the holder or
beneficiary, and applicable statutory costs and allowances if any
foreclosure proceedings shall have commenced. All loan agreements in
connection with any Improvements, including but not limited to
construction loans, long term loans and refinancing permitted by the terms
of this Lease shall contain the written agreement of the Leasehold
Mortgagee that Landlord shall be notified by the Leasehold Mortgagee
within thirty (30) days of any default by Tenant on any such loan and shall
be given the opportunity to correct the default and assume the loan(s) prior
to initiation of foreclosure actions other than the filing of a notice of
default pursuant to the California Civil Code Section 2924;

(n) Tenant shall give Landlord written notice of any Trust Deed prior to the
execution and/or recording of same by Tenant, and shall accompany such

CSU CPDC: July 2016 52

 notice with a true copy of such Trust Deed and the Note secured thereby;
and

(o) All insurance proceeds arising from damage or destruction of the

Improvements shall be available for restoration thereof to the extent
Tenant is obligated under the terms of this Lease to restore the
Improvements following such damage or destruction.

(p) No loan may be in an amount which exceeds seventy-five percent (75%)

of the fair market value of the Improvements at the time the loan is entered
into.

14.3 Assignment by Leasehold Mortgagee. The written consent of Landlord shall

not be required for any assignment of this Lease to a Leasehold Mortgagee or to any other entity
or person who purchased the leasehold estate hereunder at any judicial or non-judicial
foreclosure sale held pursuant to the terms of a Trust Deed or to a Leasehold Mortgagee, or an
Affiliate thereof, who acquired the leasehold estate hereunder through a deed or assignment in
lieu of foreclosure, provided that in any such event such other entity or person forthwith gives
notice to Landlord in writing of any such assignment or transfer, setting forth the name and
address of the transferee, the effective date of such assignment, and the express agreement of the
transferee assuming and agreeing to perform all of the obligations under this Lease required of
Tenant to be performed, except those covenants which, by their terms, cannot be performed by
any person other than the original Tenant, together with a copy of the document by which such
assignment was made. In the event a Leasehold Mortgagee, or an Affiliate thereof, acquired the
leasehold estate hereunder through foreclosure or deed or assignment in lieu of foreclosure, such
entity shall have the right to assign or transfer this Lease to any person or entity with the prior
written consent of Landlord, which consent shall be based on Landlord’s exclusive determination
that Landlord’s programmatic and financial interests in consenting to such assignment or transfer
are not impaired. Without limitation, Landlord may withhold such consent to assignment if it
determines in its sole and absolute discretion that the proposed assignee and its intended use of
the Premises are not or would be inconsistent with the mission of the University. The liability of
such Leasehold Mortgagee, or such Affiliate thereof, under this Lease will cease upon a
Landlord approved assignment or transfer of this Lease (which assignment or transfer shall
contain an express assumption by any transferee of all Lease obligations).

14.4 Notice of Leasehold Mortgagee. Concurrently with the execution of any Trust
Deed, Tenant shall furnish to Landlord the name and address of each Leasehold Mortgagee
secured thereby. Landlord shall thereafter mail each such Leasehold Mortgagee a duplicate copy
of any and all notices of default which Landlord may from time to time give or serve upon
Tenant under the terms of this Lease.

14.5 Request for Notice of Defaults. Upon the recording of a Trust Deed, Tenant
shall, at Tenant’s expense, cause to be recorded in the Official Records, a written request,
executed and acknowledged by Landlord, for a copy of all notices of default and all notices of
sale under such Trust Deed, as provided by the laws of the State of California. Tenant shall
include in the body of the recorded Trust Deed itself a request for notice having the effect
described above.

CSU CPDC: July 2016 53

 14.6 Notice of Defaults to Leasehold Mortgagee. If Landlord has received notice
from Tenant of the current names and addresses of one or more Leasehold Mortgagees secured
by a Trust Deed in the manner specified in this Lease, Landlord shall not take any action to
terminate this Lease because of any default or breach hereunder by Tenant if any such Leasehold
Mortgagee under such Trust Deed, within the time periods set forth below after service of written
notice to such Leasehold Mortgagee by Landlord of Landlord’s intention to terminate this Lease
for such default or breach:

(a) Shall cure, within thirty (30) days of receipt of such notice such default or
breach, if the same can be cured by the payment or expenditure of money
required to be paid under the terms of this Lease; or

(b) Shall cure, within sixty (60) days of receipt of such notice such default or
breach, if the same cannot be cured by the payment of money, or such
longer period of time as reasonably required if such cure cannot be
affected until the Leasehold Mortgagee obtains possession of the
Premises; and

(c) In the case of a default or breach which cannot be cured unless and until
the Leasehold Mortgagee has obtained possession, shall take possession of
the Premises within one hundred twenty (120) days of receipt of such
notice (including possession by receiver) and thereafter diligently proceed
to cure such default or breach; and

(d) If such default or breach is not curable under the foregoing subparagraphs
(a) through (c), Leasehold Mortgagee shall within thirty (30) days of
receipt of such notice institute and thereafter diligently prosecute judicial
or non-judicial foreclosure proceedings or otherwise acquire Tenant’s
Interest hereunder with due diligence, and keep and perform all of the
covenants and conditions of this Lease reasonably capable of being
performed by Leasehold Mortgagee during such period, including those
requiring the payment or expenditure of money by Tenant, until such time
as Tenant’s leasehold shall be sold by foreclosure pursuant to the Trust
Deed or shall be released or reconveyed thereunder.

In the event that any Leasehold Mortgagee fails or refuses to comply with the conditions of this
Section 14.6, then and thereupon, Landlord shall be released from the covenant of forbearance
herein contained with respect to such Leasehold Mortgagee.

14.7 New Lease for Leasehold Mortgagee. If this Lease shall terminate prior to the
expiration of the Term at any time a Leasehold Mortgagee is entitled to cure defaults hereunder,
or as a result of rejection of this Lease by a bankruptcy trustee, then, for a period of sixty (60)
days measured from the date of notice to such Leasehold Mortgagee of the termination of this
Lease, such Leasehold Mortgagee shall have the right to elect to receive from Landlord a new
lease of the Premises, but the term of the new lease shall not extend beyond the Term. The
Leasehold Mortgagee’s right to elect to receive said new lease shall be upon the following terms
and conditions:

CSU CPDC: July 2016 54

 (a) The new lease shall have, as the fixed date for the date of expiration
thereof, the same date as the fixed date for the expiration of the Term and
shall otherwise be on the terms and conditions set forth in this Lease.
Such new lease shall be subject to all existing rights of Building Tenants,
and all of the terms, covenants, conditions, restrictions and provisions of
this Lease.

(b) At the time of the execution of the new lease, Landlord shall be paid all
sums, if any, owing to Landlord under this Lease at the time of
termination of this Lease, as well as all sums, if any, which would have
become payable by Tenant to Landlord to the date of execution of the new
lease, had this Lease not terminated, and which remain unpaid at the time
of the execution of the new lease; provided, however, that such Leasehold
Mortgagee shall have a credit for all such sums paid to Landlord on
account of the Premises after such termination and before the effectiveness
of the new lease.

(c) The Leasehold Mortgagee shall have cured all defaults arising under this
Lease and reasonably susceptible of cure by the Leasehold Mortgagee.

(d) The new lease may, at the option of Leasehold Mortgagee, be executed by
a nominee of such Leasehold Mortgagee without the Leasehold Mortgagee
assuming the burdens and obligations of Tenant thereunder beyond the
period of the Leasehold Mortgagee’s occupancy, subject to the prior
written consent of Landlord, which consent shall be based on Landlord’s
exclusive determination that (a) Landlord’s programmatic and financial
interests in granting the new lease and permitting execution by the
nominee are not impaired (including without limitation as the same relates
to the mission of the University) and (b) that such nominee is able to
perform the obligations under the new lease as fully as the Leasehold
Mortgagee would have been able to perform had the lease been entered
into with the Leasehold Mortgagee.

(e) The Leasehold Mortgagee shall have the right to assign or transfer the new
lease to any person or entity with the prior written consent of Landlord,
which consent shall be based on Landlord’s exclusive determination that
Landlord’s programmatic and financial interests in granting the new lease
are not impaired (including without limitation as the same relates to the
mission of the University as set forth in Section 14.3 above). The liability
of the Leasehold Mortgagee under the new lease shall cease upon an
assignment of such new lease (which assignment shall contain an express
assumption by any transferee of all Lease obligations).

(f) Anything to the contrary expressed or implied elsewhere in this Lease

notwithstanding, any mortgage, deed of trust, or other lien, charge or
encumbrance created by any Leasehold Mortgagee and approved by
Landlord shall be subordinate to the new lease.

CSU CPDC: July 2016 55

 (g) If a new lease is issued pursuant to this Section 14.7, Landlord shall enter
into a subordination, non-disturbance and attornment agreement with the
new lessee in form and substance on the same material terms as the
Ground Lease Non-Disturbance Agreement.

14.8 Reimbursement of Landlord Costs. Tenant shall reimburse Landlord for all of
its costs and expenses, including fees and expenses of both internal and outside counsel, and
consultants’ fees and costs, incurred in connection with the review of requests for, and
documents and materials related to, any financing of the Improvements.

ARTICLE XV
DEFAULT

15.1 Waiver. A waiver by Landlord of any term, condition, or covenant of this Lease
shall not constitute a subsequent waiver of the same or any other term, condition or covenant of
this Lease, nor of the strict and prompt performance thereof by Tenant. Landlord’s delay, failure
or omission to reenter the Premises, or to exercise any right, power, privilege, option or remedy
arising from any default, shall not impair such right, power, privilege, option or remedy which
Landlord has, nor be construed as Landlord’s waiver or relinquishment of any such right, power,
privilege or option, or its acquiescence to a default. Landlord shall not be required to give notice
in order to restore or revive either (a) time as of the essence hereof, nor (b) any other covenant or
condition, after Landlord has waived a default in one or more instances. No right, power,
privilege, option, or remedy of Landlord shall be construed as being exhausted or discharged by
the exercise thereof in one or more instances. Each and all of the rights, powers, privileges,
options or remedies given Landlord by this Lease are cumulative and no one of them is exclusive
of the other or exclusive of any remedies provided by law, and the exercise of one right, power,
privilege, option or remedy by Landlord shall not impair Landlord’s right to any other.

15.2 Default by Tenant. Without intending to limit Landlord’s right to declare a

default of this Lease for any other reason, the occurrence of any of the following shall, at
Landlord’s election, constitute an “Event of Default” under this Lease:

(a) The vacation or abandonment of the Premises or the Improvements by

Tenant for a period of thirty (30) days;

(b) Tenant’s failure to pay to Landlord any amount due and payable hereunder
within five (5) days of receipt by Tenant of written notice of default given
by Landlord;

(c) Tenant’s failure to timely commence construction or timely achieve

Completion of Construction;

(d) A Stoppage of Construction for more than sixty (60) Business Days within
any seventy (70) Business Day period;

(e) Tenant’s failure to meet the target dates set forth in the Construction
Schedule by, in each case, ten (10) or more Business Days, and Tenant’s
failure to make up the necessary time to bring construction into
conformance with the target dates set forth in the Construction Schedule
within thirty (30) days after notice from Landlord;
CSU CPDC: July 2016 56
 (f) A failure by Tenant to observe and perform any other provision of this
Lease to be observed or performed by Tenant, when such failure continues
to the later to occur of (a) thirty (30) days after written notice thereof by
Landlord to Tenant or (b) thirty (30) days after an arbitration has
determined that there has been a default if such default is properly a matter
of arbitration and same has been submitted to arbitration pursuant to the
terms of this Lease; provided, however, that if the nature of such default is
such that the same cannot reasonably be cured within such thirty (30) day
period, Tenant shall not be deemed to be in default if Tenant shall within
such period commence such cure and thereafter diligently prosecute the
same to completion within a period not to exceed ninety (90) days
additional; or

(g) The making by Tenant of any general assignment for the benefit of
creditors, or the filing of a petition to have Tenant adjudicated as bankrupt,
or the filing of a petition for reorganization or arrangement under any law
relating to bankruptcy unless, in the case of a petition filed against Tenant,
the same is dismissed within ninety (90) days; or the appointment of a
trustee or receiver to take possession of substantially all of Tenant’s
interest in this Lease, when possession is not restored to Tenant within
ninety (90) days; or the attachment, execution or other judicial seizure of
substantially all of Tenant’s assets located on the Premises or of Tenant’s
interest in this Lease, when such seizure is not discharged within ninety
(90) days.

15.3 Remedies by Landlord. Subject to the provisions of this Lease regarding rights
of Leasehold Mortgagee, upon the occurrence of an Event of Default, Landlord may resort,
cumulatively or in the alternative to the following remedies as well as to any one or more other
remedies provided by law or equity:

15.4 Non-monetary Remedies.

15.4.1 Termination. Landlord may, upon Tenant’s default, at Landlord’s

election, terminate this Lease by giving Tenant notice of termination. On the giving of the
notice, all of Tenant’s rights in the Premises, and every part thereof, shall terminate. Landlord
shall not be deemed to have terminated this Lease unless Landlord shall have so declared in
writing to Tenant, nor shall Landlord be deemed to have accepted or consented to an
abandonment by Tenant by performing acts intended to maintain or preserve the Premises or the
Improvements, making efforts to relet the Premises or appointing a receiver to protect Landlord’s
interest under this Lease. Immediately after notice of termination, Tenant shall surrender and
vacate the Premises and all Improvements in a broom clean condition considering ordinary wear
and tear, and Landlord may reenter and take possession of the Premises and all Improvements
and eject all parties in possession or eject some and not others or eject none; provided that no
Building Tenants who are in possession of any portion of the Premises pursuant to Building
Tenant Leases entered into in compliance with this Lease, who are not in default and who agree
to attorn to Landlord shall not be ejected. In the event of any termination of this Lease, Tenant’s
right, title and interest in development documents related to the Improvements shall
automatically and without additional compensation to Tenant become the property and vest in
Landlord. Upon any termination of this Lease, Tenant shall execute such documents as Landlord
CSU CPDC: July 2016 57
may request to memorialize the termination and to release Landlord and the Premises from the
terms and conditions of this Lease. Said documents shall include agreements which assign
contracts between Tenant and vendors relating to the operation, management or maintenance of
the Premises, or any part thereof, to Landlord.

15.4.2 Reentry Without Termination. Landlord may at Landlord’s election re-

enter the Premises and, without terminating this Lease, at any time and from time to time re-let
the Premises and Improvements, or any part or parts of them, for the account and in the name of
Tenant or otherwise. Landlord may, at Landlord’s election, eject all persons or eject some and
not others or eject none; provided that no Building Tenants who are not then in default and who
agree to attorn to Landlord, shall be ejected. Any re-letting may be for the remainder of the
Term or for a longer or shorter period. Landlord may execute any leases made under this
provision either in Landlord’s name or in Tenant’s name and shall be entitled to all rents from
the use, operation, or occupancy of the Premises or the Improvements or both. No act by or on
behalf of Landlord under this provision shall constitute a termination of this Lease unless
Landlord gives Tenant written notice of termination.

15.4.3 Tenant’s Personal Property. Landlord may, at Landlord’s election, use

Tenant’s personal property and fixtures or any of such property and fixtures without
compensation and without liability for use or damage, or Landlord may store them for the
account and at the cost of Tenant. The election of one remedy for any one item shall not
foreclose an election of any other remedy for another item or for the same item at a later time.

15.5 Monetary Remedies for Tenant’s Default.

15.5.1 Termination. Termination under Section 15.4.1 shall not relieve Tenant
from the payment of any sum then due to Landlord.

15.5.2 Reentry Without Termination. Landlord’s reentry without termination

under Section 15.4.2 shall not relieve Tenant from payment to Landlord on the due dates
specified in this Lease the equivalent of all sums required of Tenant under this Lease, plus
Landlord’s expenses, less the proceeds of any reletting or assignment.

15.5.3 Recovery of Damage. In addition to any other remedies Landlord may

have, it may recover from Tenant all damages it may reasonably incur by reason of Tenant’s
Default, including, without limitation, the cost of recovering the Premises and reasonable
attorneys’ fees and expenses and all other amounts recoverable pursuant to section 1951.2 of the
California Civil Code. Landlord shall be obligated to take all reasonable steps to mitigate its
damages. The amounts recoverable pursuant to section 1951.2 of the California Civil Code are
as follows:

(a) the worth at the time of award of any unpaid rent which had been earned
at the time of such termination; plus

(b) 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 Tenant proves could have been
reasonably avoided; plus

CSU CPDC: July 2016 58

 (c) 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 Tenant proves could be reasonably avoided; plus

(d) any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease or which in the ordinary course of things would be likely
to result therefrom.

As used in clauses (a) and (b) above, the "worth at the time of award" is computed by allowing
interest at the maximum rate an individual is permitted to charge by law. As used in clause (c)
above, the "worth at the time of award" is computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).

15.6 Landlord May Require Strict Performance. Landlord may require strict
performance of all covenants and obligations herein as the same shall accrue or become due,
including, but not limited to, the right to recover rent and charges equivalent to rent without
terminating this Lease and have the right of action therefor without awaiting the end of the Term.

15.7 Landlord May Obtain Possession. Nothing contained herein shall affect,
change or waive any rights of Landlord to obtain equitable relief when such relief is otherwise
appropriate, or to obtain the relief provided by California Code of Civil Procedure sections 1159,
et seq., relating to actions for unlawful detainer, forcible entry and forcible detainer. If Landlord
obtains possession of the Premises under a judgment pursuant to Section 1174 of the Code of
Civil Procedure, or if Landlord by written notice declares this Lease to be terminated because of
a breach of this Lease, then Landlord may repossess and enjoy the Premises, together with all
additions alterations and improvements thereto, including the Improvements thereon. Any
lawful reentry as provided for herein shall be allowed by Tenant without hindrance, and
Landlord shall not be liable in damages or guilty of trespass because of any such lawful reentry.

15.8 No Waiver. Landlord’s election to perform any obligation of Tenant on Tenant’s

failure or refusal to do so shall not constitute a waiver of any right or remedy for Tenant’s
default, and Tenant shall promptly reimburse, defend and indemnify the Indemnified Parties
against all liability, loss, cost and expense arising therefrom.

15.9 Remedies of Tenant. Tenant shall have, subject to Landlord’s right to arbitration
under Article XVII, such remedies as are provided by law with respect to a breach or alleged
default by Landlord.

15.10 Entry of Premises by Landlord. A representative of Landlord may enter the

Premises, including the Improvements, during normal business hours upon reasonable prior
written notice for the purpose of inspection, subject to Tenant’s reasonable requirements as to
security on the Premises. Landlord shall give Tenant prior notice of such entry, and, except in
the case of an emergency, Landlord shall be accompanied by a representative of Tenant.

15.11 Failure of Tenant to Perform Required Acts. Subject to Tenant’s right to

contest as provided elsewhere in this Lease, if Tenant fails, refuses, or neglects during the Term
to do any of the things required to be done by Tenant, Landlord shall have the right, but not the
obligation, to do the same, but at the cost of and for the account of Tenant. Unless Landlord
CSU CPDC: July 2016 59
reasonably believes that its interests may be adversely affected by such delay, Landlord shall in
no case take such action sooner than thirty (30) days after giving Tenant written notice of such
failure, refusal or neglect. Tenant shall pay to Landlord on demand any sum expended by
Landlord under this Section 15.11 together with interest thereon at the rate provided in Section
4.8. Nothing contained in this Section 15.11 shall impair the rights or Landlord with regard to
defaults or remedies under the remaining portion of this Article XV. [the following is applicable
to hotel leases] If a Reserve Account has been established pursuant to Section 6.7, Landlord may
elect to use such funds from the Reserve Account to take any action permitted under this Section
15.11. If pursuant to this Section 15.11, Landlord uses funds from the Reserve Account for
matters other than those proscribed uses of the Reserve Account set forth in Section 6.7, then
within ten (10) days of demand from Landlord, Tenant will replenish the Reserve Account.

ARTICLE XVI
CERTAIN COVENANTS AND REPRESENTATIONS OF TENANT

16.1 Non Discrimination. During the term of this Lease, Tenant and its
subcontractors shall not deny the benefits of this Lease to any person on the basis of religion,
color, ethnic group identification, sex, age, physical or mental disability, nor shall they
discriminate unlawfully against any employee or applicant for employment because of race,
religion, color, national origin, ancestry, physical handicap, mental disability, medical condition,
marital status, age (over 40) or sex. Tenant shall insure that the evaluation and treatment of
employees and applicants for employment are free of such discrimination.

16.2 Fair Employment and Housing Act. During the term of this Lease, Tenant and
its subcontractors shall comply with the provisions of the Fair Employment and Housing Act
(Government Code Section 12900 et seq.), the regulations promulgated there under (California
Code of Regulations, Title 2, Sections 7285.0 et seq.), and the provisions of Article 9.5, Chapter
1, Part 1, Division 3, Title 2 of the Government Code (Government Code Sections 11135-
11139.5). Tenant shall permit access by representatives of the Department of Fair Employment
and Housing and the Landlord upon reasonable notice at any time during the normal business
hours, but in no case less than 24 hours notice, to such of its books, records, accounts, other
sources of information, and its facilities as said Department or Landlord shall require to ascertain
compliance with this clause.

16.3 Subcontracts. All of Tenant’s contracts with subcontractors regarding or

involving Tenant’s Interest shall contain provisions similar to those contained in Sections 16.1
and 16.2 above.

ARTICLE XVII
MEDIATION AND ARBITRATION; CHOICE OF FORUM

17.1 Disputes Subject to Mediation and Arbitration. The provisions of this Article
17 shall in no way limit the following even though it may be before, after, or during the
pendency of any Accelerated Trial: (a) the right of Landlord to obtain a judgment for unlawful
detainer, ejectment or the like from a court of competent jurisdiction; or (b) the right of any party
to exercise self-help remedies; or (c) the right of any party to obtain equitable, provisional or
ancillary remedies (such as, but not limited to, temporary restraining orders or preliminary or
permanent injunctions) from a court of competent jurisdiction. The parties agree that the
Superior Court of the State of California, in and for the County, shall have exclusive jurisdiction
CSU CPDC: July 2016 60
over all such matters. The exercise of any such right or remedy by a party shall not waive the
right of that party to resort to an Accelerated Trial.

17.2 Initial Mediation. With respect to any dispute between the parties, the parties
shall attempt in good faith first to mediate such dispute and use their best efforts to reach
agreement on the matters in dispute. Within five (5) days of the request of any party, the
requesting party shall attempt to employ the services of a third person mutually acceptable to the
parties to conduct such mediation within five (5) days of his appointment. If the parties are
unable to agree on such third person, or, if on completion of such mediation, the parties are
unable to agree and settle the dispute, then the dispute may be referred to arbitration in
accordance with the following section.

17.3 Accelerated Trial. Except as set forth in Sections 17.1 and 17.2 above, if either
Landlord or Tenant claim that the other is in default or breach of any obligation under this Lease,
written notice of such claim shall, in accordance with this Lease, be served upon the other party.
Landlord, within ten (10) Business Days of receipt of such claim from Tenant, or concurrently
with delivery of written notice to Tenant that a dispute exists as to the claim, or such part of it as
the notifying party designates, may elect to resolve such dispute by Accelerated Trial pursuant
this Section. If Landlord so elects to resolve the dispute, and if the dispute cannot informally be
resolved between the parties, Landlord and Tenant agree to resolve such dispute(s) by
accelerated trial (“Accelerated Trial”) as follows:

17.3.1 Complaint. The aggrieved party shall file a complaint in the Superior
Court of the State of California for the County, specifying the disputed claim as the cause of
action upon which the complaint is filed. The complaint shall state that the complainant waives
trial by jury.

17.3.2 Answer. Provided that service of the complaint is accompanied by

written notice that failure to respond within ten (10) days could result in a default judgment
being entered, the defendant must answer the complaint within ten (10) Business Days after
service (and such period shall not be extended), for failure of which a default judgment may be
entered against it. The answer shall state that the respondent waives trial by jury.

17.3.3 Service of Process. The summons and complaint may be served

personally or by U.S. Postal Service Express Mail, return receipt requested, to the addresses
provided in this Lease, or in such other manner as provided by law. Service of the answer and
other filings shall be made by telephone facsimile transmission with an original simultaneously
sent by U.S. Postal Service Express Mail, or in such other manner as provided by law.

17.3.4 Temporary Judge. Not later than five (5) Business Days after service
and filing of the answer, the parties shall stipulate that the case shall be heard and determined for
all purposes by a retired judge of the Superior Court for the County where the case was filed,
appointed and sitting without a jury as a temporary judge pursuant to California Constitution
Article VI, Section 21. In the event that the parties cannot agree within fifteen (15) days after
service and filing of the answer on the retired judge to be appointed as temporary judge, one
shall be appointed, upon the request of either party, by the Presiding Judge of the Superior Court
for the County where the case was filed.

CSU CPDC: July 2016 61

 17.3.5 Retention of Rights. Notwithstanding their stipulation to a temporary
judge to try the case and the waiver by both parties to trial by jury, the parties retain all other
rights for discovery, to make motions, to summon and present witness and to present evidence, to
cause a record of the case to be made, to require findings and conclusions, to seek a new trial and
to otherwise enjoy and obtain all rights and privileges of a party to a lawsuit in a court of record,
even though not enumerated herein, that they otherwise would have under the laws of the State
of California (and the rules of court thereof) had they not stipulated to a temporary judge;
including the right to appeal the judgment of the trial court, to obtain stays, orders, review and
other relief from the appellate court and Supreme Court.

17.3.6 Conference. As soon as possible after the appointment of the temporary

judge but in no event later than ten (10) days thereafter, the parties shall meet with the judge to
arrange a schedule for discovery and pre-trial motions, which schedule shall be designed to bring
the matter to trial at the earliest reasonable and feasible date, but in no event later than one
hundred twenty (120) days after the conference. The parties agree that the judge shall have
considerable latitude in shortening statutory time periods so as to accommodate the desired
schedule. Such schedule shall then be established by judicial order.

17.3.7 Enforcement of the Schedule. The parties acknowledge and agree that it
is in each of their best interests to resolve the disputes subject to this Section in the shortest
reasonable and feasible time. Therefore, the parties agree that the judge shall firmly but fairly
enforce the schedule, using whatever tools are provided by law, including, without limitation,
contempt citations and the imposition of sanctions.

17.3.8 Limited to Certain Disputes. The parties acknowledge and agree that the
provisions of this Section for Accelerated Trial are limited to those certain disputes at the
election of Landlord that Landlord expressly agrees would be so resolved. All other disputes
between the parties shall be resolved in the manner otherwise available at law or in equity and
Accelerated Trial of an issue in the manner set forth in this Section shall not preclude any party
from bringing a separate action in any court of competent jurisdiction on a related issue. The
terms of this Section also shall not limit or preclude either party's right to bring an action against
one who is not a party to this Lease.

17.3.9 Fees and Costs. Landlord and Tenant each shall pay one-half of the fees
of the temporary judge and a court reporter.

CSU CPDC: July 2016 62

 NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE
AGREEING TO HAVE CERTAIN DISPUTES ARISING OUT OF THE
MATTERS INCLUDED WITHIN THE SCOPE OF THE
ACCELERATED TRIAL PROVISION ABOVE DECIDED BY
NEUTRAL REFEREE AS PROVIDED BY CALIFORNIA LAW AND,
EXCEPT AS PROVIDED IN SECTION 17.1 AND 17.3.8 ABOVE, YOU
ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE
THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. IF YOU
REFUSE TO SUBMIT TO ACCELERATED TRIAL WHEN
REQUIRED BY THIS LEASE AFTER AGREEING TO THIS
PROVISION, YOU MAY BE COMPELLED TO SUBMIT UNDER THE
AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE.
YOUR AGREEMENT TO THIS ACCELERATED TRIAL PROVISION
IS VOLUNTARY. WE HAVE READ AND UNDERSTAND THE
FOREGOING.

Landlord's Initials: _________________

Tenant's Initials: _________________

ARTICLE XVIII
DETERMINATION OF FAIR MARKET RENT

18.1 Determination of Fair Market Rent for Premises. Whenever it is necessary

pursuant to Section 4.3.2 to determine the Fair Market Rent for the Premises, then the parties
shall negotiate and attempt to agree upon, within thirty (30) days of either party’s request for
determination of such Fair Market Rent, either (i) the Fair Market Rent of the Premises or (b) a
single appraiser to determine said Fair Market Rent. If the parties are unable to agree upon either
the Fair Market Rent of the Premises or a single appraiser to determine said Fair Market Rent
within such thirty (30) day period, then such Fair Market Rent shall be determined pursuant to
the provisions of Section 18.2.

18.2 Determination by Appraisal. If the Fair Market Rent of the Premises is to be

determined hereunder, the parties shall each appoint an appraiser, by notice delivered to the
other. If either Landlord or Tenant selects its appraiser and the other does not within ten (10)
business days after receipt of the other party’s designation of an appraiser, then the appraiser
selected by the party selecting the appraiser shall act as the sole appraiser in determining fair
market rent. If both parties have designated an appraiser within said ten (10) day period, each of
said appraisers shall, within forty-five (45) days of selection of the last of such appraisers to be
selected, independently determine the fair market rent of the Premises and if the two
determinations of Fair Market Rent are within ten percent (10%) of each other (using the higher
determination as a reference), the two determinations shall be averaged and such average shall be
the Fair Market Rent of the Premises. If the two appraisers disagree by an amount greater than
10% (using the higher determination as a reference), the two appraisers shall select a third
appraiser who shall, within 45 days of his or her selection, independently and without knowledge
of the two appraisals previously made, determine the Fair Market Rent of the Premises.
Thereupon, the fair market rent of the Leased Land shall be the average of the two appraisals
which are closest in rent and the third appraisal shall be disregarded unless one appraisal is the
CSU CPDC: July 2016 63
arithmetic mean of the other two in which event such mean appraisal shall be fair market rent of
the Leased Land. If it is necessary in accordance with the foregoing provisions for the two
appraisers selected by Landlord and Tenant to appoint a third appraiser and the two appraisers
cannot agree on the third appraiser, within 30 days from the rendering of the two initial
appraisals, either party may apply to have the third appraiser selected by the Presiding Judge of
the Superior Court of the State of California in the County.

18.3 Methodology of Appraisal. With respect to any appraisal pursuant to this

Article XVIII, the Fair Market Rent of the Premises shall be determined without regard to the
existence of any Improvements or utilities located thereon and as limited for use by the terms of
any zoning or restrictions in this Lease including those imposed by University Entities. Each
appraiser shall consider only those appraisal practices, approaches, methods and techniques that
are relevant and that conform to the then recognized Standards of Practices and Code of Ethics of
the American Institute of Real Estate Appraisers or successor organization. Landlord and Tenant
shall each have the right to submit testimony, oral and written, in support of their respective
opinions of Fair Market Rent of the Premises, and such submission shall take place within fifteen
(15) days after appointment of the appraiser. If there is only one appraiser, each party shall pay
fifty percent (50%) of the cost of the appraisal. If there are two or more appraisers, each party
shall pay the cost of the appraiser selected by it and the cost of the third appraiser, if any, shall be
paid fifty percent (50%) by each party. Landlord and Tenant shall agree on the methodology to
be used by the appraisers in determining their appraisals prior to engaging them to perform the
appraisals. If Landlord and Tenant do not agree on such methodology within ten (10) days after
the end of the thirty (30) day period referenced in Section 18.1, then the methodology selected by
Landlord shall be used by the appraisers.

18.4 Qualification of the Appraisers. Each appraiser designated under Section 18.2
shall serve as an independent valuation expert rather than an advocate for the position of or
consultant to Landlord or Tenant, and shall meet the following minimum qualifications:

(a) Shall qualify as an expert in the valuation of property used or intended to

be used for the purposes set forth in this Lease;

(b) Shall be a member of the American Institute of Real Estate Appraisers

(MAI);

(c) Shall be an independent person, not currently or previously an employee,

agent or business associate of Landlord or Tenant, or of any financial
institutions with legal interests in the Premises; and

(d) Shall have at least 10 years of experience appraising commercial property

in the County, California.

ARTICLE XIX
MISCELLANEOUS

19.1 Notices. All notices, demands, or other communications that either party desires
or is required or permitted to give or make to the other party under or pursuant to this Lease
(collectively referred to as “notices”) shall be made or given in writing and shall either be (i)
personally served, (ii) sent by registered or certified mail, postage prepaid, or (iii) sent by a
CSU CPDC: July 2016 64
nationally recognized overnight delivery service or courier (such as Federal Express or xxxx).
All notices shall be addressed to or personally served on the parties as follows:

If to Landlord, to: California State University, __________

___________________
_________, California _____
Attention: Office of the President

and to: The California State University

Office of General Counsel
401 Golden Shore, 4th Floor
Long Beach, California 90802-42
Attention: General Counsel

If to Tenant: _________________________
__________, CA

Any notice sent to Tenant hereunder shall be simultaneously sent to each Leasehold Mortgagee,
provided that Landlord has been given such notice as is required by Section 14.4, by registered
or certified mail, return receipt requested, at the address or addresses previously provided by
Tenant. Any notice that contains a request for Landlord’s consent shall clearly state that consent
is being requested in such notice and, if applicable, that failure to respond within the applicable
time period (which time period shall be stated in such notice) may be deemed consent. Service
of any such notice or demand so made by mail shall be deemed complete as of (i) if personally
served, on the day of actual delivery, or (ii) if mailed, the date as shown by the addressee’s
registry or certification receipt. The address to which notices and demands shall be delivered or
sent may be changed from time to time by notice served as herein provided by either party upon
the other party. Any correctly addressed notice that is refused, unclaimed, or undeliverable
because of an act or omission of the party to be notified shall be considered to be effective as of
the first date that the notice was refused, unclaimed, or considered undeliverable by the postal
authorities, messenger, or overnight delivery service.

19.2 Brokerage Commissions. Each party represents to the other that it has not
entered into any agreement or incurred any obligation which might result in the obligation to pay
a brokerage commission or finder’s fee with respect to this transaction. Each party agrees to
indemnify, defend and hold harmless the other party from and against any real estate brokerage
commissions or other such obligations incurred by the indemnified party as the result of any
agreement or act of the indemnifying party giving rise to a claim for such commission or other
obligation.

19.3 Estoppel Certificates. Tenant or Landlord, as the case may be, will execute,
acknowledge and deliver to the other, within fifteen (15) days of request, its certificate certifying
(a) that this Lease is unmodified and in full force and effect, (or, if there have been
modifications, that this Lease is in full force and effect as modified, and stating the
modifications), (b) the dates, if any, to which the rent has been paid, (c) that there are no existing
offsets or defenses against the enforcement of any term hereof on the part of tenant to be
performed or complied with (or, if so, specifying the same), (d) if any notice has been given to
either party of any default which has not been cured. Any such certificate may be relied upon by
any prospective purchaser, mortgagee or beneficiary under a Trust Deed and/or (e) any other
CSU CPDC: July 2016 65
matters that Landlord or Tenant, as applicable, reasonable requests. Failure by either party to
execute or deliver an estoppel certificate in the required time period shall constitute an
acknowledgement by the party not producing the certificate that the statements included in the
estoppel certificate are true and correct without exception.

19.4 Indemnification.

19.4.1 Tenant’s Indemnification. Tenant shall indemnify, defend and hold

harmless the Indemnified Parties of Landlord, the Premises, and the leasehold interest from and
against any claims, damages, costs, expenses, including reasonable costs and expenses of
attorneys, or liabilities arising out of or in any way connected with this Lease, including, without
limitation, claims, damages, expenses or liabilities for loss or damage to any property or for
death or injury to any person or persons, in proportion to and to the extent such liens, claims,
expenses and liabilities result from the willful or negligent acts, errors or omissions of Tenant, its
Building Tenants, and their respective officers, agents, contractors, employees and invitees.

19.4.2 Landlord’s Indemnification. Landlord shall indemnify, defend and hold

harmless the Indemnified Parties of Tenant from and against any claims, damages, costs,
expenses, including reasonable costs and expenses of attorneys, or liabilities arising out of or in
any way connected with this Lease, including, without limitation, claims, damages, expenses or
liabilities for loss or damage to any property or for death or injury to any person or persons, in
proportion to and to the extent such liens, claims, expenses and liabilities result from the willful
or negligent acts, errors or omissions of Landlord, its officers, agents, employees and invitees.

19.5 Waiver of Subrogation. Landlord and Tenant each hereby waive any right of
recovery against the other due to loss of or damage to the property of either of them when such
loss of or damage to property arises out of the acts of God or any of the perils insured under a
standard fire and extended perils policy of insurance, whether or not such perils have been
insured, self-insured or non-insured.

19.6 Non-merger of Fee and Leasehold Estates. If under any circumstances both
Landlord’s and Tenant’s estates in the Premises, or any portions thereof, become vested in the
same owner, this Lease nevertheless shall not be extinguished by application of the doctrine of
merger except at the express election of the owner and with the express written consent of the
beneficiary or beneficiaries under all Trust Deeds affecting the Premises and Tenant’s leasehold
estate.

19.7 Time of the Essence. Time limits in this Lease are to be strictly observed. Time
is of the essence in the performance of each and every obligation and covenant of the parties
hereto.

19.8 Joint and Several Obligations. If either Landlord or Tenant consists of more
than one person, the obligations of the persons constituting such party is joint and several. For
purposes of this paragraph, “person” includes natural persons, entities, or any combination of
natural persons and entities.

19.9 Captions. The captions and section headings used herein are for convenience
only and are not a part of this Lease and do not in any way limit or amplify the terms and
provisions hereof.
CSU CPDC: July 2016 66
 19.10 Construction. For purposes of this Agreement, words of the masculine gender
shall be deemed to include correlative words of the feminine and neuter genders. Unless the
context shall otherwise indicate, words importing the singular number shall include the plural
number and vice versa and words importing persons shall include corporations and associations,
including public bodies and the term “agent” shall refer to a person’s employees, contractors, and
representatives.

19.11 Governing Law. This Lease shall be interpreted in accordance with and
governed by the laws of the State of California. The language in all parts of this Lease shall be,
in all cases, construed according to its fair meaning and not strictly for or against Landlord or
Tenant.

19.12 Entire Agreement. This Lease contains all covenants, terms, provisions and
agreements between Landlord and Tenant relating in any manner to the construction, rental, use
and occupancy of the Premises and other matters set forth in this Lease. No prior agreement or
understanding with respect to the same shall be valid or of any force or effect, and no covenant,
term, provision or agreement of this Lease can be altered, changed, modified or added to, except
in writing, signed by Landlord and Tenant. No representation, inducement, understanding, or
anything of any nature whatsoever made, stated, or represented on behalf of either party hereto,
either orally or in writing, has induced the other party to enter into this Lease except as set forth
in this Lease.

19.13 Right to Request Injunction. In the event of any violation or threatened

violation by either party of any of the terms, covenants, and conditions herein contained, in
addition to the other remedies herein provided, each party shall have the right to petition for
injunctive relief against such violation or threatened violation in a court of competent
jurisdiction.

19.14 Severability. If any clause, sentence or other portions of this Lease shall become
illegal, null or void for any reason, or shall be held by any court of competent jurisdiction to be
so, the remaining portions thereof shall remain in full force and effect.

19.15 BOT Action. Tenant acknowledges that many of the approvals or consents to be
given by Landlord hereunder are subject to approval by the BOT through formal action of the
BOT at a regularly or specially called meeting. Landlord makes no representation as to whether
any such approval or consent may be granted or that any consent or approval granted by
Landlord shall indicate that the attendant approval or consent from the BOT is forthcoming.
Landlord shall not be in breach of any obligation under this Lease requiring the consent,
approval or other action of the BOT if such consent, approval or other action has not been given
or completed within the applicable period set forth herein. Notwithstanding the foregoing, the
parties hereto understand and agree that nothing contained in this paragraph shall change or alter
the standards for approval, as set forth elsewhere in this Lease, or any action that Tenant
proposes to take.

19.16 Cooperation in Execution, Delivery and Recordation of Documents. Landlord

and Tenant agree to cooperate in the execution, delivery and recordation of such documents and
agreements requested by either party as are reasonably necessary in order to carry out the
purposes of this Lease and to execute and deliver all documents and instruments reasonably

CSU CPDC: July 2016 67

necessary to terminate all interests granted herein upon their termination or expiration as
provided herein.

19.17 Representations and Warranties of Tenant. As a material inducement to

Landlord to enter into this Lease, Tenant represents and warrants the following:

19.17.1 Power and Authority. That it is a limited partnership (or general

partnership, or limited liability company) duly organized, validly existing and in good standing
under the laws of the State of California, and, is duly qualified to do business and is in good
standing in the State of California; that it has all necessary power and authority to enter into this
Lease and to carry out the transactions contemplated herein; and that the execution and delivery
hereof and the performance by Tenant of Tenant’s obligations hereunder will not violate or
constitute an Event of Default under the terms and provisions of any agreement, law or court
order to which Tenant is a party or by which Tenant is bound the remedy for which default
would have a material adverse effect on Tenant’s ability to perform its obligations hereunder.

19.17.2 Authorization; Valid Obligations. That all actions required to be taken

by or on behalf of Tenant to authorize it to execute, deliver and perform its obligations under this
Lease have been taken, and that this Lease is a valid and binding obligation of Tenant
enforceable in accordance with its terms, except as the same may be affected by bankruptcy,
insolvency, moratorium or similar laws, or by legal or equitable principles relating to or limiting
the rights of contracting parties generally.

19.17.3 Executing Parties. That the persons executing this Lease on behalf of
Tenant have full power and authority to bind Tenant to the terms hereof.

19.17.4 Patriot Act. That Tenant is not included on the List of Specially
Designated Nationals and Blocked Persons maintained by OFAC, and does not reside in, and is
not organized or chartered under the laws of, (i) a jurisdiction that has been designated by the
U.S. Secretary of the Treasury under Section 311 or 312 of the Patriot Act as warranting special
measures due to money laundering concerns or (ii) any foreign country that has been designated
as non-cooperative with international anti-money laundering principles or procedures by an
intergovernmental group or organization, such as the Financial Action Task Force on Money
Laundering, of which the United States is a member and with which designation the United
States representative to the group or organization continues to concur.

19.17.5 No Bankruptcy. Tenant has not made a general assignment for the
benefit of creditors; filed any voluntary petition in bankruptcy; suffered the filing of an
involuntary petition by its creditors; suffered the appointment of a receiver to take possession of
substantially all of its assets; suffered the attachment or other judicial seizure of substantially all
of its assets; admitted its inability to pay its debts as they come due; or made an offer of
settlement, extension or composition to its creditors general.

19.18 Representations and Warranties of Landlord. As a material inducement to

Tenant to enter into this Lease, Landlord represents and warrants the following:

19.18.1 Power and Authority. That it is a campus of the California State

University, which is the state of California acting in its higher education capacity, duly
organized, validly existing and in good standing under the laws of the State of California, and, is
CSU CPDC: July 2016 68
duly qualified to do business and is in good standing in the State of California; that it has all
necessary power and authority to enter into this Lease and to carry out the transactions
contemplated herein; and that the execution and delivery hereof and the performance by
Landlord of Landlord’s obligations hereunder will not violate or constitute an Event of Default
under the terms and provisions of any agreement, law or court order to which Landlord is a party
or by which Landlord is bound the remedy for which default would have a material adverse
effect on Landlord’s ability to perform its obligations hereunder.

19.18.2 Authorization; Valid Obligations. That all actions required to be taken

by or on behalf of Landlord to authorize it to execute, deliver and perform its obligations under
this Lease have been taken, and that this Lease is a valid and binding obligation of Landlord
enforceable in accordance with its terms, except as the same may be affected by bankruptcy,
insolvency, moratorium or similar laws, or by legal or equitable principles relating to or limiting
the rights of contracting parties generally.

19.18.3 Executing Parties. That the persons executing this Lease on behalf of
Landlord have full power and authority to bind Landlord to the terms hereof.

19.19 Relationship of Parties. Nothing contained in this Lease shall be deemed or

construed by the parties or by any third person to create the relationship of principal and agent,
or of partnership or of joint venture, or of any association between Landlord and Tenant, and
none of the provisions contained in this Lease or any acts of the parties shall be deemed to create
any relationship other than lessor and lessee between Landlord and Tenant, nor shall this Lease
be construed, except as expressly provided, to authorize either to act as agent for the other.

19.20 Attorneys’ Fees and Costs. If any party to this Lease commences an action or
proceeding against any other party to this Lease to interpret or enforce any of the terms of this
Lease or because of the breach of the other party to any of the terms hereof, each party shall pay
its own attorneys’ fees and other costs and expenses incurred in connection with the prosecution
or defense of such action or proceeding, whether or not the action or proceeding is prosecuted to
a final judgment. The terms “attorneys’ fees” or “attorneys’ fees and costs” shall also include,
without limitation, all such fees and expenses incurred with respect to appeals, arbitrations and
bankruptcy proceedings, and whether or not any action or proceeding is brought with respect to
the matter for which said fees and expenses were incurred.

19.21 Survival of Covenants. All covenants which, by their terms, are not to be
performed before the expiration or earlier termination of this Lease shall survive the expiration
or earlier termination hereof.

19.22 Binding Effect. The provisions of this Lease shall bind or benefit the heirs,
executors, administrators, successors and assigns of the original parties to this Lease.

19.23 Execution in Counterparts. This Lease may be executed in counterparts, each

of which shall constitute an original of such Lease, but all of which shall constitute one and the
same instrument.

19.24 Memorandum of Lease. Concurrently with the execution of this Lease, the
parties shall execute and acknowledge a Memorandum of Lease, which Memorandum of Lease
shall be filed in the Official Records.
CSU CPDC: July 2016 69
 19.25 Liquor License. Tenant intends to obtain one or more licenses from the
Department of Alcoholic Beverage Control of the State of California to serve beer, wine and
spirits at the Improvements. Landlord shall use commercially reasonable efforts to support
Tenant's application for such license; provided, however, the scope and content of such license
shall be subject to the reasonable approval of Landlord. Tenant shall not interfere with or
oppose in any way efforts by Landlord, or other tenants, lessees, or licensees of Landlord, to
obtain alcoholic licenses for service of alcoholic beverages at venues located at the University.
[only if applicable]

19.26 Naming Rights. The BOT, and only the BOT, has the authority to name all CSU
facilities and all improvements constructed on property owned by CSU, such as the Premises.
The Premises shall at all times comply with CSU policies, as from time to time amended,
regarding the naming of facilities located on property owned by CSU. Tenant may not adopt,
create, or permit to be attached to the Premises or any Improvements thereon, any name other
than the street address of the Premises, except (i) in accordance with all applicable CSU naming
policies, and (ii) with the approval of the BOT.

[Signatures Continue on Next Page]

CSU CPDC: July 2016 70

 IN WITNESS WHEREOF, the parties hereto have executed this Lease on the date
indicated next to their signatures below.

LANDLORD:

CALIFORNIA STATE UNIVERSITY _______

Date Signed: By:

_________, President

CALIFORNIA STATE UNIVERSITY

Date Signed: By:

Elvyra F. San Juan, Assistant Vice
Chancellor, Capital Planning, Design and
Construction

TENANT:
_________, a _______ [limited liability company]

By:
Date Signed: [Name and Title]

CSU CPDC: July 2016 71

 List of Exhibits:

A -- Legal Description of Premises

B -- Description of Improvements
C -- Construction Requirements
D -- Design Guidelines
E -- Guaranty
F -- University Rules
G -- SNDA

CSU CPDC: July 2016 72

 TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS................................................................................................. 1
ARTICLE II GRANT AND TERM ...................................................................................... 8
2.1 Lease ...................................................................................................................... 8
2.2 Use of the Premises ................................................................................................ 9
2.3 Reservation of Oil, Gas and Mineral Rights .......................................................... 9
2.4 Term ....................................................................................................................... 9
2.5 Tenant’s First Right to Negotiate ........................................................................... 9
2.6 Holding Over ......................................................................................................... 9
2.7 Early Termination .................................................................................................. 9
2.8 Guaranty ............................................................................................................... 10
2.9 Security Deposit ................................................................................................... 10
2.10 Quiet Enjoyment .................................................................................................. 11
2.11 Condition of Premises .......................................................................................... 11
2.12 Ownership and Removal of Improvements ......................................................... 12
2.13 Surrender of Premises .......................................................................................... 14
2.14 Tenant Right to Terminate ................................................................................... 14
ARTICLE III CONSTRUCTION OF THE IMPROVEMENTS ......................................... 15
3.1 Tenant’s Obligation ............................................................................................. 15
3.2 Submittal of Schematic Design Package ............................................................. 15
3.3 Commencement, Prosecution and Completion of Construction .......................... 16
3.4 Tenant’s Contractor ............................................................................................. 18
3.5 Compliance with Laws and University Requirements......................................... 18
3.6 Design Professionals ............................................................................................ 18
3.7 Encumbrance of Estate ........................................................................................ 19
3.8 Costs of Construction........................................................................................... 19
3.9 Infrastructure ........................................................................................................ 19
3.10 Cooperation .......................................................................................................... 19
3.11 Reports ................................................................................................................. 19
3.12 Insurance .............................................................................................................. 19
3.13 No Responsibility................................................................................................. 20

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3.14 Notice of Non-Responsibility .............................................................................. 20

3.15 Liens..................................................................................................................... 20
3.16 Assignment .......................................................................................................... 21
3.17 Standard of Work ................................................................................................. 21
3.18 Indemnification .................................................................................................... 21
3.19 Tenant Indemnity ................................................................................................. 21
ARTICLE IV LEASE CONSIDERATION.......................................................................... 21
4.1 Construction of Improvements ............................................................................ 21
4.2 Annual Base Rent ................................................................................................ 21
4.3 Adjustment of Annual Base Rent ........................................................................ 21
4.4 Place of Payment of Rental .................................................................................. 22
4.5 Net Lease; No Rent Abatement or Reduction...................................................... 22
4.6 Other Payments .................................................................................................... 23
4.7 Interest.................................................................................................................. 23
4.8 Late Charges ........................................................................................................ 23
4.9 Net Proceeds From Refinancings, Sales and Assignments.................................. 23
4.10 Unrelated Business Income.................................................................................. 23
4.11 Percentage Rent ................................................................................................... 24
4.12 Percentage Rent [for Hotel Leases only] ............................................................. 25
ARTICLE V USE ................................................................................................................ 26
5.1 Use of Premises.................................................................................................... 26
5.2 Changed Use ........................................................................................................ 27
5.3 Waste; Nuisance................................................................................................... 27
5.4 Environmental Requirements............................................................................... 27
5.5 Environmental Remediation and Indemnification ............................................... 27
5.6 Compliance with Government Regulations ......................................................... 28
5.7 Evidence of Compliance with Laws .................................................................... 28
5.8 Right to Contest ................................................................................................... 28
5.9 Landlord’s Rules and Regulations ....................................................................... 29
5.10 Advertising and Signs .......................................................................................... 29

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5.11 University Name .................................................................................................. 29

5.12 Operator ............................................................................................................... 29
ARTICLE VI OPERATION AND MAINTENANCE ......................................................... 30
6.1 Standards of Operation ........................................................................................ 30
6.2 Maintenance ......................................................................................................... 30
6.3 Management and Operation of the Premises ....................................................... 30
6.4 Specific Tenant Obligations ................................................................................. 31
6.5 Requirements of Government Agencies .............................................................. 31
6.6 Meetings to Discuss Maintenance of Improvements ........................................... 32
6.7 Replacement Reserve Fund.................................................................................. 32
6.8 Capital Improvement Fund .................................................................................. 33
6.9 Vending ................................................................................................................ 34
ARTICLE VII TAXES AND ASSESSMENTS .................................................................... 35
7.1 Taxes .................................................................................................................... 35
7.2 Landlord Indemnified and Held Harmless ........................................................... 35
7.3 Tenant’s Right to Contest .................................................................................... 35
7.4 Landlord’s Cooperation in Tenant’s Contest ....................................................... 35
7.5 Excluded Taxes .................................................................................................... 36
7.6 Prorations ............................................................................................................. 36
7.7 Personal Property Taxes ...................................................................................... 36
7.8 Separate Assessment ............................................................................................ 36
7.9 Replacement Taxes .............................................................................................. 36
ARTICLE VIII UTILITIES..................................................................................................... 36
8.1 Construction of Utilities....................................................................................... 36
8.2 Cost of Utilities .................................................................................................... 37
8.3 Utility Easements ................................................................................................. 37
ARTICLE IX ALTERATIONS, DAMAGE OR DESTRUCTION ..................................... 37
9.1 Alteration of Improvements ................................................................................. 37
9.2 Damage or Destruction of Improvements ............................................................ 38
9.3 Work of Improvement.......................................................................................... 39

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ARTICLE X INSURANCE................................................................................................. 39
10.1 Commercial General Liability Insurance ............................................................. 39
10.2 Property Insurance During Construction ............................................................. 40
10.3 Property Insurance After Construction ................................................................ 40
10.4 Escrow of Casualty Insurance Proceeds .............................................................. 41
10.5 Workers’ Compensation Insurance ...................................................................... 41
10.6 Tenant Not Relieved ............................................................................................ 41
10.7 Additional Insureds .............................................................................................. 41
10.8 Basis of Insurance ................................................................................................ 41
10.9 Proceeds ............................................................................................................... 41
10.10 Waiver of Subrogation Rights ............................................................................. 41
10.11 Compliance with Requirements of Carriers ......................................................... 42
10.12 Non Contributing ................................................................................................. 42
10.13 Termination Notice/Form of Policies .................................................................. 42
10.14 Evidence of Insurance .......................................................................................... 42
10.15 Settlement of Claims ............................................................................................ 42
ARTICLE XI CONDEMNATION ....................................................................................... 43
11.1 Lease Governs ...................................................................................................... 43
11.2 Taking Defined .................................................................................................... 43
11.3 Total Taking Defined ........................................................................................... 43
11.4 Partial Taking Defined ......................................................................................... 43
11.5 Termination of Lease ........................................................................................... 43
11.6 Partial Taking; Rental Abatement ........................................................................ 43
11.7 Partial Taking; Restoration .................................................................................. 43
11.8 Distribution of Award .......................................................................................... 43
11.9 Allocation of Award; Partial Taking.................................................................... 44
11.10 Allocation of Award; Temporary Taking ............................................................ 44
11.11 Allocation of Award; Total Taking...................................................................... 44
11.12 Conduct of Proceedings ....................................................................................... 45
11.13 Notice ................................................................................................................... 45

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ARTICLE XII ASSIGNMENT, SUBLETTING AND BUILDING TENANT

LEASES ......................................................................................................... 45
12.1 Assignment .......................................................................................................... 45
12.2 Transfers of Interests in Tenant ........................................................................... 47
12.3 Building Tenant Leases........................................................................................ 47
12.4 Requests for SNDAs from Subtenants ................................................................. 47
12.5 Subtenant’s Option to Purchase ........................................................................... 48
12.6 Right of First Offer .............................................................................................. 48
12.7 Landlord’s Right of First Refusal ........................................................................ 48
ARTICLE XIII LIENS AND ENCUMBRANCES................................................................. 49
13.1 Covenant Against Encumbrances ........................................................................ 49
13.2 Hold Harmless ..................................................................................................... 49
13.3 Non Subordination ............................................................................................... 50
13.4 Mechanics’ and Similar Liens ............................................................................. 50
ARTICLE XIV HYPOTHECATION ...................................................................................... 50
14.1 Lease as Security.................................................................................................. 50
14.2 Financing.............................................................................................................. 51
14.3 Assignment by Leasehold Mortgagee .................................................................. 53
14.4 Notice of Leasehold Mortgagee ........................................................................... 53
14.5 Request for Notice of Defaults ............................................................................ 53
14.6 Notice of Defaults to Leasehold Mortgagee ........................................................ 53
14.7 New Lease for Leasehold Mortgagee .................................................................. 54
14.8 Reimbursement of Landlord Costs ...................................................................... 55
ARTICLE XV DEFAULT ..................................................................................................... 56
15.1 Waiver .................................................................................................................. 56
15.2 Default by Tenant ................................................................................................ 56
15.3 Remedies by Landlord ......................................................................................... 57
15.4 Non-monetary Remedies ..................................................................................... 57
15.5 Monetary Remedies for Tenant’s Default............................................................ 58
15.6 Landlord May Require Strict Performance .......................................................... 59

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15.7 Landlord May Obtain Possession ........................................................................ 59

15.8 No Waiver ............................................................................................................ 59
15.9 Remedies of Tenant ............................................................................................. 59
15.10 Entry of Premises by Landlord ............................................................................ 59
15.11 Failure of Tenant to Perform Required Acts........................................................ 59
ARTICLE XVI CERTAIN COVENANTS AND REPRESENTATIONS OF TENANT ...... 60
16.1 Non Discrimination .............................................................................................. 60
16.2 Fair Employment and Housing Act ..................................................................... 60
16.3 Subcontracts ......................................................................................................... 60
ARTICLE XVII MEDIATION AND ARBITRATION; CHOICE OF FORUM ..................... 60
17.1 Disputes Subject to Mediation and Arbitration ................................................... 60
17.2 Initial Mediation................................................................................................... 60
17.3 Accelerated Trial .................................................................................................. 61
ARTICLE XVIII DETERMINATION OF FAIR MARKET RENT ......................................... 63
18.1 Determination of Fair Market Rent for Premises ................................................ 63
18.2 Determination by Appraisal ................................................................................. 63
18.3 Methodology of Appraisal ................................................................................... 63
18.4 Qualification of the Appraisers ............................................................................ 64
ARTICLE XIX MISCELLANEOUS ...................................................................................... 64
19.1 Notices ................................................................................................................. 64
19.2 Brokerage Commissions ...................................................................................... 65
19.3 Estoppel Certificates ............................................................................................ 65
19.4 Indemnification .................................................................................................... 65
19.5 Waiver of Subrogation ......................................................................................... 66
19.6 Non-merger of Fee and Leasehold Estates .......................................................... 66
19.7 Time of the Essence ............................................................................................. 66
19.8 Joint and Several Obligations .............................................................................. 66
19.9 Captions ............................................................................................................... 66
19.10 Construction ......................................................................................................... 66
19.11 Governing Law .................................................................................................... 66

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19.12 Entire Agreement ................................................................................................. 66

19.13 Right to Request Injunction ................................................................................. 67
19.14 Severability .......................................................................................................... 67
19.15 BOT Action.......................................................................................................... 67
19.16 Cooperation in Execution, Delivery and Recordation of Documents.................. 67
19.17 Representations and Warranties of Tenant .......................................................... 67
19.18 Representations and Warranties of Landlord ....................................................... 68
19.19 Relationship of Parties ......................................................................................... 68
19.20 Attorneys’ Fees and Costs ................................................................................... 69
19.21 Survival of Covenants .......................................................................................... 69
19.22 Binding Effect ...................................................................................................... 69
19.23 Execution in Counterparts.................................................................................... 69
19.24 Memorandum of Lease ........................................................................................ 69
19.25 Liquor License ..................................................................................................... 69
19.26 Naming Rights ..................................................................................................... 69

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