Exhibit 10.09

 

TWELFTH AMENDMENT TO LEASE

 

THIS TWELFTH AMENDMENT TO LEASE (“Amendment”) dated this 12th day of May, 2015
(the “Amendment Date”), is made and entered into by and between HOLLIS STREET
INVESTORS II, L.L.C., a Delaware limited liability company (“Landlord”) and
LEAPFROG ENTERPRISES, INC., a Delaware corporation (“Tenant”).

 

BACKGROUND

 

A.           Landlord and Tenant entered into that certain Lease Agreement dated
November 14, 2000 (the “Original Lease”), as amended by that certain First
Amendment to Lease dated April 30, 2001, as further amended by that certain
Second Amendment to Lease dated February 22, 2002, as further amended by that
certain Third Amendment to Lease dated March 27, 2003, as further amended by
that certain Fourth Amendment to Lease dated March 27, 2003, as further amended
by that certain Fifth Amendment to Lease dated March 7, 2005, as further amended
by that certain Sixth Amendment to Lease dated March 22, 2006, as further
amended by that certain Seventh Amendment to Lease dated December 6, 2010, as
further amended by that certain Eighth Amendment to lease dated June 2, 2011, as
further amended by that certain Ninth Amendment to Lease dated December 9, 2013,
as further amended by that certain Tenth Amendment to Lease dated April 1, 2014,
and as further amended by that certain Eleventh Amendment to Lease dated as of
December 13, 2014 (collectively, the “Lease”). Any capitalized term used but not
defined in this Amendment shall have the meaning assigned to such term in the
Lease.

 

B.           Pursuant to the terms of the Lease, Tenant leases Suite 100,
consisting of approximately 31,980 rentable square feet of space (the “Suite 100
Building A Premises”), Suite 150, consisting of approximately 40,060 rentable
square feet of space (the “Suite 150 Building A Premises”) and Suite 125,
consisting of approximately 34,393 rentable square feet of space (the “Suite 125
Building A Premises”) located at 6401 Hollis Street, Emeryville, California
(“Building A”) and leases Suite 150, consisting of approximately 3,129 rentable
square feet of space (the “Suite 150 Building B Premises”) and Suite 160,
consisting of approximately 4,352 rentable square feet of space (the “Suite 160
Building B Premises”) located at 1480 64th Street, Emeryville, California
(“Building B”). The Suite 100 Building A Premises, the Suite 150 Building A
Premises, the Suite 125 Building A Premises, the Suite 150 Building B Premises
and the Suite 160 Building B Premises shall collectively be referred to herein
as the “Original Premises”. The Original Premises currently consists of
approximately 113,914 rentable square feet of space.

 

C.           The Term of the Lease expires on March 31, 2016.

 

D.           Tenant desires to surrender a portion of the Original Premises,
extend the Term and amend certain other the terms and conditions of the Lease as
set forth below:

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the parties hereby mutually agree as follows:

 

1.          Termination and Surrender of Portion of Original Premises. From and
after April 1, 2016 (the “Commencement Date”), Tenant shall relinquish
possession to Landlord of a portion of the Suite 125 Building A Premises
consisting of approximately 30,883 rentable square feet depicted as the
cross-hatched area on Exhibit A, attached hereto (the “Surrendered Suite 125
Space”), the Suite 150 Building B Premises and the Suite 160 Building B Premises
(collectively, the “Surrendered Premises”). Landlord shall cooperate with Tenant
with respect to marketing the Surrendered Premises for lease to other occupants
prior to the Commencement Date. Tenant shall surrender the Surrendered Premises
to Landlord in good condition, ordinary wear and tear and casualty excepted;
provided, however, Tenant shall be permitted to leave in the Surrendered Suite
125 Space any cubicle furniture to the extent not purchased and removed by the
existing occupant. Furthermore, Landlord acknowledges that the Surrendered Suite
125 Space contains HVAC units (the “Suite 125 HVAC Units”) which service
Tenant’s lab in the Premises (as herein defined), and accordingly, Landlord
hereby grants Tenant a non-exclusive license to enter the Surrendered Suite 125
Space, outside of standard business hours, upon prior written notice to Landlord
and the occupant of the Surrendered Suite 125 Space, on a quarterly (or
as-needed) basis to access, utilize, maintain and replace the Suite 125 HVAC
Units; provided that such entry by Tenant into the Surrendered Suite 125 Space
shall not unreasonably interfere with such occupants use thereof. For the
avoidance of doubt, from and after the Commencement Date, Tenant shall continue
to lease, occupy and possess approximately 3,510 rentable square feet of the
Suite 125 Building A Premises depicted as the cross-hatched area on Exhibit B,
attached hereto (the “Reduced Suite 125 Space”) pursuant to the terms and
conditions of the Lease (as amended hereby).

 

 

 

 

2.          Premises. From and after the Commencement Date, Landlord shall
continue to lease to Tenant, and Tenant shall continue to lease from Landlord
the Suite 100 Building A Premises, the Suite 150 Building A Premises and the
Reduced Suite 125 Space, which shall consist of approximately 75,550 rentable
square feet of space, pursuant to the terms and conditions of the Lease (as
amended hereby). From and after the Commencement Date, any reference to the
“Premises” in the Lease shall refer to and mean the Suite 100 Building A
Premises, the Suite 150 Building A Premises and the Reduced Suite 125 Space.
Tenant acknowledges that it is currently in possession of the Premises and
accordingly, Tenant (a) shall accept, on the Commencement Date, the Premises in
its then AS IS condition, but subject to Landlord’s repair and maintenance
obligations under the Lease and to any representations and warranties Landlord
made with respect to the Premises when originally delivered under the Lease, and
(b) acknowledges that Tenant is not relying on any representations or warranties
by any person regarding the Premises, except as expressly set forth in the Lease
(as amended hereby).

 

3.          Term. The Term shall expire on March 31, 2021 (the “Expiration
Date”), or such date upon which the Lease may be extended or cancelled or
terminated pursuant to the provisions of the Lease or by law. After the
Commencement Date, any reference to the “Term” in the Lease shall refer to the
Term with respect to the Premises.

 

4.          Base Rent. The monthly amount of Base Rent for the Premises and the
corresponding portion of the Term during which such monthly amount of Base Rent
for the Premises is payable by Tenant shall be as set forth on the following
table:

 

Applicable Portion of Term         Beginning on  Ending on  Rate
Per/Rentable
Sq. Ft./ Month   Monthly Base Rent  April 1, 2016  June 30, 2017  $0.00   $0.00 
July 1, 2016  March 31, 2017  $1.90   $143,545.00  April 1, 2017  March 31,
2018  $1.96   $147,851.35  April 1, 2018  March 31, 2019  $2.02   $152,286.89 
April 1, 2019  March 31, 2020  $2.08   $156,855.50  April 1, 2020  March 31,
2021  $2.14   $161,561.16 

 

Commencing on the Rent Commencement Date (as defined below), monthly
installments of Base Rent for the Premises shall be paid, without demand, and in
advance, on or before the first (1st) day of each calendar month during the
Term. The monthly installment of Base Rent for the Premises for any partial
month at the beginning or end of the Term shall be prorated. For the avoidance
of doubt, Tenant shall not be obligated to pay Base Rent for the period (the
“Abatement Period”) commencing on the Commencement Date until July 1, 2016 (the
“Rent Commencement Date”), but the Base Rent shall become immediately due and
payable if at any time during the Abatement Period, there is an Event of Default
by Tenant as described in the Lease.

 

5.          Tenant’s Percentage Share. From and after the Commencement Date,
“Tenant’s Percentage Share” shall mean Fifty-Five and Eight Hundredths Percent
(55.08%).

 

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6.          Expansion Option. From and after the Commencement Date, Tenant shall
have a right of first offer to lease all or any portion of the Surrendered Suite
125 Space, Suite 175 in Building A or any vacant space in Building B during the
Term (the “Offer Space”), in the event that all or any portion of the Offer
Space is vacant or becomes vacant during the Term. Prior to leasing all or any
portion of the Offer Space to any prospective third parties, Landlord shall
notify Tenant in writing (“Landlord’s Offer Notice”) of the general terms and
conditions, including without limitation, the size and location of the available
space (the “Available Space”), the rent, tenant allowance and parking ratio,
under which Landlord would be willing to lease such Available Space. Tenant
shall have an option, exercisable by written notice to Landlord (“Tenant’s
Acceptance Notice”) delivered to Landlord within ten (10) business days after
Tenant’s receipt of Landlord’s Offer Notice, to lease all or a portion of the
Available Space in accordance with the provisions contained in Landlord’s Offer
Notice. As a condition to Tenant’s right of first offer, as of the date Tenant
delivers Tenant’s Acceptance Notice to Landlord, there shall be no continuing
Event of Default (beyond applicable notice and cure periods) by Tenant under the
Lease. Promptly after Tenant provides Landlord with Tenant’s Acceptance Notice
for the lease of the Available Space pursuant to the preceding sentence, the
parties shall enter into an amendment to the Lease that incorporates the
Available Space as part of the Premises. If Tenant elects not to lease all or
any portion of the Available Space specified in Landlord’s Offer Notice, the
right of first offer shall terminate as to such Available Space and Landlord
shall be free to lease the Available Space to any third party; provided,
however, the terms and conditions of any lease with the third party are
substantially the same as those set forth in Landlord’s Offer Notice. For
purposes hereof, the terms offered to a third party shall be deemed to be
“substantially the same as those set forth in Landlord’s Offer Notice” if there
is no more than a seven percent (7%) reduction in the “bottom line” cost per
rentable square foot of the Available Space to the third party when compared
with the “bottom line” cost per rentable square foot under Landlord’s Offer
Notice, considering the following economic terms in both deals, respectively:
(i) base rent, (ii) tenant allowance, (iii) any tenant concessions, including
free rent, and (iv) brokerage commissions. If the terms and conditions of any
lease with such third party are not substantially the same as those set forth in
Landlord’s Offer Notice, Tenant shall have a right of first refusal to lease the
Available Space at the price and terms offered to the third party.

 

7.          Extension Option. Tenant shall have the option to renew the Lease
for one (1) additional period of five (5) years (the “Extension Period”). The
option to extend the term of the Lease under the preceding sentence shall be
exercised by written notice from Tenant to Landlord no later than twelve (12)
months prior to the expiration of the Term; provided that, as of the date of
such notice and as of such commencement date for the Extension Period: (a)
Tenant is not in default under the Lease beyond applicable notice and cure
periods, and (b) Tenant is then leasing and occupying either (i) the entire
Suite 100 Building A Premises, or (ii) the entire Suite 150 Building A Premises.
The Base Rent for the Extension Period shall be the amount determined in
accordance with Exhibit C, attached hereto. All other terms and conditions of
the Lease shall remain in full force and effect during the Extension Period.

 

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8.          Parking. From and after the Commencement Date, Tenant shall have the
right to use four (4) unreserved self-park spaces per 1,000 rentable square feet
of the Premises for a total of three hundred two (302) parking spaces in the
Building’s common parking facilities (“Allocated Parking Spaces”), twenty-four
hours a day, seven days a week (subject to Landlord’s repair and maintenance
obligations under the Lease and to Force Majeure), upon such terms and
conditions as may from time to time be reasonably established by Landlord.
Commencing on the first day of the first calendar month after the Commencement
Date and on the first (1st) day of each calendar month during the Term
thereafter, Tenant shall pay an initial charge of Fifty Dollars ($50.00) per
month for each Allocated Parking Space used by Tenant in the immediately
preceding month (the “Parking Charge”), and such Parking Charge, which shall be
payable in arrears, shall be considered additional Rent for all purposes under
this Lease. Commencing on the first anniversary of the Commencement Date and on
each anniversary of the Commencement Date for the remainder of the Term, the
Parking Charge shall increase by three percent (3%) of the amount paid as the
Parking Charge for the immediately preceding year. Tenant shall not use in
excess of the number of parking spaces for which it is paying the Parking
Charge, and Tenant agrees to cooperate with Landlord and other tenants in the
use of the parking facilities. Landlord reserves the right, in its reasonable
discretion, to determine whether the parking facilities are becoming crowded and
to allocate and assign parking spaces among Tenant and the other tenants;
provided Landlord shall not reduce the number of Allocated Parking Spaces to
which Tenant is entitled, and provided, further that Landlord shall not
implement a valet system without providing Tenant with prior written notice
thereof. Landlord shall not be liable to Tenant, nor shall the Lease be
affected, if any parking is impaired by moratorium, initiative, referendum, law,
ordinance, regulation or order passed, issued or made by any Governmental
Authority or by fire or other casualty. Upon Landlord’s request, Tenant shall
provide Landlord with written notice of the names of each party to whom Tenant
from time to time distributes Tenant’s parking rights hereunder (all of whom
must be employees, temporary employees, independent contractors, partners,
members, or shareholders, as applicable, of Tenant or any permitted subtenant
under the Lease), and upon Landlord’s request, Tenant shall cause each such
party to execute Landlord’s standard contract and waiver form for use of the
parking facilities. If the Parking Charge is not paid when due, and such failure
continues for thirty (30) days after written notice thereof to Tenant, then
Landlord may terminate Tenant’s rights under this Section 8 as to the number of
parking spaces for which the Parking Charge has not been paid in full until such
time as the Parking Charge has been paid in full. The parking rights in this
Section 8 are personal to the Tenant and any permitted subtenants, assignees or
Affiliates and shall not inure to the benefit of any other party. For the
avoidance of doubt, from and after the Commencement Date, all references to the
parking rights or spaces offered to Tenant or charges payable by Tenant in
connection therewith under Section 28 of the Original Lease and all amendments
to the Original Lease shall be deleted in their entirety and of no further force
and effect. For purposes of this Amendment, “Governmental Authority” shall mean
the United States of America, the state in which Building A is located, any
county, city, district, municipality or other governmental subdivision, court or
agency or quasi-governmental agency with jurisdiction and any board, agency or
authority associated with any such governmental entity. Notwithstanding the
above, Tenant shall continue to have the right to use unlimited parking spaces
beyond the Allocated Parking Spaces (the “Additional Parking Spaces”) until such
time as Landlord determines, in its sole discretion, that Tenant shall not be
permitted to use such Additional Parking Spaces, and provides Tenant with
written notice thereof. Tenant shall be required to pay Landlord the Parking
Charge for any Additional Parking Spaces used by Tenant in the same manner as
required for the Allocated Parking Spaces. Tenant shall not be required to use
all of the Allocated Parking Spaces and Tenant shall only be charged for the
number of Allocated Parking Spaces actually used by Tenant in any month which
shall be tracked by Landlord and Tenant on a monthly basis. Landlord shall
deliver a monthly invoice detailing the Parking Charges and the number of
parking spaces utilized by Tenant for the prior month. Tenant shall have the
right to request supporting documentation to confirm the Parking Charge owed by
Tenant and to perform a review of Landlord’s records with respect to Parking
Charges. If the review indicates that Tenant has rented fewer parking spaces
than Tenant has paid Parking Charges for in any given month, Tenant shall
receive a credit for any such overpayment within thirty (30) days. Conversely,
if the review indicates that Tenant has rented more parking spaces than Tenant
has paid Parking Charges for in any given month, Tenant shall pay any such
deficiency within thirty (30) days thereafter.

 

9.          Access Laws.

 

a.           Pursuant to California Civil Code Section 1938, Landlord hereby
discloses to Tenant that the Premises, (as defined herein), have not been
inspected by a Certified Access Specialist. For purposes hereof, “Access Laws”
shall mean the Americans With Disabilities Act of 1990 (including the Americans
with Disabilities Act Accessibility Guidelines for Building and Facilities) and
all other Governmental Requirements relating to the foregoing. For purposes of
this Amendment, “Governmental Requirement” shall mean any and all statutes,
ordinances, codes, laws, rules, regulations, orders and directives of any
Governmental Authority as now or later amended, promulgated or issued and all
current or future final orders, judgments or decrees of any court with
jurisdiction interpreting or enforcing any of the foregoing.

 

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b.           Tenant agrees to notify Landlord immediately if Tenant receives
notification or otherwise becomes aware of: (a) any condition or situation on,
in, under or around Building A which may constitute a violation of any Access
Laws, or (b) any threatened or actual lien, action or notice that Building A is
not in compliance with any Access Laws. If Tenant is responsible for such
condition, situation, lien, action or notice under the Lease, Tenant’s notice to
Landlord shall include a statement as to the actions Tenant proposes to take in
response to such condition, situation, lien, action or notice.

 

c.           Tenant shall not alter or permit any assignee or subtenant or any
other person to alter the Premises in any manner which would violate any Access
Laws or increase Landlord’s responsibilities for compliance with Access Laws,
without the prior written approval of the Landlord.

 

d.           Tenant hereby agrees to use reasonable efforts to notify Landlord
if Tenant makes any alterations, additions and/or improvements to the Premises
that might impact accessibility to the Premises or Building A under any Access
Laws. Landlord hereby agrees to use reasonable efforts to notify Tenant if
Landlord makes any alterations, additions and/or improvements to the Premises
that might impact accessibility to the Premises or Building A under any Access
Laws.

 

e.           The provisions of this Section 9 shall supersede any other
provisions in the Lease regarding Access Laws, to the extent inconsistent with
the provisions of any other paragraphs.

 

10.         HVAC Work. Landlord agrees that it shall rebalance the HVAC units in
the Suite 100 Building A Premises and the Suite 150 Building A Premises and
perform any repairs as a result of such rebalancing (the “HVAC Work”). The HVAC
Work shall be performed during non-business hours and shall be completed no
later than August 1, 2015.

 

11.         Tenant Rights to Common Areas. Subject to availability thereof and
all of Tenant’s rights and obligations under the Lease, Tenant shall have the
ongoing non-exclusive right to use the lobby and courtyard of Building A for
hosting special events subject to Landlord’s prior written consent thereto.
Landlord shall respond to Tenant’s written request to use the lobby and
courtyard of Building A for such events within five (5) business days and
Landlord’s failure to respond within such time period shall be deemed Landlord’s
consent thereto.

 

12.         Authority. Tenant represents and warrants that all necessary
corporate actions have been duly taken to permit Tenant to enter into this
Amendment and that the person signing this Amendment on behalf of Tenant has
been duly authorized and instructed to execute this Amendment. Landlord
represents and warrants that all necessary company actions have been duly taken
to permit Landlord to enter into this Amendment and that the person signing this
Amendment on behalf of Landlord has been duly authorized and instructed to sign
this Amendment.

 

13.         Brokers. Each of Landlord and Tenant warrants and represents that it
has dealt with no real estate broker in connection with this Amendment other
than Colliers International (“Brokers”) and that no broker is entitled to any
commission on account of this Amendment (other than Brokers). The party who
breaches this warranty shall defend, hold harmless and indemnify the other from
any loss, cost, damage or expense, including reasonable attorneys’ fees, arising
from the breach. Landlord is solely responsible for paying the commission of the
Brokers in accordance with a separate agreement.

 

14.         Ratification. Except as expressly modified above, all terms and
conditions of the Lease remain in full force and effect and are hereby ratified
and confirmed. Landlord and Tenant hereby acknowledge and agree that, except as
provided in this Amendment, the Lease has not been modified, amended, canceled,
terminated, released, superseded or otherwise rendered of no force or effect.

 

15.         Entire Agreement. This Amendment constitutes the sole and only
agreement of the parties hereto with respect to the subject matter hereof (other
than the Lease, as amended hereby) and supersedes any prior understandings or
written or oral agreements between the parties respecting the subject matter
hereof and cannot be changed except by their written consent.

 

16.         Counterparts. This Amendment may be executed in counterparts, which
together shall constitute one agreement. For purposes of determining the
enforceability of this Amendment, facsimile or PDF signatures shall be deemed
originals.

 

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17.         Rule of Construction. The parties hereto acknowledge that the
parties and their respective counsel have each reviewed and revised this
Amendment, and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Amendment or any exhibits hereto.

 

[Signature page follows.]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
Amendment Date.

 

Designated Address for Landlord:

 

Hollis Street Investors II LLC

c/o Bentall Kennedy (U.S.) Limited Partnership

Attn: Dir. of Asset Management

1215 Fourth Avenue, Suite 2400

Seattle, WA 98161

Facsimile: 206-682-4769

 

and to:

 

Hollis Street Investors II LLC

c/o Bentall Kennedy (U.S.) Limited Partnership

Attn: Dir. of Asset Management

7315 Wisconsin Ave., Ste. 350 West

Bethesda, MD 20814

Facsimile: 301-656-9339

 

and to:

 

MEPT Edgemoor REIT, LLC

c/o NewTower Trust Company

Attn: President

3 Bethesda Metro Center, Suite 1600

Bethesda, MD 20814

Facsimile: 240-235-9961

 

 

Designated Address for Tenant:

 

Leapfrog Enterprises, Inc.

Attn: Director of Real Estate and Facilities

6401 Hollis Street

Emeryville, CA 94608

 

With a copy to:

 

Leapfrog Enterprises, Inc.

Attn: General Counsel

6401 Hollis Street

Emeryville, CA 94608

 

LANDLORD:

 

Hollis Street Investors II LLC, a Delaware limited liability company

 

By: Hollis Street Investors, L.L.C, a Delaware limited liability company, its
Sole Member             By: MEPT Hollis Street LLC, a Delaware limited liability
company, its Manager               By: MEPT Edgemoor REIT LLC, a Delaware
limited liability company, its Manager                 By: Bentall Kennedy
(U.S.) Limited Partnership, its Authorized Signatory                   By:
Bentall Kennedy (U.S.) G.P. LLC, its General Partner                       By:
/s/ Bruce Tuesley           Name: Bruce Tuesley           Its: Vice President  
                      By: /s/ Mark D. Reinikka           Name: Mark D. Reinikka
          Its: Senior Vice President             May 29, 2015

 

TENANT:

 

Leapfrog Enterprises, Inc., a Delaware corporation

 

By: /s/ Raymond L. Arthur   Name:  Raymond L. Arthur   Its: CFO  

 

 

 

 

Exhibit A

DEPICTION OF SURRENDERED SUITE 125 SPACE

 

 

 

 

Exhibit B

DEPICTION OF REDUCED SUITE 125 SPACE

 

 

 

 

Exhibit C

Rent Determination in Extension PERIOD

 

1.          Tenant shall have the option to extend the Term for the Extension
Period. Base Rent for the Extension Period shall be one hundred percent (100%)
of the then-prevailing market rate for comparable space in the area (“Fair
Market Value”) as determined in accordance with this Exhibit C.

 

2.          In the event Landlord and Tenant are unable to agree upon a mutually
acceptable Fair Market Value by the date that is four (4) months prior to the
expiration of the Term (the “Fair Market Deadline”), Landlord shall, within
fifteen (15) days following the Fair Market Deadline, appoint an appraiser to
complete an appraisal of the Fair Market Value within fifteen (15) days after
the appointment of Landlord’s appraiser and Landlord shall deliver a copy
thereof to Tenant promptly upon receipt by Landlord (“Landlord Appraisal”).

 

3.        If Tenant delivers notice to Landlord of Tenant’s disapproval of the
Landlord Appraisal within five (5) Business Days of Tenant’s receipt of the
Landlord Appraisal, then Tenant shall have ten (10) days to select an appraiser
to deliver an additional appraisal of the Fair Market Value (the “Tenant
Appraisal”). The Tenant Appraisal shall be delivered within fifteen (15) days
after the appointment of Tenant’s appraiser and Tenant shall deliver a copy
thereof to Landlord promptly upon receipt by Tenant.

 

4.          If Landlord delivers notice to Tenant of Landlord’s disapproval of
the Tenant Appraisal within fifteen (15) Business Days of Landlord’s receipt of
the Tenant Appraisal, then Landlord and Tenant shall each cause their respective
appraisers to jointly select a third appraiser (the “Joint Appraiser”). If the
two appraisers fail to select a Joint Appraiser within thirty (30) days
following the date that Tenant received Landlord’s notice of disapproval of the
Tenant Appraisal, either Landlord or Tenant may petition a court of competent
jurisdiction to appoint a third appraiser. The Joint Appraiser shall, within
fifteen (15) days of appointment, select either the Landlord Appraisal or the
Tenant Appraisal as the Final Appraisal.

 

5.          Notwithstanding anything to the contrary herein, the Fair Market
Value for the Extension Period shall be either (i) the Fair Market Value as
expressed in either the Landlord Appraisal or the Tenant Appraisal, if both
Landlord and Tenant agree that one of such appraisals properly reflects the Fair
Market Value; or (ii) the Fair Market Value reflected in the Final Appraisal, as
selected by the Joint Appraiser.

 

6.          All appraisers appointed hereunder shall be, at the time of their
appointment, licensed real estate brokers with at least ten (10) years
commercial real estate experience in the East Bay of California. The party whose
appraisal the Joint Appraiser did not select shall be responsible for the cost
of the Joint Appraiser’s services, otherwise, the cost of the Landlord Appraisal
shall be borne by Landlord and the cost of the Tenant Appraisal shall be borne
by the Tenant.

 

7.          In the event that the Fair Market Value of the Premises is not
determined in accordance with this Exhibit C by the commencement date for the
Extension Period, Tenant shall pay Base Rent to Landlord at the same rates
payable for the Premises immediately preceding the commencement date of the
Extension Period, and the parties acknowledge and agree that, after the
determination of Fair Market Value, the Base Rent shall be (a) the Fair Market
Value going forward for the remainder of the Extension Period, and (b)
retroactively adjusted such that any overpayment or underpayment of such Base
Rent by Tenant to Landlord for the period prior to the determination of Fair
Market Value shall be paid within thirty (30) days thereafter.