exv10w1



 






EXHIBIT 10.1




Execution Draft




LEASE




     THIS LEASE AGREEMENT, dated as of the Execution Date (this “Lease”), is by and between
United Health Care Services, Inc., a Minnesota corporation, as landlord (“Landlord”), and
Novavax, Inc., a Delaware corporation, as tenant (“Tenant”).




	1.	 	BASIC LEASE PROVISIONS





     1.1 Basic Lease Definitions. In this Lease, the following defined terms have the
meanings indicated.



	 	 	 	 	 
	(a)

	 	Execution Date
	 	As of April   , 2005.
	 
	 	 	 	 
	(b)

	 	Building:
	 	1 Taft Court, Rockville, Maryland, which is deemed to contain 34,000 RSF
	 
	 	 	 	 
	(c)

	 	Premises:
	 	Suite 200 (identified on
Exhibit A), located on the 2nd floor of the
Building and deemed to contain 11,743 RSF.
	 
	 	 	 	 
	(d)

	 	Use:
	 	General administrative non-governmental office use consistent with
that of a first-class office building, bench-top medical
laboratory purposes and, to the extent permitted by applicable
law and zoning codes, light assembly purposes.
	 
	 	 	 	 
	(e)

	 	Scheduled Term:
	 	60 months.
	 
	 	 	 	 
	(f)

	 	Commencement Date:
	 	April 1, 2005.
	 
	 	 	 	 
	(g)

	 	Expiration Date
	 	March 31, 2010
	 
	 	 	 	 
	(h)

	 	Base Rent:
	 	The following amounts payable in accordance with Article 4






	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Annual Base Rent	 	Annual Base Rent for	 	Monthly Base Rent
	Months	 	Rate per RSF	 	11,743 RSF	 	for 11,743 RSF
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Commencement Date until

	 	$	0.00	 	 	$	0.00	 	 	$	0.00	 
	May 30, 2005
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	June 1, 2005-

	 	$	20.00	 	 	$	234,860.00	 	 	$	19,571.67	 
	March 31, 2006
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	April 1, 2006-

	 	$	20.60	 	 	$	241,905.84	 	 	$	20,158.82	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	March 31, 2007

	 	 	($20.00 x 1.03	)	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	April 1, 2007-

	 	$	21.22	 	 	$	249,186.46	 	 	$	20,765.54	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	March 31, 2008

	 	($20.60 x 1.03)	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	April 1, 2008-

	 	$	21.86	 	 	$	256,701.98	 	 	$	21,391.83	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	March 31, 2009

	 	($21.22 x 1.03)	 	 	 	 	 	 	 	 






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	April 1, 2009-

	 	$	22.52	 	 	$	264,452.36	 	 	$	22,037.70	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	February 28, 2010

	 	($21.86 x 1.03	)	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	March 1, 2010 to

	 	$	0.00	 	 	$	0.00	 	 	$	0.00	 
	March 31, 2010
	 	 	 	 	 	 	 	 	 	 	 	 






	 	 	 	 	 
	(i)

	 	Base Year (“Base Year”)
	 	Calendar Year 2005
	 
	 	 	 	 
	(j)

	 	Tenant’s Share:
	 	Thirty-four and five tenths percent (34.5%)
which is 11,743 RSF comprising the Premises
divided by 34,000 RSF comprising the Building
	 
	 	 	 	 
	(k)

	 	Security Deposit:
	 	$19,571.67
	 
	 	 	 	 
	(l)

	 	Notice Address:
	 	For each party, the following address(es):






	 	 	 
	To Landlord	 	To Tenant
	 
	 	 
	United HealthCare Services, Inc.

	 	Novavax, Inc.
	Attention: Lease Administration

	 	Attention: Dennis W. Genge
	MN008-E305

	 	508 Lapp Road
	9900 Bren Road

	 	Malvern, PA 19355
	Minnetonka, MN 55343
	 	 
	 
	 	 
	With a copy to:

	 	With a copy to:
	 
	 	 
	United HealthCare Services, Inc.

	 	David A. White, Esq.
	Facility Manager

	 	White White & Van Etten LLP
	800 Oak Street

	 	55 Cambridge Parkway
	Frederick, MD 21703

	 	Cambridge, MA 02142






	 	 	 	 	 
	(m)

	 	Brokers:
	 	Trammell Crow Company (for Landlord); and USI Real Estate Brokerage Services, Inc. (for Tenant).
Brokers will be paid by Landlord in accordance with a separate agreement.
	 
	 	 	 	 
	(n)

	 	Liability Limit:
	 	$1,000,000.00 for any one accident or occurrence.
	 
	 	 	 	 
	(o)

	 	Construction Allowance:
	 	$58,715.00 ($5.00 times 11,743 RSF).
	 
	 	 	 	 
	(p)

	 	Business Hours:
	 	From 8:00 a.m. to 6:00 p.m. on Monday through Friday and from 8:00 a.m. to 12:00 noon on Saturday,
excepting: New Year’s Day, Martin Luther King, Jr. Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and the day after Thanksgiving Day, Christmas Day, and other legal holidays
commonly observed in similar class office buildings in the locale of the Building (“Holidays”).






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	2.	 	PROJECT





     2.1 Project. The “Project” is collectively (i) the Building; (i) the land (“Land”) (whether
leased or owned) on which the Building is located; (iii) all Common Areas servicing the Building
and the Land; and (iv) all easements, licenses, appurtenants and rights in connection
therewith.



     2.2 Base Building. “Base Building” means Building Structure and Mechanical Systems,
collectively, defined as follows:




	 	(a)	 	Building Structure. “Building Structure” means the foundations, floor/ceiling slabs,
roofs, exterior walls, load-bearing interior walls, exterior glass and mullions,
columns, beams, shafts, stairs, stairwells, Building mechanical, electrical and
telephone closets, Common Areas, public areas, and any other structural components
in the Building. The Building Structure excludes the Leasehold Improvements (and
similar improvements to other premises) and the Mechanical Systems.
	 
	 	(b)	 	Mechanical Systems. “Mechanical Systems” means the mechanical,
electronic, physical or informational systems generally serving the Building
(including those serving the Premises on a non-exclusive basis) or Common Areas,
including the sprinkler, plumbing, heating, ventilating, air conditioning, lighting,
communications, security, drainage, sewage, waste disposal, vertical transportation,
and fire/life safety systems.





     2.3 Common Areas. Tenant will have a non-exclusive right to use the Common Areas
subject to the terms of this Lease. “Common Areas” means those interior and exterior common
and public areas on the Land and in the Building (and appurtenant easements) designated by
Landlord for the non-exclusive use by Tenant in common with Landlord, other tenants and occupants, and
their employees, agents and invitees, including any parking facilities serving the Building that are
owned or leased by Landlord.



     2.4 Premises. Landlord leases to Tenant the Premises subject to the terms of this Lease.
Except as provided elsewhere in this Lease, by taking possession of the Premises Tenant accepts the
Premises in their “as is” condition and with all faults, and the Premises are deemed in good
order, condition, and repair. The Premises include the Leasehold Improvements and excludes certain areas,
facilities and systems, as follows:




	 	(a)	 	Leasehold Improvements. “Leasehold improvements” means all
non-structural improvements in the Premises or, to the extent referenced below,
exclusively serving the Premises, and any structural improvements to the Building
made to accommodate Tenant’s particular use of the Premises. The Leasehold
Improvements may exist in the Premises as of the Execution Date, or be installed by
Landlord or Tenant under this Lease at the cost of either party. The Leasehold
Improvements include: (1) interior non-load-bearing walls and partitions (including
those surrounding structural columns entirely or partly within the Premises); (2) the
interior one-half of walls that separate the Premises from adjacent areas designated
for leasing; (3) the interior drywall on exterior structural walls, and walls that
separate the Premises from the Common Areas (defined below); (4) stairways and
stairwells connecting parts of the Premises on different floors, except those
required for emergency exiting; (5) the frames, casements, doors, windows and
openings installed in or on the improvements described in (1-4), or that provide
entry/exit to/from the Premises;





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	 	 	 	(6) all hardware, fixtures, cabinetry, railings, paneling, woodwork and finishes in
the Premises or that are installed in or on the improvements described in (1-5); (7)
if any part of the Premises is on the ground floor, the ground floor exterior
windows (including mullions, frames and glass); (8) integrated ceiling systems
(including grid, panels and lighting); (9) carpeting and other floor finishes; (10)
kitchen, rest room, laboratory or other similar facilities that exclusively serve
the Premises (including plumbing fixtures, toilets, sinks and built-in appliances);
and (11) the sprinkler heads, plumbing fixtures and lighting fixtures. Notwithstanding anything to the
contrary contained herein, Leasehold Improvements shall also include the heating,
ventilating and air conditioning systems exclusively serving the Premises.
	 
	 	(b)	 	Exclusions from the Premises. The Premises does not include: (1) any
areas above the finished ceiling or integrated ceiling systems, or below the finished
floor coverings that are not part of the Leasehold Improvements, (2) janitor’s
closets, (3) stairways and stairwells to be used for emergency exiting or as Common Areas, (4)
rooms for Mechanical Systems or connection of telecommunications equipment, (5) vertical
transportation shafts, (6) vertical or horizontal shafts, risers, chases, flues
or ducts, and (7) any easements or rights to natural light, air or view.





     2.5 Building Standard. “Building Standard” means the minimum or exclusive type,
brand, quality or quantity of materials Landlord designates for use in the Building from time to time.



     2.6 Tenant’s Personal Property. “Tenant’s Personal Property” means those trade
fixtures, furnishings, equipment, work product, inventory, stock-in-trade and other personal property
of Tenant that are not permanently affixed to the Project in a way that they become a part of the
Project and will not, if removed, impair the value of the Leasehold Improvements that Tenant is
required to deliver to Landlord at the end of the Term under §3.4.




	3.	 	TERM





     3.1 Term. “Term” means the period that begins on the Commencement Date and ends
on the Expiration Date, subject to renewal, extension or earlier termination as may be further
provided in this Lease. “Month” means a full calendar month of the Term.



     (a) Commencement Date. “Commencement Date” is April 1, 2005.



     (b) Expiration Date. “Expiration Date” means March 31, 2010.



     3.2
Option to Extend Term. (a) Provided this Lease is in full force and effect and that
no Default by Tenant, as defined in this Lease, is in existence either on the date of Tenant’s
Extension Notice (as hereinafter defined) or, unless waived in writing by Landlord for the
purpose of this Extension Option (as hereinafter defined), on the Extension Effective Date, and provided
further that this Lease shall not have theretofore been assigned and the Premises (nor any portion
thereof) shall have theretofore been subleased (other than pursuant to an assignment or sublease not
requiring Landlord’s consent thereto), Tenant shall have the right, at Tenant’s option, to extend the
Term of this Lease for one (1) additional period of five (5) years (the “Optional Extended Term”)
commencing on the day following the Expiration Date (the “Extension Effective Date”) and ending
on the fifth (5th) anniversary of the Expiration Date (the “Optional Extended Term
Expiration Date”). Such option to extend (the “Extension Option”) shall be exercised by Tenant giving
written notice (“Tenant’s Extension Notice”) of the exercise thereof to Landlord at least nine (9)
months before the Expiration Date. If Tenant shall fail to timely give Tenant’s Exercise Notice as
provided



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herein, the Extension Option shall be deemed automatically and irrevocably waived by Tenant. The
Term as extended pursuant to the Extension Option shall be upon the same terms, covenants, and
conditions as set forth in this Lease except that the Base Rent payable during the Optional
Extended Term, if exercised, shall equal the Market Rate (defined below). In the event Tenant
exercises the Extension Option as provided herein, then Tenant shall, within fifteen (15) days
after Landlord’s request, execute and deliver an amendment to the Lease memorializing such
exercise and the Rent payable by Tenant during the Optional Extended Term. At any time within
twelve (12) months prior to the Expiration Date, Tenant may request that Landlord furnish Tenant
with Landlord’s determination of the Market Rent for the Optional Extended Term, which Landlord shall furnish
within thirty (30) days after such request.




          (b) “Market Rate” means the rate then being offered by landlords for comparable bench-top
medical laboratory space in the Rockville, Maryland market and for a comparable term, taking into
account any tenant improvement allowances or other leasing concessions offered in connection
therewith.



     3.3 Holdover. If Tenant keeps possession of the Premises after the end of the Term
(a “Holdover”) without Landlord’s prior written consent (which may be withheld in its sole
discretion), then in addition to the remedies available elsewhere under this Lease or by Law, Tenant will
be a tenant at sufferance and must comply with all of Tenant’s obligations under this Lease, except
that during the Holdover Tenant will pay 200% of the monthly Base Rent and Additional Rent last
payable under this Lease, without prorating for any partial month of Holdover. Tenant shall
indemnify and defend Landlord from and against all direct claims and damages that Landlord
suffers due to Tenant’s failure to return possession of the Premises to Landlord at the end of the
Term. Landlord’s deposit of Tenant’s Holdover payment will not constitute Landlord’s consent to a
Holdover, or create or renew any tenancy.



     3.4 Condition on Expiration. By the end of the Term, Tenant will return possession of
the Premises to Landlord vacant, free of Tenant’s Personal Property, in broom-clean condition,
and with all Leasehold Improvements in good working order and repair (excepting ordinary wear and
tear), except that Tenant will remove Tenant’s Wiring and those Leasehold Improvements and
Alterations that, when approved by Landlord, were required to be removed at the end of the
Term. If Tenant fails to return possession of the Premises to Landlord in this condition, Tenant shall
reimburse Landlord for the costs incurred to put the Premises in the condition required under
this §3.4. Tenant’s Personal Property left behind in the
Premises after the end of the Term will
be considered abandoned and Landlord may move, store, retain or dispose of these items at
Tenant’s cost.




	4.	 	RENT





     4.1
Base Rent. Tenant shall prepay the Base Rent for July, 2005 by the Execution Date,
which Landlord will apply toward Tenant’s July, 2005 Base Rent obligation under this Lease.
During the Term, Tenant shall pay all other Base Rent in advance, in monthly installments, on
the 1st of each calendar month. Base Rent for any partial month will be prorated.



     4.2 Additional Rent. Tenant’s obligation to pay Taxes and Expenses under this §4.2 is
referred to in this Lease as “Additional Rent.”




	 	(a)	 	Taxes. For each calendar year after the Base Year (each, a
“Comparison Year”), Tenant shall pay as in the manner described below the Tenant’s
Share of the amount





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	 	 	 	that Taxes for the Comparison Year exceed Taxes for the Base Year. “Taxes” means
the total costs incurred by Landlord for: (1) real and personal property taxes and
assessments (including ad valorem and special assessments) levied on the Project and
Landlord’s personal property used in connection with the Project; (2) taxes on rents
or other income derived from the Building; (3) capital and place-of-business taxes; (4)
taxes, assessments or fees in lieu of the taxes described in (l)
through (3) above;
and (5) the reasonable costs incurred to reduce the taxes described in (1) through (4)
above. Taxes exclude net income taxes and taxes paid under §4.3.
	 
	 	(b)	 	Expenses. For each Comparison Year, Tenant shall pay in the manner described below
the Tenant’s Share of the amount that Expenses for the Comparison Year exceed Expenses for
the Base Year. “Expenses” means the total costs incurred by Landlord to operate, manage,
administer, equip, secure, protect, repair, replace, refurbish, clean, maintain, decorate
and inspect the Project, including a market fee to manage the Project
of not more than 4% of
the gross revenue of the Project. Expenses that vary with occupancy will be calculated as if
the Project is 95% occupied and operating and all such services are provided to all tenants.






	 	(1)	 	Expenses include:






	 	(A)	 	Standard Services provided under §6.1;

	 
	 	(B)	 	Repairs and maintenance performed under §7.2;
	 
	 	(C)	 	Insurance maintained under §9.1 (including deductibles paid);
	 
	 	(D)	 	Wages, salaries and benefits of personnel up to the level
of property manager to the extent they render services to the Project;
	 
	 	(E)	 	Costs of operating the Project management office
(including reasonable rent);
	 
	 	(F)	 	Costs of operating, repairing or maintaining the parking
facilities serving the Project;
	 
	 	(G)	 	Charges for replacement of electronic key cards; and
	 
	 	(H)	 	Costs which would, under generally accepted accounting
principles, be deemed capital costs or capital expenditures may be included
in the definition of “Expenses” only to the extent that such costs: (i)
relate to an expenditure which is required to comply with changes in
applicable Laws which occur after the Commencement Date; or (ii) relate to
an expenditure which is incurred based upon a reasonable forecast that such
expenditure will reduce in future years another cost which would be deemed
an Expense; and (iii) are amortized, with interest of eight percent (8%) per
annum, on a straight-line basis over the useful life of the improvement to
which such cost relates, with only the amortized amount for each year to be
included in Expenses for such year.






	 	(2)	 	Expenses exclude:






	 	(A)	 	Taxes;





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	 	(B)	 	Mortgage payments (principal and interest), and ground lease rent;
	 
	 	(C)	 	Commissions, advertising costs, attorney’s fees and costs
of improvements in connection with leasing space in the Building;
	 
	 	(D)	 	Costs reimbursed by insurance proceeds or tenants of the
Building (other than as Additional Rent);
	 
	 	(E)	 	Depreciation;
	 
	 	(F)	 	Collection costs and legal fees paid in disputes with tenants;
	 
	 	(G)	 	Costs to maintain and operate the entity that is Landlord (as
opposed to operation and maintenance of the Project); and
	 
	 	(H)	 	In the Base Year, only, installments of costs amortized
under subsection (c) of this §4.2.
	 
	 	(U)	 	Tenant specific costs billed to and paid by specific tenants.






	 	(c)	 	Amortization and Accounting Principles.






	 	(1)	 	Landlord will use sound real estate accounting and management principles,
consistently applied, to determine Additional Rent.
	 
	 	(3)	 	Any special assessment will only be included in Taxes to the extent it is
levied after the Commencement Date and then only based upon that installment thereof
(including interest thereon) payable in a particular tax year assuming such special
assessment was spread over the longest term available to Landlord by the assessing
authority and at the lowest interest rate available from the assessing authority.






	 	(d)	 	Estimates. Landlord will reasonably estimate Additional Rent each calendar year
that Additional Rent may be payable. Tenant will pay the estimated Additional Rent
in advance, in monthly installments, on the first day of each month, until the estimate
is revised by Landlord. Landlord may reasonably revise its estimate during a
calendar year and the monthly installments after the revision will be paid based on
the revised estimate. The aggregate estimates of Additional Rent paid by Tenant in a
calendar year is the “Estimated Additional Rent.”
	 
	 	(e)	 	Settlement. As soon as reasonably practical after the end of each calendar year that
Additional Rent is payable, Landlord will give Tenant a statement of the actual
Additional Rent for the calendar year. The statement of Additional Rent is
conclusive, binds Tenant, and Tenant waives all rights to contest the statement,
except for items of Additional Rent to which Tenant objects by notice to Landlord
given within one year after receipt of Landlord’s statement; however, Tenant’s
objection will not relieve Tenant from its obligation to pay Additional Rent pending
resolution of any objection. Upon Tenant’s request, Landlord shall provide Tenant
with a copy of the tax bill or bills evidencing the Taxes included in Additional Rent.
If the Additional Rent exceeds the Estimated Additional Rent for the calendar year,
then Tenant shall pay the underpayment to Landlord in a lump sum as Rent within 30
days after receipt of Landlord’s statement of Additional Rent. If the Estimated
Additional Rent exceeds the Additional Rent for the calendar year, then Landlord





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	 	 	 	shall credit the overpayment against Rent next due; provided, however, that if the
amount of such overpayment exceeds the Rent due for the balance of
the Term,
Landlord shall promptly refund such excess to Tenant. However, if the Term ends
during a calendar year, then Landlord’s and Tenant’s obligations under this
§4.2(e) shall survive the end of the Term.
	 
	 	(f)	 	Audit Right. Landlord shall maintain records concerning
estimated and actual Expenses for no less than twelve (12) months following the period
covered by the statement or statements furnished Tenant, after which time Landlord may dispose of
such records. Provided that Tenant is not then in Default of its obligation to pay
Base Rent, Additional Rent or other payments required to be made by it under this
Lease and provided that Tenant is not otherwise in Default under this Lease, Tenant
may, at Tenant’s sole cost and expense, cause a Qualified Person (defined below) to
inspect Landlord’s Expense records. Within ninety (90) calendar days after receipt
of Landlord’s written statement under Section 4.2(e) of Expenses for the previous
year, Tenant must provide Landlord written notice if Tenant elects to cause a
Qualified Person to inspect Landlord’s records. Such inspection, if any, shall be
conducted no more than once each year of the Term, during Landlord’s normal
business hours at least twenty (20) calendar days’ after Tenant’s written notice of its
intent to inspect, but not more than three (3) months after such notice. Any errors
disclosed by the review shall be promptly corrected by Landlord; provided, however,
that if Landlord disagrees with any such claimed errors, Landlord shall have the right
to cause another review to be made by an independent auditor of Landlord’s choice.
In the event the results of the review of records (taking into account, if applicable,
the results of any additional review caused by Landlord) reveal that Tenant has
overpaid obligations for a preceding period, the amount of such overpayment shall be
credited against Tenant’s subsequent installment(s) of Base Rent, Additional Rent
and other payments due to Landlord under the Lease. In the event that such results
show that Tenant has underpaid its obligations for a preceding period, the amount of
such underpayment shall be paid by Tenant to Landlord with the next succeeding
installment obligation of estimated Expenses. If the actual Expenses allocable to the
Premises for any given year were improperly computed and if the actual Expenses
allocable to the Premises are overstated by more than five percent (5%), Landlord
shall reimburse Tenant for the cost of its audit.





     4.3
Other Taxes. Upon demand, Tenant will reimburse Landlord for taxes paid by
Landlord on (a) Tenant’s Personal Property, (b) Rent, (c) Tenant’s occupancy of the Premises, or
(d) this Lease. If Tenant cannot lawfully reimburse Landlord for these taxes, then the Base
Rent will be increased to yield to Landlord the same amount after these taxes were imposed as Landlord
would have received before these taxes were imposed. Notwithstanding anything to the contrary
contained in this Lease, in no event will Tenant be obligated to pay any income, franchise, excise,
gross receipt, gift, succession, estate, transfer or inheritance taxes or income taxes measured by
the net income of Landlord from all sources.



     4.4
Terms of Payment. “Rent” means all amounts payable by Tenant under this Lease
and the Exhibits, including Base Rent and Additional Rent. If a time for payment of an item of
Rent is not specified in this Lease, then Tenant will pay Rent within 30 days after receipt of
Landlord’s statement or invoice. Unless otherwise provided in this Lease, Tenant shall pay Rent without
notice,



8









 




demand, deduction, abatement or setoff, in lawful U.S. currency, at Landlord’s Notice Address.
Landlord will send invoices payable by Tenant to Tenant’s Notice Address; however, neither
Landlord’s failure to send an invoice nor Tenant’s failure to receive an invoice for Base Rent
(and installments of Estimated Additional Rent) will relieve Tenant of its obligation to timely
pay Base Rent (and installments of Estimated Additional Rent). Each partial payment by Tenant
shall be deemed a payment on account; and, no endorsement or statement on any check or any
accompanying letter shall constitute an accord and satisfaction, or affect Landlord’s right to
collect the full amount due. No payment by Tenant to Landlord will be
deemed to extend the Term or render any notice, pending suit or judgment ineffective.
By notice to the other, each party may change its Notice Address.




     4.5 Late Payment. If Landlord does not receive all or part of any item of Rent when due, then
Tenant shall, from and after the second such occurrence in any given calendar year, pay Landlord a
one time “Late Charge” of 5% of the overdue amount. Tenant agrees that the Late Charge is not a
penalty, and will compensate Landlord for costs not contemplated under this Lease that are
impracticable or extremely difficult to fix. Landlord’s acceptance of a Late Charge does not waive
Tenant’s default.




	5.	 	USE & OCCUPANCY





     5.1 Use. Tenant shall use and occupy the Premises only for the Use. Landlord does not
represent or warrant that the Project is suitable for the conduct of Tenant’s particular business.
Tenant shall not test its emergency generators during Business Hours.



     5.2 Compliance with Laws and Directives.




	 	(a)	 	Definition of Laws; Tenant’s Compliance. “Laws” are, collectively, all federal, state,
local and municipal laws, statutes, rules, regulations, orders, ordinances, codes,
orders and directives, including, without limitation, local building and zoning
codes, and the Americans with Disabilities Act. Subject to the remaining terms of this
Lease, Tenant shall comply at Tenant’s expense with all directives of Landlord’s
insurers or Laws concerning:






	 	(1)	 	The Alterations (subject to the provisions of Article 8 of this Lease),
	 
	 	(2)	 	Tenant’s employer/employee obligations, or
	 
	 	(3)	 	Tenant’s failure to comply with this Lease.






	 	(b)	 	Landlord’s Compliance. Subject to the remaining terms of this Lease, Landlord shall
comply at Landlord’s cost with all directives of Landlord’s insurers or Laws
concerning the Project other than those that are Tenant’s obligation under
subsection (a). The costs of compliance under this subsection (b) will be included in
Expenses to the extent allowed under §4.2.





     5.3 Occupancy. Tenant shall not interfere with Building services or other tenants’ rights
to quietly enjoy their respective premises or the Common Areas. Tenant shall not make or continue
any nuisance, including any objectionable odor, noise, fire hazard, vibration, or wireless or
electromagnetic transmission. Tenant will not maintain any Leasehold Improvements or use the
Premises in a way that increases the cost of insurance required under §9.2, or requires insurance in
addition to the coverage required under §9.2.



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     5.4 Tenant’s Environmental, Health and Safety Compliance Requirements.



          5.4.1 For purposes of this Section, and in addition to any other provision of this Lease,
the following requirements apply:




	 	(a)	 	“Hazardous Materials Laws” shall mean all federal, state and local laws, statutes, ordinances, orders, regulations, plans, policies and decrees now or hereafter
in effect and applicable to the Project which relate to (i) Hazardous Materials; (ii)
the use, treatment, storage, generation, manufacture, emission, transportation or
disposal of Hazardous Materials or solid waste; or (iii) occupation safety and
health, industrial hygiene, land use or the protection of human, plant or animal
health, safety or welfare, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C.
§9601 et
seq.)(“CERCLA”); the Hazardous Materials
Transportation Act (49 U.S.C. §180 et
seq.); the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. §136
et seq.); the Resource Conservation and Recovery Act
(42 U.S.C. §6901 et
seq.)(“RCRA”); the Toxic Substances Control
Act (42 U.S.C. 7401et seq.); the Clean
Air Act (42 U.S.C. §740 et seq.); the Federal Water Pollution Control Act (33
U.S.C. §1251 et seq.); the Occupational Safety and
Health Act (29 U.S.C. §651 et
seq.); the Safe Drinking Water Act (42 U.S.C. 300f et
seq.); and the rules,
regulations and ordinances of applicable federal, state and local agencies and
bureaus, as amended from time to time.






	 	(b)	 	“Hazardous Materials” shall mean (i) any chemical, compound, material, mixture or substance that is now or hereafter defined or listed in, or otherwise classified pursuant to, any applicable Hazardous Materials Laws as a “hazardous substance”, “hazardous material”, “hazardous waste”, “extremely hazardous waste”,
“acutely hazardous waste”, “radioactive waste”, “infectious waste”, “biohazardous waste”, “toxic substance”, “pollutant”, “toxic pollutant”, “contaminant” and
any other term or terms not mentioned herein intended to define, list, or classify
substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, “EP toxicity” or “TCLP
toxicity”; (ii) petroleum, natural gas, natural gas
liquids, liquified natural gas, synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas) and
ash produced by a resource recovery facility utilizing a municipal solid waste
stream, and drilling fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, natural gas, or geothermal
resources; (iii) asbestos in any form; (iv) urea formaldehyde foam insulation; (v)
transformers or other equipment which contain dielectric fluid containing levels
of polychlorinated biphenyls (PCBs); (vi) radon; (vii) medical or biological substances or wastes including, without limitation, bloodborne pathogens regulated
under 29 C.F.R. standard 1910.1030; and (viii) any other chemical, material, or
substance that, because of its quantity, concentration, or physical or chemical
characteristics, exposure to which is limited or regulated for health and safety reasons by any governmental authority, or which poses a significant present or potential hazard to human health and safety or to the environment if released into the
workplace or the environment.





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	 	(c)	 	"Hazardous Materials Claims” shall mean any and all enforcement,
clean-up, abatement, removal or other governmental or regulatory actions, orders or
notices of violations threatened, instituted or completed pursuant to any Hazardous
Materials Laws, together with all claims, accusations, allegations or other demands
made or threatened by any third party against Tenant, Landlord or the Project,
including, without limitation, allegations of nuisance, trespass, waste, strict
liability for ultrahazardous activity, equitable indemnity, contribution, cost
recovery compensation, indemnity, relating to any damage, personal injury (including sickness,
disease or death), tangible or intangible property damage, indirect or
consequential damages, damage to the environment or natural resources, or relating
to fines, penalties or restrictions, in connection with any Hazardous Materials.





          5.4.2 Tenant agrees not to use, treat, store, generate, manufacture, emit, transport or dispose of and not to suffer or permit anyone else to use, treat, store, generate,
manufacture, emit, transport or dispose of, whether temporarily or permanently, any Hazardous
Material at, on, or beneath the Project except in compliance with Hazardous Materials Laws. At all
times during the term of the Lease, Tenant shall promptly submit to Landlord any notices it receives
from any governmental entity in connection with a violation or alleged violation of any Hazardous
Materials Laws or Tenant’s use, treatments, storage, manufacture, generation, emission,
transportation or disposal of Hazardous Materials.



          5.4.3 At any time within the last six (6) months of expiration or sooner termination
of the Lease, and at any time thereafter in cases of abandonment,
Landlord may require Tenant to conduct such environmental health and
safety or industrial hygiene or medical audit investigation (“Audit”) on, in or around the Project as Landlord reasonably believes is reasonably
necessary to satisfy itself that Tenant has complied with Section 5.4 of this Lease.
Furthermore, if at any time prior to such six (6) month period, Landlord reasonably believes that Tenant
has not complied with said section, Landlord may require Tenant to conduct such an Audit. If the
Audit indicates that Tenant has complied with this Section 5.4, Landlord, and not Tenant, will
bear the cost of the Audit. At the end of the Term of the Lease, Tenant, at Tenant’s cost and
expense, shall undertake to clean, decontaminate, and disinfect the Project to the extent that
the Audit indicates that Tenant is responsible for the contamination, including the removal or
proper disposition of all of Tenant’s Hazardous Materials, and provide a report and clearance
certification reasonably acceptable to Landlord, certifying the completion of the cleanup and decontamination.



          5.4.4 To the fullest extent permitted by law, Tenant agrees to protect, indemnify, defend, save and hold Landlord and its Affiliates harmless from and against any
foreseeable or unforeseeable claim, action, suit, proceeding, loss, costs, damage, liability, deficiency,
fine, penalty or expense (including, without limitation, reasonable attorneys’ fees and costs),
directly or indirectly resulting from, arising out of, or based upon (i) any Hazardous Materials Claims
arising from Tenant’s negligence or willful act or omission; (ii) Tenant’s use, treatment, storage,
generation, manufacture, emission, transportation or disposal of Hazardous Materials in, on or
under the Project; (iii) any residual contamination on or about the Project affecting any
natural resource or the environment caused by Tenant’s use, treatment, storage, generation,
manufacture, emission, transportation or disposal of Hazardous Materials in, on or under the Project; (iv)
any violation or alleged violation by Tenant of any Hazardous Materials Laws; or (v) any claim,




11









 




demand or cause of action, or any action or other proceeding, whether meritorious or not,
brought or asserted against any person or entity indemnified herein which directly or indirectly
relates to, arises from or is based on any of the matters described in clauses (i)-(v) or any
allegation of any such matters. This obligation on the part of Tenant shall survive the expiration
or earlier termination of this Lease. Tenant shall have the right to assume exclusive control of
the defense of any such claim, action, suit or proceeding, and Landlord agrees to cooperate
reasonably with Tenant in the performance by Tenant of its obligations under this Section 5.4.4.




          5.4.5 Notwithstanding anything contained in this Lease, Tenant shall, at Tenant’s sole cost
and expense, upon expiration or sooner termination of the Lease, promptly remove from the Project
any and all personal property and trade fixtures used in connection with the use, treatment,
storage, generation, emission, or disposal of Hazardous Materials.




	6.	 	SERVICES & UTILITIES






	 	6.1	 	Standard Services.
	 
	 	(a)	 	Standard Services Defined. “Standard Services” means:






	 	(1)	 	Heating, ventilation and air-conditioning (“HVAC”) during
Business Hours as reasonably required to comfortably use and occupy the Premises and
interior Common Areas;
	 
	 	(2)	 	Tempered water from the public utility for use in Common Areas
rest rooms and kitchen and laboratory facilities in the Premises;
	 
	 	(3)	 	Janitorial services to the Common Areas and the Premises to the
extent reasonably determined by Landlord;
	 
	 	(4)	 	Access to the Premises 24 hours a day, 7 days a week, 52 weeks a year; and
	 
	 	(5)	 	Electricity from Landlord’s selected provider(s) for Common
Areas lighting that require electric light during the day or are open at night, including
replacement of tubes and ballasts in lighting fixtures.






	 	(b)	 	Standard Services Provided. During the Term, Landlord provides the Standard
Services to Tenant. The cost of the Standard Services is included in Expenses.
Landlord is not responsible for any inability to provide Standard Services due to
either: the concentration of personnel or equipment in the Premises; or Tenant’s use
of equipment in the Premises that is not customary office equipment, has special
cooling requirements, or generates heat.





     6.2 Additional Services. Unless Tenant obtains Landlord’s prior written consent, Tenant
will not use utilities or services in excess of the Standard Services. If Landlord so consents,
Landlord may provide utilities and services in excess of the Standard Services subject to the following:




	 	(a)	 	Electricity. Electricity for the Premises shall not be furnished by
Landlord but shall be furnished by the electric utility company serving the Building
as determined by Landlord. Tenant shall make all necessary arrangements with the
utility company for metering and paying for electric current furnished by said
utility company to the Tenant and Tenant shall pay for all charges for electric
current consumed on the





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	 	 	 	Premises during the Term of this Lease. Tenant’s electrical use in the
Premises shall not exceed the capacity of the existing system serving the Premises,
nor shall Tenant use more than its proportionate share of the Building electrical
riser capacity. Landlord, or its agent, shall provide to Tenant and install in the
Premises all lamps, bulbs, ballasts and starters used in the Premises
(provided that Tenant may at its sole cost and expense and in its sole discretion
purchase, and engage directly a licensed union electrician to change, lamps and
bulbs used in the Premises).
	 
	 	(b)	 	HVAC. If tenant requests HVAC service to the Premises
during non-Business
Hours, Tenant will pay as Rent Landlord’s scheduled rate for this service, which
shall be a competitive rate.
	 
	 	(c)	 	Lighting. Subject to Tenant’s rights under clause (a) above, Landlord
will furnish both Building Standard and non-Building Standard lamps, bulbs, ballasts and starters
that are part of the Leasehold Improvements.
	 
	 	(d)	 	Other Utilities and Services. Tenant will pay as Rent the actual cost
of utilities or services (other than HVAC and lighting addressed in (a) and (b)) either used by
Tenant or provided at Tenant’s request in excess of that provided as part of the
Standard Services. Tenant’s excess consumption may be estimated by Landlord
unless either Landlord requires or Tenant elects to install Building Standard meters to
measure Tenant’s consumption.
	 
	 	(e)	 	Additional Systems and Metering. Landlord may require Tenant, at
Tenant’s expense, to upgrade or modify existing Mechanical Systems serving the Premises or
the Leasehold Improvements to the extent necessary to meet Tenant’s excess
requirements (including installation of Building Standard meters to measure the same).





     6.3 Telecommunications Services. Tenant will contract directly with third party providers
and will be solely responsible for paying for all telephone, data transmission, video and other
telecommunication services (“Telecommunication Services”) subject to the following:




	 	(a)	 	Providers. Each Telecommunications Services provider that does not
already provide service to the Building shall be subject to Landlord’s approval, which
Landlord may withhold in Landlord’s sole discretion. Without liability to Tenant,
the license of any Telecommunications Services provider servicing the Building may
be terminated under the terms of the license, or not renewed upon the expiration of
the license. Landlord hereby consents to Tenant’s existing Telecommunications
Services provider, which is Inter-Tel, and Tenant shall not replace such provider
without Landlord’s prior written consent, which consent will not be unreasonably
withheld.
	 
	 	(b)	 	Tenant’s Wiring. Landlord may, in its sole discretion, designate the
location of all wires, cables, fibers, equipment, and connections (“Tenant’s Wiring”) for Tenant’s
Telecommunications Services, and restrict and control access
to telephone cabinets and rooms (provided Tenant shall have reasonable access
thereto). Tenant may not use or access the Base Building, Common Areas or roof
for Tenant’s Wiring without Landlord’s prior written consent, which consent
shall not be unreasonably withheld,





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	 	 	 	conditioned or delayed. Landlord hereby consents to the existing location of
Tenant’s Wiring.
	 
	 	(c)	 	This §6.3 is solely for Tenant’s benefit, and no one else shall be
considered a third party beneficiary of these provisions.






6.4 Interruption of Services.



	 	(a)	 	Without breaching the Lease, Landlord may:






	 	(1)	 	Comply with Laws or voluntary government or industry
guidelines
concerning the services to be provided by Landlord or obtained by
Tenant under this Article 6;
	 
	 	(2)	 	Interrupt, limit or discontinue the services to be provided by
Landlord or obtained by Tenant under this Article 6 as may be reasonably required during
an emergency or Force Majeure event; or
	 
	 	(3)	 	If Landlord gives Tenant reasonable prior notice and uses
commercially reasonable efforts not to disturb Tenant’s use of the Premises for the Use,
interrupt, limit or discontinue the services to be provided by Landlord or
obtained by Tenant under this Article 6 to repair and maintain the Project
under §7.2, or make any improvements or changes to the Project.






	 	(b)	 	Abatement for Interruption of Standard Services. If due to an
interruption in a utility
service that prevents Landlord from providing any of the Standard Services for more
than five (5) consecutive days, Tenant is actually unable to use all or a part of the
Premises for the normal conduct of its business (“Untenantable”), then from the fifth
(5th) consecutive day of interruption until the Standard Services are restored,
Landlord shall abate Tenant’s Base Rent and Additional Rent, subject to the following:






	 	(1)	 	Landlord will only abate Base Rent and Additional Rent to the
extent the Premises are untenantable and not actually used by Tenant to conduct
business;
	 
	 	(2)	 	Landlord will only abate Base Rent and Additional Rent if the
interruption of Standard Services is within Landlord’s
reasonable control to remedy; and
	 
	 	(3)	 	Landlord will only abate Base Rent and Additional Rent to the
extent the interruption in Base Rent and Additional Rent is or would be covered by
insurance. Landlord must maintain under §9.2; and






	 	(c)	 	No Other Liability. Except as provided under (b), Landlord will not be
liable in any manner for any interruption in services to be provided by Landlord or obtained by
Tenant under this Article 6 (including damage to Tenant’s Personal Property,
consequential damages, actual or constructive eviction, or abatement of any other item of Rent).






7. REPAIRS




     7.1 Tenant’s Repairs. Except as provided in Articles 10 and 12, during the Term Tenant
shall, at Tenant’s cost, repair and maintain (and replace, as necessary) the Leasehold Improvements



14









 




and keep the Premises in good order and condition, reasonable wear and tear excepted. Tenant’s
work under this §7.1 (a) is subject to the prior approval and supervision of Landlord, which
approval shall not be unreasonably withheld, conditioned or delayed, (b) must be performed in
compliance with Laws and Building rules and regulations, and (c) must be performed in a
first-class, lien free and workmanlike manner, using materials not less than Building Standard.
Notwithstanding anything to the contrary contained in this Lease, in no event shall Tenant be
obligated to make any repairs or replacements (i) except to the extent required to comply with
Section 5.2 and Section 8.1(a)(2), which would, under generally accepted accounting
principles, be deemed capital costs or capital expenditures,
(ii) to the extent required as the result of the negligence or willful
misconduct of Landlord, its agents, employees, representatives or contractors, or (iii) to the
extent required as the result of the failure of Landlord to perform any of its obligations under
this Lease, all of which repairs or replacements shall be made by Landlord at Landlord’s sole cost
and expense.




     7.2 Landlord’s Repairs. Except as provided in Articles 10 and 12, during the Term Landlord
shall, at Landlord’s cost (but included as Expenses to the extent provided in §4.2) repair and
maintain (and replace, as necessary) all parts of the Project that are not Tenant’s responsibility
to repair and maintain under §7.1 (or any other tenant’s responsibility under their respective
lease) and keep the Project in good order and condition according to the standards prevailing for
comparable office buildings in the area in which the Building is located. Tenant may not repair or
maintain the Project on Landlord’s behalf or offset any Rent for any repair or maintenance of the
Project that is undertaken by Tenant.




8. ALTERATIONS




     8.1 Alterations by Tenant. “Alterations” means any modifications, additions or improvements
to the Premises or Leasehold Improvements made by Tenant during the Term. Alterations do not
include Tenant Improvements made under any Workletter attached to this Lease. Alterations are made
at Tenant’s sole cost and expense, subject to the following:




	 	(a)	 	Consent Required. All Alterations require Landlord’s prior written
consent. If a Design Problem exists, Landlord may withhold its consent in Landlord’s
sole discretion; otherwise, Landlord will not unreasonably withhold its consent. In
either case, Landlord may condition its consent to any item of
Alterations on the
requirement that Tenant remove this item of Alterations upon termination of this
Lease. “Design Problem” means a condition that results, or will result, from
Alterations that are proposed, being performed or have been completed that either:






	 	(1)	 	Does not comply with Laws;
	 
	 	(2)	 	Would require Landlord to incur costs to comply with Laws, or
to incur costs to bring all or any part of the Project into compliance with Laws, unless
Tenant agrees in writing to pay for those costs;
	 
	 	(3)	 	Does not meet or exceed the Building Standard;
	 
	 	(4)	 	Exceeds the capacity, adversely affects, is incompatible with,
or impairs Landlord’s ability to maintain, operate, alter, modify or improve the Base Building;
	 
	 	(5)	 	Affects the exterior appearance of the Building or Common Areas;
	 
	 	(6)	 	Violates any agreement affecting the Project;





15









 






	 	(7)	 	Costs more to demolish than Building Standard improvements;
	 
	 	(8)	 	Violates any insurance regulations or standards for a
fire-resistive office building; or
	 
	 	(9)	 	Locates any equipment, Tenant’s Wiring or Tenant’s Personal
Property on the roof of the Building, in Common Areas or in telecommunications or
electrical closets.






	 	(b)	 	Performance of Alterations. Alterations shall be
performed by Tenant in a good and
workman-like manner according to plans and specifications approved by Landlord,
which approval shall not be unreasonably withheld, conditioned or delayed. All
Alterations shall comply with Law and insurance requirements. Landlord’s designated
contractors must perform Alterations affecting the Base Building or Mechanical
Systems; and, all other work will be performed by qualified contractors that meet
Landlord’s insurance requirements and are otherwise approved by Landlord, which
approval shall not be unreasonably withheld, conditioned or delayed. Promptly after
completing Alterations, Tenant will deliver to Landlord “as-built” CADD plans,
proof of payment, a copy of the recorded notice of completion, and all
unconditional lien releases. Notwithstanding the foregoing, Tenant may make
improvements, additions, installations, decorations and changes to the Premises
which do not create or cause Design Problems, the cost of any one of which must not
exceed $15,000.00, all of which in any twelve-month period must not exceed
$45,000.00, and Tenant delivers to Landlord as-built drawings thereof within 30
days after substantial completion of each such improvement, addition, installation,
decoration or change.
	 
	 	(c)	 	Alterations Fee. Tenant shall reimburse Landlord for reasonable,
out-of-pocket third party costs incurred in connection with review of Tenant’s plans
and construction coordination and inspection of the completed Alterations.





     8.2 Alterations by Landlord. Landlord may make any modifications, additions,
renovations or improvements to the Project that Landlord deems appropriate, provided Landlord uses
commercially reasonable efforts to avoid disrupting Tenant’s business.



     8.3 Liens and Disputes. Tenant will keep title to the Land and Building free of any liens
concerning the Leasehold Improvements, Alterations, or Tenant’s Personal Property, and will
promptly take whatever action is required to have any of these liens released and removed of record
(including, as necessary, posting a bond or other deposit). To the extent legally permitted, each
contract and subcontract for Alterations will provide that no lien attaches to or may be
claimed against the Project other than Tenant’s leasehold interest in the Premises.



     8.4 Leasehold Improvements. The initial Leasehold Improvements will be constructed
by Tenant in accordance with the Work Letter attached hereto as Exhibit C.




	9.	 	INSURANCE






	 	9.1	 	Tenant’s Insurance.
	 
	 	(a)	 	Tenant’s Coverage. Before taking possession of the Premises for any
purpose (including construction of Tenant Improvements, if any) and during the Term,
Tenant will provide and keep in force the following coverage:





16









 






	 	(1)	 	Commercial general liability insurance insuring Tenant’s use and occupancy
of the Premises and Common Areas, and covering personal and bodily injury,
death, and damage to others’ property of not less than the Liability, Limit.
Each of these policies shall include cross liability and severability of interests
clauses, and be written on an occurrence, and not claims-made, basis. Each
of these policies shall name Landlord, the Building property manager, and
each secured lender of which Landlord has given Tenant notice as an
additional insured (“Additional Insured”).
	 
	 	(2)	 	Special risk of loss insurance (including standard extended coverage
endorsement perils, leakage from fire protective devices and other water
damage) covering the full replacement cost of the Leasehold Improvements
and Tenant’s Personal Property. Each of these policies shall name Landlord
and each Additional Insured an additional insured to the extent of their
interest in the Leasehold Improvements. Each of these policies shall include
a provision or endorsement in which the insurer waives its right of
subrogation against Landlord and each Additional Insured.
	 
	 	(3)	 	Insurance covering the perils described in (2) for Tenant’s loss of income or
insurable gross profits with a limit not less than $1,000,000. Each of these
policies shall include a provision or endorsement in which the insurer waives
its right of subrogation against Landlord and each Additional Insured.
	 
	 	(4)	 	If any boiler or machinery is operated in the Premises, boiler and machinery
insurance.
	 
	 	(5)	 	Insurance required by Law, including workers’ compensation insurance.
	 
	 	(6)	 	Employers liability insurance with limits not less than $1 million.
	 
	 	(7)	 	Insurance covering the Leasehold Improvements and Tenant’s Personal
Property against loss or damage due to earthquake or difference in condition.
Tenant may elect to self-insure this coverage. If Tenant does not elect to
self-insure this coverage, then each of these policies shall name Landlord and
each Additional Insured an additional insured to the extent of their interest in
the Leasehold Improvements.






	 	(b)	 	Insurers and Terms. Each policy required under (a) shall be written with insurance
companies licensed to do business in the state in which the Building is located.
	 
	 	(c)	 	Proof of Insurance. Tenant shall provide Landlord with certificates of insurance or
other reasonable proof that the coverage required under (a) is in effect. Tenant will
provide reasonable proof at least 30 days before any policy expires that the expiring
policy will be replaced.
	 
	 	9.2	 	Landlord’s Insurance.
	 
	 	(a)	 	Landlord’s Coverage. During the Term, Landlord will provide and keep in
force the following coverage:






	 	(1)	 	Commercial general liability insurance.





17









 






	 	(2)	 	All risk insurance (including standard extended coverage endorsement perils,
leakage from fire protective devices and other water damage) covering the
full replacement cost of the Project improvements (excepting the Leasehold
Improvements to be insured by Tenant). Each of these policies shall include
a provision or endorsement in which the insurer waives its right of
subrogation against Tenant.
	 
	 	(3)	 	Insurance covering the perils described in (2) for Landlord’s loss of rental
income of insurable gross profits. Each of these policies shall include a
provision or endorsement in which the insurer waives its right of subrogation
against Tenant.
	 
	 	(4)	 	Boiler and machinery insurance.
	 
	 	(5)	 	Other insurance that Landlord elects to maintain to the extent
consistent with insurance generally maintained with respect to other commercial building
complexes comparable to the Project.






	 	(b)	 	Terms. Each of the policies required under (a) will have those
limits, deductibles, retentions and other terms that Landlord prudently determines.






	10.	 	DAMAGE OR DESTRUCTION





     10.1 Damage and Repair. If the Leasehold Improvements, Premises or Building is damaged by
fire or other casualty, then the parties will proceed as follows:




	 	(a)	 	Landlord’s Estimates. Landlord will assess the damage to the Project
(but not the Leasehold Improvements) and notify Tenant of Landlord’s reasonable estimate of the
time required to substantially complete repairs and restoration of the Project
(“Repair Estimate”). Landlord will also estimate the time that the Premises will be
untenantable (“Interruption Estimate”). Within 30 days after the later of the
casualty, issuance of the Repair Estimate, issuance of the Interruption Estimate, or receipt
of any denial of coverage or reservation of rights from Landlord’s insurer, each party
may terminate the Lease by written notice to the other on the following conditions:






	 	(1)	 	Landlord may elect to terminate, this Lease if either:






	 	(A)	 	The damage occurs during the last year of
the Term and the Repair Estimate exceeds 20% of Rent for the remaining Term.
	 
	 	(B)	 	The Repair Estimate exceeds 180 days, or
	 
	 	(C)	 	The repair and restoration is not fully
covered by insurance maintained or required to be maintained by Landlord (subject only to
those deductibles or retentions Landlord elected to maintain) or
Landlord’s insurer denies coverage or reserves its rights on
coverage.






	 	(2)	 	Tenant may elect to terminate this Lease if the Interruption
Estimate exceeds 180 days.






	 	(b)	 	If neither party terminates the Lease under (a), then the Lease shall remain in
full force and effect and the parties will proceed as follows:





18









 






	 	(1)	 	Landlord will repair and restore the Project (but not Leasehold
Improvements) to the condition existing prior to such damage, except for
modifications required by Law. Landlord will perform such work reasonably
promptly, subject to delay for loss adjustment, Tenant Delay and Force
Majeure. Landlord, shall use reasonable efforts to perform such repairs so as
to minimize the interference with Tenant’s business operations.
	 
	 	(2)	 	Tenant will repair and restore the Leasehold Improvements reasonably
promptly to the condition existing prior to such damage, but not less than
then current Building Standards, except for modifications required by Law.
	 
	 	(3)	 	Notwithstanding anything to the contrary contained in this
Lease, if Landlord shall fail, either to complete the restoration and repair of the Premises,
or to restore the same to their condition immediately prior to the fire or other
casualty, within 180 days (regardless of any period of delay due to Force
Majeure) from the date of occurrence of the fire or casualty, then, in
either such event, Tenant may terminate this Lease by 10 days’ prior written notice
to Landlord given no later than 30 days after the expiration of the aforesaid 180-day period.





     10.2 Rent Abatement. If as a result of the damage or destruction under §10.1 the Premises are
rendered Untenantable for more than 5 consecutive days, then Tenant’s Base Rent and Additional Rent
for the Untenantable portion of the Premises shall be abated from the 6th consecutive
day until the damaged or destroyed portion of the Premises becomes tenantable, but in no case later
than 15 days after Landlord completes its required repairs and restoration of the Project. Tenant’s
sole remedy will be the abatement of Base Rent and Additional Rent provided under this §10.2, and
Landlord will not be liable to Tenant for any other amount, including damages to Tenant’s Personal
Property, consequential damages, actual or constructive eviction, or abatement of any other item of
Rent.




	11.	 	INDEMNITY





     11.1 Claims. “Claims” means any and all liabilities, losses, claims, demands, damages or
expenses that are suffered or incurred by a party, including reasonable attorneys’ fees
reasonably incurred by that party in the defense or enforcement of the rights of that party.



     11.2 Tenant’s Indemnity. Landlord shall provide Tenant with prompt written notice of
any Claims and shall cooperate reasonably with Tenant in the performance of Tenant’s obligations
under this section. Tenant shall have the right to assume exclusive control of the defense of
such Claims or, at the option of Tenant, to settle the same.




	 	(a)	 	Landlord’s Waivers. Landlord waives any Claims against Tenant and its
Affiliates for perils insured or required to be insured by Landlord under subsections (2) and (3)
of §9.2(a), except to the extent caused by the gross negligence or willful misconduct of Tenant or its Affiliates.
	 
	 	(b)	 	Claims Against Landlord. Unless waived by Landlord under (a),
Tenant will indemnify and defend Landlord and its Affiliates and hold each of them harmless
from and against Claims to the extent arising from:





19









 






	 	(1)	 	Any accident or occurrence on or about the Premises, except to the
extent caused by the negligence or willful misconduct of Landlord or its Affiliates
or its agents, representatives or contractors;
	 
	 	(2)	 	Tenant’s or its Affiliates’ negligence or willful misconduct; or
	 
	 	(3)	 	Any claim for commission or other compensation by any person other than
the Brokers for services rendered to Tenant in procuring this Lease.





     11.3
Landlord’s Indemnity.




	 	(a)	 	Tenant’s Waivers. Tenant waives any Claims against Landlord and its Affiliates for:






	 	(1)	 	Peril insured or required to be insured by Tenant under
subsections (2), (3) and Section (7) of §9.1 (a), except to the extent caused by the gross
negligence or willful misconduct of Landlord or its Affiliates, or its agents,
representatives or contractors, but in no case including any special or
consequential damages (such as interruption of business, loss of income, or
loss of opportunity); and
	 
	 	(2)	 	Damage caused by any public utility, public work, other tenants
or occupants of the Project, or persons other than Landlord, its Affiliates,
representatives or contractors.






	 	(b)	 	Claims against Tenant. Unless waived by Tenant under (a), Landlord
will indemnify and defend Tenant and its Affiliates and hold each of them harmless from and against
Claims arising from:






	 	(1)	 	Any accident or occurrence on or about the Project (excluding
the Premises), except to the extent caused by the negligence or willful misconduct of Tenant
or its Affiliates or its agents, representatives or contractors;
	 
	 	(2)	 	Landlord’s or its Affiliates’ or its agents’, representatives’
or contractors’ negligence or willful misconduct; or
	 
	 	(3)	 	Any claim for commission or other compensation by any person
other than the Brokers for services rendered to Landlord in procuring this Lease.





     11.4 Affiliates Defined. “Affiliates” means with respect to a party (a) that party’s
partners, co-members and joint venturers, (b) each corporation or other entity that is a
parent or subsidiary of that party, (c) each corporation or other entity that is controlled by or under
common control of a parent of such party, and (d) the directors, officers, employees and agents of
that party and each person or entity described in this §11.4(a-c).



     11.5 Survival of Waivers, and Indemnities. Landlord’s and Tenant’s waivers and
indemnities under §11.2 and §11.3 will survive the expiration or early termination of this Lease.



     11.6 Waiver of Consequential Damages. Notwithstanding anything to the contrary
contained in this Lease, neither Landlord nor Tenant is liable to the other under, or in connection
with, this Lease for any consequential damages, and both Landlord and Tenant waive, to the full
extent permitted by law, any claim for consequential damages.



20









 






	12.	 	CONDEMNATION





     12.1 Taking. “Taking” means acquiring of all or part of the Project for any public or
quasi-public use by exercise of a right of eminent domain or under any other Law, or any sale in
lieu thereof. If a Taking occurs:




	 	(a)	 	The Lease will terminate as of the date of a Taking if substantially all of
the Premises becomes untenantable for substantially all of the remaining Term because
of the Taking.
	 
	 	(b)	 	If the Lease is not terminated under (a), Landlord shall restore or alter the Premises
after the Taking to be tenantable, unless Landlord reasonably determines that it
will be uneconomical to do so, in which case Landlord may terminate the Lease upon 60
days prior written notice to Tenant.
	 
	 	(c)	 	If the Lease is not terminated under (a), more than 20% of the Premises is
untenantable because of the Taking, Tenant cannot operate Tenant’s business for the
Use in the Premises after such Taking, and Landlord is unable to provide Tenant with
comparable premises in the Project within 30 days after the Taking, then Tenant may
terminate the Lease upon 60 days prior written notice to Landlord.
	 
	 	(d)	 	If the Lease is not terminated under (a), (b) or (c), the Rent payable by
Tenant will be reduced for the term of the Taking based upon the rentable area of the Premises made
untenantable by the Taking.





     12.2 Awards. Landlord is entitled to the entire award for any claim for a taking of any
interest in this Lease or the Project, without deduction or offset for Tenant’s estate or
interest; however, Tenant may make a claim for relocation expenses and damages to Tenant’s
Personal Property and business to the extent that Tenant’s claim does not reduce Landlord’s award.




	13.	 	TENANT TRANSFERS






	 	13.1	 	Terms Defined.
	 
	 	(a)	 	Transfer Defined. “Transfer” means any:






	 	(1)	 	Sublease of all or part of the Premises, or assignment,
mortgage, hypothecation or other conveyance of an interest in this Lease;
	 
	 	(2)	 	Use of the Premises by anyone other than Tenant with Tenant’s consent; or
	 
	 	(3)	 	Change in Tenant’s form of organization (e.g., a change from a
partnership to limited liability company).





     13.2 Prohibited Transfers. Tenant may not enter into a Transfer or other agreement to
use or occupy the Premises that provides for rent or other compensation based in whole or in part on
the net income or profits from the business operated in the Premises. Any such Transfers shall be
considered null, void and of no force or effect.



     13.3 Consent Not Required. Tenant may effect a Transfer to a Permitted Transferee
without Landlord’s prior consent, but with notice to Landlord prior to the Permitted Transferee’s
occupancy. “Permitted Transferee” means any person or entity that:



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	 	(a)	 	Either (1) controls, is controlled by, or is under common control with Tenant (for
purposes hereof, “control” shall mean ownership of not less than 50% of all of the
voting stock or legal and equitable interest in the entity in question), (2) results from
the merger or consolidation of Tenant, or (3) acquires all or substantially all of the
stock and/or assets of Tenant as a going concern;
	 
	 	(b)	 	Has a tangible net worth immediately following the Transfer equal to Tenant’s
tangible net worth immediately before the Transfer; and
	 
	 	(c)	 	Will not, by occupying the Premises, cause Landlord to breach any
other lease or other agreement affecting the Project.





     13.4 Consent Required. Each proposed Transfer other than those prohibited under §13.2 or
permitted under §13.3 requires Landlord’s prior consent, in which case the parties will proceed as
follows:




	 	(a)	 	Tenant’s Notice. Tenant shall notify Landlord at least 30 days prior to
the proposed Transfer of the name and address of the proposed transferee and the proposed use of
the Premises, and include in the notice the Transfer documents and copies of the
proposed transferee’s balance sheets and income statements (both current and for the past 2 years).
	 
	 	(b)	 	Landlord’s Rights. Within 30 days after receipt of Tenant’s complete
notice, Landlord may either:






	 	(1)	 	If the proposed Transfer is either an assignment of this Lease
or sublease of substantially all of the Premises, terminate this Lease as of the proposed
Transfer date;
	 
	 	(2)	 	If the proposed Transfer is a sublease of all of the Premises
or any part of the Premises that will be separately demised and have its own entrance from the
Common Areas, exercise a right of first refusal to sublease such portion of
the Premises at the lesser of (A) the Rent (prorated for subletting part of
the Premises), or (B) the rent payable in the proposed Transfer; or
	 
	 	(3)	 	Consent or deny consent to the proposed Transfer, consent not
to be unreasonably withheld if:






	 	(A)	 	The proposed transferee, in Landlord’s
reasonable opinion, has the financial capacity to meet its obligations under the proposed
Transfer;
	 
	 	(B)	 	The proposed use is consistent with the Use and
will not cause Landlord to be in breach of any lease or other agreement affecting the
Project;
	 
	 	(C)	 	The proposed transferee is typical of tenants
that directly lease premises in first-class office buildings;
	 
	 	(D)	 	The proposed transferee is not an existing
tenant or an Affiliate of an existing tenant, or a party with which Landlord is actively
negotiating to lease space in the Building (or has, in the last 6 months, been
actively negotiating to lease space in the Building); and
	 
	 	(E)	 	Tenant is not in Default under this Lease.





22









 






	 	(c)	 	Compelling Consent. If Landlord does not consent to a Transfer,
Tenant’s sole remedy against Landlord will be an action for specific performance or
declaratory relief, and Tenant may not terminate this Lease or seek monetary
damages.






	 	 	If Landlord notifies Tenant of Landlord’s election to terminate this Lease pursuant to this
Section, Tenant shall have the right, by notice to Landlord given within 10 days after
receipt by Tenant of Landlord’s notice of termination, to withdraw Tenant’s request to assign or
sublet this Lease, in which event Landlord’s election to terminate shall be rendered null and void.





     13.5 Payments to Landlord. Tenant shall pay Landlord 50% of Transfer receipts that
exceed Tenant’s Rent (on a per square foot basis); after Tenant is reimbursed for Tenant’s reasonable
and customary out-of-pocket costs incurred in the Transfer, including attorneys’ fees, Alterations,
and broker commissions. Tenant shall pay Landlord a $2,500 review fee for each proposed Transfer,
excepting those in which Landlord exercises its rights under subsection (1) or (2) of
§13.4(b).



     13.6 Effect of Transfers. No Transfer releases Tenant or any guarantor of this Lease from
any Lease obligation. Landlord’s acceptance of a payment from any person or entity other than
Tenant that occupies the Premises does not waive Tenant’s obligations under this Article 13. If
Tenant is in Default of this Lease, Landlord may proceed against Tenant without exhausting any
remedies against any transferee and may require (by written notice to any transferee) any
transferee to pay Transfer rent owed Tenant directly to Landlord (which Landlord will apply against
Tenant’s Lease obligations). Termination of this Lease for any reason will not result in a merger.
Each sublease will be deemed terminated upon termination of this Lease unless Landlord notifies the
subtenant in writing of Landlord’s election to assume any sublease, in which case the
subtenant shall attorn to Landlord under the executory terms of the sublease.




	14.	 	LANDLORD TRANSFERS





     14.1 Landlord’s Transfer. Landlord’s right to transfer any interest in the Project or this
Lease is not limited by this Lease. Upon any such transfer, Tenant will attorn to Landlord’s
transferee and Landlord will be released from liability under this Lease, except for any Lease
obligations accruing before the transfer that are not assumed by the transferee.



     14.2 Subordination. This Lease is, and will at all times be, subject and subordinate to
each ground lease, mortgage, deed to secure debt or deed of trust now or later encumbering the
Building, including each renewal, modification, supplement, amendment, consolidation or
replacement thereof (each, an “Encumbrance”); provided, however, that Tenant’s possession of the
Premises will not be disturbed as long as no Event of Default exists. At Landlord’s request,
Tenant will, without charge, promptly execute, acknowledge and deliver to Landlord (or, at Landlord’s
request, the Encumbrance holder) any instrument reasonably necessary to evidence this
subordination. Notwithstanding the foregoing, each Encumbrance holder may unilaterally elect to
subordinate its Encumbrance to this Lease.



     14.3 Attornment. Tenant will automatically attorn to any transferee of Landlord’s interest
in the Project that succeeds Landlord by reason of a termination, foreclosure or enforcement
proceeding of an Encumbrance, or by delivery of a deed in lieu of any foreclosure or
proceeding (a “Successor Landlord”). In this event, the Lease will continue in full force and effect as a
direct lease between the Successor Landlord and Tenant on all of the terms of this Lease, except that the
Successor Landlord shall not be:



23









 





     (a) Liable for any obligation of Landlord under this Lease, or be subject to any
counterclaim, defense or offset accruing before Successor Landlord succeeds to Landlord’s interest
except to the extent such obligation is continuing at the time such Successor Landlord
succeeds to Landlord’s interest or such counterclaim, defense or offset relates to a Landlord default
which is continuing at the time such Successor Landlord succeeds to Landlord’s interest;



     (b) Bound by any prepayment of more than one month’s Rent;



     (c) Obligated
to return any Security Deposit not paid over to Successor
Landlord, or



     (d) Obligated to perform any improvements to the Premises (or provide an allowance therefor).
Upon Successor Landlord’s request, Tenant will, without charge, promptly execute, acknowledge and
deliver to Successor Landlord any instrument reasonably necessary required to evidence such
attornment.



     14.4 Estoppel Certificate. Within 10 business days after receipt of Landlord’s written
request, Tenant (and each guarantor of the Lease) will execute, acknowledge and deliver to
Landlord a certificate upon which Landlord and each existing or prospective Encumbrance holder may
rely confirming the following (or any exceptions to the following):



     (a) The Commencement Date and Expiration Date;



     (b) The documents that constitute the Lease, and that the Lease is unmodified and in full
force and effect or, if modified, the amendments thereto;



     (c) The date through which Base Rent, Additional Rent, and other Rent has been paid;



     (d) That, to Tenant’s knowledge, neither Landlord nor Tenant is in Default;



     (e) That Landlord has satisfied all Lease obligations to improve the Premises (or provide
Tenant an allowance therefor) and Tenant has accepted the Premises;



     (f) That Tenant solely occupies the Premises or, if not, the names of any sublessee(s) of
Tenant; and



     (g) Such other matters concerning this Lease or Tenant’s occupancy that Landlord may
reasonably require.




	15.	 	DEFAULT AND REMEDIES






	 	15.1	 	Tenant’s Default and Remedies.
	 
	 	(a)	 	Tenant will be in “Default” of this Lease if Tenant either:






	 	(1)	 	Fails to pay Rent when due, and the failure continues for 5
business days after Landlord notifies Tenant of this failure under §17.2 (Tenant waiving
any other notice that may be required by Law);
	 
	 	(2)	 	Fails to perform a non-monetary Lease obligation of Tenant
and the failure continues for 30 days after Landlord notifies Tenant of this failure, but:






	 	(A)	 	In an emergency Landlord may require Tenant
to perform this obligation in a reasonable time of less than 30 days, or
	 
	 	(B)	 	If it will reasonably take more than 30 days
to perform this obligation, then Tenant will have a reasonable time to perform this





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	 	 	 	obligation, but only if Tenant commences performing this obligation
within 30 days after Landlord notifies Tenant of this failure and
thereafter diligently prosecutes such cure to completion;






	 	(3)	 	Consummates a Transfer that violates Article 13;
	 
	 	(4)	 	Fails, within 20 days after it occurs, to discharge any attachment or levy
on Tenant’s interest in this Lease;
	 
	 	(5)	 	Fails, within 60 days after it occurs, to have vacated or dismissed any
appointment of a receiver or trustee of Tenant’s assets (or any Lease
guarantor’s assets), or any voluntary or involuntary bankruptcy or assignment
for the benefit of Tenant’s creditors (or any Lease guarantor’s creditors); or
	 
	 	(6)	 	Breaches any of the covenants contained in Section 5.4.2 of this Lease.






	 	(b)	 	If Tenant is in Default, Landlord may, without prejudice to the exercise of any other
remedy, exercise any remedy available under Law, including those described below:






	 	(1)	 	Landlord may enter the Premises as reasonably required and cure Tenant’s
Default on Tenant’s behalf without releasing Tenant from any Lease
obligation, and Tenant shall reimburse Landlord on demand for all costs of
such cure, plus Landlord’s standard administration fee.
	 
	 	(2)	 	Landlord may terminate this Lease upon notice to Tenant (on a date
specified in the notice) and recover possession of the Premises from Tenant. At
Landlord’s election, either:






	 	(A)	 	Landlord may recover any Rent unpaid as of the termination date, and
Tenant will remain liable for the payment when due of Rent for the
remaining Term, less the proceeds that Landlord receives in reletting
the Premises, but only after Landlord is reimbursed from these
proceeds for the expenses Landlord incurs to recover possession of
the Premises and relet the Premises.
	 
	 	(B)	 	To the extent permitted by applicable law, Landlord may
recover any Rent unpaid as of the termination date, and further recover the
amount by which the present value as of the termination date
(calculated using the then current discount rate of the Federal Reserve
Bank of New York) of the Rent to be paid for the Term remaining
after the termination date (assuming 3% annual increases in
Additional Rent) exceeds the proceeds that Landlord receives in
reletting the Premises, but only after Landlord is reimbursed from
these proceeds for the expenses Landlord incurs to recover possession
of the Premises and relet the Premises.






	 	(3)	 	Landlord may use reasonably necessary force to enter and take possession
of all or any part of the Premises, expel Tenant or any other occupant, and remove
their personal property, and the entry will not constitute a trespass or terminate
the Lease. After regaining possession of the Premises, Landlord may relet the
Premises for Tenant’s account, but Landlord will not be





25









 






	 	 	 	responsible or liable if Landlord fails to do so or is unable to
collect rent due from any reletting. Tenant will continue to pay Rent due,
less a credit for the proceeds that Landlord receives in reletting the
Premises, but only after Landlord is reimbursed from these proceeds for the
expenses Landlord incurs to recover possession of the Premises and relet the
Premises.
	 
	 	(4)	 	For any amounts owed under (1), (2) or (3), Landlord may recover interest at
the lesser of the interest rate permitted under Law or 10% (“Default Rate”)
from the date each amount is due until paid by Tenant.






	 	15.2	 	Landlord’s Default and Remedies.
	 
	 	(a)	 	Landlord will be in “Default” of this Lease if Landlord fails to perform any
Lease obligation of Landlord and this failure continues for 20 days after Tenant notifies
Landlord of such failure, or such longer period of time as is reasonable if more than
20 days is reasonably required to perform this obligation if performance commences
within this 20-day period and is diligently prosecuted to completion.
	 
	 	(b)	 	If Landlord is in Default, then Tenant may exercise any remedy available under
Law that is not waived or limited under this Lease, subject to the following:






	 	(1)	 	Tenant may not terminate this Lease due to any Landlord Default
until Tenant notifies each Encumbrance holder and each Encumbrance holder is
provided a reasonable opportunity to gain legal possession of the Project and,
after gaining possession, cure the Default.
	 
	 	(2)	 	Landlord’s liability under this Lease is limited to Landlord’s
interest in the Building.
	 
	 	(3)	 	No liability under this Lease is assumed by Landlord’s Affiliates.





     15.4 Enforcement Costs. If Landlord or Tenant brings any action against the other to
enforce or interpret any provision of this Lease (including any claim in a bankruptcy or an
assignment for the benefit of creditors), the prevailing party will be entitled to recover
from the other reasonable costs and attorneys’ fees incurred in such action.



     15.5 Jury Trial. Landlord and Tenant each waive trial by jury in any action, proceeding
or counterclaim brought by either party against the other concerning any matter related to this Lease.



     15.6 Force Majeure. “Force Majeure” means any cause or event beyond both Landlord’s
and Tenant’s reasonable control, including any act of God, government act or restriction, labor
disturbance, general shortage of materials or supplies, riot, insurrection, or act of war or terrorism.
Force Majeure excuses a party from performing any non-monetary Lease obligation for a
commercially reasonable time.




	16.	 	SECURITY DEPOSIT





     16.1 Deposit. Tenant will deposit the Security Deposit with Landlord on execution of this
Lease. Landlord is not required to either segregate the Security Deposit from any other funds
or pay any interest on the Security Deposit. The Security Deposit secures Tenant’s performance of
all Lease obligations. Landlord may apply the Security Deposit against any cost Landlord incurs or
damage Landlord suffers because Tenant fails to perform any Lease obligation, including payment of
Rent. Upon Landlord’s demand, Tenant shall replenish any Security Deposit applied by



26









 




Landlord. At Tenant’s election, Tenant may provide the Security Deposit in the form of a
letter of credit that is in form, substance and duration reasonably acceptable to Landlord.




     16.2 Refund. After making such payments from the Security Deposit as may be required to cure
any outstanding Default then Landlord will refund the Security Deposit (or any balance remaining)
to Tenant within 60 days after the expiration or early termination of the Term and Tenant’s
vacation and surrender of the Premises to Landlord in the condition required by §3.4. If Tenant has
assigned this Lease, Landlord may return the Security Deposit to
either Tenant or the then current
assignee. Landlord’s transfer of the Security Deposit to any
transferee of Landlord’s interest in
the Building relieves Landlord of its obligations under this section, and Tenant will look solely
to Landlord’s transferee for return of the Security Deposit.




	17.	 	MISCELLANEOUS





     17.1 Rules and Regulations. Tenant will comply with the Rules and Regulations attached
as Exhibit B. Landlord may reasonably and in a non-discriminatory manner modify or add to the
Rules and Regulations upon notice to Tenant. If the Rules and Regulations conflict with this
Lease, the Lease shall govern.



     17.2 Notice. Notice to Landlord must be given to Landlord’s Notice Addresses. Notice to
Tenant must be given to Tenant’s Notice Addresses. By notice to the other, either party may change
its Notice Address. Each notice must be in writing and will be validly given if either: (a)
the notice is personally delivered and receipt is acknowledged in writing; (b) the notice is delivered by
private carrier (e.g., Federal Express) and receipt is acknowledged in writing. If the party to
receive notice refuses to acknowledge its receipt in writing, then notice may be validly given by mailing the
notice first-class, certified or registered mail, postage prepaid, and the notice will be deemed
received by the party 3 business days after the notice’s deposit in the U.S. Mail.



     17.3 Relocation. Landlord may, upon not less than two years prior written notice (the
“Relocation Notice”), relocate Tenant to new premises (“New Premises”) which are either (i)
elsewhere in the Building; or (ii) within another Landlord-owned building that is within five
miles of the Building; provided that in either event the New Premises is comparably sized and may be
comparably configured for Tenant’s use and, as constructed by Landlord pursuant to the second
immediately succeeding sentence, approved for Tenant’s then existing use by all applicable units of
government, including, without limitation, the Federal Food and Drug Administration. Tenant’s
occupancy of the New Premises is subject to the terms and provisions of this Lease, including,
without limitation, Base Rent payable therefor, except to the extent such provisions are not
applicable to the New Premises. If Landlord elects to relocate Tenant under this §17.3, then
Landlord will, at Landlord’s cost, first construct leasehold improvements in the New Premises of
comparable quality and comparably configured to those existing in the Premises and in
compliance with the requirements of all applicable units of government as aforesaid, move Tenant’s
personal property from the Premises to the New Premises, relocate Tenant’s existing telephone and
computer systems, and replace up to $500 of any in-stock stationery identifying the
Premises. Notwithstanding anything in this Section 17.3 to the contrary, Tenant may, in lieu of
relocating to the New Premises, terminate this Lease by giving written notice (the “Termination Notice”) of
such election to Landlord within 90 days after the date of the Relocation Notice. If Tenant elects to
terminate this Lease in accordance with the immediately foregoing sentence, the Lease will
terminate on the date that is 60 days after the date of the Termination Notice.



27









 





     17.4 Building Name. Tenant shall not use the Building’s name or image for any purpose,
other than Tenant’s address. Landlord may change the name of the Building without any obligation
or liability to Tenant.



     17.5 Entire Agreement. This Lease is deemed integrated and contains all of each party’s
representations, waivers and obligations. The parties may only modify or amend this Lease in a
writing that is fully executed by and delivered to both parties.



     17.6 Successors. Unless provided to the contrary elsewhere in this Lease, this Lease binds
and inures to the benefit of each party’s heirs, successors and permissible assignees.



     17.7 No Waiver. A party’s waiver of a breach of this Lease will not be considered a
waiver of any other breach. No custom or practice that develops between the parties will prevent
either party from requiring strict performance of the terms of this Lease. No Lease provision
or act of a party creates any relationship between the parties other than that of landlord and tenant.



     17.8 Independent Covenants. The covenants of this Lease are independent. A court’s
declaration that any part of this Lease is invalid, void or illegal will not impair or
invalidate the remaining parts of this Lease, which will remain in full force and effect.



     17.9 Captions. The use of captions, headings, boldface, italics or underlining is for
convenience only, and will not affect the interpretation of this Lease.



     17.10 Authority. Individuals signing this Lease on behalf of either party represent and
warrant that they are authorized to bind that party.



     17.11 Applicable Law. This Lease is governed by the Laws of the state in which the
Building is located, without giving effect to its principles of conflict of laws.



     17.12 Confidentiality. Tenant will not record this Lease or a memorandum of this Lease
without Landlord’s written consent. Tenant will keep the terms of this Lease confidential and,
unless required by Law, regulation, order or requirement of any governmental or quasi-governmental
entity, may not disclose the terms of this Lease to anyone other than Tenant’s Affiliates to the extent
necessary to Tenant’s business.



     17.13 Reasonableness. Tenant’s sole remedy for any claim against Landlord that Landlord
has unreasonably withheld or unreasonably delayed any consent or approval shall be an action for
injunctive or declaratory relief.



     17.14 Time. Time is of the essence as to all provisions in this Lease in which time is a factor.



     17.15 Quiet Enjoyment. So long as Tenant is not in Default, Tenant shall have the right to
peacefully and quietly enjoy the Premises for the Term under the terms of this Lease.



     17.16 Right to Enter Premises. Landlord may enter the Premises at any reasonable time
and upon reasonable prior notice to inspect the Premises, show the Premises to prospective lenders,
purchasers or, during the final six months of the Scheduled Term, as the same may be extended,
tenants, or perform Landlord’s duties under this Lease. Landlord shall be accompanied during such
entry by a representative of Tenant, which representative Tenant shall make available promptly upon
notice of such entry.



     17.17 Exhibits. The exhibits attached to this Lease are incorporated herein. If any exhibit
is inconsistent with the terms of this Lease, the provisions of this Lease will govern.



28









 





     17.18 Parking. Landlord shall provide, at no additional cost to Tenant, parking spaces
based on the ratio of 3.5 space for every 1,000 RSF comprising the Premises for Tenant’s
nonexclusive use. The parking spaces must be available and accessible to Tenant for Tenant’s use
twenty-four (24) hours a day, seven (7) days a week. Tenant’s use of the parking areas will be in
common with other tenants, and is subject to the reasonable rules and regulations uniformly applied.



[The balance of this page is intentionally left blank.]




29









 





     Having read and intending to be bound by the terms and provisions thereof, Landlord and
Tenant have executed this Lease as follows.



	 	 	 	 	 
	 	LANDLORD





United Healthcare Services, Inc..

 	 
	 	By:  	/s/ BETH LEAF
 	 
	 	Its: 	Beth Leaf, Vice President 	 
	 	 	United Healthcare Services, Inc. 	 
	 
	 	TENANT 



Novavax, inc.

 	 
	 	By:  	/s/ ILLEGIBLE
 	 
	 	Its: 	PRESIDENT & CEO 	 
	 	 	 	 
	 




30









 





EXHIBIT
A — LOCATION OF PREMISES






A-1









 








EXHIBIT B — RULES & REGULATIONS




     1. Landlord’s Entry. Landlord may enter the Premises at all reasonable hours to perform
its obligations under this Lease. During the last 12 months of the Term, Landlord may enter
the Premises with reasonable prior notice to Tenant to show the Premises to
prospective tenants.



     2. Right to Exclude. Landlord may require that Tenant, its Affiliates and guests
comply with each reasonable and uniformly enforced security measure that Landlord may establish
as a condition to entry to the Premises, Building or Project. These measures may include submitting
to a search by persons or devices employed by Landlord, presenting an identification card or pass
issued by the government, Landlord, or both, being announced to Tenant and accepted as a visitor by
Tenant, and signing a register on entry and exit. Any person who cannot comply with these
requirements may be excluded from the Project. If Landlord requires a Building pass issued by
Landlord as a condition of entry to the Premises, Building or Project, Landlord will furnish a
Building pass to all persons reasonably designated by Tenant in writing. Landlord may exclude or
expel from the Project any person who, in Landlord’s reasonable opinion, is intoxicated or
under the influence of alcohol or drugs.



     3. Obstructions. Tenant will not cause the Common Areas, or sidewalks or driveways
outside the Building to be obstructed. Landlord may, at Tenant’s expense, remove any such
obstruction without prior notice to Tenant.



     4. Trash. Tenant will properly dispose of all trash in proper receptacles, all at Tenant’s
cost. Tenant may not litter in the Common Areas, or sidewalks or driveways outside the Building.



     5. Public Safety. Tenant will not throw anything out of doors, windows or skylights,
down passageways or over walls. Tenant will not use any fire exits or stairways in the Building
except in case of emergency.



     6. Keys and Locks. Landlord may from time to time install and change locks on
entrances to the Project, Building, Common Areas or Premises, and will provide Tenant a number of
keys to meet Tenant’s reasonable requirements. Additional keys will be furnished by Landlord at
Tenant’s cost. Landlord reserves the right to replace all, or any part of, the lock system in the
Project, including the Premises, with an electronic card access system and to charge Tenant Tenant’s
share of the cost of such system, including, without limitation replacement electronic key
cards. At the end of the Term, Tenant will promptly return to Landlord all keys for the Building and
Premises issued by Landlord to Tenant. Unless Tenant obtains Landlord’s prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed, Tenant will not add any
locks or change existing locks on any door to the Premises, or in or about the Premises. If with
Landlord’s consent, Tenant installs any lock incompatible with the Building master locking system, Tenant
will: relieve Landlord of each Lease obligation that requires access to each affected area;
indemnify Landlord against any Claim resulting from forced entry to each affected area in an emergency;
and, at the end of the Term, remove each incompatible lock and replace it with a Building Standard
lock at Tenant’s expense.



     7. Aesthetics. Unless Tenant obtains Landlord’s prior written consent (which may be
withheld in Landlord’s sole discretion), Tenant may not:



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	 	(a)	 	Attach any awnings, signs, displays or projections to either the outside walls or
windows of the Building, or to any part of the Premises visible from outside the
Premises;
	 
	 	(b)	 	Hang any non-Building Standard curtains, blinds, shades or screens in any
window or door of the Premises;
	 
	 	(c)	 	Coat or sunscreen the interior or exterior of any windows; or
	 
	 	(d)	 	Place any objects on windowsills.





     8. Signs. Tenant may, at its own expense and with Landlord’s prior written consent
(which consent will not be unreasonably withheld), install Building-standard suite identification
signage. There is no directory signage in the Project. Landlord hereby consents to Tenant’s existing signage.



     9. HVAC Operation. Tenant will not obstruct the HVAC convectors or diffusers, or
adjust or interfere with the HVAC system. Tenant will assist the HVAC system in maintaining
comfort in the Premises by drawing shades, blinds and other window coverings in the Premises as
may be reasonable required. Tenant may not use any method of heating or cooling the Premises
other than that supplied by Landlord.



     10. Plumbing. Tenant will use plumbing fixtures only for the purpose for which they are
constructed. Tenant will reimburse Landlord for any damage caused by Tenant’s misuse of
plumbing fixtures.



     11. Equipment Location. Landlord may specify the location of any of Tenant’s
Business machines, mechanical equipment or other property that are unusually heavy, may damage
the Building, or may cause vibration, noise or annoyance to other tenants. Tenant will reimburse
Landlord for any professional engineering certification or assistance reasonably required to
determine the location of these items.



     12. Bicycles. Tenant may not bring bicycles or other vehicles into the Building or
Premises. Bicycles and other vehicles may only be parked in areas designated by Landlord.



     13. Animals. Tenant may not bring any birds or animals, excepting seeing-eye/assistance
dogs, into the Building or Premises.



     14. Carpet Protection. To protect carpeting in the Premises, Tenant will, at its own
expense, install and maintain pads to protect the carpet under all furniture having castors
other than carpet castors.



     15. Elevators. Reserved.



     16. Moving and Deliveries. Moving of Tenant’s Personal Property and deliveries of
materials and supplies to the Premises must be made during the times and through the entrances and
corridors reasonably designated by Landlord. Moving and deliveries may not be made through any
of the main entrances to the Building without Landlord’s prior permission, which permission shall
not be unreasonably withheld, conditioned or delayed. Any hand truck or other conveyance used in
the Common Areas must be equipped with rubber tires and rubber side guards to prevent damage to
the Building and its property. Tenant will promptly reimburse Landlord for the cost of
repairing any damage to the Building or its property caused by any person making deliveries to the Premises.



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     17. Solicitation. Canvassing, soliciting and peddling in the Building are prohibited and

Tenant will cooperate in preventing the same.



     18. Food. Only persons approved from time to time by Landlord in its reasonable
discretion may prepare, solicit orders for, sell, serve or distribute food in or around the Project,
excluding any food prepared or served in any kitchen area of the Premises for individual
consumption. Except as may be specified in the Lease or on
construction drawings for the Premises
approved by Landlord, and except for microwave cooking, Tenant will not use the Premises for
dispensing food, or soliciting the orders for sale, serving or distribution of food.



     19. Work Orders. Only authorized representatives of Tenant may request services or
work on behalf of Tenant. Tenant may not request that Building employees perform any work
outside of their duties assigned by Landlord.



     20. Smoking. Neither Tenant nor its Affiliates shall smoke or permit smoking in any
part of the Project in which Landlord, in Landlord’s sole discretion, prohibits smoking. Landlord
may designate the entire Project a no-smoking area, excepting areas in which Landlord, in
Landlord’s sole discretion, permits smoking.



     21. Rules Applied. These Rules and Regulations apply equally to Tenant’s Affiliates
and others permitted by Tenant to access, use or occupy the Premises. Landlord shall apply these
Rules and Regulations in a uniform and non-discriminatory manner to all occupants of the
Project.



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EXHIBIT C WORK LETTER




     1. Defined Terms. Terms capitalized in this Exhibit, but not otherwise defined,
have the meanings ascribed to them in the Lease as if actually set forth in this Exhibit.



     2. Tenant’s Work. Tenant is responsible for all work (collectively, “Tenant’s
Work”) required to design and construct those improvements identified on attached Attachment I
(the “Leasehold Improvements”) in accordance with the Construction Documents, as defined in Section
4 of this Exhibit. Tenant shall obtain all necessary permits and licenses required in connection
with Tenant’s Work, and shall cause all Tenant’s Work to be completed in accordance with applicable
Laws. Tenant shall pay all cost of Tenant’s Work (subject to reimbursement in accordance with
Section 3 hereof) and shall otherwise comply with those provisions of the Lease pertaining to
mechanics’ liens.



     3. Leasehold Allowance.



          3.1
The “Leasehold Allowance” is $58,715. Tenant may use the Leasehold
Allowance for the actual, out-of-pocket hard and soft costs that it incurs in constructing the
Leasehold Improvements (the “Cost of Tenant’s Work”). Tenant is responsible for all Costs of
Tenant’s Work that exceed the Leasehold Allowance. If the Leasehold Allowance is greater than
the Cost of Tenant’s Work, Landlord shall be entitled to retain such difference. Landlord has the
right, upon reasonable prior written notice, to audit Tenant’s books and records regarding the
Costs of Tenant’s Work.



          3.2 Landlord shall reimburse Tenant for the Cost of Tenant’s Work within
thirty (30) days after the latest of the following dates:




A. The date Tenant has commenced doing business in, and is paying Base Rent for,
the entire Premises;




B.
The date on which the local unit of government having jurisdiction
over the Premises issues a certificate of occupancy with respect to the entire Premises; or




C. The date Landlord has received copies of lien waivers (in form, substance and
amount reasonably acceptable to Landlord) from the general contractor,
and any subcontractor reasonably identified by Landlord, performing Tenant’s Work.



     4. Preparation of Plans.



     4.1
Tenant shall cause to be prepared a set of design intent drawings (“Design Intent
Drawings”) which will not be for construction but will show the location of all full height
partitions, circulation patterns, electrical/cabling plans based on furniture layout, furniture
plans, finish plans and written specifications for the Premises. Tenant will deliver the Design
Intent Drawings to Landlord as soon as reasonably possible. If Landlord reasonably objects to the
Design Intent Drawings, then Tenant shall submit revised Design Intent Drawings to Landlord as



4









 




soon as reasonably possible after objection and Landlord shall approve or disapprove in accordance
with the same procedures.




     4.2 Tenant shall, based upon the approved Design Intent Drawings, prepare, or cause to be
prepared, construction documents (“Construction Documents”) for the Leasehold Improvements. The
Construction Documents will be in sufficient scope and detail to
satisfy requirements for (i) obtaining permits for construction of the Leasehold Improvements; (ii) obtaining firm cost
bids for the construction; and (iii) directing the construction of the Leasehold
Improvements. Tenant will submit the Construction Documents to Landlord for Landlord’s
approval as soon as reasonably possible. If Landlord reasonably objects to the Construction
Documents, then Tenant shall submit revised Construction Documents to Landlord within ten (10)
business days after receipt of Landlord’s objection, and Landlord shall approve or disapprove the
revised Construction Documents in accordance with the same procedures
set forth in this Section 4.2.



     5. Selection of Contractors and Subcontractors, Substantial Completion Tenant shall
only use contractors previously approved in writing by Landlord (which approval will not be unreasonably withheld), for Tenant’s Work. Tenant’s Work will reach “Substantial Completion”
on the date that the local unit of government having jurisdiction over the Premises issues its certificate of occupancy for the Premises.



     6. Change Orders. All changes to the Construction Documents or to the Leasehold
Improvements having a value of $500 or more are subject to the prior written approval of Landlord, which approval will not be unreasonably withheld unless the change (i) materially adversely affects the structural elements of the Building or the
Building systems; (ii) describes a floor plan substantially different from that previously approved by Landlord; or (iii) does
not comply with applicable Laws.



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Attachment I

The
Leasehold Improvements




 C-1