Document:

dgtw_ex103.htm

EXHIBIT 10.3
  
 REGISTRATION RIGHTS AGREEMENT
  
 REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of April 23, 2018, by and between DIGITALTOWN, INC., a Minnesota corporation (the “Company”), and TRITON FUNDS LP, a Delaware limited partnership (together with it permitted assigns, the “Buyer”). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the equity purchase agreement by and between the parties hereto, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”).
  
 WHEREAS:
  
 The One Million Dollars ($1,000,000.00) of Capital Call Shares and to induce the Buyer to enter into the Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “Securities Act”), and applicable state securities laws.
  
 NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Buyer hereby agree as follows:
  
 1. DEFINITIONS.
  
 As used in this Agreement, the following terms shall have the following meanings:
  
 a. “Investor” means the Buyer, any transferee or assignee thereof to whom a Buyer assigns its rights under this Agreement in accordance with Section 9 and who agrees to become bound by the provisions of this Agreement, and any transferee or assignee thereof to whom a transferee or assignee assigns its rights under this Agreement in accordance with Section 9 and who agrees to become bound by the provisions of this Agreement.
  
 b. “Person” means any individual or entity including but not limited to any corporation, a limited liability company, an association, a partnership, an organization, a business, an individual, a governmental or political subdivision thereof or a governmental agency.
  
 c. “Register”, “registered”, and “registration” refer to a registration effected by preparing and filing one or more registration statements of the Company in compliance with the Securities Act and/or pursuant to Rule 415 under the Securities Act or any successor rule providing for offering securities on a continuous basis (“Rule 415”), and the declaration or ordering of effectiveness of such registration statement(s) by the United States Securities and Exchange Commission (the “ SEC ”).
  
 d. “Registrable Securities” means (a) an aggregate of up to 60,000,000 Capital Call Shares and any shares of common stock issued to the Investor as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise with respect thereto.
  
 e. “Registration Statement” means one or more registration statements of the Company covering only the sale of the Registrable Securities.
  
  	 
	 
	 
 
	 

  
 2. REGISTRATION.
  
 a. Mandatory Registration. The Company shall, within thirty (30) calendar days from the date hereof, file with the SEC an initial Registration Statement covering the maximum number of Registrable Securities (beginning with the Capital Call Shares) as shall be permitted to be included thereon in accordance with applicable SEC rules, regulations and interpretations so as to permit the resale of such Registrable Securities by the Investor, including but not limited to under Rule 415 under the Securities Act at then prevailing market prices (and not fixed prices), as mutually determined by both the Company and the Investor in consultation with their respective legal counsel, subject to the aggregate number of authorized shares of the Company’s Common Stock then available for issuance in its Certificate of Incorporation. The initial Registration Statement shall register only the Registrable Securities. The Investor and its counsel shall have a reasonable opportunity to review and comment upon such Registration Statement and any amendment or supplement to such Registration Statement and any related prospectus prior to its filing with the SEC, and the Company shall give due consideration to all reasonable comments. The Investor shall furnish all information reasonably requested by the Company for inclusion therein. The Company shall use its reasonable best efforts to have the Registration Statement and any amendment declared effective by the SEC at the earliest possible date. The Company shall use reasonable best efforts to keep the Registration Statement effective, including but not limited to pursuant to Rule 415 promulgated under the Securities Act and available for the resale by the Investor of all of the Registrable Securities covered thereby at all times until the earlier of (i) the date as of which the Investor may sell all of the Registrable Securities without restriction pursuant to Rule 144 promulgated under the Securities and (ii) the date on which the Investor shall have sold all the Registrable Securities covered thereby and no Available Amount remains under the Purchase Agreement (the “Registration Period”). The Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading.
  
 b. Rule 424 Prospectus. The Company shall, as required by applicable securities regulations, from time to time file with the SEC, pursuant to Rule 424 promulgated under the Securities Act, the prospectus and prospectus supplements, if any, to be used in connection with sales of the Registrable Securities under the Registration Statement. The Investor and its counsel shall have a reasonable opportunity to review and comment upon such prospectus prior to its filing with the SEC, and the Company shall give due consideration to all such comments. The Investor shall use its reasonable best efforts to comment upon such prospectus within one (1) Business Day from the date the Investor receives the final pre-filing version of such prospectus.
  
 c. Sufficient Number of Shares Registered. In the event the number of shares available under the Registration Statement is insufficient to cover all of the Registrable Securities, the Company shall amend the Registration Statement or file a new Registration Statement (a “New Registration Statement”), so as to cover all of such Registrable Securities (subject to the limitations set forth in Section 2(a)) as soon as practicable, but in any event not later than ten (10) Business Days after the necessity therefor arises, subject to any limits that may be imposed by the SEC pursuant to Rule 415 under the Securities Act. The Company shall use it reasonable best efforts to cause such amendment and/or New Registration Statement to become effective as soon as practicable following the filing thereof. Unless the Registration Period has ended, in the event that any of the Capital Call Shares are not included in the Registration Statement, or have not been included in any New Registration Statement and the Company files any other registration statement under the Securities Act (other than on Form S-4, Form S-8, or with respect to other employee related plans or rights offerings) (“Other Registration Statement ”) then the Company shall include in such Other Registration Statement first all of such Capital Call Shares that have not been previously registered, and second any other securities the Company wishes to include in such Other Registration Statement. Unless the Registration Period has ended, the Company agrees that it shall not file any such Other Registration Statement unless all of the Capital Call Shares have been included in such Other Registration Statement or otherwise have been registered for resale as described above.
  
 d. Offering. If the staff of the SEC (the “Staff’) or the SEC seeks to characterize any offering pursuant to a Registration Statement filed pursuant to this Agreement as constituting an offering of securities that does not permit such Registration Statement to become effective and be used for resales by the Investor under Rule 415 at then-prevailing market prices (and not fixed prices), or if after the filing of the initial Registration Statement with the SEC pursuant to Section 2(a), the Company is otherwise required by the Staff or the SEC to reduce the number of Registrable Securities included in such initial Registration Statement, then the Company shall reduce the number of Registrable Securities to be included in such initial Registration Statement (with the prior consent, which shall not be unreasonably withheld, of the Investor and its legal counsel as to the specific Registrable Securities to be removed therefrom) until such time as the Staff and the SEC shall so permit such Registration Statement to become effective and be used as aforesaid. Unless the Registration Period has ended, in the event of any reduction in Registrable Securities pursuant to this paragraph, the Company shall file one or more New Registration Statements in accordance with Section 2(c) until such time as all Registrable Securities have been included in Registration Statements that have been declared effective and the prospectus contained therein is available for use by the Investor. Notwithstanding any provision herein or in the Purchase Agreement to the contrary, the Company’s obligations to register Registrable Securities (and any related conditions to the Investor’s obligations) shall be qualified as necessary to comport with any requirement of the SEC or the Staff as addressed in this Section 2(d).
  
  	 
	 
	 
 
	 

  
 3. RELATED OBLIGATIONS.
  
 With respect to the Registration Statement and whenever any Registrable Securities are to be registered pursuant to Section 2 including on any New Registration Statement, the Company shall use its reasonable best efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations:
  
 a. The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to any registration statement and the prospectus used in connection with such registration statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep the Registration Statement or any New Registration Statement effective at all times during the Registration Period, and, during such period, comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by the Registration Statement or any New Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such registration statement.
  
 b. The Company shall permit the Investor to review and comment upon the Registration Statement or any New Registration Statement and all amendments and supplements thereto at least two (2) Business Days prior to their filing with the SEC, and not file any document in a form to which Investor reasonably objects. The Investor shall use its reasonable best efforts to comment upon the Registration Statement or any New Registration Statement and any amendments or supplements thereto within two (2) Business Days from the date the Investor receives the final version thereof. The Company shall furnish to the Investor, without charge any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to the Registration Statement or any New Registration Statement.
  
 c. Upon request of the Investor, the Company shall furnish to the Investor, (i) promptly after the same is prepared and filed with the SEC, at least one copy of such registration statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits, (ii) upon the effectiveness of any registration statement, a copy of the prospectus included in such registration statement and all amendments and supplements thereto (or such other number of copies as the Investor may reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as the Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by the Investor. For the avoidance of doubt, any filing available to the Investor via the SEC’s live EDGAR system shall be deemed “furnished to the Investor” hereunder.
  
 d. The Company shall use reasonable best efforts to (i) register and qualify the Registrable Securities covered by a registration statement under such other securities or “blue sky” laws of California, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify the Investor who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of California or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose. 
  
  	 
	 
	 
 
	 

  
 e. As promptly as practicable after becoming aware of such event or facts, the Company shall notify the Investor in writing of the happening of any event or existence of such facts as a result of which the prospectus included in any registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and promptly prepare a supplement or amendment to such registration statement to correct such untrue statement or omission, and deliver a copy of such supplement or amendment to the Investor (or such other number of copies as the Investor may reasonably request). The Company shall also promptly notify the Investor in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a registration statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to the Investor by email or facsimile on the same day of such effectiveness and by overnight mail), (ii) of any request by the SEC for amendments or supplements to any registration statement or related prospectus or related information, and (iii) of the Company’s reasonable determination that a post-effective amendment to a registration statement would be appropriate.
  
 f. The Company shall use its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness of any registration statement, or the suspension of the qualification of any Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify the Investor of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.
  
 g. The Company shall (i) cause all the Registrable Securities to be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (ii) secure designation and quotation of all the Registrable Securities on the Principal Market. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section.
  
 h. The Company shall cooperate with the Investor to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to any registration statement and enable such certificates to be in such denominations or amounts as the Investor may reasonably request and registered in such names as the Investor may request.
  
 i. The Company shall at all times provide a transfer agent and registrar with respect to its Common Stock.
  
 j. If reasonably requested by the Investor, the Company shall (i) immediately incorporate in a prospectus supplement or post-effective amendment such information as the Investor believes should be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities; (ii) make all required filings of such prospectus supplement or post-effective amendment as soon as practicable upon notification of the matters to be incorporated in such prospectus supplement or post¬effective amendment; and (iii) supplement or make amendments to any registration statement.
  
 k. The Company shall use its reasonable best efforts to cause the Registrable Securities covered by any registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities.
  
 l. Within three (3) Business Days after any registration statement which includes the Registrable Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Investor) confirmation that such registration statement has been declared effective by the SEC in the form attached hereto as Exhibit A. Thereafter, if requested by the Buyer at any time, the Company shall require its counsel to deliver to the Buyer a written confirmation whether or not the effectiveness of such registration statement has lapsed at any time for any reason (including, without limitation, the issuance of a stop order) and whether or not the registration statement is current and available to the Buyer for sale of all of the Registrable Securities.
  
 m. The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by the Investor of Registrable Securities pursuant to any registration statement.
  
  	 
	 
	 
 
	 

  
 4. OBLIGATIONS OF THE INVESTOR.
  
 a. The Company shall notify the Investor in writing of the information the Company reasonably requires from the Investor in connection with any registration statement hereunder. The Investor shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.
  
 b. The Investor agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any registration statement hereunder.
  
 c. The Investor agrees that, upon receipt of any notice from the Company of the happening of any event or existence of facts of the kind described in Section 3(f) or the first sentence of 3(e), the Investor will immediately discontinue disposition of Registrable Securities pursuant to any registration statement(s) covering such Registrable Securities until the Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(f) or the first sentence of 3(e). Notwithstanding anything to the contrary, the Company shall cause its transfer agent to promptly deliver shares of Common Stock without any restrictive legend in accordance with the terms of the Purchase Agreement in connection with any sale of Registrable Securities with respect to which an Investor has entered into a contract for sale prior to the Investor’s receipt of a notice from the Company of the happening of any event of the kind described in Section 3(f) or the first sentence of Section 3(e) and for which the Investor has not yet settled.
  
 5. EXPENSES OF REGISTRATION.
  
 All reasonable expenses, other than sales or brokerage commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company, shall be paid by the Company.
  
 6. INDEMNIFICATION.
  
 a. To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Investor, each Person, if any, who controls the Investor, the members, the directors, officers, partners, employees, agents, representatives of the Investor and each Person, if any, who controls the Investor within the meaning of the Securities Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (each, an “Indemnified Person”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, attorneys’ fees, amounts paid in settlement or expenses, joint or several, (collectively, “Claims”) incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in the Registration Statement, any New Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading, (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to the Registration Statement or any New Registration Statement or (iv) any material violation by the Company of this Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively, “Violations”). The Company shall reimburse each Indemnified Person promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information about the Investor furnished in writing to the Company by such Indemnified Person expressly for use in connection with the preparation of the Registration Statement, any New Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(c) or Section 3(e); (ii) with respect to any superseded prospectus, shall not inure to the benefit of any such person from whom the person asserting any such Claim purchased the Registrable Securities that are the subject thereof (or to the benefit of any person controlling such person) if the untrue statement or omission of material fact contained in the superseded prospectus was corrected in the revised prospectus, as then amended or supplemented, if such revised prospectus was timely made available by the Company pursuant to Section 3(c) or Section 3(e), and the Indemnified Person was promptly advised in writing not to use the incorrect prospectus prior to the use giving rise to a violation and such Indemnified Person, notwithstanding such advice, used it; (iii) shall not be available to the extent such Claim is based on a failure of the Investor to deliver or to cause to be delivered the prospectus made available by the Company, if such prospectus was timely made available by the Company pursuant to Section 3(c) or Section 3(e); and (iv) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Investor pursuant to Section 9.
  
  	 
	 
	 
 
	 

  
 b. Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effectuated without its written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such claim or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action.
  
 c. The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred.
  
 d. The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.
  
  	 
	 
	 
 
	 

  
 7. CONTRIBUTION.
  
 To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that: (i) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities.
  
 8. REPORTS AND DISCLOSURE UNDER THE SECURITIES ACTS.
  
 With a view to making available to the Investor the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration (“Rule 144”), the Company agrees, at the Company’s sole expense, to:
  
 a. make and keep public information available, as those terms are understood and defined in Rule 144;
  
 b. use reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act so long as the Company remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144;
  
 c. furnish to the Investor so long as the Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting and or disclosure provisions of Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investor to sell such securities pursuant to Rule 144 without registration; and
  
 d. take such additional action as is requested by the Investor to enable the Investor to sell the Registrable Securities pursuant to Rule 144, including, without limitation, delivering all such legal opinions, consents, certificates, resolutions and instructions to the Company’s Transfer Agent as may be requested from time to time by the Investor and otherwise fully cooperate with Investor and Investor’s broker to effect such sale of securities pursuant to Rule 144.
  
 9. ASSIGNMENT OF REGISTRATION RIGHTS.
  
 The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor. The Investor may not assign its rights under this Agreement without the written consent of the Company.
  
 10. AMENDMENT OF REGISTRATION RIGHTS.
  
 No provision of this Agreement may be amended or waived by the parties from and after the date that is one Business Day immediately preceding the initial filing of the Registration Statement with the SEC. Subject to the immediately preceding sentence, no provision of this Agreement may be (i) amended other than by a written instrument signed by both parties hereto or (ii) waived other than in a written instrument signed by the party against whom enforcement of such waiver is sought. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.
  
  	 
	 
	 
 
	 

  
 11. MISCELLANEOUS.
  
 a. A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities.
  
 b. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile or email (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one (1) Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses for such communications shall be:
  
 If to the Company:
  
 If to the Investor:
  
 TRITON FUNDS LLC
 1262 PROSPECT STREET
 LA JOLLA, CA 92037
 e-mail: tritonfunds@tritonfunds.com
  
 or at such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by written notice given to each other party three (3) Business Days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine or email account containing the time, date, recipient facsimile number or email address, as applicable, and an image of the first page of such transmission or (C) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.
  
 c. The corporate laws of the State of California shall govern all issues concerning this Agreement. All other questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of California, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting the State of California, County of Orange, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. 
  
  	 
	 
	 
 
	 

  
 d. This Agreement and the Purchase Agreement constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement and the Purchase Agreement supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof.
  
 e. Subject to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties hereto.
  
 f. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
  
 g. This Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by email in a “.pdf” format data file of a copy of this Agreement bearing the signature of the party so delivering this Agreement.
  
 h. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
  
 i. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party.
  
 j. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
  
 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of day and year first above written. 
  
 	  
	 THE COMPANY:
	  

				  

	  
	 DIGITALTOWN, INC.
	  

				  

	  
	 By:
		  

	  
	 Name:
		  

	  
	 Title:
		  

				  

	  
	 THE INVESTOR:
	  

				  

	  
	 TRITON FUNDS LP
	  

				  

	  
	 By:
		  

	  
	 Name:
		  

	  
	 Title:
		  

  
  	 
	 
	 
 
	 

  
 EXHIBIT A
  
 TO REGISTRATION RIGHTS AGREEMENT
  
 FORM OF NOTICE OF EFFECTIVENESS
 OF REGISTRATION STATEMENT
  
 _____________, 2018
  
 Re: [__________]
  
 Ladies and Gentlemen:
  
 We are counsel to DIGITALTOWN, INC., a Minnesota corporation (the “Company”), and have represented the Company in connection with that certain Purchase Agreement, dated as of April 23, 2018 (the “Purchase Agreement”), entered into by and between the Company and TRITON FUNDS LP (the “Buyer”) pursuant to which the Company has agreed to issue to the Buyer shares of the Company’s Common Stock, $0.01 par value (the “Common Stock ”), in an amount up to One Million Dollars ($1,000,000.00) (the “ Capital Call Shares ”), in accordance with the terms of the Purchase Agreement. In connection with the transactions contemplated by the Purchase Agreement, the Company has registered with the U.S. Securities & Exchange Commission the following shares of Common Stock:
  
 (1) Capital Call Shares to be issued to the Buyer upon purchase from the Company by the Buyer from time to time in accordance with the Purchase Agreement.
  
 Pursuant to the Purchase Agreement, the Company also has entered into a Registration Rights Agreement, of even date with the Purchase Agreement with the Buyer (the “Registration Rights Agreement”) pursuant to which the Company agreed, among other things, to register the Capital Call Shares under the Securities Act of 1933, as amended (the “Securities Act”). In connection with the Company’s obligations under the Purchase Agreement and the Registration Rights Agreement, on [__________], 2018, the Company filed a Registration Statement (File No. 333-[__________]) (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) relating to the resale of the Capital Call Shares.
  
 In connection with the foregoing, we advise you that a member of the SEC’s staff has advised us by telephone that the SEC has entered an order declaring the Registration Statement effective under the Securities Act at [__________] [A.M./P.M.] on [__________], 2018 and we have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC and the Capital Call Shares are available for resale under the Securities Act pursuant to the Registration Statement and may be issued without any restrictive legend.
  
 	  
	 Very truly yours,
	  

				  

	  
	 [Company Counsel]
	  

				  

	  
	 By:
		  

	  
	 Name:
		  

	  
	 Title:
		  

			  
	  

	 cc: TRITON FUNDS LLCExhibit

EXHIBIT 10.1

AMENDMENT NO. 6 TO DEED OF LEASE

THIS AMENDMENT NO. 6 TO DEED OF LEASE (“Amendment”) is made as of the __30___ day of ____May___________, 2018 (“Effective Date”), by and between SOUTH OF MARKET LLC, a Delaware limited liability company (“Landlord”), and COMSCORE, INC., a Delaware corporation (“Tenant”).

RECITALS

Recital 1.     Landlord and Tenant are parties to a certain Deed of Lease, dated December 21, 2007, as amended by a certain Amendment No. 1, dated April 28, 2008, a certain Amendment No. 2 to Deed of Lease, dated July 28, 2010, a certain Amendment No. 3 to Deed of Lease, dated December 29, 2011 (“Third Amendment”), a certain Amendment No. 4 to Deed of Lease, dated September 8, 2014, and a certain Amendment No. 5 to Deed of Lease, dated January 26, 2015 (as so amended, “Lease”), under which Landlord leases to Tenant approximately 83,577 square feet of rentable area (“Premises”) situated on the third (3rd), fourth (4th), fifth (5th) and sixth (6th) floors of the building commonly known as Two South of Market located at 11950 Democracy Drive, Reston, Virginia (“Building”).

Recital 2.     Landlord and Tenant desire to amend the Lease to extend the Lease Term thereof make certain other amendments to the Lease, all as more particularly set forth in this Amendment. 

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, covenant and agree as follows:

1.    Recitals Incorporated; Defined Terms. The foregoing recitals are incorporated by reference into this Section as if set forth in this Section in full. All capitalized terms used and not otherwise defined herein shall have the same meanings as provided for such terms in the Lease.

2.    Extension of the Lease Term. The Lease Term is hereby extended with respect to the entire Premises for a period of five (5) years (“Extension Term”), commencing on August 1, 2022 (“Extension Commencement Date”) and ending on July 31, 2027, unless otherwise terminated earlier in accordance with the provisions of the Lease.

3.    Base Rent. 

(a)    Tenant shall pay to Landlord Base Rent for the Premises, without set off, deduction or demand, at the applicable rate(s) set forth in the Lease through July 31, 2022. 

(b)    (i)    Beginning on the Extension Commencement Date, Tenant shall pay to Landlord, as annual Base Rent for the Premises, without set off, deduction or demand, an amount equal to the product of Fifty-Seven and 00/100 Dollars ($57.00) multiplied by the total number of square feet of rentable area in the Premises. 

(ii)    Beginning on the first anniversary of the Extension Commencement Date and on each anniversary thereafter, the annual Base Rent set forth in Section 3(b)(i) above shall be increased by two and fifty hundredths percent (2.50%) of the amount of annual Base Rent payable for the Premises during the immediately preceding twelve (12) month period (without regard to any abatement or offset applicable thereto). 

(iii)    Provided Tenant is not in an Event of Default under the Lease beyond any applicable notice and cure periods, Landlord hereby agrees to grant Tenant an abatement of one hundred percent (100%) of the Base Rent payable hereunder for the Premises for the first (3) full calendar months of the Extension Term. Except as provided in the immediately preceding sentence, Tenant shall pay the full amount of the Base Rent due in accordance with the provisions of this Section 3(b). Notwithstanding anything to the contrary in this Section 3(b)(iii), the rent escalation, as required by Section 3(b)(ii), shall be based on the full and unabated annual Base Rent for the Premises payable during the applicable preceding twelve (12) month period. 

4.    Operating Expenses.

(a)    Tenant shall continue to pay Tenant’s Proportionate Share of increases in Operating Expenses, as and when due under the Lease through July 31, 2022.

(b)    Beginning on the Extension Commencement Date, the following shall apply:

(i)    Section 4.1(b)(2)(xlvi) shall be deemed deleted and the following shall be deemed inserted in place thereof: “Property management fees for the Building included in Operating Expenses shall be limited to three percent (3%) of the Building’s gross revenues.”

(ii)    “Base Year” shall mean calendar year 2022.

(iii)    Tenant shall have no obligation to pay Tenant’s Proportionate Share of increases in Operating Expenses for the period commencing on the Extension Commencement Date and continuing through July 31, 2023. Beginning on August 1, 2023, Tenant shall pay Tenant’s Proportionate Share of increases in Operating Expenses as and when due under the Lease (as modified by this Amendment). 

5.    Condition of the Premises.

(a)    Tenant shall accept and continue to occupy the Premises in its “as is” condition as of the Extension Commencement Date. Except with respect to Landlord’s on-going repair and maintenance obligations as expressly provided in the Lease, Landlord is under no 

2

obligation to make any structural or other alterations, decorations, additions or improvements in or to the Premises or the Building.

(b)    Landlord shall grant Tenant an improvement allowance and Tenant shall have the right to make certain improvements to the Premises, all as more particularly set forth in Exhibit B attached hereto.

6.    Renewal. Tenant shall continue to have the right to renew the Lease Term for two (2) renewal terms as set forth in Rider No. 1 attached to the Lease (as amended by the Third Amendment); provided, however, the Lease is hereby amended to provide that (i) the first Renewal Term shall commence immediately following the expiration of the Extension Term and (ii) Tenant shall exercise such right to renew the Lease Term by giving Landlord the Renewal Option Notice no less than fifteen (15) months and no more than eighteen (18) months prior to, with respect to the first Renewal Term, the expiration of the Extension term or, with respect to the second Renewal Term, the expiration of the first Renewal Term.

7.    Lease Adjustments. 

(a)    Articles XXXI and XXXII of the Lease (as amended), and Tenant rights to reduce the size of the Premises and to terminate the Lease set forth therein, are hereby deleted and of no further force or effect, and Tenant hereby waives any Lease Term extension, acceleration, termination and expansion rights that Tenant has or might hereafter have under the Lease (whether fixed, right of opportunity or otherwise), except as expressly set forth in Article XXX of the Lease (as amended by the Third Amendment) and Rider No. 1 attached to the Lease (as amended by the Third Amendment and this Amendment). 

(b)    The last sentence of Section 1.3 of the Lease is hereby deleted and the following is inserted in place thereof:

Furthermore, it is understood and agreed that Landlord shall have the continuing right to cause its architect to re-measure the Building, provided that such re-measurement is conducted without interfering with Tenant's use of the Premises, but neither Tenant's Base Rent nor Tenant's Proportionate Share (as defined below) of Operating Expenses may be increased as a consequence of any such re-measurement.

(c)    (i)    Section 5.1(a) of the Lease is hereby deleted and the following is inserted in place thereof:

Landlord is currently in possession of a Letter of Credit in the amount of One Million Seven Hundred Seventy-Five Thousand Three Hundred Seventy-Seven and 32/100th Dollars ($1,775,377.32), as a security deposit (hereinafter referred to as “security deposit” or “Security Deposit”).  Among other things Landlord has assigned (or intends to assign) to the holder of the mortgage now or hereafter encumbering the Building, all of Landlord’s interest in this Lease, including, without limitation, the Security Deposit.

3

(ii)    Section 5.1(d) of the Lease is hereby deleted and the following table is inserted in place thereof:

Provided that, as of the Reduction Date (as defined below), (i) no monetary default or material non-monetary Event of Default has occurred and is then continuing under this Lease and (ii) Tenant has annual revenues of no less than $350 million (in 2022 United States Dollars) and is publicly traded on a nationally recognized stock exchange, Tenant shall have the right to reduce the security deposit by the amount set forth below with respect to each Reduction Date:

	
		
	Reduction Date
	Security Deposit 
Reduction Amount

	

August 1, 2022

	

$397,000.00

	

August 1, 2024

	

$397,000.00

	

August 1, 2025

	

$584,000.00

(iii)    The second sentence of the paragraph immediately following the table set forth in Section 5.1(d) is hereby deleted.

(iv)    The last sentence of Section 5.1(d) of the Lease is hereby deleted and the following is inserted in place thereof: “In addition, in no event shall the Security Deposit be reduced to an amount less than $397,377.32.”

8.    Amendment No. 3 Rent Abatement Reduction. One Freedom Square, LLC (“One Freedom Square Landlord”), an affiliate of Landlord, and Tenant are parties to a certain Deed of Lease, dated December 29, 2011 (as amended, “One Freedom Square Lease”), under which One Freedom Square Landlord leases to Tenant certain premises at the building commonly known as One Freedom Square located at 11951 Freedom Drive, Reston, Virginia. If Tenant terminates the One Freedom Square Lease and elects to reduce the Termination Payment (as defined in the One Freedom Square Lease) by $860,000.00 as set forth in that certain [Termination Agreement], dated on or about the date hereof, between One Freedom Square Landlord and Tenant, Tenant acknowledges and agrees that the Amendment No. 3 Rent Abatement set forth in the Third Amendment shall be reduced by $860,000.00 (i.e., the Amendment No. 3 Rent Abatement Period shall be shortened such that Tenant shall be obligated to pay an additional $860,000.00 in Base Rent under the Lease).

9.    Broker. Landlord recognizes CBRE, Inc. (“Broker”) as the sole broker procuring this Amendment and shall pay said Broker a commission pursuant to a separate agreement between 

4

said Broker and Landlord. Landlord and Tenant each represent and warrant to the other that, except as provided in the preceding sentence, neither of them has employed or dealt with any broker, agent or finder in carrying on the negotiations relating to this Amendment. Landlord shall indemnify and hold Tenant harmless from and against all claims, costs, damages, demands, actions, liabilities, expenses and causes of action (including, without limitation, attorney's fees) of any sort arising out of, resulting from or relating to a breach of the above representation and warranty by Landlord. Tenant shall indemnify and hold Landlord harmless from and against all claims, costs, damages, demands, actions, liabilities, expenses and causes of action (including, without limitation, attorney's fees) of any sort arising out of, resulting from or relating to a breach of the above representation and warranty by Tenant.

10.    Ratification. Except as otherwise expressly modified by the terms of this Amendment, the Lease shall remain unchanged and continue in full force and effect. All terms, covenants and conditions of the Lease not expressly modified herein are hereby confirmed and ratified and remain in full force and effect, and, as further amended hereby, constitute valid and binding obligations of Tenant enforceable according to the terms thereof. 

11.    [intentionally omitted]

12.    Mutual Negotiation. Landlord and Tenant each hereby covenant and agree that each and every provision of this Amendment has been jointly and mutually negotiated and authorized by both Landlord and Tenant, and in the event of any dispute arising out of any provision of this Amendment, Landlord and Tenant do hereby waive any claim of authorship against the other party.

13.    General Provisions.

(a)    Landlord and Tenant hereby represent and warrant to each other that all necessary action has been taken to enter this Amendment and that the persons signing this Amendment on behalf of Landlord and Tenant, respectively, have been duly authorized to do so.

(b)    Landlord and Tenant agree that the terms and conditions of this Amendment and the Lease shall remain confidential and shall not be disclosed, directly or indirectly, to any individual or entity by either Landlord or Tenant without the express written consent of the other, with the exception of consultants, brokers, employees, agents, lawyers, accountants and other professionals employed or retained directly by either or both of the parties to negotiate or work on this Amendment who have a legitimate need to know such information, and any other disclosures as may be required to comply with applicable Legal Requirements or otherwise required by a court of law or in connection with any other legal arbitration or dispute resolution proceeding. Any and all public announcements regarding the Lease or this Amendment and any public announcement using either party’s name must be approved in writing by such party prior to publication or other dissemination.

(c)    This Amendment shall not be effective and binding unless and until fully executed and delivered by each of the parties hereto. This Amendment may not be modified, changed or terminated in whole or in part in any manner other than by an agreement in writing duly signed 

5

by all parties hereto. All of the covenants contained in this Amendment, including, but not limited to, all covenants of the Lease as modified hereby, shall be binding upon and inure to the benefit of the parties hereto, their respective heirs, legal representatives and permitted successors and assigns.

(d)    This Amendment may be executed in multiple counterparts, each of which shall be an original, but all of which shall constitute one and the same Amendment. The parties acknowledge and agree that they will accept faxed transmissions of, or electronically scanned and transmitted versions of, an original signature.

(e)    If any provision of this Amendment or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Amendment, or the application of such provision to persons or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each provision of this Amendment shall be valid and enforceable to the fullest extent permitted by law.

(f)    This Amendment shall be governed by and construed in accordance with the laws of the jurisdiction in which the Building is located, without regard to the conflicts of laws principles.

(g)    In the event of any conflict between the Lease and this Amendment, the terms of this Amendment shall control.
    
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURE PAGE FOLLOWS]

6

IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment on or as of the day and year first above written. 

	
		
	LANDLORD:

	 
	 

	SOUTH OF MARKET LLC,

	a Delaware limited liability company

	 
	 

	By:
	BOSTON PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership, its sole member and manager

	 
	 

	By:
	BOSTON PROPERTIES INC., a Delaware Corporation, its general partner

	
		
	By:
	/s/ Jonathan L. Kaylor

	Name:
	Jonathan L. Kaylor

	Title:
	Senior Vice President

	
		
	TENANT:

	 
	 

	COMSCORE, INC.,

	a Delaware corporation

	 
	 

	By:
	/s/ Gregory A. Fink

	Name:
	Gregory A. Fink

	Title:
	Chief Financial Officer and Treasurer

 

[AMENDMENT NO. 6 TO DEED OF LEASE]

EXHIBIT A

DIAGRAM OF THE PREMISES

[attached]

EXHIBIT B

WORK AGREEMENT

All capitalized terms not defined herein shall have the meaning set forth in the Amendment. 
    
1.    Authorized Representatives. Tenant designates [____________ and/or ___________]1 (“Tenant’s Authorized Representative”) as the person(s) authorized to approve in writing all plans, drawings, specifications, change orders, charges and approvals pursuant to this Exhibit (and the act of either of the aforenamed persons shall be sufficient to bind Tenant). Landlord designates Sharon Clayborne, Vice President, Construction (“Landlord’s Authorized Representative”) as the person authorized to approve in writing all plans, drawings, specifications, change orders, charges and approvals pursuant to this Exhibit, subject to any applicable partnership restrictions (and the act of the aforenamed person shall be sufficient to bind Landlord). Either party may designate a substitute Authorized Representative by written notice to the other party. Neither party shall be obligated to respond to any instructions, approvals, changes, or other communications in connection with this Exhibit from anyone claiming to act on the other party’s behalf other than their Authorized Representative. All references in this Exhibit to actions taken, approvals granted, or submissions made by either party shall mean that such actions, approvals or submissions have been taken, granted or made, in writing, by such party’s Authorized Representative acting for such party. 

2.    Leasehold Work. The leasehold improvements to the Premises made in connection with the Amendment (“Leasehold Work”) shall be designed and constructed in accordance with the terms of this Exhibit.

3.    Architect and Engineers.

(a)    Tenant shall engage an architect reasonably approved by Landlord, to prepare all plans for the Leasehold Work (“Leasehold Architect”). Landlord, at Landlord’s sole expense, separate from the Tenant Improvement Allowance, shall fund an allowance to be used by Tenant for test fit planning as set forth in Section 4(f). The Leasehold Architect will engage the base building MEP Engineer to prepare the engineering drawings related to the Leasehold Work. If the Leasehold Architect is unable to employ the base building MEP Engineer on acceptable terms, after consultation with Landlord, Tenant shall direct the Leasehold Architect to retain another qualified engineer, approved by Landlord in its sole discretion, and Leasehold Architect shall cause the chosen leasehold engineer to coordinate its drawings for the Premises with the base building MEP Engineer. The engineer so engaged by the Leasehold Architect is hereinafter referred to as the “Leasehold Engineer.”

(b)    Tenant may employ a professional project management or construction management firm, reasonably approved by Landlord, to provide project management services with respect to the Leasehold Work, and shall pay any fees due to the project manager for such services, which fees may be paid from the Improvement Allowance (subject to the permitted application thereof pursuant to Section 6(a)).
__________________________
1 Tenant: Please provide.

Exhibit B, Page 1

4.    Plans for Leasehold Work.

(a)    Tenant shall cause the Leasehold Architect and the Leasehold Engineer to prepare final construction documents (“Construction Documents”) for the Leasehold Work, in a form approved by Tenant, for submission to Landlord for its approval. If Landlord has any comments with respect to the Construction Documents, Landlord shall use commercially reasonable efforts to make such comments known to Tenant within ten (10) business days following Landlord’s receipt of the Construction Documents. All of the Construction Documents for the Leasehold Work that have been submitted by Tenant and approved by Landlord shall be referred to herein collectively as the “Leasehold Plans.” 

(b)    All plans, drawings and documents related to the Leasehold Work (and any change orders related thereto) shall be submitted to Landlord for its approval in accordance with this Exhibit, which approval shall not be unreasonably withheld, conditioned or delayed with respect to components of the Leasehold Work that do not constitute Structural Alterations, but which approval with respect to any components of the Leasehold Work that constitute Structural Alterations, may be granted or withheld in Landlord’s sole discretion. Tenant shall incorporate into the Leasehold Work the standard building requirements and materials as identified by Landlord. 

(c)    Any changes to the Leasehold Plans made after Landlord’s initial review and approval must be clearly noted on the Leasehold Plans and submitted to Landlord, together with a written narrative describing the changes, for Landlord’s additional approval. Tenant shall be responsible for all costs related to the failure to identify any such changes.

(d)    If Landlord requires that any submission from Tenant be modified in order to obtain Landlord’s approval, then Tenant shall resubmit revised documents, plans, specifications or other materials, as the case may be, incorporating Landlord’s requested changes, to the extent that Landlord’s approval is required by this Exhibit, and responding to any other issues or questions properly reasonably raised by Landlord in its review of any prior submission. Such submission and approval shall continue until approval is granted as submitted.

(e)    Tenant shall be solely responsible to ensure that the Leasehold Plans (and each component thereof) comply with all Legal Requirements and with all design standards set forth in the Rules for Contractors attached hereto as Schedule II and Landlord’s approval thereof shall not constitute Landlord’s representation or approval that such plans comply with all applicable Legal Requirements or such design standards.

(f)    Landlord shall grant Tenant an allowance in an amount equal to $0.12 multiplied by the number of square feet of rentable area in the Premises to be applied toward the costs to design and prepare the Leasehold Plans.

     5.    Leasehold Contractor; Cost of Leasehold Improvements.

(a)    Tenant shall engage a general contractor (“Leasehold Contractor”), to be reasonably approved by Landlord, to construct the Leasehold Work in accordance with the Leasehold Plans. All other contractors and subcontractors for the Leasehold Work shall be approved by 

Exhibit B, Page 2

Landlord in writing and in advance of the performance of any work by such contractors or subcontractors. All contractors and subcontractors shall be licensed, of good reputation, have a demonstrated capability to perform quality workmanship, be experienced in performing work of the type contemplated in similar class buildings, and be bondable.

(b)    The cost of the design, permitting and construction of the Leasehold Work, including without limitation, architectural and engineering fees, other design and construction consulting fees, telephone, audio-visual and security cabling and wiring, signage, moving expenses, furniture, fixtures and equipment, and other expenditures for the design and construction of the Leasehold Work, such as permits, permit expediters, “peer review” etc., including Landlord’s Construction Monitoring Fee (collectively, “Leasehold Costs”) shall, in each case, be borne by Tenant, subject to the permitted application of the Improvement Allowance pursuant to Section 6(a). 

(c)    During construction of the Leasehold Work, the usage of the Building’s service elevator by Tenant, the Leasehold Contractor, its subcontractors and any other contractors engaged by Tenant in connection with the Leasehold Work shall (i) be coordinated with Landlord and (ii) not interfere with the use of the service elevator by any other contractors working in the Building or any other tenants already occupying their respective premises in the Building. Tenant agrees that other tenants already occupying their respective premises in the Building shall have priority usage of the service elevator during the Building’s normal business hours and any planned usage of the service elevator by Tenant or such contractors for other than moving its respective personnel (i.e., for stocking materials) shall occur on an after-hours basis and shall be coordinated with Landlord’s on-site property management staff. Tenant shall not be required to pay Landlord any fees or charges for use by Tenant and such contractors of the service elevator during construction of the Leasehold Work. 

(d)    Tenant shall cause the Leasehold Contractor to engage (or shall otherwise employ) Landlord’s base building subcontractors and consultants set forth in the Rules for Contractors (each a “Required Subcontractor”) for the design and performance of all Leasehold Work related to (i) tie-ins to the base building’s fire and life-safety system and elevators, (ii) the Building’s exterior envelope (including the roof and the glass and glazing systems), (iii) the base building’s HVAC control system and (iv) such other portions of the Leasehold Work that would be customarily performed by a contractor or subcontractor of the same trade as any Required Subcontractor. Landlord shall exercise commercially reasonable efforts to ensure fair pricing for such work.

(e)    All amounts payable by Tenant pursuant to this Exhibit shall be considered additional rent.

6.    Improvement Allowance.

(a)    Provided no monetary default, or non-monetary Event of Default beyond any applicable notice and cure periods, has occurred and is continuing under the Lease, Landlord shall grant Tenant an improvement allowance (“Improvement Allowance”) in an amount equal to $45.00 multiplied by the number of square feet of rentable area in the Premises, to be applied toward the Leasehold Costs. Tenant shall have access to the Improvement Allowance on the Effective Date, 

Exhibit B, Page 3

subject to the disbursement requirements set forth herein. At least seventy-five percent (75%) of the Improvement Allowance shall be applied within the entire Premises toward “hard costs” (i.e., the cost of demolition, construction and installation of the Leasehold Work and acquisition of the materials for the Leasehold Work). In addition, Tenant may apply up to twenty-five percent (25%) of the Improvement Allowance toward the costs of (i) audio-visual systems, security systems, furniture, fixtures, equipment, and moving expenses (“Limited Soft Costs”) and (ii) architectural design fees, engineering services, permitting costs, cabling, data and telephone installation and related construction management fees (the items described in clauses (i) and (ii), collectively “Soft Costs”); provided, however, in no event may Tenant apply more than an amount equal to $5.00 multiplied by the number of square feet of rentable area in the Premises toward the Limited Soft Costs. No part of the Improvement Allowance may be applied towards signage costs or rental abatement or credits. Any portion of the Improvement Allowance that remains unreserved and unapplied by December 31, 2019 shall be deemed waived and forfeited. For purposes of this Section 6(a), Improvement Allowance funds shall be deemed reserved only to the extent that the Leasehold Work for which the Improvement Allowance funds will be applied has been completed and a disbursement requisition for such funds has been submitted to Landlord.

(b)    Disbursements of the Improvement Allowance will be made by Landlord within thirty (30) days after Tenant’s submission of a requisition (together with the supporting documentation required hereunder), which requisitions shall be submitted no more frequently than monthly. Delivery to Landlord by Tenant of all the following shall be a condition precedent to Landlord’s obligation to disburse any portion of the Improvement Allowance: (i) invoices for completed portions of the Leasehold Work; (ii) conditional lien waivers for such work from all persons or entities that could file mechanics’ or materialmen’s liens against the Premises, the Building or the land on which the Building is located, with respect to all work performed or services or materials provided through the date of each such invoice (subject only to receipt of the requisitioned amount); (iii) the Leasehold Architect’s written certification that the work for which the requisition is being made has been completed in accordance with the Leasehold Plans; (iv) with respect to any Soft Costs for which Tenant has directly contracted, a certificate specifying the cost of such Soft Costs, together with evidence of such cost in the form of paid invoices, receipts and the like; (v) an updated budget for the Leasehold Work detailing the net cost to complete the Leasehold Work (i.e., net of costs for the Leasehold Work previously paid); and (vi) such other documentation as may be reasonably requested by Landlord. Landlord shall make disbursements directly to Tenant’s Leasehold Contractor, Leasehold Architect or Leasehold Engineer, provided that Landlord receives written direction to make such direct payment for the applicable disbursement.

(c)    Any portion of the Leasehold Costs in excess of the Improvement Allowance shall be borne by Tenant. The following provisions shall apply with respect to disbursement of the Improvement Allowance.

(i)    In the event that the Leasehold Costs are equal to or less than the Improvement Allowance, then Landlord shall make disbursements of the Improvement Allowance to Tenant for the Leasehold Costs, net of previous disbursements therefrom.

(ii)    In the event that the Leasehold Costs are greater than the Improvement Allowance, then Landlord shall make disbursements of the Improvement Allowance (or such portion 

Exhibit B, Page 4

thereof as has not previously been disbursed) to Tenant in pro rata payments, based on the percentage of the Leasehold Work that has been completed (but not in excess of the sums actually being disbursed to the Leasehold Contractor).  If the cost to construct the Leasehold Work, as adjusted by any increase or decrease in Leasehold Costs resulting from change orders, will exceed the unapplied (and unreserved) portion of the Improvement Allowance (“Unused Allowance”), then Landlord’s pro rata share of the requisition shall be determined by multiplying said requisition by a fraction, the numerator of which is the amount of the Unused Allowance as of the date of such requisition, and the denominator of which is the net cost to complete the Leasehold Work (i.e., net of costs for the Leasehold Work previously paid) as adjusted by any increase or decrease in Leasehold Costs resulting from change orders as of such date.

(iii)    Tenant shall provide Landlord monthly with a written statement evidencing the Leasehold Costs incurred to date.

(d)    A retainage in an amount equal to ten percent (10%) of the Improvement Allowance shall be withheld from disbursement of the Improvement Allowance by Landlord until such time as the Close-Out Requirements set forth on Schedule I are completed.

(e)    All improvements that are funded by the Improvement Allowance shall be the property of Landlord; provided, however, that upon the expiration of the Term, Tenant shall be required to remove [(i) Leasehold Work equipment and/or fixtures that the Lease expressly requires Tenant to remove pursuant to other provisions of the Lease, and (ii) all Leasehold Work equipment and/or fixtures that constitute Non-standard Improvements and of which Landlord gave notice to Tenant at the time of approval of the plans and specifications therefor that such improvements would have to be removed upon the expiration of the Term.]2 Any damage and injury to the Premises or the Building caused by any such removal shall be repaired by Tenant, at Tenant’s sole expense. 

7.    Additional Requirements. Tenant shall comply with, or shall cause the applicable party to comply with, the following requirements in connection with the Leasehold Work.

(a)    The Leasehold Contractor, its subcontractors and any other contractors engaged by Tenant in connection with the Leasehold Work shall comply with all Legal Requirements relating to employment or conditions of employment of its employees, including, without limitation, laws or regulations concerning workers’ compensation, social security, unemployment insurance, classification of employees, hours of labor, wages, working conditions, safety regulations and work practices. All work performed by Tenant, the Leasehold Contractor, its subcontractors and any other
contractors engaged by Tenant in connection with the Leasehold Work shall be performed in a good and workmanlike and safe manner, in accordance with all applicable Legal Requirements and with the approved Leasehold Plans. Landlord shall have the right to cause Tenant to correct, replace or remove any improvements installed in the Premises by Tenant, the Leasehold Contractor, its subcontractors or any other contractors engaged by Tenant in connection with the Leasehold Work that do not comply with the preceding sentence.

(b)    Tenant, the Leasehold Contractor, its subcontractors and any other contractors engaged by Tenant in connection with the Leasehold Work shall comply with the Rules
____________________
2 Note: This is the same removal obligation per Section 9.4 of the Lease.

Exhibit B, Page 5

for Contractors attached hereto as Schedule II and with any additional or modified work rules that may be reasonably adopted by Landlord (“Rules for Contractors”) and shall coordinate on an ongoing basis with Landlord’s project manager and construction manager concerning construction-related matters. 

(c)    Tenant shall be solely responsible for the progress of construction of the Leasehold Work and for the quality or fitness thereof. Tenant shall be liable for any breakage or damage to the Building (including, without limitation, the base building systems) caused by any act or omission of Tenant, the Leasehold Contractor, its subcontractors or any other contractors engaged by Tenant in connection with the Leasehold Work and each of their respective agents or employees. 

(d)    Prior to the commencement of the Leasehold Work, Tenant shall (i) obtain all permits and approvals relating to the performance of the Leasehold Work required by any governmental or quasi-governmental agency (including, without limitation, any applicable design or architectural review boards or other governance boards) having jurisdiction over the Premises and deliver copies thereof to Landlord, (ii) deliver to Landlord a budget for the Leasehold Work, and (iii) deliver to Landlord certificates of insurance from the Leasehold Contractor and the applicable subcontractors (it being understood that certificates of insurance from subcontractors may be delivered after the commencement of the Leasehold Work so long as such certificates are delivered prior to the performance of the portion of the Leasehold Work applicable to such subcontractor). 

(e)    Prior to Tenant’s occupancy of the Premises (or the affected portion thereof, as applicable), Tenant shall obtain all permits, approvals and required final inspections relating to the lawful occupancy of the Premises (or the affected portion thereof) required by any governmental or quasi-governmental agency (including, without limitation, any applicable design or architectural review boards or other governance boards) having jurisdiction over the Premises and deliver copies thereof to Landlord. 

(f)    Upon completion of the Leasehold Work, Tenant and the Leasehold Contractor shall comply with, and provide Landlord with the documents and materials set forth in, the close-out requirements as set forth on Schedule I attached hereto.

8.    Construction Oversight Fee; Third Party Costs. 

(a)    Tenant shall pay to Landlord a construction oversight fee (“Construction Oversight Fee”) in an amount equal to $2,500.00, which shall be paid from the Improvement Allowance.  

(b)    Tenant shall pay to Landlord the reasonable, actual out-of-pocket costs incurred by Landlord for disciplines or trades that are not currently within Landlord’s capacity to perform in-house (e.g., structural engineering and MEP engineering) in connection with the review and approval of the Leasehold Plans (and any changes thereto) and in connection with the supervision of the performance of the Leasehold Work (capped at $2,500.00, per Section 8(a)), which may be paid from the Improvement Allowance (subject to the permitted application thereof pursuant to Section 6(a)).

Exhibit B, Page 6

Schedules to Exhibit B:

Schedule I        Close-Out Requirements
Schedule II        Rules for Contractors 

Exhibit B, Page 7

SCHEDULE I

CLOSE-OUT REQUIREMENTS

The following items are required from the general contractor prior to final payment being made:

		
	1.
	Two (2) complete sets of all Operations and Maintenance Manuals with an index, as specified in the project manuals. The sets should consist of one (1) bound in notebooks and one (1) PDF copy. 

		
	2.
	Two (2) sets of final, for-record, black line prints including architectural, structural, plumbing, fire protection, elevator, mechanical, and electrical drawings. The set should consist of one (1) PDF copy and one (1) hard copy. The drawings must include modifications made to the specifications, schedules and details and all changes initiated by requests for information and field orders.

		
	3.
	All original building permits and Non-Residential Use permits, or occupancy permits.

		
	4.
	Final Releases of Liens from the general contractor and all subcontractors.

		
	5.
	Two (2) copies of all warranties, including an approved roof warranty, if appropriate, with a corresponding warranty log. One (1) copy should be bound in notebooks and one (1) copy in PDF format. 

		
	6.
	One (1) complete PDF set of all approved submittals and shop drawings and a copy of the final submittal log.

		
	7.
	A complete list of all subcontractors and suppliers with addresses, phone numbers and contact persons. Also, a listing of all vendors, including names, addresses, phone numbers and contact persons that will be providing warranty service during the warranty periods.

		
	8.
	Two (2) copies of an as-built finish schedule suitable for quick reference.

		
	9.
	Two (2) copies of NEBB certified air and water balancing reports, including as-built air balance drawings identifying AHU’s, VAV boxes, and air diffusers by NEBB numbering system. One (1) copy should be in PDF file format and once copy should set of black line prints.

		
	10.
	One (1) completed “Subcontractor/Supplier/Vendor Compliance Certification” form indicating compliance with all relevant and applicable Federal procurement laws, regulations, terms and conditions.

		
	11.
	When the general contractor considers the work to be ready for final acceptance, written certification shall be submitted stating the following:

		
	(a)
	Work has been completed in accordance with the Contract Documents;

Schedule I, Page 1

		
	(b)
	All punch list items and other deficiencies identified by the Certificate of Substantial Completion have been corrected;

		
	(c)
	Work has been inspected for compliance with Contract Documents;

		
	(d)
	All mechanical and electrical equipment and systems have been tested in the presence of the Owner’s representative and are operational; and

		
	(e)
	Final, for record drawings have been reviewed and are accurate.

Note: All electronic copies are to be distributed on USB flashdrive(s).

Schedule I, Page 2

SCHEDULE II

RULES FOR CONTRACTORS

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