Document:

Exhibit 10.2

 

Boreal Water Collection, Inc., Mortgagor

 

 

TO

 

 

Woodbridge Mortgage Investment Fund 1, LLC,
a Delaware LLC, Mortgagee

 

 

 

 

 

MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY

AGREEMENT AND FIXTURE FILING

 

 

 

Dated as of:     August
27, 2013

 

Location:4494-4496 State Road 42 North Kiamesha, New York 12751

 

 

	Section:		9

	Block:		1

	Lot:		40.2 and 41

	County:		Sullivan

	Municipality:		Thompson

 

 

 

 

 

 

 

 

RECORD AND RETURN TO:

 

 

 

Finger & Finger, A Professional Corporation

158 Grand Street

White Plains, New York 10601

 

 

    	 

    	 

    

THIS
MORTGAGE made as of the August 27, 2013, by Boreal Water Collection, Inc., a Nevada Corporation organized and existing under
the laws of the State of Nevada, having an office at 4494-4496 State Road 42 North, Kiamesha, New York 12751 (hereinafter referred
to as the "Mortgagor") and Woodbridge Mortgage Investment Fund 1, LLC, a Delaware LLC, having its principal place
of business at 14225 Ventura Boulevard, Suite 100, Sherman Oaks, CA 91423 (hereinafter referred to as the "Mortgagee").

 

W I T N E S S E T H:

 

WHEREAS, the Mortgagor is the owner of a fee estate in the premises
described in Exhibit A attached hereto (the "Premises");

 

 

NOW, THEREFORE, to secure the payment of an
indebtedness in the principal sum of Nine Hundred Thousand and N0/100 ($900,000) DOLLARS, lawful money of the United States of
America, to be paid with interest according to a certain Note dated the date hereof given by the Mortgagor to the Mortgagee (the
"Note") (said indebtedness, interest and all other sums which may or shall become due hereunder, collectively,
the "Debt"), the Mortgagor has mortgaged, given, granted, bargained, sold, aliened, enfeoffed, conveyed, confirmed
and assigned, and by these presents does mortgage, give, grant, bargain, sell, alien, enfeoff, convey, confirm and assign unto
the Mortgagee forever all right, title and interest of the Mortgagor now owned, or hereafter acquired, in and to the following
property, rights and interest (such property, rights and interests, collectively, the "Mortgaged Property"):

 

(a)       The
Premises;

 

(b)       all
buildings and improvements now or hereafter located on the Premises (the "Improvements");

 

(c)       all of the estate,
right, title, claim or demand of any nature whatsoever of the Mortgagor, either in law or in equity, in possession or expectancy,
in and to the Mortgaged Property or any part thereof;

 

(d)       all easements, rights-of-way,
gores of land, streets, ways, alleys, passages, sewer rights, waters, water courses, water rights and powers, and all estates,
rights, titles, interests, privileges, liberties, tenements, hereditaments, and appurtenances of any nature whatsoever, in any
way belonging, relating or pertaining to the Mortgaged Property (including, without limitation, any and all development rights,
air rights or similar or comparable rights of any nature whatsoever now or hereafter appurtenant to the Premises or now or hereafter
transferred to the Premises) and all land lying in the bed of any street, road or avenue, opened or proposed, in front of or adjoining
the Premises to the center line thereof;

 

(e)       all machinery, apparatus,
equipment, fittings, fixtures and other property of every kind and nature whatsoever and all additions thereto and renewals and
replacements thereof, and all substitutions therefor now owned or hereafter acquired by the Mortgagor, or in which the Mortgagor
has or shall have an interest, now or hereafter located upon or in, or attached to, any portion of the Mortgaged Property or appurtenances
thereto, and used or usable in connection with the present or future operation and occupancy of the Mortgaged Property and all
building equipment, materials and supplies of any nature whatsoever owned by the Mortgagor, or in which the Mortgagor has or shall
have an interest, now or hereafter located upon the Mortgaged Property and whether stored at the Mortgaged Property or off-site
(collectively, the "Equipment"), and the right, title and interest of the Mortgagor in and to any of the Equipment which
may be subject to any security agreements (as defined in the Uniform Commercial Code of New York), superior in lien to lien of
this Mortgage and all proceeds and products of any of the above;

 

    	1

    	 

    

 

(f)       all awards or payments, including interest
thereon, and the right to receive the same, which may be made with respect to the Mortgaged Property, whether from the exercise
of the right of eminent domain (including any transfer made in lieu of the exercise of said right), or for any other injury to
or decrease in the value of the Mortgaged Property;

 

(g)       all leases and other agreements affecting
the use or occupancy of the Mortgaged Property now or hereafter entered into (the "Leases") and the right to receive
and apply the rents, issues and profits of the Mortgaged Property (the "Rents") to the payment of the Debt which Leases
and Rents are hereby absolutely and unconditionally assigned to Mortgagee;

 

(h)       all
right, title and interest of the Mortgagor in and to (i) all contracts from time to time executed by the Mortgagor or any manager
or agent on its behalf relating to the ownership, construction, maintenance, repair, operation, occupancy, sale or financing of
the Mortgaged Property or any part thereof and all agreements relating to the purchase or lease of any portion of the Mortgaged
Property or any property which is adjacent or peripheral to the Mortgaged Property, together with the right to exercise such options
and all leases of Equipment, (ii) all consents, licenses, building permits, certificates of occupancy and other governmental approvals
relating to construction, completion, occupancy, use or· operation of the Mortgaged Property or any part thereof, and (iii)
all drawings, plans, specifications and similar or related items relating to the Mortgaged Property;

 

(i)       all trade names, trademarks, logos, copyrights,
good will and books and records relating to or used in connection with the operation of the Mortgaged Property or any part thereof;
all general intangibles related to the operation of the Mortgaged Property now existing or hereafter arising;

 

(j)       all proceeds, both cash and non-cash, of
the foregoing;

 

(k)       all proceeds of and any unearned premiums
on any insurance policies covering the Mortgaged Property, including, without limitation, the right to receive and apply the proceeds
of any insurance, judgments, or settlements made in lieu thereof, for damage to the Mortgaged Property; and

 

(l)       the right, in the name and on behalf of
the Mortgagor, to appear in and defend any action or proceeding brought with respect to the Mortgaged Property and to commence
any action or proceeding to protect the interest of the Mortgagee in the Mortgaged Property.

 

TO HAVE AND TO HOLD the above granted and described
Mortgaged Property unto and to the proper use and benefit of the Mortgagee, and the successors and assigns of the Mortgagee, forever.

 

AND the Mortgagor covenants and agrees with
and represents and warrants to the Mortgagee as follows:

 

1.       Payment of Debt. The Mortgagor will
pay the Debt at the time and in the manner provided for its
payment in the Note and in this Mortgage.

 

 

    	2

    	 

    

 

2.       Warranty of Title.

 

(a)        Subject
only to those exceptions to title specifically set forth in the title policy issued or to be issued by Chicago Title Insurance
Company to the Mortgagee and insuring the lien of this Mortgage, the Mortgagor warrants the title to the Premises, the Improvements,
the Equipment and the balance of the Mortgaged Property. The Mortgagor also represents and warrants that (i) the Mortgagor is now,
and after giving effect to this Mortgage, will be in a solvent condition, (ii) the execution and delivery of this Mortgage by the
Mortgagor does not constitute a "fraudulent conveyance" within the meaning of Title 11 of the United States Code
as now constituted or under any other applicable statute, and (iii) no bankruptcy or insolvency proceedings are pending or contemplated
by or against the Mortgagor.

 

(b)       The
Mortgagor (and the undersigned representative of the Mortgagor, if any) additionally represents and warrants that: (i) it has full
power, authority and legal right to execute this Mortgage, and to mortgage, give, grant, bargain, sell, alien, enfeoff, convey,
confirm and assign the Mortgaged Property pursuant to the terms hereof and to keep and observe all of the terms of this·
Mortgage on the Mortgagor's part to be performed, (ii) if the Mortgagor is a corporation, the Mortgagor is a duly organized and
presently existing corporation and this Mortgage has been executed by authority of its Board of Directors and with the requisite
consent of the holders of the outstanding shares of its capital stock entitled to vote thereon, if such consent is required under
the provisions of the certificate of incorporation of the Mortgagor, (iii) if the Mortgagor is a partnership, the Mortgagor is
a duly authorized and validly existing partnership and this Mortgage has been executed by a duly authorized general partner and
(iv) if the Mortgagor is a limited liability company, this Mortgage has been authorized and executed in accordance with the provisions
of the operating agreement of the Mortgagor.

 

3.       Insurance.

 

The Mortgagor (i) will keep the Improvements
and the Equipment insured against loss or damage by fire, standard extended coverage perils and such other hazards as the Mortgagee
shall from time to time require in amounts approved by the Mortgagee, which amounts shall in no event be less than 100% of the
full insurable value of the Improvements and the Equipment and shall be sufficient to meet all applicable co-insurance requirements,
and (ii) will maintain rental and business interruption insurance and (iii) such other forms of insurance coverage with respect
to the Mortgaged Property as the Mortgagee shall from time to time require in amounts approved by the Mortgagee. All policies of
insurance (the "Policies") shall be issued by insurers having a minimum policy holders rating of "A" per the
latest rating publication of Property and Casualty Insurers by A.M. Best Company and who are lawfully doing business in New York
and are otherwise acceptable in all respects to the Mortgagee. All Policies shall contain the standard New York mortgagee non-contribution
clause endorsement or an equivalent endorsement satisfactory to the Mortgagee naming the Mortgagee as the person to which all payments
made by the insurer thereunder shall be paid and shall otherwise be in form and substance satisfactory in all respects to the Mortgagee.
Blanket insurance policies shall not be acceptable for the purposes of this paragraph unless otherwise approved to the contrary
by the Mortgagee. The Mortgagor shall pay the premiums for the Policies as the same become due and payable. At the request of the
Mortgagee, the Mortgagor will deliver the Policies to the Mortgagee. Not later than ten (10) days prior to the expiration date
of each of the Policies, the Mortgagor will deliver to the Mortgagee a renewal policy or policies marked "premium paid"
or accompanied by other evidence of payment of premium satisfactory to the Mortgagee. If at any time the Mortgagee is not in receipt
of written evidence that all insurance required hereunder is

 

    	3

    	 

    

 

in force and effect, the Mortgagee shall have the right without notice to the Mortgagor to take such action
as the Mortgagee deems necessary to protect its interest in the Mortgaged Property, including, without limitation, the obtaining
of such insurance coverage as the Mortgagee in its sole discretion deems appropriate, and all expenses incurred by the Mortgagee
in connection with such action or in obtaining such insurance and keeping it in effect shall be paid by the Mortgagor to the Mortgagee
upon demand. The Mortgagor shall at all times comply with and shall cause the Improvements and Equipment and the use, occupancy,
operation, maintenance, alteration, repair and restoration thereof to comply with the terms, conditions, stipulations and requirements
of the Policies. If the Premises, or any portion of the Improvements or the Equipment, is located in a Federally designated "special
flood hazard area," in addition to the other Policies required under this paragraph, a flood insurance policy shall be delivered
by the Mortgagor to the Mortgagee. If no portion of the Premises is located in a Federally designated "special flood hazard
area" such fact shall be substantiated by a certificate in form satisfactory to the Mortgagee from a licensed surveyor, appraiser
or professional engineer or other qualified person. If the Mortgaged Property shall be damaged or destroyed, in whole or in part,
by fire or other property hazard or casualty, the Mortgagor shall give prompt notice thereof to the Mortgagee. Sums paid to the
Mortgagee by any insurer may be retained and applied by the Mortgagee toward payment of the Debt whether or not then due and payable
in such order, priority and proportions as the Mortgagee in its discretion shall deem proper or, at the discretion of the Mortgagee,
the same may be paid, either in whole or in part, to the Mortgagor for such purposes as the Mortgagee shall designate. If the
Mortgagee shall receive and retain such insurance proceeds, the lien of this Mortgage shall be reduced only by the amount thereof
received and retained by the Mortgagee and actually applied by the Mortgagee in reduction of the Debt. The provisions of subsection
4 of Section 254 of the Real Property Law of New York covering the insurance of buildings against loss by fire shall not apply
to this Mortgage. In addition, the Mortgagee must be named as first mortgagee and loss payee as to the Mortgaged Property under
the insurance policy maintained by the Mortgagor for the Mortgaged Property.

 

4.       Payment
of Taxes, etc. The Mortgagor shall pay all taxes, assessments, water rates, sewer rents and other charges, including vault
charges and license fees for the use of vaults, chutes and similar areas adjoining the Premises, now or hereafter levied or assessed
against the Mortgaged Property, and all common charges, dues and assessments imposed pursuant to the Condominium Documents, all
insurance premiums, water rates and sewer rents (the "Taxes") prior to the date upon which any fine, penalty, interest
or cost may be added thereto or imposed by law for the nonpayment thereof. The Mortgagor shall deliver to the Mortgagee, upon request,
receipted bills, cancelled checks and other evidence satisfactory to the Mortgagee evidencing the payment of the Taxes prior to
the date upon which any fine, penalty, interest or cost may be added thereto or imposed by law for the nonpayment thereof.

 

5.       
At the option of the Mortgagee, the Mortgagor will pay to the Mortgagee on the 1st day of each calendar month one-twelfth of an
amount (the "Escrow Fund") which would be sufficient to pay the Taxes payable, or estimated by the Mortgagee to be payable,
during the ensuing twelve (12) months. The Mortgagee will apply the Escrow Fund to the payment of Taxes which are required to
be paid by the Mortgagor pursuant to the provisions of this Mortgage. If the amount of the Escrow Fund shall exceed the amount
of the Taxes payable by the Mortgagor pursuant to the provisions of this Mortgage, the Mortgagee shall, in its discretion, (a)
return any excess to the Mortgagor, or (b) credit such excess against future payments to be made to the Escrow Fund. In allocating
such excess, the Mortgagee may deal with the person shown on the records of the Mortgagee to be the owner of the Mortgaged Property.
If the Escrow Fund is not sufficient to pay the Taxes, as the same become payable, the Mortgagor shall pay to the Mortgagee, upon
request, an amount which the Mortgagee shall estimate as sufficient to make up the deficiency. Until expended or applied as above
provided, any amounts in the Escrow Fund may be commingled with the general funds of the Mortgagee and shall constitute additional
security for the Debt and shall not bear interest.

 

    	4

    	 

    

6.       Condemnation.
Notwithstanding any taking by any public or quasi-public authority through eminent domain or otherwise, the Mortgagor shall continue
to pay the Debt at the time and in the manner provided for its payment in the Note and this Mortgage and the Debt shall not be
reduced until any award or payment therefor shall have been actually received and applied by the Mortgagee to the discharge of
the Debt. The Mortgagee may apply the entire amount of any such award or payment to the discharge of the Debt whether or not then
due and payable in such order, priority and proportions as the Mortgagee in its discretion shall deem proper. If the Mortgaged
Property is sold, through foreclosure or otherwise, prior to the receipt by the Mortgagee of such award or payment, the Mortgagee
shall have the right, whether or not a deficiency judgment on the Note shall have been sought, recovered or denied, to receive
such award or payment, or a portion thereof sufficient to pay the Debt, whichever is less. The Mortgagor shall file and prosecute
its claim or claims for any such award or payment in good faith and with due diligence and cause the same to be collected and paid
over to the Mortgagee. The Mortgagor hereby irrevocably authorizes and empowers the Mortgagee, in the name of the Mortgagor or
otherwise, to collect and receipt for any such award or payment and to file and prosecute such claim or claims. Although it is
hereby expressly agreed that the same shall not be necessary in any event, the Mortgagor shall, upon demand of the Mortgagee, make,
execute and deliver any and all assignments and other instruments sufficient for the purpose of assigning any such award or payment
to the Mortgagee, free and clear of any encumbrances of any kind or nature whatsoever.

 

7.       Leases
and Rents.

 

(a)       Subject to the terms of this paragraph,
the Mortgagee waives the right to enter the Mortgaged Property for the purpose of collecting the Rents, and grants the Mortgagor
the right to collect the Rents. The Mortgagor shall hold the Rents, or an amount sufficient to discharge all current sums due
on the Debt, in trust for use in payment of the Debt. The right of the Mortgagor to collect the Rents may be revoked by the Mortgagee
upon any default by the Mortgagor under the terms of the Note or this Mortgage by giving notice of such revocation to the Mortgagor.
Following such notice the Mortgagee may retain and apply the Rents toward payment of the Debt in such order, priority and proportions
as the Mortgagee, in its discretion, shall deem proper, or to the operation, maintenance and repair of the Mortgaged Property,
and irrespective of whether the Mortgagee shall have commenced a foreclosure of this Mortgage or shall have applied or arranged
for the appointment of a receiver. The Mortgagor shall not, without the consent of the Mortgagee, make, or suffer to be made,
any Leases or cancel any Leases or modify or cancel any Leases or accept prepayments of installments of the Rents for a period
of more than one (1) month in advance or further assign the whole or any part of the Rents. The Mortgagee shall have all of the
rights against tenants of the Mortgaged Property as set forth in Section 291-f of the Real Property Law of New York. The Mortgagor
shall (a) fulfill or perform each and every provision of the Leases on the part of the Mortgagor to be fulfilled or performed,
(b) promptly send copies of all notices of default which the Mortgagor shall send or receive under the Leases to the Mortgagee,
and (c) enforce, short of termination of the Leases, the performance or observance of the provisions thereof by the tenants thereunder.
In addition to the rights which the Mortgagee may have herein, in the event of any default under this Mortgage, the Mortgagee,
at its option, may require the Mortgagor to pay monthly in advance to the Mortgagee, or any receiver appointed to collect the
Rents, the fair and reasonable rental value for the use and occupation of such part of the Mortgaged Property as may be in possession
of the Mortgagor. Upon default in any such payment, the Mortgagor will vacate and surrender possession of the Mortgaged Property
to the Mortgagee, or to such receiver, and, in default thereof, the Mortgagor may be evicted by summary proceedings or otherwise.
Nothing contained in this paragraph shall be construed as imposing on the Mortgagee any of the obligations of the lessor under
the Leases.

 

 

    	5

    	 

    

 

(b)       Mortgagor
acknowledges and agrees that, upon recordation of this Mortgage, Mortgagee's interest in the Rents shall be deemed to be fully
perfected "choate" and enforced as to Mortgagor and all third parties, including without limitation, any subsequently
appointed trustee in any case under the U.S. Bankruptcy Code, without the necessity of (i) commencing a foreclosure action with
respect to this Mortgage, (ii) furnishing notice to Mortgagor or tenants under the Leases, (iii) making formal demand for the
Rents (iv) taking possession of the Mortgaged Property as a Mortgagee-in-possession, (v) obtaining the appointment of a receiver
of rents and profits of the Mortgaged Property, (vi) sequestering or impounding the Rents, or (vii) taking any other affirmative
action.

 

(c)       For purposes of 11
U.S.C. Section 552 (b), Mortgagor and Mortgagee agree that this Mortgage shall constitute a "security agreement," that
the security interest created by such security agreement extends to property of Borrower acquired before the commencement of a
case in bankruptcy and to all amounts paid as Rents and that such security interest shall extend to all Rents acquired by the estate
after the commencement of a case in bankruptcy.

 

(d)       Mortgagor hereby further
acknowledges and agrees that all Rents are and shall be deemed to be "Cash Collateral" under Section 363 of the U.S.
Bankruptcy Code in the event that Mortgagor files a voluntary petition in bankruptcy or is made subject to any involuntary bankruptcy
proceeding. Borrower may not use the Cash Collateral without the consent of Mortgagee and/or an order of any bankruptcy court pursuant
to II U.S.C. 363(b) (2), and Mortgagor hereby waives any right it may have to assert that the Rents do not constitute Cash Collateral.
No consent by Mortgagee to the use of Cash Collateral by Mortgagor shall be deemed to constitute Mortgagee's approval of the purpose
for which such Cash Collateral was expended.

 

8.       Maintenance
of the Mortgaged Property. The Mortgagor shall cause the Mortgaged Property to be maintained in good condition and repair and
will not commit or suffer to be committed any waste of the Mortgaged Property. The Improvements and the Equipment shall not
be removed, demolished or materially altered (except for normal replacement of the Equipment) without the prior written
consent of the Mortgagee. The Mortgagor shall promptly comply with all existing and future governmental laws, orders,
ordinances, rules and regulations affecting the Mortgaged Property, or any portion thereof or the use thereof, including
without limitation, the Americans with Disabilities Act of 1990 (42 U.S.C.A. Sec. 12101 et. seq.) The
Mortgagor shall promptly repair, replace or rebuild any part of the Mortgaged Property which may be damaged or destroyed by
fire or other property hazard or casualty (including any fire or other property hazard or casualty for which insurance was
not obtained or obtainable) or which may be affected by any taking by any public or quasi-public authority through eminent
domain or otherwise, and shall complete and pay for, within a reasonable time, any structure at any time in the process of
construction or repair on the Premises. If such fire or other property hazard or casualty shall be covered by the Policies,
the Mortgagor's obligation to repair, replace or rebuild such portion of the Mortgaged Property shall be contingent upon the
Mortgagee paying the Mortgagor the proceeds of the Policies, or such portion thereof as shall be sufficient to complete such
repair, replacement or rebuilding, whichever is less. The Mortgagor will not, without obtaining the prior consent of the
Mortgagee, initiate, join in or consent to any private restrictive covenant, zoning ordinance, or other public or private
restrictions, limiting or affecting the uses which may be made of the Mortgaged Property or any part thereof.

 

    	6

    	 

    

 

9.       Environmental Provisions.

 

(a)       For the purposes of
this paragraph the following terms shall have the following meanings: (i) the term "Hazardous Material" shall
mean any material or substance that, whether by its nature or use, is now or hereafter defined or regulated as a hazardous waste,
hazardous substance, pollutant or contaminant under any Environmental Requirement, or which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous or which is or contains petroleum, gasoline, diesel fuel,
another petroleum hydrocarbon product, asbestos, asbestos-containing materials or polychlorinated biphenyls (ii) the "Environmental
Requirements" shall collectively mean all present and future laws, statutes, common law, ordinances, rules, regulations,
orders, codes, licenses, permits, decrees, judgments, directives or the equivalent of or by any Governmental Authority and relating
to or addressing the protection of the environment or human health, and (iii) the term "Governmental Authority" shall
mean the Federal government, or any state or other political subdivision thereof, or any agency, court or body of the Federal government,
any state or other political subdivision thereof, exercising executive, legislative, judicial, regulatory or administrative functions.

 

(b)       The
Mortgagor hereby represents and warrants to the Mortgagee that, to the best of Mortgagor's knowledge, after diligent inquiry, (i)
no Hazardous Material is currently located at, in, on, under or about the Mortgaged Property in manner which violates any Environmental
Requirement, or which requires cleanup or corrective action of any kind under any Environmental Requirement, (ii) no releasing,
emitting, discharging, leaching, dumping, disposing or transporting of any Hazardous Material from the Mortgaged Property onto
any other property or from any other property onto or into the Mortgaged Property has occurred or is occurring in violation of
any Environmental Requirement, (iii) no notice of violation, non-compliance, liability or potential liability, lien, complaint,
suit, order or other notice with respect to the Mortgaged Property is presently outstanding under any Environmental Requirement,
nor does the Mortgagor have knowledge or reason to believe that any such notice will be received or is being threatened, and (iv)
the Mortgaged Property and the operation thereof are in full compliance with all Environmental Requirements.

 

(c)       The
Mortgagor shall comply, and shall cause all tenants or other occupants of the Mortgaged Property to comply in all respects
with all Environmental Requirements, and will not generate,
store, handle, process, dispose of or otherwise use, and will not permit any tenant or other occupant of the Mortgaged
Property to generate, store, handle, process, dispose of or otherwise use, Hazardous Materials at, in, on, or about the
Mortgaged Property in a manner that could lead or potentially lead to the imposition on the Mortgagor, the Mortgagee or the
Mortgaged Property of any liability or lien of any nature whatsoever under any Environmental Requirement. The Mortgagor shall
notify the Mortgagee promptly in the event of any spill or other release of any Hazardous Material at, in, on, under or about
the Mortgaged Property which is required to be reported to a Governmental Authority under any Environmental Requirement, will
promptly forward to the Mortgagee copies of any notices received by the Mortgagor relating to alleged violations of any
Environmental Requirement or any potential liability under any Environmental Requirement and will promptly pay when due any
fine or assessment against the Mortgagee, the Mortgagor or the Mortgaged Property relating to any Environmental Requirement.
If at any time it is it is determined that the operation or use of the Mortgaged Property is in violation of any applicable
Environmental Requirement or that there are Hazardous Materials located at, in, on, under or about the Mortgaged Property
which violate any applicable Environmental Requirement or that there are Hazardous Materials located at, in, on, under or
about the Mortgaged Property which, under any Environmental Requirement, require special handling in collection, storage,
treatment or disposal, or any form of cleanup or corrective action, the Mortgagor shall, within thirty (30) days after
receipt of notice thereof from any Governmental Authority or from the Mortgagee, take, at the Mortgagor's sole cost and
expense, such actions as may be necessary to fully comply in all respects with all Environmental Requirements, provided,
however, that if such compliance cannot reasonably be completed within such thirty (30) day period, the Mortgagor shall
commence such necessary action within such thirty (30) day period and shall thereafter diligently and expeditiously proceed
to fully comply in all respects and in a timely fashion with all Environmental Requirements.

 

    	7

    	 

    

 

(d)       If the
Mortgagor fails to timely take, or to diligently and expeditiously proceed to complete in a timely fashion, any such action described
in clause (c) above, the Mortgagee may, in its sole and absolute discretion, make advances or payments toward the performance or
satisfaction of the same, but shall in no event be under any obligation to do so. All sums so advanced or paid by the Mortgagee
(including, without limitation, reasonable counsel fees and all consultant fees and expenses, investigation and laboratory fees
and expenses, and fines or other penalty payments) and all sums advanced or paid in connection with any judicial or administrative
investigation or proceeding relating thereto, will immediately, upon demand, become due and payable from the Mortgagor and shall
bear interest at the Default Rate from the date any such sums are so advanced or paid by the Mortgagee until the date any such
sums are repaid by the Mortgagor to the Mortgagee. The Mortgagor will execute and deliver, promptly upon request, such instruments
as the Mortgagee may deem useful or necessary to permit the Mortgagee to take any such action, and such additional notes and mortgages,
as the Mortgagee may require to secure all sums so advanced or paid by the Mortgagee. If a lien is filed against the Mortgaged
Property by any Governmental Authority resulting from the need to expend or the actual expending of monies arising from an action
or omission, whether intentional or unintentional, of the Mortgagor or for which the Mortgagor is responsible, resulting in the
releasing, spilling, leaking, leaching, pumping, emitting, pouring, emptying or dumping of any Hazardous Material into the waters
or onto land located within or without the State where the Mortgaged Property is located, then the Mortgagor will, within thirty
(30) days from the date that the Mortgagor is first given notice that such lien has been placed against the Mortgaged Property
(or within such shorter period of time as may be specified by the Mortgagee if such Governmental Authority has commenced steps
to cause the Mortgaged Property to be sold pursuant to such lien), either (a) pay the claim and remove the lien, or (b) furnish
a cash deposit, bond, or such other security with respect thereto as is satisfactory in all respects to the Mortgagee and is sufficient
to effect a complete discharge of such lien on the Mortgaged Property.

 

(e)       The
Mortgagee may, at its option, at intervals of not less than one year, or more frequently if the Mortgagee reasonably believes that
a Hazardous Material or other environmental condition violates or threatens to violate any Environmental Requirement, cause an
environmental audit of the Mortgaged Property or portions thereof to be conducted to confirm the Mortgagor's compliance with the
provisions of this paragraph, and the Mortgagor shall cooperate in all reasonable ways with the Mortgagee connection with any such
audit. If such audit discloses that a violation of or a liability under an Environmental Requirement exists or if such audit was
required or prescribed by law, regulation or governmental or quasi-governmental authority, the Mortgagor shall pay all costs and
expenses incurred in connection with such audit; otherwise, the costs and expenses of such audit shall, notwithstanding anything
to the contrary set forth in this paragraph, be paid by the Mortgagee.

 

(f)       If
this Mortgage is foreclosed, or if the Mortgaged Property is sold pursuant to the provisions of this Mortgage, or if the Mortgagor
tenders a deed or assignment in lieu of foreclosure or sale, the Mortgagor shall deliver the Mortgaged Property to the purchaser
at foreclosure or sale or to the Mortgagee, its nominee, or wholly-owned
subsidiary, as the case may be, in a condition that complies in all respects with all Environmental Requirements.

 

    	8

    	 

    

 

(g)       The
Mortgagor will defend, indemnify, and hold harmless the Mortgagee, its co-lenders, participants, employees, agents, officers,
and directors, from and against any and all claims, demands, penalties, causes of action, fines, liabilities, settlements, damages,
costs, or expenses of whatever kind or nature, known or unknown, foreseen or unforeseen, contingent or otherwise (including, without
limitation, counsel and consultant fees and expenses, investigation and laboratory fees and expenses, court costs, and litigation
expenses) arising out of, or in any way related to, (i) any breach by the Mortgagor of any of the provisions of this paragraph
9, (ii) the presence, disposal, spillage, discharge, emission, leakage, release, or threatened release of any Hazardous Material
which is at, in, on, under, about, from or affecting the Mortgaged Property, including, without limitation, any damage or injury
resulting from any such Hazardous Material to or affecting the Mortgaged Property or the soil, water, air, vegetation, buildings,
personal property, persons or animals located on the Mortgaged Property or on any other property or otherwise, (iii) any personal
injury (including wrongful death) or property damage (real or personal) arising out of or related to any such Hazardous Material,
(iv) any lawsuit brought or threatened, settlement reached, or order or directive of or by any Governmental Authority relating
to such Hazardous Material, or (v) any violation of any Environmental .Requirement or any policy or requirement of the Mortgagee
hereunder. The aforesaid indemnification shall, notwithstanding any exculpatory or other provision of any other document or instrument
now or hereafter executed and delivered in connection with the loan evidenced by the Note and secured by this Mortgage, constitute
the personal recourse undertakings, obligations and liabilities of the Mortgagor. The obligations and liabilities of the Mortgagor
under this paragraph 9 shall survive and continue in full force and effect and shall not be terminated, discharged or released,
in whole or in part, irrespective of whether the Debt has been paid in full and irrespective of any foreclosure of this Mortgage,
sale of the Mortgaged Property pursuant to the provisions of this Mortgage or acceptance by the Mortgagee, its nominee or affiliate
of a deed or assignment in lieu of foreclosure or sale and irrespective of any other fact or circumstance of any nature whatsoever.

 

1 0.       Estoppel
Certificates. The Mortgagor, within ten (10) days after request by the Mortgagee and at its expense, will furnish the Mortgagee
with a statement, duly acknowledged and certified, setting forth the amount of the Debt and the offsets or defenses thereto, if
any.

 

11.       Transfer
or Encumbrance of the Mortgaged Property.

 

No part of the Mortgaged Property nor any interest
of any nature whatsoever therein nor any interest of any nature whatsoever in the Mortgagor or any Guarantor (whether partnership,
stock, equity, beneficial, profit, loss or otherwise) shall in any manner, directly or indirectly, be further encumbered, sold,
transferred or conveyed, or permitted to be further encumbered, sold, transferred, assigned or conveyed without the prior consent
of the Mortgagee, which consent in any and all circumstances may be withheld in the sole and absolute discretion of the Mortgagee.
The provisions of the foregoing sentence of this paragraph shall apply to each and every such further encumbrance, sale, transfer,
assignment or conveyance, regardless of whether or not the Mortgagee has consented to, or waived by its action or inaction its
rights hereunder with respect to, any such previous further encumbrance, sale, transfer, assignment or conveyance, and irrespective
of whether such further encumbrance, sale, transfer, assignment or conveyance is voluntary, by reason of operation of law or is
otherwise made.

 

12. Notice. Any notice, request, demand,
statement, authorization, approval or consent made hereunder shall be in writing and shall be hand delivered or sent by Federal
Express, or other reputable courier service, or by postage pre-paid registered or certified mail, return receipt requested, and
shall be deemed given (i) when received at the following addresses if hand delivered or sent by Federal Express, or other reputable
courier service, and (ii) three (3) business days after being postmarked and addressed as follows if sent by registered or certified
mail, return receipt requested:

 

    	9

    	 

    

 

	If to Mortgagor:	Boreal Water Collection, Inc.
	 	4494-4496 State Road 42 North
	 	Kiamesha, New York 12751
	 	Attention:
	 	 
	with a copy to:	Billig, Loughlin & Baer
	 	461 Broadway
	 	Monticello, New York 12701
	 	Attention: Jacob R. Billig, Esq.
	 	 
	If  to the Mortgagee:	Woodbridge Mortgage Investment Fund 1, LLC, a Delaware LLC
	• 	14225 Ventura Boulevard, Suite 100 
	 	Sherman Oaks, CA 91423
	•  	Attention:    General Counsel
	 	 
	With a copy to:	Finger & Finger, A Professional Corporation
	 	158 Grand Street
	 	White Plains, New York 10601
	 	Attention:     Daniel S. Finger, Esq.

 

Each party may designate a change of address
by notice to the other party, given at least fifteen (15) days before such change of address is to become effective.

 

13.       Sale of Mortgaged
Property.

 

(a)       In the event of a default hereunder, Mortgagee,
may choose to utilize, if permitted under the laws of the State of New York, a non-judicial foreclosure by power of sale of this
mortgage.

 

(b)       If this Mortgage is foreclosed, the Mortgaged Property, or
any interest therein, may, at the discretion of the Mortgagee, be sold in one or more parcels or in several interests or portions
and in any order or manner.

 

14.       Changes in Laws
Regarding Taxation. In the event of the passage after the date of this Mortgage of any law of the State of New York deducting
from the value of real property for the purpose of taxation any lien or encumbrance thereon or changing in any way the laws for
the taxation of mortgages or debts secured by mortgages for state or local purposes or the manner of the collection of any such
taxes, and imposing a tax, either directly or indirectly, on this Mortgage, the Note or the Debt, the Mortgagor shall, if permitted
by law, pay any tax imposed as a result of any such law within the statutory period or within fifteen (15) days after demand by
the Mortgagee, whichever is less, provided, however, that, if, in the opinion of the attorneys for the Mortgagee, the Mortgagor
is not permitted by law to pay such taxes, the Mortgagee shall have the right, at its option, to declare the Debt due and payable
on a date specified in a prior notice to the Mortgagor of not less than thirty (30) days.

 

15.       No Credits on Account
of the Debt. The Mortgagor will not claim or demand or be entitled to any credit or credits on account of the Debt for any
part of the Taxes assessed against the Mortgaged Property or any part thereof and no deduction shall otherwise be made or claimed
from the taxable value of the Mortgaged Property, or any part thereof, by reason of this Mortgage or the Debt. If at any time
this Mortgage shall secure less than all of the principal amount of the Debt, it is expressly agreed that any repayment of the
principal amount of the Debt shall not reduce the amount of the lien of this Mortgage until the lien amount shall equal the principal
amount of the Debt outstanding.

 

    	10

    	 

    

 

16.       Offsets,
Counterclaims and Defenses. Any assignee of this Mortgage and the Note shall take the same free and clear of all offsets,
counterclaims or defenses of any nature whatsoever which the Mortgagor may have against any assignor of this Mortgage and the
Note, and no such offset, counterclaim or defense shall be interposed or asserted by the Mortgagor in any action or proceeding
brought by any such assignee upon this Mortgage or the Note and any such right to interpose or assert any such offset, counterclaim
or defense in any such action or proceeding is hereby expressly waived by the Mortgagor.

 

17.       Other
Security for the Debt. The Mortgagor shall observe and perform all of the terms, covenants and provisions contained in the
Note and in all other mortgages and other instruments or documents evidencing, securing or guaranteeing ·payment of the
Debt, in whole or in part, or otherwise executed and delivered in connection with the Note, this Mortgage or the loan evidenced
and secured thereby.

 

18.       Documentary
Stamps. If at any time the United States of America, any state thereof, or any governmental subdivision of any such state,
shall require revenue or other stamps to be affixed to the Note or this Mortgage, the Mortgagor will pay for the same, with interest
and penalties thereon, if any. ·

 

19.       Right
of Entry. Upon prior notice, the Mortgagee and its agents shall have the right to enter and inspect the Mortgaged Property
at all reasonable times.

 

20.       Books
and Records. The Mortgagor will keep and maintain or will cause to be kept and maintained on a fiscal year basis in
accordance with sound accounting practices consistently applied proper and accurate books, records and accounts reflecting
all of the financial affairs of the Mortgagor and all items of income and expense in connection with the operation of the
Mortgaged Property or in connection with any services, equipment or furnishings provided in connection with the operation of
the Mortgaged Property, whether such income or expenses be realized by the Mortgagor or by any other person whatsoever
excepting lessees unrelated to and unaffiliated with the Mortgagor who have leased from the Mortgagor portions of the
Mortgaged Property for the purpose of occupying the same. The Mortgagee shall have the right from time to time upon
reasonable notice at al1 times during normal business hours to examine such books, records and accounts at the office
of the Mortgagor or other person maintaining such books, records and accounts and to make copies or extracts thereof as the
Mortgagee shall desire. The Mortgagor will furnish or cause to be furnished to the Mortgagee, annually, (i) within ninety
(90) days following the end of the fiscal year of the Mortgagor, commencing with the year ending December 31, 2013, a
property-level report showing income and expenses of the Mortgaged Property and a rent roll for the Mortgaged Property, each
certified to be true and correct by a member of the Mortgagor; (ii) commencing with the 2012 tax year, an annual Form 990 tax
return from the Mortgagor, with all supporting schedules, within thirty (30) days following the filing thereof; and (iii)
within thirteen ( 13) months from the date of delivery to the Mortgagee of its last financial statement. All of the
foregoing statements shall be satisfactory in all respects to the Mortgagee. If the Mortgagor shall fail to deliver any of
the foregoing documents to the Mortgagee as and when required, the Mortgagor will pay to the Mortgagee, upon request, a $500
fee for each such failure. Within sixty (60) days after the end of each fiscal year of the Mortgagor, the Mortgagor shall
furnish, to the Mortgagee a certificate signed by a duly authorized representative of the Mortgagor certifying on the date
thereof either that there does or does not exist an event which constitutes, or which upon notice or lapse of time or both
would constitute, a default or an Event of Default under this Mortgage and if such default or Event of Default exists, the
nature thereof and the period of time it has existed. The Mortgagor shall deliver to the Mortgagee within fifteen ( 15) days
following the filing thereof, a copy of the federal income tax returns and all schedules thereto, signed and dated and filed
with the Internal Revenue Service of the Mortgagor and Francine Lavoie (the "Guarantor"). Evidence of an
extension request, if applicable, for either the Mortgagor or the Guarantor, shall be furnished to the Mortgagee. The
Mortgagor shall deliver to the Mortgagee within fifteen (15) days following the filing thereof any other documents filed with
eh Internal Revenue Service by either the Mortgagor or the Guarantor. The Mortgagor shall furnish the Mortgagee with such
additional financial information or other information pertaining to the operation of the Mortgaged Property and/or to the
financial condition or operations of the Mortgagor or any Guarantor as the Mortgagee may from time to time
request, including, but not limited to, accounts receivable aging, accounts payable aging and internal financial
statements.

 

    	11

    	 

    

 

 

	
        •

 

21.       Performance of Other Agreements. The Mortgagor shall observe
and perform each and every term to be observed or performed by· the
Mortgagor pursuant to the terms of any agreement or recorded instrument affecting or pertaining to the Mortgaged Property.

 

22.       Events
of Default. The Debt shall become due at the option of the Mortgagee upon the occurrence of any one or more of the following
events (herein collectively referred to as Events of Default):

 

(a)       if
any portion of the Debt is not paid within five (5) days after the same is due;

 

(b)       if
the Mortgagor shall fail to pay within twenty (20) days of notice and demand by the Mortgagee, any installment of any assessment
against the Mortgaged Property for local improvements heretofore or hereafter laid, which assessment is or may become payable in
annual or periodic installments and is or may become a lien on the Mortgaged Property;

 

(c)       if
any Federal tax lien is filed against the Mortgagor, any Guarantor or the Mortgaged Property and the same is not discharged of
record within thirty (30) days after written notice thereof to Mortgagor;

 

(d)       if
without the consent of the Mortgagee (which consent in any and all circumstances may be withheld in the sole and absolute discretion
of the Mortgagee) any part of the Mortgaged Property or any interest of any nature whatsoever therein or any interest of any nature
whatsoever in the Mortgagor, or any Guarantor (whether partnership, stock, equity, beneficial, profit, loss or otherwise) is in
any manner, by operation of law or otherwise, whether directly or indirectly, further encumbered (except as otherwise permitted),
sold, transferred, assigned or conveyed, and irrespective of whether any such further encumbrance, sale, transfer, assignment or
conveyance is voluntary, by reason or operation of law or is otherwise made;

 

(e)       if
without the consent of the Mortgagee any Improvement or the Equipment (except for the normal replacement of the Equipment) is removed,
demolished or materially altered, or if the

Mortgaged Property is not kept in good condition
and repair;

 

(f)
of law if the Mortgagor shall fail to comply with any requirement or order or notice of violation or ordinance issued by any governmental
department claiming jurisdiction over the Mortgaged Property
within three (3) months from the issuance thereof, or the time period set forth therein, whichever is less, provided that, if such
requirement or order or notice cannot reasonably be complied with within such three-month period and the Mortgagor shall have commenced
to comply therewith within such three-month period and thereafter diligently and expeditiously proceeds to complete such compliance,
such three-month period shall be extended for so long as it shall require the Mortgagor in the exercise of due diligence to complete
such compliance, it being agreed that no such extension shall be for a period in excess of one hundred twenty (120) days;

 

    	12

    	 

    

 

(g)       if
the Policies are not kept in full force and effect, or if the Policies are not delivered to the Mortgagee within ten (10) days
after written request by Mortgagee;

 

(h)       if
on application of the Mortgagee two or more fire insurance companies lawfully doing business in the State of New York refuse to
issue Policies;

 

(i)       if
the Mortgagor shall fail to pay the Mortgagee within ten (10) days following demand therefor all Premiums and/or Taxes paid by
the Mortgagee pursuant to this Mortgage, together with any late payment charge and interest thereon calculated at the Default Rate;

 

(j)       
if without the consent of the Mortgagee any portion of the Rents is paid for a period of more than one (1) month in advance or
if any of the Rents are further assigned;

 

(k)       if
any representation or warranty of the Mortgagor, or of any person (herein referred to as a Guarantor) guaranteeing payment of the
Debt or any portion thereof, or of operating expenses of the Mortgaged Property or guaranteeing performance by the Mortgagor of
any of the terms of this Mortgage made herein or in any such guaranty (the "Guaranty"), or in any certificate, report,
financial statement or other instrument furnished in connection with the making of the Note, this Mortgage, or any such Guaranty,
shall prove false or misleading in any material respect;

 

(1)       if
the Mortgagor or any Guarantor shall make an assignment for the benefit of creditors;

 

(m)       if
a court of competent jurisdiction enters a decree or order for relief with respect to the Mortgagor or any Guarantor under Title
11 of the United States Code as now constituted or hereafter amended or under any other applicable Federal or state bankruptcy
law or other similar law, or if such court enters a decree or order appointing a receiver, liquidator, assignee, trustee, sequestrator
(or similar official) of the Mortgagor or any Guarantor, or of any substantial part of their respective properties, or if such
court decrees or orders the winding up or liquidation of the affairs of the Mortgagor or any Guarantor;

 

(n)       if
the Mortgagor or any Guarantor files a petition or answer or consent seeking relief under Title 11 of the United States Code as
now constituted or hereafter amended, or under any other applicable Federal or state bankruptcy law or other similar law, or if
the Mortgagor or any Guarantor consents to the institution of proceedings thereunder or to the filing of any such petition or to
the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of the Mortgagor or any Guarantor, or of any substantial part of their respective properties, or if the Mortgagor or
any Guarantor fails generally to pay their respective debts as such debts become due, or if the Mortgagor or any Guarantor takes
any action in furtherance of any action described in this subparagraph;

 

(o)       if
the Mortgagor or other person, or any Guarantor, shall be in default hereunder or under the Note, the Mortgage or any other mortgage,
instrument or document evidencing, securing or guaranteeing payment
of the Debt, in whole or in part, or otherwise executed and delivered in connection with the Note, this Mortgage or the loan evidenced
and secured thereby;

 

    	13

    	 

    

 

(p)       if
the Mortgagor or other person, or any Guarantor, shall be in default under any mortgage or deed of trust covering any part of
the Mortgaged Property whether superior or inferior in lien to this Mortgage, and including, without limitation, any such mortgage
or deed of trust now or hereafter held by the Mortgagee;

 

(q)       
if the Mortgaged Property shall become subject (i) to any tax lien, other than a lien for local real estate taxes and assessments
not due and payable, or (ii) to any lis pendens, notice of pendency, stop order, notice of intention to file mechanic's or materialman's
lien, mechanic's or materialman's lien, or other liens of any nature whatsoever, and the same shall not either be discharged of
record or in the alternative insured over to the satisfaction of the Mortgagee by the title company insuring the lien of this Mortgage
within a period of sixty (60) days after the same is filed or recorded, and irrespective of whether the same is superior or subordinate
in lien or other priority to the lien of this Mortgage and irrespective of whether the same constitutes a perfected or inchoate
lien or encumbered on the Mortgaged Property or is only a matter of record or notice

 

(r)       
if any Guarantor shall die, become legally incapacitated, terminated, dissolved, wound up or liquidated or if any Guarantor shall
be in default under its guarantee;

 

(s)       if
the Mortgagor or any Guarantor shall fail to pay when due any obligations or shall fail or neglect to keep or observe any term,
provision, condition, warranty or representation contained in any other note or loan document evidencing or securing any other
loan from the Mortgagee to the Mortgagor or any Guarantor, whether now or hereafter existing;

 

(t)       if
the Mortgagee deems itself insecure or if there is such a change in the condition or affairs (financial or otherwise) of the Mortgagor
or any Guarantor which the Mortgagee believes materially impairs the financial condition of the Mortgagor or any Guarantor or increases
the Mortgagee's risk of non-payment of the Note secured hereby;

 

(u)       if
the Mortgagor shall fail to fully and punctually perform each and every obligation on the part of the Mortgagor to be performed
in connection with the Corporate Documents or, without the prior written consent of the Mortgagee, shall join in or consent to
any amendment thereof or to any Restrictive Covenant or amendment thereof;

 

(v)       if
the Mortgagor shall continue to be in default under any of the other terms, covenants or conditions of this Mortgage for five (5)
days after notice from the Mortgagee in the case of any default which can be cured by the payment of a sum of money or for twenty
(20) days after notice from the Mortgagee in the case of any other default, provided that, if such default cannot reasonably be
cured within such twenty (20) day period and the Mortgagor shall have commenced to cure such default within such twenty (20) day
period and thereafter diligently and expeditiously proceeds to cure the same, such twenty (20) day period shall be extended for
so long as it shall require the Mortgagor in the exercise of due diligence to cure such default, it being agreed that no such extension
shall be for a period in excess of sixty (60) days.

 

Upon the occurrence of an Event of Default,
the Mortgagee may at any time, at its option and in its sole discretion, (i) bring an action in any court of competent jurisdiction
to foreclose this instrument or to enforce the covenants hereof, (ii) exercise any or all of the remedies available to a secured
party under the Uniform Commercial Code, and (iii) exercise any or all of its other
rights and remedies under the Mortgage, the other Loan Documents and applicable law.

 

    	14

    	 

    

 

23.       Right
to Cure Defaults. If default in the performance of any of the covenants of the Mortgagor herein occurs, the Mortgagee may,
at its discretion, remedy the same and for such purpose shall have the right to enter upon the Mortgaged Property or any portion
thereof without thereby becoming liable to the Mortgagor or any person in possession thereof holding under the Mortgagor. If the
Mortgagee shall remedy such a default or appear in, defend, or bring any action or proceeding to protect its interest in the Mortgaged
Property or to foreclose this Mortgage or collect the Debt, the costs and expenses thereof (including reasonable attorneys' fees
to the extent permitted by law), with interest as provided in this paragraph, shall be paid by the Mortgagor to the Mortgagee upon
demand. All such costs and expenses incurred by the Mortgagee in remedying such default or in appearing in, defending, or bringing
any such action or proceeding shall be paid by the Mortgagor to the Mortgagee upon demand, with interest (calculated for the actual
number of days elapsed on the basis of a 360-day year) at a rate per annum equal to twenty four percent (24%) per annum
(herein referred to as the "Default Rate"), provided, however, that the Default Rate shall in no event exceed
the maximum interest rate which the Mortgagor may by law pay, for the period after notice from the Mortgagee that such costs or
expenses were incurred to the date of payment to the Mortgagee. To the extent any of the aforementioned costs or expenses paid
by the Mortgagee after default by the Mortgagor shall constitute payment of (i) taxes, charges or assessments which may be imposed
by law upon the Mortgaged Property, (ii) premiums on insurance policies covering the Mortgaged Property, (iii) expenses incurred
in upholding the lien of this Mortgage, including, but not limited to, the costs and expenses of any litigation to collect the
indebtedness secured by this Mortgage or to prosecute, defend, protect or preserve the rights and the lien created by this Mortgage,
or (iv) any amount, cost or charge to which the Mortgagee becomes subrogated, upon payment, whether under recognized principles
of law or equity, or under express statutory authority; then, and in each such event, such costs, expenses and amounts, together
with interest thereon at the Default Rate, shall be added to the indebtedness secured by this Mortgage and shall be secured by
this Mortgage. Notwithstanding anything to the contrary contained in this Mortgage, the maximum amount of the principal indebtedness
secured by this Mortgage at execution or which under any contingency may become secured by this Mortgage is Nine Hundred Thousand
AND N0/100 ($900,000) DOLLARS plus all amounts expended by the Mortgagee after default by the Mortgagor, as hereinabove set forth
in this paragraph.

 

24.       Appointment
of Receiver. The Mortgagee, in any action to foreclose this Mortgage or upon the actual or threatened waste to any part of
the Mortgaged Property or upon the occurrence of any default hereunder, shall be at liberty, without notice, to apply for the appointment
of a receiver of the Rents, and shall be entitled to the appointment of such receiver as a matter of right, without regard to the
value of the Mortgaged Property as security for the Debt, or the solvency or insolvency of any person then liable for the payment
of the Debt.

 

25.       Non-Waiver.
The failure of the Mortgagee to insist upon strict performance of any term of this Mortgage shall not be deemed to be a waiver
of any term of this Mortgage. The Mortgagor shall not be relieved of the Mortgagor's obligation to pay the Debt at the time and
in the manner provided for its payment in the Note and this Mortgage by reason of (i) failure of the Mortgagee to comply with any
request of the Mortgagor to take any action to foreclose this Mortgage or otherwise enforce any of the provisions hereof or of
the Note or any other mortgage, instrument or document evidencing, securing or guaranteeing payment of the Debt or any portion
thereof (ii) the release, regardless of consideration, of the whole or any part of the Mortgaged Property or any other security
for the Debt, or (iii) any agreement or stipulation between the Mortgagee and any subsequent owner or owners of the Mortgaged Property
or other person extending the time of payment or otherwise modifying
or supplementing the terms of the Note, this Mortgage or any other mortgage, instrument or document evidencing, securing or guaranteeing
payment of the Debt or any portion thereof, without first having obtained the consent of the Mortgagor, and in the latter event,
the Mortgagor shall continue to be obligated to pay the Debt at the time and in the manner provided in the Note and this Mortgage,
as so extended, modified and supplemented, unless expressly released and discharged from such obligation by the Mortgagee in writing.
Regardless of consideration, and without the necessity for any notice to or consent by the holder of any subordinate lien, encumbrance,
right, title or interest in or to the Mortgaged Property, the Mortgagee may release any person at any time liable for the payment
of the Debt or any portion thereof or any part of the security held for the Debt and may extend the time of payment or otherwise
modify the terms of the Note or this Mortgage, including, without limitation, a modification of the interest rate payable on the
principal balance of the Note, without in any manner impairing or affecting this Mortgage or the lien thereof or the priority of
this Mortgage, as so extended and modified, as security for the Debt over any such subordinate lien, encumbrance, right, title
or interest. The Mortgagee may resort for the payment of the Debt to any other security held by the Mortgagee in such order and
manner as the Mortgagee, in its discretion, may elect. The Mortgagee may take action to recover the Debt, or any portion thereof,
or to enforce any covenant hereof without prejudice to the right of the Mortgagee thereafter to foreclose this Mortgage. The Mortgagee
shall not be limited exclusively to the rights and remedies herein stated but shall be entitled to every additional right and remedy
now or hereafter afforded by law. The rights of the Mortgagee under this Mortgage shall be separate, distinct and cumulative and
none shall be given effect to the exclusion of the others. No act of the Mortgagee shall be construed as an election to proceed
under any one provision herein to the exclusion of any other provision.

 

    	15

    	 

    

 

26.       Liability.
If the Mortgagor consists of more than one person, the obligations and liabilities of each such person hereunder shall be joint
and several.

 

27.       
Construction. The terms of this Mortgage shall be construed in accordance with the laws of the State of New York.

 

28.       Security
Agreement. This Mortgage constitutes both a real property mortgage and a "security agreement" and a "fixture
filing," within the meaning of the Uniform Commercial Code, and the Mortgaged Property includes both real and personal
property and all other rights and interest, whether tangible or intangible in nature, of the Mortgagor in the Mortgaged Property.
The Mortgagor by executing and delivering this Mortgage has granted to the Mortgagee, as security for the Debt, a security interest
in the Equipment. The Mortgagor hereby authorizes the Mortgagee or its agents or assigns, to execute and file, without the signature
of the Mortgagor, one or more UCC-1 Financing Statements for the purpose of perfecting such security interest, if permitted under
the laws of the state wherein the Mortgaged Property is located. If the Mortgagor shall default under the Note or this Mortgage,
the Mortgagee, in addition to any other rights and remedies which it may have, shall have and may exercise immediately and without
demand, any and all rights and remedies granted to a secured party upon default under the Uniform Commercial Code, including,
without limiting the generality of the foregoing, the right to take possession of the Equipment or any part thereof, and to take
such other measures as the Mortgagee may deem necessary for the care, protection and preservation of the Equipment. Upon request
or demand of the Mortgagee, the Mortgagor shall at its expense assemble the Equipment and make it available to the Mortgagee at
a convenient place acceptable to the Mortgagee. The Mortgagor shall pay to the Mortgagee on demand any and all expenses, including
legal expenses and attorneys' fees, incurred or paid by the Mortgagee in protecting its interest in the Equipment and in enforcing
its rights hereunder with respect to the Equipment. Any notice of sale, disposition or other intended action by the Mortgagee
with respect to the Equipment sent to the Mortgagor in accordance with the provisions of this Mortgage at least seven (7) days
prior to the date of any such sale, disposition or other action, shall constitute reasonable notice to the Mortgagor, and the
method of sale or disposition or other intended action set forth or specified in such notice shall conclusively be deemed to be
commercially reasonable within the meaning of the Uniform Commercial Code unless objected to in writing by the Mortgagor within
five (5) days after receipt by the Mortgagor of such notice. The proceeds of any sale or disposition of the Equipment, or any
part thereof, may be applied by the Mortgagee to the payment of the Debt in such order, priority and proportions as the Mortgagee
in its discretion shall deem proper. If any change shall occur in the Mortgagor's name, the Mortgagor shall promptly cause to
be filed at its own expense, new financing statements as required under the Uniform Commercial Code to replace those on file in
favor of the Mortgagee.

 

    	16

    	 

    

 

29.       Further
Acts, etc. The Mortgagor will, at the cost of the Mortgagor, and without expense to the Mortgagee, do, execute, acknowledge
and deliver all and every such further acts, deeds, conveyances, mortgages, assignments, notices of assignments, transfers and
assurances as the Mortgagee shall, from time to time, require for the better assuring, conveying, assigning, transferring and
confirming unto the Mortgagee the property and rights hereby mortgaged or intended now or hereafter so to be, or which the
Mortgagor may be or may hereafter become bound to convey or assign to the Mortgagee, or for carrying out the intention or facilitating
the performance of the terms of this Mortgage or for filing, registering or recording this mortgage and, on demand, will execute
and deliver and hereby authorizes the Mortgagee to execute in the name of the Mortgagor to the extent the Mortgagee may lawfully
do so, one or more financing statements, chattel mortgages or comparable security instruments, to evidence more effectively the
lien hereof upon the Mortgaged Property.

 

30.       Headings, etc.
The headings and captions of various paragraphs of this Mortgage are for convenience of reference only and are not to be construed
as defined or limiting, in any way, the scope or intent of the provisions hereof.

 

 

31. Filing of Mortgage, etc. The Mortgagor forthwith upon
the execution and delivery of this Mortgage and thereafter, from time to time, will cause this Mortgage, and any security instrument
creating a lien or evidencing the lien hereof upon the Mortgaged Property and each instrument of further assurance to be filed,
registered or recorded in such manner and in such places as may be required by any present or future law in order to publish notice
of and fully to protect, preserve and perfect the lien hereof upon, and the interest of the Mortgagee in, the Mortgaged Property.
The Mortgagor will pay all filing, registration and recording fees, and all expenses incident to the preparation, execution and
acknowledgment of this Mortgage, any mortgage supplemental hereto, any security instrument with respect to the Mortgaged Property,
and any instrument of further assurance, and all Federal, state, county and municipal taxes, duties, imposts, assessments and charges
arising out of or in connection with the execution and delivery of this Mortgage, any mortgage supplemental hereto, any security
instrument with respect to the Mortgaged Property or any instrument of further assurance. The Mortgagor shall hold harmless and
indemnify the Mortgagee, its successors and assigns, against any liability incurred by reason of the imposition of any tax on the
making and recording of this Mortgage.

 

32.       Usury Laws.
This Mortgage and the Note are subject to the express condition that at no time shall the Mortgagor be obligated or required to
pay interest on the principal balance due under the Note at a rate which could subject the holder of the Note to either civil or
criminal liability as a result of being in excess of the maximum interest rate which the Mortgagor is permitted by law to contract
or agree to pay. If by the terms of this Mortgage or the Note, the
Mortgagor is at any time required or obligated to pay interest on the principal balance due under the Note at a rate in excess
of such maximum rate, the rate of interest under the Note shall be deemed to be immediately reduced to such maximum rate and the
interest payable shall be computed at such maximum rate and all prior interest payments in excess of such maximum rate shall be
applied and shall be deemed to have been payments in reduction of the principal balance of the Note.

 

    	17

    	 

    

33.       
        Sole Discretion of Mortgagee. Except as may otherwise be expressly provided
to the contrary, wherever pursuant to the Note, this Mortgage, or any other document or instrument now or hereafter executed and
delivered in connection therewith or otherwise with respect to the loan secured hereby, the Mortgagee exercises any right given
to it to consent or not consent, or to approve or disapprove, or any arrangement or term is to be satisfactory to the Mortgagee,
the decision of the Mortgagee to consent or not consent, or to approve or disapprove, or to decide that arrangements or terms are
satisfactory or not satisfactory, shall be in the sole and absolute discretion of the Mortgagee and shall be final and conclusive.

 

34.       Reasonableness.
If at any time the Mortgagor believes that the Mortgagee has not acted reasonably in granting or withholding any .approval or consent
under the Note, this Mortgage, or any other document or instrument now or hereafter executed and delivered in connection therewith
or otherwise with respect to the loan secured hereby, as to which approval or consent either (i) the Mortgagee has expressly agreed
to act reasonably, or (ii) absent such agreement, applicable law would nonetheless require the Mortgagee to act reasonably, then
the Mortgagor's sole remedy shall be to seek injunctive relief or specific performance, and no action for monetary damages or punitive
damages shall in any event or under any circumstance be maintained by the Mortgagor against the Mortgagee.

 

35.       Recovery
of Sums Required To Be Paid. The Mortgagee shall have the right from time to time to take action to recover any sum or sums
which constitute a part of the Debt as the same become due, without regard to whether or not the balance of the Debt shall be due,
and without prejudice to the right of the Mortgagee thereafter to bring an action of foreclosure, or any other action, for a default
or defaults by the Mortgagor existing at the time such earlier action was commenced.

 

36.       Actions
and Proceedings. The Mortgagee shall have the right to appear in and defend any action or proceeding brought with respect to
the Mortgaged Property and to bring any action or proceeding, in the name and on behalf of the Mortgagor, which the Mortgagee,
in its discretion, determines should be brought to protect its interest in the Mortgaged Property.

 

 

37.       Inapplicable
Provisions. If any term, covenant or condition of this Mortgage shall be held to be invalid, illegal or unenforceable in any
respect, this Mortgage shall be construed without such provision.

 

38.       Duplicate
Originals. This Mortgage may be executed in any number of duplicate originals and each such duplicate original shall be deemed
to constitute but one and the same instrument.

 

39.       Certain
Definitions. Unless the context clearly indicates a contrary intent or unless otherwise specifically provided in this Mortgage,
words used in this Mortgage shall be used interchangeably in singular or plural form and the word "Mortgagor" shall
mean each the Mortgagor and any subsequent owner or owners of the Mortgaged Property or any part thereof or interest therein;
the word "Mortgagee" shall mean the Mortgagee or any subsequent holder of the Note; the word "Note"
shall mean the Note or any other evidence of indebtedness secured by this Mortgage; the word "Guarantor" shall mean
each person guaranteeing payment of the Debt or any portion thereof or indemnifying the Mortgagee against any loss arising out
of the transactions referred to herein or performance by the Mortgagor of any of the terms of this Mortgage and their respective
heirs, executors, administrators, legal representatives, successors and assigns; the word "person" shall include an
individual, corporation, partnership, trust, unincorporated association, government, governmental authority, or other entity;
the words "Mortgaged Property" shall include any portion of the Mortgaged Property or interest therein; and the word
"Debt" shall mean all sums secured by this Mortgage; and the word "default', shall mean the occurrence of any default
by the Mortgagor or other person in the observance or performance of any of the terms, covenants or provisions of the Note or
this Mortgage on the part of the Mortgagor or such other person to be observed or performed without regard to whether such default
constitutes or would constitute upon notice or lapse of time, or both, an Event of Default under this Mortgage. Whenever the context
may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form
of nouns and pronouns shall include the plural and vice versa.

 

    	18

    	 

    

 

40.       Waiver of Notice. The Mortgagor shall not be entitled
to any notices of any nature whatsoever from the Mortgagee except with respect to matters for which this Mortgage specifically
and expressly provides for the giving of notice by the Mortgagee to the Mortgagor, and the Mortgagor hereby expressly waives the
right to receive any notice from the Mortgagee with respect to any matter for which this Mortgage does not specifically and expressly
provide for the giving of notice by the Mortgagee to the Mortgagor.

 

41.        No
Oral Change. This Mortgage may only be modified, amended or changed by an agreement in writing signed by the Mortgagor and
the Mortgagee, and may only be released, discharged or satisfied of record by an agreement in writing signed by the Mortgagee.
No waiver of any term, covenant or provision of this Mortgage shall be effective unless given in writing by the Mortgagee and if
so given by the Mortgagee shall only be effective in the specific instance in which given. The Mortgagor acknowledges that the
Note, this Mortgage, and the other documents and instruments executed and delivered in connection therewith or otherwise in connection
with the loan secured hereby set forth the entire agreement and understanding of the Mortgagor and the Mortgagee with respect to
the loan secured hereby and that no oral or other agreements, understanding, representation or warranties exist with respect to
the loan secured hereby other than those set forth in the Note, this Mortgage and such other executed and delivered documents and
instruments.

 

42.       Trust Fund. Pursuant to Section 13 of the Lien Law of New York, the Mortgagor shall receive the advances secured hereby and shall
hold the right to receive such advances as a trust fund to be applied first for the purpose of paying the cost of any improvement
and shall apply such advances first to the payment of the cost of any such improvement on the Mortgaged Property before using any
part of the total of the same for any other purpose.

 

 

43.        Non-Residential
Property. This Mortgage does not cover real property principally improved by one or more structures containing in the aggregate
six (6) or less residential dwelling units having their own separate cooking facilities.

 

44. WAIVER OF TRIAL BY JURY. THE MORTGAGOR
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAlVES, AND THE MORTGAGEE BY ITS ACCEPTANCE OF THE NOTE AND THIS MORTGAGE IRREVOCABLY AND
UNCONDITIONALLY WAIVES, ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION, SUIT OR COUNTERCLAIM ARISING IN CONNECTION WITH, OUT OF OR OTHERWISE RELATING TO THE NOTE, THIS MORTGAGE ANY OTHER DOCUMENT
OR INSTRUMENT NOW OR HEREAFTER EXECUTED AND DELIVERED IN CONNECTION THEREWITH OR THE LOAN SECURED BY THIS MORTGAGE.

    	19

    	 

    

 

45.       
WAIVER OF STATUTORY RIGHTS. THE MORTGAGOR SHALL NOT AND WILL NOT APPLY FOR OR AVAIL ITSELF OF ANY APPRAISEMENT, VALUATION,
STAY, EXTENSION OR EXEMPTION LAWS, OR ANY SO-CALLED "MORATORIUM LAWS," NOW EXISTING OR HEREAFTER ENACTED, IN ORDER TO
PREVENT OR HINDER THE ENFORCEMENT OR FORECLOSURE OF THIS MORTGAGE, BUT HEREBY WAlVES THE BENEFIT OF SUCH LAWS TO THE FULL EXTENT
THAT THE MORTGAGOR MAY DO SO UNDER APPLICABLE LAW. THE MORTGAGOR FOR ITSELF AND ALL WHO MAY CLAIM THROUGH OR UNDER IT WAIVES ANY
AND ALL RIGHT TO HAVE THE PROPERTY AND ESTATES COMPRISING THE MORTGAGED PROPERTY MARSHALLED UPON ANY FORECLOSURE OF THE LIEN OF
THIS MORTGAGE AND AGREES THAT ANY COURT HAVING JURISDICTION TO FORECLOSE SUCH LIEN MAY ORDER THE MORTGAGED PROPERTY SOLD AS AN
ENTIRETY. THE MORTGAGOR HEREBY WAIVES FOR ITSELF AND ALL WHO MAY CLAIM THROUGH OR UNDER IT, AND TO THE FULL EXTENT THE MORTGAGOR
MAY DO SO UNDER APPLICABLE LAW, ANY AND ALL RIGHTS OF REDEMPTION FROM SALE UNDER ANY ORDER OF DECREE OF FORECLOSURE OF THIS MORTGAGE
OR GRANTED UNDER ANY STATUTE NOW EXISTING OR HEREAFTER ENACTED.

 

46.       Brokerage.
The Mortgagor covenants and agrees that no brokerage commission or other fee, commission or compensation is to be paid by the Mortgagee
on account of the loan or other financing obligations evidenced by the Note and/or secured by this Mortgage and the Mortgagor agrees
to indemnify the Mortgagee against any claims for any of the same.

 

47.       Enforceability.
This Mortgage was negotiated in the State of New York, and made by the Mortgagor and accepted by the Mortgagee in the State of
New York, and the proceeds of the loan secured hereby were disbursed from the State of New York, which State the parties agree
has a substantial relationship to the parties and to the underlying transaction embodied hereby, and in all respects, including,
without limiting the generality of the foregoing, matters of construction, validity and performance, this Mortgage and the obligations
arising hereunder shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts
made and performed in such State and any applicable laws of the United State of America, except with respect to the provisions
hereof which relate to the realization upon the security covered by this Mortgage, in which case such provisions shall be governed
by the State in which the Mortgaged Property is located, it being understood that, to the fullest extent permitted by the law of
such State, the law of the State of New York shall govern the validity and enforceability of this Mortgage, the Note, and other
documents executed and delivered in connection with the Debt, and the obligations arising hereunder and thereunder. Whenever possible,
each provision of this Mortgage shall be interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this Mortgage shall be unenforceable or prohibited by or invalid under applicable law, such provision shall be ineffective
to the extent of such unenforceability, prohibition or invalidity, without invalidating the remaining provisions of this Mortgage.

 

    	20

    	 

    

 

48.       Indemnification.
Anything in this Mortgage or the other Loan Documents to the contrary notwithstanding, the Mortgagor shall indemnify and hold the
Mortgagee harmless and defend the Mortgagee at the Mortgagor's
sole cost and expense against any loss or liability, cost or expense (including, without limitation, title insurance premiums and
charges and reasonable attorneys' fees and disbursements of the Mortgagee's counsel, whether in-house staff, retained firms or
otherwise), and all claims, actions, procedures and suits arising out of or in connection with (i) any ongoing matters arising
out of the transaction contemplated hereby, the Debt, this Mortgage, the Note or any other document or instrument now or hereafter
executed and/or delivered in connection with the Debt (the "Loan Documents") and/or the. Mortgaged Property, including,
but not limited to, all costs of reappraisal of the mortgaged property or any part thereof, whether required by law, regulation,
the Mortgagee or any governmental or quasi-governmental authority, (ii) any amendment to, or restructuring of, the Debt and this
Mortgage, the Note or any of the other Loan Documents, and (iii) any and all lawful action that may be taken by the Mortgagee in
connection with the enforcement of the provisions of this Mortgage or the Note or any of the other Loan Documents, whether or not
suit is filed in connection with the same, or in connection with the Mortgagor, any Guarantor and/or any partner, joint venturer,
member or shareholder thereof becoming a party to a voluntary or involuntary federal or state bankruptcy, insolvency or similar
proceeding. All sums expended by the Mortgagee shall be payable on demand and, until reimbursed by the Mortgagor pursuant hereto,
shall be deemed additional principal of the Debt and secured hereby and shall bear interest at the Default Rate. The obligations
of the Mortgagor under this paragraph shall, notwithstanding any exculpatory or other provisions· of any nature whatsoever
set forth in the Loan Documents, constitute the personal recourse undertakings, obligations and liabilities of the Mortgagor.

 

49.       Relationship.
The relationship of the Mortgagee to the Mortgagor hereunder is strictly and solely that of lender and borrower and mortgagor and
mortgagee and nothing contained in the Note, this Mortgage or any other document or instrument now or hereafter executed and delivered
in connection therewith or otherwise in connection with the loan secured hereby is intended to create, or shall in any event or
under any circumstance be construed as creating, a partnership, joint venture, tenancy-in-common, joint tenancy or other relationship
of any nature whatsoever between the Mortgagee and the Mortgagor other than as lender and borrower.

 

50.       Letter
Agreements. The Mortgagor shall fully and faithfully observe and perform all of the terms, covenants, conditions, provisions
and agreements contained in any letter agreements dated the date hereof, the terms, covenants and conditions of which are incorporated
herein by this reference, and made a part hereof, with the same force and effect as if the same were fully set forth in this Mortgage.

 

51.       Representations
and Warranties. Mortgagor represents and warrants, and covenants for so long as any obligations secured by this Mortgage remain
outstanding, as follows:

 

          (a)       Mortgagor
does not and will not own any asset or property other than the Mortgaged Property and related assets and property.

 

          (b)       Mortgagor
does not and will not engage in any business other than the acquisition, ownership, management and operation of the Mortgaged Property,
and Mortgagor will conduct and operate its business in all material respects as presently conducted and operated and will not change
the use of the Mortgaged Property, nor may the Mortgagor undertake any development of the Mortgaged Property without the prior
written consent of the Mortgagee. Mortgagee's consent shall be granted or withheld at Mortgagee's sole discretion.

 

    	21

    	 

    

 

          (c)       Mortgagor
has not incurred and will not incur any indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including
guaranteeing any obligation), other than (i) the Indebtedness, and (ii) trade and operational debt incurred in the ordinary course
of business with trade creditors and in amounts as are customary and reasonable under the circumstances. Except with Mortgagee's
prior written approval in each instance, no indebtedness other than the Indebtedness is or shall be secured by the Property. Mortgagee's
approval shall be granted or withheld at Mortgagee's sole discretion. In connection with any such financing approved by Mortgagee,
Mortgagor shall be required to obtain and deliver to Mortgagee a subordination and standstill agreement from such mortgagee which
shall be in form and substance satisfactory to Mortgagee in its sole discretion.

 

          (d)       Mortgagor
has not made and will not make any loans or advances to any third party (including any constituent party, any guarantor of the
Indebtedness or any affiliate of Mortgagor, or any constituent party of any such guarantor), except in de minimis amounts
in the ordinary course of business and of the character of trade or operational expenses.

 

          (e)       Mortgagor
will maintain books and records and bank accounts separate from those of its affiliates and any constituent party, and Mortgagor
will file or cause to be filed separate, distinct tax returns or informational return relating only to Mortgagor.

 

          (f)       
Mortgagor is and will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any
other entity (including any affiliate or constituent party of Mortgagor or any affiliate or constituent party of any guarantor
of the Indebtedness), and will use and conduct its business in its own name.

 

          (g)       Neither
Mortgagor nor any constituent party will cause or seek the dissolution or winding up, in whole or in part, of Mortgagor.

 

          (h)       Mortgagor
will not commingle its funds and other assets with those of, or pledge its assets for the benefit of any affiliate of Mortgagor,
any guarantor of the Indebtedness or any other party.

 

          (i)       Mortgagor
does not or will not hold itself out to be responsible for the debts or obligations or any other person and does not or will not
pay another person's liabilities out of its own funds.

 

          (j)      Mortgagor
will not consent to the filing of any petition to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization
statute, and Mortgagor will not make an assignment for the benefit of its creditors.

 

52.       Appraisals;
Value of Property. Mortgagor shall permit Mortgagee to prepare or cause to be prepared, from time to time at least annually,
at the sole option and discretion of the Mortgagee, appraisals of the Mortgaged Property, at Mortgagor's sole cost and expense,
and Mortgagor shall fully cooperate in connection with the preparation thereof. Mortgagor covenants and agrees that to the extent
Mortgagee determines in its reasonable discretion that the outstanding principal amount of the Loan exceeds seventy-five percent
(75%) of the sum of the value of the Mortgaged Property plus all other property constituting collateral for the loan, then Mortgagee
may, at its option, require Mortgagor to provide Mortgagee with additional collateral satisfactory to Mortgagee or reduce the principal
balance of the Loan. The failure of Mortgagor to comply with Mortgagee's demand for additional collateral or a principal paydown
shall constitute an Event of Default. Mortgagor shall pay Mortgagee, upon demand, for the cost of any such appraisals.

 

    	22

    	 

    

 

 

53.       Material
Occurrence. Mortgagor shall promptly notify Mortgagee of the occurrence of any event or events which may, individually or in
the aggregate, have a material adverse effect upon (i) Mortgagor's or guarantor's business, assets, condition (financial or otherwise)
or operations, (ii) Mortgagor's ability to carry out its obligations hereunder or (iii) the Mortgaged Property. If a material,
adverse change occurs in Mortgagor's or any guarantor's business, assets, condition (financial or otherwise) or operations Mortgagor
shall promptly take action to remedy the same to the reasonable satisfaction of Mortgagee.

 

54.       Flood Insurance. If,
during origination or at any time during the life of the loan it is determined that all or a portion of the improvements situated
on the Mortgaged Property are located within an area designated as a Special Flood Hazard Area, the Mortgagee is compelled, as
a matter of law, to ensure that flood insurance is obtained and maintained with respect to the mortgaged property. Such insurance
must be in form, amount and from an issuing company acceptable to the Mortgagee, and shall name Mortgagee as mortgagee and
loss payee, but in no case shall the amount of coverage be less than the minimum amount mandated by law (which is either the outstanding
loan balance or the maximum limit of coverage made available under the National Flood Insurance Reform Act, whichever is less),
but in no event should the amount of • coverage be less than the value of the improved structure. This insurance must be maintained
at the borrower's expense for the life of the loan. If Mortgagee notifies Mortgagor that the pledged collateral is in a Special
Flood Hazard Area, and, Mortgagor fails to obtain or maintain insurance coverage within forty .five (45) days of notification,
the Mortgagee may purchase such insurance in form, amount and from an issuing company acceptable to the Mortgagee and may add the
premiums to the principal balance and charge interest thereon at the rate payable on the Note.

 

55.       Application
of Proceeds. The proceeds of any sale made and any other sums which may be held by Mortgagee as part of the Mortgaged
Property shall be applied in the following order: First, to the payment of the costs and expenses of Mortgagee in enforcing
the provisions of this Mortgage and the Note or any other Loan Document and enforcing its remedies thereunder and hereunder
and the costs and expenses of the sale and of any judicial proceeding wherein the sale may be made, including attorneys' fees
and expenses; Second, to the payment of amounts then owing on the Note in such order as Mortgagee shall determine; Third,
to the payment of any other sums secured by this Mortgage; and Fourth, to the payment of the surplus to any person
entitled thereto.

 

56.       Government
Regulation. Mortgagor shall not (i) be or become subject at any time to any law, regulation, or list of any government agency
(including, without limitation, the U.S. Office of Foreign Asset Control list) that prohibits or limits Mortgagee from making any
advance or extension of credit to Mortgagor of from otherwise conducting business with Mortgagor, or (ii) fail to provide documentary
and other evidence of Mortgagor's identity as may be requested by Mortgagee at any time to enable Mortgagee to verify Mortgagor's
identity or to comply with any applicable law or regulation, including, without limitation, Section 326 of the USA Patriot Act
of 2001, 31 U.S.C. Section 5318.

 

57.       Transfer
of Indebtedness. Mortgagor acknowledges that Mortgagee, at its sole cost and expense, may (i) sell or transfer interests' in
the Indebtedness and Loan Documents to one or more participants or special purpose entities, (ii) pledge Mortgagee's interests
in the Indebtedness and the Loan Documents as security for one or more loans obtained by Mortgagee, or (iii) sell the Indebtedness
evidenced by the Note and the Loan Documents to a party who may pool the Indebtedness with a number of other loans and to have
the holder of such loans grant participation therein or issue one or more classes of Mortgage-Backed, Pass-Through Certificates
or other securities evidencing a beneficial interest in a rate or unrated public offering or private placement
(the "Securities''). The Securities may be rated by one or more national rating agencies. Mortgagor acknowledges and
agrees that Mortgagee may, at any time, at no expense to Mortgagor, sell, transfer or assign the Note, this Mortgage and the other
Loan Documents, and any or all servicing rights with respect thereto, or grant participation therein or issue Securities evidencing
a beneficial interest in a rate or unrated public offering or private placement. In this regard, Mortgagor agrees to make available
to Mortgagee all information concerning its business and operations which Mortgagee reasonably requests. Mortgagee may share such
information with the investment banking firms, rating agencies, accounting firms, law firms and other third party advisory firms
involved with the Indebtedness or the Securities. Mortgagee may forward to each purchaser, transferee, assignee, servicer, participant
or investor in such securities or credit rating agency rating such Securities (collectively, the "Investor") and
each prospective Investor, all documents and information which Mortgagee now has or may hereafter acquire relating to Mortgagor
and the Property, whether furnished by Mortgagor or otherwise, as Mortgagee determines necessary or desirable consistent with full
disclosure for purposes of marketing and underwriting the Indebtedness. Mortgagor shall furnish and hereby consents to Mortgagee
furnishing to such Investors or such prospective Investors 'any and all information concerning Mortgagor and the Property as may
be requested by Mortgagee, any Investor or any prospective Investor in connection with any sale, transfer or participation interest.
It is understood that the information provided by Mortgagor to Mortgagee ·may ultimately be incorporated into the offering
documents for the Securities and thus such information may be disclosed to Investors and prospective Investors. Mortgagee and all
of the aforesaid third-party advisors and professional firms shall be entitled to rely on the information supplied by Mortgagor.
Upon any transfer or proposed transfer contemplated above and by the Loan Documents, at Mortgagee's request and at Mortgagee's
sale cost and expense, Mortgagor shall provide an estoppel certificate to the Investor or any prospective Investor in such form,
substance and detail as Mortgagee may reasonably require.

 

    	23

    	 

    

 

58.       Required Notices.
 (a) Mortgagor shall promptly notify Mortgagee in writing of the occurrence of any of the following:

 

(i)        receipt
by Mortgagor of any written notice from any governmental authority or instrumentality concerning (A) compliance or lack of compliance
of all or any part of the Mortgaged Property, or any business or other activity conducted thereon, with any law, ordinance, rule,
regulation, order, judgment, injunction or decree or with the conditions or other requirements of any license, permit, approval
or authorization (including, without limitation, notice of any violation or alleged violation of any Environmental Law, or of any
threatened, proposed or actual cleanup or other protective or remedial action relating to any Hazardo.us Material, whether pursuant
to any Environmental Law or otherwise), or (B) the status of, or need for, any license, permit, approval or authorization;

 

(ii)       receipt
by Mortgagor of any written notice concerning compliance or lack of compliance of all or any part of the Mortgaged Property, or
any business or other activity conducted thereon, with any agreement or restrictive covenant;

 

(iii)       receipt
by Mortgagor of any written notice from any tenant leasing all or any part of the Mortgaged Property or from the holder of any
lien or security interest encumbering all or any part of the Mortgaged Property concerning any default or any other material matter
in respect of such lease, lien or security interest;

 

 

(iv)       receipt
by Mortgagor of any written notice of any contemplated, threatened or pending condemnation or eminent domain proceeding relating
to all or any part of the Mortgaged Property;

 

    	24

    	 

    

 

(v)      receipt
by Mortgagor of any written notice concerning (A) any contemplated, threatened or pending cancellation of any insurance coverage
on all or any part of the Mortgaged Property, (B) any refusal by any insurance company to provide or continue insurance coverage
on all or any part of the Mortgaged Property, or (C) any increase in the cost of premiums for any insurance coverage on all or
any part of the Mortgaged Property due to the condition thereof or due to any business or activity conducted therein or thereon;

 

(vi)     receipt by
Mortgagor of any written notice concerning commencement of any judicial or administrative proceedings by, against, or otherwise
having a material effect on Mortgagor, the Mortgaged Property or any entity controlled by or under common control with Mortgagor;

 

(vii)    receipt by Mortgagor
of any written notice concerning commencement of any action for default under the terms of any loan by any creditor of Mortgagor
or any entity controlled by or under common control with Mortgagor;

 

(viii)   any change in the name of Mortgagor or in
the location of Mortgagor's principal place of business; or

 

(ix)    any material change
in the use of the Mortgaged Property.

 

          (b)       Mortgagor
also shall notify Mortgagee in writing upon receipt by Mortgagor of notice of any other occurrence requiring the giving of notice
to Mortgagee pursuant to this Mortgage or any of the other Loan Documents. Each notice to Mortgagee pursuant to this Paragraph
54 shall be accompanied by a true, correct and complete copy of any notice received by Mortgagor which is the subject of such notice
to Mortgagee.

 

59.       Application
of Moneys by Mortgagee. Any moneys collected or received by Mortgagee in connection with the enforcement of its rights or remedies
following any Event of Default shall be applied, in such priority as Mortgagee may determine, to the payment of compensation, expenses
and disbursements of the agents, contractors, attorneys and other representatives of Mortgagee, to the payment of all or any part
of the Debt or for any other purpose authorized by any of the Loan Documents or by law.

 

60.        Assignment of
Mortgage. If at any time during the term hereof, the Mortgagor shall request an assignment of the Mortgage to an institutional
investor which will result in the repayment to the Mortgagee of all sums evidenced by the Note, the Mortgagee shall deliver such
assignment upon the payment by the Mortgagor to the Mortgagee of (i) a fee equal to one-half of the applicable mortgage tax which
would be payable on the unpaid principal balance of the Note and (ii) the reasonable fees and expenses of its counsel in connection
therewith.

 

 

  

 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

    	25

    	 

    

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Mortgage, Assignment of
Leases & Rents, Security Agreement and Fixture Filing as of the day and year first above written.

 

	Boreal Water Collection, Inc.
	 
	 
	By: /s/ Francine Lavoie
	       Francine Lavoie 

 

 

 

 

	STATE OF NEW YORK	)
		) ss.:
	COUNTY OF WESTCHESTER	)

 

On August 27, 2013, before me, the undersigned, a Notary
Public in and for the State of New York, personally appeared Francine Lavoie, personally known to me or proved to me on the basis
of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her capacity, and that by his/her signature on the instrument, the individual, or the person upon behalf
of which the individual executed the instrument.

 

 

	 	/s/ Donna Lee Ward
	 	NOTARY PUBLIC

 

 

 

[Signature Page to Mortgage, Assignment of Leases
& Rents,

Security Agreement and Fixture Filing]

 

 

    	26

    	 

    

 

 

 

EXHIBIT A

 

 

ALL that certain plot, piece or parcel of land situate, lying and being in Thompson,
County of Sullivan and State of New York, consisting of:

 

 

 

 

 

 

 

 

    	27

    	 

    

 

 

Schedule A

Advance Title

 

ALL that certain plot, piece or parcel of land, situate, lying and being in the Town
of Thompson, County of Sullivan, and State of New York being the premises conveyed by deeds recorded in Liber of Deeds 582 at
Page 114 and Liber of Deeds 724 at Page 870 and being more particularly bounded and described as follows:

 

BEGINNING at a point in the approximate center
of traveled way of N.Y.S. Route 42 on the Southerly bounds of lands reputedly of the Village of Monticello;

 

RUNNING THENCE from said point of beginning,
South 68 degrees 05 minutes 18 seconds East, 427.73 feet running along the said Southerly bounds of lands reputedly of the Village
of Monticello to a point on the Westerly shore of Kiamesha Lake;

 

THENCE South 41 degrees 34 minutes 13 seconds East, 502.11
feet running through the waters of said lake to a point therein;

 

THENCE North 80 degrees 03 minutes 04 seconds
West, 754.38 feet running through the waters of said lake, crossing the shoreline of said lake and running along the Northerly
bounds of lands reputedly of Schuckalo and Nestico and running along a section of stonerow and passing through an iron pipe found
on the Easterly side of said N.Y.S. Route 42 to a point in the approximate center of traveled way thereof;

 

THENCE running generally along the center of traveled way of said
roadway the following twelve (12) courses:

 

1.       North 17 degrees 24 minutes 55 seconds West, 64.73 feet;

 

2.       North 13 degrees 43 minutes 30 seconds, deed (50 seconds, survey)
West, 43.34 feet;

 

3.       North 10 degrees
05 minutes 51 seconds West, 35.37 feet;

 

4.       North 5 degrees 57 minutes 22 seconds West, 24.68 feet;

 

5.       North 2 degrees 54 minutes 39 seconds West, 27.40 feet;

 

6.       North 1 degree 31
minutes 41 seconds East, 36.35 feet;

 

7.       North 6 degrees 9 minutes 48 seconds East, 24.86 feet;

 

 

    	28

    	 

    

 

SCHEDULE A (CONT.)

 

8.        North 9 degrees 08 minutes 24 seconds East, 30.10 feet;

 

9.        North 12 degrees 42 minutes 20 seconds East, 26.78 feet;

 

10.        North 15 degrees 48 minutes 49 seconds East, 27.65 feet;

 

11.        North 20 degrees 50 minutes 00 seconds East, 31.66 feet;

 

12.        North 25 degrees 34 minutes 45 seconds East, 45.72 feet
to the point or place of BEGINNING.

 

 

 

 

 

 

    	29Exhibit 10.4

 

LEASE

 

BETWEEN

 

350 MARINE PARKWAY LLC, GILLIKIN TRADE LLC,
 LEWIS TRADE LLC, SPIEGL TRADE LLC, and
 WELSH TRADE LLC, LESSOR

 

AND

 

ROCKET FUEL, INC., LESSEE

 

Suite 220
 350 Marine Parkway
 Redwood City, California 94065

 

February 17, 2009

 

 

TABLE OF CONTENTS

 

	
Paragraph
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.
    	
 
    	
Lease
    	
1
    
	
 
    	
2.
    	
 
    	
Initial Term
    	
2
    
	
 
    	
3.
    	
 
    	
Option to Extend
    	
3
    
	
 
    	
4.
    	
 
    	
Monthly Base Rent
    	
5
    
	
 
    	
5.
    	
 
    	
Additional Rent; Increases in Operating Expenses and Taxes
    	
5
    
	
 
    	
6.
    	
 
    	
Payment of Rent
    	
9
    
	
 
    	
7.
    	
 
    	
Security Deposit
    	
9
    
	
 
    	
8.
    	
 
    	
Use
    	
10
    
	
 
    	
9.
    	
 
    	
Environmental Matters
    	
10
    
	
 
    	
10.
    	
 
    	
Taxes on Lessee’s Property
    	
12
    
	
 
    	
11.
    	
 
    	
Insurance
    	
12
    
	
 
    	
12.
    	
 
    	
Indemnification
    	
13
    
	
 
    	
13.
    	
 
    	
Tenant Improvement Work
    	
14
    
	
 
    	
14.
    	
 
    	
Maintenance and Repairs; Alterations; Surrender and Restoration
    	
15
    
	
 
    	
15.
    	
 
    	
Utilities and Services
    	
17
    
	
 
    	
16.
    	
 
    	
Liens
    	
18
    
	
 
    	
17.
    	
 
    	
Assignment and Subletting
    	
18
    
	
 
    	
18.
    	
 
    	
Non-Waiver
    	
21
    
	
 
    	
19.
    	
 
    	
Holding Over
    	
21
    
	
 
    	
20.
    	
 
    	
Damage or Destruction
    	
22
    
	
 
    	
21.
    	
 
    	
Eminent Domain
    	
23
    
	
 
    	
22.
    	
 
    	
Remedies
    	
24
    
	
 
    	
23.
    	
 
    	
Lessee’s Personal Property
    	
25
    
	
 
    	
24.
    	
 
    	
Notices
    	
25
    
	
 
    	
25.
    	
 
    	
Estoppel Certificates
    	
25
    
	
 
    	
26.
    	
 
    	
Parking
    	
26
    
	
 
    	
27.
    	
 
    	
Signage; Roof Rights
    	
26
    
	
 
    	
28.
    	
 
    	
Real Estate Brokers
    	
26
    
	
 
    	
29.
    	
 
    	
Subordination; Attornment
    	
26
    
	
 
    	
30.
    	
 
    	
Breach by Lessor
    	
27
    
	
 
    	
31.
    	
 
    	
Lessor’s Entry
    	
27
    
	
 
    	
32.
    	
 
    	
Financial Statements
    	
27
    
	
 
    	
33.
    	
 
    	
Attorneys’ Fees
    	
28
    
	
 
    	
34.
    	
 
    	
Quiet Enjoyment
    	
28
    
	
 
    	
35.
    	
 
    	
Lessee’s Expansion Rights
    	
28
    
	
 
    	
36.
    	
 
    	
General Provisions
    	
29
    

 

SCHEDULE OF EXHIBITS

 

	
EXHIBIT “A”
    	
Legal Description
    
	
EXHIBIT “B”
    	
The Premises
    
	
EXHIBIT “C”
    	
Lessor’s Furniture Inventory
    
	
EXHIBIT “D”
    	
Commencement Memorandum
    

 

 

 

LEASE

 

Suite 220
 350 Marine Parkway
 Redwood City, California 94065

 

THIS LEASE (“this Lease”), dated for reference purposes as of February 17, 2009, is made and entered into by and between 350 MARINE PARKWAY LLC, a California limited liability company, GILLIKIN TRADE LLC, California limited liability company, LEWIS TRADE LLC, California limited liability company, SPIEGL TRADE LLC, California limited liability company, and WELSH TRADE LLC, California limited liability company, hereafter referred to as “Lessor,” and ROCKET FUEL, INC., a Delaware corporation, hereafter referred to as “Lessee.”

 

RECITALS:

 

A.                                    Lessor is the owner of the real property located in Redwood City, California 94065, commonly referred to as 350 Marine Parkway, Redwood City, California 94065, more particularly described on Exhibit “A” attached hereto and incorporated by reference herein, consisting of a parcel of land containing approximately 2.946 acres, together with all easements and appurtenances thereto (the “Land”) and a building thereon containing approximately 34,452 rentable square feet (the “Building”), and all other improvements located thereon (collectively, the “Improvements”). The real property referred to above, together with the Building and all other improvements thereon, is hereafter called the “Complex.”

 

B.                                    The portions of the Complex not covered by the Building are hereafter called the “Outside Areas.”

 

C.                                    Lessor and Lessee wish to enter into this Lease of certain premises located on the floor of the Building upon the terms and conditions set forth herein.

 

NOW, THEREFORE, the parties agree as follows: 

 

1.                                      Lease.

 

(a)                            Lessor hereby leases to Lessee, and Lessee leases and hires from Lessor, those certain premises consisting of approximately five thousand one hundred eighty-seven (5,187) rentable square feet (the “Premises”) located on the second floor of the Building. This Lease shall be for the term, at the rental, and upon the covenants and conditions contained herein. The Premises are shown on Exhibit “B” attached hereto and incorporated by reference herein.

 

(b)                            “Lessee’s Share” as used in this Lease shall mean the percentage calculated by dividing the total number of rentable square feet of the Premises by the total number of rentable square feet in the Complex (34,452 rentable square feet). The parties agree that Lessee’s Share shall be 15.06% based upon the Premises consisting of approximately five thousand one hundred eighty-seven (5,187) rentable square feet (5,187/34,452).

 

 

(c)                                  All existing workstation furniture described on Exhibit “C” attached hereto and incorporated by reference herein located on the Premises on the date of the execution and delivery of this Lease shall remain on the Premises and may be used by Lessee during the term of this Lease without additional charge to Lessee. All of the existing workstation furniture located on the Premises and provided by Lessor pursuant to this subparagraph (c) shall remain the property of Lessor and shall be returned by Lessee to Lessor upon the expiration or earlier termination of the Lease term in serviceable condition and repair, normal wear and tear excepted.

 

2.                                      Initial Term.

 

(a)                                 The initial term of this Lease (the “initial term”) shall commence on or about March 15, 2009 (the “Commencement Date”), subject to the prior satisfaction of the conditions set forth in Paragraph 2(c). The Commencement Date shall be confirmed in writing by Lessor and Lessee by the execution and delivery of the Commencement Memorandum in the form attached hereto as Exhibit “D” and incorporated by reference herein. Provided this Lease has been executed and delivered by the parties by 5:00 PM Pacific time on Wednesday, February 18, 2009, if Lessor has not substantially completed Lessor’s Tenant Improvement Work in the Premises referred to in Paragraph 13(a) on or before March 31, 2009, Lessee shall have the right to terminate this Lease by giving written notice of termination to Lessor.

 

(b)                                 The initial term of this Lease shall expire on May 14, 2011 (the “Expiration Date”), unless sooner terminated in accordance with the provisions hereof.

 

(c)                                  The commencement of the initial term of this Lease on the Commencement Date specified in Paragraph 2(a) shall be subject to the prior satisfaction of the following conditions: (1) the prior execution and delivery of this Lease by the parties, (2) the payment by Lessee to Lessor upon the execution and delivery of this Lease, of the sum of Thirteen Thousand Seven Hundred Forty-five and Fifty-five Hundredths Dollars ($13,745.55) representing the Monthly Base Rent for the fourth month of the initial term, (3) the payment by Lessee to Lessor concurrently with the execution and delivery of this Lease of the sum of Twenty-eight Thousand Five Hundred Twenty-eight and Fifty Hundredths Dollars ($28,528.50) representing the Security Deposit referred to in Paragraph 7(a), and (4) substantial completion of Lessor’s Tenant Improvement Work to be performed by Lessor in the Premises referred to in Paragraph 13(a). Lessor warrants that on the Commencement Date the Premises and the Building will be in compliance with the Americans With Disabilities Act (ADA), applicable building codes, and all other applicable orders, regulations, rules, laws, statutes, ordinances and requirements of all governmental agencies or authorities (collectively, “Laws”), and with the roof membrane and roof structure and all of the systems of the Building in good operating condition and repair, including, but not limited to, the HVAC, mechanical, lighting, electrical, life safety, and plumbing systems, with the ceiling tiles in good condition, and with the roof in water tight condition.

 

(d)                                 Subject to the satisfaction of conditions (1), (2), and (3) set forth in Paragraph 2(c), and the delivery by Lessee to Lessor of written evidence that Lessee’s commercial general liability insurance coverage required by Paragraph 11(a) is in effect, Lessee and Lessee’s vendors and contractors shall have access to the Premises, on February 20, 2009 for the installation by Lessee at Lessee’s expense of Lessee’s furniture, trade fixtures, and telecommunications equipment, provided that Lessee sand its vendors and suppliers shall not interfere with the construction of Lessor’s Tenant Improvement Work.

 

2

 

(e)                                  As used in this Lease, “term” or “term of this Lease” shall include the initial term and the option extension period, if exercised.

 

3.                                      Option to Extend.

 

(a)                       Lessor hereby grants to Lessee one (1) option to extend the term of this Lease for a period of twenty four (24) calendar months immediately following the expiration of the initial term (the “option extension period”). Lessee may exercise the foregoing option to extend by giving written notice of exercise to Lessor at least six (6) months, but not more than twelve (12) months, prior to the expiration of the initial term of this Lease (the “option exercise period”), provided that if there currently exists an Event of Default by Lessee (as defined in Paragraph 22) under this Lease that remains uncured after the expiration of notice and cure periods, if any, at the time of exercise of the option or at the commencement date of the option extension period, such notice shall be void and of no force or effect. The option extension period, if exercised, shall be upon the same terms and conditions as the initial term of this Lease, including the payment by Lessee of Lessee’s Share of increases in the Operating Expenses and Taxes pursuant to Paragraph 5, except that (1) the Monthly Base Rent during the option period, if exercised, shall be determined as set forth in Paragraph 3(c) hereof, (2) Lessor may adjust the hourly rate for after hours HVAC services as of the commencement date of the option extension period pursuant to Paragraph 15(b), (3) there shall be no additional option to extend, and (4) Lessee shall accept the Premises in their “as is” condition, subject to compliance with Laws as provided in Paragraph 2(c) and compliance with the Americans With Disabilities Act as provided in Paragraph 13(d) which shall also apply to the commencement of the option extension period. If Lessee does not exercise the option in a timely manner, the option shall lapse, time being of the essence. Subject to the foregoing, neither Lessor nor Lessee shall be required to perform any tenant improvement work with respect to the option extension period.

 

(b)                       The option to extend granted to Lessee by this Paragraph 3 is granted for the personal benefit of Rocket Fuel, Inc. (“Rocket Fuel”) only, and shall be exercisable only by Rocket Fuel or by an assignee or sublessee referred to in Paragraph 17(g) as a “Permitted Affiliate.” Said option may not be assigned or transferred by Rocket Fuel to, or exercised by, any assignee or sublessee, except as provided in Paragraph 17(g).

 

(c)                        The initial Monthly Base Rent for the Premises during the option extension period shall be determined pursuant to the provisions of this subparagraph (c) and shall be equal to the then current fair market Monthly Base Rent of the Premises on the commencement date of the option extension period as determined by agreement between the Lessor and Lessee reached prior to the expiration of the option exercise period, if possible, or by the process of appraisal if the parties cannot reach agreement.

 

Upon the written request by Lessee to Lessor received by Lessor no earlier than twelve (12) months prior to the expiration of the initial term, and no later than the eight (8) months prior to the expiration of the initial term, and prior to the exercise by Lessee of the option to extend, Lessor shall give Lessee written notice of Lessor’s good faith opinion of the amount equal to the fair market Monthly Base Rent of the Premises as of the commencement of the option extension period. Thereafter, upon the request of Lessee, Lessor and Lessee shall enter into good faith negotiations for up to thirty (30) days in an effort to reach agreement on the fair market Monthly Base Rent for the Premises on the commencement date of the option extension period.

 

3

 

If Lessor and Lessee are unable to agree upon the amount equal to the initial fair market Monthly Base Rent for the Premises on a full service basis, and thereafter, prior to the expiration of the option exercise period, Lessee exercises the option to extend, said amount of the initial Monthly Base Rent shall be determined by appraisal. The appraisal shall be performed by one appraiser if the parties are able to agree upon one appraiser. If the parties are unable to agree upon one appraiser, each party shall appoint an appraiser and the two appraisers shall select a third appraiser. Each appraiser selected shall be a member of the American Institute of Real Estate Appraisers (AIREA) with at least five (5) years of full-time commercial real estate appraisal experience in the Redwood City-Redwood Shores, California office rental market.

 

If only one appraiser is selected, that appraiser shall notify the parties in simple letter form of its determination of the amount equal to the fair market Monthly Base Rent for the Premises on the commencement date of the option extension period within fifteen (15) days following its selection. Said appraisal shall be binding on the parties as the appraised current “fair market Monthly Base Rent” for the Premises which shall be based upon what a willing new lessee would pay and a willing lessor would accept at arm’s length for premises comparable to the Premises determined with reference to comparable premises in the vicinity of the Complex of similar age, size, quality of construction and specifications (excluding the value of any improvements to the Premises made at Lessee’s cost) for a lease of similar duration to this Lease and taking into consideration that there will be no free rent, improvement allowance, or other concessions. If multiple appraisers are selected, each appraiser shall within ten (10) days of being selected make its determination of the amount equal to the initial fair market Monthly Base Rent for the Premises on a full service basis in simple letter form. If two (2) or more of the appraisers agree on said amount, such agreement shall be binding upon the parties. If multiple appraisers are selected and two (2) appraisers are unable to agree on said amount, the amount equal to the initial fair market Monthly Base Rent for the Premises shall be determined by taking the mean average of the appraisals; provided, that any high or low appraisal, differing from the middle appraisal by more than ten percent (10%) of the middle appraisal, shall be disregarded in calculating the average. Said initial Monthly Base Rent shall be adjusted annually on the anniversary of the commencement of the option extension period in the manner determined by the appraiser or appraisers to be consistent with the then prevailing market practice for comparable space in the Redwood City, California office rental market.

 

If only one appraiser is selected, then each party shall pay one-half of the fees and expenses of that appraiser. If three appraisers are selected, each party shall bear the fees and expenses of the appraiser it selects and one-half of the fees and expenses of the third appraiser.

 

(d)                            Thereafter, provided that Lessee has previously given timely notice to Lessor of the exercise by Lessee of the option to extend the term, Lessor and Lessee shall execute an amendment to this Lease stating that the Monthly Base Rent for the Premises as of the commencement of the option extension period shall be equal to fair market rent as agreed upon by Lessor and Lessee, or one hundred percent (100%) of the fair market rental for the Premises as determined by the appraisal process referred to above.

 

(e)                             Notwithstanding anything to the contrary contained in subparagraph (c) above, in no event shall the Monthly Base Rent at the commencement of the option extension period be less than the Monthly Base Rent in effect immediately prior to the commencement of the option extension period.

 

4

 

4.                                      Monthly Base Rent.

 

(a)              Lessee shall pay to Lessor during the term of this Lease Base Rent on a full service basis as follows:

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Monthly Base
    	
 
    
	
Period
    	
 
    	
Sq. Ft.
    	
 
    	
Rate/sq. ft.
    	
 
    	
Rent (Full Service)
    	
 
    
	
Months 1 – 3
    	
 
    	
5,187
    	
 
    	
$
    	
-0-/sq. ft.
    	
 
    	
$
    	
-0-
    	
 
    
	
Months 4 –12
    	
 
    	
5,187
    	
 
    	
$
    	
2.65/sq. ft.
    	
 
    	
$
    	
13,745.55 full service
    	
 
    
	
Months 13 – 26
    	
 
    	
5,187
    	
 
    	
$
    	
2.75/sq. ft.
    	
 
    	
$
    	
14,264.25 full service
    	
 
    

 

(b)            Upon the execution and delivery of this Lease by Lessor and Lessee, Lessee shall pay to Lessor the sum of Thirteen Thousand Seven Hundred Forty-five and Fifty-five Hundredths Dollars ($13,745,55) representing the Monthly Base Rent for the fourth calendar month of the initial term.

 

(c)              Monthly Base Rent is determined on a full service basis and includes the Base Operating Expenses and Base Taxes referred to in Paragraph 5(b) hereof.

 

5.                                      Additional Rent: Increases in Operating Expenses and Taxes.

 

(a)             If Operating Expenses and/or Taxes as defined in Paragraphs 5(c) and 5(d), respectively, for any calendar year during the term of this Lease after the calendar year 2009 exceeds Base Operating Expenses and/or Base Taxes as defined in Paragraph 5(b), Lessee shall pay to Lessor, as “Additional Rent,” Lessee’s Share of such increase in Operating Expenses and Taxes in accordance with Paragraph 5(f) hereof.

 

(b)             “Base Operating Expenses” and “Base Taxes” shall mean the actual Operating Expenses and Taxes of the Complex for the calendar year 2009, adjusted to reflect a ninety-five percent (95%) occupancy rate of the Complex throughout such year.

 

(c)              “Operating Expenses,” as used herein, shall include all direct costs of management, operation, maintenance, and repair of the Complex and providing services to tenants of the Building as determined by generally accepted accounting principles (unless excluded by this Lease), including, but not limited to:

 

Personal property taxes related to the Complex; any parking taxes or parking levies imposed on the Complex in the future by any governmental agency; a pro rata portion of the management fee charged for the management and operation of the Complex, in an amount equal to four percent (4%) of the total gross income received by Lessor from the operation of the Complex (including Monthly Base Rent and Additional Rent received from tenants), such amount to be capped at four percent (4%) during the term of the Lease; water and sewer charges; waste disposal; insurance premiums for insurance coverages maintained by Lessor pursuant to Paragraph 11(b) hereof; license, permit, and inspection fees; charges for electricity, heating, air conditioning, gas, and any other utilities (including, without limitation, any temporary or permanent utility surcharge or other exaction); security; janitorial services and maintenance contracts; painting and repairing, interior and exterior; maintenance and replacement of floor and window coverings; repair and maintenance of air-conditioning, heating, mechanical and electrical systems, elevators, plumbing

 

5

 

and sewage systems; compensation and related fringe benefits paid to a building engineer, if any, directly employed in the operation and maintenance of the Complex; landscaping and gardening of Outside Areas; glazing; repair, maintenance, cleaning, sweeping, striping, and resurfacing of the parking area; supplies, materials, equipment and tools in the maintenance of the Complex; costs for accounting services incurred in the calculation of Operating Expenses and Taxes and Lessee’s Share thereof as defined herein; Lessee’s Share of the amortized cost of the replacement of the HVAC system, elevators, replacement of the parking area, and any other improvements or replacements which would properly be capitalized under standard accounting practices, including the cost of any capital expenditures for any improvements or changes to the Complex which are required by laws, ordinances, or other governmental regulations adopted after the Commencement Date or for any items which are intended to and have the effect of reducing Operating Expenses, provided, however, that the cost of said capital improvements (together with interest on the unamortized balance at the rate equal to the effective rate of interest on Lessor’s bank line of credit at the time of completion of said improvements, but in no event in excess  of ten percent (10%) per annum) shall be amortized on a useful life basis in accordance with standard accounting practices and treated as an Operating Expense, except that with respect to capital improvements made to save Operating Expenses such amortization shall not be at a rate greater than the anticipated savings in Operating Expenses. Operating Expenses shall also include any other expense or charge, whether or not described herein not specifically excluded by other provisions of this Lease, which in accordance with generally accepted accounting and management practices would be considered an expense of managing, operating, maintaining, and repairing the Complex.

 

(d)                                 Real property taxes and assessments upon the Complex, during each lease year or partial lease year during the term of this Lease are referred to herein as “Taxes.”

 

As used herein, “Taxes” shall mean:

 

(1)                                 all real estate taxes, assessments and any other taxes levied or assessed against the Complex including the Land, the Building, all improvements located thereon, and any increases in Taxes resulting from reassessments following any change in ownership of the Complex or any interest therein, by any new construction or major repairs to the Complex (“major repairs” are defined for this purpose as any repairs, work, alterations, or improvements to the Complex performed by Lessor or Lessee that cost in excess of Twenty Thousand Dollars ($20,000.00)), or change in valuation now or hereafter imposed by any governmental or quasi-governmental authority or special district having the direct or indirect power to tax or levy assessments; and

 

(2)                                 all other taxes which may be levied in lieu of real estate taxes, assessments, and other fees, charges, and levies, general and special, ordinary and extraordinary, unforeseen as well as foreseen, of any kind and nature by any authority having the direct or indirect power to tax, including without limitation any governmental authority or any improvement or other district or division thereof, for public improvements, services, benefits, or environmental matters which are assessed, levied, confirmed, imposed, or become a lien (a) upon the Complex; or (b) upon this transaction or any document to which Lessee is a party creating or transferring any interest in the Premises; and (c) any tax or excise, however described, imposed in addition to, or in substitution partially or totally of, any tax previously included within the definition of “Taxes” or any tax the nature of which was previously included in the definition “Taxes.”

 

6

 

Not included within the definition of “Taxes” are any net income, profits, transfer, franchise, capital stock, estate or inheritance taxes imposed by any governmental authority; late payment penalties or interest, provided that Lessee is not in default in the payment of Monthly Base Rent or Additional Rent; or any increase in Taxes which are the result of leasehold improvements for any other tenant of the Complex which are substantially in excess of building standard improvements.

 

With respect to any assessments which may be levied against or upon the Complex, or the underlying realty thereof, which under the laws then in force may be evidenced by improvement or other bonds, or may be paid in annual installments, only the amount of such annual installment (with appropriate proration of any partial year) and statutory interest shall be included within the computation of the annual Taxes levied against the Complex, the Building and improvements thereon, and the underlying realty thereof.

 

(e)                                  The following costs (“Costs”) shall be excluded from the definition of Operating Expenses:

 

(1)                                 Costs occasioned by the act, omission or violation of law by Lessor, any other occupant of the Complex, or their respective agents, employees or contractors;

 

(2)                                 Costs for which Lessor receives reimbursement from others, including reimbursement from insurance;

 

(3)                                 The cost of any renovation, improvement, painting or redecorating of any portion of the Complex which is not a common area or not made available for Lessee’s use in common with other tenants;

 

(4)                                 Fees, commissions, attorneys’ fees, costs or other disbursements incurred in connection with negotiations or disputes with any other occupant of the Complex and costs arising from the violation by Lessor or any occupant of the Complex (other than Lessee) of the terms and conditions of any lease or other agreement;

 

(5)                                 Interest, charges and fees incurred on debt or payments on any deed of trust on the Complex;

 

(6)                                 Advertising or promotional costs or other costs incurred in procuring tenants;

 

(7)                                 Costs incurred in repairing, maintaining or replacing any structural elements of the Building and Complex for which Lessor are responsible pursuant to Paragraph 14(a) hereof;

 

(8)                                 Any wages, bonuses or other compensation of employees above the grade of the on site building engineer who perform or supervise the performance of general building maintenance, and any executive salary of any officer or employee of Lessor, including fringe benefits other than insurance plans and tax-qualified benefit plans, or any fee, profit or compensation retained by Lessor or its affiliates for management and administration of the Complex in excess of the sum specified in Paragraph 5(c) above;

 

7

 

(9)                                      General corporate overhead and general and administrative expenses of Lessor, except as specifically provided in Paragraph 5(c); and

 

(10)                               Leasing expenses and broker commissions payable by Lessor.

 

Lessor shall at all times use its best efforts to operate the Building and Complex in an economically reasonable manner at costs not disproportionately higher than those experienced by other comparable buildings in the market area in which the Premises are located (Redwood Shores).

 

(f)                                   As close as reasonably possible to the end of each calendar year commencing with the end of the calendar year 2009, Lessor shall notify Lessee of any increases in Operating Expenses and/or Taxes over the Base Operating Expenses and Base Taxes reasonably estimated by Lessor for the following calendar year. Concurrent with such notice, Lessor shall provide a description of such Operating Expenses and Taxes. Commencing on the first day of January of each calendar year after 2009 for which Lessor has estimated an increase in Operating Expenses and/or Taxes, and on the first day of each calendar month thereafter, Lessee shall pay to Lessor, as Additional Rent, one-twelfth (1/12th) of Lessee’s Share of the estimated increases in Operating Expenses and Taxes. If at any time during any such calendar year, it appears to Lessor that the Operating Expenses or Taxes for such year will vary from Lessor’s estimate, Lessor may, by written notice to Lessee, revise Lessor’s estimate for such year and the Additional Rent and Taxes payments by Lessee of Lessee’s Share of increases for such year shall thereafter be based upon such revised estimate. Lessor shall furnish to Lessee with such revised estimate written verification showing that the actual Operating Expenses or Taxes are greater than Lessor’s estimate. The increase in the monthly installments of Additional Rent and Taxes resulting from Lessor’s revised estimate shall not be retroactive, but the amount of the increases in Additional Rent and Taxes payable by Lessee for each calendar year shall be subject to adjustment between Lessor and Lessee after the close of the calendar year, as provided below.

 

As soon as practical after the end of the calendar year 2009, and as soon as practical after the end of each calendar year of the initial term thereafter, Lessor shall furnish Lessee a statement certified by a responsible employee or agent of Lessor (the “Operating Statement”) with respect to such year, prepared by an employee or agent of Lessor, showing Operating Expenses and Taxes broken down by component expenses, Base Taxes and Base Operating Expenses broken down by component expenses, Lessee’s Share of such increases in Operating Expenses and Taxes, and the total payments made by Lessee on the basis of any previous estimate of such Operating Expenses and Taxes, all in sufficient detail for verification by Lessee. Unless Lessee raises any objections to the Operating Statement within ninety (90) days after receipt of the same, such statement shall conclusively be deemed correct and Lessee shall have no right thereafter to dispute such statement or any item therein or the computation of Operating Expenses and/or Taxes. Lessee or its accountants shall have the right to inspect and audit Lessor’s books and records with respect to this Lease once each Lease year to verify actual Operating Expenses and/or Taxes. Lessor’s books and records shall be kept in accord with generally accepted accounting principles. If Lessee’s audit of Lessee’s Share of increases in the Operating Expenses and/or Taxes for any year reveals a net overcharge of Lessee of more than five percent (5%), Lessor promptly shall reimburse Lessee for the cost of the audit; otherwise, Lessee shall bear the cost of Lessee’s audit. If Lessee objects to Lessor’s Operating Statement, Lessee shall continue to pay on a monthly basis Lessee’s Share of the increases in Operating Expenses and/or Taxes based upon the prior year’s Operating Statement until the dispute is resolved.

 

8

 

If Lessee’s Share of the increases in the Operating Expenses and Taxes for the year as finally determined exceeds the total payments made by Lessee based on Lessor’s estimates, Lessee shall pay to Lessor the deficiency, within thirty (30) days after the receipt of Lessor’s Operating Statement. If the total payments made by Lessee on account of Lessee’s Share of any such increases based on Lessor’s estimate of the increases in Operating Expenses and/or Taxes exceed Lessee’s Share of the increases in Operating Expenses and/or Taxes as finally determined, Lessee’s extra payment (but not more than Lessee’s Share of such increases), plus the cost of the audit if charged to Lessor, shall be credited against payments of Lessee’s Share of increases in Additional Rent next due hereunder.

 

Notwithstanding the termination of this Lease, within thirty (30) days after Lessee’s receipt of Lessor’s Operating Statement or the completion of Lessee’s audit regarding the Operating Expenses and/or Taxes for the calendar year in which this Lease terminates, Lessee shall pay to Lessor or shall receive from Lessor, as the case may be, an amount equal to the difference between Lessee’s Share (prorated to the expiration date or the termination date of this Lease) of the increases in Operating Expenses and/or Taxes for such year, as finally determined (plus the cost of the audit if charged to Lessor), and the amount previously paid by Lessee on account thereof.

 

6.                                      Payment of Rent.

 

(a)                                 All rent shall be due and payable in lawful money of the United States of America at the address of Lessor set forth in Paragraph 24, “Notices,” without deduction or offset and without prior demand or notice, unless otherwise specified herein. Monthly Base Rent and Additional Rent payable by Lessee shall be payable monthly, in advance, on the first day of each calendar month. Lessee’s obligation to pay rent for any partial month at the expiration or termination of the term shall be prorated on the basis of the actual number of days in said calendar month.

 

(b)                                 If any installment of Monthly Base Rent, Additional Rent or any other sum due from Lessee is not received by Lessor within five (5) days after Lessor’s notice to Lessee that such amount has not been received when due, Lessee shall pay to Lessor an additional sum equal to five percent (5%) of the amount overdue as a late charge. The parties agree that this late charge represents a fair and reasonable estimate of the costs that Lessor will incur by reason of the late payment by Lessee. Acceptance of any late charge shall not constitute a waiver of Lessee’s default with respect to the overdue amount. Any amount not paid within ten (10) days after Lessee’s receipt of written notice that such amount is due shall bear interest from the date due until paid at the rate of ten percent (10%) per annum, in addition to the late payment charge.

 

Initials: Lessor             Lessee             

 

7.                                      Security Deposit.

 

(a)                                 Lessee shall deposit with Lessor upon execution hereof the sum of Twenty-eight Thousand Five Hundred Twenty-eight and Fifty Hundredths Dollars ($28,528.50) (the “Security Deposit”), as security for Lessee’s faithful performance of Lessee’s obligations under this Lease. Lessor and Lessee agree that Lessor may apply the Security Deposit to the amounts reasonably necessary to remedy defaults by Lessee beyond applicable notice and cure periods in the payment of rent, to repair damages to the Premises caused by Lessee, and to clean the Premises upon the expiration or earlier termination of the term. If Lessor uses or applies all or any

 

9

 

portion of the Security Deposit to remedy any such defaults by Lessee, Lessee shall within ten (10) days after written request therefor deposit an amount with Lessor sufficient to restore the Security Deposit to the original amount required by this Lease. Lessor shall not be required to keep all or any part of the Security Deposit separate from its general accounts.

 

(b)                                 Lessor shall, at the expiration or earlier termination of the term hereof and after Lessee has vacated the Premises, but not later than thirty (30) days after the date Lessor receives possession of the Premises, return to Lessee (or, at Lessor’s option, to the last assignee, if any, of Lessee’s interest herein), that portion of the Security Deposit not used or applied by Lessor to remedy any defaults by Lessee referred to in Paragraph 7(a). No part of the Security Deposit shall be considered to be held in trust, to bear interest or other increment for its use, or to be prepayment for any moneys to be paid by Lessee under this Lease.

 

8.                                      Use. Lessee shall use and occupy the Premises only for general office uses, research and development, and for no other use or purpose without Lessor’s prior written consent.

 

9.                                      Environmental Matters.

 

(a)                                      The term “Hazardous Materials” as used in this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or release, is regulated or monitored by any governmental authority pursuant to Environmental Laws. Hazardous Materials shall include, but not be limited to hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-products or fractions thereof.

 

(b)                                      “Environmental Laws” shall mean and include any Federal, State, or local statute, law, ordinance, code, rule, regulation, order, or decree regulating, relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic, or dangerous waste, substance, element, compound, mixture or material, as now or at any time hereafter in effect including, without limitation, California Health and Safety Code §§25100 et seq., §§25300 et seq., Sections 25281(f) and 25501 of the California Health and Safety Code, Section 13050 of the Water Code, the Federal Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C. §§9601 et seq. (“CERCLA”), the Superfund Amendments and Reauthorization Act, 42 U.S.C. §§9601 et seq., the Federal Toxic Substances Control Act, 15 U.S.C. §§2601 et seq., the Federal Resource Conservation and Recovery Act as amended, 42 U.S.C. §§6901 et seq., the Federal Hazardous Material Transportation Act, 49 U.S.C. §§1801 et seq., the Federal Clean Air Act, 42 U.S.C. §7401 et seq., the Federal Water Pollution Control Act, 33 U.S.C. §1251 et seq., the River and Harbors Act of 1899, 33 U.S.C. §§401 et seq., and all rules and regulations of the EPA, the California Environmental Protection Agency, or any other state or federal department, board or any other agency or governmental board or entity generally having jurisdiction over the environment, as any of the foregoing have been, or are hereafter amended.

 

(c)                                       Lessee shall not use, store, or transport to or from the Premises or the Complex, or dispose of any Hazardous Materials without Lessor’s prior written consent, except (1) ordinary and customary office supplies and cleaning materials which are used in the normal course of Lessee’s agreed use of the Premises, and (2) such other Hazardous Materials the generation, possession, storage, use, transportation, or disposal of which in the quantities used by Lessee do not require a permit from any governmental authority. All such Hazardous Materials (1) shall be used, stored, transported, and disposed of in strict compliance with Environmental Laws, and (2) shall be

 

10

 

 

stored on the Premises only in limited quantity required for Lessee’s business at the Premises. Except as otherwise specifically permitted by this Paragraph 9(c), Lessee shall not use, store, transport, or dispose of any Hazardous Materials in or about the Premises or the Complex. Without limiting the generality of the foregoing, Lessee shall, at its sole cost, comply with all Environmental Laws relating to its use of Hazardous Materials. If Hazardous Materials are discovered at or about the Premises or the Complex in violation of Environmental Laws and such Hazardous Materials were used, stored, transported, or disposed of by Lessee, then Lessee shall, at Lessee’s sole expense, promptly take all action necessary to cause the Complex to comply with all Environmental Laws with respect to such Hazardous Materials. Upon Lessor’s request, Lessee shall deliver to Lessor (1) a copy of Lessee’s current Hazardous Materials Management Plan, if any, and any amendments or supplements thereto, or replacements thereof, from time to time during the term of this Lease, and (2) a copy of all Hazardous Materials reports or plans filed by Lessee with the City of Redwood City, if any, even though Lessee’s Hazardous Materials Management Plan and any such reports or plans filed with the City show that Lessee is not currently using any reportable Hazardous Materials on the Premises.

 

(d)                                 If Lessee knows, or has reasonable cause to believe, that Hazardous Materials have come to be located in, on, under or about the Premises, Lessee shall immediately give written notice of such fact to Lessor and provide Lessor with a copy of any report, notice, claim or other documentation which Lessee has in its possession concerning the presence of such Hazardous Materials.

 

(e)                                  Lessee shall indemnify, defend with counsel reasonably acceptable to Lessor, and hold Lessor harmless from any and all claims, damages, fines, judgments, penalties, costs, liabilities or losses (including, without limitation, any and all sums paid for settlement of claims, attorneys’ fees, consultant and expert fees) (“Claims”) arising during or after the term (as such may be extended) from the use, storage, transportation, release, disposal, discharge, or emission of Hazardous Materials at or about the Premises or the Complex by Lessee, or Lessee’s employees, agents, contractors, invitees, or sublessees (collectively, “Lessee Parties”), in violation of Environmental Laws or the terms of this Lease. Without limitation of the foregoing, this indemnification shall include any and all costs incurred due to any investigation of the site or any cleanup, removal or restoration mandated by a federal, state or local agency or political subdivision and any repairs to the Complex required in connection therewith. The foregoing indemnity shall survive the expiration or earlier termination of this Lease.

 

(f)                                   Prior to the expiration of the term and the surrender of possession of the Premises by Lessee to Lessor, in the event that Lessee or any sublessee during the term of this Lease has used Hazardous Materials on the Premises for which a permit is required, Lessee shall obtain at Lessee’s expense an environmental closure report certified by the appropriate department of the City of Redwood City (“Certified Closure Report”) and a copy of such Certified Closure Report shall be delivered to Lessor if such report is required by the City of Redwood City or applicable law. Such closure shall include the removal and remediation at Lessee’s expense of any Hazardous Materials in, on, under, or about the Premises released or discharged by Lessee, its Permitted Affiliates, sublessees, assignees, employees, agents, contractors, or invitees (i) referred to in the environmental closure report prepared by the City of Redwood City, or (ii) as may be required by the City as a condition to the issuance by the City of a Certified Closure Report that does not recommend or require further clean up or other similar action.

 

11

 

(g)                                  Lessee shall not be responsible under this Lease, and Lessor hereby releases Lessee from liability for any Hazardous Materials present on the Complex that were not released by Lessee or its employees, agents, contractors, invitees, or sublessees.

 

(h)                                 The provisions of this Paragraph 9 shall survive the expiration or earlier termination of the term of this Lease.

 

10.                               Taxes on Lessee’s Property. Lessee shall pay before delinquency any and all taxes, assessments, license fees, and public charges levied, assessed, or imposed and which become payable during the initial term and any extension thereof upon Lessee’s equipment, fixtures, furniture, and personal property installed or located in the Premises, and all of Lessor’s FF&E located on the Premises which Lessee has the right to use without additional cost pursuant to Paragraph 1(c)

 

11.                               Insurance.

 

(a)                                 Lessee shall, at Lessee’s sole cost and expense, provide and keep in force commencing with the date Lessee has early access to the Premises pursuant to Paragraph 2(b) and continuing during the term of this Lease, a commercial general liability insurance policy with a recognized casualty insurance company qualified to do business in California, insuring against any and all liability occasioned by any occurrence in, on, about, or related to the Premises, or arising out of the condition, use, occupancy, alteration or maintenance of the Premises, and covering the contractual liability referred to in Paragraph 12(a) of this Lease, having a combined single limit for both bodily injury and property damage in an amount not less than Three Million Dollars ($3,000,000). All such insurance carried by Lessee shall be in a form reasonably satisfactory to Lessor and its mortgage lender and shall be carried with companies that have a general policyholder’s rating of not less than “A” and a financial rating of not less than Class “X” in the most current edition of Best’s Insurance Reports; shall provide that such policies shall not be subject to material alteration or cancellation except after at least thirty (30) days’ prior written notice to Lessor; and shall be primary and non-contributory. Prior to entering the Premises pursuant to the early access provision of Paragraph 2(d) and upon renewal of such policies not less than fifteen (15) days prior to the expiration of the term of such coverage, Lessee shall deliver to Lessor certificates of insurance confirming such coverage, together with evidence of the payment of the premium therefor, naming Lessor and Lessor’s property manager as additional insureds. If Lessee fails to procure and maintain the insurance required hereunder, Lessor may, but shall not be required to, order such insurance at Lessee’s expense and Lessee shall reimburse Lessor for all costs incurred by Lessor with respect thereto. Lessee’s reimbursement to Lessor for such amounts shall be deemed Additional Rent, and shall include all sums disbursed, incurred or deposited by Lessor, including Lessor’s costs, expenses and reasonable attorneys’ fees with interest thereon at the interest rate referred to in Paragraph 6(a). Lessee shall also carry at Lessee’s expense property insurance coverage on the FF&E naming Lessor as insured and with loss payable to Lessor.

 

(b)                                 Lessor shall obtain and carry in Lessor’s name, as insured, as an Operating Expense of the Premises as provided in Paragraph 5(b), during this Lease term, “all risk” property insurance coverage (with rental loss insurance coverage for a period of one year), flood insurance, commercial general liability insurance and property damage insurance, and insurance against such other risks or casualties as Lessor shall determine, including, but not limited to, insurance coverages required of Lessor by the beneficiary of any deed of trust which encumbers the Complex, including earthquake insurance coverage if required by Lessor’s institutional mortgage lender, provided that

 

12

 

such coverage is available at a commercially reasonable cost, insuring Lessor’s interest in the Complex (including any leasehold improvements to the Premises constructed by Lessor or by Lessee with Lessor’s prior written approval) in an amount not less than the full replacement cost of the Building and all other Improvements from time to time. The proceeds of any such insurance shall be payable solely to Lessor and Lessee shall have no right or interest therein. Lessor shall have no obligation to insure against loss by Lessee to Lessee’s equipment, fixtures, furniture, or other personal property of Lessee in or about the Premises, or to any FF&E of Lessor in or about the Premises that Lessee has the right to use without charge, occurring from any cause whatsoever. Lessor’s commercial general liability insurance shall provide for contractual liability referred to in Paragraph 12(b) of this Lease.

 

(c)                                       Notwithstanding anything to the contrary contained in this Lease, the parties release each other, and their respective authorized representatives, employees, officers, directors, shareholders, managers, members, assignees, subtenants, and property managers, from any claims for damage to any person or to the Premises and to the fixtures, personal property, leasehold improvements and alterations of either Lessor or Lessee in or on the Premises that are caused by or result from (1) risks required by this Lease to be insured against or (2) risks actually insured against by any property insurance policies carried by the parties and in force at the time of any such damage, whichever is greater. This waiver applies whether or not the loss is due to the negligent acts or omissions of Lessor or Lessee or their respective officers, directors, employees, agents, contractors, or invitees.

 

(d)                                      Each party shall cause each property insurance policy obtained by it to provide that the insurance company waives all right of recovery by way of subrogation against either party in connection with the above waiver and any damage covered by any policy; provided, however, that such provision or endorsement shall not be required if the applicable policy of insurance permits the named insured to waive rights of subrogation on a blanket basis, in which case the blanket waiver shall be acceptable. Neither party shall be liable to the other for any damage caused by fire or any of the risks insured against under any insurance policy required by this Lease.

 

12.                               Indemnification.

 

(a)                                 Lessee waives all claims against Lessor for damages to Lessee’s furniture, fixtures, equipment, leasehold improvements, or other property located in, upon, or about the Premises, and for injuries to persons in, upon, or about the Premises from any cause arising at any time, except as may be caused by the negligence or willful misconduct of Lessor or its employees, agents or contractors, or Lessor’s failure to perform any of its obligations under this Lease. Lessee shall indemnify, defend, and hold harmless Lessor from claims, suits, actions, or liabilities for personal injury, death or for loss or damage to property that arise from (1) bodily injury or damage to property which arises in or about the Building or the Outside Areas to the extent the personal injury, death, or damage to property results from the negligent acts or omissions of Lessee, its employees, agents or contractors, or (2) any event of default by Lessee in the performance of any obligation on Lessee’s part to be performed under this Lease.

 

(b)                                 Except to the extent of Lessee’s negligence or willful misconduct, Lessor shall indemnify, defend, and hold harmless Lessee from claims, suits, actions, or liabilities for personal injury, death or for loss or damage to property that arise from (1) any activity, work, or thing done, or permitted by Lessor in or about the Premises, (2) any occurrence in or about the Land, the Building, or the Improvements to the extent the personal injury, death, or damage to

 

13

 

property results from the gross negligence or willful acts or omissions of Lessor, its employees, agents or contractors, or (3) any breach or default by Lessor in the performance of any obligation on Lessor’s part to be performed under this Lease.

 

(c)                                       In the absence of comparative or concurrent negligence on the part of Lessee or Lessor, their respective agents, affiliates, and subsidiaries, or their respective officers, directors, members, employees or contractors, the foregoing indemnities by Lessee and Lessor shall also include reasonable costs, expenses and attorneys’ fees incurred in connection with any indemnified claim or incurred by the indemnitee in successfully establishing the right to indemnity. The indemnitor shall have the right to assume the defense of any claim subject to the foregoing indemnities with counsel reasonably satisfactory to the indemnitee. The indemnitee agrees to cooperate fully with the indemnitor and its counsel in any matter where the indemnitor elects to defend, provided the indemnitor shall promptly reimburse the indemnitee for reasonable costs and expenses incurred in connection with its duty to cooperate.

 

The foregoing indemnities are conditioned upon the indemnitee providing prompt notice, upon the indemnitee’s discovery thereof, to the indemnitor of any claim or occurrence that is likely to give rise to a claim, suit, action or liability that will fall within the scope of the foregoing indemnities, along with sufficient details that will enable the indemnitor to make a reasonable investigation of the claim.

 

When the claim is caused by the joint negligence or willful misconduct of Lessee and Lessor or by the indemnitor party and a third party unrelated to the indemnitor party (except indemnitor’s agents, officers, employees or invitees), the indemnitor’s duty to indemnify and defend shall be proportionate to the indemnitor’s allocable share of joint negligence or willful misconduct.

 

(d)                                 Lessor shall not be liable to Lessee for (1) any injury or damage caused by the acts or negligence of any other occupant of the Building, or (2) resulting from the overflow, breakage, or leakage of water, steam, gas, or electricity from pipes, wires, or otherwise in the Premises or the Building however caused.

 

13.                               Tenant Improvement Work.

 

(a)                                 Subject to the conditions contained in Paragraph 2(c) above, Lessor shall, at Lessor’s sole cost and expense cause the following tenant improvement work (“Lessor’s Tenant Improvement Work”) in the Premises based on the floor plan of the Premises attached hereto as Exhibit “B,” to be substantially completed prior to the Commencement Date:

 

(1)                                 Install all existing cubes/furniture located on the second floor into the Premises, per a mutually agreed upon cube plan;

 

(2)                                 Replace the carpeting and install tile in the Kitchen;

 

(3)                                 Paint walls as indicated by Lessee; and

 

(4)                                 Replace existing artwork located in the common areas of the second floor.

 

14

 

(b)                                      Lessor’s Tenant Improvement Work shall be performed by a general contractor selected by Lessor pursuant to a construction contract between Lessor and the contractor describing Lessor’s Tenant Improvement Work and the scheduled completion date.

 

(c)                                       Lessor shall cause Lessor’s Tenant Improvement Work to be performed in accordance with all applicable Laws, in a good and workmanlike manner, free of defects and using new materials and equipment of good quality. Lessor shall cause Lessor’s contractor to correct at the contractor’s expense any defects in any of the work noted by Lessee or by Lessor within one hundred twenty (120) days after the Commencement Date. Any needed repairs to Lessor’s Tenant Improvement Work thereafter shall be performed by Lessor and included in Operating Expenses pursuant to Paragraph 5 if the nature of such repairs is that it falls under Lessor’s maintenance and repair obligations, otherwise such repairs shall be made by Lessee at Lessee’s expense.

 

(d)                                      Subject to Paragraph 2(c), Lessor shall cause the Premises to be in the condition required by Paragraph 2(c), including in compliance with the Americans With Disabilities Act (ADA) on the Commencement Date. Lessee shall give written notice to Lessor of any defect in any of the foregoing elements of the Building within one hundred twenty (120) days after the Commencement Date, and Lessor shall cause any such defect specified by Lessee to be repaired, at Lessor’s expense, as soon as possible. Any needed repairs to any of the foregoing elements of the Building of which Lessee gives Lessor written notice after such period shall be performed by Lessor and included in Operating Expenses pursuant to Paragraph 5.

 

(e)                                       Subject to the completion of Lessor’s Tenant Improvement Work, and the performance by Lessor of Lessor’s obligations under Paragraphs 2(c) and 2(d), Lessee waives all right to make repairs at the expense of Lessor, or to deduct the costs thereof from the rent, and Lessee waives all rights under Section 1941 and 1942 of the Civil Code of the State of California. At the expiration or sooner termination of this Lease, Lessee shall surrender the Premises and Lessor’s workstation furniture (cubes) in a clean and as good condition as received, except for ordinary wear and tear and except for damage caused by casualty, the elements, acts of God, a taking by eminent domain, maintenance that is Lessor’s responsibility hereunder, alterations or other improvements made by Lessee with Lessor’s prior written consent which Lessee is not required to remove as a condition to Lessor’s approval of such alterations or improvements.

 

14.                               Maintenance and Repairs; Alterations; Surrender and Restoration.

 

(a)                                 Lessor shall, at Lessor’s sole expense, keep in good order, condition, and repair and replace when necessary, the structural elements of the roof (excluding the roof membrane) and the structural elements of the foundation and exterior walls (except the interior faces thereof), of the Building, and other structural elements of the Building and the Complex as “structural elements” are defined in building codes applicable to the Building, excluding any alterations structured, or otherwise, made by Lessee to the Premises or the Building which are not approved in writing by Lessor prior to the construction or installation thereof by Lessee.

 

(b)                                 Lessor shall repair and maintain, as an Operating Expense pursuant to Paragraph 5 hereof, the exterior entrances, all glass and window moldings, the roof membrane, and the common areas of the Building, and all partitions, doors, door jambs, door closers, door hardware, fixtures, equipment, and appurtenances thereof, including all electrical, lighting, heating,

 

15

 

plumbing, and air conditioning systems serving the Premises, except for reasonable use and wear and except for any damage caused by the negligence or willful misconduct of Lessee or its employees, agents, invitees, licensees, or contractors. In the event Lessee provides Lessor with written notice of the need for any repairs, Lessor shall commence any such repairs promptly following receipt by Lessor of such notice and Lessor shall diligently prosecute such repairs to completion. Lessor shall execute and maintain in force a service contract with an authorized air conditioning service company and shall provide five-day a week janitorial service to the Premises. Lessor shall also repair and maintain as an Operating Expense pursuant to Paragraph 5 hereof, the Outside Areas of the Complex, including the landscaping, walkways, and parking area.

 

(c)                                  Subject to the foregoing and except as provided elsewhere in this Lease, Lessee shall at all times at Lessee’s expense keep the Premises, and the existing office furniture listed on Exhibit “C,” in good and safe order, condition, and repair. Subject to the release of claims and waiver of subrogation contained in Paragraphs 11(c) and 11(d), if Lessor are required to make any repairs by reason of Lessee’s negligence or willful misconduct or omission to act, Lessor may add the cost of such repairs to the next installment of rent which shall thereafter become due, and Lessee shall promptly pay the same upon receipt of an invoice therefor.

 

(d)                                 Lessee may, from time to time, at its own cost and expense and without the consent of Lessor make nonstructural alterations to the interior of the Premises if the cost thereof in any one instance is Ten Thousand Dollars ($10,000) or less, provided Lessee first notifies Lessor in writing of any such nonstructural alterations. Otherwise, Lessee shall not make any additional alterations, improvements, or additions to the Premises without delivering to Lessor a complete set of plans and specifications for such work and obtaining Lessor’s prior written consent thereto, which consent shall not be unreasonably withheld or delayed. Lessor may condition its consent to Lessee agreeing to remove any such alterations upon expiration of the lease term and Lessee agreeing to restore the Premises to its condition prior to such alterations at Lessee’s expense. Lessor shall advise Lessee in writing at the time consent is granted whether Lessor reserves the right to require Lessee to remove any alterations from the Premises upon termination of this Lease.

 

All alterations, trade fixtures and personal property installed in the Premises solely at Lessee’s expense (“Lessee’s Property) shall during the term of this Lease remain Lessee’s property and Lessee shall be entitled to all depreciation, amortization and other tax benefits with respect thereto. Upon the expiration or sooner termination of this Lease all alterations, fixtures and improvements to the Premises, whether made by Lessor or installed by Lessee at Lessee’s expense, shall be surrendered by Lessee with the Premises and shall become the property of Lessor.

 

(e)                                  Lessee, at Lessee’s sole cost and expense, shall promptly and properly observe and comply with all present and future orders, regulations, rules, laws, and ordinances of all governmental agencies or authorities, and the Board of Fire Underwriters, except that Lessee shall not be required to make any structural changes or repairs or other repairs or changes of any nature which would be considered a capital expenditure under generally accepted accounting principles to the Premises at Lessee’s expense unless such structural repairs or changes are required by reason of the specific nature of the use of the Premises by Lessee.

 

(f)                                   Lessee shall surrender the Premises by the last day of the lease term or any earlier termination date, and Lessor’s workstation furniture by the last day of the Lease term or any earlier termination date, in accordance with this Paragraph (f) with all of the improvements to the Premises, parts, and surfaces thereof, clean and free of debris, and with the Premises and Lessor’s

 

16

 

workstation furniture returned in same condition as received, ordinary wear and tear or damage by casualty excepted and otherwise in the condition described in Paragraph 13(e). “Ordinary wear and tear” shall not include any damage or deterioration that would have been prevented by good maintenance practice or by Lessee performing all of its obligations under this Lease. The obligations of Lessee shall include the repair of any damage occasioned by the installation, maintenance, or removal of Lessee’s trade fixtures, furnishings, equipment, and alterations, and the restoration by Lessee of the Premises to its condition prior to any alterations, additions, or improvements if (1) Lessor’s consent thereto was conditioned upon such removal and restoration upon expiration or sooner termination of the Lease term pursuant to Paragraph 14(d), or (2) Lessee made any such alterations, additions, or improvements without obtaining Lessor’s prior written consent in breach of Paragraph 13(d). Such removal and restoration shall be performed by Lessee within a reasonable time after the expiration or sooner termination of the Lease term if Lessor gives written notice to Lessee requiring Lessee to perform such removal and restoration.

 

15.                               Utilities and Services.

 

(a)                                      Lessor shall, as an Operating Expense of the Building pursuant to Paragraph 5(b) hereof, provide reasonable quantities of electricity, gas and water standard for a Class A office building. Heat and Air Conditioning service for the building is Monday through Friday from 8:00 a.m. to 6:00 p.m., except recognized holidays. Lessor shall also provide five-day a week cleaning and maintenance service and refuse pick-up service to the Premises. Lessee, at its option, may contract for its own janitorial service for Lessee’s Premises, provided that such service is performed on a regular basis by a recognized professional janitorial service firm. In such event, Lessor shall no longer bill Lessee for janitorial services to the Premises.

 

(b)                                      Lessee shall have access to the Premises twenty-four (24) hours per day, seven (7) days per week, by means of a card key system. Lessor shall provide Lessee and the Premises with heating and air conditioning service, in addition to the hours set forth in subparagraph (a) above, to the extent that such service is requested by Lessee. In the event of such a request by Lessee, the first twenty (20) hours of after hours heating and air conditioning service per Lease year shall be at no charge to Lessee and, thereafter, Lessee shall pay to Lessor on a monthly basis Lessor’s charge for such additional heating and air conditioning service. Lessor’s charge shall be Thirty-five Dollars ($35) per hour for after hours’ service. Lessor may make reasonable adjustments to said hourly rate as of the commencement date of each of the option extension periods, if Lessee exercises its options to extend.

 

(c)                                       Lessor shall not be liable to Lessee for any interruption or failure of any utility services to the Building or the Premises which is not caused by Lessor’s willful acts or negligence; provided however, that if service to the Premises is interrupted or provided only intermittently for more than five (5) consecutive business days (Monday through Friday, except recognized holidays), Lessee’s Monthly Base Rent shall be abated proportionately on a daily basis from the date of such interruption or commencement of only intermittent service until normal service is restored. Lessor shall use its best efforts to promptly resume or restore the interrupted utilities or services. In the event that utility services are not restored to the Building or the Premises within ninety (90) days after the date of the initial interruption, Lessee shall have the right to terminate this Lease by giving written notice of termination to Lessor within ten (10) days after said period of ninety (90) days, unless the utility services are restored prior to the receipt by Lessor of the notice of termination.

 

17

 

16.                               Liens. Lessee agrees to keep the Premises and the Complex free from all liens arising out of any work performed, materials furnished, or obligations incurred by Lessee. Lessee shall give Lessor at least ten (10) days prior written notice before commencing any work of improvement on the Premises. Lessor shall have the right to post notices of non-responsibility with respect to any such work.

 

17.                               Assignment and Subletting.

 

(a)                                 Except as otherwise provided in this Paragraph 17, Lessee shall not assign this Lease, or any interest therein, voluntarily or involuntarily, and shall not sublet the Premises or any part thereof, or any right or privilege appurtenant thereto, without the prior written consent of Lessor in each instance pursuant to the terms and conditions set forth below, which consent shall not be unreasonably withheld, subject to the following provisions. Except as provided in Paragraph 17(g) and Paragraph 17(h), the following shall constitute an assignment requiring Lessor’s prior written consent: the sale of all or substantially all of Lessee’s business operations conducted on the Premises; or the sale by Lessee of all or substantially all of Lessee’s business assets located on the Premises; or a change in the control of Lessee. Except as provided in Paragraph 17(h), the transfer, on a cumulative basis, of more than fifty percent (50%) of the voting control of Lessee shall constitute a change in control for this purpose.

 

(b)                                 Prior to any assignment or sublease which Lessee desires to make, Lessee shall provide to Lessor the name and address of the proposed assignee or sublessee, true and complete copies of all documents relating to Lessee’s prospective agreement to assign or sublease, a copy of a current financial statement for such proposed assignee or sublessee, and Lessee shall specify all consideration to be received by Lessee for such assignment or sublease in the form of lump sum payments, installments of rent, or otherwise. For purposes of this Paragraph 17, the term “consideration” shall include all money or other consideration to be received by Lessee for such assignment or sublease. Within fifteen (15) days after the receipt of such documentation and information, Lessor shall (1) notify Lessee in writing that Lessor consents to the proposed assignment or sublease subject to the terms and conditions hereinafter set forth; or (2) notify Lessee in writing that Lessor refuses such consent, specifying reasonable grounds for such refusal; or (3) subject to the provisions set forth below, notify Lessee that Lessor elect to terminate this Lease and specifying the effective date of termination. If Lessor elects to terminate this Lease, then upon the effective date of termination Lessor and Lessee shall each be released and discharged from any liability or obligation to the other under this Lease accruing thereafter, and Lessee agrees that Lessor may enter into a direct lease with such proposed assignee or sublessee without any obligation or liability to Lessee. Notwithstanding the foregoing, Lessor shall only have the right to terminate this Lease pursuant to the foregoing clause (3) in the event of a proposed assignment or sublease by Lessee of more than fifty percent (50%) of the rentable square feet of the Premises, provided that in no event shall Lessor have any right to terminate this Lease in connection with any permitted transfer under Paragraph 17(g). In addition, if Lessor notifies Lessee pursuant to the foregoing clause (3) that Lessor elect to terminate this Lease, Lessee shall have the right to rescind its proposed assignment or sublease by giving written notice thereof to Lessor, in which event this Lease shall remain in full force and effect as if Lessee had never proposed such assignment or sublease.

 

18

 

(c)                                  In deciding whether to consent to any proposed assignment or sublease, Lessor may take into account whether or not reasonable conditions relating to the proposed assignment or subletting have been satisfied, including, but not limited to, the following:

 

(1)                                 In Lessor’s reasonable judgment, the proposed assignee or subtenant is engaged in such a business, that the Premises, or the relevant part thereof, will be used in such a manner which complies with Paragraph 8 hereof entitled “Use”;

 

(2)                                 The proposed assignee or sublessee does not propose to conduct any manufacturing or development processes on the Premises in which Hazardous Materials are regularly used;

 

(3)                                 The proposed assignee or subtenant is a reputable entity or individual with sufficient financial net worth so as to reasonably indicate that it will be able to meet its obligations under this Lease or the sublease in a timely manner;

 

(4)                                 The proposed assignment or sublease is approved by Lessor’s mortgage lender (which shall not be unreasonably withheld) if such lender has the right to approve or disapprove proposed assignments or subleases; and

 

(5)                                 Lessor’s consent to the assignment or sublease shall be in a separate instrument containing the relevant provisions of this Paragraph 17 and otherwise in form reasonably acceptable to Lessor and its counsel.

 

(d)                                 As a condition to Lessor’s granting its consent to any assignment or sublease, (1) Lessor may require that Lessee pay to Lessor, as and when received by Lessee, fifty percent (50%) of the amount of any excess of the consideration received by Lessee in connection with said assignment or sublease over and above the rental amount fixed by this Lease and payable by Lessee to Lessor, after deducting only reasonable leasing commissions, reasonable attorneys’ fees, and the cost of minor tenant improvements such as painting and carpet cleaning, etc.) incurred by Lessee, and other reasonable costs and expenses incurred by Lessee in consummating such assignment or sublease which are approved in writing by Lessor; (2) Lessee and the proposed assignee or sublessee shall demonstrate to Lessor’s reasonable satisfaction that each of the criteria referred to in subparagraph (c) above is satisfied; and (3) Lessee shall reimburse Lessor upon demand for the attorneys’ fees, not to exceed One Thousand Five Hundred Dollars ($1,500), and costs incurred by Lessor in negotiating, reviewing, and approving the documentation relating to the assignment or sublease transaction.

 

(e)                                  Each assignment or sublease agreement to which Lessor has consented shall be an instrument in writing which complies with the provisions of this Paragraph 17 and in form reasonably satisfactory to Lessor, and shall be executed by both Lessee and the assignee or sublessee, as the case may be. Each such assignment or sublease agreement shall recite that it is and shall be subject and subordinate to the provisions of this Lease, that the assignee or sublessee accepts such assignment or sublease, that Lessor’s consent thereto shall not constitute a consent to any subsequent assignment or subletting by Lessee or the assignee or sublessee, and, except as otherwise set forth in a sublease approved by Lessor, that the assignee or sublessee agrees to perform all of the obligations of Lessee hereunder (to the extent such obligations relate to the portion of the Premises assigned or subleased), and that the termination of this Lease shall, at Lessor’s sole election, constitute a termination of every such assignment or sublease.

 

19

 

(f)                                   In the event Lessor shall consent to an assignment or sublease, Lessee shall, except as otherwise provided in Paragraph 17(g), remain primarily liable for all obligations and liabilities of Lessee under this Lease, including, but not limited to, the payment of rent.

 

(g)                                  Notwithstanding the foregoing, Lessee may, without Lessor’s prior written consent, without Lessor having the right pursuant to Paragraph 17(b) above to terminate this Lease, and without any participation by Lessor in assignment and subletting proceeds, assign this Lease or sublet all or any portion of the Premises to a subsidiary, affiliate, division or corporation controlled or under common control with Lessee, or in connection with a merger, consolidation or reorganization, or to a purchaser of all or substantially all of Lessee’s assets or substantially all of Lessee’s stock (collectively, “Permitted Affiliate”), provided, that except as specified hereafter, Rocket Fuel shall remain primarily liable for all obligations and liabilities of Lessee under this Lease, including, but not limited to, the payment of rent. Lessee’s foregoing rights to assign this Lease or to sublet the Premises shall be subject to the following conditions: (1) there shall be no uncured Event of Default by Lessee under this Lease; (2) in the case of an assignment or subletting to a Permitted Affiliate, Rocket Fuel shall remain liable to Lessor hereunder, unless as a result of a merger, consolidation, or reorganization Rocket Fuel is not a surviving entity, and in such event the transferee or successor entity to Rocket Fuel has a net worth as shown on its current balance sheet certified by a third party certified public accounting firm, or certified by the Chief Financial Officer of Lessee, equal to at least the net worth of Rocket Fuel of the date of the merger, consolidation, or reorganization; and (3) the transferee or successor entity shall expressly assume in writing Lessee’s obligations hereunder accruing from and after the effective date of such assignment or subletting.

 

(h)                                 Neither the sale nor transfer of Lessee’s capital stock in a public offering pursuant to an effective registration statement filed by Lessee with the Securities and Exchange Commission, or the sale or transfer of Lessee’s securities at any time after Lessee’s securities are publicly traded, shall be deemed an assignment, subletting, or other transfer of this Lease or the Premises, provided, that in the event of the sale, transfer or issuance of Lessee’s securities in connection with a merger, consolidation, or reorganization, the conditions set forth in Paragraph 17(g) shall apply.

 

(i)                                     Subject to the provisions of this Paragraph 17 any assignment or sublease without Lessor’s prior written consent shall at Lessor’s election be void. The consent by Lessor to any assignment or sublease shall not constitute a waiver of the provisions of this Paragraph 17, including the requirement of Lessor’s prior written consent, with respect to any subsequent assignment or sublease. If Lessee purports to assign this Lease, or sublease all or any portion of the Premises, without Lessor’s prior written consent (if such consent is required hereunder), Lessor may collect rent from the person or persons then or thereafter occupying the Premises and apply the net amount collected to the rent reserved herein, but no such collection shall be deemed a waiver of Lessor’s rights and remedies under this Paragraph 17, or the acceptance of any such purported assignee, sublessee, or occupant, or a release of Lessee from the further performance by Lessee of any of the covenants by Lessee contained herein.

 

(j)                                    Lessee shall not hypothecate or encumber its interest under this Lease or any rights of Lessee hereunder, or enter into any license or concession agreement respecting all or any portion of the Premises, without Lessor’s prior written consent which shall not be unreasonably withheld, subject to all of the provisions of this Paragraph 17.

 

20

 

 

(k)                                 In the event of any sale or exchange of the Complex by Lessor and assignment of this Lease by Lessor, Lessor shall, upon providing Lessee with written confirmation that Lessor has transferred any security deposit held by Lessor, to Lessor’s successor in interest and upon the assumption by the transferee of all of Lessor’s obligations hereunder accruing from and after the effective date of such assignment, be and hereby is entirely relieved of all liability under any and all of Lessor’s covenants and obligations contained in or derived from this Lease with respect to the period commencing with the consummation of the sale or exchange and assignment.

 

(l)                                     Lessee hereby stipulates that the foregoing terms and conditions of this Paragraph 17 are reasonable and that Lessor has the remedy described in California Civil Code Section 1951.4 (Lessor may continue the Lease in effect after Lessee’s breach and abandonment and recover rent as it becomes due, if Lessee has right to sublet or assign, subject only to reasonable limitations).

 

18.                               Non-Waiver.

 

(a)                                 No waiver of any provision of this Lease shall be implied by any failure of Lessor to enforce any remedy for the violation of that provision, even if that violation continues or is repeated. Any waiver by Lessor of any provision of this Lease must be in writing.

 

(b)                                 No receipt of Lessor of a lesser payment than the rent required under this Lease shall be considered to be other than on account of the earliest rent due, and no endorsement or statement on any check or letter accompanying a payment or check shall be considered an accord and satisfaction. Lessor may accept checks or payments without prejudice to Lessor’s right to recover all amounts due and pursue all other remedies provided for in this Lease.

 

Lessor’s receipt of monies from Lessee after giving notice to Lessee terminating this Lease shall in no way reinstate, continue, or extend the Lease term or affect the termination notice given by Lessor before the receipt of those monies. After serving notice terminating this Lease, filing an action, or obtaining final judgment for possession of the Premises, Lessor may receive and collect any rent, and the payment of that rent shall not waive or affect such prior notice, action, or judgment.

 

19.                               Holding Over. Lessee shall vacate the Premises and deliver the same to Lessor, together with Lessor’s workstation furniture, upon the expiration or sooner termination of this Lease. In the event of holding over by Lessee after the expiration or termination of this Lease, such holding over shall be on a month-to-month tenancy and all of the terms and provisions of this Lease shall be applicable during such period, except that Lessee shall pay Lessor as Monthly Base Rent during such holdover an amount equal to the greater of (1) one hundred fifty percent (150%) of the Monthly Base Rent in effect at the expiration of the term, or (2) the then market rent for comparable office space in the Redwood City-Redwood Shores market area. If such holdover is without Lessor’s written consent, Lessee shall be liable to Lessor for all costs, expenses, and consequential damages incurred by Lessor as a result of such holdover. The rental payable during such holdover period shall be payable to Lessor on demand.

 

21

 

20.                               Damage or Destruction.

 

(a)                                 In the event of a total destruction of the Building and improvements during the initial term from any cause, either party may elect to terminate this Lease by giving written notice of termination to the other party within thirty (30) days after the casualty occurs. A total destruction shall be deemed to have occurred for this purpose if the Building or the Complex are destroyed to the extent of seventy-five percent (75%) or more of the full replacement cost thereof. If the Lease is not terminated, Lessor shall repair and restore the Premises in a diligent manner and this Lease shall continue in full force and effect, except that Monthly Base Rent and Additional Rent shall be abated in accordance with Paragraph 20(d) below.

 

(b)                                 In the event of a partial destruction of the Building or the Complex to an extent not exceeding twenty-five percent (25%) of the replacement cost thereof and if the damage thereto can be repaired, reconstructed, or restored within a period of one hundred twenty (120) days from the date of such casualty, and if the casualty is from a cause which is required to be insured under Lessor’s property insurance coverage, or is insured under any other coverage then carried by Lessor, and Lessor receives proceeds of insurance together with the deductible sufficient to repair and restore the Building and improvements, Lessor shall forthwith repair the same, and this Lease shall continue in full force and effect, except that Monthly Base Rent and Additional Rent shall be abated in accordance with Paragraph 20(d) below. If any of the foregoing conditions is not met, Lessor shall have the option of either repairing and restoring the Building and improvements, or terminating this Lease by giving written notice of termination to Lessee within thirty (30) days after the casualty, subject to the provisions of Paragraph 20(c).

 

(c)                                  In the event of a partial destruction of the Building and improvements of the Complex to an extent equal to or exceeding twenty-five percent (25%) but less than seventy-five percent (75%) of the replacement cost thereof, or if the damage thereto cannot be repaired, reconstructed, or restored within a period of one hundred twenty (120) days from the date of such casualty, either Lessor or Lessee may terminate this Lease by giving written notice of termination to the other within thirty (30) days after the casualty.

 

Furthermore, if such casualty is from a cause which is not required to be insured under Lessor’s property insurance coverage, or is not insured under any other insurance carried by Lessor, or if the proceeds of insurance received by Lessor are not sufficient (or would not have been sufficient if required insurance were carried) to repair and restore the Building and improvements, Lessor may elect to repair and restore the Building and improvements (provided that Lessee has not elected to terminate this Lease pursuant to the first sentence of this Paragraph 20(c)), or Lessor may terminate this Lease by giving written notice of termination to Lessee. Lessor’s election to repair and restore the Building and improvements or to terminate this Lease, shall be made and written notice thereof shall be given to Lessee within thirty (30) days after the casualty. Notwithstanding the foregoing, (1) if Lessor has not obtained all necessary governmental permits for the restoration and commenced construction of the restoration within one hundred twenty (120) days after the casualty, Lessee may terminate this Lease by written notice to Lessor given at any time prior to the actual commencement of construction of the restoration; or (2) if Lessor elect to repair and restore the Building and improvements under subparagraph (b) or (c) above, but the repairs and restoration are not substantially completed within one hundred eighty (180) days after the casualty, Lessee may terminate this Lease by written notice to Lessor given within thirty (30) days after the expiration of said period of one hundred eighty (180) days after the casualty.

 

22

 

If this Lease is not terminated by Lessor or Lessee pursuant to the foregoing provisions, Lessor shall complete the repairs in a diligent manner and this Lease shall continue in full force and effect, except that Monthly Base Rent and Additional Rent shall be abated in accordance with Paragraph 20(d) below.

 

(d)                                 In the event of repair, reconstruction, or restoration as provided herein, the Monthly Base Rent and Additional Rent shall be abated proportionally in the ratio which the Lessee’s use of the Premises is impaired during the period of such repair, reconstruction, or restoration, from the date of the casualty until such repair, reconstruction or restoration is completed.

 

(e)                                  With respect to any destruction of the Complex which Lessor are obligated to repair, or may elect to repair, under the terms of this Paragraph 20, the provisions of Section 1932, Subdivision 2, and of Section 1933, Subdivision 4, of the Civil Code of the State of California are waived by the parties. Lessor’s obligation to repair and restore the Complex shall be limited to the improvements originally constructed by Lessor at Lessor’s expense. Lessee shall repair or replace, at Lessee’s expense, all leasehold improvements, fixtures, and equipment installed by Lessee or paid for by Lessee, plus Lessor’s furniture listed on Exhibit “C.”

 

(f)                                   In the event of termination of this Lease pursuant to any of the provisions of this Paragraph 20, the monthly rent shall be apportioned on a per diem basis and shall be paid to the date of the casualty. In no event shall Lessor be liable to Lessee for any damages resulting to Lessee from the occurrence of such casualty, or from the repairing or restoration of the Building and improvements, or from the termination of this Lease as provided herein, nor shall Lessee be relieved thereby from any of Lessee’s obligations hereunder, except to the extent and upon the conditions expressly set forth in this Paragraph 20.

 

21.                               Eminent Domain.

 

(a)                                 If the whole or any substantial part of the Building or appurtenant real property owned by Lessor shall be taken or condemned by any competent public authority for any public use or purpose, the term of this Lease shall end upon the earlier to occur of the date when the possession of the part so taken shall be required for such use or purpose or the vesting of title in such public authority. Rent shall be apportioned as of the date of such termination. Lessee shall be entitled to receive any damages awarded by the court for (1) leasehold improvements installed at Lessee’s expense or other property owned by Lessee, and (2) reasonable costs of moving by Lessee to another location in San Mateo County, California. The entire balance of the award shall be the property of Lessor.

 

(b)                                 If there is a partial taking of the Premises by eminent domain which is not a substantial part of the Building and the balance of the Premises remains reasonably suitable for continued use and occupancy by Lessee in Lessee’s reasonable judgment for the purpose referred to in Paragraph 8, Lessor shall complete any necessary repairs in a diligent manner and this Lease shall remain in full force and effect with a just and proportionate abatement of the Monthly Base Rent and Additional Rent, to reflect the number of square feet of the Premises taken and the number of square feet remaining. If after a partial taking, the Premises and parking are not reasonably suitable for Lessee’s continued use and occupancy for the use permitted herein, Lessee may terminate this Lease effective on the earlier of the date title vests in the public authority or the date possession is

 

23

 

taken. Subject to the provisions of Paragraph 21(a), the entire award for such taking shall be the property of Lessor.

 

22.                               Remedies. If Lessee fails to make any payment of rent or any other sum due under this Lease for five (5) days after receipt by Lessee of written notice from Lessor; or if Lessee is in default in the performance of any other term of this Lease for thirty (30) days or more after receipt by Lessee of written notice from Lessor (unless such default is incapable of cure within thirty (30) days and Lessee commences cure within thirty (30) days and diligently prosecutes the cure to completion within a reasonable time); or if Lessee’s interest herein, or any part thereof, is assigned or transferred, either voluntarily or by operation of law (except as expressly permitted by other provisions of this Lease); or if Lessee makes a general assignment for the benefit of its creditors; or if this Lease is rejected (1) by a bankruptcy trustee for Lessee, (2) by Lessee as debtor in possession, or (3) by failure of Lessee as a bankrupt debtor to act timely in assuming or rejecting this Lease; then any of such events shall constitute an event of default by Lessee under this Lease and Lessor may, at its option, elect the remedies specified in either subparagraph (a) or (b) below. Any such rejection of this Lease referred to above shall not cause an automatic termination of this Lease. Whenever in this Lease reference is made to a default by Lessee, such reference shall refer to an event of default as defined in this Paragraph 22.

 

(a)                                 Lessor may, in accordance with applicable Laws, repossess the Premises and remove all persons and property therefrom. If Lessor repossesses the Premises because of a breach of this Lease, this Lease shall terminate and Lessor may recover from Lessee:

 

(1)                                 the worth at the time of award of the unpaid rent which had been earned at the time of termination including interest thereon at a rate equal to the Federal discount rate plus one percent (1%) per annum, or the maximum legal rate of interest, whichever is less, from the time of termination until paid;

 

(2)                                 the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Lessee proves could have been reasonably avoided, including interest thereon at a rate equal to the Federal discount rate plus one percent (1%) per annum, or the maximum legal rate of interest, whichever is less, from the time of termination until paid;

 

(3)                                 the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss for the same period that Lessee proves could be reasonably avoided; and

 

(4)                                 any other amount necessary to compensate Lessor for all the detriment proximately caused by Lessee’s breach or by Lessee’s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom.

 

(b)                                 If Lessor does not repossess the Premises, then this Lease shall continue in effect for so long as Lessor does not terminate Lessee’s right to possession and Lessor may enforce all of its rights and remedies under this Lease, including the right to recover the rent and other sums due from Lessee hereunder. For the purposes of this Paragraph 22, the following do not constitute a repossession of the Premises by Lessor or a termination of the Lease by Lessor:

 

24

 

(1)                                 Acts of maintenance or preservation by Lessor or efforts by Lessor to relet the Premises; or

 

(2)                                 The appointment of a receiver by Lessor to protect Lessor’s interests under this Lease.

 

23.                               Lessee’s Personal Property. If any personal property of Lessee remains on the Premises after (1) Lessor terminates this Lease pursuant to Paragraph 22 above following an event of default by Lessee, or (2) after the expiration of the Initial term or after the termination of this Lease pursuant to any other provisions hereof, Lessor shall give written notice thereof to Lessee pursuant to applicable law. Lessor shall thereafter release, store, and dispose of any such personal property of Lessee in accordance with the provisions of applicable law.

 

24.                               Notices. All notices, statements, demands, requests, or consents given hereunder by either party to the other shall be in writing and shall be personally delivered or sent by United States mail, registered or certified, return receipt requested, postage prepaid, or by recognized overnight courier service, and addressed to the parties as follows:

 

Lessor:                                                         350 Marine Parkway LLC, Gillikin Trade LLC,

Lewis Trade LLC, Spiegl Trade LLC, and

Welsh Trade LLC

c/o Pollock Financial Group

150 Portola Road

Portola Valley, California 94028

 

Attention: Lincoln W. Westcott

 

Lessee:                                                        Pre-Commencement:

Rocket Fuel, Inc.

1 Lagoon Drive, Suite 475

Redwood Shores, California 94065

 

Attention: George John, CEO

 

After Commencement:

Rocket Fuel, Inc.

350 Marine Parkway

Redwood City, California 94065

 

Attention: George John, CEO

 

or to such other address as either party may have furnished to the other as a place for the service of notice. Notices shall be deemed given upon receipt or attempted delivery where delivery is not accepted. After the Commencement Date, Lessee’s address shall be the Premises.

 

25.                               Estoppel Certificate. Lessee and Lessor shall within fifteen (15) days following request by the other party (the “Requesting Party”), execute and deliver to the Requesting Party an estoppel certificate (1) certifying that this Lease has not been modified and certifying that this Lease is in full force and effect, or, if modified, stating the nature of such modification and certifying that

 

25

 

this Lease, as so modified, is in full force and effect; (2) stating the date to which the rent and other charges are paid in advance, if at all; (3) stating the amount of any security deposit held by Lessor; and (4) acknowledging that there are not, to the responding party’s knowledge, any uncured defaults on the part of the Requesting Party hereunder, or if there are uncured defaults on the part of the Requesting Party, stating the nature of such uncured defaults.

 

26.                               Parking. Lessee shall have the right to use free of charge (subject to payment of Lessee’s Share of Operating Expenses attributable thereto) in common with other tenants or occupants of the Complex on a non-reserved basis Lessee’s proportionate share of the parking facilities of the Complex based upon the number of square feet occupied (3.3/1000), subject to such reasonable, written rules and regulations for such parking facilities which may be established or altered by Lessor at any time or from time to time during the initial term, provided that such rules and regulations shall not unreasonably interfere with Lessee’s parking rights. Vehicles of Lessee or its employees shall not park in driveways or occupy parking spaces or other areas designated for any use such as handicap parking, visitors, deliveries, or loading.

 

27.                               Signage; Roof Rights. Lessor shall provide Lessee with space for Lessee’s sign on the Complex monument sign for the Building, as well as a listing on the lobby directory and signage at the entrance to Lessee’s Premises. Lessee shall also have the right to install a directional sign off the elevator and staircase directing people to Lessee’s suite. The cost of the signs shall be paid by Lessee. The cost of installation of the signs shall be paid by Lessee. Lessee shall have the nonexclusive right at Lessee’s expense to install a rooftop satellite dish or other communications equipment on the roof of the Building for Lessee’s use only. Lessee shall, at Lessee’s expense, remove all such equipment and shall repair any damage to the roof or the Building resulting from the installation or removal of such equipment. Lessor reserves the right to lease, or to grant licenses to others, including persons or entities who are not tenants of the Building, to install, operate, and use telecommunications antennae or microwave dishes on the roof of the Building, provided that such equipment does not interfere with the operation of any rooftop satellite dish or other communications equipment installed on the roof of the Building by Lessee for Lessee’s use only.

 

28.                               Real Estate Broker. Cornish & Carey Commercial Oncor International (“Cornish & Carey”) represents both Lessor and Lessee in this transaction. Lessor shall pay a real estate commission to Cornish & Carey pursuant to a separate agreement between Lessor and Cornish & Carey. Except for Cornish & Carey, each party represents to the other that it has not had any dealings with any other real estate broker, agent, finder, or other person with respect to this Lease, and each party shall indemnify, defend, and hold harmless the other party from all damages, expenses, and liabilities resulting from any claims that may be asserted against the other party by any broker, agent, finder, or other person with whom the indemnifying party has or purportedly has dealt other than the aforementioned broker.

 

29.                               Subordination; Attornment.

 

(a)                                 This Lease, without any further instrument, shall at all times be subject and subordinate to any and all mortgages and deeds of trust which may now or hereafter affect Lessor’s interest in the real property of which the Premises form a part, and to all advances made or hereafter to be made upon the security thereof, and to all renewals, modifications, consolidations, replacements and extensions thereof. Lessor shall use reasonable efforts to cause the beneficiary of any deed of trust executed by Lessor as trustor after the date hereof to execute a recognition and

 

26

 

non-disturbance agreement in a form reasonably satisfactory to Lessor, Lessee and such beneficiary which (1) provides that this Lease shall not be terminated so long as Lessee is not in default under this Lease, and (2) that upon acquiring title to the Premises by foreclosure or otherwise such holder shall recognize all of Lessee’s rights hereunder which accrue thereafter.

 

(b)                                 In confirmation of such subordination, Lessee shall promptly execute any certificate or other instrument which Lessor may deem proper to evidence such subordination, without expense to Lessor; provided, however, that if any person or persons purchasing or otherwise acquiring the real property of which the Premises form a part by any sale, sales and/or other proceedings under such mortgages and/or deeds of trust, shall elect to continue this Lease in full force and effect in the same manner and with like effect as if such person or persons had been named as Lessor herein, then this Lease shall continue in full force and effect as aforesaid, and Lessee hereby attorns and agrees to attorn to such person or persons.

 

(c)                                  If Lessee is notified in writing of Lessor’s default under any deed of trust affecting the Premises and if Lessee is instructed in writing by the party giving notice to make Lessee’s rental payments to the beneficiary of said deed of trust Lessee shall comply with such request without liability to Lessor until Lessee receives written confirmation that such default has been cured by Lessor and that the deed of trust has been reinstated.

 

30.                               Breach by Lessor.

 

(a)                                 Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable time to perform an obligation required to be performed by Lessor pursuant to this Lease. For purposes of this Paragraph 30, a reasonable time shall in no event be less then thirty (30) days after receipt by Lessor, and by the holders of any mortgage or deed of trust covering the Premises whose name and address have been furnished to Lessee in writing for such purposes, of written notice specifying wherein such obligation of Lessor has not been performed; provided, however, that if the nature of Lessor’s obligation is such that more than thirty (30) days after such notice are reasonably required for its performance, then Lessor shall not be in breach of this Lease if performance is commenced within such thirty (30) day period and thereafter diligently pursued to completion.

 

(b)                                 In the event of a breach of this Lease by Lessor, Lessee’s sole remedy shall be to institute an action against Lessor for damages or for equitable relief, but Lessee shall not have the right to rent abatement, to offset against rent, or to terminate this Lease. Lessee expressly waives the defense of constructive eviction.

 

31.                               Lessor’s Entry. Lessor and Lessor’s agents, except in the case of an emergency, shall provide Lessee with twenty-four (24) hours’ notice prior to entry of the Premises. Such entry by Lessor and Lessor’s agents shall not impair Lessee’s operations more than reasonably necessary. Lessor and Lessor’s agents shall at all times be accompanied by Lessee during any such entry except in case of emergency and except for janitorial work.

 

32.                               Financial Statements. Lessee shall deliver to Lessor upon request (not more frequently than once during any six (6) months period) a true, correct and complete copy of Lessee’s latest quarterly and annual income statements and balance sheets, certified by Lessee’s independent certified public accountants, or if Lessee does not obtain audited financial statements, such financial statements shall be certified by Lessee’s Chief Financial Officer or Chief Executive

 

27

 

Officer. Lessor shall preserve the confidentiality of such financial statements so long as Lessee is not a publicly reporting company, provided that Lessor may disclose such financial statements to Lessor’s attorneys, accountants, or existing or prospective mortgage lenders, or to the extent required to comply with applicable law.

 

33.                               Attorneys’ Fees. If any action at law or in equity shall be brought to recover any rent under this Lease, or for or on account of any breach of or to enforce or interpret any of the provisions of this Lease or for recovery of the possession of the Premises, the prevailing party shall be entitled to recover from the other party costs of suit and reasonable attorneys’ fees, the amount of which shall be fixed by the court and shall be made a part of any judgment rendered.

 

34.                               Quiet Enjoyment. So long as no event of default by Lessee exists under this Lease, Lessee shall have quiet enjoyment and possession of the Premises for the entire term hereof subject to all of the provisions of this Lease.

 

35.                               Lessee’s Expansion Rights.

 

(a)                                 Lessor hereby grants to Lessee the right of first offer to lease the adjoining premises on the second floor of the Building referred to as Suite 210, consisting of approximately four thousand eighty-three (4,083) rentable square feet (the “Expansion Space”), upon the following terms and conditions: prior to entering into a lease of the Expansion Space with any other tenant, Lessor shall deliver to Lessee a written offer (“First Offer”) to lease the Expansion Space, the Monthly Base Rent at which the Expansion Space is offered for lease, and the approximate date that the Expansion Space will be available for occupancy. Lessor shall also specify the amount, if any, of any tenant improvement allowance that Lessor is offering for the Expansion Space, and the portion of the Expansion Space, if any, that is offered for lease “as is,” without any tenant improvement allowance. Lessee shall have ten (10) calendar days after receipt of the First Offer within which to give written notice to Lessor of Lessee’s acceptance of Lessor’s First Offer with respect to any or all of the Expansion Space, time being of the essence. Failure of Lessee to deliver such written acceptance within said period of ten (10) calendar days shall be deemed a rejection of the First Offer with respect to all of the Expansion Space.

 

(b)                                 If Lessee accepts Lessor’s First Offer to lease the Expansion Space within the time specified, Lessor and Lessee shall execute and deliver an amendment to this Lease stating that (1) the Expansion Space shall be added to the Premises leased by Lessee, and Lessee shall pay the Monthly Base Rent for the Expansion Space specified by Lessor in the First Offer, with increases, if any, specified in the First Offer; (2) Lessee’s Share of the Additional Rent (increases in Operating Expenses and Taxes), as defined in Paragraph 5(a) hereof, to be paid by Lessee with respect to the Expansion Space; (3) the Expansion Space shall be leased by Lessee for a term which is co-terminus with the then remaining initial term of this Lease of the original Premises; (4) the Expansion Space shall be leased to Lessee subject to all of the other terms and provisions of this Lease, except as otherwise specified in Lessor’s First Offer; and (5) if Lessee exercises the option to extend contained in Paragraph 3 of this Lease, the premises leased by Lessee during the option period(s) referred to in this Lease shall include the original Premises and the Expansion Space.

 

(c)                                  If Lessee rejects the First Offer, Lessor shall have the right, within one hundred eighty (180) days after the expiration of said period of five (5) business days referred to in subparagraph (a) above, to lease all or any portion of the Expansion Space to a third party

 

28

 

tenant, but not for a rent or on terms and conditions substantially more favorable to the tenant than those specified in the First Offer. If Lessor leases the entire Expansion Space to a third party tenant during the period of one hundred eighty (180) days after the rejection of the First Offer by Lessee, Lessee’s right of first offer with respect to the Expansion Space shall terminate and shall be of no further force or effect. If Lessor is not successful in so leasing the Expansion Space during said period of one hundred eighty (180) days, Lessee’s right of first offer to lease the Expansion Space shall again apply on the same terms and conditions as provided in this Paragraph 35.

 

36.                               General Provisions.

 

(a)                            Nothing contained in this Lease shall be deemed or construed by the parties hereto or by any third person to create the relationship of principal and agent or of partnership or of joint venture of any association between Lessor and Lessee, and neither the method of computation of rent nor any other provisions contained in this Lease nor any acts of the parties hereto shall be deemed to create any relationship between Lessor and Lessee other than the relationship of landlord and tenant.

 

(b)                            Each and all of the provisions of this Lease shall be binding upon and inure to the benefit of the parties hereto, and except as otherwise specifically provided elsewhere in this Lease, their respective heirs, executors, administrators, successors, and assigns, subject at all times, nevertheless, to all agreements and restrictions contained elsewhere in this Lease with respect to the assignment, transfer, encumbering, or subletting of all or any part of Lessee’s interest in this Lease.

 

(c)                             The captions of the paragraphs of this Lease are for convenience only and shall not be considered or referred to in resolving questions of interpretation or construction.

 

(d)                            This Lease is and shall be considered to be the only agreement between the parties hereto and their representatives and agents. All negotiations and oral agreements acceptable to both parties have been merged into and are included herein. There are no other representations or warranties between the parties and all reliance with respect to representations is solely upon the representations and agreements contained in this instrument.

 

(e)                             The laws of the State of California shall govern the validity, performance, and enforcement of this Lease. Notwithstanding which of the parties may be deemed to have prepared this Lease, this Lease shall not be interpreted either for or against Lessor or Lessee, but this Lease shall be interpreted in accordance with the general tenor of the language in an effort to reach an equitable result.

 

(f)                              Time is of the essence with respect to the performance of each of the covenants and agreements contained in this Lease.

 

(g)                             Lessee hereby expressly waives any and all rights of redemption granted by or under any present or future law in the event of Lessee being evicted or dispossessed for any cause, or in the event of Lessor obtaining possession of the Premises by reason of the breach by Lessee of any of the covenants and conditions of the Lease or otherwise. The rights given to Lessor herein are in addition to any rights that may be given to Lessor by any statute or otherwise.

 

29

 

(h)                                      Recourse by Lessee for breach of this Lease by Lessor shall be expressly limited to Lessor’s interest in the Complex and the rents, issues and profits therefrom, and in the event of any such breach or default by Lessor Lessee hereby waives the right to proceed against any other assets of Lessor or against any other assets of any manager or member of Lessor.

 

(i)                                          Any provision or provisions of this Lease which shall be found to be invalid, void or illegal by a court of competent jurisdiction, shall in no way affect, impair, or invalidate any other provisions hereof, and the remaining provisions hereof shall nevertheless remain in full force and effect.

 

(j)                                         This Lease may be modified in writing only, signed by the parties in interest at the time of such modification.

 

(k)                                      Each party represents to the other that the person signing this Lease on its behalf is properly authorized to do so, and in the event this Lease is signed by an agent or other third party on behalf of either Lessor or Lessee, written authority to sign on behalf of such party in favor of the agent or third party shall be provided to the other party hereto either prior to or simultaneously with the return to such other party of a fully executed copy of this Lease.

 

(l)                                          No binding agreement between the parties with respect to the Premises shall arise or become effective until this Lease has been duly executed by both Lessee and Lessor and a fully executed copy of this Lease has been delivered to both Lessee and Lessor.

 

(m)                             Lessor and Lessee acknowledge that the terms and conditions of this Lease constitute confidential information of Lessor and Lessee. Neither party shall disseminate orally or in written form a copy of this Lease, lease proposals, lease drafts, or other documentation containing the terms and conditions hereof to any third party, except to the attorneys, accountants, or other authorized business representatives or agents of the parties, or unless required in connection with any financing by Lessee or in connection with a public offering of securities by Lessee. Lessor shall make no public announcement of the consummation of this Lease transaction without Lessee’s prior approval.

 

(n)                                 Except as provided in Paragraph 30, the rights and remedies that either party may have under this Lease or at law or in equity, upon any breach, are distinct, separate and cumulative and shall not be deemed inconsistent with each other, and no one of them shall be deemed to be exclusive of any other.

 

(o)                                 Except as provided in Paragraph 19, Holding Over, Lessor and Lessee waive any claim for consequential damages which one may have against the other for breach of or failure to perform or observe the requirements and obligations created by this Lease.

 

(p)                                 Lessor and Lessee each agree to and they hereby do waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with this Lease, the relationship of Lessor and Lessee, Lessee’s use or occupancy of the Premises and/or any claim of injury or damage, and any statutory remedy.

 

(q)                                 This Lease shall not be recorded.

 

30

 

 

IN WITNESS WHEREOF, the Lessor and Lessee have duly executed this Lease as of the date first set forth herein.

 

	
 
    	
“Lessor”
    
	
 
    	
 
    
	
 
    	
350 MARINE PARKWAY LLC,
    
	
 
    	
a California limited liability company
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James M. Pollock
    
	
 
    	
 
    	
James M. Pollock 
    
	
 
    	
 
    	
Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
GILLIKIN TRADE LLC,
    
	
 
    	
a California limited liability company
    
	
 
    	
By:
    	
Pollock Realty II LLC,
    
	
 
    	
 
    	
a California limited liability company 
    
	
 
    	
 
    	
Its   Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ James M. Pollock
    
	
 
    	
 
    	
 
    	
James M. Pollock 
    
	
 
    	
 
    	
 
    	
Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
LEWIS TRADE LLC,
    
	
 
    	
a California limited liability company
    
	
 
    	
By:
    	
Pollock Realty II LLC,
    
	
 
    	
 
    	
a California limited liability company
    
	
 
    	
 
    	
Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ James M. Pollock
    
	
 
    	
 
    	
 
    	
James M. Pollock 
    
	
 
    	
 
    	
 
    	
Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
SPIEGL TRADE LLC,
    
	
 
    	
a California limited liability company
    
	
 
    	
By:
    	
Pollock Realty II LLC,
    
	
 
    	
 
    	
a California limited liability company
    
	
 
    	
 
    	
Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ James M. Pollock
    
	
 
    	
 
    	
 
    	
James M. Pollock
    
	
 
    	
 
    	
 
    	
Its Manager
    

 

Signatures continue on following page

 

31

 

	
 
    	
WELSH TRADE LLC
    
	
 
    	
a California limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
Pollock Realty II LLC,
    
	
 
    	
 
    	
a California limited liability company
    
	
 
    	
 
    	
Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ James M. Pollock
    
	
 
    	
 
    	
 
    	
James M. Pollock
    
	
 
    	
 
    	
 
    	
Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
“Lessee”
    
	
 
    	
 
    
	
 
    	
ROCKET FUEL, INC., 
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ George H. John
    
	
 
    	
 
    	
Name:
    	
George H. John
    
	
 
    	
 
    	
Its:
    	
CEO
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Its:
    
					

 

32

 

LEGAL DESCRIPTION

 

Real property in the City of Redwood City, County of San Mateo, State of California, described as follows:

 

PARCEL I:

 

LOT 1, AS SHOWN ON PARCEL MAP NO. 97-8, FILED APRIL 8, 1998, BOOK 70 OF PARCEL MAPS, PAGES 51 AND 52, SAN MATEO COUNTY RECORDS.

 

PARCEL II:

 

A NON-EXCLUSIVE EASEMENT FOR INGRESS AND EGRESS, ACCESS, STORM DRAIN AND SANITARY SEWER PURPOSES WITHIN LOT 1, AS SHOWN ON THAT CERTAIN MAP ENTITLED “MARINA PARK CENTER”, BEING A RESUBDIVISION OF LOTS 3, 4, 5, 7 & 8 AND A PORTION OF LOT 1 OF THE MAP OF MARINA PARK NO. 2, RECORDED IN VOL. 97 OF MAPS PAGES 89 & 90, AND LANDS DESCRIBED IN DEED DOCUMENT 7770 O.R. 1845, OF SAN MATEO COUNTY RECORDS, REDWOOD CITY, SAN MATEO COUNTY, CALIFORNIA,” FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN MATEO COUNTY, STATE OF CALIFORNIA ON MARCH 22,1982 IN BOOK 106 OF MAPS AT PAGES 84 AND 85.

 

SAID EASEMENT IS FOR THE BENEFIT OF AND APPURTENANT TO PARCEL I HEREIN AND WAS CREATED BY THAT CERTAIN GRANT OF EASEMENT RECORDED MARCH 22, 1982 UNDER DOCUMENT NO. 82022638, RECORDS OF SAN MATEO COUNTY, CALIFORNIA.

 

PARCEL III:

 

EASEMENTS APPURTENANT TO PARCEL I ABOVE FOR INGRESS, EGRESS, USE, OCCUPANCY, ENJOYMENT AND FOR CONSTRUCTION, MAINTENANCE AND OPERATION OF UTILITIES OVER THE COMMON AREA AS PROVIDED FOR IN SECTIONS 4.2 AND 4.3 OF THE SHORE BUSINESS CENTER DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS & CHARGES FOR COMMERCIAL DEVELOPMENT RECORDED FEBRUARY 6, 1981, SERIES NUMBER 12350AS, SAN MATEO COUNTY RECORDS.

 

PARCEL IV:

 

EASEMENTS APPURTENANT TO PARCEL I ABOVE FOR THE PURPOSES SET FORTH IN SECTION 3 OF THAT CERTAIN AMENDED AND RESTATED RECIPROCAL EASEMENT AND MAINTENANCE AGREEMENT RECORDED OCTOBER 27, 1997, SERIES NUMBER 97-138358, OFFICIAL RECORDS.

 

APN: 095-242-260-8

 

JPN: 106-084-000-03T and 106-084-000-04T

 

EXHIBIT “A”

 

 

EXHIBIT B
 PLAN OF PREMISES

 

[FLOOR PLAN]

 

Exhibit B - Page 1

 

Exhibit “C”

 

FURNITURE INVENTORY

 

	
Manufacturer
    	
 
    	
Item/Description
    	
 
    	
Count
    
	
Knoll
    	
 
    	
Cubicle system — this system is configured
    	
 
    	
24
    
	
 
    	
 
    	
In groups of four; each grouping includes
    	
 
    	
 
    
	
 
    	
 
    	
Hardwired divider panels with power and data
    	
 
    	
 
    
	
 
    	
 
    	
Outlets at each station; adjustable desk units;
    	
 
    	
 
    
	
 
    	
 
    	
Assortment of desk accessories including some
    	
 
    	
 
    
	
 
    	
 
    	
Trays, pen holders, calendar trays and file holders.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Knoll
    	
 
    	
Two-drawer file roller with pad
    	
 
    	
24
    
	
Knoll
    	
 
    	
Triangular roller tables
    	
 
    	
16
    
	
Knoll
    	
 
    	
Rectangular conference tables
    	
 
    	
6
    
	
 
    	
 
    	
White Refrigerator
    	
 
    	
1
    
	
 
    	
 
    	
Server Room Racks
    	
 
    	
3
    
	
 
    	
 
    	
Miscellaneous office task chairs
    	
 
    	
13
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Initials
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Landlord
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Tenant
    	
 
    	
65
    

 

 

COMMENCEMENT MEMORANDUM

 

Date:                             , 2009

 

Re:                             Lease dated February 17, 2009 between 350 MARINE PARKWAY LLC, a California limited liability company, GILLIKIN TRADE LLC, California limited liability company, LEWIS TRADE LLC, California limited liability company, SPIEGL TRADE LLC, California limited liability company, and WELSH TRADE LLC, California limited liability company, hereafter referred to as “Lessor,” and ROCKET FUEL, INC., a Delaware corporation„ Lessee (the “Lease”), concerning the premises described in the Lease located at 350 Marine Parkway, Redwood City, California 94065 (the “Premises”).

 

Ladies and Gentlemen:

 

In accordance with the Lease, we confirm and agree as follows:

 

1.                                 That the Premises have been accepted on this date by Lessee.

 

2.                                 That the Lessee has possession of the Premises and hereby acknowledges that under the provisions of the Lease, the Commencement Date of the initial term of the Lease is                   , 2009 and the expiration date of the initial term of the Lease is                   , 2011.

 

3.                                 That in accordance with the provisions of the Lease, rent commences to accrue on                      , 2009.

 

4.                                 Rent is due and payable in advance on the first day of each and every month during the term of said Lease. Your rent checks should be made payable to 350 Marine Parkway LLC and mailed to 350 Marine Parkway LLC, c/o Pollock Financial Group, 150 Portola Road, Portola Valley, California 94028.

 

AGREED AND ACCEPTED

 

	
LESSEE:
    	
 
    	
LESSOR:
    
	
 
    	
 
    	
 
    
	
ROCKET FUEL, INC.,
    	
 
    	
350 MARINE PARKWAY LLC,
    
	
a Delaware corporation
    	
 
    	
a California limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By: 
    	
/s/ James M. Pollock 
    
	
Name:
    	
 
    	
 
    	
 
    	
James M. Pollock 
    
	
Its:
    	
 
    	
 
    	
 
    	
Its Manager
    

 

Signatures continue on following page

 

EXHIBIT “D”

Page 1

 

	
 
    	
GILLIKIN TRADE LLC,
    
	
 
    	
a California limited liability company 
    
	
 
    	
By:
    	
Pollock Realty II LLC,
    
	
 
    	
 
    	
a California limited liability company 
    
	
 
    	
 
    	
Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James M. Pollock
    
	
 
    	
 
    	
James M. Pollock 
    
	
 
    	
 
    	
Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
LEWIS TRADE LLC,
    
	
 
    	
a California limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Pollock Realty II LLC,
    
	
 
    	
 
    	
a California limited liability company 
    
	
 
    	
 
    	
Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James M. Pollock
    
	
 
    	
 
    	
James M. Pollock
    
	
 
    	
 
    	
Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
SPIEGL TRADE LLC,
    
	
 
    	
a California limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Pollock Realty II LLC,
    
	
 
    	
 
    	
a California limited liability company 
    
	
 
    	
 
    	
Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James M. Pollock
    
	
 
    	
 
    	
James M. Pollock
    
	
 
    	
 
    	
Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
WELSH TRADE LLC
    
	
 
    	
a California limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Pollock Realty II LLC,
    
	
 
    	
 
    	
a California limited liability company 
    
	
 
    	
 
    	
Its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James M. Pollock
    
	
 
    	
 
    	
James M. Pollock 

Its Manager
    

 

EXHIBIT “D”

Page 2

 

 

FIRST AMENDMENT TO LEASE

 

350 Marine Parkway
 Redwood City, California 94065

 

THIS FIRST AMENDMENT TO LEASE (this “Amendment”), dated for reference purposes as of October 11, 2010, is made and entered into by and between 350 MARINE PARKWAY LLC, a California limited liability company, hereafter referred to as “Lessor,” and ROCKET FUEL INC., a Delaware corporation, hereafter referred to as “Lessee.”

 

RECITALS

 

A.            Lessor and Lessee entered into a lease dated as of February 17, 2009 (the “Lease”) of certain premises consisting of approximately 5,187 rentable square feet referred to as Suite 220 (the “Existing Premises”) located on the second floor of the Building on the real property owned by Lessor commonly referred to as 350 Marine Parkway, Redwood City, California 94065.

 

B.            The initial term of the Lease commenced on March 15, 2009. Lessor and Lessee wish to enter into this Amendment to extend the initial term of the Lease of the Existing Premises, to expand the Existing Premises to include approximately 4,328 additional rentable square feet in the Building referred to as Suite 210 (the “Expansion Premises”), and to amend the Lease in certain other respects, as set forth herein.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

 

1.             Defined Terms. Except as otherwise provided herein, all capitalized terms and phrases used but not defined in this Amendment shall have the meanings given to them in the Lease. References to “the Lease” hereafter shall mean the Lease referred to in Recital A, as amended by this Amendment.

 

2.             Extension of the Lease Term of the Existing Premises. The initial term of the Lease of the Existing Premises commenced on March 15, 2009 and expires on May 14, 2011. Lessor and Lessee agree that the initial term of the Lease of the Existing Premises is hereby extended for a period of thirty-two and one-half (32.5) months commencing on May 15, 2011 and ending on January 31, 2014 (the “Existing Premises Extension Term”). The Existing Premises Extension Term shall be upon all of the same terms and conditions of the Lease, except that (1) the Monthly Base Rent payable by Lessee to Lessor during the Existing Premises Extension Term with respect to the Existing Premises shall be as set forth in Paragraph 6 hereof; (2) the Premises shall be expanded to include the Expansion Premises pursuant to Paragraph 3 hereof; and (3) the Option to Extend set forth in Paragraph 3 of the Lease is amended as set forth in Paragraph 11 of this Amendment.

 

 

3.           Expansion of the Existing Premises to Include the Expansion Premises.

 

(a)           Effective as of February 1, 2011, Lessor and Lessee hereby agree that the Existing Premises shall be expanded to include the Expansion Premises consisting of approximately 4,328 additional rentable square feet. The Expansion Premises are shown on the floor plan of the second floor of the Building attached hereto as Amended Exhibit “B” and made a part hereof.

 

(b)           The initial term of the lease of the Expansion Premises shall be thirty-six (36) months, commencing on February 1, 2011 (the “Expansion Premises Commencement Date”), and shall expire on January 31, 2014, unless sooner terminated pursuant to the Lease; provided, however, that the Expansion Premises Commencement Date, and Lessee’s obligation to pay Rent for the Expansion Premises, shall be delayed for each day Lessor delays in delivering possession of the Expansion Premises to Lessee (i) during the early access period described in Paragraph 5 hereof, and (ii) with the Tenant Improvements described in Paragraph 10 hereof substantially completed.

 

(c)           Attached hereto as Exhibit “C-1” and incorporated by reference herein is a list of Lessor’s existing workstation furniture located in the Expansion Premises (“Furniture”) which shall remain in place and which Lessee shall have the right to use during the term of the Lease of the Expansion Premises without additional cost. Upon receipt by Lessor of a written request from Lessee, provided that Lessee delivers such written request to Lessor prior to April 1, 2011, Lessor shall remove any Furniture designated by Lessee at Lessor’s expense. Lessee shall return any remaining Furniture listed on Exhibit “C-1” to Lessor in the same condition and repair as when received, reasonable wear and tear excepted, upon such removal thereof at Lessee’s request as provided above, if applicable, and the balance (or all, if applicable) of the Furniture at the expiration or sooner termination of the Lease of the Expansion Premises.

 

(d)           The Expansion Premises Commencement Date shall be confirmed in writing by Lessor and Lessee by the execution and delivery of the Expansion Premises Commencement Memorandum in the form attached hereto as “Exhibit “D-1” and made a part hereof.

 

4.             Lessee’s Share. Paragraph 1(b) of the Lease is hereby amended as of the Expansion Premises Commencement Date to read as follows:

 

“(b) “Lessee’s Share” as used in this Lease shall mean the percentage calculated by dividing the sum of the total number of rentable square feet of the Existing Premises (5,187) and the Expansion Premises (4,328), which equals 9,515, by the total number of rentable square feet in the Complex (34,452 rentable square feet). The parties agree that Lessee’s Share shall be 27.62% based upon the Existing Premises and the Expansion Premises consisting of a total of approximately nine thousand five hundred fifteen (9,515) rentable square feet (9,515/34,452).”

 

5.             Early Access to the Expansion Premises. Subject to (1) the prior execution and delivery of this Amendment by Lessor and Lessee; (2) the payment by Lessee to Lessor concurrently with the execution and delivery of this Amendment of the sum of Twelve Thousand One Hundred Sixty-seven and Sixty-seven Hundredths Dollars ($12,167.67) representing the

 

2

 

increase in the Security Deposit referred to in Paragraph 9 of this Amendment; and (3) the delivery by Lessee to Lessor of written evidence that Lessee’s commercial general liability insurance coverage required by Paragraph 11(a) of the Lease is in effect and has been amended to expressly refer to both the Existing Premises and the Expansion Premises, Lessee and Lessee’s vendors and contractors shall have access to the Expansion Premises, free of charge, from January 1, 2011 to January 31, 2011 for office set up and for the construction of Tenant Improvements by Lessee, provided that (a) Lessor has approved in writing prior to the commencement of any proposed Tenant Improvements by Lessee in the Expansion Premises any Tenant Improvements to be constructed by or for Lessee in the Expansion Premises, (b) Lessee shall pay the entire cost of any such Tenant Improvements, and (c) Paragraph 16, Liens, of the Lease shall apply to any such Tenant Improvements to be constructed by or for Lessee in the Expansion Premises.

 

6.             Existing Premises Monthly Base Rent. Paragraph 4(a) of the Lease is hereby amended to read as follows:

 

“4.           Existing Premises Monthly Base Rent. Lessee shall pay to Lessor Monthly Base Rent determined on a full service basis that includes the Base Operating Expenses and Base Taxes referred to in Paragraph 5(b) hereof, with respect to the Existing Premises during the Existing Premises Extension Term pursuant to Paragraph 2 of this Amendment, as follows:

 

Existing Premises:

 

	
Period — 32.5 Months
    	
 
    	
Rent/SF/Mo.
    	
 
    	
Sq. Ft.
    	
 
    	
Amount/Mo.
    Full Service
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
May 15, 2011—   August 15, 2011
    	
 
    	
$
    	
0
    	
 
    	
5,187
    	
 
    	
$
    	
0
    	
 
    
	
August 16, 2011 —   May 31, 2012
    	
 
    	
$
    	
2.65
    	
 
    	
5,187
    	
 
    	
$
    	
13,745.55
    	
 
    
	
June 1, 2012 —   May 31, 2013
    	
 
    	
$
    	
2.73
    	
 
    	
5,187
    	
 
    	
$
    	
14,157.92
    	
 
    
	
June 1, 2013   —January 31, 2014
    	
 
    	
$
    	
2.81
    	
 
    	
5,187
    	
 
    	
$
    	
14,582.66
    	
”
    

 

7.             The Expansion Premises Monthly Base Rent.

 

(a)           Lessee shall pay to Lessor Monthly Base Rent on a full service basis with respect to the Expansion Premises during the initial term of the Lease of the Expansion Premises, as follows:

 

Expansion Premises:

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Amount/Mo.
    	
 
    
	
Period — 36 Months
    	
 
    	
Rent/SF/Mo.
    	
 
    	
Sq. Ft.
    	
 
    	
Full Service
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
February 1, 2011—   April 30, 2011
    	
 
    	
$
    	
0
    	
 
    	
4,328
    	
 
    	
$
    	
0
    	
 
    
	
May 1, 2011 —   January 31, 2012
    	
 
    	
$
    	
2.65
    	
 
    	
4,328
    	
 
    	
$
    	
11,469.20
    	
 
    
	
February 1, 2012 —   January 31, 2013
    	
 
    	
$
    	
2.7295
    	
 
    	
4,328
    	
 
    	
$
    	
11,813.28
    	
 
    
	
February 1, 2013 —   January 31, 2014
    	
 
    	
$
    	
2.8114
    	
 
    	
4,328
    	
 
    	
$
    	
12,167.67
    	
 
    

 

3

 

(b)           Monthly Base Rent for the Expansion Premises is determined on a full service basis and includes the Base Operating Expenses and Base Taxes referred to in Paragraph 8 hereof.

 

8.             Additional Rent; Increases in Operating Expenses and Taxes.

 

(a)           If Operating Expenses and/or Taxes with respect to the Existing Premises and the Expansion Premises as defined in Paragraphs 8(c) and 8(d), respectively, of this Amendment, for any calendar year during the extension of the term of the Lease of the Existing Premises or during the term of the Expansion Premises after the calendar year 2011 exceeds Base Operating Expenses and/or Base Taxes as defined in Paragraph 8(b) hereof, Lessee shall pay to Lessor, as “Additional Rent,” Lessee’s Share (as defined in Paragraph 4 hereof) of such increase in Operating Expenses and Taxes in accordance with Paragraph 5(f) of the Lease, as amended by Paragraph 8(e) hereof.

 

(b)           “Base Operating Expenses” and “Base Taxes” shall mean the actual Operating Expenses and Taxes of the Complex for the calendar year 2011, adjusted to reflect a ninety-five percent (95%) occupancy rate of the Complex throughout such year.

 

(c)           “Operating Expenses,” as used in this Amendment are defined in Paragraph 5(c) of the Lease, which is hereby incorporated herein by reference (subject to the Costs that are excluded from the definition of Operating Expenses by Paragraph 5(e) of the Lease).

 

(d)           “Taxes” as used in this Amendment are defined in Paragraph 5(d) of the Lease which is hereby incorporated herein by reference.

 

(e)           Effective as of the Expansion Premises Commencement Date, Paragraph 5(f) of the Lease is hereby amended by substituting “2011” in place of “2009.”

 

9.              Additional Security Deposit. Concurrently with the execution and delivery of this Amendment by Lessor and Lessee, Lessee shall pay to Lessor the sum of Twelve Thousand One Hundred Sixty-seven and Sixty-seven Hundredths Dollars ($12,167.67) as an additional Security Deposit reflecting the expansion of the Premises to include the Expansion Premises. Said additional sum shall increase the Security Deposit held by Lessor pursuant to Paragraph 7 of the Lease from Twenty-eight Thousand Five Hundred Twenty-eight and Fifty Hundredths Dollars ($28,528.50) to a total of Forty Thousand Six Hundred Ninety-six and Seventeen Hundredths Dollars ($40,696.17).

 

10.            Expansion Premises Tenant Improvement Work. Lessor shall cause to be performed prior to January 1, 2011, at Lessor’s sole cost and expense, the following Tenant Improvements in the Expansion Premises: remove the dividing wall between the Existing Premises and the Expansion Premises. Lessor agrees to cause such work to be performed after 5:00 p.m., Monday through Friday, or on weekends.

 

11.            Option to Extend. Paragraph 3(a) Option to Extend, of the Lease is hereby amended: (a) to provide that the Premises subject to the option to extend are the entire 9,515 rentable square feet consisting of the Existing Premises and the Expansion Premises, and (b) references in Paragraph 3 to “the expiration of the initial term” shall mean January 31, 2014.

 

4

 

12.          Real Estate Broker. Cornish & Carey Commercial (“Cornish & Carey”) represents both Lessor and Lessee in this transaction. Lessor shall pay a real estate commission to Cornish & Carey pursuant to a separate agreement between Lessor and Cornish & Carey. Except for Cornish & Carey, each party represents to the other that it has not had any dealings with any other real estate broker, agent, finder, or other person with respect to this Lease, and each party shall indemnify, defend, and hold harmless the other party from all damages, expenses, and liabilities resulting from any claims that may be asserted against the other party by any broker, agent, finder, or other person with whom the indemnifying party has or purportedly has dealt other than the aforementioned broker.

 

13.          Parking.  Paragraph 26, Parking, of the Lease is amended as of February 1, 2011 to increase the number of parking spaces that Lessee shall have the right to use on a non-reserved basis pursuant to Paragraph 26 of the Lease. Lessee’s share of parking spaces shall be increased to equal Lessee’s proportionate share of the parking facilities of the Complex based upon the total 9,515 rentable square feet of the Existing Premises and the Expansion Premises. Paragraph 26 of the Lease shall remain in effect subject to the foregoing increase.

 

14.          Right of First Offer to Lease.

 

(a)           Subject to the expiration on December 31, 2010 of the existing Lease between Lessor and Gabriel Investment Services, LLC (“Gabriel Ventures”) of Suite 200, and subject to Gabriel Ventures vacating Suite 200, Lessor hereby grants to Lessee the right of first offer to lease the premises on the second floor of the Building referred to as Suite 200, consisting of approximately five thousand six hundred sixty (5,660) rentable square feet (the “First Offer Space”), upon the following terms and conditions: prior to entering into a lease of the First Offer Space with any other tenant, Lessor shall deliver to Lessee a written offer (“First Offer”) to lease the entire First Offer Space, the Monthly Base Rent at which the First Offer Space is offered for lease (which shall be Lessor’s good faith determination of the fair market value of the First Offer Space), the term of the lease of the First Offer Space in accordance with Paragraph 14(b), and the approximate date that the First Offer Space will be available for occupancy. Lessor shall also specify the amount, if any, of any tenant improvement allowance that Lessor is offering for the First Offer Space, or if the First Offer Space is offered for lease “as is,” without any tenant improvement allowance. Lessee shall have ten (10) calendar days after receipt of the First Offer within which to give written notice to Lessor of Lessee’s acceptance of Lessor’s First Offer to lease the First Offer Space, time being of the essence. Failure of Lessee to deliver such written acceptance within said period of ten (10) calendar days shall be deemed a rejection of the First Offer with respect to the First Offer Space.

 

(b)           If Lessee accepts Lessor’s First Offer to lease the First Offer Space within the time specified, Lessor and Lessee shall execute and deliver an amendment to this Lease stating that (1) the First Offer Space shall be added to the premises leased by Lessee, and Lessee shall pay the Monthly Base Rent for the First Offer Space specified by Lessor in the First Offer, with increases, if any, specified in the First Offer; (2) Lessee’s Share of the Additional Rent (increases in Operating Expenses and Taxes), as defined in Paragraph 8 of this Amendment, to be paid by Lessee with respect to the First Offer Space; (3) the First Offer Space shall be leased by Lessee for a term which is co-terminus with the then remaining term of this Lease of the Existing Premises and the Expansion Premises; provided, however, if Lessor’s First Offer is made on or after February 1, 2012 and Lessee has not further extended the Term as of such date,

 

5

 

Lessor shall have the right to specify in the First Offer that the term for the First Offer Space shall extend beyond the Term of this Lease for a period not to exceed thirty-six (36) months; (4) the First Offer Space shall be leased to Lessee subject to all of the other terms and provisions of the Lease as amended hereby, (A) except that Lessee’s termination right in Paragraph 16 shall be of no further force or effect, and (B) except as otherwise specified in Lessor’s First Offer; and (5) if Lessee exercises the option to extend referred to in Paragraph 11 of this Amendment, the premises leased by Lessee during the option period referred to in Paragraph 11 of this Amendment shall include the Existing Premises, the Expansion Premises, and the First Offer Space.

 

(c)           If Lessee rejects the First Offer, Lessor shall have the right, within one hundred eighty (180) days after the expiration of said period of ten (10) calendar days referred to in subparagraph (a) above, to lease all or any portion of the First Offer Space to a third party tenant, but not for a rent or on terms and conditions substantially more favorable to the tenant than those specified in the First Offer. If Lessor leases the entire First Offer Space to a third party tenant during the period of one hundred eighty (180) days after the rejection of the First Offer by Lessee, Lessee’s right of First Offer with respect to the First Offer Space shall terminate and shall be of no further force or effect. If Lessor is not successful in so leasing the First Offer Space during said period of one hundred eighty (180) days, Lessee’s right of First Offer to lease the First Offer Space shall again apply on the same terms and conditions as provided in this Paragraph 14.

 

(d)           Lessee’s expansion rights in Paragraph 35 of the Lease shall remain in effect subject to said Paragraph 35.

 

15.          Right of First Notification. During the term of the Lease as amended hereby, Lessor shall give Lessee at least fifteen (15) days written notice of the availability for lease, on a direct basis by Lessor, of the space on the ground floor of the Building and the lease terms for such space before such ground floor space is offered to the market for lease by Lessor.

 

16.          Termination Right. If Lessee gives written notice to Lessor between June 1, 2012 and July 31, 2012 (the exact date is referred to hereafter as the “notice date”) of Lessee’s bona fide need for additional space in the Building, specifying the number of rentable square feet that Lessee needs and if Lessor is not able to agree to accommodate Lessee’s additional space needs in the Building prior to January 31, 2013 because such additional space in the Building is not available for lease, provided Lessee is not in default beyond applicable notice and cure periods as of the notice date, or on the effective date of termination specified hereafter, subject to Paragraph 14(b)(4)(A), Lessee shall have the one time right to terminate the Lease effective January 31, 2013, (1) by giving written notice of termination to Lessor between June 1, 2012 and July 31, 2012, time being of the essence, and (2) concurrently with giving such notice of termination, Lessee shall pay to Lessor by bank cashier’s check a termination fee equal to the total of three (3) months of Monthly Base Rent for the Existing Premises and the Expansion Premises at the rates in effect on the effective date of termination, plus Lessee’s Share of Additional Rent (Operating Expenses and Taxes) due, if any, prorated as of the effective date of termination. If Lessee timely exercises its termination right as set forth herein and Lessee pays to Lessor the amounts at the time specified, the Lease shall terminate as of January 31, 2013 in the same manner as if the Lease had terminated in accordance with its terms, except for Lessee’s obligations to pay to Lessor the termination fee and the prorated Additional Rent. Lessor shall

 

6

 

respond to Lessee’s request to lease additional space in writing within ten (10) calendar days after Lessor’s receipt of Lessee’s notice. Lessor shall advise Lessee in Lessor’s written response whether or not Lessor is able to accommodate Lessee’s additional space needs.

 

17.          Continuing Effect. The parties acknowledge that the Lease remains in full force and effect as amended hereby, and with the term extended with respect to the Existing Premises and with the Existing Premises expanded to include the Expansion Premises subject to all of the terms and conditions of the Lease, as amended by this Amendment.

 

18.          Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signature pages may be detached from counterparts and attached to a single copy of this Amendment to form one (1) document.

 

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date set forth above.

 

	
 
    	
“Lessor”
    
	
 
    	
 
    
	
 
    	
350 MARINE PARKWAY LLC,
    
	
 
    	
a California limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ James M. Pollock
    
	
 
    	
 
    	
James M. Pollock, Manager
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeffrey O. Pollock
    
	
 
    	
 
    	
Jeffrey Ord Pollock, Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
“Lessee”
    
	
 
    	
 
    
	
 
    	
ROCKET FUEL INC., 
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ George H. John
    
	
 
    	
Name:
    	
George H. John
    
	
 
    	
Its:
    	
CEO
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Its:
    	
 
    

 

7

 

EXPANSION PREMISES FLOOR PLAN

 

[FLOOR PLAN]

 

AMENDED EXHIBIT “B”

 

 

LESSOR’S FURNITURE

 

	
Item/Description
    	
 
    	
Count
    
	
 
    	
 
    	
 
    
	
Herman Miller cubes
    	
 
    	
16
    
	
 
    	
 
    	
 
    
	
Overhead cabinets
    	
 
    	
15
    
	
 
    	
 
    	
 
    
	
File cabinets
    	
 
    	
14
    
	
 
    	
 
    	
 
    
	
Blue tack boards
    	
 
    	
15
    
	
 
    	
 
    	
 
    
	
U shaped desks with overhead cabinet and file cabinet.
    	
 
    	
2
    
	
 
    	
 
    	
 
    
	
L shaped desk with overhead cabinet and file cabinet
    	
 
    	
1
    

 

EXHIBIT “C-1”

 

 

 

SECOND AMENDMENT TO LEASE

 

350 Marine Parkway

Redwood City, California 94065

 

THIS SECOND AMENDMENT TO LEASE (this “Amendment”), dated for reference purposes as of February 25, 2011, is made and entered into by and between 350 MARINE PARKWAY LLC, a California limited liability company, hereafter referred to as “Lessor,” and ROCKET FUEL, INC., a Delaware corporation, hereafter referred to as “Lessee.”

 

RECITALS

 

A.              Lessor and Lessee entered into a lease dated as of February 17, 2009 (the “Original Lease”) of certain premises consisting of approximately 5,187 rentable square feet referred to as Suite 220 (the “Existing Premises”) located on the second floor of the Building on the real property owned by Lessor commonly referred to as 350 Marine Parkway, Redwood City, California 94065.

 

B.              Lessor and Lessee entered into a First Amendment to Lease dated as of October 11, 2010 (the “First Amendment”) amending the Original Lease by, among other things, extending the term of the lease of the Existing Premises, expanding the Existing Premises to include approximately 4,328 additional rentable square feet (the “Expansion Premises”), in the Building, and to amend the lease in certain other respects as set forth therein. The Original Lease as amended by the First Amendment, and as further amended by this Amendment, is hereafter referred to as the “Lease.”

 

C.              Lessor and Lessee wish to enter into this Amendment to expand the Existing Premises to include approximately 90 additional rentable square feet in the Building, and to amend the Lease in certain other respects, as set forth herein.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

 

1.              Defined Terms. Except as otherwise provided herein, all capitalized terms and phrases used but not defined in this Amendment shall have the meanings given to them in the Lease.

 

2.              Expansion of the Existing Premises.

 

(a)                            Effective as of March 15, 2011, Lessor and Lessee hereby agree that the Existing Premises shall be expanded by approximately 90 rentable square feet, from approximately 5,187 rentable square feet to approximately 5,277 rentable square feet (the “Expanded Existing Premises”). The amended floor plan of the second floor of the Building is attached hereto as Amended Exhibit “B” and made a part hereof.

 

 

(b)                            Subject to the expansion of the Existing Premises as of March 15, 2011 pursuant to Paragraph 2(a) above, the initial term of the lease of the Expanded Existing Premises shall remain as set forth in Paragraph 2 of the First Amendment.

 

3.             Lessee’s Share. Paragraph 1(b) of the Lease and Paragraph 4 of the First Amendment are hereby amended as of March 15, 2011 to read as follows:

 

“(b) “Lessee’s Share” as used in this Lease shall mean the percentage calculated by dividing the sum of the total number of rentable square feet of the Expanded Existing Premises (5,277) and the Expansion Premises (4,328), which equals 9,605 rentable square feet, by the total number of rentable square feet in the Complex (34,452 rentable square feet). The parties agree that as of March 15, 2011 Lessee’s Share shall be 27.88% based upon the Expanded Existing Premises and the Expansion Premises consisting of a total of approximately nine thousand six hundred five (9,605) rentable square feet (9,605/34,452).”

 

4.             Expanded Existing Premises Monthly Base Rent. Paragraph 6 of the First Amendment is hereby amended to read as follows:

 

“6.       Existing Premises Monthly Base Rent. Paragraph 4(a) of the Lease is hereby amended to read as follows:

 

‘4.        Expanded Existing Premises Monthly Base Rent. Commencing as of March 15, 2011 and ending on January 31, 2014, Lessee shall pay to Lessor Monthly Base Rent determined on a full service basis that includes the Base Operating Expenses and Base Taxes referred to in Paragraph 8(b) of the First Amendment with respect to the Expanded Existing Premises, as follows:

 

Expanded Existing Premises:

 

	
Period
    	
 
    	
Rent/SF/Mo.
    	
 
    	
Sq. Ft.
    	
 
    	
Amount/Mo.
   Full Service
    	
 
    
	
March 15, 2011 –   May 14, 2011
    	
 
    	
$
    	
2.75
    	
 
    	
5,277
    	
 
    	
$
    	
14,511.75
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
May 15, 2011 –   August 15, 2011
    	
 
    	
$
    	
0
    	
 
    	
5,277
    	
 
    	
$
    	
0
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
August 16, 2011 –   May 31, 2012
    	
 
    	
$
    	
2.65
    	
 
    	
5,277
    	
 
    	
$
    	
13,984.05
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
June 1, 2012 –   May 31, 2013
    	
 
    	
$
    	
2.73
    	
 
    	
5,277
    	
 
    	
$
    	
14,406.21
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
June 1, 2013 –   January 31, 2014
    	
 
    	
$
    	
2.81
    	
 
    	
5,277
    	
 
    	
$
    	
14,828.37
    	
 
    

 

5.              Additional Rent. Whenever reference is made to the “Existing Premises” in Paragraph 8, “Additional Rent, Increases in Operating Expenses and Taxes” of the First Amendment such term shall mean the Existing Premises as expanded by the additional approximately 90 rentable square feet referred to in this Amendment.

 

6.              Expanded Existing Premises Tenant Improvement Work. Lessor shall cause to be performed at Lessor’s sole cost and expense the Tenant Improvement Work in the Expanded Existing Premises described in the Proposal dated 1/21/2011 by JM Lehman Construction, Inc.

 

2

 

attached hereto as Exhibit “E” and made a part hereof. Any additional work in the Expanded Existing Premises or elsewhere in the Existing Premises shall be performed at Lessee’s expense, subject to Lessor’s approval of said additional work.

 

7.             The Expansion Premises Monthly Base Rent. The Expansion Premises Monthly Base Rent shall be payable by Lessee to Lessor in accordance with Paragraph 7 of the First Amendment.

 

8.             Option to Extend. Paragraph 3(a), Option to Extend, of the Lease is hereby amended to provide that the Premises subject to the option to extend are the entire 9,605 rentable square feet consisting of the Expanded Existing Premises and the Expansion Premises.

 

9.             Real Estate Broker. Cornish & Carey Commercial (“Cornish & Carey”) represents both Lessor and Lessee with respect to this Second Amendment. Lessor shall pay a real estate commission to Cornish & Carey for its services in connection with this Second Amendment pursuant to a separate agreement between Lessor and Cornish & Carey. Except for Cornish & Carey, each party represents to the other that it has not had any dealings with any other real estate broker, agent, finder, or other person with respect to this Amendment, and each party shall indemnify, defend, and hold harmless the other party from all damages, expenses, and liabilities resulting from any claims that may be asserted against the other party by any broker, agent, finder, or other person with whom the indemnifying party has or purportedly has dealt other than the aforementioned broker.

 

10.          Continuing Effect. The parties acknowledge that the Lease remains in full force and effect as amended hereby, with the Existing Premises expanded by approximately 90 rentable square feet, as provided in this Amendment.

 

11.          Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signature pages may be detached from counterparts and attached to a single copy of this Amendment to form one (1) document.

 

3

 

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date set forth above.

 

	
 
    	
“Lessor”
    
	
 
    	
 
    
	
 
    	
350 MARINE PARKWAY LLC,
    
	
 
    	
a California limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ James M. Pollock
    
	
 
    	
 
    	
James M. Pollock, Manager company
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeffrey O. Pollock
    
	
 
    	
 
    	
Jeffrey Ora Pollock, Manager
    
	
 
    	
 
    
	
 
    	
“Lessee”
    
	
 
    	
 
    
	
 
    	
ROCKET FUEL, INC.,
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ George H. John
    
	
 
    	
 
    
	
 
    	
Name:
    	
George H. John
    
	
 
    	
 
    
	
 
    	
Its:
    	
CEO
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Illegible
    
	
 
    	
 
    
	
 
    	
Name:
    	
Illegible
    
	
 
    	
 
    
	
 
    	
Its:
    	
CFO
    

 

4

 

AMENDED EXPANSION PREMISES FLOOR PLAN

 

ATTACHED

 

AMENDED EXHIBIT “B”

 

 

EXHIBIT B 

 

[FLOOR PLAN]

 

 

	
JM LEHMAN CONSTRUCTION, INC.
    	
 
    	
 
    	
 
    	
PROPOSAL
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
1932 EUCALYPTUS AVE.
    	
 
    	
Date
    	
 
    	
Proposal #
    
	
SAN CARLOS, CA 94070
    	
 
    	
1/21/2011
    	
 
    	
2009M327
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
TEL: (650) 593-6211
    	
 
    	
 
    	
 
    	
 
    
	
FAX: (650) 637-1040
    	
 
    	
 
    	
 
    	
 
    
	
CA LICENSE #627936
    	
 
    	
 
    	
 
    	
 
    

 

	
Name / Address
    	
 
    	
Project
    
	
 
    	
 
    	
 
    
	
Pollack Financial

150 Portola Rd.

Portola Valley, CA
    	
 
    	
Rocketfuel Inc.

350 Marine Parkway, Suite 220

Redwood Shores, CA 94065
    

 

	
Description
    	
 
    	
Total
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
SCOPE OF WORK:
    	
 
    	
5,200.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Lobby Area
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
- Demo existing Entry Door
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
- Demo Corridor wall and leave header (T-bar ceilings do not match)
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
- Wrap header with sheetrock, install square cornerbead,   tape & finish smooth
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
- Frame new full height Entry wall, sheetrock, tape & finish   smooth
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
- Demo T-bar ceiling for full height entry wall, install new wall   angle, put T-bar back together
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
- Install Entry Door in new location
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
- Furnish and install 18” x 9’ hollow metal 20 min. rated borrowed   lite on side of Entry Door
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
- Furnish and install clear aluminum borrowed lite to match existing
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
- Demo approx. 22’ x 14’ of glue down carpet
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
- Furnish and install new glue down carpet & base (allowance   $1,500.00)
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
- Electrical (Demo switches & two (2) duplex outlets,   wire for & install new switches)
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
- Paint
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
- Clean-up
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Thank you for the opportunity to provide pricing for this project.
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Total
    	
 
    	
 
    	
 
    
	
APPROVED:
    	
DATE:
    	
 
    	
 
    	
 
    	
 
    

 

Exhibit “E”

 

1

 

	
JM LEHMAN CONSTRUCTION, INC.
    	
 
    	
 
    	
 
    	
PROPOSAL
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
1932 EUCALYPTUS AVE.
    	
 
    	
Date
    	
 
    	
Proposal #
    
	
SAN CARLOS, CA 94070
    	
 
    	
1/21/2011
    	
 
    	
2009M327
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
TEL: (650) 593-6211
    	
 
    	
 
    	
 
    	
 
    
	
FAX: (650) 637-1040
    	
 
    	
 
    	
 
    	
 
    
	
CA LICENSE #627936
    	
 
    	
 
    	
 
    	
 
    

 

	
Name / Address
    	
 
    	
Project
    
	
 
    	
 
    	
 
    
	
Pollack Financial

150 Portola Rd.

Portola Valley, CA
    	
 
    	
Rocketfuel Inc.

350 Marine Parkway, Suite 220

Redwood Shores, CA 94065
    

 

	
Description
    	
 
    	
Total
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
* All work to be done   during normal business hours
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Payment is to be made as follows:  Full payment upon Job   Completion
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
All material is guaranteed to be as specified. All work is to be   completed in a manner according to standard practices. Any alternation or   deviation from the specifications made involving extra costs will be executed   only upon written orders and will become an extra charge over and above the   proposal.
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
THIS PROPOSAL MAY BE WITHDRAWN BY US IF NOT ACCEPTED WITHIN   THIRTY (30) DAYS.
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
AUTHORIZED SIGNATURE
    	
DATE:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
ACCEPTANCE OF PROPOSAL — The above prices, specifications, and   conditions are satisfactory and are hereby accepted. You are authorized to do   the work as specified. Payment will be made as outlined above.
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
ACCEPTANCE SIGNATURE
    	
DATE:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Thank you for the opportunity to provide pricing for this project.
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Total
    	
 
    	
$
    	
5,200.00
    	
 
    
	
APPROVED:
    	
DATE:
    	
 
    	
 
    	
 
    	
 
    
								

 

Exhibit “E”

 

2

 

THIRD AMENDMENT TO LEASE

 

350 Marine Parkway

Redwood City, California 94065

 

THIS THIRD AMENDMENT TO LEASE (this “Third Amendment”), dated for reference purposes as of March 22, 2012, is made and entered into by and between 350 MARINE PARKWAY LLC, a California limited liability company, hereafter referred to as “Lessor,” and ROCKET FUEL, INC., a Delaware corporation, hereafter referred to as “Lessee.”

 

RECITALS

 

A.            Lessor and Lessee entered into a lease dated as of February 17, 2009 (the “Original Lease”) of certain premises consisting of approximately 5,187 rentable square feet referred to as Suite 220 located on the second floor of the Building on the real property owned by Lessor commonly referred to as 350 Marine Parkway, Redwood City, California 94065.

 

B.            Lessor and Lessee entered into a First Amendment to Lease dated as of October 11, 2010 (the “First Amendment”) amending the Original Lease by, among other things, extending the term of the Original Lease, expanding the second floor premises by approximately 4,328 rentable square feet, from approximately 5,187 rentable square feet to a total of approximately 9,515 rentable square feet and amending the Original Lease in certain other respects as set forth in the First Amendment.

 

C.            Lessor and Lessee entered into a Second Amendment to Lease dated as of February 25, 2011 (the “Second Amendment”) amending the Original Lease, as amended by the First Amendment, by expanding the Existing Premises on the second floor of the Building by approximately 90 rentable square feet from approximately 9,515 rentable square feet to approximately 9,605 rentable square feet (referred to in this Third Amendment as the “Existing Premises”). The Original Lease, as amended by the First Amendment and the Second Amendment, is hereafter referred to as the “Lease.”

 

D.            Lessor and Lessee now wish to enter into this Third Amendment to expand the Existing Premises to include Suite 100, the entire first floor of the Building consisting of approximately 14,572 rentable square feet (referred to in this Third Amendment as the “Expansion Premises”), and to amend the Lease in certain other respects, as set forth herein.

 

 

AGREEMENT

 

NOW THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

 

1.             Defined Terms.

 

(a)           Except as otherwise provided herein, all capitalized terms and phrases used but not defined in this Third Amendment shall have the meanings given to them in the Lease.

 

(b)           As used in this Third Amendment (1) the “Existing Premises” refers to Suite 220 consisting of approximately 9,605 rentable square feet on the second floor of the Building (5,187 + 4,328 + 90 = 9,605); (2) the “Expansion Premises” refers to Suite 100, consisting of approximately 14,572 rentable square feet on the first floor of the Building; and (3) the “Total Premises” refers to the sum of the Existing Premises and the Expansion Premises for a total of approximately 24,177 rentable square feet. Effective as of the Expansion Premises Commencement Date, the term “Premises” as used in the Lease shall mean the Total Premises, except as otherwise provided in this Third Amendment.

 

2.             Term.

 

(a)           The commencement date of the term of the Original Lease of approximately 5,187 rentable square feet of the premises located on the second floor of the Building was on or about March 15, 2009; the commencement date of the expansion of the premises on the second floor of the Building of approximately 4,328 additional rentable square feet was on or about February 1, 2011 pursuant to the First Amendment; and the commencement date of the expansion of the premises on the second floor of the Building by approximately 90 rentable square feet was on or about March 15, 2011.

 

(b)           Except as otherwise provided in this Third Amendment, the Commencement Date of the term of the Lease as to the Expansion Premises (the “Expansion Premises Commencement Date”), shall be the later of August 1, 2012 or the date that Lessor delivers legal possession of the Expansion Premises to Lessee free of any claims by the Superior Lessors (as defined in Paragraph 15 below), and the Expiration Date of the Lease of the Expansion Premises shall be July 31, 2017, unless sooner terminated in accordance with the Lease, making the Total Premises in the Building leased by Lessee approximately 24,177 rentable square feet. An amended floor plan of the Total Premises is attached hereto as Exhibit A. Effective as of the

 

2

 

Expansion Premises Commencement Date, Lessor hereby leases the Expansion Premises to Lessee, subject to all of the terms and conditions of the Lease, as amended by this Third Amendment. Notwithstanding anything to the contrary in the Lease, Lessor agrees that Lessee may surrender possession of the Total Premises at the expiration or earlier termination of the Lease in the condition existing as of the Expansion Premises Commencement Date, as modified by the Tenant Improvement Work.

 

(c)           Effective as of the Expansion Premises Commencement Date, the Expiration Date of the Lease as to the Existing Premises is hereby extended from January 31, 2014 to July 31, 2017 in order to be co-terminus with the Expiration Date of the term of the Lease as to the Expansion Premises.

 

3.             Lessee’s Share. Paragraph 3(b) of the Lease is hereby amended to read as follows:

 

“(b)         Through July 31, 2012 “Lessee’s Share” as used in this Lease shall be 27.88%, the percentage calculated by dividing the number of rentable square feet of the Existing Premises (approximately 9,605 rentable square feet) by 34,452 (9,605/34,452). Effective as of the Expansion Premises Commencement Date, “Lessee’s Share” as used in this Lease shall be 70.18% the percentage calculated by dividing the number of rentable square feet of the Total Premises (24,177 rentable square feet), by the total number of rentable square feet in the Complex (34,452 rentable square feet). The parties agree that as of the Expansion Premises Commencement Date, Lessee’s Share shall be 70.18% based upon the Total Premises containing approximately twenty-four thousand one hundred seventy-seven (24,177) rentable square feet (24,177/34,452).”

 

4.             Existing Premises Monthly Base Rent. Effective as of the Expansion Premises Commencement Date, Paragraph 4(a) of the Lease is deleted in its entirety and replaced by the following:

 

“(a)         Commencing as of February 1, 2012 and ending on July 31, 2017, Lessee shall pay to Lessor Monthly Base Rent for the Existing Premises determined on a full service basis that includes Lessee’s Share of the Base Operating Expenses and Base Taxes attributable to the Existing Premises as follows:

 

3

 

	
Period
    	
 
    	
Rent/SF/Mo.
    	
 
    	
Sq. Ft.
    	
 
    	
Amount/Mo.
   Full Service
    	
 
    
	
February 1,   2012 – May 31, 2012
    	
 
    	
$
    	
2.65
    	
 
    	
9,605
    	
 
    	
$
    	
25,453.25
    	
 
    
	
June 1,   2012 – May 31, 2013
    	
 
    	
$
    	
2.73
    	
 
    	
9,605
    	
 
    	
$
    	
26,221.65
    	
 
    
	
June 1,   2013 – January 31, 2014
    	
 
    	
$
    	
2.81
    	
 
    	
9,605
    	
 
    	
$
    	
26,990.05
    	
 
    
	
February 1,   2014 – July 31, 2014
    	
 
    	
$
    	
3.5535
    	
 
    	
9,605
    	
 
    	
$
    	
34,131.37
    	
 
    
	
August 1,   2014 – July 31, 2015
    	
 
    	
$
    	
3.6601
    	
 
    	
9,605
    	
 
    	
$
    	
35,155.26
    	
 
    
	
August 1,   2015 – July 31, 2016
    	
 
    	
$
    	
3.7699
    	
 
    	
9,605
    	
 
    	
$
    	
36,209.89
    	
 
    
	
August 1,   2016 – July 31, 2017
    	
 
    	
$
    	
3.8830
    	
 
    	
9,605
    	
 
    	
$
    	
37,296.22
    	
 
    

 

“Base Operating Expenses” and “Base Taxes” payable by Lessee with respect to the Existing Premises shall mean Lessee’s Share of the actual Operating Expenses and Taxes of the Complex for the calendar year 2011 and continuing through July 31, 2017, adjusted to reflect a ninety-five percent (95%) occupancy rate of the Complex throughout such year, pursuant to Paragraph 3 above.”

 

5.             Expansion Premises Monthly Base Rent.

 

(a)           Commencing as of the Expansion Premises Commencement Date and ending on July 31, 2017, Lessee shall pay to Lessor Monthly Base Rent for the Expansion Premises determined on a full service basis that includes Lessee’s Share of the Base Operating Expenses and Base Taxes (referred to in Paragraph 3 above) as follows:

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Amount/Mo.
    	
 
    
	
Period
    	
 
    	
Rent/SF/Mo.
    	
 
    	
Sq. Ft
    	
 
    	
Full Service
    	
 
    
	
Expansion Premises Commencement Date -   October 31, 2012
    	
 
    	
$
    	
0
    	
 
    	
14,572
    	
 
    	
$
    	
0
    	
 
    
	
November 1,   2012 - July 31, 2013
    	
 
    	
$
    	
3.45
    	
 
    	
14,572
    	
 
    	
$
    	
50,273.40
    	
 
    
	
August 1,   2013 - July 31, 2014
    	
 
    	
$
    	
3.5535
    	
 
    	
14,572
    	
 
    	
$
    	
51,781.60
    	
 
    
	
August 1,   2014 - July 31, 2015
    	
 
    	
$
    	
3.6601
    	
 
    	
14,572
    	
 
    	
$
    	
53,355.05
    	
 
    
	
August 1,   2015 - July 31, 2016
    	
 
    	
$
    	
3.7699
    	
 
    	
14,572
    	
 
    	
$
    	
54,935.10
    	
 
    
	
August 1,   2016 - July 31, 2017
    	
 
    	
$
    	
3.8830
    	
 
    	
14,572
    	
 
    	
$
    	
56,583.15
    	
 
    

 

(b)           Commencing on the Expansion Premises Commencement Date, and continuing through July 31, 2017, “Base Operating Expenses” and “Base Taxes” payable by Lessee with respect to the Expansion Premises shall mean Lessee’s Share of the actual

 

4

 

Operating Expenses and Taxes of the Complex for the calendar year 2012 adjusted to reflect a ninety-five percent (95%) occupancy rate of the Complex throughout such year.

 

6.             Expansion Premises Tenant Improvement Work.

 

(a)           Subject to Paragraph 6(b) Lessor shall cause to be performed general fix up work in the approximately 14,572 rentable square feet of the Expansion Premises, including, but not limited to, replacement of carpet, new paint, installation of glass to recently added offices, the addition of a unisex restroom, and the demolition of a few walls specified by Lessee, as reflected by a space plan approved in writing by Lessor and Lessee is attached hereto as Exhibit B (the “Expansion Premises Tenant Improvement Work”).  The Expansion Premises Tenant Improvement Work shall be performed by a general contractor selected by Lessor (the “General Contractor”) pursuant to a construction contract between Lessor and the General Contractor (the “Construction Contract”) containing a guaranteed maximum price of the work in an amount not exceeding the construction budget for the Expansion Premises Tenant Improvement Work attached hereto as Exhibit B (the “Approved Budget”) and a one (1) year warranty against defects in the Expansion Premises Tenant Improvement Work. The Construction Contract shall specify a substantial completion date of the Expansion Premises Tenant Improvement Work which date shall be on or about August 1, 2012.

 

(b)           Lessor shall contribute the sum of up to One Hundred Sixty Thousand Two Hundred Ninety-two Dollars ($160,292.00) ($11.00 per square foot of the Expansion Premises) (“Lessor’s Tenant Improvement Allowance”). Lessee shall be required to pay (collectively, the “Lessee’s Contribution”): (i) the excess, if any, of the Approved Budget over the Lessor’s Tenant Improvement Allowance; and (ii) any increase in the cost of the Expansion Premises Tenant Improvement Work in excess of Lessor’s Tenant Improvement Allowance that is due to any additions to the work described in Paragraph 6(a) requested by Lessee before the commencement of the work, that are approved in writing by Lessor, or any additions to the work requested by Lessee after the commencement of the work that are the subject of change orders requested by Lessee that are approved by Lessor and Lessee in writing (“Approved Change Orders”). Lessor shall pay any increase in the guaranteed maximum price of the work specified in the Construction Contract claimed by the contractor due to Building conditions not apparent to the contractor at the time the guaranteed maximum price Construction Contract is signed by the contractor.

 

(c)           Upon receipt by Lessor of any progress billings from the General Contractor that exceed Lessor’s Tenant Improvement Allowance, Lessor shall submit

 

5

 

an invoice to Lessee for Lessee’s Contribution (together with copies of the General Contractor’s total billings to date), and Lessor shall submit an invoice to Lessee for each billing by the General Contractor thereafter for all additional amounts payable by Lessee as Lessee’s Contribution (with a copy of such billing). Lessee shall pay to Lessor for payment by Lessor to the General Contractor the amount of each such invoice for Lessee’s Contribution within ten (10) business days after receipt by Lessee of such invoice.

 

(d)           Notwithstanding anything to the contrary in the Lease or this Third Amendment, Lessor shall pay for (and the Tenant Improvement Allowance shall be deemed to be increased by the amount of) any of the following costs: (i) costs incurred due to the presence of Hazardous Materials in the Expansion Premises or the surrounding areas unless due to the use of Hazardous Material by Lessee, (ii) costs to bring the Expansion Premises, the Building or any exterior areas into compliance with applicable laws and restrictions, including, without limitation, the Americans with Disabilities Act and environmental laws, even if such compliance is triggered as a result of the Expansion Premises Tenant Improvement Work, and (iii) any construction management, supervision, alteration, or similar fees of Lessor or its property manager in connection with the Expansion Premises Tenant Improvement Work.

 

(e)           Any unused amount of Lessor’s Tenant Improvement Allowance shall be retained by Lessor upon completion of the Expansion Premises Tenant Improvement Work and shall not be credited against rent payable by Lessee to Lessor.

 

(f)            The Expansion Premises Tenant Improvement Work shall comply with all applicable laws and building codes, including the Americans with Disabilities Act, and shall be constructed in a good and workmanlike manner, free of defects, using new materials and equipment of good quality. Upon substantial completion of the Expansion Premises Tenant Improvement Work, Lessee shall have the right to submit a written “punch list” to Lessor, setting forth any defective items of construction. Lessor shall cause any such items to be corrected promptly by the General Contractor or the responsible subcontractor. Neither the acceptance by Lessee of the Expansion Premises nor the submission of a “punch list” shall be deemed a waiver by Lessee of Lessee’s right to have any defects in the Expansion Premises Tenant Improvement Work repaired at no cost to Lessee, provided that Lessee gives written notice to Lessor of any defects in the Expansion Premises Tenant Improvement Work within the one (1) year contractor’s warranty in the Construction Agreement with the General Contractor against defects in workmanship or materials. The cost of any repairs necessary to correct any defects in the Expansion Premises

 

6

 

Tenant Improvement Work thereafter shall be treated as an Operating Expense pursuant to Paragraph 5 of the Original Lease.

 

(g)           The Expansion Premises shall be delivered to Lessee in good working condition, including, but not limited to, the roof of the Building, HVAC, electrical, plumbing, and lighting systems in the Building and the Expansion Premises, and, Lessor shall, at its sole cost and expense, repair any defect in the foregoing delivery condition promptly after receipt of notice from Lessee; provided, that, Lessee provides such notice within ninety (90) days following (l) the Expansion Premises Commencement Date or (2) the substantial completion of the Expansion Premises Tenant Improvement work, whichever occurs first. Subject to the foregoing and the completion of the Expansion Premises Tenant Improvement Work, Lessee waives all right to make repairs at the expense of Lessor, or to deduct the costs thereof from the rent, and Lessee waives all rights under Section 1941 and 1942 of the Civil Code of the State of California.

 

(h)           Lessor acknowledges that Lessee occupies or will occupy the Expansion Premises under a Temporary License Agreement (as defined in Paragraph 15 of this Third Amendment). Lessor agrees that, at Lessee’s option, the Expansion Premises Tenant Improvement Work may be performed in the Expansion Premises prior to the Expansion Premises Commencement Date, provided that (1) Lessor has previously approved in writing the plans and specifications for the Expansion Premises Tenant Improvement Work and the guaranteed maximum price specified in the Construction Contract between Lessor and the General Contractor who is to perform the Expansion Premises Tenant Improvement Work; (2) Lessee shall deliver to Lessor concurrently with execution and delivery by the parties of this Third Amendment a certificate of insurance confirming that Lessee’s Commercial General Liability Insurance coverage is in effect with respect to the Expansion Premises and that Lessor is named as an additional insured thereon pursuant to the terms and conditions of Paragraph 11(a) of the Original Lease; and (3) Lessee has delivered to Lessor prior to or concurrently with the execution and delivery by the parties of this Third Amendment the additional Security Deposit amount referred to in Paragraph 7 hereof.

 

(i)            During the Lease term, as extended, Lessee shall have the right to use any cubicles owned by Lessor and located in the Expansion Premises (the “Lessor-Owned Cubicles”). An inventory of the Lessor-Owned Cubicles is attached hereto as Exhibit C. Lessor shall remove certain furniture in the Expansion Premises specified by Lessee within thirty (30) days after (1) the Expansion Premises Commencement Date, or (2) the substantial completion of the Expansion Premises Tenant Improvement Work, whichever occurs first. If after such thirty (30) days

 

7

 

Lessee wants to have furniture removed from the Premises, Lessee shall give written notice to Lessor requesting such removal. Lessor shall remove such furniture and submit an invoice to Lessee for the actual, reasonable cost of such removal, and Lessee shall promptly reimburse Lessor for such cost. Upon such removal the parties shall update the inventory attached hereto as Exhibit C. Lessor shall ensure that all existing wiring in the Expansion Premises is not cut during the removal of any furniture.

 

(j)            Lessee agrees to observe the following rules and regulations of the Building during the term of this Lease: (1) There shall be no loud music or musical instruments played in the Building; (2) Lessee shall use its good faith diligent efforts to keep the Building restrooms in a neat and orderly condition; and (3) any common area parties or other events sponsored by Lessee shall be subject to Lessor’s prior written approval, which approval Lessor may withhold in Lessor’s sole, but reasonable, judgment if Lessor believes that any such event could disturb other tenants of the Building. If Lessee breaches any of the foregoing Building rules and regulations Lessor shall give Lessee prompt written notice thereof and for one (1) year thereafter Lessor may, in Lessor’s sole judgment, withhold Lessor’s approval of any common area parties or other events.

 

7.             Security Deposit. Lessor currently holds a Security Deposit from Lessee of Forty Thousand Dollars ($40,000.00). Concurrently with the execution and delivery of this Third Amendment by Lessor and Lessee, Lessee shall pay to Lessor an additional cash Security Deposit in the amount of Three Hundred Sixty Thousand Dollars ($360,000.00), increasing the Security Deposit to Four Hundred Thousand Dollars ($400,000.00). Upon Lessee delivering to Lessor bank statements confirming that Lessee has raised a minimum of Twenty Million Dollars ($20,000,000.00) debt or equity funding during the calendar year 2012, and provided that no event of default by Lessee under this Lease has occurred and is continuing as of the date of receipt of such confirmation (as “event of default” is defined in Paragraph 22 of the Original Lease), Lessor shall promptly release and return to Lessee One Hundred Thousand Dollars ($100,000.00) of the Security Deposit, reducing the Security Deposit to Three Hundred Thousand Dollars ($300,000.00). Thereafter, provided that (1) Lessee delivers written evidence acceptable to Lessor that Lessee has a cash balance of at least Five Million Dollars ($5,000,000.00) in Lessee’s corporate bank accounts; and (2) no event of default by Lessee under this Lease has occurred and is continuing as of the applicable Reduction Date, as of March 1, 2013 and thereafter on each anniversary of said date during the term of the Lease (each, a “Reduction Date”), Lessor shall credit on each Reduction Date the total sum of Seventy-five Thousand Dollars ($75,000.00) of the Security Deposit to the next monthly payments of the Existing Premises Monthly Base Rent and the Expansion Premises Monthly Base Rent,

 

8

 

prorata, based on said two Monthly Base Rent amounts following such Reduction Date; provided, however, that such reductions of the Security Deposit shall cease when the Security Deposit has been reduced to One Hundred Fifty Thousand Dollars ($150,000.00), which amount shall be retained by Lessor as a Security Deposit until the expiration of the term of the Lease of the Existing Premises and the Expansion Premises and the term of any Option to Extend exercised by Lessee.

 

8.             Option to Extend.  Paragraph 3(a), Option to Extend, of the Lease and Paragraph 8 of the Second Amendment, are hereby amended as follows:

 

(a)           The option extension period is extended from twenty-four (24) calendar months to sixty (60) calendar months;

 

(b)           Lessee may exercise the Option to Extend with respect to the Existing Premises; or the Expansion Premises; or the Total Premises; and

 

(c)           Subject to the amendments referred to in subparagraphs (a) and (b) above of this Paragraph 8, Paragraph 3, Option to Extend, of the Lease and Paragraph 8 of the Second Amendment shall continue to apply such that Lessee has one (1) Option to Extend the term of the Lease as to the Existing Premises, the Expansion Premises, or both, for one (1) additional term of sixty (60) calendar months.

 

9.             Right of First Offer.

 

(a)           Subject to the prior rights granted by Lessor to Gabriel Investments (Suite 200) and Woodside Fund (Suite 300), in their existing leases as set forth on Exhibit D attached hereto, Lessor hereby grants to Lessee the right of first offer (“Right of First Offer”) to lease Suite 200 and/or Suite 300 if either or both said suites becomes available for lease pursuant to a direct lease from Lessor (not a sublease) at any time during the initial term of this Lease. Lessee’s Right of First Offer is personal to Rocket Fuel, Inc. and any Permitted Affiliate of Lessee. Lessee’s Right of First Offer to lease Suite 200 and/or Suite 300 shall be upon the following terms and conditions: provided that no event of default by Lessee (as defined in Paragraph 22 of the Original Lease) has occurred and remains uncured, and provided that Lessee has not assigned its interest in this Lease to any third party, (other than a Permitted Affiliate), and subject to the prior rights of Gabriel Investments and Woodside Fund referred to above, when either of Suite 200 or Suite 300 becomes available for lease Lessor shall deliver to Lessee written notice offering to lease such space to Lessee, specifying the number of rentable square feet of the space available

 

9

 

for lease, the Monthly Base Rent for such space, the date the space will be available for occupancy, and the term of the Lease for such space (“First Offer”). The space shall be offered to Lessee for lease “as is” in its then condition. Lessor shall have no obligation to construct any Tenant Improvements to such space. Lessee shall have five (5) business days after receipt of the First Offer within which to give written notice to Lessor of interest by Lessee’s management in leasing the offered space pursuant to Lessor’s First Offer. Failure of Lessee to deliver such written notice of interest within said period of five (5) business days following receipt of Lessor’s notice of the First Offer, or Lessee’s failure to deliver Lessee’s final written acceptance of Lessor’s First Offer within ten (10) business days following receipt of Lessor’s notice of the First Offer, shall be deemed a rejection of the First Offer, time being of the essence. If Lessee rejects the First Offer, Lessor shall have the right to lease all or any part of the space to a third party lessee for a term, at such rental, and upon such other terms and conditions as Lessor shall determine in Lessor’s sole judgment, provided that if Lessee rejects the First Offer and thereafter Lessor decides to offer to lease the space at a lower Monthly Base Rent or on materially more favorable terms than the terms contained in Lessor’s First Offer to Lease, Lessor shall re-offer the space to Lessee in writing at the lower Monthly Base Rent or on such more favorable terms before offering the space to a third party at such lower Monthly Base Rent or on such more favorable terms (a “Reoffer”), and Lessee shall have three (3) business days after receipt of the Reoffer to accept the revised First Offer in writing, time being of the essence. If Lessee notifies Lessor in writing of Lessee’s final acceptance of Lessor’s First Offer or Reoffer within the time periods referred to above, then Lessee and Lessor shall execute and deliver an amendment to this Lease to include the space which shall become a part of the Total Premises for purposes of this Lease. The space shall be leased by Lessee at the then applicable Monthly Base Rent in Lessor’s First Offer (or such lower rent as is offered to Lessee in the Reoffer), and subject to all of the other terms and provisions of this Lease (as the same may be amended by the terms of the First Offer or Reoffer), excluding Paragraph 6 hereof (Expansion Premises Tenant Improvement Work) if no tenant improvement allowance is provided in the First Offer or Reoffer.

 

(b)           The rights of Lessee under this Paragraph 9 shall be continuous through the term of the Lease, as extended. Lessee’s rejection of any particular offer shall not relieve Lessor of its obligation to again offer Suite 200 and Suite 300 to Lessee at any time that such space subsequently becomes available.

 

10.          Assignment and Subletting. The word “Premises” when used in Paragraph 17, Assignment and Subletting, of the Lease shall mean both the Existing Premises and the Expansion Premises. Subject to Paragraph 8(b) above, Paragraph 17 of the Lease, Assignment and Subletting, shall apply to the Total Premises.

 

10

 

11.          Parking. The provision “Lessee’s proportionate share of the parking facilities of the Complex” as used in Paragraph 26 of the Original Lease shall mean 70% of the parking facilities of the Complex (24,177/34,452) such that from and after the Expansion Premises Commencement Date Lessee shall have the right to use on a non-reserved basis pursuant to Paragraph 26 of the Lease Lessee’s proportionate share of the parking facilities of the Complex based upon the total 24,177 rentable square feet of the Existing Premises and the Expansion Premises. Paragraph 26 of the Lease shall remain in effect subject to the foregoing increase.

 

12.          Signage. Lessee’s signage rights granted by Lessor in Paragraph 27 of the Original Lease (Building directory, suite signage, and monument signage) shall be expanded to reflect the total rentable square feet of the Total Premises (24,177 square feet). Lessee shall also have the right at Lessee’s expense to install Building top signage, subject to (1) the prior written approval by Lessor of the size, design, and location of all such signage, including the Building top signage, (2) compliance by Lessee with all rules, regulations and ordinances of the City of Redwood City, and the Redwood Shores Association applicable to all of Lessee’s signage, including the Building top signage, and (3) the prior written approval by the City of Redwood City and the Redwood Shores Association of Lessee’s signage, including the Building top signage. Lessee shall repair and maintain at Lessee’s expense all such signage, and Lessee shall remove at Lessee’s expense upon the expiration or sooner termination of this Lease all of Lessee’s signage installed in, on, or about the Building, including the Building top signage, and Lessee shall promptly repair at Lessee’s expense any damage to the Building or common areas of the Property caused by such removal upon the expiration or sooner termination of this Lease. The foregoing obligations of Lessee shall survive the expiration or sooner termination of this Lease.

 

13.          Real Estate Broker. Cornish & Carey Commercial Newmark Knight Frank (“Cornish & Carey”) represents both Lessor and Lessee with respect to this Third Amendment. Lessor shall pay a real estate commission to Cornish & Carey for its services in connection with this Third Amendment pursuant to a separate agreement between Lessor and Cornish & Carey. Except for Cornish & Carey, each party represents to the other that it has not had any dealings with any other real estate broker, agent, finder, or other person with respect to this Third Amendment, and each party shall indemnify, defend, and hold harmless the other party from all damages, expenses, and liabilities resulting from any claims that may be asserted against the other party by any broker, agent, finder, or other person with whom the indemnifying party has or purportedly has dealt other than Cornish & Carey.

 

11

 

14.          Continuing Effect. The parties acknowledge that except to the extent the Lease is amended by this Third Amendment the Lease shall remain unmodified and in full force and effect and is hereby ratified and confirmed.

 

15.          Existing Sublease. The parties acknowledge that the Expansion Premises were originally leased by 350 Marine Parkway LLC, Gillikin Trade LLC, Lewis Trade LLC, Spiegl Trade LLC, and Welsh Trade LLC (collectively “Building Owner”) to Hudson Entertainment, Inc. (the “Sublessor”) under that certain Standard Office Master Lease dated July 11, 2006 (the “Master Lease”), and subleased by Sublessor to Activision Publishing, Inc. (the “Sub-Sublessor”) under that certain Sublease dated November 7, 2008 (the “Sublease”), and sub-subleased by Sub-Sublessor to Obopay, Inc. (the “Sub-Sublessee,” and, collectively with Building Owner, Sublessor and Sub-Sublessor, the “Superior Lessors”) pursuant to that certain Sub-Sublease dated May 17, 2010 (the “Sub-Sublease,” and, collectively with the Master Lease and Sublease, the “Superior Leases”). Sub-Sublessee subsequently licensed a portion of the Expansion Space and has the right to license and occupy the entire Expansion Space pursuant to that certain License dated February 1, 2012 (the “Temporary License Agreement”), which Temporary License Agreement expires July 31, 2012. Accordingly, Lessor further agrees as follows:

 

(a)           Lessor acknowledges and consents to the Temporary License Agreement and agrees that Lessor shall not terminate the Master Lease or take any action under the Master Lease or the other Superior Leases to declare any Superior Lessor to be in default of any Superior Lease due to the Temporary License Agreement or Lessee’s occupancy of the Expansion Space thereunder.

 

(b)           Lessor agrees that, in the event of any termination of the Master Lease prior to the Expansion Premises Commencement Date, the Lease and this Third Amendment shall be automatically amended such that the Expansion Premises Commencement Date shall be deemed to have occurred as of the date of such termination of the Master Lease; provided, however, that if such termination of the Master Lease arises out of the occurrence of a casualty or condemnation event, then Paragraph 20, Damage and Destruction, and Paragraph 21, Eminent Domain, respectively, of the Lease shall apply.

 

(c)           Notwithstanding anything to the contrary in this Lease or any of the Superior Leases, Lessor hereby releases all Superior Lessors from any surrender obligations with respect to the Expansion Premises, and, acknowledges that possession of the Expansion Premises will not be surrendered at the expiration of the Superior Leases (due to the continued occupancy by Lessee of the Expansion Premises pursuant to this Third Amendment). Each Superior Lessor shall be a third

 

12

 

party beneficiary of the foregoing release, and, Lessor will execute a separate release in favor of any such Superior Lessor, if requested by such Superior Lessor.

 

(d)           Lessor agrees to provide copies to Lessee of any notices or other correspondence with any Superior Lessor in connection with the Expansion Premises and/or the Superior Leases.

 

16.          SNDA. Lessor shall use its good faith diligent efforts to obtain within thirty (30) days after the execution and delivery by the parties of this Third Amendment a commercially reasonable subordination and non-disturbance agreement (“SNDA”) from any lender with a deed of trust lien on the Complex providing that Lessee’s leasehold interest in the Complex shall not be disturbed in the event of a foreclosure of the lender’s deed of trust or a transfer of the Complex by a deed in lieu of foreclosure, so long as no event of default by Lessee under the Lease remains uncured. The SNDA shall provide that in the event of foreclosure or conveyance of the Complex by deed in lieu of foreclosure the lender shall not be bound by any previous defaults of Lessor then existing under the Lease, including, but not limited to, Lessor’s obligation to fund the Lessor’s Tenant Improvement Allowance specified in subparagraph 6(b) of this Third Amendment.

 

17.          Counterparts. This Third Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signature pages may be detached from counterparts and attached to a single copy of this Third Amendment to form one document.

 

(Signatures appear on the following page.)

 

13

 

IN WITNESS WHEREOF, the parties have executed this Third Amendment as of the date set forth above.

 

	
 
    	
“Lessor”
    
	
 
    	
 
    
	
 
    	
350 MARINE PARKWAY LLC,
    
	
 
    	
a California limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ James M. Pollock
    
	
 
    	
 
    	
James M. Pollock, Manager
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Lincoln Westcott
    
	
 
    	
 
    	
Lincoln Westcott, Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
“Lessee”
    
	
 
    	
 
    
	
 
    	
ROCKET FUEL, INC.,
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ J. Peter Bardwick
    
	
 
    	
 
    
	
 
    	
Name:
    	
J. Peter Bardwick
    
	
 
    	
 
    
	
 
    	
Its:
    	
CFO
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    
	
 
    	
Its:
    	
 
    

 

14

 

Exhibit A

 

Total Premises Floor Plan

 

[See attached]

 

 

EXISTING PREMISES

 

[FLOOR PLAN]

 

EXPANSION PREMISES

 

[FLOOR PLAN]

 

 

Exhibit B

 

Space Plan for Expansion Premises Tenant Improvement Work

 

[See attached]

 

 

	
JM LEHMAN CONSTRUCTION, INC.
    	
 
    	
 
    	
 
    	
PROPOSAL
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
1932 EUCALYPTUS AVE.
    	
 
    	
Date
    	
 
    	
Proposal #
    
	
SAN CARLOS, CA 94070
    	
 
    	
4/3/2012
    	
 
    	
20110179
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
TEL: (650) 593-6211
    	
 
    	
 
    	
 
    	
 
    
	
FAX: (650) 637-1040
    	
 
    	
 
    	
 
    	
 
    
	
CA LICENSE #627936
    	
 
    	
 
    	
 
    	
 
    

 

	
Name / Address
    	
 
    	
Project
    
	
 
    	
 
    	
 
    
	
Pollack Financial
    	
 
    	
Revised
    
	
150 Portola Rd.
    	
 
    	
Rocketfuel Inc.
    
	
Portola Valley, CA
    	
 
    	
350 Marine Parkway
    
	
 
    	
 
    	
1st Floor
    
	
 
    	
 
    	
Redwood Shores, CA 94065
    

 

	
Description
    	
 
    	
Total
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
SCOPE   OF WORK (per job walk and sketch):
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
-   Demo (2 corner offices (Ping Pang Room), full height wall, T-bar,   doors/frames & Office behind stairwell with full height walls)
    	
 
    	
8,135.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
-   Demo fire sprinkler drops from Office demo, relocate upward
    	
 
    	
2,300.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
-   New T-bar Ceiling
    	
 
    	
2,375,00
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Computer   Room 131
    	
 
    	
3,100.00
    	
 
    
	
-   Frame undergrid wall, sheetrock, tape & finish to match existing
    	
 
    	
 
    	
 
    
	
-   Install door/frame (provided by landlord)
    	
 
    	
 
    	
 
    
	
-   Paint
    	
 
    	
 
    	
 
    
	
-   Redistribute electrical to stay in new Server Room
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Wall   in Front of Restrooms
    	
 
    	
1,550.00
    	
 
    
	
-   Frame wall (6’ high) column to column, sheetrock both sides, tape &   finish to match existing walls
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
*Alternate:   Furnish and install two (2) clear aluminum borrowed lites approx. 10’   wide x 6’ high with   one (1) vertical mullion in each with 1/4” clear tempered glass
    	
 
    	
3,465.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Thank you for the opportunity to provide   pricing for this project.
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Total
    	
 
    	
 
    	
 
    
	
APPROVED:
    	
DATE:
    	
 
    	
 
    	
 
    	
 
    

 

1

 

	
JM LEHMAN CONSTRUCTION, INC.
    	
 
    	
 
    	
 
    	
PROPOSAL
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
1932 EUCALYPTUS AVE.
    	
 
    	
Date
    	
 
    	
Proposal #
    
	
SAN CARLOS, CA 94070
    	
 
    	
4/3/2012
    	
 
    	
20110179
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
TEL: (650) 593-6211
    	
 
    	
 
    	
 
    	
 
    
	
FAX: (650) 637-1040
    	
 
    	
 
    	
 
    	
 
    
	
CA LICENSE #627936
    	
 
    	
 
    	
 
    	
 
    

 

	
Name / Address
    	
 
    	
Project
    
	
 
    	
 
    	
 
    
	
Pollack   Financial 
    	
 
    	
Revised
    
	
150   Portola Rd.
    	
 
    	
Rocketfuel Inc.
    
	
Portola   Valley, CA
    	
 
    	
350 Marine Parkway
    
	
 
    	
 
    	
1st Floor
    
	
 
    	
 
    	
Redwood Shores, CA 94065
    

 

	
Description
    	
 
    	
Total
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Womens Restroom
    	
 
    	
27,400,00
    	
 
    
	
- Furr wall & fill-in existing   sidelite
    	
 
    	
 
    	
 
    
	
- Plumbing (one (1) toilet &   one (1) sink)
    	
 
    	
 
    	
 
    
	
- Saw cut & Fill-in
    	
 
    	
 
    	
 
    
	
- Floor & Wainscot Tile
    	
 
    	
 
    	
 
    
	
- Exhaust Fan
    	
 
    	
 
    	
 
    
	
- Electrical
    	
 
    	
 
    	
 
    
	
- Stone countertops with 4” stone   backsplash 
    	
 
    	
 
    	
 
    
	
- Accessories
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Mens Restroom/Shower
    	
 
    	
38,200.00
    	
 
    
	
- Frame ceiling
    	
 
    	
 
    	
 
    
	
- Frame & hang Densarmor Plus   (wing wall for Shower)
    	
 
    	
 
    	
 
    
	
- Plumbing (one (1) toilet, one   (1) sink, two (2) urinals, & one (1) shower)
    	
 
    	
 
    	
 
    
	
- Saw cut & Fill-in
    	
 
    	
 
    	
 
    
	
- Floor & Wainscot Tile
    	
 
    	
 
    	
 
    
	
- Waterproofing & Shower Tile
    	
 
    	
 
    	
 
    
	
- Exhaust Fan
    	
 
    	
 
    	
 
    
	
- Electrical
    	
 
    	
 
    	
 
    
	
- Stone countertops with 4” stone   backsplash
    	
 
    	
 
    	
 
    
	
- Toilet/Urinal Partitions 
    	
 
    	
 
    	
 
    
	
- Accessories
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
- Move switches in six (6) offices
    	
 
    	
7,260.00
    	
 
    
	
- Furnish and install six (6) clear   aluminum borrowed lites to match door height (7’)
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
- Carpet (demo & install   Designweave Carpet Tiles) 
    	
 
    	
59,733.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
- Paint
    	
 
    	
16,250.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Thank you for the opportunity to provide   pricing for this project.
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Total
    	
 
    	
 
    	
 
    
	
APPROVED:
    	
DATE:
    	
 
    	
 
    	
 
    	
 
    

 

2

 

	
JM LEHMAN CONSTRUCTION, INC.
    	
 
    	
 
    	
 
    	
PROPOSAL
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
1932 EUCALYPTUS AVE.
    	
 
    	
Date
    	
 
    	
Proposal #
    
	
SAN CARLOS, CA 94070
    	
 
    	
4/3/2012
    	
 
    	
20110179
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
TEL: (650) 593-6211
    	
 
    	
 
    	
 
    	
 
    
	
FAX: (650) 637-1040
    	
 
    	
 
    	
 
    	
 
    
	
CA LICENSE #627936
    	
 
    	
 
    	
 
    	
 
    

 

	
Name / Address
    	
 
    	
Project
    
	
 
    	
 
    	
 
    
	
Pollack   Financial
    	
 
    	
Revised
    
	
150   Portola Rd.
    	
 
    	
Rocketfuel Inc.
    
	
Portola   Valley, CA
    	
 
    	
350 Marine Parkway
    
	
 
    	
 
    	
1st Floor
    
	
 
    	
 
    	
Redwood   Shores, CA 94065
    

 

	
Description
    	
 
    	
Total
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
- General Conditions,   Supervision & Overhead
    	
 
    	
25,223.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
- 10% Contingency $19,338.00
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
* All work to be done during normal   business hours
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Exclusions:
    	
 
    	
 
    	
 
    
	
- Drawings
    	
 
    	
 
    	
 
    
	
- Permit Fees
    	
 
    	
 
    	
 
    
	
- Fire Sprinklers (except Corner Offices)
    	
 
    	
 
    	
 
    
	
- HVAC
    	
 
    	
 
    	
 
    
	
- Life Safety
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Payment is to be made as   follows:   Progress Payments
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
All material is guaranteed to be as specified. All work is to be   completed in a manner according to standard practices. Any alteration or   deviation from the specifications made involving extra costs will become an   extra charge over and above the proposal.
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
THIS PROPOSAL MAY BE WITHDRAWN BY US   IF NOT ACCEPTED WITHIN THIRTY (30) DAYS.
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AUTHORIZED SIGNATURE
    	
 
    	
 
    	
DATE:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
ACCEPTANCE OF PROPOSAL — The above prices,   specifications, and conditions are satisfactory and are hereby accepted. You   are authorized to do the work as specified. Payment will be made as outlined   above.
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
ACCEPTANCE SIGNATURE
    	
/s/ lllegible
    	
 
    	
DATE:
    	
4-3-12
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Thank you for the opportunity to provide   pricing for this project.
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Total
    	
 
    	
$
    	
194,991.00
    	
 
    
	
APPROVED:
    	
DATE:
    	
 
    	
 
    	
 
    	
 
    
														

 

3

 

Exhibit C

 

Inventory of Lessor-Owned Cubicles

 

[See attached]

 

All Lessor owned Cubicles will be moved out of the Premises prior to teh Commencement Date by Lessee.

 

There shall be no Lessor Cubicles left in the Premises as of the Commencement Date.

 

 

Exhibit D

 

Suite 200 & Suite 300 Existing Extension Rights

 

Gabriel Investments (Suite 200)

 

·        Existing lease expires on December 31, 2012. Tenant has one (1) option to extend the term of the Lease for a period of five (5) years, which must be exercised, if at all, between April 1, 2012 and June 30, 2012.

 

Woodside Fund (Suite 300)

 

·        Existing lease expires on April 30, 2014. Tenant has one (1) option to extend for a period of five (5) years, which option must be exercised, if at all, between May 1, 2013 and July 31, 2013.

 

 

FOURTH AMENDMENT TO LEASE

 

350 Marine Parkway

Redwood City, California 94065

 

THIS FOURTH AMENDMENT TO LEASE (this “Fourth Amendment”), dated for reference purposes as of May 1, 2013, is made and entered into by and between 350 MARINE PARKWAY LLC, a California limited liability company, hereafter referred to as “Lessor,” and ROCKET FUEL, INC., a Delaware corporation, hereafter referred to as “Lessee.”

 

RECITALS

 

A.            Lessor and Lessee entered into a lease dated as of February 17, 2009 (the “Original Lease”) of certain premises consisting of approximately 5,187 rentable square feet referred to as Suite 220 located on the second floor of the Building on the real property owned by Lessor commonly referred to as 350 Marine Parkway, Redwood City, California 94065.

 

B.            Lessor and Lessee entered into a First Amendment to Lease dated as of October 11, 2010 (the “First Amendment”) amending the Original Lease by, among other things, extending the term of the Original Lease, expanding the second floor premises leased by Lessee by approximately 4,328 rentable square feet from approximately 5,187 rentable square feet to a total of approximately 9,515 rentable square feet, and amending the Original Lease in certain other respects as set forth in the First Amendment.

 

C.            Lessor and Lessee entered into a Second Amendment to Lease dated as of February 25, 2011 (the “Second Amendment”) amending the Original Lease, as amended by the First Amendment, by expanding the Existing Premises on the second floor of the Building by approximately 90 rentable square feet from approximately 9,515 rentable square feet to approximately 9,605 rentable square feet.

 

D.            Lessor and Lessee entered into a Third Amendment to Lease dated as of March 22, 2012 (the “Third Amendment”) amending the Original Lease, as amended by the First Amendment, and the Second Amendment, to expand the Existing Premises to include Suite 100, the entire first floor of the Building consisting of approximately 14,572 rentable square feet, increasing the Premises to approximately 24,177 rentable square feet, to further extend the term of the Original Lease, and to amend the Lease in certain other respects, as set forth therein. The Original Lease as amended by the First Amendment, the Second Amendment, and the Third Amendment, is hereafter referred to as the “Lease.”

 

 

AGREEMENT

 

NOW THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

 

1.             Defined Terms.

 

(a)           Except as otherwise provided herein, all capitalized terms and phrases used but not defined in this Fourth Amendment shall have the meanings given to them in the Lease.

 

(b)           As used in this Fourth Amendment the “Existing Premises” refers to (1) Suite 220 consisting of approximately 9,605 rentable square feet on the second floor of the Building (5,187 + 4,328 + 90 = 9,605); and (2) Suite 100 consisting of approximately 14,572 rentable square feet on the first floor of the Building, for a total of approximately 24,177 rentable square feet in the Existing Premises. Lessor and Lessee now wish to enter into this Fourth Amendment to Lease to expand the Existing Premises to include Suite 200, located on the second floor of the Building consisting of approximately 5,660 rentable square feet (referred to in this Fourth Amendment as the “Expansion Premises”). The “Total Premises” refers to the sum of the Existing Premises and the Expansion Premises for a total of approximately 29,837 rentable square feet.

 

2.             Term.

 

(a)           Effective as of the Expansion Premises Commencement Date, Lessor hereby leases the Expansion Premises to Lessee and Lessee hereby leases the Expansion Premises from Lessor, subject to the terms and conditions of the Lease, as amended by this Fourth Amendment. The Commencement Date of the term of the Lease of the Expansion Premises (the “Expansion Premises Commencement Date”) shall be May 1, 2013 and the Expiration Date of the Lease of the Expansion Premises shall be October 31, 2014, unless sooner terminated in accordance with the provisions of the Lease. As of the Expansion Premises Commencement Date the Total Premises in the Building leased by Lessee consists of approximately 29,837 rentable square feet. An amended floor plan of the Total Premises is attached hereto as Exhibit A.

 

(b)           Lessor shall grant to Lessee early access to the Expansion Premises free of charge from the date of the execution and delivery of this Fourth Amendment by the parties through the Expansion Premises Commencement Date for Lessee’s office set up and Lessee’s painting and carpeting, provided that before Lessee shall have early access to the Expansion Premises, Lessee shall deliver to Lessor evidence that Lessee’s commercial general liability insurance coverage

 

2

 

required by the Original Lease is in full  force and effect. Except as set forth below, Lessee shall accept the Expansion Premises on the Expansion Premises Commencement Date in its “as is” condition. Except as otherwise provided in this Fourth Amendment, any Tenant Improvements to the Expansion Premises shall be made at Lessee’s expense provided that before any Tenant Improvement Work is commenced in the Expansion Premises Lessee shall obtain Lessor’s written approval of Lessee’s proposed Tenant Improvement Work. Lessor shall deliver possession of the Expansion Premises to Lessee in good, vacant broom clean condition, with all building systems in good working order and in compliance with all laws. Lessee’s acceptance of the Expansion Premises shall not be deemed a waiver of Lessee’s rights to have defects in the Expansion Premises repaired at no cost to Lessee. Lessee shall give notice to Lessor whenever any such defect becomes reasonably apparent, and Lessor shall repair such defect as soon as possible.

 

3.             Expansion. Premises Monthly Base Rent. Subject to the terms of Paragraph 2(a) above, commencing as of May 1, 2013, the Expansion Premises Commencement Date, and ending on October 31, 2014, the Expansion Premises Expiration Date, Lessee shall pay to Lessor Monthly Base Rent for the Expansion Premises determined on a full service basis, as follows:

 

	
Period
    	
 
    	
Rent/SF/Mo.
    	
 
    	
Sq. Ft.
    	
 
    	
Amount/Mo.
   Full Service
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
May 1, 2013 —   April 30, 2014
    	
 
    	
$
    	
4.15
    	
 
    	
5,660
    	
 
    	
$
    	
23,489.00
    	
 
    
	
May 1, 2014 —   October 31, 2014
    	
 
    	
$
    	
4.2745
    	
 
    	
5,660
    	
 
    	
$
    	
24,193.67
    	
 
    

 

4.             Lessee’s Share. With respect to the Expansion Premises, commencing January 1, 2014 through October 31, 2014, Lessee shall pay to Lessor Lessee’s Share (as defined below) of any increases in Operating expenses and Taxes over the 2013 base year. “Lessee’s Share” as used in this Fourth Amendment shall be the percentage calculated by dividing the number of rentable square feet of the Expansion Premises (5,660) by the total number of rentable square feet in the Complex (34,452 rentable square feet). The parties agree that Lessee’s Share of the Operating Expenses and Taxes payable by Lessee with respect to the Expansion Premises shall be 16.43% (5,660/34,452) based on the Expansion Premises consisting of approximately five thousand six hundred sixty (5,660) rentable square feet.

 

5.             Security Deposit. Lessor currently holds a Security Deposit from Lessee of Three Hundred Sixty Thousand Dollars ($360,000.00). Concurrently with the execution and delivery of this Fourth Amendment by Lessor and Lessee, Lessee shall pay to Lessor an additional Security Deposit in cash in the amount of Twenty-four Thousand One Hundred Ninety-three and Sixty-seven Hundredths Dollars

 

3

 

($24,193.67) (one month of Monthly Base Rent for the Expansion Premises), increasing the Security Deposit to Three Hundred Eighty-four Thousand One Hundred Ninety-three and Sixty-seven Hundredths Dollars ($384,193.67).

 

6.             Option to Extend. If the Option to Extend in Paragraph 3(a) of the Original Lease, or in Paragraph 8 of the Second Amendment, is exercised the Expansion Premises shall be included in the Premises that the Option to Extend applies to.

 

7.             Right of First Offer.

 

(a)           Subject to the prior right granted by Lessor to Woodside Fund (Suite 300), in its existing lease, as set forth on Exhibit B attached hereto Lessor hereby grants to Lessee the right of first offer (“Right of First Offer”) to lease Suite 300 if said premises becomes available for lease pursuant to a direct lease from Lessor (not a sublease) at any time during the term of the Lease of the Expansion Premises. Lessee’s Right of First Offer is personal to Rocket Fuel, Inc. and any Permitted Affiliate of Lessee. Lessee’s Right of First Offer to lease Suite 300 shall be upon the following terms and conditions: provided that no event of default by Lessee (as defined in Paragraph 22 of the Original Lease) has occurred beyond any applicable notice and cure periods, and provided that Lessee has not assigned its interest in this Lease to any other party, (other than a Permitted Affiliate), and subject to the prior rights of Woodside Fund referred to above, when Suite 300 becomes available for lease Lessor shall deliver to Lessee written notice offering to lease such space to Lessee, specifying the number of rentable square feet of the space available for lease, and the terms upon which Lessor is willing to lease such space, including the Monthly Base Rent for such space, the date the space will be available for occupancy, and the term of the Lease for such space (“First Offer”). The space shall be offered to Lessee for lease “as is” in its then condition. Lessor shall have no obligation to construct any Tenant Improvements to such space. Lessee shall have five (5) business days after receipt of the First Offer within which to give written notice to Lessor of interest by Lessee’s management in leasing the offered space pursuant to Lessor’s First Offer. Failure of Lessee to deliver such written notice of interest within said period of five (5) business days following receipt of Lessor’s notice of the First Offer, or Lessee’s failure to deliver Lessee’s final written acceptance of Lessor’s First Offer within ten (10) business days following receipt of Lessor’s notice of the First Offer, shall be deemed a rejection of the First Offer, time being of the essence. If Lessee rejects the First Offer, Lessor shall have the right to lease all or any part of the space to another lessee party for a term, upon the same terms and conditions as set forth in the First Offer, provided that if Lessee rejects the First Offer and thereafter Lessor decides to offer to lease the space at a lower Monthly Base Rent or on materially more favorable terms than the terms contained in Lessor’s First Offer to Lease, Lessor shall re-offer

 

4

 

the space to Lessee in writing at the lower Monthly Base Rent or on such more favorable terms before offering the space to a third party at such lower Monthly Base Rent or on such more favorable terms (a “Reoffer”), and Lessee shall have three (3) business days after receipt of the Reoffer to accept the revised First Offer in writing, time being of the essence. If Lessee notifies Lessor in writing of Lessee’s final acceptance of Lessor’s First Offer or Reoffer within the time periods referred to above, then Lessee and Lessor shall execute and deliver an amendment to this Lease to include the space which shall become a part of the Total Premises for purposes of the Lease. The space shall be leased by Lessee at the then applicable Monthly Base Rent in Lessor’s First Offer (or such lower rent as is offered to Lessee in the Reoffer), and subject to all of the other terms and provisions of the Lease (as the same may be amended by the terms of the First Offer or Reoffer), excluding Paragraph 13 of the Original Lease, Tenant Improvement Work (Expansion Premises Tenant Improvement Work) if no tenant improvement allowance is provided in the First Offer or Reoffer.

 

(b)           The rights of Lessee under this Paragraph 7 shall be continuous through the term of the Lease of the Expansion Premises, as extended. Lessee’s rejection of any particular offer shall not relieve Lessor of its obligation to again offer Suite 300 to Lessee at any time that such space subsequently becomes available.

 

8.             Parking. The term “Lessee’s proportionate share of the parking facilities of the Complex” as used in Paragraph 26 of the Original Lease shall mean the parking facilities of the Complex such that from and after the Expansion Premises Commencement Date Lessee shall have the right to use on a non-reserved basis pursuant to Paragraph 26 of the Original Lease Lessee’s proportionate share of the parking facilities of the Complex based upon the total of 29,837 rentable square feet of the Existing Premises and the Expansion Premises (29,837/34,452 = 86.6%). Paragraph 26 of the Original Lease shall remain in effect subject to the foregoing increase.

 

9.             Real Estate Broker. Cornish & Carey Commercial Newmark Knight Frank (“Cornish & Carey”) represents both Lessor and Lessee with respect to this Fourth Amendment. Lessor shall pay a real estate commission to Cornish & Carey for its services in connection with this Fourth Amendment pursuant to a separate agreement between Lessor and Cornish & Carey. Except for Cornish & Carey, each party represents to the other that it has not had any dealings with any other real estate broker, agent, finder, or other person with respect to this Fourth Amendment, and each party shall indemnify, defend, and hold harmless the other party from all damages, expenses, and liabilities resulting from any claims that may be asserted against the other party by any broker, agent, finder, or other person with whom the indemnifying party has or purportedly has dealt other than Cornish & Carey.

 

5

 

10.          Continuing Effect. The parties acknowledge that except to the extent the Lease is amended by this Fourth Amendment the Original Lease as amended by the First Amendment, Second Amendment, the Third Amendment and this Fourth Amendment shall remain unmodified and in full force and effect and is hereby ratified and confirmed.

 

11.          Counterparts. This Fourth Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signature pages may be detached from counterparts and attached to a single copy of this Fourth Amendment to form one document.

 

IN WITNESS WHEREOF, the parties have executed this Fourth Amendment as of the date set forth above.

 

	
 
    	
“Lessor”
    
	
 
    	
 
    
	
 
    	
350 MARINE PARKWAY LLC,
    
	
 
    	
a California limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ James M. Pollock
    
	
 
    	
 
    	
James M. Pollock, Manager
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Lincoln Westcott
    
	
 
    	
 
    	
Lincoln Westcott, Manager 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
“Lessee”
    
	
 
    	
 
    
	
 
    	
ROCKET FUEL, INC.,
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ JoAnn Covington
    
	
 
    	
Name:
    	
JoAnn Covington
    
	
 
    	
Its:
    	
VP, General Counsel
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ J. Peter Bardwick
    
	
 
    	
Name:
    	
J. Peter Bardwick
    
	
 
    	
Its:
    	
CFO
    

 

6

 

Exhibit A

 

Total Premises Floor Plan

 

[See attached]

 

 

EXHIBIT A

Premises

 

[FLOOR PLAN]

 

Exhibit A - Page 1

 

[FLOOR PLAN]

 

 

[FLOOR PLAN]

 

 

Exhibit B

 

Suite 300 Existing Extension Rights

 

Woodside Fund (Suite 300): Existing lease expires on April 30, 2014. Tenant has one (1) option to extend for a period of five (5) years, which option must be exercised, if at all, between May 1, 2013 and July 31, 2013.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00221-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00221-of-00352.parquet"}]]