Document:

Exhibit 10.3

 

EXECUTION VERSION

 

MILLENNIAL MEDIA, INC.

 

THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
PAGE
    
	
 
    	
 
    	
 
    
	
SECTION 1.
    	
GENERAL
    	
1
    
	
 
    	
 
    	
 
    
	
1.1
    	
Amendment   and Restatement of Prior Agreement
    	
1
    
	
 
    	
 
    	
 
    
	
1.2
    	
Definitions
    	
2
    
	
 
    	
 
    	
 
    
	
SECTION 2.
    	
REGISTRATION;   RESTRICTIONS ON TRANSFER
    	
3
    
	
 
    	
 
    	
 
    
	
2.1
    	
Restrictions   on Transfer
    	
3
    
	
 
    	
 
    	
 
    
	
2.2
    	
Demand   Registration
    	
5
    
	
 
    	
 
    	
 
    
	
2.3
    	
Piggyback   Registrations
    	
6
    
	
 
    	
 
    	
 
    
	
2.4
    	
Form   S-3 Registration
    	
7
    
	
 
    	
 
    	
 
    
	
2.5
    	
Expenses   of Registration
    	
9
    
	
 
    	
 
    	
 
    
	
2.6
    	
Obligations   of the Company
    	
9
    
	
 
    	
 
    	
 
    
	
2.7
    	
Delay   of Registration; Furnishing Information
    	
11
    
	
 
    	
 
    	
 
    
	
2.8
    	
Indemnification
    	
11
    
	
 
    	
 
    	
 
    
	
2.9
    	
Assignment   of Registration Rights
    	
13
    
	
 
    	
 
    	
 
    
	
2.10
    	
Limitation   on Subsequent Registration Rights
    	
14
    
	
 
    	
 
    	
 
    
	
2.11
    	
“Market   Stand-Off” Agreement
    	
14
    
	
 
    	
 
    	
 
    
	
2.12
    	
Agreement   to Furnish Information
    	
15
    
	
 
    	
 
    	
 
    
	
2.13
    	
Rule   144 Reporting
    	
15
    
	
 
    	
 
    	
 
    
	
SECTION 3.
    	
COVENANTS   OF THE COMPANY
    	
15
    
	
 
    	
 
    	
 
    
	
3.1
    	
Basic   Financial Information and Reporting
    	
15
    
	
 
    	
 
    	
 
    
	
3.2
    	
Inspection   Rights
    	
17
    
	
 
    	
 
    	
 
    
	
3.3
    	
Confidentiality   of Records
    	
17
    
	
 
    	
 
    	
 
    
	
3.4
    	
Reservation   of Common Stock
    	
17
    
	
 
    	
 
    	
 
    
	
3.5
    	
Stock   Vesting; Stock Option Plans
    	
17
    
	
 
    	
 
    	
 
    
	
3.6
    	
Visitation   Rights
    	
18
    
	
 
    	
 
    	
 
    
	
3.7
    	
Employee   Nondisclosure and Developments Agreement
    	
19
    
	
 
    	
 
    	
 
    
	
3.8
    	
Approval   of Capital Expenditures
    	
19
    
	
 
    	
 
    	
 
    
	
3.9
    	
Directors’   Liability and Indemnification
    	
19
    
	
 
    	
 
    	
 
    
	
3.10
    	
Directors   and Officers Insurance
    	
19
    
	
 
    	
 
    	
 
    
	
3.11
    	
Board   of Directors
    	
19
    
	
 
    	
 
    	
 
    
	
3.12
    	
Assignment   of Right of First Refusal
    	
19
    

 

i

 

TABLE OF CONTENTS

(CONTINUED)

 

	
 
    	
 
    	
PAGE
    
	
 
    	
 
    	
 
    
	
3.13
    	
Board   Approval of Certain Transactions
    	
20
    
	
 
    	
 
    	
 
    
	
3.14
    	
Compensation   and Audit Committees
    	
20
    
	
 
    	
 
    	
 
    
	
3.15
    	
Press   Release
    	
20
    
	
 
    	
 
    	
 
    
	
3.16
    	
FIRPTA   Covenants
    	
21
    
	
 
    	
 
    	
 
    
	
3.17
    	
Indemnification   Matters
    	
21
    
	
 
    	
 
    	
 
    
	
3.18
    	
Termination   of Covenants
    	
21
    
	
 
    	
 
    	
 
    
	
SECTION 4.
    	
RIGHTS   OF FIRST REFUSAL
    	
22
    
	
 
    	
 
    	
 
    
	
4.1
    	
Subsequent   Offerings
    	
22
    
	
 
    	
 
    	
 
    
	
4.2
    	
Exercise   of Rights
    	
22
    
	
 
    	
 
    	
 
    
	
4.3
    	
Issuance   of Equity Securities to Other Persons
    	
22
    
	
 
    	
 
    	
 
    
	
4.4
    	
Termination   and Waiver of Rights of First Refusal
    	
23
    
	
 
    	
 
    	
 
    
	
4.5
    	
Assignment   of Rights of First Refusal
    	
23
    
	
 
    	
 
    	
 
    
	
4.6
    	
Excluded   Securities
    	
23
    
	
 
    	
 
    	
 
    
	
SECTION 5.
    	
MISCELLANEOUS
    	
24
    
	
 
    	
 
    	
 
    
	
5.1
    	
Governing   Law
    	
24
    
	
 
    	
 
    	
 
    
	
5.2
    	
Successors   and Assigns
    	
24
    
	
 
    	
 
    	
 
    
	
5.3
    	
Entire   Agreement
    	
24
    
	
 
    	
 
    	
 
    
	
5.4
    	
Severability
    	
24
    
	
 
    	
 
    	
 
    
	
5.5
    	
Amendment   and Waiver
    	
24
    
	
 
    	
 
    	
 
    
	
5.6
    	
Delays   or Omissions
    	
25
    
	
 
    	
 
    	
 
    
	
5.7
    	
Notices
    	
25
    
	
 
    	
 
    	
 
    
	
5.8
    	
Attorneys’   Fees
    	
25
    
	
 
    	
 
    	
 
    
	
5.9
    	
Titles   and Subtitles
    	
25
    
	
 
    	
 
    	
 
    
	
5.10
    	
Additional   Investors
    	
25
    
	
 
    	
 
    	
 
    
	
5.11
    	
Counterparts
    	
25
    
	
 
    	
 
    	
 
    
	
5.12
    	
Aggregation   of Stock
    	
25
    
	
 
    	
 
    	
 
    
	
5.13
    	
Pronouns
    	
26
    
	
 
    	
 
    	
 
    
	
5.14
    	
Termination
    	
26
    

 

ii

 

MILLENNIAL MEDIA, INC.

 

THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

 

THIS THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the “Agreement”) is entered into as of the 23rd day of December, 2010, by and among MILLENNIAL MEDIA, INC., a  Delaware corporation (the “Company”) and the investors listed on EXHIBIT A hereto, referred to hereinafter as the “Investors” and each individually as an “Investor.”

 

RECITALS

 

WHEREAS, certain of the Investors are purchasing shares of the Company’s Series D Preferred Stock (the “Series D Stock”), pursuant to that certain Series D Preferred Stock Purchase Agreement (the “Purchase Agreement”) of even date herewith (the “Financing”);

 

WHEREAS, the obligations in the Purchase Agreement are conditioned upon the execution and delivery of this Agreement;

 

WHEREAS, certain of the Investors (the “Prior Investors”) are holders of the Company’s Series A-1 Preferred Stock (the “Series A-1 Stock”), Series A-2 Preferred Stock (the “Series A-2 Stock,” together with the Series A-1 Stock, the “Series A Stock”), Series B Preferred Stock (the “Series B Stock”) and Series C Preferred Stock (the “Series C Stock”);

 

WHEREAS, the Prior Investors and the Company are parties to a Second Amended and Restated Investor Rights Agreement dated November 13, 2009 (the “Prior Agreement”);

 

WHEREAS, the parties to the Prior Agreement desire to amend and restate the Prior Agreement and accept the rights and covenants hereof in lieu of their rights and covenants under the Prior Agreement; and

 

WHEREAS, in connection with the consummation of the Financing, the Company and the Investors have agreed to the registration rights, information rights, and other rights as set forth below.

 

NOW, THEREFORE, in consideration of these premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

SECTION 1.                            GENERAL.

 

1.1          Amendment and Restatement of Prior Agreement.  The Prior Agreement is hereby amended in its entirety and restated herein.  Such amendment and restatement is effective upon the execution of this Agreement by the Company and the Requisite Preferred Holders (as such term was defined in the Prior Agreement).  Upon such execution, all provisions of, rights granted and covenants made in the Prior Agreement are hereby waived, released and superseded in their entirety and shall have no further force or effect, including, without limitation, all rights 

 

 

of first refusal and any notice period associated therewith otherwise applicable to the transactions contemplated by the Purchase Agreement.

 

1.2          Definitions.  As used in this Agreement the following terms shall have the following respective meanings:

 

(a)           “Board” means the Board of Directors of the Company.

 

(b)           “Exchange Act”  means the Securities Exchange Act of 1934, as amended.

 

(c)           “Form S-3”  means such form under the Securities Act as in effect on the date hereof or any successor or similar registration form under the Securities Act subsequently adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

 

(d)           “Holder”  means any person owning of record Registrable Securities that have not been sold to the public or any assignee of record of such Registrable Securities in accordance with Section 2.9 hereof.

 

(e)           “Initial Offering”  means the Company’s first firm commitment underwritten public offering of its Common Stock registered under the Securities Act.

 

(f)            “Register,”  “registered,” and “registration”  refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document.

 

(g)           “Registrable Securities”  means (a) Common Stock of the Company issuable or issued upon conversion of the Shares and (b) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such above-described securities. Notwithstanding the foregoing, Registrable Securities shall not include any securities (i) sold by a person to the public either pursuant to a registration statement or Rule 144, (ii) sold in a private transaction in which the transferor’s rights under Section 2 of this Agreement are not assigned or (iii) if the Company has completed its Initial Offering, (y) sold by a Holder in compliance with Rule 144(b)(1)(i) or (z) sold by a Holder who holds one percent (1%) or less of the Company’s outstanding Common Stock and all Registrable Securities (together with any Affiliate of the Holder with whom such Holder must aggregate its sales under Rule 144) in any three (3) month period.

 

(h)           “Registrable Securities then outstanding”  shall be the number of shares of the Company’s Common Stock that are Registrable Securities and either (a) are then issued and outstanding or (b) are issuable pursuant to then exercisable or convertible securities.

 

(i)            “Registration Expenses”  shall mean all expenses incurred by the Company in complying with Sections 2.2, 2.3 and 2.4 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, reasonable fees and disbursements not to exceed $25,000  of a single special counsel for the Holders, blue sky fees and expenses and the expense of any special audits incident to or 

 

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required by any such registration (but excluding the compensation of regular employees of the Company which shall be paid in any event by the Company).

 

(j)            “Requisite Preferred Holders” means the holders of at least sixty-seven percent (67%) of the Registrable Securities held by the Investors, voting together as a single class on an as-converted basis.

 

(k)           “SEC” or “Commission”  means the Securities and Exchange Commission.

 

(l)            “Securities Act”  shall mean the Securities Act of 1933, as amended.

 

(m)          “Selling Expenses”  shall mean all underwriting discounts and selling commissions applicable to the sale.

 

(n)           “Series Designees” shall have the meaning given such term in the Company’s Amended and Restated Certificate of Incorporation as in effect on the date hereof;

 

(o)           “Series A Designees” shall have the meaning given such term in the Company’s Amended and Restated Certificate of Incorporation as in effect on the date hereof;

 

(p)           “Series B Designee” shall have the meaning given such term in the Company’s Amended and Restated Certificate of Incorporation as in effect on the date hereof;

 

(q)           “Series C Designee” shall have the meaning given such term in the Company’s Amended and Restated Certificate of Incorporation as in effect on the date hereof;

 

(r)           “Shares”  shall mean the Series D Stock issued pursuant to the Purchase Agreement, the Series C Stock issued pursuant to that certain Series C Preferred Stock Purchase Agreement dated November 13, 2009, the Series B Stock issued pursuant to that certain Series B Preferred Stock Purchase Agreement dated November 2, 2007, and the Series A Stock issued pursuant to that certain Preferred Stock Purchase Agreement dated July 21, 2006, in each case, held from time to time by the Investors listed on EXHIBIT A hereto and their permitted assigns.

 

(s)           “Special Registration Statement” shall mean (i) a registration statement relating to any employee benefit plan or (ii) with respect to any corporate reorganization or transaction under Rule 145 of the Securities Act, any registration statements related to the issuance or resale of securities issued in such a transaction or (iii) a registration related to stock issued upon conversion of debt securities.

 

SECTION 2.                            REGISTRATION; RESTRICTIONS ON TRANSFER.

 

2.1          Restrictions on Transfer.

 

(a)           Each Holder agrees not to make any disposition of all or any portion of the Shares or Registrable Securities unless and until:

 

3

 

(i)            there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(ii)           (A) The transferee has agreed in writing to be bound by the terms of this Agreement, (B) such Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and (C) if reasonably requested by the Company, such Holder shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such shares under the Securities Act.  It is agreed that the Company will not require opinions of counsel for transactions made pursuant to Rule 144, except in unusual circumstances.  After its Initial Offering, the Company will not require any transferee pursuant to Rule 144 to be bound by the terms of this Agreement if the shares so transferred do not remain Registrable Securities hereunder following such transfer.

 

(b)           Notwithstanding the provisions of subsection (a) above, no such restriction shall apply to a transfer by a Holder that is (A) a partnership transferring to its partners or former partners in accordance with partnership interests, (B) a corporation transferring to a wholly-owned subsidiary or a parent corporation that owns all of the capital stock of the Holder, (C) a limited liability company transferring to its members or former members in accordance with their interest in the limited liability company, or (D) an individual transferring to the Holder’s family member or trust for the benefit of an individual Holder; provided that in each case the transferee will agree in writing to be subject to the terms of this Agreement to the same extent as if he were an original Holder hereunder.

 

(c)           Each certificate representing Shares or Registrable Securities shall be stamped or otherwise imprinted with legends substantially similar to the following (in addition to any legend required under applicable state securities laws):

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

 

THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN INVESTOR RIGHTS AGREEMENT BY AND BETWEEN THE STOCKHOLDER AND THE COMPANY.  COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON 

 

4

 

WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.

 

(d)           The Company shall be obligated to reissue promptly unlegended certificates at the request of any Holder thereof if the Company has completed its Initial Offering and the Holder shall have obtained an opinion of counsel (which counsel may be counsel to the Company) reasonably acceptable to the Company to the effect that the securities proposed to be disposed of may lawfully be so disposed of without registration, qualification and legend, provided that the second legend listed above shall be removed only at such time as the Holder of such certificate is no longer subject to any restrictions hereunder.

 

(e)           Any legend endorsed on an instrument pursuant to applicable state securities laws and the stop-transfer instructions with respect to such securities shall be removed upon receipt by the Company of an order of the appropriate blue sky authority authorizing such removal.

 

2.2          Demand Registration.

 

(a)           Subject to the conditions of this Section 2.2, if the Company shall receive a written request from the Holders of at least sixty percent (60%) of the Registrable Securities (the “Initiating Holders”) that the Company file a registration statement under the Securities Act covering the registration of at least a majority  of the Registrable Securities then outstanding (or a lesser percent if the anticipated aggregate offering price, net of underwriting discounts and commissions, would exceed $5,000,000  (a “Qualified Public Offering”)), then the Company shall, within thirty (30) days of the receipt thereof, give written notice of such request to all Holders, and subject to the limitations of this Section 2.2, effect, as expeditiously as reasonably possible, the registration under the Securities Act of all Registrable Securities that all Holders request to be registered.

 

(b)           If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2.2 or any request pursuant to Section 2.4 and the Company shall include such information in the written notice referred to in Section 2.2(a) or Section 2.4(a), as applicable.  In such event, the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein.  All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Holders of a majority of the Registrable Securities held by all Initiating Holders (which underwriter or underwriters shall be reasonably acceptable to the Company).  Notwithstanding any other provision of this Section 2.2 or Section 2.4, if the underwriter advises the Company that marketing factors require a limitation of the number of securities to be underwritten (including Registrable Securities) then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares that may be included in the underwriting shall be allocated to the Holders of such Registrable Securities on a pro rata basis based on the number of Registrable Securities held by all such Holders (including the Initiating Holders).  Any 

 

5

 

Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration.

 

(c)           The Company shall not be required to effect a registration pursuant to this Section 2.2:

 

(i)            prior to the expiration of the restrictions on transfer set forth in Section 2.11 following the Initial Offering;

 

(ii)           after the Company has effected two (2) registrations pursuant to this Section 2.2, and such registrations have been declared or ordered effective;

 

(iii)         during the period starting with the date of filing of, and ending on the date one hundred eighty (180) days following the effective date of the registration statement pertaining to the Initial Offering (or such longer period as may be determined pursuant to Section 2.11 hereof); provided that the Company makes reasonable good faith efforts to cause such registration statement to become effective;

 

(iv)          if within thirty (30) days of receipt of a written request from Initiating Holders pursuant to Section 2.2(a), the Company gives notice to the Holders of the Company’s intention to file a registration statement for a public offering, other than pursuant to a Special Registration Statement within ninety (90) days;

 

(v)            if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 2.2 a certificate signed by the Chairman of the Board stating that in the good faith judgment of the Board it would be seriously detrimental to the Company and its stockholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders; provided that such right to delay a request shall be exercised by the Company not more than once in any twelve (12) month period;

 

(vi)          if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 2.4 below; or

 

(vii)         in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance.

 

2.3          Piggyback Registrations.  The Company shall notify all Holders of Registrable Securities in writing at least fifteen (15) days prior to the filing of any registration statement under the Securities Act for purposes of a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities of the Company, but excluding Special Registration Statements) and will afford each such Holder an opportunity to include in such registration statement all or part of such Registrable Securities held by such Holder.  Each Holder desiring to include in any such registration statement all or any part of the Registrable Securities held by it shall, within fifteen (15) days after the above-described notice from the Company, so notify the Company in writing.  Such 

 

6

 

notice shall state the intended method of disposition of the Registrable Securities by such Holder.  If a Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein.

 

(a)           Underwriting.  If the registration statement of which the Company gives notice under this Section 2.3 is for an underwritten offering, the Company shall so advise the Holders of Registrable Securities.  In such event, the right of any such Holder to include Registrable Securities in a registration pursuant to this Section 2.3 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein.  All Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company.  Notwithstanding any other provision of this Agreement, if the underwriter determines in good faith that marketing factors require a limitation of the number of shares to be underwritten, the number of shares that may be included in the underwriting shall be allocated, first, to the Company; second, to the Holders on a pro rata basis based on the total number of Registrable Securities held by the Holders; and third, to any stockholder of the Company (other than a Holder) on a pro rata basis; provided, however, that no such reduction shall reduce the amount of securities of the selling Holders included in the registration below thirty-three and one-third percent (33-1/3%) of the total amount of securities included in such registration, unless such offering is the Initial Offering and such registration does not include shares of any other selling stockholders, in which event any or all of the Registrable Securities of the Holders may be excluded in accordance with the immediately preceding clause.  If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter, delivered at least ten (10) business days prior to the effective date of the registration statement.  Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration.  For any Holder which is a partnership, limited liability company or corporation, the partners, retired partners, members, retired members and stockholders of such Holder, or the estates and family members of any such partners, retired partners, members and retired members and any trusts for the benefit of any of the foregoing person shall be deemed to be a single “Holder,” and any pro rata reduction with respect to such “Holder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “Holder,” as defined in this sentence.

 

(b)           Right to Terminate Registration.  The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.3 whether or not any Holder has elected to include securities in such registration, and shall promptly notify any Holder that has elected to include shares in such registration of such termination or withdrawal.  The Registration Expenses of such withdrawn registration shall be borne by the Company in accordance with Section 2.5 hereof.

 

2.4          Form S-3 Registration.  In case the Company shall receive from any Holder or Holders of Registrable Securities a written request or requests that the Company effect a 

 

7

 

registration on Form S-3 (or any successor to Form S-3) or any similar short-form registration statement and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company will:

 

(a)           promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders of Registrable Securities; and

 

(b)           as soon as practicable, effect such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holder’s or Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section 2.4:

 

(i)            if Form S-3 is not available for such offering by the Holders;

 

(ii)           if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less than  one million dollars ($1,000,000);

 

(iii)         if within thirty (30) days of receipt of a written request from any Holder or Holders pursuant to this Section 2.4, the Company gives notice to such Holder or Holders of the Company’s intention to make  a public offering within ninety (90) days, other than pursuant to a Special Registration Statement;

 

(iv)          if the Company shall furnish to the Holders a certificate signed by the Chairman of the Board stating that in the good faith judgment of the Board, it would be seriously detrimental to the Company and its stockholders for such Form S-3 registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than ninety (90) days after receipt of the request of the Holder or Holders under this Section 2.4; provided, that such right to delay a request shall be exercised by the Company not more than once in any twelve (12) month period;

 

(v)            if the Company has, within the twelve (12) month period preceding the date of such request,  already effected two (2) registrations on Form S-3 for the Holders pursuant to this Section 2.4; or

 

(vi)          in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance.

 

(c)           Subject to the foregoing, the Company shall file a Form S-3 registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the requests of the Holders.  Registrations effected pursuant to 

 

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this Section 2.4 shall not be counted as demands for registration or registrations effected pursuant to Section 2.2.

 

2.5          Expenses of Registration.  Except as specifically provided herein, all Registration Expenses incurred in connection with any registration, qualification or compliance pursuant to Section 2.2, 2.3 or 2.4 herein shall be borne by the Company.  All Selling Expenses incurred in connection with any registrations hereunder, shall be borne by the holders of the securities so registered pro rata on the basis of the number of shares so registered.  The Company shall not, however, be required to pay for expenses of any registration proceeding begun pursuant to Section 2.2 or 2.4, the request of which has been subsequently withdrawn by the Initiating Holders unless (a) the withdrawal is based upon material adverse information concerning the Company of which the Initiating Holders were not aware at the time of such request or (b) the Holders of a majority of Registrable Securities agree to deem such registration to have been effected as of the date of such withdrawal for purposes of determining whether the Company shall be obligated pursuant to Section 2.2(c) or 2.4(b)(v), as applicable, to undertake any subsequent registration, in which event such right shall be forfeited by all Holders).  If the Holders are required to pay the Registration Expenses, such expenses shall be borne by the holders of securities (including Registrable Securities) requesting such registration in proportion to the number of shares for which registration was requested.  If the Company is required to pay the Registration Expenses of a withdrawn offering pursuant to clause (a) above, then such registration shall not be deemed to have been effected for purposes of determining whether the Company shall be obligated pursuant to Section 2.2(c) or 2.4(b)(v), as applicable, to undertake any subsequent registration.

 

2.6          Obligations of the Company.  Whenever required to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

 

(a)           prepare and file with the SEC a registration statement with respect to such Registrable Securities and use all reasonable efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for up to thirty (30) days or, if earlier, until the Holder or Holders have completed the distribution related thereto; provided, however, that at any time, upon written notice to the participating Holders and for a period not to exceed sixty (60) days thereafter (the “Suspension Period”), the Company may delay the filing or effectiveness of any registration statement or suspend the use or effectiveness of any registration statement (and the Initiating Holders hereby agree not to offer or sell any Registrable Securities pursuant to such registration statement during the Suspension Period) if the Company reasonably believes that there is or may be in existence material nonpublic information or events involving the Company, the failure of which to be disclosed in the prospectus included in the registration statement could result in a Violation (as defined below).  In the event that the Company shall exercise its right to delay or suspend the filing or effectiveness of a registration hereunder, the applicable time period during which the registration statement is to remain effective shall be extended by a period of time equal to the duration of the Suspension Period.  The Company may extend the Suspension Period for an additional consecutive sixty (60) days with the consent of the holders of sixty percent (60%) of the Registrable Securities registered under the applicable registration statement, which consent shall not be unreasonably withheld.  In no event shall any Suspension Period, when taken together with all prior Suspension Periods, 

 

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exceed 120 days in the aggregate.  If so directed by the Company, all Holders registering shares under such registration statement shall (i) not offer to sell any Registrable Securities pursuant to the registration statement during the period in which the delay or suspension is in effect after receiving notice of such delay or suspension; and (ii) use their best efforts to deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Holders’ possession, of the prospectus relating to such Registrable Securities current at the time of receipt of such notice.  Notwithstanding the foregoing, the Company shall not be required to file, cause to become effective or maintain the effectiveness of any registration statement other than a registration statement on Form S-3 that contemplates a distribution of securities on a delayed or continuous basis pursuant to Rule 415 under the Securities Act.

 

(b)           Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in subsection (a) above.

 

(c)           Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them.

 

(d)           Use all reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions.

 

(e)           In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering.  Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.

 

(f)            Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. The Company will use reasonable efforts to amend or supplement such prospectus in order to cause such prospectus not to include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.

 

(g)           Use all reasonable efforts to furnish, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, (i) an opinion, dated as of such date, of the counsel representing the Company for

 

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the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and (ii) a letter, dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering addressed to the underwriters.

 

2.7          Delay of Registration; Furnishing Information.

 

(a)           No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

 

(b)           It shall be a condition precedent to the obligations of the Company to take any action pursuant to Section 2.2, 2.3 or 2.4 that the selling Holders shall furnish to the Company such information regarding themselves, the Registrable Securities held by them and the intended method of disposition of such securities as shall be required to effect the registration of their Registrable Securities.

 

(c)           The Company shall have no obligation with respect to any registration requested pursuant to Section 2.2 or Section 2.4 if the number of shares or the anticipated aggregate offering price of the Registrable Securities to be included in the registration does not equal or exceed the number of shares or the anticipated aggregate offering price required to originally trigger the Company’s obligation to initiate such registration as specified in Section 2.2 or Section 2.4, whichever is applicable.

 

2.8          Indemnification.  In the event any Registrable Securities are included in a registration statement under Sections 2.2, 2.3 or 2.4:

 

(a)           To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, members, stockholders, officers and directors of each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”) by the Company: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement or incorporated by reference therein, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law in connection with the offering covered by such registration statement; and the Company will reimburse each such Holder, partner, member, stockholder, officer, director, underwriter or controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action;

 

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provided however, that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder, partner, member, stockholder, officer, director, underwriter or controlling person of such Holder.

 

(b)           To the extent permitted by law, each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration qualifications or compliance is being effected, indemnify and hold harmless the Company, each of its directors, its officers and each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holder’s partners, members, stockholders, directors or officers or any person who controls such Holder, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer, controlling person, underwriter or other such Holder, or partner, member, stockholder, director, officer or controlling person of such other Holder may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any of the following statements: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement or incorporated reference therein, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act (collectively, a “Holder Violation”), in each case to the extent (and only to the extent) that such Holder Violation occurs in reliance upon and in conformity with written information furnished by such Holder under an instrument duly executed by such Holder and stated to be specifically for use in connection with such registration; and each such Holder will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter or other Holder, or partner, member, stockholder, officer, director or controlling person of such other Holder in connection with investigating or defending any such loss, claim, damage, liability or action if it is judicially determined that there was such a Holder Violation; provided, however, that the indemnity agreement contained in this Section 2.8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided further, that in no event shall any indemnity under this Section 2.8 exceed the net proceeds from the offering received by such Holder.

 

(c)           Promptly after receipt by an indemnified party under this Section 2.8 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.8, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however,

 

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that an indemnified party shall have the right to retain its own counsel, with the fees and expenses thereof to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.8 to the extent, and only to the extent, prejudicial to its ability to defend such action, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.8.

 

(d)           If the indemnification provided for in this Section 2.8 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any losses, claims, damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the Violation(s) or Holder Violation(s) that resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations.  The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, that in no event shall any contribution by a Holder hereunder exceed the net proceeds from the offering received by such Holder.

 

(e)           The obligations of the Company and Holders under this Section 2.8 shall survive completion of any offering of Registrable Securities in a registration statement and, with respect to liability arising from an offering to which this Section 2.8 would apply that is covered by a registration filed before termination of this Agreement, such termination.  No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.

 

2.9          Assignment of Registration Rights.  The rights to cause the Company to register Registrable Securities pursuant to this Section 2 may be assigned by a Holder to a transferee or assignee of Registrable Securities (for so long as such shares remain Registrable Securities) that (a) is a subsidiary, parent, general partner, limited partner, retired partner, member or retired member, or stockholder of a Holder that is a corporation, partnership or limited liability company, (b) is a Holder’s family member or trust for the benefit of an individual Holder, or (c) acquires at least 500,000  shares of Registrable Securities (as adjusted for stock splits and combinations after the date hereof); or (d) is an entity affiliated by common control (or other related entity) with such Holder provided, however, (i) the transferor shall, within ten (10) days after such transfer, furnish to the Company written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being

 

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assigned and (ii) such transferee shall agree to be subject to all restrictions set forth in this Agreement.

 

2.10                        Limitation on Subsequent Registration Rights.  Other than as provided in Section 5.10, the Company shall not enter into any agreement with any holder or prospective holder of any securities of the Company that would grant such holder rights to demand the registration of shares of the Company’s capital stock, or to include such shares in a registration statement that would reduce the number of shares includable by the Holders.

 

2.11                        “Market Stand-Off” Agreement.  Each Holder hereby agrees that such Holder shall not sell, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any Common Stock (or other securities) of the Company held by such Holder (other than those included in the registration) during the 180-day period following the effective date of the Initial Offering (or such longer period, not to exceed 34 days after the expiration of the 180-day period, as the underwriters or the Company shall request in order to facilitate compliance with NASD Rule 2711); provided that:

 

(i)                                    all officers and directors of the Company and holders of at least one percent (1%) of the Company’s voting securities are bound by and have entered into similar agreements; and

 

(ii)                                such agreement shall provide that any discretionary waiver or termination of the restrictions of such agreement by the Company or the representative of the underwriters of Common Stock (or other securities) of the Company shall apply to New Enterprise Associates 13, L.P. (“NEA”) and its affiliates, Columbia Capital Equity Partners IV (QP), L.P. (“Columbia Capital”) and its affiliates, Bessemer Venture Partners VI, L.P. “Bessemer”) and its affiliates, and Charles River Partnership XIII, L.P. (“Charles River”), pro rata (subject to underwriter cut-back provisions as set forth in Section 2.2(b) and 2.3(a), if applicable), based on the number of Registrable Securities then outstanding held by NEA, Columbia Capital, Bessemer, and Charles River and the holders of capital stock receiving the waiver or termination of such restrictions.

 

The obligations described in this Section 2.11 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction on Form S-4 or similar forms that may be promulgated in the future.  The Company covenants that it will require all future holders of its capital stock (including holders of options or other convertible securities to purchase capital stock of the Company) to enter into a market stand-off agreement on terms comparable to those set forth above.

 

2.12                        Agreement to Furnish Information.  Each Holder agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter that are consistent with the Holder’s obligations under Section 2.11 or that are necessary to give further effect thereto.  In addition, if requested by the Company or the representative of the underwriters of Common Stock (or other securities) of the Company, each Holder shall provide, within ten (10) days of such request, such information as may be required by the Company or

 

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such representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act.  The obligations described in Section 2.11 and this Section 2.12 shall not apply to a Special Registration Statement.  The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of the period described in Section 2.11.  Each Holder agrees that any transferee of any shares of Registrable Securities shall be bound by Sections 2.11 and 2.12.  The underwriters of the Company’s stock are intended third party beneficiaries of Sections 2.11 and 2.12 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.

 

2.13                        Rule 144 Reporting.  With a view to making available to the Holders the benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its best efforts to:

 

(a)                                  Make and keep public information available, as those terms are understood and defined in SEC Rule 144 or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of the first registration filed by the Company for an offering of its securities to the general public;

 

(b)                                  File with the SEC, in a timely manner, all reports and other documents required of the Company under the Exchange Act; and

 

(c)                                  So long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon request:  a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 of the Securities Act, and of the Exchange Act (at any time after it has become subject to such reporting requirements); a copy of the most recent annual or quarterly report of the Company filed with the Commission; and such other reports and documents as a Holder may reasonably request in connection with availing itself of any rule or regulation of the SEC allowing it to sell any such securities without registration.

 

SECTION 3.        COVENANTS OF THE COMPANY.

 

3.1                               Basic Financial Information and Reporting.

 

(a)                                  The Company will maintain true books and records of account in which full and correct entries will be made of all its business transactions pursuant to a system of accounting established and administered in accordance with generally accepted accounting principles consistently applied (except as noted therein), and will set aside on its books all such proper accruals and reserves as shall be required under generally accepted accounting principles consistently applied.

 

(b)                                  The Company will furnish each Investor, as soon as practicable after the end of each fiscal year of the Company, and in any event within one hundred fifty (150)  days thereafter, the Company will furnish such Investor a balance sheet of the Company, as at the end of such fiscal year, a statement of income, a statement of stockholders’ equity, and a statement of cash flows of the Company, for such year, all prepared in accordance with generally accepted accounting principles consistently applied (except as noted therein) and setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail.  Such

 

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financial statements shall be accompanied by a report and opinion thereon by independent public accountants selected by the Board.

 

(c)                                  The Company will furnish each Investor who, with its Affiliates, owns not less then 500,000 shares of Registrable Securities (as adjusted for stock splits and combinations after the date hereof) (a “Major Investor”), as soon as practicable after the end of the first, second and third quarterly accounting periods in each fiscal year of the Company, and in any event within forty-five (45)  days thereafter, a balance sheet of the Company as of the end of each such quarterly period, and a statement of income and a  statement of cash flows of the Company for such period and for the current fiscal year to date, prepared in accordance with generally accepted accounting principles consistently applied (except as noted therein), with the exception that no notes need be attached to such statements and year-end audit adjustments may not have been made.

 

(d)                                  The Company will furnish each Major Investor: (i) at least thirty (30) days (but no more then ninety (90) days) prior to the beginning of each fiscal year, an annual budget and operating plans for the Company for such fiscal year (and as soon as available, any subsequent written revisions thereto); and (ii) as soon as practicable after the end of each month, and in any event within thirty (30) days thereafter, a balance sheet of the Company as of the end of each such month, and a statement of income and a statement of cash flows of the Company for such month and for the current fiscal year to date, including a comparison to plan figures for such period, prepared in accordance with generally accepted accounting principles consistently applied (except as noted thereon), with the exception that no notes need be attached to such statements and year-end audit adjustments may not have been made.

 

(e)                                  All financial information and budgets required under Section 3.1(b)-(d) above shall consist of consolidated financial statements (consolidating the Company and its subsidiaries) unless the rules of generally accepted accounting principles provide otherwise.

 

(f)                                    As soon as practicable (or otherwise as provided herein), the Company will furnish each Major Investor with copies of the following documents: (i) material documents filed with governmental agencies, including, without limitation, the Internal Revenue Service, the Environmental Protection Agency, and the SEC, within thirty (30) days after filing; (ii) pleadings of any material lawsuits filed by or against the Company, within thirty (30) days after filing or service of process; (iii) notices regarding any default on any loan or lease to which the Company is a party, including, without limitation, the Purchase Agreement or any Related Agreements (as defined in the Purchase Agreement), within ten (10) days after discovery (such notices to contain a statement outlining such default and management’s proposed response); (iv) notices regarding any material adverse effect on the assets, conditions, affairs, results of operations or prospects of the Company, financially or otherwise, within five (5) days after discovery (such notices to contain a statement outlining such default and management’s proposed response); and (iv) any other documents or information reasonably requested by a Major Investor.

 

3.2                               Inspection Rights.  Each Major Investor shall have the right to visit and inspect any of the properties of the Company or any of its subsidiaries, and to discuss the affairs, finances and accounts of the Company or any of its subsidiaries with its officers, and to review

 

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such information as is reasonably requested all at such reasonable times and as often as may be reasonably requested; provided, however, that the Company shall not be obligated under this Section 3.2 with respect to a competitor of the Company (as reasonably determined by the Board) or with respect to information which the Board determines in good faith is confidential or attorney-client privileged and should not, therefore, be disclosed.

 

3.3                               Confidentiality of Records.  Each Investor agrees to use the same degree of care as such Investor uses to protect its own confidential information to keep confidential any information furnished to such Investor pursuant to Section 3.1 and 3.2 hereof that the Company identifies as being confidential or proprietary (so long as such information is not in the public domain), except that such Investor may disclose such proprietary or confidential information (i) to any partner, subsidiary or parent of such Investor or any former partners or members who retained an economic interest in such Investor (or any employee or representative of any of the foregoing or legal counsel, accountants or representatives for such Investor) (each of the foregoing persons, a “Permitted Disclosee”), as long as such Permitted Disclosee agrees or has agreed to be bound by the confidentiality provisions of this Section 3.3 or comparable restrictions; (ii) at such time as it enters the public domain through no fault of such Investor; (iii) that is communicated to it free of any obligation of confidentiality; (iv) that is developed by Investor or its agents independently of and without reference to any confidential information communicated by the Company; or (v) as required by applicable law.  Notwithstanding the foregoing, nothing contained herein shall prevent any Investor or any Permitted Disclosee from (x) entering into any business, entering into any agreement with a third party, or investing in or engaging in investment discussions with any other company (whether or not competitive with the Company), provided that such Investor or Permitted Disclosee does not, except as permitted in accordance with this Section 3.3 disclose or otherwise make use of any proprietary or confidential information of the Company in connection with such activities, or (y) making any disclosures required by law, rule, regulation or court or other governmental order.

 

3.4                               Reservation of Common Stock.  The Company will at all times reserve and keep available, solely for issuance and delivery upon the conversion of the Preferred Stock, all Common Stock issuable from time to time upon such conversion.

 

3.5                               Stock Vesting; Stock Option Plans.

 

(a)                                  Except as provided in Section 3.5(b) below, unless otherwise approved by the Board, including the affirmative vote of at least two Series Designees, all stock options and other stock equivalents issued after the date of this Agreement to employees, directors, consultants and other service providers shall be subject to vesting as follows: twenty-five percent (25%) of such stock shall vest at the end of the first year following the earlier of the date of issuance or such person’s services commencement date with the Company, and seventy-five percent (75%) of such stock shall vest over the remaining three (3) years (the “Standard Vesting Schedule”).

 

(b)                                  In connection with stock options and other stock equivalents issued to employees, the Standard Vesting Schedule shall accelerate as follows:

 

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(i)                                    Unless otherwise approved by the Board, including the affirmative vote of at least two Series Designees and at least one designee elected solely by the holders of the Company’s Common Stock (a “Common Designee”), the Standard Vesting Schedule for all employees, other than those contemplated by Section 3.5(b)(ii) and 3.5(b)(iii) below, shall accelerate as follows:  25% of the then-unvested portion shall accelerate upon a “Single Trigger” and 50% of the then-unvested portion shall accelerate upon a “Double Trigger” (each as defined below).

 

(ii)                                The Standard Vesting Schedule for employees who have vice-president titles or higher who are approved by the Board (or Compensation Committee thereof), other than those contemplated by Section 3.5(b)(iii) below, shall accelerate as follows: 25% of the then-unvested portion shall accelerate upon a “Single Trigger” and 100% of the then-unvested portion shall accelerate upon a “Double Trigger.”

 

(iii)                            The Investors and the Company’s founders have also discussed an exception that would require a higher “Single Trigger” acceleration amount.  These exceptions will be applied on a case-by-case basis as may be approved by the Board, including at least two Series Designees and one Common Designee.

 

(iv)                               For purposes of this Section 3.5: (A) a “Single Trigger” shall mean that a “Change in Control” (as such term is defined in the Company’s 2006 Equity Incentive Plan (the “Plan”)) has been consummated; and (B) a “Double Trigger” shall mean that (1) a “Change in Control” (as such term is defined in the Plan) has been consummated and (2) the employee has been terminated by the Company without “cause”, or the employee has resigned from his employment with the Company for “good reason” (as “cause” and “good reason” are defined in the Plan or, if the employee is party to an effective employment agreement with the Company that contains definitions of such terms, the definitions given to such terms in such employment agreement), in either case, within one (1) month prior to, as of, or within twelve (12) months after, the effective date of such Change in Control.

 

(c)                                  Any acceleration of the Standard Vesting Schedule not contemplated by this Section 3.5 shall require the approval of the Board, including the affirmative approval of at least two of the Series Designees.

 

(d)                                  The Company shall not amend the Plan or establish or adopt any new stock option or equity incentive plans without the approval of the Board, including the affirmative approval of at least two of the Series Designees.

 

3.6                               Visitation Rights.  The Company shall allow one representative designated by NEA to attend all meetings of the Board in a nonvoting capacity, and in connection therewith, the Company shall give such representative copies of all notices, minutes, consents and other materials, financial or otherwise, which the Company provides to the Board; provided, however, that the Company reserves the right to exclude such representative from access to any material or meeting or portion thereof if the Company believes upon advice of counsel that such exclusion is reasonably necessary to preserve the attorney-client privilege, to protect highly confidential information or for other similar reasons.  The decision of the Board with respect to the privileged or confidential nature of such information shall be final and binding.

 

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3.7                               Employee Nondisclosure and Developments Agreement.  The Company shall require all employees and consultants to execute and deliver an Employee Nondisclosure and Developments Agreement substantially in the form attached to the Purchase Agreement or such other form approved by the Board, including the affirmative approval of at least two of the Series Designees.

 

3.8                               Approval of Capital Expenditures.  The Company shall not, without the approval of the Board, including the approval of at least three of the Series Designees, authorize or enter into any capital expenditure exceeding one hundred thousand dollars ($100,000) that is not contemplated by the Company’s most recent Board-approved operating plan.

 

3.9                               Directors’ Liability and Indemnification.  The Company’s Certificate of Incorporation and Bylaws shall provide (a) for elimination of the liability of director to the maximum extent permitted by law and (b) for indemnification of directors for acts on behalf of the Company to the maximum extent permitted by law.

 

3.10                        Qualified Small Business.  The Company will use reasonable efforts to comply with the reporting and recordkeeping requirements of Section 1202 of the Internal Revenue Code of 1986, as amended, any regulations promulgated thereunder and any similar state laws and regulations.

 

3.11                        Directors and Officers Insurance.  The Company shall maintain, during the term of this Agreement director and officer liability insurance with an underwriter and with terms acceptable to the Board, including coverage limits of at least three million dollars ($3,000,000) per occurrence, including a rider containing employment practice liability insurance with coverage limits of at least one million dollars ($1,000,000) per occurrence, or such other coverage limits as may be reasonably determined by the Board to be acceptable, including the affirmative approval of  at least two of  the Series Designees.

 

3.12                        Board of Directors.  The Company will reimburse the Series Designees for their reasonable expenses incurred in attending meetings of the Board (including the committees thereof) and any other meetings or events attended on behalf of the Company at the Company’s request (such as trade shows).

 

3.13                        Assignment of Right of First Refusal.  In the event the Company elects not to exercise any right of first refusal or right of first offer the Company may have on a proposed transfer of any of the Company’s outstanding capital stock pursuant to the Company’s Bylaws, as amended from time-to-time, the Company shall, to the extent it may do so, assign such right of first refusal or right of first offer to each Investor.  In the event of such assignment, each Investor shall have a right to purchase its pro rata portion of the capital stock proposed to be transferred on the same terms as those offered to the Company.  Each Investor’s pro rata portion shall be equal to the product obtained by multiplying (i) the aggregate number of shares proposed to be transferred by (ii) a fraction, the numerator of which is the number of shares of Registrable Securities held by such Investor at the time of the proposed transfer and the denominator of which is the total number of Registrable Securities owned by all Investors at the time of such proposed transfer.

 

19

 

3.14                        Board Approval of Certain Transactions.

 

(a)                                  The Company will not do any of the following, unless previously approved by a majority of the Board, including the affirmative vote of at least three of the Series Designees:

 

(i)                                    Enter into or grant an exclusive license of any of the Company’s intellectual property or any other transaction that is substantially equivalent to a sale of the Company’s intellectual property;

 

(ii)                                Create any committees of the Board; or

 

(iii)                            Enter any transaction that results in first priority security interest being placed on all or substantially all of the Company’s assets or intellectual property;

 

(b)                                  The Company will not do any of the following, unless previously approved by a majority of the Board:

 

(i)                                    Approve any annual operating budget;

 

(ii)                                Sell, transfer, pledge, dispose of or license any of the intellectual property rights of the Company or other Company assets, other than in the ordinary course of the Company’s business;

 

(iii)                            Enter into or grant an exclusive distribution or partnership agreement relating to the Company’s intellectual property;

 

(iv)                               Terminate or hire, or change the responsibilities (including title) of, any executive officer of the Company;

 

(v)                                   Enter into any employment or severance agreement with any executive officer of the Company, or make any material modification to the terms of any such agreement;

 

(vi)                               Acquire all or substantially all of the stock or assets of any other business entity (whether by stock or asset purchase, merger, consolidation or otherwise);

 

(vii)                           Form, contribute any capital or assets, or loan or advance any funds, to any subsidiary, joint venture or similar business entity;

 

(viii)                       Enter into any material new line of business or materially change the Company’s existing line of business;

 

(ix)                              Relocate the Company’s principal office outside of the Baltimore, Maryland metropolitan area; or

 

(x)                                  Permit any executive officer of the Company to devote less than all of his or her business time to the conduct of the business of the Company.

 

20

 

(c)                                  The Company will not do any of the following, unless previously approved by the Compensation Committee:

 

(i)                                    Terminate or hire, or change the responsibilities (including title) of, any Senior Vice President of the Company;

 

(ii)                                Enter into any employment or severance agreement with any Senior Vice President of the Company, or make any material modification to the terms of any such agreement;

 

(iii)                            Permit any Senior Vice President of the Company to devote less than all of his or her business time to the conduct of the business of the Company; or

 

(iv)                               Increase the compensation of any member of management, any key employee or any employee if such employee earns a salary in excess of one hundred fifty thousand dollars ($150,000) in the aggregate per calendar year.

 

(d)                                  The Company will not enter into transactions with any director or management employee of the Company or their immediate families or affiliates thereof, other than the transactions contemplated by the Purchase Agreement, unless previously approved by a majority of the disinterested members of the Board.

 

3.15                        Compensation and Audit Committees.  To the extent the Company forms a Compensation Committee or Audit Committee of the Board, each of the Series Designees shall have the right in their sole discretion to be members of such committees (along with any other members of such committees).

 

3.16                        Press Release.  Any press release issued by the Company in connection with, or referencing the sale of Preferred Stock, must be previously approved by NEA, Columbia Capital, Bessemer and Charles River.  Expenses in connection with such press release shall be paid for by the Company.

 

3.17                        “Key Man” Insurance.  The Company will maintain or obtain, as applicable, “key man” insurance on Paul Palmieri in the amount of at least two million dollars ($2,000,000) each, within sixty (60) days of the date of this Agreement.

 

3.18                        FIRPTA Covenants.  The Company shall provide prompt notice to NEA following any “determination date” (as defined in Treasury Regulation Section 1.897-2(c)(1)) on which the Company becomes a United States real property holding corporation.  In addition, upon a written request by NEA, the Company shall provide NEA with a written statement informing NEA whether NEA’s interest in the Company constitutes a United States real property interest.  The Company’s determination shall comply with the requirements of Treasury Regulation Section 1.897-2(h)(1) or any successor regulation, and the Company shall provide timely notice to the Internal Revenue Service, in accordance with and to the extent required by Treasury Regulation Section 1.897-2(h)(2) or any successor regulation, that such statement has been made.  The Company’s written statement to NEA shall be delivered to NEA within ten (10) days of NEA’s written request therefor.  The Company’s obligation to furnish such written statement shall continue notwithstanding the fact that a class of the Company’s stock may be

 

21

 

regularly traded on an established securities market or the fact that there is no preferred stock then outstanding.

 

3.19                        Indemnification Matters.  The Company hereby acknowledges that one (1) or more of the Series Designees nominated to serve on the Board by the Investors (each a “Fund Director”) may have certain rights to indemnification, advancement of expenses and/or insurance provided by one or more of the Investors and certain of their affiliates (collectively, the “Fund Indemnitors”).  The Company hereby agrees (a) that it is the indemnitor of first resort (i.e., its obligations to any such Fund Director are primary and any obligation of the Fund Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such Fund Director are secondary), (b) that it shall be required to advance the full amount of expenses incurred by such Fund Director and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement by or on behalf of any such Fund Director to the extent legally permitted and as required by the Company’s Amended and Restated Certificate of Incorporation (as in effect on the date hereof) or Bylaws of the Company (or any agreement between the Company and such Fund Director), without regard to any rights such Fund Director may have against the Fund Indemnitors, and, (c) that it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof.  The Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of any such Fund Director with respect to any claim for which such Fund Director has sought indemnification from the Company shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Fund Director against the Company.  The Company and the Fund Director(s) agree that the Fund Indemnitors are express third party beneficiaries of the terms hereof.

 

3.20                        Termination of Covenants.  All covenants of the Company contained in Section 3 of this Agreement (other than the provisions of Section 3.3, 3.9 and 3.19)  shall expire and terminate as to each Investor upon the earlier of (i) the effective date of the registration statement pertaining to the Initial Offering which results in the Preferred Stock being converted into Common Stock or (ii) upon an “Acquisition” as defined in the Company’s Amended and Restated Certificate of Incorporation as in effect on the date hereof.

 

SECTION 4.        RIGHTS OF FIRST REFUSAL.

 

4.1                               Subsequent Offerings.  Subject to applicable securities laws, each Investor shall have a right of first refusal to purchase its pro rata share of all Equity Securities, as defined below, that the Company may, from time to time, propose to sell and issue after the date of this Agreement, other than the Equity Securities excluded by Section 4.6 hereof.  Each Investor’s pro rata share is equal to the ratio of (a) the number of shares of the Company’s Common Stock (including all shares of Common Stock issuable or issued upon conversion of the Shares or upon the exercise of outstanding warrants or options) of which such Investor is deemed to be a holder immediately prior to the issuance of such Equity Securities to (b) the total number of shares of the Company’s outstanding Common Stock (including all shares of Common Stock issued or issuable upon conversion of the Shares or upon the exercise of any outstanding warrants or options) immediately prior to the issuance of the Equity Securities.  The term “Equity

 

22

 

Securities” shall mean (i) any Common Stock, Preferred Stock or other security of the Company, (ii) any security convertible into or exercisable or exchangeable for, with or without consideration, any Common Stock, Preferred Stock or other security (including any option to purchase such a convertible security), (iii) any security or unit carrying any warrant or right to subscribe to or purchase any Common Stock, Preferred Stock or other security or (iv) any such warrant or right.

 

4.2                               Exercise of Rights.  If the Company proposes to issue any Equity Securities, it shall give each Investor written notice of its intention, describing the Equity Securities, the price and the terms and conditions upon which the Company proposes to issue the same.  Each Investor shall have fifteen (15) days from the giving of such notice to agree to purchase its pro rata share of the Equity Securities for the price and upon the terms and conditions specified in the notice by giving written notice to the Company and stating therein the quantity of Equity Securities to be purchased.  Notwithstanding the foregoing, the Company shall not be required to offer or sell such Equity Securities to any Investor who would cause the Company to be in violation of applicable federal securities laws by virtue of such offer or sale.

 

4.3                               Issuance of Equity Securities to Other Persons.  If not all of the Investors elect to purchase their pro rata share of the Equity Securities, then the Company shall promptly notify in writing the Investors who do so elect and shall offer such Investors the right to acquire such unsubscribed shares on a pro rata basis.  The Investors shall have five (5) business days after receipt of such notice to notify the Company of its election to purchase all or a portion thereof of the unsubscribed shares.  The Company shall have ninety (90)  days thereafter to sell the Equity Securities in respect of which the Investor’s rights were not exercised, at a price not lower and upon general terms and conditions not materially more favorable to the purchasers thereof than specified in the Company’s notice to the Investors pursuant to Section 4.2 hereof.  If the Company has not sold such Equity Securities within ninety (90) days of the notice provided pursuant to Section 4.2, the Company shall not thereafter issue or sell any Equity Securities, without first offering such securities to the Investors in the manner provided above.

 

4.4                               Termination and Waiver of Rights of First Refusal.  The rights of first refusal established by this Section 4 shall not apply to, and shall terminate upon the earlier of (i) the effective date of the registration statement pertaining to the Initial Offering which results in the Preferred Stock being converted into Common Stock or (ii) an “Acquisition” as defined in the Company’s Amended and Restated Certificate of Incorporation as in effect on the date hereof.  Notwithstanding Section 5.5 hereof, the rights of first refusal established by this Section 4 may be amended, or any provision waived, with and only with the written consent of the Company and the Requisite Preferred Holders.

 

4.5                               Assignment of Rights of First Refusal.  The rights of first refusal of each Investor under this Section 4 may be assigned to the same parties, subject to the same restrictions as any transfer of registration rights pursuant to Section 2.9.

 

4.6                               Excluded Securities.  The rights of first refusal established by this Section 4 shall have no application to any of the following Equity Securities:

 

23

 

(a)                                  shares of Common Stock and/or options, warrants or other Common Stock purchase rights and the Common Stock issued pursuant to such options, warrants or other rights issued or to be issued after the date hereof to employees, officers or directors of, or consultants or advisors to, the Company or any subsidiary that are approved by the Board and that are made pursuant to the Company’s 2006 Equity Incentive Plan or such other stock purchase or stock option plans or other arrangements that are approved by the Board, including the affirmative approval of at least two of the Series Designees;

 

(b)                                  stock issued or issuable pursuant to any rights or agreements, options, warrants or convertible securities outstanding as of the date of this Agreement; and stock issued pursuant to any such rights or agreements granted after the date of this Agreement, so long as the rights of first refusal established by this Section 4 were complied with, waived, or were inapplicable pursuant to any provision of this Section 4.6 with respect to the initial sale or grant by the Company of such rights or agreements;

 

(c)                                  any Equity Securities issued for consideration other than cash pursuant to a merger, consolidation, acquisition, strategic alliance or similar business combination with a bona fide commercial operating entity approved by the Board, including the affirmative approval of at least three of the Series Designees;

 

(d)                                  any Equity Securities issued in connection with any stock split, stock dividend or recapitalization by the Company;

 

(e)                                  any Equity Securities issued pursuant to any equipment loan or leasing arrangement, real property leasing arrangement, or debt financing from a bank or similar financial or lending institution approved by the Board, including the affirmative approval of at least three of the Series Designees;

 

(f)                                    any Equity Securities that are issued by the Company pursuant to the registration statement pertaining to the Initial Offering which results in the Preferred Stock being converted into Common Stock;

 

(g)                                 any Equity Securities issued in connection with strategic transactions involving the Company and other bona fide commercial operating entities, including, without limitation (i) joint ventures, manufacturing, marketing or distribution arrangements or (ii) technology transfer or development arrangements; provided that the issuance of shares therein has been approved by the Board, including the affirmative approval of at least three of the Series Designees.

 

SECTION 5.                       MISCELLANEOUS.

 

5.1                               Governing Law.  This Agreement shall be governed by and construed under the laws of the State of Delaware  in all respects as such laws are applied to agreements among Delaware residents entered into and to be performed entirely within Delaware, without reference to conflicts of laws or principles thereof.

 

5.2                               Successors and Assigns.  Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the parties hereto and their

 

24

 

respective successors, assigns, heirs, executors, and administrators and shall inure to the benefit of and be enforceable by each person who shall be a holder of Registrable Securities from time to time; provided, however, that prior to the receipt by the Company of adequate written notice of the transfer of any Registrable Securities specifying the full name and address of the transferee, the Company may deem and treat the person listed as the holder of such shares in its records as the absolute owner and holder of such shares for all purposes, including the payment of dividends or any redemption price.

 

5.3                               Entire Agreement.  This Agreement, the Exhibits and Schedules hereto, the Purchase Agreement and the other documents delivered pursuant thereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and no party shall be liable or bound to any other in any manner by any oral or written representations, warranties, covenants and agreements except as specifically set forth herein and therein.  Each party expressly represents and warrants that it is not relying on any oral or written representations, warranties, covenants or agreements outside of this Agreement.

 

5.4                               Severability.  In the event one or more of the provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

 

5.5                               Amendment and Waiver.

 

(a)                                  Except as otherwise expressly provided, this Agreement may be amended or modified, and the obligations of the Company and the rights of the Holders under this Agreement may be waived, only upon the written consent of the Company and the Requisite Preferred Holders.

 

(b)                                  For the purposes of determining the number of Holders or Investors entitled to vote or exercise any rights hereunder, the Company shall be entitled to rely solely on the list of record holders of its stock as maintained by or on behalf of the Company.

 

5.6                               Delays or Omissions.  It is agreed that no delay or omission to exercise any right, power, or remedy accruing to any party, upon any breach, default or noncompliance by another party under this Agreement shall impair any such right, power, or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar breach, default or noncompliance thereafter occurring.  It is further agreed that any waiver, permit, consent, or approval of any kind or character on any party’s part of any breach, default or noncompliance under the Agreement or any waiver on such party’s part of any provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Agreement, by law, or otherwise afforded to any party, shall be cumulative and not alternative.

 

5.7                               Notices.  All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if

 

25

 

not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.  All communications shall be sent, if to the Company, to 2400 Boston Street, Signature Building, Suite 301, Baltimore, MD 21224, with a copy to Cooley LLP, 11951 Freedom Drive, Reston, VA 20190, Attn: Mark D. Spoto, fax: (703) 456-8100, email: mspoto@cooley.com, and if to an Investor, at the address as set forth on EXHIBIT A hereto or at such other address or electronic mail address as such party may designate by ten (10) days advance written notice to the other parties hereto.

 

5.8                               Attorneys’ Fees.  In the event that any suit or action is instituted under or in relation to this Agreement, including without limitation to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.

 

5.9                               Titles and Subtitles.  The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

5.10                        Additional Investors.  Notwithstanding anything to the contrary contained herein, if the Company shall issue additional shares of its Preferred Stock pursuant to the Purchase Agreement, any purchaser of such shares of Preferred Stock shall become a party to this Agreement by executing and delivering an additional counterpart signature page to this Agreement and shall be deemed an “Investor,” a “Holder” and a party hereunder.

 

5.11                        Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.

 

5.12                        Aggregation of Stock.  All shares of Registrable Securities held or acquired by affiliated entities or persons or persons or entities under common management or control shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

 

5.13                        Pronouns.  All pronouns contained herein, and any variations thereof, shall be deemed to refer to the masculine, feminine or neutral, singular or plural, as to the identity of the parties hereto may require.

 

5.14                        Termination.  This Agreement shall terminate and be of no further force or effect upon the earlier of (i) an “Acquisition” as defined in the Company’s Amended and Restated Certificate of Incorporation as in effect on the date hereof  or (ii) the date five (5) years following the consummation of the Initial Offering which results in the Preferred Stock being converted into Common Stock.

 

[THIS SPACE INTENTIONALLY LEFT BLANK]

 

26

 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

	
COMPANY:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
MILLENNIAL   MEDIA, INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Paul J. Palmieri
    	
 
    	
 
    
	
 
    	
Paul   J. Palmieri
    	
 
    	
 
    
	
 
    	
President   and Chief Executive Officer
    	
 
    	
 
    

 

THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

 

	
INVESTORS:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
NEW   ENTERPRISE ASSOCIATES 13, L.P.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
NEA   Partners 13, L.P., its general partner
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
NEA   13 GP, LTD, its general partner
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Charles W. Newhall, III
    	
,   Director
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
NEA VENTURES 2009, LIMITED   PARTNERSHIP
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Pamela J. Clark
    	
,   Vice President
    	
 
    	
 
    

 

THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

	
CHARLES RIVER PARTNERSHIP XIII,   LP
    	
 
    	
 
    
	
By:
    	
Charles   River XIII GP, LP
    	
 
    	
 
    
	
 
    	
Its   General Partner
    	
 
    	
 
    
	
 
    	
By:
    	
Charles   River XIII GP, LLC
    	
 
    	
 
    
	
 
    	
 
    	
Its:   General Partner
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   George Zachary
    	
 
    	
 
    
	
 
    	
 
    	
Authorized Manager
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CHARLES RIVER FRIENDS XIII-A,   LP
    	
 
    	
 
    
	
By:
    	
Charles   River XIII GP, LLC
    	
 
    	
 
    
	
 
    	
Its:
    	
General   Partner
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   George Zachary
    	
 
    	
 
    
	
 
    	
Authorized Manager
    	
 
    	
 
    
							

 

THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

	
COLUMBIA CAPITAL EQUITY   PARTNERS IV (QP), L.P.
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
Columbia   Capital Equity Partners IV,
    	
 
    	
 
    
	
 
    	
L.P.,   its General Partner
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
Columbia   Capital IV, LLC,
    	
 
    	
 
    
	
 
    	
its   General Partner
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Donald A. Doering
    	
 
    	
 
    
	
 
    	
Donald   A. Doering
    	
 
    	
 
    
	
 
    	
Executive   Vice President
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
COLUMBIA CAPITAL EQUITY   PARTNERS IV (QPCO), L.P.
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
Columbia   Capital Equity Partners IV,
    	
 
    	
 
    
	
 
    	
L.P.,   its General Partner
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
Columbia   Capital IV, LLC,
    	
 
    	
 
    
	
 
    	
its   General Partner
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Donald A. Doering
    	
 
    	
 
    
	
 
    	
Donald   A. Doering
    	
 
    	
 
    
	
 
    	
Executive   Vice President
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
COLUMBIA CAPITAL EMPLOYEE   INVESTORS IV, L.P.
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
Columbia   Capital IV, LLC,
    	
 
    	
 
    
	
 
    	
its   General Partner
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Donald A. Doering
    	
 
    	
 
    
	
 
    	
Donald   A. Doering
    	
 
    	
 
    
	
 
    	
Executive   Vice President
    	
 
    	
 
    

 

THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

	
BESSEMER   VENTURE PARTNERS VI, L.P.
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
BESSEMER   VENTURE PARTNERS VI INSTITUTIONAL L.P.
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
BESSEMER VENTURE PARTNERS   CO-INVESTMENT L.P.
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
Deer   VI & Co. LLC, General Partner
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Scott Ring
    	
 
    	
 
    
	
 
    	
Scott   Ring, General Counsel
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    

 

THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

	
ACTA   WIRELESS CAPITAL, LLC
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Alan MacIntosh
    	
 
    	
 
    
	
 
    	
Name:
    	
Alan   MacIntosh
    	
 
    	
 
    
	
 
    	
Title:
    	
Member
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
BANG INVESTMENTS, INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
MARK EWEN
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ROBERT MARSHALL
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
GC&H INVESTMENTS, LLC
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    	
 
    

 

THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

EXHIBIT A

SCHEDULE OF INVESTORS

 

New Enterprise Associates 13, L.P.

NEA Ventures 2009,

Limited Partnership

5425 Wisconsin Ave

Suite 800

Chevy Chase, MD 20815

Attn:  Patrick Kerins

 

and correspondence to:

 

New Enterprise Associates 13, L.P.

NEA Ventures 2009,

Limited Partnership

1954 Greenspring Drive

Timonium, MD 21093

Attn: Louis Citron, Esq.

 

Columbia Capital Equity Partners IV (QP), L.P.

Columbia Capital Equity Partners IV (QPCO), L.P.

Columbia Capital Employee Investors IV, L.P.

201 North Union Street, Suite 300

Alexandria, VA 22314

Attn: Donald A. Doering, Executive Vice President

 

Bessemer Venture Partners VI, L.P.

Bessemer Venture Partners VI Institutional L.P.

Bessemer Venture Partners Co-Investment L.P.

1865 Palmer Avenue

Suite 104

Larchmont, NY 10538

Attn: J. Edmund Colloton, Executive Manager

 

Charles River Partnership XIII, LP

Charles River Friends XIII-A, LP

1000 Winter Street

Suite 3300

Waltham, MA 02451

Attn: George Zachary

 

Acta Wireless Capital, LLC

3201 Brassfield Road

Suite 300

Greensboro, NC 27410

Attn:  Mark McDowell

 

 

BANG Investments, Inc.

17 Anwoth

Westmount, QC H3Y 2E6

Attn: Garner Bornstein

 

Mark Ewen

8035 Entrada Deluz West

San Diego, CA 92127

 

Robert Marshall

10130 Greensward Link

Ijamsville, Maryland 21754

 

GC&H Investments, LLC

101 California St.

5th Floor

San Francisco, CA 94111

Attn:  John CardozaExhibit 10.4

 

OFFICE LEASE

 

by and between

 

THE CAN COMPANY LLC

 

(Landlord)

 

and

 

MILLENNIAL MEDIA, INC.

 

(Tenant)

 

i

 

TABLE OF CONTENTS

 

	
1.
    	
DEFINITIONS
    	
1
    
	
2.
    	
PREMISES; MEASUREMENT
    	
7
    
	
3.
    	
TERM
    	
7
    
	
4.
    	
RENT; SECURITY DEPOSIT
    	
8
    
	
5.
    	
TAXES
    	
13
    
	
6.
    	
USE OF PREMISES
    	
14
    
	
7.
    	
INSURANCE AND INDEMNIFICATION
    	
18
    
	
8.
    	
SERVICES AND UTILITIES
    	
22
    
	
9.
    	
REPAIRS AND MAINTENANCE
    	
24
    
	
10.
    	
IMPROVEMENTS
    	
25
    
	
11.
    	
LANDLORD’S RIGHT OF ENTRY
    	
26
    
	
12.
    	
DAMAGE OR DESTRUCTION
    	
26
    
	
13.
    	
CONDEMNATION
    	
27
    
	
14.
    	
ASSIGNMENT AND SUBLETTING
    	
28
    
	
15.
    	
RULES AND REGULATIONS
    	
30
    
	
16.
    	
SUBORDINATION AND ATTORNMENT
    	
30
    
	
17.
    	
DEFAULTS AND REMEDIES
    	
32
    
	
18.
    	
ESTOPPEL CERTIFICATE
    	
35
    
	
19.
    	
QUIET ENJOYMENT
    	
35
    
	
20.
    	
NOTICES
    	
36
    
	
21.
    	
GENERAL
    	
36
    

 

	
 
    	
Exhibits
    
	
 
    	
 
    
	
A
    	
Plan   showing Project and Building
    
	
B
    	
Drawing   showing approximate location of Premises
    
	
C
    	
Current   Rules and Regulations
    

 

ii

 

OFFICE LEASE

 

THIS LEASE is made on this 11th day of July, 2008 (the “Effective Date”), by and between THE CAN COMPANY LLC, a Maryland limited liability company (the “Landlord”), and MILLENNIAL MEDIA, INC., a Delaware corporation (the “Tenant”).

 

IN CONSIDERATION of the agreements and covenants hereinafter set forth, Landlord and Tenant mutually agree as follows:

 

1.                                      DEFINITIONS.

 

1.1.                              As used herein, the following terms shall have the following meanings:

 

“Base Operating Costs” means Operating Costs incurred for the 2009 calendar year (the “Base Year”).  If less than 95% of the rentable square feet in the Project is occupied by tenants or Landlord is not supplying services to 95% of the rentable square feet of the Project at any time during any calendar year (including the Base Year), then Operating Costs for such calendar year shall be an amount equal to the Operating Costs which would normally be expected to be incurred using reasonable projections and reasonable extrapolations from existing cost data had 95% of the Project’s rentable square feet been occupied and had Landlord been supplying services to 95% of the Project’s rentable square feet throughout such calendar year.  Furthermore, if after the Base Year, the Landlord provides additional services or incurs cost items in a category not otherwise covered in Operating Costs as defined herein, the Base Operating Costs shall be increased in a manner as reasonably determined by Landlord to include such additional matter.

 

“Base Rent” has the meaning given it in subsection 4.1.

 

“Base Taxes” means Taxes incurred for the state fiscal tax year 2009-2010.

 

“Building” means one (1) building and related accessory uses in the development known as The Can Company, and located in Baltimore City, Maryland.  The Building is more particularly shown on Exhibit A, subject to adjustment from time to time.

 

“Building Service Equipment” means all apparatus, machinery, devices, fixtures, appurtenances, equipment and personal property now or hereafter located on the Premises and owned by the Landlord.

 

“Common Areas” means those areas and facilities of the Project which may be designated by the Landlord from time to time as common areas (portions of which may from time to time be relocated and/or reconfigured by the Landlord in its sole discretion so long as reasonable access to and from the Premises is maintained), which Common Areas include footways, sidewalks, Parking Areas, lobbies, elevators, stairwells, corridors, restrooms, and certain exterior areas on the Project, subject, however, to the Rules and Regulations.

 

1

 

“Default Rate” means an annual floating rate of interest equal to two (2) percentage points in excess of the prime rate of interest as announced from time to time by Bank of America, or its successor.

 

“Insurance Premiums” means the aggregate of any and all premiums paid by the Landlord for hazard, liability, loss-of-rent, workmens’ compensation, boiler and machinery or similar insurance upon any or all of the Project.

 

“Landlord” means the Person hereinabove named as such and its successors and assigns.

 

“Lease Year” means (a) the period commencing on the Rent Commencement Date and terminating at 11:59 p.m. on the first anniversary of the last day of the month in which the Rent Commencement Date occurs, and (b) each successive period of twelve (12) calendar months thereafter during the Term.

 

“Operating  Costs” means any and all costs and expenses incurred by the Landlord for services performed by the Landlord or by others on behalf of the Landlord with respect to the operation and maintenance of the Premises, Building, the Project, and the Common Areas located therein and serving or allocable to the Premises (including the Parking Areas) in a manner deemed reasonable and appropriate by Landlord, including, without limitation, all costs and expenses of:

 

(a)                                  operating, maintaining, repairing, lighting, signing, cleaning, removing trash from, painting, striping, controlling of traffic in, controlling of rodents in, policing and securing the Common Areas (including, without limitation, the costs of parking lot attendants, uniforms, equipment, assembly permits, supplies, materials, security alarm and life safety systems, and maintenance and service agreements);

 

(b)                                 purchasing and maintaining in full force insurance for the Project as deemed necessary in Landlord’s discretion (including, without limitation, liability insurance for personal injury, death and property damage, rent insurance, insurance against fire, extended coverage, theft or other casualties, workers’ compensation insurance covering personnel, fidelity bonds for personnel, insurance against liability for defamation and claims of false arrest occurring on or about the Common Areas, and plate glass insurance);

 

(c)                                  operating, maintaining, repairing and replacing machinery, furniture, accessories and equipment used in the operation and maintenance of the Project, and the personal property taxes and other charges incurred in connection with such machinery, furniture, accessories and equipment;

 

(d)                                 maintaining and repairing roofs, awnings, paving, curbs, walkways, drainage pipes, ducts, conduits, grease traps and lighting fixtures throughout the Common Areas;

 

(e)                                  interior and exterior planting, replanting and replacing flowers, shrubbery, trees, grass and planters;

 

2

 

(f)                                    providing electricity, heating, ventilation and air conditioning to the Common Areas and HVAC service to the Building (it being understood that Tenant shall pay for its own electricity and that the costs of any electricity that is provided to other tenants shall not be included in Operating Costs), and operating, maintaining and repairing any equipment used in connection therewith, including, without limitation, costs incurred in connection with determining the feasibility of installing, maintaining, repairing or replacing any facilities, equipment, systems or devices which are intended to reduce utility expenses of the Project as a whole and repair and maintenance of HVAC facilities and related electrical and mechanical equipment serving all rentable square feet of office space in the Project;

 

(g)                                 water and sanitary sewer services and other services, if any, furnished to the Premises, Common Areas and all rentable square feet of office space in the Project for the non-exclusive use of tenants;

 

(h)                                 parcel pick-up, delivery and other similar services;

 

(i)                                     enforcing any operating agreements pertaining to the Common Areas or any portions thereof, and any easement and/or rights agreements entered into by the Landlord for the benefit and use of the Landlord, the Project or tenants thereof, or any arbitration or judicial actions undertaken with respect to the same;

 

(j)                                     cleaning, maintaining and repairing the Project, including, without limitation, exhaust systems, sprinkler systems, pumps, fans, switchgear, loading docks and ramps, freight elevators, escalators, passenger elevators, stairways, service corridors, delivery passages, utility plants, transformers, doors, walls, floors, skylights, ceilings and windows;

 

(k)                                  commercially reasonable, out-of-pocket, third party accounting, audit and management fees and expenses, including a commercially reasonable property management fee not to exceed five percent (5%), payroll, payroll taxes, employee benefits and related expenses of all personnel engaged in the operation, maintenance, and management of the Project, including, without limitation, any maintenance personnel, secretaries and bookkeepers (including, specifically, uniforms and working clothes and the cleaning thereof, tools, equipment and supplies used by such personnel, and the expenses imposed on or allocated to the Landlord or its agents pursuant to any collective bargaining or other agreement), office expenses for on-site maintenance and/or management office;

 

(l)                                     the cost and expense of complying with all federal, state and local laws, orders, regulations and ordinances applicable to the Project which are now in force, or which may hereafter be in force;

 

(m)                               the cost (including legal, architectural and engineering fees incurred in connection therewith) of any improvement made to the Project during any Operating Year either (x) in order to comply with a legal requirement or insurance requirement,

 

3

 

whether or not such legal requirement or insurance requirement is mandatory, (y) with the reasonable expectation by Landlord of reducing Operating Costs (as, for example, a labor-saving improvement) or enhancing services, or (z) in lieu of a repair; provided, however, (i) to the extent the cost of such improvement is required to be capitalized under generally accepted accounting principles, such cost shall be amortized over the useful economic life of such improvement as reasonably estimated by Landlord, and the annual amortization shall be deemed an Operating Cost in each of the Operating Years during which the cost of the improvement is amortized; and (ii) in no event shall the amount included in Operating Costs in connection with a capital improvement of the nature described in clause (y) above exceed the annual amount by which Operating Costs were reduced as a result of such capital;

 

(n)                                 providing janitorial and trash removal services to the Project and Premises; and

 

(o)                                 all other costs of maintaining, repairing or replacing any or all of the Building (including expenses of landscaping, snow, ice, water and debris removal, outdoor lighting, road maintenance and exterior signage relating to the Project);

 

Notwithstanding the foregoing, the following items shall be excluded from Operating Expenses:

 

(a)                                  franchise or income taxes imposed upon Landlord;

 

(b)                                 debt service on Mortgages and any costs and expenses relating to a refinancing or debt modification, including legal fees, title insurance premiums, survey expenses, appraisal, environmental report, or engineering report;

 

(c)                                  leasing commissions, brokerage fees or legal fees incurred in connection with the negotiation and preparation of letters, deal memos, letters of intent, leases and related documents with respect to the leasing, assignment or subletting of space for any occupant of the Building;

 

(d)                                 the cost of tenant installations incurred in connection with preparing space for a new tenant or refurbishing or renovating space for an existing tenant;

 

(e)                                  salaries and other compensations of personnel not involved in the day to day management and operations of the building.

 

(f)                                    any expense for which Landlord is otherwise compensated through the proceeds of insurance or is otherwise compensated by any tenant (including Tenant) of the Building for services in excess of the services Landlord is obligated to furnish to Tenant hereunder;

 

(g)                                 Landlord’s gifts to tenants and advertising and promotional costs for the Building;

 

(h)                                 costs of compliance with the Americans with Disabilities Act;

 

4

 

(i)                                     capital costs, depreciation or amortization (except as provided in the list of inclusions for Operating Costs under item (m) above);

 

(j)                                     costs incurred by Landlord due to a violation of any lease in the Building or penalties or charges arising due to violation of any Legal Requirement or Insurance Requirement required to be complied with by Landlord;

 

(k)                                  costs incurred from Landlord’s charitable or political contributions;

 

(l)                                     attorneys fees and disbursements and other expenses, including settlements, incurred in connection with disputes with the Mortgagee or other tenants or occupants of the Building or associated with the enforcement of any leases or the defense of Landlord’s title or interest in the Project or any part thereof;

 

(m)                               bad debt losses or reserves;

 

(n)                                 accounting fees incurred in preparing Landlord’s financial reports for Landlord, its partners, affiliates or any Mortgagee or in preparing Landlord’s tax returns or other accounting fees not directly related to the operation of the Building or the preparation of Operating Statements;

 

(o)                                 all costs of correcting latent defects in construction of the Building, provided that Tenant shall have the burden of proof in establishing that such costs are attributable to latent defects in construction as opposed to ordinary wear and tear or other causes;

 

(p)                                 travel and meal expenses of Landlord’s management and leasing employees;

 

(q)                                 cost of increases in insurance premiums due solely to the activities of another tenant;

 

(r)                                    cost of removal of Hazardous Wastes from the Project which were performed or should have been performed pursuant to environmental studies and recommendations received by Landlord in connection with the initial construction, renovation, and/or rehabilitation of the Building or due to any other pre-existing environmental condition; and

 

(s)                                  all costs applicable solely to any additional buildings constructed on the Project.

 

“Operating Year” means each respective calendar year or part thereof during the Term, or, at the Landlord’s option, any other 12-month period or part thereof designated by the Landlord during the Term.

 

“Parking Areas” means those portions of the Common Areas or other areas under Landlord’s control which from time to time are designated by the Landlord for the parking of automobiles and other automotive vehicles while engaged in business upon the Premises (other than while being used to make deliveries to and from the Premises).

 

5

 

“Person” means a natural person, a trustee, a corporation, a limited liability company, a partnership and/or any other form of legal entity.

 

“Premises” means that certain space having a rentable area of 16,057 square feet and located on the 3rd floor of The Signature Building, as more particularly depicted on Exhibit B; provided, that if at any time hereafter any portion of the Premises becomes no longer subject to this Lease, “Premises” shall thereafter mean so much thereof as remains subject to this Lease.

 

“Project” means that certain project located in Baltimore City known as The Can Company containing approximately 4.3 acres, more or less, together with the Building thereon.  The Project is more particularly shown on Exhibit A.

 

“Rent” means all Base Rent and all Additional Rent.

 

“Rules and Regulations” means the reasonable rules and regulations having uniform applicability to all tenants of the Project (subject to their respective leases) and governing their use and enjoyment of the Project; provided that such rules and regulations shall not materially interfere with the Tenant’s use and enjoyment of the Premises in accordance with this Lease for the purposes listed in subsection 6.1.

 

“Tax Year” means the 12-month period beginning July 1 of each year or such other 12-month period (deemed for the purposes of this Lease to have 365 days) established as a real estate tax year by the taxing authority having lawful jurisdiction over the Project.

 

“Taxes” means the aggregate of any and all real property and other taxes, metropolitan district charges, front-foot benefit assessments, special assessments and other taxes or public or private assessments or charges levied against any or all of the tax parcel containing the Premises, including but not limited to any such charges imposed under any private covenants encumbering the title to any or all of the Project, and regardless of whether any of the same are ordinary or extraordinary, foreseen or unforeseen, recurring or nonrecurring, or special or general and including the costs of any appeals of Taxes or re-assessments.

 

“Tenant” means the Person hereinabove named as such and its successors and permitted assigns hereunder.

 

“Tenant’s Proportionate Share” means a fraction, the numerator of which is the number of rentable square feet in the Premises and the denominator of which is the number of square feet in the Building, subject to adjustment from time to time as such areas may change.  As of the Rent Commencement Date, Tenant’s Proportionate Share is equal to 8%.

 

“Tenant’s Share of Increased Operating Costs” shall be the amount of (i) the Operating Costs for the Operating Year in question less the Base Operating Costs multiplied by (ii) the Tenant’s Proportionate Share.

 

“Tenant’s Share of Increased Taxes” shall be the amount of (i) the Taxes for the Tax Year in question less the Base Taxes multiplied by (ii) the Tenant’s Proportionate Share.

 

“Term” means the Original Term plus any exercised renewals thereof.

 

6

 

2.                                      PREMISES; MEASUREMENT.

 

2.1.                              Premises.  The Landlord hereby leases to the Tenant, and the Tenant hereby leases from the Landlord, the Premises, together with the right to use, in common with others, the Common Areas.

 

2.2.                              Rentable Area.   The rentable area of the Premises shall be 16,057 square feet.

 

3.                                      TERM.

 

3.1.                              Original Term; Rent Commencement Date.  This Lease shall be for a term (the “Original Term”) commencing on the Effective Date and ending at 11:59 p.m. on the last day of the sixtieth (60th) month after the Rent Commencement Date shall occur (which date is hereinafter referred to as the “Termination Date”). Monthly payments of Base Rent, Additional Rent and all other charges under this Lease shall commence on the “Rent Commencement Date” which shall be the earlier to occur of (a) January 1, 2009, or (b) the date which is sixty (60) days following notice of Tenant’s request for an earlier Rent Commencement date.  Landlord shall permit the Tenant, at least thirty (30) days prior to the Rent Commencement Date, to enter the Premises and install furniture and telephone and data cabling.  Tenant shall have the right to use existing telecom conduits or construct new conduits, install cables, equipment and other related telecommunications facilities for Tenant’s network into the Building.

 

3.2.                              Confirmation of Commencement and Termination.  The Landlord and the Tenant at the Landlord’s request after (a) the Rent Commencement Date or (b) the expiration of the Term or any earlier termination of this Lease by action of law or in any other manner, shall confirm in writing by instrument in recordable form that, respectively, such rent commencement or such termination has occurred, setting forth therein, respectively, the Rent Commencement Date and the Termination Date.

 

3.3.                              Renewal.  Tenant shall have the option to renew the Term of this Lease for one  period) of five (5) years (the “Renewal Term”).  Tenant shall exercise the option by providing written notice to Landlord of its election to exercise such option no later than two hundred and seventy (270) days prior to the expiration of the Term, provided, however, that Tenant’s option to renew shall be subject to the condition that no default shall have occurred and be continuing after applicable notice and cure periods have expired as of the date of Tenant’s exercise of such option or as of the date of commencement of the Renewal Term; and provided further, that if Tenant’s estate hereunder shall terminate prior to the commencement of the Renewal Term, Tenant’s option to renew shall expire upon such termination.  Tenant shall have no other right to renew this Lease after the Renewal Term.

 

Except as otherwise expressly provided in this Lease, all terms, covenants, and conditions of this Lease shall remain in full force and effect during the Renewal Term, except that the Rent applicable to the Renewal Term shall be as set forth in Section 4.1(b).  In no event shall the Rent for the Renewal Term be less than the Rent in effect at the expiration of the immediately preceding Term of the Lease.  If the Tenant fails to give notice exercising the foregoing option by the date required herein, or if at the time Tenant exercises such option or at commencement of

 

7

 

the Renewal Term the Tenant continues to be in default of any term of this Lease following the expiration of all applicable notice and cure periods for such default, or if this Lease is assigned by Tenant or if more than 50% of the Premises is sublet to an entity other than an Affiliate (hereinafter defined) or Tenant or an Affiliate is not then occupying at least 50% of the Premises, then Tenant’s rights and options to renew shall be automatically terminated and of no further force or effect.

 

3.4.                              Surrender.  The Tenant, at its expense at the expiration of the Term or any earlier termination of this Lease, shall (a) promptly surrender to the Landlord possession of the Premises (including any fixtures or other improvements which, under Section 10, are owned by the Landlord) in good order and repair (ordinary wear and tear excepted) and broom clean, (b) remove therefrom all signs, goods, effects, machinery, fixtures and equipment used in conducting the Tenant’s trade or business which are neither part of the Building Service Equipment nor owned by the Landlord, and (c) repair any damage caused by such removal.

 

3.5.                              Holding Over.  If the Tenant continues to occupy the Premises after the expiration of the Term or any earlier termination of this Lease after obtaining the Landlord’s express, written consent thereto, then:

 

(a)                                  such occupancy (unless the parties hereto otherwise agree in writing) shall be deemed to be under a month-to-month tenancy, which shall continue until either party hereto notifies the other in writing, at least one month before the end of any calendar month, that the notifying party elects to terminate such tenancy at the end of such calendar month, in which event such tenancy shall so terminate;

 

(b)                                 anything in this section to the contrary notwithstanding, the Rent payable for each such monthly period shall equal the sum of (a) one-twelfth (1/12) of that amount which is equal to 125% of the Base Rent for the Lease Year during which such expiration of the Term or termination of this Lease occurs, plus (b) the Additional Rent payable under subsection 4.2; and

 

(c)                                  except as provided herein, such month-to-month tenancy shall be on the same terms and subject to the same conditions as those set forth in this Lease; provided, however, that if the Landlord gives the Tenant, at least one month before the end of any calendar month during such month-to-month tenancy, written notice that such terms and conditions (including any thereof relating to the amount and payment of Rent) shall, after such month, be modified in any manner specified in such notice, then such tenancy shall, after such month, be upon the said terms and subject to the said conditions, as so modified.

 

4.                                      RENT; SECURITY DEPOSIT.

 

As Rent for the Premises, the Tenant shall pay to the Landlord all of the following:

 

8

 

4.1.                              Base Rent.

 

(a)  An annual rent (the “Base Rent”) for the Original Term as follows:

 

	
Lease   Year
    	
 
    	
Per Square Foot
    	
 
    	
Monthly
    	
 
    	
Annual
    	
 
    
	
1
    	
 
    	
$
    	
20.00
    	
 
    	
$
    	
16,761.67
    	
 
    	
$
    	
201,140.00
    	
 
    
	
2, months 1-6
    	
 
    	
$
    	
20.60
    	
 
    	
$
    	
22,414.52
    	
 
    	
$
    	
134,487.10
    	
*
    
	
2, months 7-12
    	
 
    	
$
    	
20.60
    	
 
    	
$
    	
27,564.52
    	
 
    	
$
    	
165,387.10
    	
*
    
	
3
    	
 
    	
$
    	
21.22
    	
 
    	
$
    	
28,394.13
    	
 
    	
$
    	
340,729.54
    	
 
    
	
4
    	
 
    	
$
    	
21.86
    	
 
    	
$
    	
29,250.50
    	
 
    	
$
    	
351,006.02
    	
 
    
	
5
    	
 
    	
$
    	
22.52
    	
 
    	
$
    	
30,133.64
    	
 
    	
$
    	
361,603.64
    	
 
    

 

*Rent figure is for a six-month period

 

9

 

(b)         Tenant shall pay to Landlord, as Base Rent during the Renewal Term, the Fair Market Rental Value of the Premises.  “Fair Market Rental Value” means the annual base rent for each year of the relevant period for which, on the terms and conditions of this Lease, a willing landlord would rent the Premises to a willing tenant with neither party being compelled to rent, and after appropriate exposure of the Premises to the market for a reasonable period of time and taking into account any then-applicable market rent abatement, brokerage commissions, and construction allowances being offered to tenants renewing leases.  Notwithstanding the forgoing, in no event will the Fair Market Rental Value be less than the Base Rent payable for the year immediately preceding the commencement of the Renewal Term.  Fair Market Rental Value will not include the cost of improvements or alterations to the Premises which were paid for by Tenant and not reimbursed by Landlord.

 

(c)          At least three hundred and sixty five (365) days prior to the expiration of the Original Term, Landlord and Tenant shall endeavor to mutually agree upon the Fair Market Rental Value. Within two (2) months after Landlord’s receipt of Tenant’s notice of its intent to renew the Lease, Landlord and Tenant shall deliver to each other Landlord’s or Tenant’s, as the case may be, determination of the Fair Market Rental Value.  The parties shall have thirty (30) days (the “Negotiation Period”) after Tenant’s receipt of Landlord’s determination in which to agree on such Fair Market Rental Value.  If the two determinations differ by less than three percent (3%), the Fair Market Rental Value will be the average of the two determinations.  If the parties do not agree on the Fair Market Rental Value prior to the end of the Negotiation Period as evidenced by an amendment to this Lease executed by Landlord and Tenant, and the Landlord’s and Tenant’s determinations of Fair Market Rental Value differ by three percent (3%) or more, then, effective and the Fair Market Rental Value will be determined pursuant to Section 4.1(d).

 

10

 

(d)         If Landlord’s and Tenant’s determinations of Fair Market Rental Value differ by three percent (3%) or more, then, within five (5) days after the conclusion of the Revocation Period, Landlord and Tenant shall each appoint one disinterested appraiser having the qualifications set forth herein.  Each such appraiser must be a Member of the Appraisal Institute (MAI) and have at least ten (10) years of experience appraising multi-tenanted office buildings in the greater Baltimore area as a MAI appraiser.  If either Landlord or Tenant fails to appoint an appraiser within such five (5) day period, the appraiser appointed by Landlord or Tenant, as the case may be, shall appoint an appraiser having the qualifications set forth herein.  As promptly as possible, but in no event later than ten (10) days after the appointment of both appraisers, the appraisers shall notify Landlord and Tenant in writing of their determination of the Fair Market Rental Value.  The Fair Market Rental Value so selected by the two appraisers will constitute the Fair Market Rental Value for the relevant period, and will be binding upon Landlord and Tenant.  If the two appraisers are unable to agree as to the Fair Market Rental Value, but their determinations differ by less than three percent (3%), the Fair Market Rental Value will be the average of the determinations of the two appraisers.  If the two appraisers’ determinations differ by three percent (3%) or more, then the two appraisers shall, within five (5) days, render separate written reports of their determinations and together appoint a third appraiser having the qualifications set forth herein.  The third appraiser shall, within ten (10) days of appointment, determine which of the two initial appraisers determination of Fair Market Rental Value is the closest to the actual Fair Market Rental Value, taking into account the requirements of this Section 4, and shall notify Landlord and Tenant thereof.  The Fair Market Rental Value selected by the third appraiser will constitute the Fair Market Rental Value for the relevant period, and will be binding upon Landlord and Tenant.  Upon the determination of the Fair Market Rental Value, Landlord and Tenant shall promptly execute an instrument setting forth the amount of such Fair Market Rental Value.

 

(e)          [intentionally omitted.]

 

(f)            Landlord has included as part of the Base Rent set forth above one (1) parking space per 1,000 square feet leased by Tenant.

 

(g)         It is the purpose and intent of Landlord and Tenant that this Lease be a full service lease with Landlord providing all service, maintenance and repair to the Building, (except telephone service; interior janitorial; utilities; and light bulb/tube replacement, which costs shall be the responsibility of the Tenant); and all maintenance and repair to the Building’s and Premises’ structural components, fixtures, mechanical systems, lighting fixtures and ballasts, and roads and grounds.  Tenant shall provide telephone service at its sole cost.

 

4.2.                              Additional Rent.  Additional rent (“Additional Rent”) shall include any and all charges or other amounts which the Tenant is obligated to pay to the Landlord under this Lease, other than the Base Rent.

 

4.3.                              Operating Costs.

 

4.3.1.                     Computation.  Within one hundred twenty (120) days after the end of each calendar year during the Term, the Landlord shall provide Tenant with a statement of Landlord’s estimates of Tenant’s Share of Increased Operating Costs, which statement shall show the

 

11

 

computation the total of the Operating Costs incurred for the Building during such calendar year and Tenant’s Share of Increased Operating Costs for such calendar year.  Landlord shall allocate the Operating Costs to each separate rentable space within the Building in proportion to the respective operating costs percentages assigned to such spaces; provided that anything in this subsection 4.3 to the contrary notwithstanding, wherever the Tenant and/or any other tenant of space within the Building has agreed in its lease or otherwise to provide any item of such services partially or entirely at its own expense, or wherever in the Landlord’s reasonable judgment any such significant item of expense is not incurred with respect to or for the benefit of all of the net rentable space within the Building (including but not limited to any such expense which, by its nature, is incurred only with respect to those spaces which are occupied), in allocating the Operating Costs pursuant to this subsection, the Landlord shall make an appropriate adjustment, using generally accepted accounting principles, as aforesaid, so as to avoid allocating to the Tenant or to such other tenant (as the case may be) those Operating Costs covering such services already being provided by the Tenant or by such other tenant at its own expense, or to avoid allocating to all of the net rentable space within the Project those Operating Costs incurred only with respect to a portion thereof, as aforesaid.

 

4.3.2.                     Payment as Additional Rent.  For each Operating Year, the Tenant shall pay as Additional Rent to the Landlord, in the manner provided herein, Tenant’s Share of Increased Operating Costs.  Prior to, or as soon as reasonably practicable after the beginning of, each Operating Year, the Landlord shall send to the Tenant an annual statement setting forth the actual or estimated Operating Costs for the next calendar year, subject to Section 4.3.4, below.

 

4.3.3.                     Proration.  If only part of any calendar year falls within the Term, the amount computed as Tenant’s Share of Increased Operating Costs for such calendar year under this subsection shall be prorated in proportion to the portion of such calendar year falling within the Term (but the expiration of the Term before the end of a calendar year shall not impair the Tenant’s obligation hereunder to pay such prorated portion of Tenant’s Share of Increased Operating Costs for that portion of such calendar year falling within the Term, which amount shall be paid on demand).

 

4.3.4.                     Landlord’s Right to Estimate.  Anything in this subsection to the contrary notwithstanding, the Landlord, at its reasonable discretion, may (a) make from time to time during the Term a reasonable estimate of the Tenant’s Share of Increased Operating Costs which may become due under this subsection for any calendar year, (b) require the Tenant to pay to the Landlord for each calendar month during such year one twelfth (1/12) of such Tenant’s share of increased Operating Costs, at the time and in the manner that the Tenant is required hereunder to pay the monthly installment of the Base Rent for such month, and (c) increase or decrease from time to time during such calendar year the amount initially so estimated for such calendar year, all by giving the Tenant written notice thereof, accompanied by a schedule setting forth in reasonable detail the expenses comprising the Operating Costs, as so estimated.  Landlord shall cause the actual amount of such Tenant’s Share of Increased Operating Costs to be computed and certified to the Tenant in a reasonably detailed written statement (the “Tenant’s Share of Increased Operating Costs Statement”) within one hundred twenty (120) days after the end of such calendar year. Any overpayment or deficiency in the Tenant’s payment of Tenant’s Share of Increased Operating Costs shall be adjusted between the Landlord and the Tenant; the Tenant shall pay the Landlord or the Landlord shall credit to the Tenant’s account (or, if such adjustment

 

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is at the end of the Term, the Landlord shall pay to the Tenant), as the case may be, within fifteen (15) days after such notice to the Tenant, such amount necessary to effect such adjustment. The Landlord’s failure to provide such notice within the time prescribed above shall not relieve the Tenant of any of its obligations hereunder. The Tenant shall have the right to review the books and records of the Landlord with respect to the calculation of Operating Costs for the prior Lease Year at the Landlord’s office during normal business hours, at the Tenant’s sole expense, provided (i) the Tenant provides at least fifteen (15) days’ advance written notice to the Landlord of its desire to inspect such books and records, and (ii) such request is made within ninety (90) days after the Operating Costs Statement is delivered by the Landlord to the Tenant.  If the results of Tenant’s audit show that Tenant overpaid Tenant’s Share of Increased Operating Costs by 10% or more, then Landlord shall reimburse Tenant for the costs of the audit (provided that such costs must be reasonable and not-to-exceed $1,000.00), and Landlord shall credit to the Tenant’s account (or, if such adjustment is at the end of the Term, the Landlord shall pay to the Tenant), as the case may be, within fifteen (15) days after such notice to the Tenant, such amount necessary to effect such adjustment.

 

4.4.                              When Due and Payable.

 

4.4.1.                     Base Rent.  The Base Rent for any Lease Year shall be due and payable in twelve (12) consecutive, equal monthly installments, in advance, on the first (1st) day of each calendar month during such Lease Year.  In addition, if the Rent Commencement Date falls on a day other than the first day of a calendar month, then the Base Rent for the first month of the Term shall be prorated based on the number of days remaining in that month and such amount shall be due and payable on the Rent Commencement Date.

 

4.4.2.                     Additional Rent.  Any Additional Rent accruing to the Landlord under this Lease, except as is otherwise set forth herein, shall be due and payable when the installment of Base Rent next falling due after such Additional Rent accrues and becomes due and payable, unless the Landlord makes written demand upon the Tenant for payment thereof at any earlier time, in which event such Additional Rent shall be due and payable at such time (provided that Tenant shall receive at least 5 business days prior written notice of such earlier time).

 

4.4.3.                     No Set-Off; Late Payment.  Each such payment shall be made promptly when due and, except as otherwise expressly set forth herein, all payments shall be made without any deduction or setoff, and without demand, failing which the Tenant shall pay to the Landlord as Additional Rent, after the fifth (5th) day after such payment remains due but unpaid, a late charge equal to five percent (5%) of such payment which remains due but unpaid.  In addition, any payment that is not paid by the tenth (10th) day after such payment is due shall bear interest at the Default Rate.  Any payment made by the Tenant to the Landlord on account of Rent may be credited by the Landlord to the payment of any Rent then past due before being credited to Rent currently falling due.  Any such payment which is less than the amount of Rent then due shall constitute a payment made on account thereof, the parties hereto hereby agreeing that the Landlord’s acceptance of such payment (whether or not with or accompanied by an endorsement or statement that such lesser amount or the Landlord’s acceptance thereof constitutes payment in full of the amount of Rent then due) shall not alter or impair the Landlord’s rights hereunder to be paid all of such amount then due, or in any other respect.

 

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4.5.                              Where Payable.  The Tenant shall pay the Rent, in lawful currency of the United States of America, to the Landlord by delivering or mailing it to the Landlord’s address which is set forth in section 20, or to such other address or in such other manner as the Landlord from time to time specifies by written notice to the Tenant.

 

4.6.                              Tax on Lease.  If federal, state or local law now or hereafter imposes any tax, assessment, levy or other charge directly or indirectly upon (a) the Landlord with respect to this Lease or the value thereof, (b) the Tenant’s use or occupancy of the Premises, (c) the Base Rent, Additional Rent or any other sum payable under this Lease, or (d) this transaction, then the Tenant shall pay the amount thereof as Additional Rent to the Landlord upon demand, unless the Tenant is prohibited by law from doing so, in which event the Landlord at its election may terminate this Lease by giving written notice thereof to the Tenant.

 

4.7.1                        Letter of Credit.  Not later than ten (10) days following the Effective Date, Tenant shall deliver to Landlord an unconditional irrevocable letter of credit issued by a commercial bank reasonably acceptable to Landlord payable to Landlord or Landlord’s assigns as “beneficiary” in the amount of $90,000.00, (the “Letter of Credit”) as security for the performance of the Tenant’s covenants and obligations under this Lease for the Term.  The Letter of Credit shall expire at the end of the Original Term.

 

Provided Tenant is not in default hereunder beyond any applicable notice and cure period, the Letter of Credit shall be reduced as set forth below:

 

(i)                                                           Upon the fist (1st) anniversary of the Rent Commencement Date, the Letter of Credit shall be reduced to $72,000.00;

 

(ii)                                                        Upon the second (2nd) anniversary of the Rent Commencement Date, the Letter of Credit shall be reduced to $54,000.00;

 

(iii)                                                     Upon the third (3rd) anniversary of the Rent Commencement Date, the Letter of Credit shall be reduced to $36,000.00; and

 

(iv)                                                    Upon the fourth (4th) anniversary of the Rent Commencement Date, the Letter of Credit shall be reduced to $26,761,67.

 

4.7.2                        If Tenant fails to pay Base Rent or other charges due hereunder in accordance with the terms of this Lease, or otherwise defaults with respect to any provision of this Lease which default continues beyond any applicable notice and cure period, Landlord shall have the right to: 1) draw against the Letter of Credit and hold the funds for the payment of any Base Rent or other charge due hereunder; 2) to pay any other sum to which Landlord may become obligated by reason of Tenant’s default, or to compensate Landlord for any loss or damage which Landlord may suffer thereby; and 3) to require the Letter of Credit to remain at its then-current amount through the end of the Term, without the reduction described in Section 4.7.1 above.  If Landlord so uses or applies all or any portion of said Letter of Credit, Tenant shall within fifteen (15) days after written demand therefor restore the amount of the Letter of Credit drawn so that the Letter of Credit is restored to the amount existing prior to any drawing.

 

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4.7.3                        On termination of this Lease, the Landlord shall return the Letter of Credit to Tenant.  The Letter of Credit shall be freely assignable at no cost to the Landlord or to any Mortgagee or purchaser of the Project.

 

4.8.                              Advance Rent.  Tenant has as of this date deposited with Landlord the sum of $16,761.67 representing advance payment of the first month’s Base Rent, to be applied by Landlord to such rental obligations.

 

5.                                      TAXES.

 

5.1.                              Payment.  For each Tax Year, the Tenant shall pay to the Landlord, in the manner provided herein, Tenant’s Share of Increased Taxes.

 

5.2.                              Proration.  If only part of any Tax Year falls within the Term, the amount computed as Tenant’s Share of Increased Taxes for such Tax Year under this subsection shall be prorated in proportion to the portion of such Tax Year falling within the Term (but the expiration of the Term before the end of a Tax Year shall not impair the Tenant’s obligations hereunder to pay such prorated portion of Tenant’s Share of Increased Taxes for that portion of such Tax Year falling within the Term, which amount shall be paid on demand).

 

5.3.                              Method of Payment.  Tenant’s Share of Increased Taxes shall be paid by the Tenant, at the Landlord’s election (i) in advance, in equal monthly installments in such amounts as are estimated and billed for each Tax Year by the Landlord at the commencement of the Term and at the beginning of each successive Tax Year during the Term, each such installment being due on the first day of each calendar month or (ii) in a lump sum, following the Landlord’s receipt of the tax bill for the Tax Year in question, calculation of Tenant’s Share of Increased Taxes with respect thereto and provision to Tenant of a reasonably detailed written statement that details Tenant’s Share of Increased Taxes.  If the Landlord has elected that the Tenant pay Tenant’s Share of Increased Taxes in installments, in advance, then, at any time during a Tax Year, the Landlord may re-estimate Tenant’s Share of Increased Taxes and thereafter adjust the Tenant’s monthly installments payable during the Tax Year to reflect more accurately Tenant’s Share of Increased Taxes.  Within one hundred twenty (120) days after the Landlord’s receipt of tax bills for each Tax Year, the Landlord will notify the Tenant of the amount of Taxes for the Tax Year in question and the amount of Tenant’s Share of Increased Taxes thereof.  Any overpayment or deficiency in the Tenant’s payment of Tenant’s Share of Increased Taxes for each Tax Year shall be adjusted between the Landlord and the Tenant; the Tenant shall pay the Landlord or the Landlord shall credit to the Tenant’s account (or, if such adjustment is at the end of the Term, the Landlord shall pay the Tenant), as the case may be, within fifteen (15) days after such notice to the Tenant, such amount necessary to effect such adjustment.  The Landlord’s failure to provide such notice within the time prescribed above shall not relieve the Tenant of any of its obligations hereunder.

 

5.4.                              Taxes on Rent.  In addition to Tenant’s Share of Increased Taxes, the Tenant shall pay to the appropriate agency any sales, excise and other tax (not including, however, the Landlord’s income taxes) levied, imposed or assessed by the State of Maryland or any political subdivision thereof or other taxing authority upon any Rent payable hereunder.  The Tenant shall

 

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also pay, prior to the time the same shall become delinquent or payable with penalty, all taxes imposed on Tenant’s inventory, furniture, trade fixtures, apparatus, equipment, leasehold improvements installed by the Tenant or by the Landlord on behalf of the Tenant and any other property of the Tenant.

 

5.5.                              [Intentionally Omitted].

 

6.                                      USE OF PREMISES.

 

6.1.                              Nature of Use.  The Tenant shall use the Premises only for general office purposes consistent with general office use.

 

6.2.                              Compliance with Law and Covenants.  The Tenant, throughout the Term and at its sole expense, in its use and possession of the Premises, shall:

 

(a)                                  comply promptly and fully with (i) all laws, ordinances, notices, orders, rules, regulations and requirements of all federal, state and municipal governments and all departments, commissions, boards and officers thereof, including but not limited to The Americans with Disabilities Act, 42 U.S.C. §12101 et. seq., and the ADA Disability Guidelines promulgated with respect thereto (provided that such guidelines are applicable to and binding upon the Tenant or the Premises), and (ii) all requirements (Y) of the National Board of Fire Underwriters (or any other body now or hereafter constituted exercising similar functions) which are applicable to any or all of the Premises, or (Z) imposed by any policy of insurance covering any or all of the Premises and required by Section 7 to be maintained by the Tenant, and (iii) all covenants and restrictions which may encumber the title to any or all of the Premises, all if and to the extent that any of such requirements relate to any or all of the Premises or to any equipment, pipes, utilities or other parts of the Project which exclusively serve the Premises, whether any of the foregoing are foreseen or unforeseen, or are ordinary or extraordinary;

 

(b)                                 (without limiting the generality of the foregoing provisions of this subsection) keep in force throughout the Term all licenses, consents and permits necessary for the lawful use of the Premises for the purposes herein provided; provided, however, that Landlord shall be responsible for obtaining a certificate of occupancy for the Premises; and

 

(c)                                  pay when due all personal property taxes, income taxes, license fees and other taxes assessed, levied or imposed upon the Tenant or any other person in connection with the operation of its business upon the Premises or its use thereof in any other manner; and (d) not obstruct, annoy or interfere with the rights of other Tenants.

 

6.3.                              Mechanics’ Liens.

 

6.3.1.                     Without limiting the generality of the foregoing provisions of this section, the Tenant shall not create or permit to be created, and if created shall discharge or have released, any mechanics’ or materialmens’ lien arising while this Lease is in effect and affecting any or all of the Premises, the Building and/or the Project, and the Tenant shall not permit any other matter or thing whereby the Landlord’s estate, right and interest in any or all of the Premises, the Building and/or the Project might be impaired.  The Tenant shall defend, indemnify and hold

 

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harmless the Landlord against and from any and all liability, claim of liability or expense (including but not limited to that of reasonable attorneys’ fees) incurred by the Landlord on account of any such lien or claim created or permitted to be created by Tenant, its agents, contractors, servants, employees, licenses, concessionaires, suppliers, materialmen or invitees.

 

6.3.2.                     If the Tenant fails to discharge (whether by payment or posting a bond in lieu thereof having the effect of removing such lien) any such lien within fifteen (15) days after it first becomes effective against any of the Premises, the Building and/or the Project, then, in addition to any other right or remedy held by the Landlord on account thereof, the Landlord may (a) discharge it by paying the amount claimed to be due or by deposit or bonding proceedings, and/or (b) in any such event compel the prosecution of any action for the foreclosure of any such lien by the lienor and pay the amount of any judgment in favor of the lienor with interest, costs and allowances.  The Tenant shall reimburse the Landlord for any amount paid by the Landlord to discharge any such lien and all expenses incurred by the Landlord in connection therewith, together with interest thereon at the Default Rate from the respective dates of the Landlord’s making such payments or incurring such expenses (all of which shall constitute Additional Rent).

 

6.3.3.                     Nothing in this Lease shall be deemed in any way (a) to constitute the Landlord’s consent or request, express or implied, that any contractor, subcontractor, laborer or materialman provide any labor or materials for any alteration, addition, improvement or repair to any or all of the Premises, the Building and/or the Project, or (b) to give the Tenant any right, power or authority to contract for or permit to be furnished any service or materials, if doing so would give rise to the filing of any mechanics’ or materialmens’ lien against any or all of the Premises, the Building and/or the Project, or the Landlord’s estate or interest therein, or (c) to evidence the Landlord’s consent that the Premises, the Building and/or the Project be subjected to any such lien.

 

6.4.                              Signs.  The Tenant shall have no right to erect signs upon the Premises or the remainder of the Building or the Project.  The Landlord shall provide, at the Landlord’s sole expense, customary identification of the Tenant’s business on the lobby directory of the Building and on the entrance door to the Premises.

 

6.5.                              License.

 

6.5.1.                     Grant of License.  The Landlord hereby grants to the Tenant a non-exclusive license to use (and to permit its officers, directors, agents, employees and invitees to use), in the course of conducting business at the Premises, the Common Areas.

 

6.5.2.                     Non-Exclusive License.  Such license shall be exercised in common with the exercise thereof by the Landlord, the other tenants or occupants of the Project, and their respective officers, directors, agents, employees and invitees.

 

6.5.3.                     Parking Areas; Changes.

 

(a)                                  Tenant’s employees, agents, officers, directors and invitees shall have non-exclusive access to park in the Parking Areas.  The “Parking Areas” shall mean those portions of the Common Areas which from time to time are designated by the Landlord for the parking of

 

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automobiles and other automotive vehicles while engaged in business upon the Premises (other than while being used to make deliveries to and from the Premises).

 

(b)                                 The Landlord reserves the right to change the entrances, exits, traffic lanes, boundaries and locations of the Parking Areas.  The Landlord reserves the right to designate for the specific account of the Tenant, and/or of other tenants of the Project, specific parking areas or spaces constructed around, within or under the Project.  All Parking Areas and facilities which may be furnished by the Landlord in or near the Project, including any employee parking areas, truckways, loading docks, pedestrian sidewalks and ramps, landscaped areas and other areas and improvements which may be provided by the Landlord for the Tenant’s exclusive use or for general use, in common with other tenants, their officers, agents, employees and visitors, shall at all times be subject to the Landlord’s exclusive control and management, and the Landlord shall have the right from time to time to establish, modify and enforce reasonable rules and regulations with respect thereto.  The Landlord shall have the right to (a) police the Common Areas, (b) establish and from time to time to change the level of parking surfaces, (c) close all or any portion of the Common Areas to such extent as, in the opinion of the Landlord’s counsel, may be legally sufficient to prevent a dedication thereof or the accrual of any rights to any person or to the public therein, (d) close temporarily all or any portion of the Parking Areas, (e) discourage non-tenant parking, and (f) do and perform such other acts in and to the Common Areas as, in the use of good business judgment, the Landlord determines to be advisable with a view to the improvement of the convenience and use thereof by tenants, their officers, agents, employees and visitors.  The Tenant shall cause its officers, agents and employees to park their automobiles only in such areas as the Landlord from time to time may designate by written notice to the Tenant as employee parking areas, and the Tenant shall not use or permit the use of any of the Common Areas in any manner which will obstruct the driveways or throughways serving the Parking Areas or any other portion of the Common Areas allocated for the use of others.

 

(c)                                  The Tenant has the nonexclusive right to use sixteen (16) on-site parking spaces during the Term of this Lease as provided in this Section 6.5.  At Landlord’s request, Tenant shall provide license plate numbers for its employees and otherwise cooperate with Landlord’s management of the Parking Areas, which may include attended parking service.  The costs of such parking service shall be part of Operating Costs.

 

6.5.4.                     Alterations.  The Landlord reserves the right at any time and from time to time (i) to change or alter the location, layout, nature or arrangement of the Common Areas or any portion thereof, including but not limited to the arrangement and/or location of entrances, passageways, doors, corridors, stairs, lavatories, elevators, parking areas, and other public areas of the Building, and (ii) to construct additional improvements on the Project and make alterations thereof or additions thereto and build additional stories on or in any such buildings adjoining the same; provided, however, that no such change or alteration shall deprive the Tenant of reasonable access to the Premises.

 

6.5.5.                     Use of Common Areas.

 

(a)                                  The Landlord shall at all times have full and exclusive control, management and direction of the Common Areas.  Without limiting the generality of the foregoing, the Landlord

 

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shall have the right to maintain and operate lighting facilities on all of the Common Areas and to police the Common Areas.

 

(b)                                 The Tenant shall maintain in a neat and clean condition that area designated by the Landlord as the refuse collection area, and shall not place or maintain anywhere within the Project, other than within the area which may be designated by Landlord from time to time as such refuse collection area, any trash, garbage or other items, except as may otherwise be expressly permitted by this Lease.

 

(c)                                  In its use of the Common Areas, the Tenant shall not take, or permit its agents, employees, invitees, visitors and guests to take, any of the following actions:

 

(i)                                     the parking or storage of automobiles, or other automotive vehicles anywhere within the Project if such vehicles lack current, valid license plates, or other than in the Parking Areas (and the individual parking spaces from time to time designated therein), or anywhere within the Project if the body, windows or other exterior portions of such vehicles are in an obvious state of damage or disrepair;

 

(ii)                                  the performance of any body work, maintenance or other repairs to vehicles, or the painting of any vehicle, anywhere within the Premises or the rest of the Project; or

 

(iii)                               the parking or storage of any trucks or vans weighing over three-quarters (3/4) of one ton, except for purposes of temporary loading and unloading.

 

6.6.                              Liability of Landlord.  The Landlord and its agents and employees shall not be liable to the Tenant or any other person whatsoever for any loss or damage that may be occasioned by or through the acts or omissions of any other tenant of the Project or of any other person whatsoever, other than due to the gross negligence or willful misconduct of the Landlord or its employees or agents.

 

6.7.                              Floor Load.  The Tenant shall not place a load upon any floor of the Premises exceeding the floor load per square foot area which such floor was designed to carry.  The floor load for the third (3rd) floor is seventy-five (75) pounds.  The Landlord reserves the right to prescribe the weight and position of all safes and other heavy equipment, and to prescribe the reinforcing necessary, if any, which in the opinion of the Landlord may be required under the circumstances, such reinforcing to be at the Tenant’s sole expense.  Business machines and mechanical equipment shall be placed and maintained by the Tenant in settings sufficient in the Landlord’s judgment to absorb and prevent vibration and noise, and the Tenant shall, at its sole expense, take such steps as the Landlord may direct to remedy any such condition.

 

6.8.                              Hazardous Materials.  The Tenant warrants and agrees that the Tenant shall not cause or permit any Hazardous Material to be brought upon, kept or used in or about the Premises by the Tenant, its agents, employees, contractors or invitees.  If the Tenant breaches the obligations stated in the preceding sentence, then the Tenant shall indemnify, defend and hold the Landlord harmless from and against any and all claims, judgments, damages, penalties, fines, costs, liabilities or losses (including, without limitation, diminution in value of the Premises, the Building and the Project generally, damages for the loss or restriction on use of rentable or

 

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usable space or of any amenity of the Building or the Project generally, damages from any adverse impact on marketing of space in the Building, and sums paid in settlement of claims, reasonable attorneys’ fees, reasonable consultant fees and reasonable expert fees) which arise during or after the Term as a result of such contamination.  This indemnification of the Landlord by the Tenant includes, without limitation, costs incurred in connection with any investigation of site conditions or any cleanup, remedial, removal or restoration work required by any governmental authority because of Hazardous Material present in the soil or ground water or under the Premises or the Project generally.  As used herein (i) “Environmental Laws” means the Clean Air Act, the Resource Conservation Recovery Act of 1976, the Hazardous Material Transportation Act, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Resource Conservation and Recovery Act, the Toxic Substances Control Act, the Occupational Safety and Health Act, the Consumer Product Safety Act, the Clean Water Act, the Federal Water Pollution Control Act, the National Environmental Policy Act, Md.  Nat.  Res.  Code Ann., Title 8, and Md. Env. Code Ann., Title 7, as each of the foregoing shall be amended from time to time, and any similar or successor laws, federal, state or local, or any rules or regulations promulgated thereunder; and (ii) “Hazardous Materials” means and includes asbestos; “oil, petroleum products and their by-products;” “hazardous substances;” “hazardous wastes” or “toxic substances,” as those terms are used in Environmental Laws; or any substances or materials listed as hazardous or toxic in the United States Department of Transportation, or by the Environmental Protection Agency or any successor agency under any Environmental Laws but excluding normal and reasonable quantities of substances customarily and prudently used in the normal course of business on the Project or as may be reasonably necessary for Tenant to conduct normal general office use operations in the Premises and/or materials handled, stored and disposed of in accordance with any applicable law.

 

7.                                      INSURANCE AND INDEMNIFICATION.

 

7.1.                              Insurance.  At all times from and after the earlier of (i) the entry by the Tenant into the Premises, or (ii) the Rent Commencement Date, the Tenant shall take out and keep in full force and effect, at its expense:

 

(a)                                  commercial general liability insurance, including Blanket Contractual Liability, Broad Form Property Damage, Completed Operations/Products Liability, Personal Injury Liability, Premises Medical Payments, Interest of Employees as additional insureds, Incidental Medical Malpractice and Broad Form General Liability Endorsement, with a combined single limit of not less than One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) in the aggregate;

 

(b)                                 special form property insurance (including but not limited to burglary and theft insurance) written at full replacement cost value and with replacement cost endorsement in an amount covering all of Tenant’s property, including, without limitation, inventory, trade fixtures, floor coverings, furniture, electronic data processing equipment and any other property removable by Tenant under the provisions of this Lease, except for existing improvements.

 

(c)                                  worker’s compensation or similar insurance in form and amounts as may be required by law; and

 

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(d)                                 such other insurance in such types and amounts as Landlord may reasonably require, provided that such other insurance is in accordance with standards generally accepted for comparable buildings.

 

7.2.                              Tenant’s Contractor’s Insurance.  The Tenant shall require any contractor of the Tenant performing work in, on or about the Premises to take out and keep in full force and effect, at no expense to the Landlord:

 

(a)                                  commercial general liability insurance, including Contractor’s Liability coverage, Blanket Contractual Liability coverage, Broad Form Property Damage Endorsement, Contractor’s Protective Liability, Completed Operations/Products Liability (Completed Operations/Products Liability coverage to be provided for at least two (2) years after final completion of work), Personal Injury, Premises Medical Payments, Interest of Employees as additional insureds, Incidental Medical Malpractice and Broad Form General Liability Endorsement, in an amount not less than One Million Dollars ($1,000,000) combined single limit per occurrence and Two Million Dollars ($2,000,000) in the aggregate;

 

(b)                                 comprehensive automobile liability insurance, with a combined single limit of not less than One Million Dollars ($1,000,000) covering all owned, non-owned or hired automobiles to be used by the contractor;

 

(c)                                  worker’s compensation or similar insurance in form and amounts required by law; and

 

(d)                                 employers liability coverage, including All States Endorsement, in an amount not less than One Million Dollars ($1,000,000).

 

7.3.                              Policy Requirements.

 

7.3.l.                        The company or companies writing any insurance which the Tenant is required to take out and maintain or cause to be taken out or maintained pursuant to subsections 7.1 and/or 7.2, as well as the form of such insurance, at all times be subject to the Landlord’s approval, and any such company or companies shall be licensed to do business in the State of Maryland and have a rating of at least A or better and a financial size rating of XII or larger from Best’s Key Rating Guide and Supplemental Service (or comparable rating from a comparable insurance rating service).  Public liability and all-risk casualty insurance policies evidencing such insurance shall name the Landlord and/or its designees (including, without limitation, any Mortgagee) as additional insureds, shall be primary and noncontributory, and shall also contain a provision by which the insurer agrees that such policy shall not be cancelled, materially changed, terminated or not renewed except after thirty (30) days’ advance written notice to the Landlord and/or such designees.  All such policies, or certificates thereof, shall be deposited with the Landlord promptly upon commencement of the Tenant’s obligation to procure the same. None of the insurance which the Tenant is required to carry and maintain or cause to be carried or maintained pursuant to subsections 7.1 and/or 7.2 shall contain deductible provisions in excess of Five Thousand Dollars ($5,000), unless approved in writing in advance by the Landlord.  If the Tenant fails to perform any of its obligations pursuant to this section 7, the Landlord may

 

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perform the same and the cost thereof shall be payable by the Tenant as Additional Rent upon the Landlord’s demand therefor.

 

7.3.2.                     The Landlord and the Tenant agree that on January 1 of the second (2nd) full calendar year during the Term and on January 1 of every second (2nd) calendar year thereafter, the Landlord will have the right to request commercially reasonable changes in the character and/or amounts of insurance required to be carried by the Tenant pursuant to the provisions of this section 7, and the Tenant shall comply with any requested change in character and/or amount within thirty (30) days after the Landlord’s request therefor.

 

7.4.                              Indemnities by Tenant and Landlord.

 

7.4.1.                     Notwithstanding any policy or policies of insurance required of the Tenant, the Tenant, for itself and its successors and assigns, to the extent permitted by law, shall defend, indemnify and hold harmless the Landlord, the Landlord’s agents and any Mortgagee against and from any and all liability or claims of liability by any person asserted against or incurred by the Landlord and/or such agent or Mortgagee in connection with (i) the use, occupancy, conduct, operation or management of the Premises by the Tenant or any of its agents, contractors, servants, employees, licensees, concessionaires, suppliers, materialmen or invitees during the Term; (ii) any work or thing whatsoever done or not done on the Premises during the Term performed by Tenant, its employees, agents or contractors; (iii) any breach or default in performing any of the obligations under the provisions of this Lease and/or applicable law by the Tenant or any of its agents, contractors, servants, employees, licensees, suppliers, materialmen or invitees during the Term; (iv) any grossly negligent, intentionally tortuous or other act or omission by the Tenant or any of its agents, contractors, servants, employees, licensees, concessionaires, suppliers, materialmen or invitees during the Term; or (v) any injury to or death of any person or any damage to any property occurring upon the Premises (whether or not such event results in the termination of this Lease), and from and against all costs, expenses and liabilities incurred in connection with any claim, action, demand, suit at law, in equity or before any administrative tribunal, arising in whole or in part by reason of any of the foregoing (including, by way of example rather than of limitation, the fees of attorneys, investigators and experts), all regardless of whether such claim, action or proceeding is asserted before or after the expiration of the Term or any earlier termination of this Lease.

 

7.4.2.                     If any claim, action or proceeding described in Section 7.4.1 is brought against the Landlord and/or any agent or Mortgagee, the Tenant, if requested by the Landlord or such agent or Mortgagee, and at the Tenant’s expense, promptly shall resist or defend such claim, action or proceeding or cause it to be resisted or defended by an insurer.  The Landlord, at its option, shall be entitled to participate in the selection of counsel, settlement and all other matters pertaining to such claim, action or proceeding, all of which shall be subject, in any case, to the prior written approval of the Landlord.

 

7.4.3.                     Subject to the provisions of subsection 7.8, the Landlord hereby agrees for itself and its successors and assigns to indemnify and save the Tenant harmless from and against any liability or claims of liability arising solely out of the gross negligence or intentional acts and omissions of the Landlord, its agents or employees.  Except to the extent caused by the gross negligence or willful misconduct of Tenant or an agent of Tenant, Landlord shall reimburse

 

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Tenant and shall indemnify and hold Tenant harmless from and against any and all liability or claims of liability by any person asserted against or incurred by the suffered or claimed against Tenant as a result of Landlord’s use or control of the Common Areas.

 

7.5.                              Landlord Not Responsible for Acts of Others.  The Landlord shall not be responsible or liable to the Tenant, or to those claiming by, through or under the Tenant, for any loss or damage which may be occasioned by or through the acts or omissions of persons occupying or using space adjoining the Premises or any part of the premises adjacent to or connecting with the Premises or any other part of the Building or the Project, or for any loss or damage resulting to the Tenant (or those claiming by, through or under the Tenant) or its or their property, from (a) the breaking, bursting, stoppage or leaking of electrical cable and/or wires, or water, gas, sewer or steam pipes, (b) falling plaster, or (c) dampness, water, rain or snow in any part of the Building.  To the maximum extent permitted by law, the Tenant agrees to use and occupy the Premises, and to use such other portions of the Project as the Tenant is herein given the right to use, at the Tenant’s own risk.

 

The Landlord is not obligated to protect from the criminal acts of third parties the Tenant, Tenant’s agents, customers, invitees or employees, the Premises or the property of Tenant or any property of any of Tenant’s agents, customers, invitees or employees.  Tenant hereby acknowledges that Tenant has the sole responsibility for the protection of the Premises, the Tenant’s property and the Tenant’s customers, agents, invitees and employees. At Tenant’s cost, Tenant shall have the ability to activate the current Sonitrol alarm system for the Premises. Tenant acknowledges that, if Landlord shall provide security guards for the Common Areas, Landlord does not represent, guarantee, or assume responsibility that Tenant will be secure from any claims or causes of action relating to such security guards.  To induce Landlord to provide such security guards, if any, Landlord deems reasonable, appropriate and economically feasible in its sole and absolute discretion, Tenant agrees that Landlord should not be responsible for, and Tenant shall defend and indemnify Landlord from, any such claims or other causes of action, including claims or causes of action caused by the sole or concurrent negligent act or omission, whether active or passive, of Landlord or its security guards, provided however, that Tenant shall have no obligation to defend or indemnify Landlord from any claims caused by the willful or criminal act of Landlord or its security guards, or covered by the public liability insurance, if any, that Landlord is required to carry by the terms of this Lease

 

7.6.                              Landlord’s Insurance.  During the Term, the Landlord shall maintain, in commercially reasonable amounts, (a) insurance on the Project against loss or damage by fire and all of the hazards included in the extended coverage endorsement, (b) comprehensive liability and property damage insurance with respect to the Common Areas, against claims for personal injury or death, or property damage suffered by others occurring in, on or about the Project, and (c) any other insurance, in such form and in such amounts as are deemed reasonable by the Landlord, including, without limitation, rent continuation and business interruption insurance, public liability insurance, theft insurance and workers’ compensation, flood and earthquake, and boiler and machinery insurance.  The costs and expenses of any and all insurance carried by the Landlord pursuant to the provisions of this subsection 7.6 shall be deemed a part of Operating Costs.

 

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7.7.          Increase in Insurance Premiums.  The Tenant shall not do or suffer to be done, or keep or suffer to be kept, anything in, upon or about the Premises, the Building or the Project which will contravene the Landlord’s policies of hazard or liability insurance or which will prevent the Landlord from procuring such policies from companies acceptable to the Landlord.  If anything done, omitted to be done, or suffered by the Tenant to be kept in, upon or about the Premises, the Building or the Project shall cause the rate of fire or other insurance on the Premises, the Building or the Project to be increased beyond the minimum rate from time to time applicable to the Premises or to any such other property for the use or uses made thereof, the Tenant shall pay to the Landlord, as Additional Rent, the amount of any such increase upon the Landlord’s demand therefor.

 

7.8.          Waiver of Right of Recovery.  To the extent that any loss or damage to the Premises, the Building, the Project, any building, structure or other tangible property, or resulting loss of income, or losses under workers’ compensation laws and benefits, are covered by insurance, neither party shall be liable to the other party or to any insurance company insuring the other party (by way of subrogation or otherwise), even though such loss or damage might have been occasioned by the negligence of such party, its agents or employees; provided, however, that if, by reason of the foregoing waiver, either party shall be unable to obtain any such insurance, then such waiver shall be deemed not to have been made by such party.  Notwithstanding the foregoing, in the event that such waiver of subrogation shall not be available to the Tenant except through the payment of additional premium therefor, the Tenant shall pay such additional premium.

 

8.             SERVICES AND UTILITIES.

 

(a)           As long as an Event of Default shall not exist, Landlord shall provide the following services and utilities during normal business hours on all days except  Sundays and federal and state holidays, or unless otherwise stated below.  Cost of such services shall be included as an Operating Cost.

 

(i)                                     when necessary during normal business hours, central heating and air conditioning  in the Common Areas at temperature levels customary for comparable office buildings in the immediate vicinity;

 

(ii)                                  janitorial services five business days per week; and

 

(iii)                               at least one elevator, to be used in common with other tenants.

 

“Normal business hours” for purposes of clause (a) above shall be deemed to mean the periods from 8:30 a.m. until 5:30 p.m. on business days (Monday through Friday).  Tenant shall nonetheless have access to the Premises and elevators twenty-four (24) hours a day, subject to and in accordance with any security procedures that Landlord may have in place.

 

(b)           Tenant shall be responsible for all electricity to the Premises, including lights, outlets, VAV boxes, and Tenant’s proportionate share of the air handling units on the floor, and after-hours HVAC service to the Premises. Tenant shall pay for electric current supplied to or used in the Premises.  Except for electricity serving the air handling units on the floor, electric

 

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service shall be separately metered and billed directly to Tenant, and Tenant shall make payments directly to the service provider.  Landlord shall not be liable to Tenant for damages arising as a result of service interruptions caused by any electric service provider.

 

(c)           Any failure by the Landlord to furnish any of the foregoing services or utilities to the Building, resulting from circumstances beyond the Landlord’s reasonable control or from interruption of such services due to repairs or maintenance shall not render the Landlord liable in any respect for damages to either person or property, nor be construed as an eviction of the Tenant, nor cause an abatement of rent hereunder, nor relieve the Tenant from any of its obligations hereunder.  Notwithstanding the foregoing to the contrary, Tenant shall be entitled to receive a rent abatement in the event of Landlord’s failure or inability to furnish any of the utilities or services required to be furnished by Landlord hereunder if (a) Landlord is not proceeding diligently and in good faith to correct such failure and inability and if all or substantially all of the Premises is rendered unusable by Tenant for a continuous period of ten (10) consecutive business days after Tenant gives Landlord written notice thereof, and if Tenant does not in fact use the Premises using such period. If any public utility or governmental body shall require the Landlord or the Tenant to restrict the consumption of any utility or reduce any service for the Building, the Landlord and the Tenant shall comply with such requirements, whether or not the services and utilities referred to in this section 8 are thereby reduced or otherwise affected, without any liability on the part of the Landlord to the Tenant or any other person or any reduction or adjustment in rent payable hereunder.

 

(d)           Tenant shall not at any time overburden or exceed the capacity of the mains, feeders, ducts, conduits, or other facilities by which such utilities are supplied to, distributed in or serve the Premises.  If Tenant desires to install any equipment which shall require additional utility facilities or utility facilities of a greater capacity than the facilities existing, such installation shall be subject to Landlord’s prior written approval of Tenant’s plans and specifications therefor.  If such installation is approved by Landlord and if Landlord provides such additional facilities to accommodate Tenant’s installation, Tenant agrees to pay Landlord, on demand, the cost for providing such additional utility facilities or utility facilities of greater capacity.  Landlord shall not be responsible for providing any meters or other devices for the measurement of utilities supplied to the Premises.

 

(e)           Landlord shall cause to be operated a trash removal service for the Project, the costs and expenses of which shall be a part of Operating Costs.  In the event that Tenant’s use of the Premises requires trash removal services in excess of that required for standard office tenants, Tenant shall pay to Landlord, as additional rent all costs and expenses in excess of the trash removal costs which are attributable to such excess usage.

 

(f)            The Landlord does not warrant that any utilities provided by any utility company for the Building or the Landlord will be free from shortages, failures, variations or interruptions caused by repairs, maintenance, replacements, improvements, alterations, changes of service, strikes, lockouts, labor controversies, accidents, inability to obtain services, fuel, steam, water or supplies, governmental requirements or requests, or other causes beyond the Landlord’s reasonable control.  The Landlord in no event shall be liable for damages by reason of such shortage, failure or variation, including without limitation loss of profits, business interruption or

 

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other incidental or consequential damages unless caused by Landlord or its agents, employees and/or contractors.

 

9.             REPAIRS AND MAINTENANCE.

 

9.1.          Landlord’s Duty to Maintain Structure.  The Landlord shall maintain or cause to be maintained in good operating condition the structure of the Building and shall be responsible for structural repairs to the exterior walls, load bearing elements, foundations, roofs, structural columns and structural floors with respect thereto, and the Landlord shall make all required repairs thereto, provided, however, that if the necessity for such repairs shall have arisen, in whole or in part, from the gross negligence or willful acts or omissions of the Tenant, its agents, concessionaires, officers, employees, licensees, invitees or contractors, or by any unusual use (other than a use consistent with general office use) of the Premises by the Tenant, then the Landlord may collect the cost of such repairs, as Additional Rent, upon demand.

 

9.2.          Tenant’s Duty to Maintain Premises.

 

9.2.1.       Except as provided in subsection 9.1, the Tenant shall keep and maintain the Premises and all fixtures and equipment located therein in a good, safe, clean and sanitary condition consistent with the operation of a first-class office building, and in compliance with all legal requirements with respect thereto.  Except as provided in subsection 9.1, all injury, breakage and damage to the Premises (and to any other part of the Building and/or the Project, if caused by any act or omission of the Tenant, its agents, concessionaires, officers, employees, licensees, invitees or contractors) caused by Tenant its agents, concessionaires, officers, employees, licensees, invitees or contractors shall be repaired or replaced by the Tenant at its expense.  The Tenant shall keep and maintain all pipes and conduits and all mechanical, electrical, HVAC and plumbing systems contained within the Premises in good, safe, clean and sanitary condition.

 

9.2.2.       The Tenant shall keep the Premises in a neat, clean and orderly appearance to a standard of cleanliness and hygiene reasonably satisfactory to the Landlord.  The Tenant shall (a) surrender the Premises at the expiration of the Term or at such other time as the Tenant may vacate the Premises in as good condition as when received, except for (i) ordinary wear and tear, (ii) damage by casualty (other than such damage by casualty which is caused, in whole or in part, by the gross negligence or willful act or omissions of the Tenant, its agents, officers, employees, licensees, invitees or contractors and which is not wholly covered by the Landlord’s hazard insurance policy), or (iii) acts of God, and (b) take care not to overload the electrical wiring serving the Premises or located within the Premises.

 

10.          IMPROVEMENTS.

 

10.1.        Base Building and Initial Tenant Improvements.  Landlord shall deliver the Premises in “as-is” condition.  Landlord shall deliver in good working order the Common Areas of the Project, as well as the structural, mechanical, electrical, plumbing, fire/life/safety, and other systems in the Building.

 

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10.2.        Tenant Alterations.   The Tenant shall not make any alteration, improvement or addition in the aggregate costing more than Twenty Thousand Dollars ($20,000) (collectively “Alterations”) to the Premises without first:

 

(i)  presenting to the Landlord plans and specifications therefor and obtaining the Landlord’s written consent thereto (which shall not, in the case of (1) non-structural interior Alterations, or (2) Alterations which would not affect any electrical, mechanical, plumbing or other Building systems, be unreasonably withheld so long as such Alterations will not violate applicable law or the provisions of this Lease, or impair the value of the Premises, the Building or the rest of the Project or be visible from the exterior of the Building) and

 

(ii)  obtaining any and all governmental permits or approvals for such Alterations, which are required by applicable law; provided, that (1) any and all contractors or workmen performing such Alterations must first be approved by the Landlord, (2) all work is performed in a good and workmanlike manner in compliance with all applicable codes, rules, regulations and ordinances, and (3) the Tenant shall restore the Premises to its condition immediately before such Alterations were made, by not later than the date on which the Tenant vacates the Premises or the Termination Date, whichever is earlier.

 

Notwithstanding the foregoing, Tenant shall be permitted to make Alterations to the Premises which are (i) purely cosmetic or decorative, (ii) do not affect the structural components of the Building and (iii) which cost in the aggregate less than $20,000, without Landlord’s consent.  The Tenant shall be responsible for the cost of repairing any damage to the Building caused by bringing therein any property for its use, or by the installation or removal of such property, regardless of fault or by whom such damage is caused.  As a condition for approving any Alterations on the Premises by the Tenant, the Landlord shall have the right to require the Tenant, or the Tenant’s contractor, to furnish a bond in an amount equal to the estimated cost of construction with a corporate surety approved by the Landlord for (i) completion of the construction and (ii) indemnification of the Landlord and the Tenant, as their interests may appear, against liens for labor and materials, which bond shall be furnished before any work has begun or any materials are delivered.

 

10.3.        Acceptance of Possession.  The Tenant shall for all purposes of this Lease be deemed to have accepted the Premises and the Building and to have acknowledged them to be in the condition called for hereunder except with respect to those defects of which the Tenant notifies the Landlord within thirty (30) days after the Rent Commencement Date.

 

10.4.        Fixtures.  Any and all improvements, repairs, alterations and all other property attached to, used in connection with or otherwise installed within the Premises by the Landlord or the Tenant shall become the Landlord’s property, without payment therefor by the Landlord, immediately on the completion of their installation; provided that any machinery, equipment or fixtures installed by the Tenant and used in the conduct of the Tenant’s trade or business (rather than to service the Premises, the Building or the Project generally) and not part of the Building Service Equipment shall remain the Tenant’s property; but further provided that if any leasehold improvements made by the Tenant replaced any part of the Premises, such leasehold improvements that replaced any part of the Premises shall be and remain the Landlord’s property.

 

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11.          LANDLORD’S RIGHT OF ENTRY.

 

The Landlord and its authorized representatives shall be entitled to enter the Premises at any reasonable time during the Tenant’s usual business hours, after giving the Tenant at least twenty-four (24) hours’ oral or written notice thereof, (a) to inspect the Premises, (b) during the last twelve (12) months of the Term, to exhibit the Premises (i) to any existing or prospective purchaser or Mortgagee thereof, or (ii) to any prospective tenant thereof, provided that in doing so the Landlord and each such invitee observes all reasonable safety standards and procedures which the Tenant may require, and (c) to make any repair thereto and/or to take any other action therein which the Landlord is permitted to take by this Lease or applicable law (provided, that in any situation in which, due to an emergency or otherwise, the Landlord reasonably believes the physical condition of the Premises, the Building or any part of the Project would be unreasonably jeopardized unless the Landlord were to take such action immediately, the Landlord shall not be required to give such notice to the Tenant and may enter the same at any time).  Nothing in this section shall be deemed to impose any duty on the Landlord to make any such repair or take any such action, and the Landlord’s performance thereof shall not constitute a waiver of the Landlord’s right hereunder to have the Tenant perform such work.  Provided that the Landlord diligently proceeds with, and uses commercially reasonable efforts to minimize disruption to the Tenant during the performance of, such repairs or the taking of such action, the Landlord shall not be liable to the Tenant for any inconvenience, annoyance, disturbance, loss of business or other damage sustained by the Tenant by reason of the making of such repairs, the taking of such action or the bringing of materials, supplies and equipment upon the Premises during the course thereof, and the Tenant’s obligations under this Lease shall not be affected thereby.

 

12.          DAMAGE OR DESTRUCTION.

 

12.1.        Option to Terminate.  If during the Term either the Premises or any portion of the Building or the Project are substantially damaged or destroyed by fire or other casualty thereby rendering the Premises totally or partially inaccessible or unusable, the Landlord shall have the option (which it may exercise by giving written notice thereof to the Tenant within sixty (60) days after the date on which such damage or destruction occurs) to terminate this Lease as of the date specified in such notice (which date shall not be earlier than the thirtieth (30th) day after such notice is given).  On such termination, the Tenant shall pay to the Landlord all Base Rent, Additional Rent and other sums and charges payable by the Tenant hereunder and accrued through the date of termination (as justly apportioned to such date).  If the Landlord does not terminate this Lease pursuant to this section, the Landlord shall diligently repair and restore the Premises and the Building to substantially the same condition they were in prior to such damage or destruction as soon thereafter as is reasonably possible, taking into account any delay experienced by the Landlord in recovering the proceeds of any insurance policy payable on account of such damage or destruction and in obtaining any necessary permits.  Until the Premises are so repaired, the Base Rent (and each installment thereof) and the Additional Rent shall abate in proportion to the floor area of so much, if any, of the Premises as is rendered substantially unusable by the Tenant by such damage or destruction.  If, within forty-five (45) days after the occurrence of the damage or destruction described in this section 12.1, Landlord determines in its sole but reasonable judgment that the repairs and restoration cannot be substantially completed within one hundred eighty (180) days after the date of such damage or

 

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destruction, and provided Landlord does not elect to terminate this Lease pursuant to this section, then Landlord shall promptly notify Tenant of such determination. For a period continuing through the later of the thirtieth (30th) day after the occurrence of the damage or destruction or the tenth (10th) day after receipt of such notice, Tenant shall have the right to terminate this Lease by providing written notice to Landlord (which date of termination shall be not more than thirty (30) days after the date of Tenant’s notice to Landlord).

 

12.2.        No Termination of Lease.  Except as is otherwise expressly permitted by subsection 12.1, no total or partial damage to or destruction of any or all of the Premises shall entitle either party hereto to surrender or terminate this Lease, or shall relieve the Tenant from its liability hereunder to pay in full the Base Rent, any Additional Rent and all other sums and charges which are otherwise payable by the Tenant hereunder, or from any of its other obligations hereunder, and the Tenant hereby waives any right now or hereafter conferred upon it by statute or otherwise, on account of any such damage or destruction, to surrender this Lease, to quit or surrender any or all of the Premises, or to have any suspension, diminution, abatement or reduction of the Base Rent or any Additional Rent or other sum payable by the Tenant hereunder.

 

13.          CONDEMNATION.

 

13.1.        Termination of Lease.  If any or all of the Premises and/or of that portion of the Project underlying the Premises is taken by the exercise of any power of eminent domain or is conveyed to or at the direction of any governmental entity under a threat of any such taking (each of which is herein referred to as a “Condemnation”), this Lease shall terminate on the date on which the title to so much of the Premises as is the subject of such Condemnation vests in the condemning authority, unless the parties hereto otherwise agree in writing. If all or any substantial portion of the Building or the Project other than that portion thereof underlying the Premises is taken or conveyed in a Condemnation, the Landlord shall be entitled, by giving written notice thereof to the Tenant, to terminate this Lease on the date on which the title to so much thereof as is the subject of such Condemnation vests in the condemning authority.  The Landlord shall notify Tenant of any Condemnation promptly after the Landlord receives notice thereof.  If Landlord does not elect to terminate the Lease pursuant to this Section, then within ten (10) days after receipt of such notice, the Tenant shall have the right to terminate this Lease with respect to the remainder of the Premises not so condemned as of the date title vests in such authority, but only if such Condemnation renders said remainder of the Premises totally unusable for their intended purpose.  If this Lease is not terminated pursuant to this subsection, the Landlord shall restore any of the Premises damaged by such Condemnation substantially to its condition immediately before such Condemnation, as soon after the Landlord’s receipt of the proceeds of such Condemnation as is reasonably possible under the circumstances.

 

13.2.        Condemnation Proceeds.  Regardless of whether this Lease is terminated under this section, the Tenant shall have no right in any such Condemnation to make any claim on account thereof against the condemning authority, except that the Tenant may make a separate claim for the Tenant’s moving expenses and the value of the Tenant’s trade fixtures, provided that

 

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such claim does not reduce the sums otherwise payable by the condemning authority to the Landlord.  Except as aforesaid, the Tenant hereby (a) waives all claims which it may have against the Landlord or such condemning authority by virtue of such Condemnation, and (b) assigns to the Landlord all such claims (including but not limited to all claims for leasehold damages or diminution in value of the Tenant’s leasehold interest hereunder).

 

13.3.        Effect on Rent.  If this Lease is terminated under this section, any Base Rent, any Additional Rent and all other sums and charges required to paid by the Tenant hereunder shall be apportioned and paid to the date of such termination.  If this Lease is not so terminated in the event of a Condemnation, the Base Rent (and each installment thereof) and the Additional Rent shall be abated from the date on which the title to so much, if any, of the Premises as is the subject of such Condemnation vests in the condemning authority, through the Termination Date, in proportion to the floor area of such portion of the Premises as is the subject of such Condemnation.

 

13.4.        No Termination of Lease.  Except as otherwise expressly provided in this section 13, no total or partial Condemnation shall entitle either party hereto to surrender or terminate this Lease, or shall relieve the Tenant from its liability hereunder to pay in full the Base Rent, any Additional Rent and all other sums and charges which are otherwise payable by the Tenant hereunder, or from any of its other obligations hereunder, and the Tenant hereby waives any right now or hereafter conferred upon it by statute or otherwise, on account of any such Condemnation, to surrender this Lease, to quit or surrender any or all of the Premises, or to receive any suspension, diminution, abatement or reduction of the Base Rent or any Additional Rent or other sum payable by the Tenant hereunder.

 

14.          ASSIGNMENT AND SUBLETTING.

 

14.1.        Landlord’s Consent Required.  The Tenant shall not assign this Lease, in whole or in part, nor sublet all or any part of the Premises, nor license concessions or lease departments therein, nor otherwise permit any other person to occupy or use any portion of the Premises (collectively, a “Transfer”), without in each instance first obtaining the written consent of the Landlord, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, Tenant shall have the right without Landlord’s prior written consent to assign this Lease or sublet all or any part of the Premises to any parent, subsidiary, affiliate corporation of the survivor of any merger or to the purchaser of all or substantially all of the assets of Tenant (an “Affiliate”). Landlord shall grant or deny with reasonable specificity any Tenant request to Transfer within thirty (30) days after such request. If Landlord fails to timely grant or deny with reasonable specificity, then Landlord shall be deemed to have granted its consent. Consent by the Landlord to any assignment, subletting, licensing or other transfer shall not (i) constitute a waiver of the requirement for such consent to any subsequent assignment, subletting, licensing or other Transfer, (ii) relieve the Tenant from its duties, responsibilities and obligations under this Lease, or (iii) relieve any guarantor of this Lease from such guarantor’s obligations under its guaranty agreement.

 

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14.2.        Acceptance of Rent from Transferee.  The acceptance by the Landlord of the payment of Rent from any person following any act, assignment or other Transfer prohibited by this section shall not constitute a consent to such act, assignment or other Transfer, nor shall the same be deemed to be a waiver of any right or remedy of the Landlord’s hereunder.

 

14.3.        Conditions of Consent.

 

14.3.1.     If the Tenant receives consent to a Transfer under subsection 14.1 above, then, in addition to any other terms and conditions imposed by the Landlord in the giving of such consent, the Tenant and the transferee shall execute and deliver, on demand, an agreement prepared by the Landlord providing that the transferee shall be directly bound to the Landlord to perform all obligations of the Tenant hereunder including, without limitation, the obligation to pay all Rent and other amounts provided for herein; acknowledging and agreeing that there shall be no subsequent Transfer of this Lease or of the Premises or of any interest therein without the prior consent of the Landlord pursuant to subsection 14.1 above; acknowledging that the Tenant as originally named herein (and any guarantor) shall remain fully liable for all obligations of the tenant hereunder, including the obligation to pay all Rent provided herein and including any and all obligations arising out of any subsequent amendments to this Lease made between the Landlord and the transferee (whether or not consented to by the Tenant and/or any guarantor), jointly and severally with the transferee; and such other provisions as the Landlord shall require.

 

14.3.2.     All reasonable costs (not to exceed $2000) incurred by the Landlord in connection with any request for consent to a Transfer, including reasonable costs of investigation and the reasonable fees of the Landlord’s counsel, shall be paid by the Tenant on demand as a further condition of any consent which may be given.

 

14.4.        Profits from Use or Transfer.

 

14.4.1.     Neither the Tenant nor any other person having an interest in the use, occupancy or other utilization of space in the Premises shall enter into any lease, sublease, license, concession or other Transfer which provides for rent or other payment for such use, occupancy or utilization based in whole or in part on the net income or profits derived from the Premises, and any such purported lease, sublease, license, concession or other Transfer shall be absolutely void and ineffective as a conveyance or creation of any right or interest in the possession, use, occupancy or utilization of any part of the Premises.

 

14.4.2.     The Tenant agrees that in the event of a Transfer, the Tenant shall pay the Landlord, within ten (10) days after receipt thereof, fifty percent (50%) of the excess of (i) any and all consideration, money or thing of value, however characterized, received by the Tenant or payable to the Tenant in connection with or arising out of such Transfer, over (ii) all amounts otherwise payable by the Tenant to the Landlord pursuant to this Lease (including transaction costs).

 

14.5.        Landlord’s Right of Recapture.  If Tenant intends to sublease more than 50% of the Premises or assign this Lease to an entity other than an Affiliate, then Tenant shall give written notice of such intent to Landlord, which notice shall constitute an offer to Landlord to recapture the Premises, or the portion of the Premises covered by such sublease, as the case may

 

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be.  Tenant’s notice to Landlord shall identify the specific “Rental Area” of the Premises subleased or indicate that the Lease is to be assigned, and the date of commencement and termination of the sublease or the effective date for the assignment, and shall include a copy of all of the documents relating to such sublease or assignment.  Within thirty (30) days after Landlord’s receipt of Tenant’s notice, Landlord may at its sole option elect to recapture the Premises or such portion thereof, as the case may be, by giving Tenant written notice thereof.  If Landlord exercises its option, Tenant shall notify the prospective subtenant or assignee of Landlord’s election, shall terminate the agreement with such prospective subtenant or assignee if so directed by Landlord, and shall surrender the space to Landlord pursuant to a written partial or total surrender of lease, as applicable, reasonably satisfactory to both parties, providing for the termination of this Lease as of the commencement date set forth in the proposed sublease or assignment with respect to the Premises or such portion thereof and the parties’ obligations to each other with respect to such space.  Upon any partial termination under this Section 14.5, (x) the Rental Area of the Premises shall be adjusted, and the base rent and additional rent shall be pro-rated as of the date of termination and shall be abated following the termination as to the surrendered Rental Area, and (y) Landlord, at Landlord’s sole cost and expense, shall construct Building standard demising walls to separate the space covered by such partial termination from the remaining part of the Premises.

 

14.6.        [Intentionally Omitted].

 

15.          RULES AND REGULATIONS.

 

The Landlord shall have the right to prescribe, at its sole discretion, the Rules and Regulations. The Rules and Regulations may govern, without limitation, the use of sound apparatus, noise or vibrations emanating from machinery or equipment, obnoxious fumes and/or odors, the parking of vehicles, lighting and storage and disposal of trash and garbage.  The Landlord will not enforce the Rules and Regulations in a discriminatory manner and will make reasonable efforts to enforce the Rules and Regulations uniformly against all tenants.  The Tenant shall adhere to the Rules and Regulations and shall cause its agents, employees, invitees, visitors and guests to do so.  A copy of the Rules and Regulations in effect on the date hereof is attached hereto as Exhibit D. The Landlord shall have the right to amend the Rules and Regulations from time to time.

 

16.          SUBORDINATION AND ATTORNMENT.

 

16.1.        Subordination.

 

16.1.1.     Unless a Mortgagee otherwise shall elect as provided in subsection 16.2, the Tenant’s rights under this Lease are and shall remain subject and subordinate to the operation and effect of any mortgage, deed of trust or other security instrument constituting a lien upon the Premises, and/or the Project, whether the same shall be in existence on the date hereof or created hereafter (any such lease, mortgage, deed of trust or other security instrument being referred to herein as a “Mortgage,” and the party or parties having the benefit of the same, whether as

 

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beneficiary, trustee or noteholders being referred to hereinafter collectively as “Mortgagee”).  The Tenant’s acknowledgment and agreement of subordination as provided for in this section is self-operative and no other instrument of subordination shall be required; however, the Tenant shall execute, within fifteen (15) days after request therefor, a document providing for such further assurance thereof and for such other matters as shall be requisite or as may be requested from time to time by the Landlord or any Mortgagee. Upon Tenant’s written request, Landlord will use reasonable efforts to obtain a non-disturbance agreement from the current Mortgagee on said Mortgagee’s standard form.

 

16.1.2.     The Landlord hereby directs the Tenant, upon (i) the occurrence of any event of default by the Landlord, as mortgagor under any Mortgage, (ii) the receipt by the Tenant of a notice of the occurrence of such event of default under such Mortgage from the Landlord or such Mortgagee, or (iii) a direction by the Mortgagee under such Mortgage to the Tenant to pay all Rent thereafter to such Mortgagee, to make such payment to such Mortgagee, and the Landlord agrees that in the event that the Tenant makes such payments to such Mortgagee, as aforesaid, the Tenant shall not be liable to the Landlord for the same.  In addition, the Mortgagee (and any person who acquires the property from Mortgagee) shall not be responsible for security deposits not actually received by the Mortgagee, or its affiliate, after the Mortgagee, or its affiliate, becomes the owner of the property.

 

16.2.        Mortgagee’s Unilateral Subordination.  If a Mortgagee shall so elect by notice to the Tenant or by the recording of a unilateral declaration of subordination, this Lease and the Tenant’s rights hereunder shall be superior and prior in right to the Mortgage of which such Mortgagee has the benefit, with the same force and effect as if this Lease had been executed, delivered and recorded prior to the execution, delivery and recording of such Mortgage, subject, nevertheless, to such conditions as may be set forth in any such notice or declaration.

 

16.3.        Attornment.  If any Person shall succeed to all or any part of the Landlord’s interest in the Premises, whether by purchase, foreclosure, deed in lieu of foreclosure, power of sale, termination of lease or otherwise, and if such successor-in-interest requests or requires, the Tenant shall attorn to such successor-in-interest and shall execute within fifteen (15) days after receipt thereof an agreement in confirmation of such attornment in a form as may be reasonably requested by such successor-in-interest.

 

16.4.        Superior Leases.  Tenant acknowledges that Landlord may restructure the ownership of the Project involving one or more ground leases or master leases (the “Superior Leases”).  In such event, Tenant agrees that it will subordinate this Lease to such Superior Leases or, at Landlord’s option, enter into a new sublease with the applicable master lessee upon substantially the same terms and conditions as are set forth herein, provided that in connection with such subordination or such new sublease, Tenant shall have the benefit of a non-disturbance agreement which shall provide in substance, along with other matters deemed reasonable or desirable by Landlord, that so long as Tenant is not in default, Tenant’s rights of use and occupancy shall not be disturbed in the event of a termination of any Superior Lease.

 

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17.          DEFAULTS AND REMEDIES.

 

17.1.        “Event of Default” Defined.  Any one or more of the following events shall constitute an “Event of Default” under the terms of this Lease:

 

(a)           the failure of the Tenant to pay any Rent or other sum of money due hereunder to the Landlord or any other person within five (5) days after receipt of written notice from Landlord that the same is due;

 

(b)           the sale of the Tenant’s interest in the Premises under attachment, execution or similar legal process without the Landlord’s prior written approval;

 

(c)           the filing of a petition proposing the adjudication of the Tenant as a bankrupt or insolvent, or the reorganization of the Tenant, or an arrangement by the Tenant with its creditors, whether pursuant to the Federal Bankruptcy Act or any similar federal or state proceeding, unless such petition is filed by a party other than the Tenant and is withdrawn or dismissed within sixty (60) days after the date of its filing;

 

(d)           the admission in writing by the Tenant of its inability to pay its debts when due;

 

(e)           the appointment of a receiver or trustee for the business or property of the Tenant, unless such appointment is vacated within sixty (60) days of its entry;

 

(f)            the making by the Tenant of an assignment for the benefit of its creditors;

 

(g)           a default by the Tenant in the performance or observance of any covenant or agreement of this Leases to be performed or observed by the Tenant (other than as set forth in clauses (a) through (f) above), which default is not cured within thirty (30) days after the giving of written notice thereof by the Landlord, unless such default is of such nature that it cannot be cured within such 30-day period, in which event an Event of Default shall not be deemed to have occurred if the Tenant institutes a cure within the 30-day period and thereafter diligently and continuously prosecutes the curing of the same until completion, but in no event shall such cure period exceed ninety (90) days; provided, however, that if the Tenant defaults in the performance of any such covenant or agreement more than two (2) times during the Term, then notwithstanding that such defaults have each been cured by the Tenant, any further defaults shall be deemed an Event of Default without the ability to cure; or

 

(h)           the vacating or abandonment of the Premises by the Tenant at any time during the Term.

 

17.2.        Landlord’s Remedies.  Upon the occurrence of an Event of Default, the Landlord, without notice to the Tenant in any instance (except where expressly provided for below), may do any one or more of the following:

 

(a)           perform, on behalf and at the expense of the Tenant, any obligation of the Tenant under this Lease which the Tenant has failed to perform beyond any applicable grace or cure periods and of which the Landlord shall have given the Tenant notice (except in an emergency situation in which no notice is required), the cost of which performance by the Landlord,

 

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together with interest thereon at the Default Rate from the date of such expenditure, shall be deemed Additional Rent and shall be payable by the Tenant to the Landlord as otherwise set forth herein;

 

(b)           elect to terminate this Lease and the tenancy created hereby by giving notice of such election to the Tenant without any right on the part of the Tenant to save the forfeiture by payment of any sum due or by other performance of condition, term, agreement or covenant broken, or elect to terminate the Tenant’s possessory rights and all other rights of the Tenant without terminating this Lease, and in either event, at any time thereafter without notice or demand and without any liability whatsoever, re-enter the Premises by force, summary proceedings or otherwise, and remove the Tenant and all other persons and property from the Premises, and store such Project in a public warehouse or elsewhere at the cost and for the account of the Tenant without resort to legal process and without the Landlord being deemed guilty of trespass or becoming liable for any loss or damage occasioned thereby;

 

(c)           accelerate the Rent and any other charges, whether or not stated to be Additional Rent, for the entire balance of the Term, or any part of such Rent, and any costs, whether chargeable to the Landlord or the Tenant, as if by the terms of this Lease the balance of the Rent and other charges and expenses were on that date payable in advance;

 

(d)           cause an attorney for the Landlord to proceed in any competent court for judgment in ejectment against the Tenant and all persons claiming under the Tenant for the recovery by the Landlord of possession of the Premises, and if for any reason after such action has been commenced it is canceled or suspended and possession of the Premises remains in or is restored to the Tenant, the Landlord shall have the right upon any subsequent default or upon the expiration or termination of this Lease, or any renewal or extension hereof, to bring one or more actions to recover possession of the Premises; and

 

(e)           exercise any other legal and/or equitable right or remedy which it may have at law or in equity, including rights of specific performance and/or injunctive relief, where appropriate.

 

In any action for possession of the Premises or for monetary damages, including Termination Damages and Liquidated Damages, or for the recovery of Rent due for the balance of the Term, the Landlord may cause to be filed in such action an affidavit setting forth the facts necessary to authorize the entry of judgment.  If a true copy of this Lease (and of the truth of the copy, such affidavit shall be sufficient proof) must be filed in such action, it shall not be necessary to file the original, notwithstanding any law, rule of court, custom or practice to the contrary.

 

17.3.        Damages.

 

(a)           If this Lease is terminated by the Landlord pursuant to subsection 17.2, the Tenant nevertheless shall remain liable for any Rent and damages which may be due or sustained prior to such termination, as well as all reasonable costs, fees and expenses, including, without limitation, sheriffs’ or other officers’ commissions whether chargeable to the Landlord or the Tenant, watchmen’s wages, brokers’ and attorneys’ fees, and repair and renovation costs incurred by the Landlord in pursuit of its remedies hereunder, and/or in connection with any bankruptcy

 

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proceedings of the Tenant, and/or in connection with renting the Premises to others from time to time (all such Rent, damages, costs, fees and expenses being referred to herein as “Termination Damages”), plus additional damages for all Rent treated as in arrears (“Liquidated Damages”).  At the election of the Landlord, Termination Damages shall be an amount equal to either:

 

(i)            the Rent which, but for the termination of this Lease, would have become due during the remainder of the Term, less the amount or amounts of rent, if any, which the Landlord receives during such period from others to whom the Premises may be rented (other than any additional rent received by the Landlord as a result of any failure of such other person to perform any of its obligations to the Landlord), in which case Termination Damages shall be computed and payable in monthly installments, in advance, on the first business day of each calendar month following the termination of this Lease and shall continue until the date on which the Term would have expired but for such termination, and any action or suit brought to collect any such Termination Damages for any month shall not in any manner prejudice the right of the Landlord to collect any Termination Damages for any subsequent months by similar proceeding; or

 

(ii)           the present worth (as of the date of such termination) of the Rent which, but for the termination of this Lease, would have become due during the remainder of the Term, less the fair rental value of the Premises, as determined by an independent real estate appraiser or broker selected by the Landlord, in which case such Termination Damages shall be payable to the Landlord in one lump sum on demand, and shall bear interest at the Default Rate.  “Present worth” shall be computed by discounting such amount to present worth at a rate equal to one percentage point above the discount rate then in effect at the Federal Reserve Bank.

 

(b)           Notwithstanding anything to the contrary set forth in this subsection 17.3, in the event (i) the Landlord must initiate legal action to enforce any one or more of the provisions of this Lease against the Tenant, its successors or assigns, or (ii) the Landlord must consult with and/or engage an attorney(s) in order (A) to enforce any one or more of the provisions of this Lease against the Tenant, its successors or assigns, or (B) in connection with any bankruptcy proceeding of the Tenant, whether or not such consultation and/or engagement results in the initiation of any judicial action or termination of this Lease, then and in any of such events, the Tenant, its successors and assigns, undertakes and agrees to pay any and all reasonable costs incurred by the Landlord in connection therewith, including, by way of illustration and not of limitation, all reasonable attorneys’ fees (inclusive of consultation fees, research costs and correspondence fees), court costs (if awarded post-judgment) and any similar professional fees or costs associated therewith.  If Tenant is in default under this Lease and has vacated the Premises, and if Landlord has terminated this Lease as a result of such default, then Landlord shall thereafter use reasonable efforts to relet the Premises; provided, however, that Tenant understands and agrees that Landlord’s main priority will be the leasing of other space in the Building (and not then leased by Landlord) and the reletting of the Premises will be of lower priority.

 

17.4.        Waiver of Jury Trial.  Each party hereto hereby waives any right which it may otherwise have at law or in equity to a trial by jury in connection with any suit or proceeding at law or in equity brought by the other against the waiving party or which otherwise relates to this

 

36

 

lease, as a result of an event of default or otherwise.  The Tenant agrees that in the event the Landlord commences any summary proceeding for nonpayment of rent or possession of the Premises, the Tenant will not, and hereby waives, all right to interpose any counterclaim of whatever nature in any such proceeding.

 

17.5.        [Intentionally Omitted].

 

17.6.        [Intentionally Omitted].

 

18.          ESTOPPEL CERTIFICATE.

 

(a)           The Tenant shall, without charge, at any time and from time to time, within fifteen (15) days after receipt of request therefor from the Landlord, execute, acknowledge and deliver to the Landlord, and to such Mortgagee or other party as may be designated by the Landlord, a written estoppel certificate in form and substance as may be requested from time to time by the Landlord, the other party or any Mortgagee, certifying to the other party, any Mortgagee, any purchaser of Landlord’s interest in all or any part of the Project, or any other person or entity designated by the other party, as of the date of such estoppel certificate, the following: (a) whether the Tenant is in possession of the Premises; (b) whether this Lease is in full force and effect; (c) whether there are any amendments to this Lease, and if so, specifying such amendments; (d) whether there are any then-existing setoffs or defenses against the enforcement of any rights hereunder, and if so, specifying such matters in detail; (e) the dates, if any, to which any rent or other sums due hereunder have been paid in advance and the amount of any security deposit held by the Landlord; (f) that the Tenant has no knowledge of any then existing defaults of the Landlord under this Lease, or if there are such defaults, specifying them in detail; (g) that the Tenant has no knowledge of any event having occurred that authorized the termination of this Lease by the Tenant, or if such event has occurred, specifying it in detail; (h) the address to which notices to the Tenant should be sent; and (i) any and all other matters reasonably requested by the Landlord, any Mortgagee and/or any other person or entity designated by the Landlord.  Any such estoppel certificate may be relied upon by the person or entity to whom it is directed or by any other person or entity who could reasonably be expected to rely on it in the normal course of business.  The failure of the Tenant to execute, acknowledge and deliver such a certificate in accordance with this section within fifteen (15) days after a request therefor by the Landlord shall constitute an acknowledgment by the Tenant, which may be relied on by any person or entity who would be entitled to rely upon any such certificate, that such certificate as submitted by the requesting party to the other party is true and correct, and the requesting party is hereby authorized to so certify.

 

(b)           Landlord also agrees to provide to Tenant a similar estoppel certificate from time to time within fifteen (15) days after Tenant’s written request.

 

19.          QUIET ENJOYMENT.

 

The Landlord hereby warrants that, so long as all of the Tenant’s obligations hereunder are timely performed, the Tenant will have during the Term quiet and peaceful possession of the Premises and enjoyment of such rights as the Tenant may hold hereunder to use the Common

 

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Areas, except if and to the extent that such possession and use are terminated pursuant to this Lease.

 

20.          NOTICES.

 

Except as may be otherwise provided in this Lease, any notice, demand, consent, approval, request or other communication or document to be provided hereunder to the Landlord or the Tenant (a) shall be in writing, and (b) shall be deemed to have been provided (i) two (2) days following the date sent as certified mail in the United States mails, postage prepaid, return receipt requested, (ii) on the day following the date it is deposited prior to the close of business with Federal Express or another national courier service or (iii) on the date of hand delivery (if such party’s receipt thereof is acknowledged in writing), in each case to the address of such party set forth hereinbelow or to such other address as such party may designate from time to time by notice to each other party hereto.

 

If to the Landlord, notice shall be sent to:

 

Can Company LLC

 

c/o Struever Brothers Eccles and Rouse

1040 Hull Street, Suite 200

Baltimore, Maryland  21230

Attention:  Property Management

 

with a copy to:

 

John P. Machen, Esquire

Piper Marbury Rudnick & Wolfe LLP

6225 Smith Avenue

Baltimore, Maryland  21209-3600

 

If to the Tenant, notice shall be sent to:

 

Millennial Media, Inc.

2400 Boston Street,

Suite 301

Baltimore, MD  21224

 

21.          GENERAL

 

21.1.        Effectiveness.  This Lease shall become effective on and only on its execution and delivery by each party hereto.

 

21.2.        Complete Understanding.  This Lease represents the complete understanding between the parties hereto as to the subject matter hereof, and supersedes all prior negotiations,

 

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representations, guaranties, warranties, promises, statements and agreements, either written or oral, between the parties hereto as to the same.

 

21.3.        Amendment.  This Lease may be amended by and only by an instrument executed and delivered by each party hereto.

 

21.4.        Waiver.  No party hereto shall be deemed to have waived the exercise of any right which it holds hereunder unless such waiver is made expressly and in writing (and, without limiting the generality of the foregoing, no delay or omission by any party hereto in exercising any such right shall be deemed a waiver of its future exercise).  No such waiver made in any instance involving the exercise of any such right shall be deemed a waiver as to any other such instance or any other such right.  Without limiting the generality of the foregoing provisions of this subsection, the Landlord’s receipt or acceptance of any Base Rent, Additional Rent or other sum from the Tenant or any other person shall not be deemed a waiver of the Landlord’s right to enforce any of its rights hereunder on account of any default by the Tenant in performing its obligations hereunder.

 

21.5.        Applicable Law.  This Lease shall be given effect and construed by application of the laws of Maryland, and any action or proceeding arising hereunder shall be brought in the courts of Maryland; provided, however, that if any such action or proceeding arises under the Constitution, laws or treaties of the United States of America, or if there is a diversity of citizenship between the parties thereto, so that it is to be brought in a United States District Court, it may be brought only in the United States District Court for Maryland or any successor federal court having original jurisdiction.

 

21.6.        Commissions.  Tenant warrants and represents to Landlord that it has not engaged any real estate broker or agent in connection with this Lease or its negotiation except CB Richard Ellis.  Landlord represents and warrants to Tenant that it has not engaged any real estate broker or agent in connection with this Lease or its negotiation except Colliers Pinkard.  Any and all commissions due such brokers shall be paid in accordance with the terms and conditions set forth in a separate written agreement or agreements between the parties set forth above..  Subject to the foregoing, each party hereto hereby represents and warrants to the other that, in connection with such leasing, the party so representing and warranting has not dealt with any real estate broker, agent or finder, and there is no commission, charge or other compensation due on account thereof.  Each party hereto shall indemnify and hold harmless the other against and from any inaccuracy in such party’s representation.

 

21.7.        Landlord’s Liability.   No Person holding the Landlord’s interest hereunder (whether or not such Person is named as the “Landlord” herein) shall have any liability hereunder after such Person ceases to hold such interest, except for any such liability accruing while such Person holds such interest.  No Mortgagee not in possession of the Premises shall have any liability hereunder.  Neither the Landlord nor any principal of the Landlord, whether disclosed or undisclosed, shall have any personal liability under this Lease.  If the Landlord defaults in performing any of its obligations hereunder or otherwise, the Tenant shall look solely to the Landlord’s equity, interest and rights in the Project to satisfy the Tenant’s remedies on account thereof.

 

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21.8.        Disclaimer of Partnership Status.  Nothing in this Lease shall be deemed in any way to create between the parties hereto any relationship of partnership, joint venture or association, and the parties hereto hereby disclaim the existence of any such relationship.

 

21.9.        Remedies Cumulative.  No reference to any specific right or remedy shall preclude the Landlord from exercising any other right or from having any other remedy or from maintaining any action to which it may otherwise be entitled at law or in equity.  No failure by the Landlord to insist upon the strict performance of any agreement, term, covenant or condition hereof, or to exercise any right or remedy consequent upon a breach thereof, and no acceptance of full or partial Rent during the continuance of any such breach, shall constitute a waiver of any such breach, agreement, term, covenant or condition.  No waiver by the Landlord of any breach by the Tenant under this Lease or of any breach by any other tenant under any other lease of any portion of the Building shall affect or alter this Lease in any way whatsoever.

 

21.10.      Severability.  No determination by any court, governmental or administrative body or agency or otherwise that any provision of this Lease or any amendment hereof is invalid or unenforceable in any instance shall affect the validity or enforceability of (a) any other provision hereof, or (b) such provision in any circumstance not controlled by such determination.  Each such provision shall remain valid and enforceable to the fullest extent allowed by, and shall be construed wherever possible as being consistent with, applicable law.

 

21.11.      Authority.  If the Tenant is a corporation partnership, limited liability company or similar entity, the person executing this Lease on behalf of the Tenant represents and warrants that (a) the Tenant is duly organized and validly existing and (b) this Lease (i) has been authorized by all necessary parties, (ii) is validly executed by an authorized officer or agent of the Tenant and (iii) is binding upon and enforceable against the Tenant in accordance with its terms.

 

21.12.      Joint and Several Liability.  If the Tenant shall be one or more individuals, corporations or other entities, whether or not operating as a partnership or joint venture, then each such individual, corporation, entity, joint venturer or partner shall be deemed to be both jointly and severally liable for the payment of the entire Rent and other payments specified herein.

 

21.13.      Recordation.  Neither this Lease, any amendment to this Lease, nor any memorandum, affidavit or other item with respect thereto shall be recorded by the Tenant or by anyone acting through, under or on behalf of the Tenant, and the recording thereof in violation o this provision shall (i) be deemed an Event of Default and (ii) at the Landlord’s election, make this Lease null and void.

 

21.14.      Time of Essence.  Time shall be of the essence with respect to the performance of the parties’ obligations under this Lease.

 

21.15.      Interpretation.  The Landlord and the Tenant hereby agree that both parties were equally influential in preparing and negotiating this Lease, and each had the opportunity to seek the advice of legal counsel prior to the execution of this Lease.  Therefore, the Landlord and the

 

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Tenant agree that no presumption should arise construing this Lease more unfavorably against any one party.

 

21.16.      Headings.  The headings of the sections, subsections, paragraphs and subparagraphs hereof are provided herein for and only for convenience of reference and shall not be considered in construing their contents.

 

21.17.      Construction.  As used herein, all references made (a) in the neuter, masculine or feminine gender shall be deemed to have been made in all such genders; (b) in the singular or plural number shall be deemed to have been made, respectively, in the plural or singular number as well; and (c) to any section, subsection, paragraph or subparagraph shall be deemed, unless otherwise expressly indicated, to have been made to such section, subsection, paragraph or subparagraph of this Lease.

 

21.18.      Exhibits.  Each writing or drawing referred to herein as being attached hereto as a schedule, an exhibit or otherwise designated herein as a schedule or an exhibit hereto is hereby made a part hereof.

 

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IN WITNESS WHEREOF, each party hereto has executed and ensealed this Lease, or caused it to be executed and ensealed on its behalf by its duly authorized representatives, on the date first above written.

 

	
WITNESS or ATTEST:
    	
 
    	
LANDLORD:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
THE CAN COMPANY LLC, a Maryland 
   limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ [ILLEGIBLE]
    	
 
    	
By:
    	
/s/ [ILLEGIBLE]
    	
(seal)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Joseph Adamo
    
	
 
    	
 
    	
 
    	
 
    
	
WITNESS or ATTEST:
    	
 
    	
TENANT:
    
	
 
    	
 
    	
MILLENNIAL MEDIA, INC., a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Matt Coury
    	
 
    	
By:
    	
/s/ Paul J. Palmieri
    	
(seal)
    
	
 
    	
 
    	
Name:
    	
Paul J. Palmieri
    	
 
    
	
 
    	
 
    	
Title:
    	
President & ceo
    	
 
    
						

 

 

ACKNOWLEDGEMENT OF LANDLORD

 

STATE OF NEW JERSEY             .

) to wit:

CITY/COUNTY OF MORRIS

 

I HEREBY CERTIFY that on this 22nd day of July, 2008 before me, the subscriber, a Notary Public in and for the State aforesaid, personally appeared Joseph Adamo who acknowledged himself to be the Authorized Signatory of The Can Company, a Maryland LLC, and that he, as such officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained by signing the name of said corporation by himself as such officer.

 

IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal.

 

	
/s/   Leona Maddocks
    	
 
    
	
Notary   Public
    	
 
    
	
 
    	
 
    
	
My   Commission Expires: 7-24-2013
    	
LEONA MADDOCKS
    
	
 
    	
NOTARY PUBLIC OF NEW JERSEY
    
	
 
    	
MY COMMISSION EXPIRES JULY 24, 2013
    

 

ACKNOWLEDGEMENT OF TENANT

 

STATE OF MARYLAND

) to wit:

CITY/COUNTY OF BALTIMORE

 

I HEREBY CERTIFY that on this 11 day of July, 2008 before me, the subscriber, a Notary Public in and for the State aforesaid, personally appeared Paul Palmieri who acknowledged himself to be the President & CEO of Millennial Media, a Delaware Corporation, and that he, as such officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained by signing the name of said corporation by himself as such officer.

 

IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal.

 

	
/s/   Valene E. Ellis
    	
 
    
	
Notary   Public
    	
 
    
	
 
    	
 
    
	
My   Commission Expires: 8/1/09
    	
 
    

 

 

EXHIBIT A

 

Site Plan showing Property and Building

 

 

 

EXHIBIT B

 

Drawing showing approximate location of Premises

 

 

 

EXHIBIT C

 

Current Rules and Regulations

 

1              The sidewalks, passages and stairways shall not be obstructed by the Tenant or Tenant’s agents, employees, or invitees or used by the Tenant for any purpose other than ingress and egress from and to the Tenant’s premises.  The Landlord shall in all cases retain the right to control or prevent access thereto by any person whose presence, in the Landlord’s judgment, would be prejudicial to the safety, peace, character or reputation of the property or of any tenant of the Project.

 

2.             The toilet rooms, water closets, sinks, faucets, plumbing and other service apparatus of any kind shall not be used by the Tenant for any purpose other than those for which they were installed, and no sweepings, rubbish, rags, ashes, chemicals or other refuse or injurious substances shall be placed therein or used in connection therewith by the Tenant, or left by the Tenant in the lobbies, passages, elevators or stairways of the Building.  The expense of any breakage, stoppage or damage to such sinks, toilets and the like shall be borne by the tenant who, or whose employees, contractors or invitees, caused it.

 

3.             No skylight, window, door or transom of the Building shall be covered or obstructed by the Tenant, and no window shade, blind, curtain, screen, storm window, awning or other material shall be installed or placed on any window or in any window space, except as approved in writing by the Landlord.  If the Landlord has installed or hereafter installs any shade, blind or curtain in the Premises, the Tenant shall not remove it without first obtaining the Landlord’s written consent thereto.

 

4.             No sign, lettering, insignia, advertisement, notice or other thing shall be inscribed, painted, installed, erected or placed in any portion of the Premises which may be seen from outside the Building, or on any window, window space or other part of the exterior or interior of the Building, unless first approved in writing by the Landlord.  Names on suite entrances may be provided by and only by the Landlord and at the Tenant’s expense, using in each instance lettering of a design and in a form consistent with the other lettering in the Building, and first approved in writing by the Landlord.  The Tenant shall not erect any stand, booth or showcase or other article or matter in or upon the Premises, the Building and/or the Project without first obtaining the Landlord’s written consent thereto.

 

5.             The Tenant shall not place any other or additional lock upon any door within the Premises or elsewhere upon the Project, and the Tenant shall surrender all keys for all such locks at the end of the Term.  The Landlord shall provide the Tenant with one set of keys to the Premises when the Tenant assumes possession thereof.

 

6.             The Tenant shall not do or permit to be done anything which obstructs or interferes with the rights of any other tenant of the Project.  No bird, fish or animal shall be brought into or kept in or about the Premises, the Building and/or the Project.

 

7.             If the Tenant desires to install signaling, telegraphic, telephonic, protective alarm or other wires, apparatus or devices within the Premises, the Landlord shall direct where and

 

 

how they are to be installed and, except as so directed, no installation, boring or cutting shall be permitted.  The Landlord shall have the right (a) to prevent or interrupt the transmission of excessive, dangerous or annoying current of electricity or otherwise into or through the Premises, the Building and/or the Project, (b) to require the changing of wiring connections or layout at the Tenant’s expense, to the extent that the Landlord may deem necessary, (c) to require compliance with such reasonable rules as the Landlord may establish relating thereto, and (d) in the event of noncompliance with such requirements or rules, immediately to cut wiring or do whatever else it considers necessary to remove the danger, annoyance or electrical interference with apparatus in any part of the Building and/or the Project.  Each wire installed by the Tenant must be clearly tagged at each distributing board and junction box and elsewhere where required by the Landlord, with the number of the office to which such wire leads and the purpose for which it is used, together with the name of the Tenant or other concern, if any, operating or using it.

 

8.             A directory may be provided by the Landlord on the ground floor of the Building or elsewhere within the Project, on which the Tenant’s name may be placed.

 

9.             The Landlord shall in no event be responsible for admitting or excluding any person from the Premises.  In case of invasion, hostile attack, insurrection, mob violence, riot, public excitement or other commotion, explosion, fire or any casualty, the Landlord shall have the right to bar or limit access to the Project to protect the safety of occupants of the Project, or any property within the Project.

 

10.           The use of any area within the Project as sleeping quarters is strictly prohibited at all times.

 

11.           The Tenant shall keep the windows and doors of the Premises (including those opening on corridors and all doors between rooms entitled to receive heating or air-conditioning service and rooms not entitled to receive such service) closed while the heating or air-conditioning system is operating, in order to minimize the energy used by, and to conserve the effectiveness of, such systems.  The Tenant shall comply with all reasonable rules and regulations from time to time promulgated by the Landlord with respect to such systems or their use.

 

12.           The Landlord shall have the right to prescribe the weight and position of inventory and of other heavy equipment or fixtures, which shall, if considered necessary by the Landlord, stand on plank strips to distribute their weight.  Any and all damage or injury to the Project arising out of the Tenant’s equipment being on the property shall be repaired by the Tenant at its expense.  The Tenant shall not install or operate any machinery whose installation or operation may affect the structure of the Building without first obtaining the Landlord’s written consent thereto, and the Tenant shall not install any other equipment of any kind or nature whatsoever which may necessitate any change, replacement or addition to, or in the use of, the water system, the heating system, the plumbing system, the air-conditioning system or the electrical system of the Premises, the Building or the Project without first obtaining the Landlord’s written consent thereto.  Business machines and mechanical equipment belonging to the Tenant which cause noise or vibration that may be transmitted to the structure of the Building, any other buildings on the Project, or any space therein to such a degree as to be objectionable to the Landlord or to any tenant, shall be installed and maintained by the Tenant, at

 

 

its expense, on vibration eliminators or other devices sufficient to eliminate such noise and vibration.  The Tenant shall remove promptly from any sidewalks and other areas on the Project any of the Tenant’s furniture, equipment, inventory or other material delivered or deposited there.

 

13.           The Tenant shall not place or permit its agents, employees or invitees to place any thing or material on the roof or in the gutters and downspouts of the Building or cut, drive nails into or otherwise penetrate the roof, without first obtaining the Landlord’s written consent thereto.  The Tenant shall be responsible for any damage to the roof caused by its employees or contractors.  The Tenant shall indemnify the Landlord and hold the Landlord harmless against expenses incurred to correct any damage to the roof resulting from the Tenant’s violation of this rule, as well as any consequential damages to the Landlord or any other tenant of the Project.  The Landlord shall repair damage to the roof caused by the Tenant’s acts, omissions or negligence and the Tenant shall reimburse the Landlord for all expenses incurred in making such repairs.  The Landlord or its agents may enter the Premises at all reasonable hours to make such roof repairs.  If the Landlord makes any expenditure or incurs any obligation for the payment of money in connection therewith, including but not limited to attorneys’ fees in instituting, prosecuting or defending any action or proceeding, such sums paid or obligations incurred, with interest at the Default Rate, and costs, shall be deemed to be Additional Rent and shall be paid by the Tenant to the Landlord within five (5) days after rendition of any bill or statement to the Tenant therefor.  The Tenant shall not place mechanical or other equipment on the roof without the Landlord’s prior written consent, which shall be conditioned in part upon the Landlord’s approval of the Tenant’s plans and specifications for such installations.  The costs of any roof improvements made pursuant hereto shall be borne by the Tenant.

 

14.           The Landlord reserves the right to institute energy management procedures when necessary.

 

15.           The Tenant shall assure that the doors of the Premises are closed and locked and that all water faucets, water apparatus and utilities are shut off before the Tenant and its employees leave the Premises each day.

 

16.           The Landlord shall have the right to rescind, suspend or modify these Rules and Regulations and to promulgate such other rules or regulations as, in the Landlord’s reasonable judgment, are from time to time needed for the safety, care, maintenance, operation and cleanliness of the Building or the Project, or for the preservation of good order therein.  Upon the Tenant’s having been given notice of the taking of any such any action, the Rules and Regulations as so rescinded, suspended, modified or promulgated shall have the same force and effect as if in effect at the time at which the Tenant’s lease was entered into (except that nothing in the Rules and Regulations shall be deemed in any way to alter or impair any provision of such lease).

 

17.           Nothing in these Rules and Regulations shall give any tenant any right or claim against the Landlord or any other person if the Landlord does not enforce any of them against any other tenant or person (whether or not the Landlord has the right to enforce them against such tenant or person), and no such non-enforcement with respect to any tenant shall constitute a waiver of the right to enforce them as to the Tenant or any other tenant or person.

 

 

18.           In any instance in which the Landlord’s prior consent or approval is required, the Landlord shall have the right to withhold or condition such consent or approval in its sole discretion.

 

 

STRUEVER BROS. ECCLES & ROUSE

 

July 24, 2008

 

Mr. Paul J. Palmieri, CEO/President

Millenial Media, Inc.

2400 Boston Street

Baltimore, Md. 21224

 

As you know, Can Company, LLC (“Landlord”) and Millenial Media (“Tenant”) are in the process of negotiating a Lease for the premises located at 2400 Boston Street, Suite 300, Baltimore, Maryland 21224 and it is anticipated that a Lease will be executed in the near future.

 

Millenial Media has requested Landlord’s permission to commence construction in the premises prior to the actual execution of a Lease. Landlord will consent to Tenant entering the premises to do its construction work upon the following terms and conditions.

 

1.               Tenant shall indemnify Landlord and all occupants of the building against any and all claims arising out of Tenant’s construction work or other activity in the premises.

 

2.               All of tenant’s construction shall be in accordance with plans to be approved by Landlord and no work shall commence prior to Tenant’s receipt of Landlord’s approval.

 

3.               Tenant’s continued use of the premises shall be subject to the execution of a Lease mutually acceptable to Landlord and Tenant. If the parties shall not have executed a Lease within thirty (30) days of this letter, Tenant agrees to vacate the premises and Landlord shall have no liability to Tenant and Tenant shall have no liability to Landlord.

 

If you are in agreement with the foregoing, please sign where indicated below and return a copy of this letter to me via facsimile at 410-558-0544 or email.

 

	
Sincerely,
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Suzanne D. Marks
    	
 
    	
 
    
	
Suzanne D. Marks
    	
 
    	
 
    
	
Associate Property Manager
    	
 
    	
 
    
	
Struever Bros Eccles and Rouse, Inc.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Agreed and Acknowledged:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Paul J. Palmieri
    	
 
    	
7-24-08
    
	
Paul J. Palmieri, CEO/President
    	
 
    	
Date
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
CONSTRUCTION
    	
 
    	
Joy Building @ Tide Point
    
	
DEVELOPMENT
    	
 
    	
1040 Hull Street, Suite 200
    
	
PROPERTY MANAGEMENT
    	
 
    	
Baltimore, MD 21230
    
	
 
    	
 
    	
www.sber.com
    
	
 
    	
 
    	
443.573.4000
    
					

 

 

COMMENCEMENT MEMORANDUM

 

THIS COMMENCEMENT MEMORANDUM, dated November 18, 2008 by and between The Can Company LLC, a Maryland limited liability company (hereinafter called “Landlord”) and Millennial Media, Inc., a Delaware corporation (hereinafter called “Tenant).

 

WITNESSETH THAT

 

By the Lease Agreement dated July 11th, 2008 the Landlord demised and let to Tenant premises located at 2400 Boston Street within Unit 301 as more particularly set forth in the lease agreement.

 

Pursuant to the provisions of the Lease, the parties enter into this Commencement Memorandum to establish the information hereinafter contained.

 

NOW, THEREFORE, intending to be bound, the parties agree as follows:

 

A.           The following dates are established:

Lease Commence Date — July 11th, 2008

Earlier Rent Commence date request — August 1st, 2008

Rent Commence Date — October 1st, 2008

Termination Date: - September 30th, 2013

Space: 301

 

B.             The size of Tenant’s Premises is an area of 16057 square feet of rentable area.

 

C.             The execution of this Agreement shall not constitute the exercise by Tenant of any option it may have to extend the term of the Lease.

 

D.            The Lease is in full force and effect and is hereby ratified and confirmed.

 

The forgoing information shall be determinative for all purposes of the Lease and shall be hereafter used for all computation set forth therein.

 

IN WITNESS WHEREOF, the parties have executed this Commencement Memorandum as of the date and year first above written.

 

	
ATTEST:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ [ILLEGIBLE]
    	
Landlord
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
11/21/2008
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
ATTEST:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Paul Palmieri
    	
Tenant
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
12/1/08
    	
 
    	
 
    
					

 

 

FIRST ADDENDUM TO LEASE AGREEMENT

 

This First Addendum to Lease Agreement is made this 12 day of December, 2011, by and between Can Company, LLC, a Maryland limited liability company (hereinafter the “Landlord”), and Millennial Media, Inc., a Delaware corporation (hereinafter the “Tenant”).

 

Reference is made to the Lease and exhibits thereto dated July 11th, 2008, between Landlord and Tenant, (hereinafter collectively, the “Lease”) for the Lease of a certain space having a rental area of approximately 16,057 sq. ft. of office space located on the third floor in the property known as the Signature Building at the Can Company, located at 2400 Boston Street, Baltimore, Maryland.

 

WHEREAS, Tenant executed the foregoing Lease with the Landlord; and

 

WHEREAS, the parties desire to add additional space to be part of the “Premises” of the Lease, and to otherwise modify certain terms of the Lease; and

 

WHEREAS, the parties desire to memorialize the terms of the Lease modification in writing and this First Addendum is being executed in connection therewith.

 

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

 

1.                                       That the definition of “Premises” is hereby modified, and the following shall be added to the current definition of same, just after the words “Exhibit B”, and before the word “provided”:

 

and also means that certain space having a rentable area of 4,222 square feet of rental space on the 4th floor and located in the Signature Building at The Can Company, as more particularly depicted on Exhibit B -1;

 

2.             That the Term for the Premises being added hereunder shall commence on December 21st, 2011 and shall terminate on September 30th, 2013.

 

3.             Section 4.1 (a) of the Lease shall be modified by adding the following table to be applicable only for the portion of the Premises being added hereunder as depicted on Exhibit B-1, and therefore, Base Rent for such Premises being added hereunder shall be as follows:

 

	
Lease Years
    	
 
    	
Rent PSF
    	
 
    	
Annual Rent
    	
 
    	
Monthly Rent
    	
 
    
	
12/21/11 – 9/30/12
    	
 
    	
$
    	
21.86
    	
 
    	
$
    	
92,292.92
    	
 
    	
$
    	
7,691.08
    	
 
    
	
10/1/12 – 9/30/13
    	
 
    	
$
    	
22.52
    	
 
    	
$
    	
95,079.44
    	
 
    	
$
    	
7,923.29
    	
 
    

 

4.                                       Landlord shall include, as part of the Base Rent set forth in paragraph 3 above, one (1) parking space per 1,000 square feet leased by Tenant.

 

 

All other terms of section 4.1 of the Lease shall be applicable to the Premises being added hereunder.

 

5.             That the following is hereby added to the end of section 4.3.2, and is applicable only to the Premises being added hereunder, and this language shall control the Premises being added hereunder, rather than the existing language in section 4.3.2:

 

Tenant shall pay its proportionate share of increases in Operating Expenses and Real Estate Taxes over the Base Year. The Base Year for Operating Expenses shall be 2009, grossed up to reflect a 95% occupied Building. The Base Year for Real Estate Taxes shall be tax year 2009 — 2010.

 

6.             That the following section 8(b) shall replace the existing section 8(b) of the Lease, but only as to the Premises being added hereunder, and this language shall control the Premises being added hereunder, rather than the existing language in section 8(b):

 

(b) Tenant shall be responsible for all electricity to the Premises, including lights, outlets, VAV boxes, and Tenant’s proportionate share of the air handling units on the floor, and after-hours HVAC service to the Premises. Tenant shall pay for electric current supplied to or used in the Premises. Landlord may calculate Tenant’s electric consumption, and calculate the amount due therefore, in any commercially reasonable manner, both parties acknowledging that there is not a separate electric meter for the Premises, nor can same be sub-metered. Landlord shall not be liable for damages arising as a result of service interruptions caused by any electric service provider.

 

7.             The Premises being added hereunder are being delivered to the Tenant “where is, as is”.

 

8.             Tenant shall pay unto Landlord the sum of $7,691.08 at the time this First Addendum is signed, to be held by Landlord as a security deposit for the faithful performance of Tenant’s duties.

 

9.             The parties hereto hereby acknowledge and agree that, in connection with the leasing of the Premises being added hereunder, Tenant has used the services of David Fields of CBRE. Any and all commissions due such brokers shall be paid in accordance with the terms and conditions set forth in a separate written agreement or agreements between the Landlord and such broker. Subject to the foregoing, each party hereto hereby represents and warrants to the other that, in connection with such leasing, the party so representing and warranting has not dealt with any real estate broker, agent or finder, and there is no commission, charge or other compensation due on account thereof. Each party hereto shall indemnify and hold harmless the other against and from any inaccuracy in such party’s representation

 

10.           That all terms used in this First Addendum to Lease Agreement shall have the meanings given unto them in the afore-referenced Lease.

 

2

 

11.           This First Addendum to Lease Agreement is effective as of the date set forth above.

 

12.           Waiver of Jury Trial. Landlord and Tenant, (collectively, the “Parties”) hereby waive trial by jury in any action or proceeding to which they or any of them may be a party arising out of or in any way related to this First Addendum to Lease Agreement. It is understood that this waiver constitutes a waiver of trial by jury of all claims against all parties to such actions or proceedings. This waiver is knowingly, willingly, and voluntarily made by the Parties, and each party represents that no representations of fact or opinion have been made by any individual to induce this waiver of trial by jury or to in anyway modify or nullify its effect. The Parties acknowledge and agree that this provision is a specific and material aspect of this First Addendum. The Parties each represent that it has been represented in the signing of this First Addendum to Lease Agreement and in the making of this waiver by independent legal counsel, and that it has had an opportunity to discuss this waiver with counsel.

 

13.           Except as otherwise modified herein, all of the terms, covenants and conditions of the afore-referenced Lease shall remain unchanged.

 

IN WITNESS WHEREOF, the parties hereto have placed their hands and seals hereto the day and year first above written.

 

	
WITNESS or ATTEST:
    	
 
    	
LANDLORD:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
CAN COMPANY, LLC
    
	
 
    	
 
    	
 
    
	
/s/ [ILLEGIBLE]
    	
 
    	
By:
    	
/s/ J. Martin Lastner
    	
(Seal)
    
	
 
    	
 
    	
Name:
    	
J. Martin Lastner
    	
 
    
	
 
    	
 
    	
Title:
    	
Its Authorized Agent
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
TENANT
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
MILLENNIAL MEDIA, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Ho Shin
    	
(Seal)
    
	
/s/ [ILLEGIBLE]
    	
 
    	
 
    	
Name:
    	
Ho Shin
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
General Counsel
    	
 
    

 

3

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