Document:

Exhibit 10.15

 

LEASE

 

CABOT ACQUISITION, LLC,

 

Landlord,

 

and

 

BLUE APRON, INC.,

 

Tenant

 

 

TABLE OF CONTENTS

 

	
1.
    	
USE AND RESTRICTIONS ON USE
    	
1
    
	
 
    	
 
    	
 
    
	
2.
    	
TERM
    	
2
    
	
 
    	
 
    	
 
    
	
3.
    	
RENT
    	
3
    
	
 
    	
 
    	
 
    
	
4.
    	
RENT ADJUSTMENTS
    	
3
    
	
 
    	
 
    	
 
    
	
5.
    	
SECURITY DEPOSIT
    	
7
    
	
 
    	
 
    	
 
    
	
6.
    	
ALTERATIONS
    	
9
    
	
 
    	
 
    	
 
    
	
7.
    	
REPAIR
    	
10
    
	
 
    	
 
    	
 
    
	
8.
    	
LIENS
    	
12
    
	
 
    	
 
    	
 
    
	
9.
    	
ASSIGNMENT AND SUBLETTING
    	
12
    
	
 
    	
 
    	
 
    
	
10.
    	
INDEMNIFICATION
    	
15
    
	
 
    	
 
    	
 
    
	
11.
    	
INSURANCE
    	
16
    
	
 
    	
 
    	
 
    
	
12.
    	
WAIVER OF SUBROGATION
    	
17
    
	
 
    	
 
    	
 
    
	
13.
    	
SERVICES AND UTILITIES
    	
17
    
	
 
    	
 
    	
 
    
	
14.
    	
HOLDING OVER
    	
17
    
	
 
    	
 
    	
 
    
	
15.
    	
SUBORDINATION
    	
17
    
	
 
    	
 
    	
 
    
	
16.
    	
RULES AND REGULATIONS
    	
18
    
	
 
    	
 
    	
 
    
	
17.
    	
REENTRY BY LANDLORD
    	
18
    
	
 
    	
 
    	
 
    
	
18.
    	
DEFAULT
    	
19
    
	
 
    	
 
    	
 
    
	
19.
    	
REMEDIES
    	
20
    
	
 
    	
 
    	
 
    
	
20.
    	
TENANT’S BANKRUPTCY OR   INSOLVENCY
    	
23
    
	
 
    	
 
    	
 
    
	
21.
    	
QUIET ENJOYMENT
    	
24
    
	
 
    	
 
    	
 
    
	
22.
    	
CASUALTY
    	
24
    
	
 
    	
 
    	
 
    
	
23.
    	
EMINENT DOMAIN
    	
27
    
	
 
    	
 
    	
 
    
	
24.
    	
SALE BY LANDLORD
    	
27
    
	
 
    	
 
    	
 
    
	
25.
    	
ESTOPPEL CERTIFICATES
    	
27
    
	
 
    	
 
    	
 
    
	
26.
    	
SURRENDER OF PREMISES
    	
27
    
	
 
    	
 
    	
 
    
	
27.
    	
NOTICES
    	
29
    
	
 
    	
 
    	
 
    
	
28.
    	
TAXES PAYABLE BY TENANT
    	
29
    
	
 
    	
 
    	
 
    
	
29.
    	
RELOCATION OF TENANT
    	
29
    
	
 
    	
 
    	
 
    
	
30.
    	
DEFINED TERMS AND HEADINGS
    	
29
    
	
 
    	
 
    	
 
    
	
31.
    	
TENANT’S AUTHORITY
    	
30
    
	
 
    	
 
    	
 
    
	
32.
    	
FINANCIAL STATEMENTS AND CREDIT   REPORTS
    	
31
    
	
 
    	
 
    	
 
    
	
33.
    	
COMMISSIONS
    	
31
    

 

i

 

	
34.
    	
TIME AND APPLICABLE LAW
    	
31
    
	
 
    	
 
    	
 
    
	
35.
    	
SUCCESSORS AND ASSIGNS
    	
31
    
	
 
    	
 
    	
 
    
	
36.
    	
ENTIRE AGREEMENT
    	
31
    
	
 
    	
 
    	
 
    
	
37.
    	
EXAMINATION NOT OPTION
    	
31
    
	
 
    	
 
    	
 
    
	
38.
    	
RECORDATION
    	
31
    
	
 
    	
 
    	
 
    
	
39.
    	
RENEWAL OPTION
    	
31
    
	
 
    	
 
    	
 
    
	
40.
    	
SIGNAGE
    	
32
    
	
 
    	
 
    	
 
    
	
41.
    	
INCENTIVES
    	
32
    
	
 
    	
 
    	
 
    
	
42.
    	
WATERFRONT COMMISSION
    	
33
    
	
 
    	
 
    	
 
    
	
43.
    	
LIMITATION OF LANDLORD’S   LIABILITY
    	
33
    

 

EXHIBIT A — PLAN DEPICTING THE PREMISES AND THE BUILDING

 

EXHIBIT B — INITIAL ALTERATIONS

 

EXHIBIT C — COMMENCEMENT DATE MEMORANDUM

 

EXHIBIT D — RULES AND REGULATIONS

 

EXHIBIT E — FORM OF LETTER OF CREDIT

 

ii

 

MULTI-TENANT INDUSTRIAL NET LEASE

 

REFERENCE PAGES

 

	
BUILDING:
    	
 
    	
Port Industrial Marine Center V
   202 Port Jersey Blvd., Jersey City, New Jersey
    
	
 
    	
 
    	
 
    
	
LANDLORD:
    	
 
    	
CABOT ACQUISITION, LLC, a Delaware limited liability   company
    
	
 
    	
 
    	
 
    
	
LANDLORD’S ADDRESS:
    	
 
    	
c/o RREEF Management L.L.C.
   Deutsche Asset & Wealth Management
   222 South Riverside Plaza,
   26th Floor
   Chicago, IL 60606
   Attn: Vice President — Asset Management
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
with a copy to:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
RREEF
   Four Technology Drive
   Westborough, MA 01581-1791
   Attn: Regional Director of Asset Management
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
and with a copy to:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
CBRE Group, Inc.
   Park 80 West, Plaza Two
   250 Pehle Avenue, Suite 600
   Saddle Brook, NJ 07663
   Attn: Michael Franzese
    
	
 
    	
 
    	
 
    
	
WIRE INSTRUCTIONS AND/OR ADDRESS FOR RENT PAYMENT:
    	
 
    	
Lockbox:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
RREEF America REIT II Corp. VVV
   NJ — Port Industrial
   61.J72002 — Industrial V
   P.O. Box 9046
   Addison, TX 75001-9046
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Wiring:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Bank Name: Northern Trust
   Account Name: NJ Port Industrial I
   Account#:
   ABA#:
    

 

iii

 

	
 
    	
 
    	
Bank City and State: Chicago, Illinois
    
	
 
    	
 
    	
 
    
	
LEASE REFERENCE DATE:
    	
 
    	
March 27, 2014
    
	
 
    	
 
    	
 
    
	
TENANT:
    	
 
    	
BLUE APRON, INC., a Delaware corporation
    
	
 
    	
 
    	
 
    
	
TENANT’S NOTICE ADDRESS:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(a) As of beginning of Term:
    	
 
    	
5 Crosby Street, 3rd Floor
   New York, NY 10013
    
	
 
    	
 
    	
 
    
	
(b) Prior to beginning or Term   (if different):
    	
 
    	
5 Crosby Street, 3rd Floor
   New York, NY 10013
    
	
 
    	
 
    	
 
    
	
PREMISES ADDRESS:
    	
 
    	
202 Port Jersey Blvd., Jersey City, NJ 07305-4522
    
	
 
    	
 
    	
 
    
	
PREMISES RENTABLE AREA:
    	
 
    	
Approximately 112,709 sq. ft. (for outline of Premises see Exhibit A)
    
	
 
    	
 
    	
 
    
	
USE:
    	
 
    	
Preparation, storage and distribution of food products,   packaging and any uses ancillary to same (collectively, the “Permitted Use”),   and, subject to Landlord’s approval, not to be unreasonably withheld, any   lawful use
    
	
 
    	
 
    	
 
    
	
SCHEDULED COMMENCEMENT DATE:
    	
 
    	
May 1, 2014
    
	
 
    	
 
    	
 
    
	
TERM OF LEASE:
    	
 
    	
Approximately ten (10) years and five (5) months,   beginning on the Commencement Date and ending on the Termination Date. The period   from the Commencement Date to the last day of the same month is the   “Commencement Month.”
    
	
 
    	
 
    	
 
    
	
TERMINATION DATE:
    	
 
    	
The last day of the one hundred twenty-fifth (125th) full   calendar month after (if the Commencement Month is not a full calendar month),   or from and including (if the Commencement Month is a full calendar month),   the Commencement Month
    

 

iv

 

ANNUAL RENT and MONTHLY INSTALLMENT OF
 RENT(Article 3):

 

	
Period
    	
 
    	
Rentable
   Square
    	
 
    	
Annual Rent
   Per Square
    	
 
    	
 
    	
 
    	
Monthly
   Installment of
    	
 
    
	
from
    	
 
    	
to
    	
 
    	
Footage
    	
 
    	
Foot
    	
 
    	
Annual Rent
    	
 
    	
Rent
    	
 
    
	
Month 1
    	
 
    	
Month 12
    	
 
    	
112.709
    	
 
    	
$
    	
5.50
    	
 
    	
$
    	
619,899.50
    	
 
    	
$
    	
51,658.29
    	
 
    
	
Month 13
    	
 
    	
Month 24
    	
 
    	
112.709
    	
 
    	
$
    	
5.62
    	
 
    	
$
    	
633,424.58
    	
 
    	
$
    	
52,785.38
    	
 
    
	
Month 25
    	
 
    	
Month 36
    	
 
    	
112.709
    	
 
    	
$
    	
5.75
    	
 
    	
$
    	
648,076.75
    	
 
    	
$
    	
54,006.40
    	
 
    
	
Month 37
    	
 
    	
Month 48
    	
 
    	
112.709
    	
 
    	
$
    	
5.88
    	
 
    	
$
    	
662,728.92
    	
 
    	
$
    	
55,227.41
    	
 
    
	
Month 49
    	
 
    	
Month 60
    	
 
    	
112.709
    	
 
    	
$
    	
6.01
    	
 
    	
$
    	
677,381.09
    	
 
    	
$
    	
56,448.42
    	
 
    
	
Month 61
    	
 
    	
Month 72
    	
 
    	
112.709
    	
 
    	
$
    	
6.15
    	
 
    	
$
    	
693,160.35
    	
 
    	
$
    	
57,763.36
    	
 
    
	
Month 73
    	
 
    	
Month 84
    	
 
    	
112.709
    	
 
    	
$
    	
6.29
    	
 
    	
$
    	
708,939.61
    	
 
    	
$
    	
59,078.30
    	
 
    
	
Month 85
    	
 
    	
Month 96
    	
 
    	
112.709
    	
 
    	
$
    	
6.43
    	
 
    	
$
    	
724,718.87
    	
 
    	
$
    	
60,393.24
    	
 
    
	
Month 97
    	
 
    	
Month 108
    	
 
    	
112.709
    	
 
    	
$
    	
6.57
    	
 
    	
$
    	
740,498.13
    	
 
    	
$
    	
61,708.18
    	
 
    
	
Month 109
    	
 
    	
Month 120
    	
 
    	
112.709
    	
 
    	
$
    	
6.72
    	
 
    	
$
    	
757,404.48
    	
 
    	
$
    	
63,117.04
    	
 
    
	
Month 121
    	
 
    	
Month 125
    	
 
    	
112.709
    	
 
    	
$
    	
6.87
    	
 
    	
$
    	
774,310.83
    	
 
    	
$
    	
64,525.90
    	
 
    

 

Month 1 is the period beginning on the Commencement Date and ending at the end of the first (1st) full calendar month of the Term (by way of example only, if the Commencement Date were May 1, 2014, Month 1 would be the period May 1, 2014 through May 31, 2014; if the Commencement Date were May 15, 2014, Month 1 would be the period from May 15, 2014 through June 30, 2014).  Month 2 is the calendar month period immediately following Month 1; Month 3 is the calendar month following Month 2; and so forth, up to the Termination Date.

 

Provided that an Event of Default has not occurred and is then continuing, the Monthly Installment of Rent and rent adjustments under Article 4 (Tenant to be responsible for its utilities, however) will be abated for the first five (5) full calendar months of the Term.  If the Commencement Month is a partial calendar month, prorated rent for the Commencement Month will be due and payable with the rent for the first full calendar month after the rent abatement period for which rent is payable (by way of example only, if the Commencement Date were May 15, 2014, then rent would be abated for the five full calendar month period of June, 2014 through October, 2014, and rent for the partial month of May, 2014 would be due and payable with the December, 2014 rent, the November, 2014 rent having been prepaid per Section 3.2).

 

	
INITIAL ESTIMATED MONTHLY   INSTALLMENT OF RENT ADJUSTMENTS (Article 4)
    	
 
    	
$18,409.14 (based on estimated 2014 Taxes of $1.32   psf, Insurance of $0.08 psf and other Expenses of $0.56 psf)
    
	
 
    	
 
    	
 
    
	
TENANT’S PROPORTIONATE SHARE:
    	
 
    	
26.51% (1112,709/425,121)
    
	
 
    	
 
    	
 
    
	
SECURITY DEPOSIT:
    	
 
    	
$280,269.71 (four months’ gross rent using Annual Rent rate for   Month I and current estimated Expenses and Taxes), in the form of an   irrevocable letter of credit; See Article 5 for reduction and other   provisions. If the letter of credit is not available at the time of
    

 

v

 

	
 
    	
 
    	
Tenant’s execution and delivery of this Lease, Tenant may   deposit cash in the foregoing amount with Landlord, to be returned to Tenant   upon delivery to Landlord of a compliant letter of credit. If Tenant fails to   deliver the required letter of credit within sixty (60) days after full   execution and delivery of this Lease, Tenant shall pay a late fee to Landlord   of $100.00 per day for each day thereafter until the letter is delivered.
    
	
 
    	
 
    	
 
    
	
ASSIGNMENT/SUBLETTING FEE
    	
 
    	
$1,500.00
    
	
 
    	
 
    	
 
    
	
REAL ESTATE BROKER DUE COMMISSION:
    	
 
    	
Greiner Maltz, for Tenant, and CBRE Inc., for Landlord
    
	
 
    	
 
    	
 
    
	
TENANT’S NAICS CODE:
    	
 
    	
[to be provided]
    
	
 
    	
 
    	
 
    
	
AMORTIZATION RATE:
    	
 
    	
11.00%
    

 

The Reference Pages information is incorporated into and made a part of the Lease.  In the event of any conflict between any Reference Pages information and the Lease, the Lease shall control.  This Lease includes Exhibits A through E, all of which are made a part of this Lease.

 

	
LANDLORD:
    	
TENANT:
    
	
 
    	
 
    
	
CABOT ACQUISITION, LLC,   a Delaware limited liability company
    	
BLUE APRON, INC.,   a Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ David F. Crane
    	
 
    	
By:
    	
/s/ Matt Salzberg
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name: David F. Crane
    	
Name: Matt Salzberg
    
	
 
    	
 
    
	
Title: Vice President
    	
Title: CEO
    
	
 
    	
 
    
	
Dated: March 31, 2014
    	
Dated: March 27, 2014
    
						

 

vi

 

LEASE

 

By this Lease Landlord leases to Tenant and Tenant leases from Landlord the Premises in the Building as set forth and described on the Reference Pages.  The outline of the Premises and the entire Building are depicted on the plan attached hereto as Exhibit A.  The Reference Pages, including all terms defined thereon, are incorporated as part of this Lease.

 

1.                                      USE AND RESTRICTIONS ON USE.

 

1.1                               The Premises are to be used solely for the Permitted Use as forth on the Reference Pages.  Tenant shall not do or permit anything to be done in or about the Premises which will in any way unreasonably obstruct or interfere with the rights of other tenants or occupants of the Building or injure, annoy, or disturb them, or allow the Premises to be used for any improper, immoral, or unlawful purpose, or commit any waste.  Tenant shall not do, permit or suffer in, on, or about the Premises the sale of any alcoholic liquor without the written consent of Landlord first obtained.  Tenant shall comply with all governmental laws, ordinances and regulations applicable to the use of the Premises and its occupancy and shall promptly comply with all governmental orders and directions for the correction, prevention and abatement of any violations in the Building or appurtenant land, caused or permitted by, or resulting from the specific use by, Tenant, or in or upon, or in connection with, the Premises, all at Tenant’s sole expense.  Tenant shall not do or permit anything to be done on or about the Premises or bring or keep anything into the Premises which will in any way increase the rate of, invalidate or prevent the procuring of any insurance protecting against loss or damage to the Building or any of its contents by fire or other casualty or against liability for damage to property or injury to persons in or about the Building or any part thereof.

 

1.2                               Tenant shall not, and shall not direct, suffer or permit any of its agents, contractors, employees, licensees or invitees (each a “Tenant Entity” and collectively, the “Tenant Entities”) to at any time handle, use, manufacture, store or dispose of in or about the Premises or the Building any (collectively “Hazardous Materials”) flammables, explosives, radioactive materials, hazardous wastes or materials, toxic wastes or materials, or other similar substances, petroleum products or derivatives or any substance subject to regulation by or under any federal, state and local laws and ordinances relating to the protection of the environment or the keeping, use or disposition of environmentally hazardous materials, substances, or wastes, presently in effect or hereafter adopted, all amendments to any of them, and all rules and regulations issued pursuant to any of such laws or ordinances (collectively “Environmental Laws”), nor shall Tenant suffer or permit any Hazardous Materials to be used in any manner not fully in compliance with all Environmental Laws, in the Premises or the Building and appurtenant land or allow the environment to become contaminated with any Hazardous Materials.  Notwithstanding the foregoing, Tenant may handle, store, use or dispose of products containing small quantities of Hazardous Materials (such as aerosol cans containing insecticides, toner for copiers, paints, paint remover and the like) to the extent customary and necessary for the use of the Premises for general office purposes; provided that Tenant shall always handle, store, use, and dispose of any such Hazardous Materials in a safe and lawful manner and never allow such Hazardous Materials to contaminate the Premises, Building and appurtenant land or the environment.  Tenant shall protect, defend, indemnify and hold each and all of the Landlord Entities (as defined in Article 30) harmless from and against any and all loss, claims, liability or

 

 

costs (including court costs and attorney’s fees) incurred by reason of any actual or asserted failure of Tenant to fully comply with all applicable Environmental Laws, or the presence, handling, use or disposition in or from the Premises of any Hazardous Materials by Tenant or any Tenant Entity (even though permissible under all applicable Environmental Laws or the provisions of this Lease), or by reason of any actual or asserted failure of Tenant to keep, observe, or perform any provision of this Section 1.2.  Tenant shall have no responsibility for any environmental conditions caused by Landlord or existing as of the Commencement Date, so long as not caused by Tenant.

 

1.3                               Tenant and the Tenant Entities will be entitled to the non-exclusive use of the common areas of the Building as they exist from time to time during the Term, including the parking facilities, subject to Landlord’s rules and regulations regarding such use.  However, in no event will Tenant or the Tenant Entities park more vehicles in the parking facilities than Tenant’s Proportionate Share of the total parking spaces available for common use.  Specifically, Tenant shall be entitled to the use of thirty-seven (37) parking spaces.  The foregoing shall not be deemed to provide Tenant with an exclusive right to any parking spaces or any guaranty of the availability of any particular parking spaces or any specific number of parking spaces.

 

2.                                      TERM.

 

2.1                               The Term of this Lease shall begin on the date (“Commencement Date”) which shall be the later of the Scheduled Commencement Date as shown on the Reference Pages and the date that Landlord shall tender possession of the Premises to Tenant, and shall terminate on the date as shown on the Reference Pages (“Termination Date”), unless sooner terminated by the provisions of this Lease.  Landlord shall tender possession of the Premises with all the work, if any, to be performed by Landlord pursuant to Exhibit B to this Lease completed.  Tenant shall, at Landlord’s request, execute and deliver a memorandum agreement provided by Landlord in the form of Exhibit C attached hereto, provided Tenant agrees with the substance of same, setting forth the actual Commencement Date, Termination Date and, if necessary, a revised rent schedule showing actual dates.  Should Tenant fail to do so within thirty (30) days after Landlord’s request, and provided Tenant does not dispute the accuracy of said memorandum agreement, the information set forth in such memorandum provided by Landlord shall be conclusively presumed to be agreed and correct.

 

2.2                               Tenant agrees that in the event of the inability of Landlord to deliver possession of the Premises on the Scheduled Commencement Date for any reason, Landlord shall not be liable for any damage resulting from such inability, but Tenant shall not be liable for any rent until the time when Landlord can, after notice to Tenant, deliver possession of the Premises to Tenant.  No such failure to give possession on the Scheduled Commencement Date shall affect the other obligations of Tenant under this Lease, except that if Landlord is unable to deliver possession of the Premises within thirty (30) days after the Scheduled Commencement Date, Tenant shall have the option to terminate this Lease upon written notice to Landlord, unless Landlord delivers possession prior to the termination date specified in such notice.  The Scheduled Commencement Date may be delayed one (1) day for each day of delay in Landlord’s delivery of the Premises resulting from strikes, shortages of materials, or similar matters (but not holdover tenancies) beyond the reasonable control of Landlord, where Tenant is notified by Landlord in writing as to such delay, for a maximum of thirty (30), days.

 

2

 

2.3                               In the event Landlord permits Tenant, or any agent, employee or contractor of Tenant, to enter, use or occupy the Premises prior to the Commencement Date, such entry, use or occupancy shall be subject to all the provisions of this Lease other than the payment of rent, including, without limitation, Tenant’s compliance with the insurance requirements of Article 11.  Said early possession shall not advance the Termination Date.  Landlord shall endeavor to provide early access to Tenant.

 

3.                                      RENT.

 

3.1                               Tenant agrees to pay to Landlord the Annual Rent in effect from time to time by paying the Monthly Installment of Rent then in effect on or before the first day of each full calendar month during the Term, except that the rent for the first full month for which rent is payable after the rent abatement period shall be paid upon the execution of this Lease.  The Monthly Installment of Rent in effect at any time shall be one-twelfth (1/12) of the Annual Rent in effect at such time.  Rent for any period during the Term which is less than a full month shall be a prorated portion of the Monthly Installment of Rent based upon the number of days in such month.  Said rent shall be paid to Landlord, without deduction or offset and without notice or demand, at the Rent Payment Address, as set forth on the Reference Pages, or to such other person or at such other place as Landlord may from time to time designate in writing.  If an Event of Default occurs, Landlord may require by notice to Tenant that all subsequent rent payments be made by an automatic payment from Tenant’s bank account to Landlord’s account, without cost to Landlord.  Tenant must implement such automatic payment system prior to the next scheduled rent payment or within twenty (20) days after Landlord’s notice, whichever is later.  Unless specified in this Lease to the contrary, all amounts and sums payable by Tenant to Landlord pursuant to this Lease shall be deemed additional rent.

 

3.2                               Tenant recognizes that late payment of any rent or other sum due under this Lease will result in administrative expense to Landlord, the extent of which additional expense is extremely difficult and economically impractical to ascertain.  Tenant therefore agrees that if rent or any other sum is not paid when due and payable pursuant to this Lease, a late charge shall be imposed in an amount equal to the greater of:  (a) Fifty Dollars ($50.00), or (b) five percent (5%) of the unpaid rent or other payment.  The amount of the late charge to be paid by Tenant shall be reassessed and added to Tenant’s obligation for each successive month until paid.  The provisions of this Section 3.2 in no way relieve Tenant of the obligation to pay rent or other payments on or before the date on which they are due, nor do the terms of this Section 3.2 in any way affect Landlord’s remedies pursuant to Article 19 of this Lease in the event said rent or other payment is unpaid after date due.  Notwithstanding the foregoing, no late fee will be charged in connection with the first two (2) late payments occurring in any calendar year, so long as each of the two are paid in full not later than the earlier to occur of (x) ten (10) days after such payment was due, or (y) five (5) days after notice to Tenant of non-receipt.

 

4.                                      RENT ADJUSTMENTS.

 

4.1                               For the purpose of this Article 4, the following terms are defined as follows:

 

4.1.1                     Lease Year:  Each fiscal year (as determined by Landlord from time to time) falling partly or wholly within the Term.

 

3

 

4.1.2       Expenses:  All costs of operation, maintenance, repair, replacement and management of the Building (including the amount of any credits which Landlord may grant to particular tenants of the Building in lieu of providing any standard services or paying any standard costs described in this Section 4.1.2 for similar tenants), as determined in accordance with generally accepted accounting principles consistently applied, including the following costs by way of illustration, but not limitation:  water and sewer charges; insurance charges of or relating to all insurance policies and endorsements deemed by Landlord to be reasonably necessary or desirable and relating in any manner to the protection, preservation, or operation of the Building or any part thereof; utility costs to the common areas, including, but not limited to, the cost of heat, light, power, steam, gas; waste disposal; the cost of security and alarm services (including any central station signaling system); costs of cleaning, repairing, replacing and maintaining the common areas, including parking and landscaping, window cleaning costs; labor costs; costs and expenses of managing the Building including management and/or administrative fees; elevator maintenance fees and supplies; material costs; equipment costs including the cost of maintenance, repair and service agreements and rental and leasing costs; purchase costs of equipment; current rental and leasing costs of items which would be capital items if purchased; tool costs; licenses, permits and inspection fees; wages and salaries; employee benefits and payroll taxes; accounting and legal fees; any sales, use or service taxes incurred in connection therewith.  In addition, Landlord shall be entitled to recover, as additional rent (which, along with any other capital expenditures constituting Expenses, Landlord may either include in Expenses or cause to be billed to Tenant along with Expenses and Taxes but as a separate item), Tenant’s Proportionate Share of:  (i) an allocable portion of the cost of capital improvement items which are reasonably calculated to reduce operating expenses; (ii) the cost of fire sprinklers and suppression systems and other life safety systems; (iii) other capital expenses which are required under any governmental laws, regulations or ordinances which were not applicable to the Building at the time it was constructed; and (iv) Amortizable Replacement Costs as defined in Section 7.1; but the costs described in this sentence shall be amortized over the reasonable life of such expenditures in accordance with such reasonable life and amortization schedules as shall be determined by Landlord in accordance with generally accepted accounting principles consistently applied, with interest on the unamortized amount at one percent (1%) in excess of the Wall Street Journal prime lending rate announced from time to time.  Expenses shall not include depreciation or amortization of the Building or equipment in the Building except as provided herein, loan principal or interest payments, costs of alterations of tenants’ premises, leasing commissions, interest expenses on long-term borrowings or advertising costs.  Notwithstanding the foregoing, Expenses shall also not include the following:  (a) tenant improvement work; (b) ground rents and loan prepayment penalties, premiums, fees or other charges in connection therewith and other non-operating debts of Landlord; (c) omitted or additional real estate taxes assessed during the Term but relating to a period prior to the Commencement Date or after the Termination Date; (d) expenses which are reimbursed by insurance or warranties; (e) the amount of any refundable deposits; (f) Federal, State or local net income taxes imposed on Landlord or any inheritance, estate, succession, transfer, gift, capital stock, franchise, or excess profit taxes (unless imposed in lieu of Taxes); (g) the cost of any work or service performed for any tenant at such tenant’s cost and expense; (h) legal expenses incurred in the preparation of the leases or enforcing the terms of any lease; (i) management fees in excess of the range customarily charged in the applicable market; (j) (intentionally deleted); (k) promotional and marketing expenses, or the cost of maintaining a leasing or marketing office for

 

4

 

the Building; (l) Landlord’s limited liability company overhead not related to management of the Building; (m) salaries and all other compensation (including fringe benefits) to the extent not directly involved in the operation, maintenance, or safekeeping of the Building above the level of senior property manager; (n) costs of repairs, replacements and alterations for which and to the extent that Landlord is actually reimbursed therefor; (o) costs and expenses incurred by Landlord to cause the common areas of the Building to comply with applicable Laws, to the extent the common areas are in violation of said Laws as of the Commencement Date; (p) sums paid by Landlord to correct violations of building codes or other laws, regulations or ordinances applicable to the Building to the extent such violation existed as of the Commencement Date; (q) expenses arising from the negligence or willful misconduct of Landlord or its agents, servants or employees or from Landlord’s breach of its obligations under this Lease and that would not have otherwise been incurred but for such negligence, willful misconduct or breach; (r) costs and expenses incurred by Landlord to remove, enclose or encapsulate Hazardous Materials existing in the Building as of the Commencement Date in violation of any Law then in effect; (s) fines, penalties, interest or legal fees incurred as a result of Landlord’s late payment of taxes, utility bills or any other costs of the Building; (t) expenses incurred by Landlord in connection with furnishing services which are not available to Tenant but which are available to other tenants at the Property; (u) costs incurred in connection with mortgaging refinancing, transferring or disposing of Landlord’s interest in the Building; (v) all general overhead and administrative expenses of Landlord or its management agent that is unrelated to the operation, management or maintenance of the Building; or (w) Taxes.

 

4.1.3       Taxes:  Real estate taxes and any other taxes, charges and assessments which are levied with respect to the Building or the land appurtenant to the Building, or with respect to any improvements, fixtures and equipment or other property of Landlord, real or personal, located in the Building and used in connection with the operation of the Building and said land, any payments to any ground lessor in reimbursement of tax payments made by such lessor; and all fees, expenses and costs incurred by Landlord in investigating, protesting, contesting or in any way seeking to reduce or avoid increase in any assessments, levies or the tax rate pertaining to any Taxes to be paid by Landlord in any Lease Year.  Taxes shall not include any corporate franchise, or estate, inheritance or net income tax, or tax imposed upon any transfer by Landlord of its interest in this Lease or the Building or any taxes to be paid by Tenant pursuant to Article 28.

 

4.2          Tenant shall pay as additional rent for each Lease Year Tenant’s Proportionate Share of Expenses and Taxes incurred for such Lease Year.

 

4.3          The annual determination of actual Expenses and Taxes incurred for the preceding year shall be made by Landlord and shall be binding upon Landlord and Tenant, subject to the provisions of this Section 4.3.  Landlord shall use commercially reasonable efforts to deliver such determination by April 1 each year.  During the Term, Tenant may review, at Tenant’s sole cost and expense, the books and records supporting such determination in an office of Landlord, or Landlord’s agent, during normal business hours, upon giving Landlord five (5) days advance written notice within ninety (90) days after receipt of such determination, but in no event more often than once in any one (1) year period, subject to execution of a confidentiality agreement reasonably acceptable to Landlord, and provided that if Tenant utilizes an independent accountant to perform such review it shall be one of regional or national standing

 

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which is reasonably acceptable to Landlord, is not compensated on a contingency basis and is also subject to such confidentiality agreement.  If Tenant fails to object to Landlord’s determination of Expenses and Taxes within one hundred twenty (120) days after receipt, or if any such objection fails to state with specificity the reason for the objection, Tenant shall be deemed to have approved such determination and shall have no further right to object to or contest such determination.  If after Tenant’s review of the books and records, it is determined by Landlord and Tenant that Tenant has overpaid any Expenses and/or Taxes, Landlord shall, within thirty (30) days of a written request, refund to Tenant any overpayment.  In the event that during all or any portion of any Lease Year or Base Year, the Building is not fully rented and occupied Landlord shall make an appropriate adjustment in occupancy-related Expenses and Taxes for such year for the purpose of avoiding distortion of the amount of such Expenses and Taxes to be attributed to Tenant by reason of variation in total occupancy of the Building, by employing consistent and sound accounting and management principles to determine Expenses and Taxes that would have been paid or incurred by Landlord had the Building been at least ninety-five percent (95%) rented and occupied, and the amount so determined shall be deemed to have been Expenses and Taxes for such Lease Year.

 

4.4          Prior to the actual determination thereof for a Lease Year, Landlord may from time to time (but no more than twice in any Lease Year) estimate Tenant’s liability for Expenses and/or Taxes under Section 4.2, Article 6 and Article 28 for the Lease Year or portion thereof.  Landlord will give Tenant written notification of the amount of such estimate and Tenant agrees that it will pay, by increase of its Monthly Installments of Rent due in such Lease Year, additional rent in the amount of such estimate.  Any such increased rate of Monthly Installments of Rent pursuant to this Section 4.4 shall remain in effect until further written notification to Tenant pursuant hereto.

 

4.5          When the above mentioned actual determination of Tenant’s liability for Expenses and/or Taxes is made for any Lease Year and when Tenant is so notified in writing, then:

 

4.5.1       If the total additional rent Tenant actually paid pursuant to Section 4.3 on account of Expenses and/or Taxes for the Lease Year is less than Tenant’s liability for Expenses and/or Taxes, then Tenant shall pay such deficiency to Landlord as additional rent in one lump sum within thirty (30) days of receipt of Landlord’s bill therefor; and

 

4.5.2       If the total additional rent Tenant actually paid pursuant to Section 4.3 on account of Expenses and/or Taxes for the Lease Year is more than Tenant’s liability for Expenses and/or Taxes, then Landlord shall credit the difference against the then next due payments to be made by Tenant under this Article 4, or, if the Lease has terminated, refund the difference in cash within thirty (30) days after such determination.

 

4.6          If the Commencement Date is other than January 1 or if the Termination Date is other than December 31, Tenant’s liability for Expenses and Taxes for the Lease Year in which said Date occurs shall be prorated based upon a three hundred sixty-five (365) day year.

 

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5.             SECURITY DEPOSIT.

 

5.1          Tenant shall deposit the Security Deposit with Landlord upon the execution of this Lease.  Said sum shall be held by Landlord as security for the faithful performance by Tenant of all the terms, covenants and conditions of this Lease to be kept and performed by Tenant and not as an advance rental deposit or as a measure of Landlord’s damage in case of Tenant’s default.  Upon the occurrence of an Event of Default, Landlord may use any part of the Security Deposit for the payment of any rent or any other sum in default, or for the payment of any amount which Landlord may spend or become obligated to spend by reason said Event of default, or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant’s default.  If any portion is so used, Tenant shall within fifteen (15) days after written demand therefor, deposit with Landlord an amount sufficient to restore the Security Deposit to its original amount and Tenant’s failure to do so shall be a material breach of this Lease.  Except to such extent, if any, as shall be required by law, Landlord shall not be required to keep the Security Deposit separate from its general funds, and Tenant shall not be entitled to interest on such deposit.  If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the Security Deposit or any balance thereof shall be returned to Tenant at such time after termination of this Lease when Landlord shall have determined that all of Tenant’s obligations under this Lease have been fulfilled, but in no event later than that date which is sixty (60) days after the Termination Date.

 

5.2          The required Security Deposit shall be in the form of an Irrevocable Standby Letter of Credit in favor of Landlord (the “letter of credit”) in the amount set forth on the Reference Pages.  Under any circumstance under which Landlord is entitled the use of all or a part of the Security Deposit, then, Landlord, in addition to all other rights and remedies provided under the Lease, shall have the right to draw down all or a portion of the full balance of the letter of credit and retain the proceeds.  The following terms and conditions shall govern the letter of credit:

 

5.2.1       Upon expiration of the Term, the letter of credit shall be returned to Tenant when Tenant is entitled to return of its Security Deposit.

 

5.2.2       The letter of credit shall be in favor of Landlord, shall be issued by a commercial bank reasonably acceptable to Landlord, shall comply with all of the terms and conditions of this Section 5.2 and shall otherwise be in form reasonably acceptable to Landlord.  Without limiting the generality of the foregoing, (i) the Letter of credit must provide for all notices to the beneficiary to be sent simultaneously to up to two (2) addressees specified in the letter of credit, and (ii) there shall be no requirement of signature guaranty for draws, assignments or other documentary action to be taken by the beneficiary.  If, at any time while the letter of credit is outstanding, (i) the issuing bank is declared insolvent or taken into receivership by the Federal Deposit Insurance Corporation or any other governmental agency, or is closed for any reason, or (ii) Landlord reasonably believes that the issuing bank may be or become insolvent or otherwise unable to meet its obligations, then, not later than thirty (30) days after written notice from Landlord, Tenant shall cause the existing letter of credit to be replaced by a new letter of credit issued by another commercial bank reasonably acceptable to Landlord, with such new letter of credit to comply with all of the terms and conditions of this Section 5.2.  If Tenant fails to deliver an acceptable replacement letter of credit within such 30 day period,

 

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Landlord shall have the right to present the existing letter of credit to the issuing bank for payment, and the entire sum so obtained shall be paid to Landlord, to be held by Landlord until Tenant would otherwise be entitled to the return of the letter of credit, and to be retained by Landlord if an Event of Default occurs.  Landlord hereby confirms and agrees that the form of letter of credit attached hereto as Exhibit E, if any, is acceptable.

 

5.2.3       The initial letter of credit shall have an expiration date not earlier than fourteen (14) months after the Commencement Date.  A draft of the form of letter of credit must be submitted to Landlord for its approval prior to issuance.

 

5.2.4       The letter of credit or any replacement letter of credit shall be irrevocable for the term thereof and shall automatically renew on a year to year basis until a period ending not earlier than three (3) months after the Termination Date (“End Date”) without any action whatsoever on the part of Landlord; provided that the issuing bank shall have the right not to renew the letter of credit by giving written notice to Landlord not less than sixty (60) days prior to the expiration of the then current term of the letter of credit that it does not intend to renew the letter of credit.  Tenant understands that the election by the issuing bank not to renew the letter of credit shall not, in any event, diminish the obligation of Tenant to maintain such an irrevocable letter of credit in favor of Landlord through such date.

 

5.2.5       Landlord, or its then managing agent, shall have the right from time to time to make one or more draws on the letter of credit at any time that Landlord has the right to use all or a part of the Security Deposit pursuant to Article 5 of this Lease, and the proceeds may be applied as permitted under said Article 5.  The letter of credit must state that it can be presented for payment at the office of the issuer or an approved correspondent in the metropolitan area in which the Building is located.  Funds may be drawn down on the letter of credit upon presentation to the issuing or corresponding bank of Landlord’s (or Landlord’s then managing agent’s) certificate stating as follows:

 

“Beneficiary is entitled to draw on this credit pursuant to that certain Lease dated for reference March 27, 2014 between CABOT ACQUISITION, LLC, a Delaware limited liability company, as Landlord and BLUE APRON, INC., a Delaware corporation, as Tenant, as amended from time to time.”

 

It is understood that if Landlord or its managing agent be a corporation, partnership or other entity, then such statement shall be signed by an officer (if a corporation), a general partner (if a partnership), or any authorized party (if another entity).

 

5.2.6       Tenant acknowledges and agrees (and the letter of credit shall so state) that the letter of credit shall be honored by the issuing bank without inquiry as to the truth of the statements set forth in such draw request and regardless of whether the Tenant disputes the content of such statement.

 

5.2.7       In the event of a transfer of Landlord’s interest in the Premises, Landlord shall have the right to transfer the letter of credit to the transferee and Tenant shall take whatever action and pay any bank fees necessary to effectuate such transfer and thereupon the Landlord shall, without any further agreement between the parties, be released by Tenant from all liability

 

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therefor, and it is agreed that the provisions hereof shall apply to every transfer or assignment of said letter of credit to a new landlord.

 

5.2.8       Without limiting the generality of the foregoing, if the letter of credit expires earlier than the End Date, or the issuing bank notifies Landlord that it will not renew the letter of credit, Landlord shall accept a renewal thereof or substitute letter credit (such renewal or substitute letter of credit to be in effect not later than thirty (30) days prior to the expiration of the expiring letter of credit), irrevocable and automatically renewable as above provided to the End Date upon the same terms as the expiring letter of credit or upon such other terms as may be reasonably acceptable to Landlord.  However, if (i) the letter of credit is not timely renewed, or (ii) a substitute letter of credit, complying with all of the terms and conditions of this Section is not timely received, then Landlord may present the expiring letter of credit to the issuing bank, and the entire sum so obtained shall be paid to Landlord, to be held by Landlord in accordance with Article 5 of the Lease.  Notwithstanding the foregoing.  Landlord shall be entitled to receive from Tenant a fee in an amount not to exceed $500.00 for attorneys’ fees incurred in connection with the review of any proposed substitute letter of credit pursuant to this subparagraph.

 

5.2.9       Provided that there is then no uncured Event of Default, and that prior to any Reduction Date there has occurred no monetary Event of Default, then, as of each Reduction Date, Landlord shall permit the amount of the letter of credit to be reduced to (or a replacement letter of credit may be issued in the amount of) the corresponding New Letter of Credit Amount as follows:

 

	
Reduction Date
    	
 
    	
New Letter of Credit Amount
    	
 
    
	
Beginning of Month 18 (see rent   schedule)
    	
 
    	
$
    	
210,202.29
    	
 
    
	
Beginning of Month 30 (sec rent   schedule)
    	
 
    	
$
    	
70,067.43
    	
 
    

 

6.             ALTERATIONS.

 

6.1          Except for those, if any, specifically provided for in Exhibit B to this Lease, Tenant shall not make or suffer to be made any alterations, additions, or improvements, including, but not limited to, the attachment of any fixtures or equipment in, on, or to the Premises or any part thereof or the making of any improvements as required by Article 7, without the prior written consent of Landlord.  When applying for such consent, Tenant shall, if requested by Landlord, furnish complete plans and specifications for such alterations, additions and improvements.  Notwithstanding the foregoing, Landlord’s consent shall not be required (but notice to Landlord shall not be required) with respect to alterations which (i) are not structural in nature, (ii) are not visible from the exterior of the Building, (iii) do not affect or require modification of the Building’s electrical, mechanical, plumbing, HVAC or other systems, and (iv) in aggregate do not cost more than $5.00 per rentable square foot of that portion of the Premises affected by the alterations in question.  Any and all alterations, additions or improvements shall become the property of Landlord upon termination of this Lease, except for trade fixtures, movable equipment or furniture owned by Tenant.

 

6.2          In the event Landlord consents to the making of any such alteration, addition or improvement by Tenant, the same shall be made by using either Landlord’s contractor or, if not Landlord’s contractor, a contractor reasonably approved by Landlord (such approval not to be

 

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unreasonably withheld, conditioned or delayed), in either event at Tenant’s sole cost and expense.  If Tenant shall employ any contractor other than Landlord’s contractor and such other contractor or any subcontractor of such other contractor shall employ any non-union labor or supplier, Tenant shall be responsible for and hold Landlord harmless from any and all delays, damages and extra costs suffered by Landlord as a result of any dispute with any labor unions concerning the wage, hours, terms or conditions of the employment of any such labor.  In any event Landlord may charge Tenant a construction management fee not to exceed the applicable Fee Percentage (defined below) of the cost of such work to cover its overhead as it relates to such proposed work, plus documented third-party costs actually incurred by Landlord in connection with the proposed work and the design thereof, with all such amounts being due five (5) days after Landlord’s demand.  If Landlord engages the contractor and designer, the “Fee Percentage” is (i) for work costing less than or equal to $5,000, zero percent (0%); (ii) for work costing more than $5,000 and less than or equal to $100,000, five percent (5%); and (iii) for work costing more than $100,000, three percent (3%), with the total fee not to exceed $75,000.  If Tenant engages the contractor and designer, the “Fee Percentage” is 0.75%. with the total fee not to exceed $75,000.

 

6.3          All alterations, additions or improvements proposed by Tenant shall be constructed in accordance with all government laws, ordinances, rules and regulations, using Building standard materials where applicable, and Tenant shall, prior to construction, provide the additional insurance required under Article 11 in such case, and, for any alterations costing in excess of $150,000, also all such assurances to Landlord as Landlord shall reasonably require to assure Landlord that Tenant has ability to pay for the construction in question.  In any event, Landlord in its reasonable discretion may require documentation such as waivers of lien, contractor sworn statements and surety company performance bonds to protect Landlord and the Building and appurtenant land against any loss from any mechanic’s, materialmen’s or other liens.  Tenant shall pay in addition to any sums due pursuant to Article 4, any increase in real estate taxes attributable to any such alteration, addition or improvement for so long, during the Term, as such increase is ascertainable; at Landlord’s election said sums shall be paid in the same way as sums due under Article 4.

 

7.             REPAIR.

 

7.1          Landlord shall have no obligation to alter, remodel, improve, repair, decorate or paint the Premises, except as expressly provided in this Lease.  Landlord shall perform, be responsible for, and bear all costs (except to the extent reimbursable through Expenses) (a) of all capital repairs and capital replacements involving the Building structure (except to the extent caused by Tenant), including but not limited to the roof structure, footings, foundations, and exterior walls; (b) all maintenance, repairs and replacements to the utilities servicing the Building and the Premises to the point of connection with the Premises; and (c) all maintenance and repairs to the common areas.  The costs of Landlord’s repairs and replacements of underground gas, parking areas, water, sanitary sewer, storm sewer and electrical lines and related components, to include any above and underground components connecting to the Building, to the point of common connection, and repairs and replacements of the sprinkler systems and parking areas, shall all be included in Expenses; however, as to capital replacements of any of the foregoing, such costs (“Amortizable Replacement Costs”) shall be amortized as provided in Section 4.1.2.  By taking possession of the Premises, Tenant accepts them as being in

 

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good order, condition and repair and in the condition in which Landlord is obligated to deliver them.  It is hereby understood and agreed that no representations respecting the condition of the Premises or the Building have been made by Landlord to Tenant, except as specifically set forth in this Lease.  Landlord shall not be liable for any failure to make any repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after written notice of the need of such repairs or maintenance is given to Landlord by Tenant.

 

7.2          Tenant shall at its own cost and expense keep and maintain all parts of the Premises and such portion of the Building and improvements as are within the exclusive control of Tenant in good condition, promptly making all necessary repairs and replacements, whether ordinary or extraordinary, with materials and workmanship of the same character, kind and quality as the original (including, but not limited to, repair and replacement of all fixtures installed by Tenant, water heaters serving the Premises, windows, glass and plate glass, doors, exterior stairs, skylights, any special office entries, interior walls and finish work, floors and floor coverings, heating and air conditioning systems serving the Premises, coolers and freezers, electrical systems and fixtures, sprinkler systems, dock boards, truck doors, dock bumpers, plumbing work and fixtures, and performance of regular removal of trash and debris).  Tenant as part of its obligations hereunder shall keep the Premises in a clean and sanitary condition.  Nothing in the foregoing shall require Tenant to replace any coolers or freezers which it does not desire to replace.  Tenant will, as far as possible keep all such parts of the Premises from deterioration due to ordinary wear and from falling temporarily out of repair, and upon termination of this Lease in any way Tenant will yield up the Premises to Landlord in good condition and repair, loss by fire or other casualty excepted (but not excepting any damage to glass).  Tenant shall, at its own cost and expense, repair any damage to the Premises or the Building resulting from and/or caused in whole or in part by the negligence or misconduct of Tenant, its agents, employees, contractors, invitees, or any other person entering upon the Premises as a result of Tenant’s business activities or caused by Tenant’s default hereunder.

 

7.3          Except as provided otherwise in this Lease, there shall be no abatement of rent and no liability of Landlord by reason of any injury to or interference with Tenant’s business arising from the making of any repairs, alterations or improvements in or to any portion of the Building or the Premises or to fixtures, appurtenances and equipment in the Building.  Except to the extent, if any, prohibited by law, Tenant waives the right to make repairs at Landlord’s expense under any law, statute or ordinance now or hereafter in effect.

 

7.4          Tenant shall, at its own cost and expense, enter into a regularly scheduled preventive maintenance/service contract with a maintenance contractor approved by Landlord (such approval not to be unreasonably withheld, conditioned or delayed) for servicing all heating and air conditioning systems and equipment serving the Premises (and a copy thereof shall be furnished to Landlord).  The service contract must include all services suggested by the equipment manufacturer in the operation/maintenance manual and must become effective within thirty (30) days of the date Tenant takes possession of the Premises.  Should Tenant fail to do so, Landlord may, upon notice to Tenant, enter into such a maintenance/ service contract on behalf of Tenant or perform the work and in either case, charge Tenant the cost thereof along with a reasonable amount for Landlord’s overhead.

 

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7.4.1       If, during the term of the Lease, the HVAC system or any major component thereof requires replacement, and so long as Tenant has complied with the foregoing obligations of this Section 7.4 and, further, that the need for such replacement does not arise from Tenant’s negligence, abuse or misuse, then Landlord shall perform such replacement at its sole cost and expense; provided, however, that Tenant shall reimburse Landlord for such cost and expense by payments of monthly additional rent in an amount that would fully amortize such cost and expense, with interest at two per cent (2%) in excess of the Wall Street Journal prime lending rate announced from time to time, as of the date such expense is incurred, over the reasonably projected useful life of the item being replaced.  Such additional rent obligation shall continue until such cost and expense is fully amortized or until the expiration of the Term, as it may be extended from time to time, whichever comes first.

 

7.5          Landlord shall coordinate any repairs and other maintenance of any railroad tracks serving the Building and, if Tenant uses such rail tracks, Tenant shall reimburse Landlord or the railroad company from time to time upon demand, as additional rent, for its share of the costs of such repair and maintenance and for any other sums specified in any agreement to which Landlord or Tenant is a party respecting such tracks, such costs to be borne proportionately by all tenants in the Building using such rail tracks, based upon the actual number of rail cars shipped and received by such tenant during each calendar year during the Term.

 

8.             LIENS.  Tenant shall keep the Premises, the Building and appurtenant land and Tenant’s leasehold interest in the Premises free from any liens arising out of any services, work or materials performed, furnished, or contracted for by Tenant, or obligations incurred by Tenant.  In the event that Tenant fails, within twenty (20) days following its knowledge of the imposition of any such lien, to either cause the same to be released of record or provide Landlord with insurance against the same issued by a major title insurance company or such other protection against the same as Landlord shall accept (such failure to constitute an Event of Default), Landlord shall have the right to cause the same to be released by such means as it shall deem proper, including payment of the claim giving rise to such lien.  All such sums paid by Landlord and all expenses incurred by it in connection therewith shall be payable to it by Tenant within fifteen (15) days of Landlord’s demand.

 

9.             ASSIGNMENT AND SUBLETTING.

 

9.1          Except as provided otherwise herein, Tenant shall not have the right to assign or pledge this Lease or to sublet the whole or any part of the Premises whether voluntarily or by operation of law, or permit the use or occupancy of the Premises by anyone other than Tenant, and shall not make, suffer or permit such assignment, subleasing or occupancy without the prior written consent of Landlord, such consent not to be unreasonably withheld, and said restrictions shall be binding upon any and all assignees of the Lease and subtenants of the Premises.  In the event Tenant desires to sublet, or permit such occupancy of, the Premises, or any portion thereof, or assign this Lease, Tenant shall give written notice thereof to Landlord at least thirty (30) days but no more than one hundred twenty (120) days prior to the proposed commencement date of such subletting or assignment, which notice shall set forth the name of the proposed subtenant or assignee, the relevant terms of any sublease or assignment and copies of financial reports and other relevant financial information of the proposed subtenant or assignee.

 

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9.2          Notwithstanding any assignment or subletting, permitted or otherwise, Tenant shall at all times remain directly, primarily and fully responsible and liable for the payment of the rent specified in this Lease and for compliance with all of its other obligations under the terms, provisions and covenants of this Lease.  Upon the occurrence of an Event of Default, if the Premises or any part of them are then assigned or sublet, Landlord, in addition to any other remedies provided in this Lease or provided by law, may, at its option, collect directly from such assignee or subtenant all rents due and becoming due to Tenant under such assignment or sublease and apply such rent against any sums due to Landlord from Tenant under this Lease, and no such collection shall be construed to constitute a novation or release of Tenant from the further performance of Tenant’s obligations under this Lease.

 

9.3          In addition to Landlord’s right to approve of any subtenant or assignee, Landlord shall have the option, in its sole discretion, in the event of any proposed subletting of substantially the entire Premises, or assignment, to terminate this Lease, or in the case of a proposed subletting of less than the entire Premises but more than 25,000 rentable square feet in aggregate, to recapture the portion of the Premises to be sublet, as of the date the subletting or assignment is to be effective.  The option shall be exercised, if at all, by Landlord giving Tenant written notice given by Landlord to Tenant within thirty (30) days following Landlord’s receipt of Tenant’s written notice as required above.  However, if Tenant notifies Landlord, within five (5) days after receipt of Landlord’s termination notice, that Tenant is rescinding its proposed assignment or sublease, the termination notice shall be void and the Lease shall continue in full force and effect.  If this Lease shall be terminated with respect to the entire Premises pursuant to this Section, the Term of this Lease shall end on the date stated in Tenant’s notice as the effective date of the sublease or assignment as if that date had been originally fixed in this Lease for the expiration of the Term.  If Landlord recaptures under this Section only a portion of the Premises, the rent to be paid from time to time during the unexpired Term shall abate proportionately based on the proportion by which the approximate square footage of the remaining portion of the Premises shall be less than that of the Premises as of the date immediately prior to such recapture.  Tenant shall, at Tenant’s own cost and expense, discharge in full any outstanding commission obligation which may be due and owing as a result of any proposed assignment or subletting, whether or not the Premises are recaptured pursuant to this Section 9.3 and rented by Landlord to the proposed tenant or any other tenant.  This Section 9.3 shall not apply to transfers for which Landlord’s consent is not required under Section 9.7 or Section 9.8.

 

9.4          In the event that Tenant sells, sublets, assigns or transfers this Lease, Tenant shall pay to Landlord as additional rent an amount equal to fifty percent (50%) of any Increased Rent (as defined below), less the Costs Component (as defined below), when and as such Increased Rent is received by Tenant.  As used in this Section, “Increased Rent’ shall mean the excess of (i) all rent and other consideration which Tenant is entitled to receive by reason of any sale, sublease, assignment or other transfer of this Lease, over (ii) the rent otherwise payable by Tenant under this Lease at such time.  For purposes of the foregoing, any consideration received by Tenant in form other than cash shall be valued at its fair market value as determined by Landlord in good faith.  The “Costs Component” is that amount which, if paid monthly, would fully amortize on a straight-line basis, over the entire period for which Tenant is to receive Increased Rent, the reasonable costs incurred by Tenant in connection with such sublease,

 

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assignment or transfer, including but not limited to, attorneys’ fees, leasing commissions and tenant improvements.

 

9.5                               Notwithstanding any other provision hereof, it shall be considered reasonable for Landlord to withhold its consent to any assignment of this Lease or sublease of any portion of the Premises if at the time of either Tenant’s notice of the proposed assignment or sublease or the proposed commencement date thereof, there shall exist any Event of Default, or if the proposed assignee or sublessee is an entity:  (a) with which Landlord is already in active negotiation; (b) is already an occupant of the Building unless Landlord is unable to provide the amount of space required by such occupant; (c) is a governmental agency; (d) is incompatible with the character of occupancy of the Building; (e) with which the payment for the sublease or assignment is determined in whole or in part based upon its net income or profits; or (f) would subject the Premises to a use which would:  (i) involve increased personnel or wear upon the Building; (ii) violate any exclusive right granted to another tenant of the Building; (iii) require any addition to or modification of the Premises or the Building in order to comply with building code or other governmental requirements; or, (iv) involve a violation of Section 1.2.  Tenant expressly agrees that for the purposes of any statutory or other requirement of reasonableness on the part of Landlord, Landlord’s refusal to consent to the assignment or sublease for any of the reasons described in this Section 9.5, shall be conclusively deemed to be reasonable.

 

9.6                               Upon any request to assign or sublet, Tenant will pay to Landlord the Assignment/Subletting Fee plus, on demand, a sum equal to all of Landlord’s reasonable documented costs, including reasonable attorney’s fees, incurred in investigating and considering any proposed or purported assignment or pledge of this Lease or sublease of any of the Premises, regardless of whether Landlord shall consent to, refuse consent, or determine that Landlord’s consent is not required for, such assignment, pledge or sublease.  Any purported sale, assignment, mortgage, transfer of this Lease or subletting which does not comply with the provisions of this Article 9 shall be void.

 

9.7                               If Tenant is a corporation, limited liability company, partnership or trust, any transfer or transfers of or change or changes in the stock, limited liability, partnership or other ownership interests, which result in Tenant’s current CEO not being involved in the day to day management of Tenant shall be regarded as equivalent to an assignment of this Lease to the persons or entities acquiring such ownership or control and shall be subject to all the provisions of this Article 9 to the same extent and for all intents and purposes as though such an assignment.  Notwithstanding anything herein to the contrary, so long as Tenant’s current CEO is involved in the day to day management of Tenant none of the aforesaid transfer, transfers, change or changes shall be subject to the provisions of this Article 9.  The restriction on assignment pursuant to this Section 9 shall not be applicable to any transfer of the stock of a corporation which is listed on a national securities exchange (as defined in the Securities Exchange Act of 1934, as amended) or whose stock is traded in the over the counter market with quotations reported by the National Association of Securities Dealers through its automated system for reporting quotations or is otherwise publicly traded.

 

9.8                               Notwithstanding the foregoing provisions of this Article to the contrary, Tenant shall be permitted to assign this Lease, or sublet all or a portion of the Premises, to an Affiliate of Tenant without the prior consent of Landlord, if all of the following conditions are first satisfied:

 

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9.8.1                     An Event of Default shall not then exist;

 

9.8.2                     a fully executed copy of such assignment or sublease, the assumption of this Lease by the assignee or acceptance of the sublease by the sublessee, and such other information regarding the assignment or sublease as Landlord may reasonably request, shall have been delivered to Landlord;

 

9.8.3                     the Premises shall continue to be operated solely for the use specified in the Reference Page or other use acceptable to Landlord in its sole discretion; and

 

9.8.4                     Tenant shall pay all costs reasonably incurred by Landlord in connection with such assignment or subletting, including without limitation attorneys’ fees.

 

Tenant acknowledges (and, at Landlord’s request, at the time of such assignment or subletting shall confirm) that in each instance Tenant shall remain liable for performance of the terms and conditions of the Lease despite such assignment or subletting (to the extent Tenant continues to be in existence).  As used herein the term “Affiliate” shall mean an entity which (i) directly or indirectly controls Tenant or (ii) is under the direct or indirect control of Tenant or (iii) is under common direct or indirect control with Tenant, (iv) is the successor in interest to Tenant by way of merger or consolidation, or by sale of all or substantially all of the stock of Tenant or of all of the assets of Tenant or (iv) any entity to which a majority of the capital stock, partnership or other equity or legal or beneficial interest of Tenant are transferred, so long as the tangible net worth of the surviving or successor entity following such transaction is at least as much as the tangible net worth of Tenant immediately preceding the transaction or at the Commencement Date, whichever is higher.  Control shall mean ownership of fifty-one percent (51%) or more of the voting securities or rights of the controlled entity.

 

10.                               INDEMNIFICATION.

 

10.1                        Except as otherwise provided herein, none of the Landlord Entities shall be liable and Tenant hereby waives all claims against them for any damage to any property or any injury to any person in or about the Premises or the Building by or from any cause whatsoever (including without limiting the foregoing, rain or water leakage of any character from the roof, windows, walls, basement, pipes, plumbing works or appliances, the Building not being in good condition or repair, gas, fire, oil, electricity or theft), except to the extent caused by or arising from the gross negligence or willful misconduct of Landlord or its agents, employees or contractors.  Tenant shall protect, indemnify and hold the Landlord Entities harmless from and against any and all loss, claims, liability or costs (including court costs and attorney’s fees) incurred by reason of (a) any damage to any property (including but not limited to property of any Landlord Entity) or any injury (including but not limited to death) to any person occurring in, on or about the Premises or the Building to the extent that such injury or damage shall be caused by or arise from any actual or alleged act, neglect, fault, or omission by or of Tenant or any Tenant Entity to meet any standards imposed by any duty with respect to the injury or damage; (b) the conduct or management of any work or thing whatsoever done by the Tenant in or about the Premises or from transactions of the Tenant concerning the Premises; (c) Tenant’s failure to comply with any and all governmental laws, ordinances and regulations applicable to the condition or use of the Premises or its occupancy; or (d) any breach or default on the part of

 

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Tenant in the performance of any covenant or agreement on the part of the Tenant to be performed pursuant to this Lease.

 

10.2                        Landlord shall protect, indemnify and hold Tenant harmless from and against any and all loss, claims, liability or costs (including court costs and attorney’s fees) arising out of the gross negligence or willful misconduct of Landlord or its agents or employees.

 

10.3                        The provisions of this Article shall survive the termination of this Lease with respect to any claims or liability accruing prior to such termination.

 

11.                               INSURANCE.

 

11.1                        Tenant shall keep in force throughout the Term:  (a) a Commercial General Liability insurance policy or policies to protect the Landlord Entities against any liability to the public or to any invitee of Tenant or a Landlord Entity incidental to the use of or resulting from any accident occurring in or upon the Premises with a limit of not less than $1,000,000 per occurrence and not less than $2,000,000 in the annual aggregate, or such larger amount as Landlord may prudently require from time to time, covering bodily injury and property damage liability and $1,000,000 products/completed operations aggregate; (b) Business Auto Liability covering owned, non-owned and hired vehicles with a limit of not less than $1,000,000 per accident; (c) Worker’s Compensation Insurance with limits as required by statute and Employers Liability with limits of $500,000 each accident, $500,000 disease policy limit, $500,000 disease—each employee; (d) All Risk or Special Form coverage protecting Tenant against loss of or damage to Tenant’s alterations, additions, improvements, carpeting, door coverings, panelings, decorations, fixtures, inventory and other business personal property situated in or about the Premises to the full replacement value of the property so insured; and, (e) Business Interruption Insurance with limit of liability representing loss of at least approximately six (6) months of income.

 

11.2                        The aforesaid policies shall (a) be provided at Tenant’s expense; (b) name the Landlord Entities as additional insureds (General Liability) and loss payee only with respect to damage or destruction to property in which the Landlord entities have an insurable interest (Property—Special Form); (c) be issued by an insurance company with a minimum Best’s rating of “A-:VII” during the Term; and (d) provide that said insurance shall not be canceled unless thirty (30) days prior written notice (ten days for non-payment of premium) shall have been given to Landlord; a certificate of Liability insurance on ACORD Form 25 and a certificate of Property insurance on ACORD Form 27 shall be delivered to Landlord by Tenant upon the Commencement Date and at least thirty (30) days prior to each renewal of said insurance.

 

11.3                        Whenever Tenant shall undertake any alterations, additions or improvements in, to or about the Premises (“Work”) the aforesaid insurance protection must extend to and include injuries to persons and damage to property arising in connection with such Work, without limitation including liability under any applicable structural work act, and such other insurance as Landlord shall reasonably require; and the policies of or certificates evidencing such insurance must be delivered to Landlord prior to the commencement of any such Work.

 

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12.                               WAIVER OF SUBROGATION.  So long as their respective insurers so permit, Tenant and Landlord hereby mutually waive their respective rights of recovery against each other for any loss insured by fire, extended coverage, All Risks or other insurance now or hereafter existing for the benefit of the respective party but only to the extent of the net insurance proceeds payable under such policies.  Each party shall obtain any special endorsements required by their insurer to evidence compliance with the aforementioned waiver.

 

13.                               SERVICES AND UTILITIES.  Tenant shall pay for all water, gas, heat, light, power, telephone, sewer, sprinkler system charges and other utilities and services used on or from the Premises, together with any taxes, penalties, and surcharges or the like pertaining thereto and any maintenance charges for utilities.  Tenant shall furnish all electric light bulbs, tubes and ballasts, battery packs for emergency lighting and fire extinguishers.  If any such services are not separately metered to Tenant, Tenant shall pay such proportion of all charges jointly metered with other premises as determined by Landlord, in its reasonable discretion.  Any such charges paid by Landlord and assessed against Tenant shall be payable to Landlord within thirty (30) days after invoice and shall be additional rent hereunder.  Tenant will not, without the written consent of Landlord, contract with a utility provider to service the Premises with any utility, including, but not limited to, telecommunications, electricity, water, sewer or gas, which is not previously providing such service to other tenants in the Building.  Landlord shall in no event be liable for any interruption or failure of utility services on or to the Premises except as follows:  In the event that the any utility service provided to the Premises shall cease or be interrupted and such interruption results from the gross negligence or willful misconduct of Landlord and renders the Premises untenantable for the uses permitted under this Lease and thereby prevents Tenant from (and Tenant, in fact ceases) conducting its business operations therein and such cessation or interruption has not resulted from a failure by Tenant to perform any of its obligations hereunder, then if such cessation or interruption and the resulting untenantability continues for a period of five (5) consecutive days after Tenant gives Landlord notice of said interruption or cessation, then Tenant shall be entitled to an appropriate abatement of rent from the fifth (5th) day after said notice is received until the service is restored and the Premises rendered tenantable.

 

14.                               HOLDING OVER.  Tenant shall pay Landlord for each day Tenant retains possession of the Premises or part of them after termination of this Lease by lapse of time or otherwise at the rate (“Holdover Rate”) which shall be One Hundred Fifty Percent (150%) of the amount of the Annual Rent for the last period prior to the date of such termination plus all Rent Adjustments under Article 4, prorated on a daily basis, and also pay all damages sustained by Landlord by reason of such retention.  If Landlord gives notice to Tenant of Landlord’s election to such effect, such holding over shall constitute renewal of this Lease for a period from month to month at the Holdover Rate, but if the Landlord does not so elect, no such renewal shall result notwithstanding acceptance by Landlord of any sums due hereunder after such termination; and instead, a tenancy at sufferance at the Holdover Rate shall be deemed to have been created.  In any event, no provision of this Article 14 shall be deemed to waive Landlord’s right of reentry or any other right under this Lease or at law.

 

15.                               SUBORDINATION.  Without the necessity of any additional document being executed by Tenant for the purpose of effecting a subordination, this Lease shall be subject and subordinate at all times to ground or underlying leases and to the lien of any mortgages or deeds

 

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of trust now or hereafter placed on, against or affecting the Building, Landlord’s interest or estate in the Building, or any ground or underlying lease; provided, however, that if the lessor, mortgagee, trustee, or holder of any such mortgage or deed of trust elects to have Tenant’s interest in this Lease be superior to any such instrument, then, by notice to Tenant, this Lease shall be deemed superior, whether this Lease was executed before or after said instrument.  Notwithstanding the foregoing, Tenant covenants and agrees to execute and deliver within ten (10) days of Landlord’s request such further instruments evidencing such subordination or superiority of this Lease as may be required by Landlord.  Landlord represents that there is currently no mortgage or deed of trust encumbering the Building.  Notwithstanding the foregoing, the subordination of this Lease to any future mortgage or deed of trust shall be conditioned upon Tenant’s receipt of a subordination, non-disturbance and allotment agreement in the lender’s standard commercially reasonable form.

 

16.                               RULES AND REGULATIONS.  Tenant shall faithfully observe and comply with all the rules and regulations as set forth in Exhibit D to this Lease and all reasonable and non-discriminatory modifications of and additions to them from time to time put into effect by Landlord.  Landlord shall not be responsible to Tenant for the non-performance by any other tenant or occupant of the Building of any such rules and regulations (provided however, Landlord shall use commercially reasonable efforts to enforce the rules and regulations against any non-performing tenant and/or occupant).

 

17.                               REENTRY BY LANDLORD.

 

17.1                        Landlord reserves and shall at all times upon reasonable notice and during business hours have the right to re-enter the Premises to inspect the same, to show said Premises to prospective purchasers, mortgagees or tenants, and to alter, improve or repair the Premises and any portion of the Building, without abatement of rent, and may for that purpose erect, use and maintain scaffolding, pipes, conduits and other necessary structures and open any wall, ceiling or floor in and through the Building and Premises where reasonably required by the character of the work to be performed, provided entrance to the Premises shall not be blocked thereby, and further provided that the business of Tenant shall not be interfered with unreasonably.  Provided entrance to the Premises shall not be blocked thereby, and further provided that the business of Tenant shall not be interfered with unreasonably, Landlord shall have the right at any time to change the arrangement and/or locations of entrances, or passageways, doors and doorways, and corridors, windows, elevators, stairs, toilets or other public parts of the Building and to change the name, number or designation by which the Building is commonly known.  In the event that Landlord damages any portion of any wall or wall covering, ceiling, or floor or floor covering within the Premises, Landlord shall promptly repair or replace the damaged portion to match the original as nearly as commercially reasonable but shall not be required to repair or replace more than the portion actually damaged.  In the absence of Landlord’s gross negligence or willful misconduct, Tenant hereby waives any claim for damages for any injury or inconvenience to or interference with Tenant’s business, any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned by any action of Landlord authorized by this Article 17.

 

17.2                        For each of the aforesaid purposes, Landlord shall at all times have and retain a key with which to unlock all of the doors in the Premises, excluding Tenant’s vaults and safes or special security areas (designated in advance), and Landlord shall have the right to use any and

 

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all means which Landlord may deem proper to open said doors in an emergency to obtain entry to any portion of the Premises.  As to any portion to which access cannot be had by means of a key or keys in Landlord’s possession, Landlord is authorized to gain access by such means as Landlord shall elect and the cost of repairing any damage occurring in doing so shall be borne by Tenant and paid to Landlord within thirty (30) days of Landlord’s written demand.

 

18.                               DEFAULT.

 

18.1                        Except as otherwise provided in Article 20, the following events shall be deemed to be Events of Default under this Lease:

 

18.1.1              Tenant shall fail to pay when due any sum of money becoming due to be paid to Landlord under this Lease, whether such sum be any installment of the rent reserved by this Lease, any other amount treated as additional rent under this Lease, or any other payment or reimbursement to Landlord required by this Lease, whether or not treated as additional rent under this Lease, and such failure shall continue for a period of five (5) days for periodic rent or fifteen (15) days for other sums becoming due after written notice that such periodic rent payment or other payment, as applicable, was not made when due.

 

18.1.2              Tenant shall fail to comply with any term, provision or covenant of this Lease which is not provided for in another Section of this Article and shall not cure such failure within thirty (30) days (forthwith, if the failure involves a hazardous condition) after written notice of such failure to Tenant provided, however, that such failure shall not be an event of default if such failure could not reasonably be cured during such thirty (30) day period, Tenant has commenced the cure within such thirty (30) day period and thereafter is diligently pursuing such cure to completion, but the total aggregate cure period shall not exceed ninety (90) days.

 

18.1.3              Tenant shall fail to vacate the Premises immediately upon termination of this Lease, by lapse of time or otherwise, or upon termination of Tenant’s right to possession only.

 

18.1.4              Tenant shall become insolvent, admit in writing its inability to pay its debts generally as they become due, file a petition in bankruptcy or a petition to take advantage of any insolvency statute, make an assignment for the benefit of creditors, make a transfer in fraud of creditors, apply for or consent to the appointment of a receiver of itself or of the whole or any substantial part of its property, or file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws, as now in effect or hereafter amended, or any other applicable law or statute of the United States or any state thereof.

 

18.1.5              A court of competent jurisdiction shall enter an order, judgment or decree adjudicating Tenant bankrupt, or appointing a receiver of Tenant, or of the whole or any substantial part of its property, without the consent of Tenant, or approving a petition filed against Tenant seeking reorganization or arrangement of Tenant under the bankruptcy laws of the United States, as now in effect or hereafter amended, or any state thereof, and such order, judgment or decree shall not be vacated or set aside or stayed within sixty (60) days from the date of entry thereof.

 

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19.                               REMEDIES.

 

19.1                        Except as otherwise provided in Article 20, upon the occurrence of any of the Events of Default described or referred to in Article 18, Landlord shall have the option to pursue any one or more of the following remedies without any notice or demand whatsoever, concurrently or consecutively and not alternatively:

 

19.1.1              Landlord may, at its election, terminate this Lease or terminate Tenant’s right to possession only, without terminating the Lease.

 

19.1.2              Upon any termination of this Lease, whether by lapse of time or otherwise, or upon any termination of Tenant’s right to possession without termination of the Lease, Tenant shall surrender possession and vacate the Premises immediately, and deliver possession thereof to Landlord, and Tenant hereby grants to Landlord full and free license to enter into and upon the Premises in such event and to repossess Landlord of the Premises as of Landlord’s former estate and to expel or remove Tenant and any others who may be occupying or be within the Premises and to remove Tenant’s signs and other evidence of tenancy and all other property of Tenant therefrom without being deemed in any manner guilty of trespass, eviction or forcible entry or detainer, and without incurring any liability for any damage resulting therefrom, Tenant waiving any right to claim damages for such re-entry and expulsion, and without relinquishing Landlord’s right to rent or any other right given to Landlord under this Lease or by operation of law.

 

19.1.3              Upon any termination of this Lease, whether by lapse of time or otherwise, Landlord shall be entitled to recover as damages, all rent, including any amounts treated as additional rent under this Lease, and other sums due and payable by Tenant on the date of termination, plus as liquidated damages and not as a penalty, an amount equal to the sum of:  (a) an amount equal to the then present value of the rent reserved in this Lease for the residue of the stated Term of this Lease including any amounts treated as additional rent under this Lease and all other sums provided in this Lease to be paid by Tenant, minus the fair rental value of the Premises for such residue; (b) the value of the time and expense necessary to obtain a replacement tenant or tenants, and the estimated expenses described in Section 19.1.4 relating to recovery of the Premises, preparation for reletting and for reletting itself; and (c) the cost of performing any other covenants which would have otherwise been performed by Tenant.

 

19.1.4              Upon any termination of Tenant’s right to possession only without termination of the Lease:

 

19.1.4.1    Neither such termination of Tenant’s right to possession nor Landlord’s taking and holding possession thereof as provided in Section 19.1.2 shall terminate the Lease or release Tenant, in whole or in part, from any obligation, including Tenant’s obligation to pay the rent, including any amounts treated as additional rent, under this Lease for the full Term, and if Landlord so elects Tenant shall continue to pay to Landlord the entire amount of the rent as and when it becomes due, including any amounts treated as additional rent under this Lease, for the remainder of the Term plus any other sums provided in this Lease to be paid by Tenant for the remainder of the Term.

 

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19.1.4.2    Landlord shall use commercially reasonable efforts to relet the Premises or portions thereof to the extent required by applicable law.  Landlord and Tenant agree that nevertheless Landlord shall at most be required to use only the same efforts Landlord then uses to lease premises in the Building generally and that in any case that Landlord shall not be required to give any preference or priority to the showing or leasing of the Premises or portions thereof over any other space that Landlord may be leasing or have available and may place a suitable prospective tenant in any such other space regardless of when such other space becomes available and that Landlord shall have the right to relet the Premises for a greater or lesser term than that remaining under this Lease, the right to relet only a portion of the Premises, or a portion of the Premises or the entire Premises as a part of a larger area, and the right to change the character or use of the Premises.  In connection with or in preparation for any reletting, Landlord may, but shall not be required to, make repairs, alterations and additions in or to the Premises and redecorate the same to the extent Landlord deems necessary or desirable, and Tenant shall pay the cost thereof, together with Landlord’s expenses of reletting, including, without limitation, any commission incurred by Landlord, within five (5) days of Landlord’s demand.  Landlord shall not be required to observe any instruction given by Tenant about any reletting or accept any tenant offered by Tenant unless such offered tenant has a credit worthiness acceptable to Landlord and leases the entire Premises upon terms and conditions including a rate of rent (after giving effect to all expenditures by Landlord for tenant improvements, broker’s commissions and other leasing costs) all no less favorable to Landlord than as called for in this Lease, nor shall Landlord be required to make or permit any assignment or sublease for more than the current term or which Landlord would not be required to permit under the provisions of Article 9.

 

19.1.4.3    Until such time as Landlord shall elect to terminate the Lease and shall thereupon be entitled to recover the amounts specified in such case in Section 19.1.3, Tenant shall pay to Landlord upon demand the full amount of all rent, including any amounts treated as additional rent under this Lease and other sums reserved in this Lease for the remaining Term, together with the costs of repairs, alterations, additions, redecorating and Landlord’s expenses of reletting and the collection of the rent accruing therefrom (including reasonable attorney’s fees and broker’s commissions), as the same shall then be due or become due from time to time, less only such consideration as Landlord may have received from any reletting of the Premises; and Tenant agrees that Landlord may file suits from time to time to recover any sums falling due under this Article 19 as they become due.  Any proceeds of reletting by Landlord in excess of the amount then owed by Tenant to Landlord from time to time shall be credited against Tenant’s future obligations under this Lease but shall not otherwise be refunded to Tenant or inure to Tenant’s benefit.

 

19.2                        Upon the occurrence of an Event of Default, Landlord may (but shall not be obligated to) cure such default at Tenant’s sole expense.  Without limiting the generality of the foregoing, Landlord may, at Landlord’s option, enter into and upon the Premises if Landlord determines in its sole discretion that Tenant is not acting within a commercially reasonable time to maintain, repair or replace anything for which Tenant is responsible under this Lease or to otherwise effect compliance with its obligations under this Lease and correct the same, without being deemed in any manner guilty of trespass, eviction or forcible entry and detainer and without incurring any liability for any damage or interruption of Tenant’s business resulting therefrom and Tenant agrees to reimburse Landlord within five (5) days of Landlord’s demand as

 

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additional rent, for any expenses which Landlord may incur in thus effecting compliance with Tenant’s obligations under this Lease, plus interest from the date of expenditure by Landlord at the Wall Street Journal prime rate.

 

19.3                        Tenant understands and agrees that in entering into this Lease, Landlord is relying upon receipt of all the Annual and Monthly Installments of Rent to become due with respect to all the Premises originally leased hereunder over the full Initial Term of this Lease for amortization, including interest at the Amortization Rate.  For purposes hereof, the “Concession Amount” shall be defined as the aggregate of all amounts forgone or expended by Landlord as free rent under the lease, under Exhibit B hereof for construction allowances (excluding therefrom any amounts expended by Landlord for Landlord’s Work, as defined in Exhibit B), and for brokers’ commissions payable by reason of this Lease.  Accordingly, Tenant agrees that if this Lease or Tenant’s right to possession of the Premises leased hereunder shall be terminated as of any date (“Default Termination Date”) prior to the expiration of the full Initial Term hereof by reason of a default of Tenant, there shall be due and owing to Landlord as of the day prior to the Default Termination Date, as rent in addition to all other amounts owed by Tenant as of such Date, the amount (“Unamortized Amount”) of the Concession Amount determined as set forth below; provided, however, that in the event that such amounts are recovered by Landlord pursuant to any other provision of this Article 19, Landlord agrees that it shall not attempt to recover such amounts pursuant to this Paragraph 19.3.  For the purposes hereof, the Unamortized Amount shall be determined in the same manner as the remaining principal balance of a mortgage with interest at the Amortization Rate payable in level payments over the same length of time as from the effectuation of the Concession concerned to the end of the full Initial Term of this Lease would be determined.

 

19.4                        If, on account of any Event of Default by Tenant in Tenant’s obligations under the terms and conditions of this Lease, it shall become necessary or appropriate for Landlord to employ or consult with an attorney or collection agency concerning or to enforce or defend any of Landlord’s rights or remedies arising under this Lease or to collect any sums due from Tenant, Tenant agrees to pay all costs and fees so incurred by Landlord, including, without limitation, reasonable attorneys’ fees and costs.  TENANT EXPRESSLY WAIVES ANY RIGHT TO:  (A) TRIAL BY JURY; AND (B) SERVICE OF ANY NOTICE REQUIRED BY ANY PRESENT OR FUTURE LAW OR ORDINANCE APPLICABLE TO LANDLORDS OR TENANTS BUT NOT REQUIRED BY THE TERMS OF THIS LEASE.

 

19.5                        Pursuit of any of the foregoing remedies shall not preclude pursuit of any of the other remedies provided in this Lease or any other remedies provided by law (all such remedies being cumulative), nor shall pursuit of any remedy provided in this Lease constitute a forfeiture or waiver of any rent due to Landlord under this Lease or of any damages accruing to Landlord by reason of the violation of any of the terms, provisions and covenants contained in this Lease.

 

19.6                        No act or thing done by Landlord or its agents during the Term shall be deemed a termination of this Lease or an acceptance of the surrender of the Premises, and no agreement to terminate this Lease or accept a surrender of said Premises shall be valid, unless in writing signed by Landlord.  No waiver by Landlord of any violation or breach of any of the terms, provisions and covenants contained in this Lease shall be deemed or construed to constitute a waiver of any other violation or breach of any of the terms, provisions and covenants contained

 

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in this Lease.  Landlord’s acceptance of the payment of rental or other payments after the occurrence of an Event of Default shall not be construed as a waiver of such Default, unless Landlord so notifies Tenant in writing.  Forbearance by Landlord in enforcing one or more of the remedies provided in this Lease upon an Event of Default shall not be deemed or construed to constitute a waiver of such Event of Default or of Landlord’s right to enforce any such remedies with respect to such Event of Default or any subsequent Event of Default.

 

19.7                        Intentionally deleted.

 

19.8                        Any and all property which may be removed from the Premises by Landlord pursuant to the authority of this Lease or of law, to which Tenant is or may be entitled, may be handled, removed and/or stored, as the case may be, by or at the direction of Landlord but at the risk, cost and expense of Tenant, and Landlord shall in no event be responsible for the value, preservation or safekeeping thereof.  Tenant shall pay to Landlord, upon demand, any and all expenses incurred in such removal and all storage charges against such property so long as the same shall be in Landlord’s possession or under Landlord’s control.  Any such property of Tenant not retaken by Tenant from storage within thirty (30) days after removal from the Premises shall, at Landlord’s option, be deemed conveyed by Tenant to Landlord under this Lease as by a bill of sale without further payment or credit by Landlord to Tenant.

 

19.9                        If more than two (2) Events of Default occur during the Term or any renewal thereof, Tenant’s renewal options, expansion options, purchase options and rights of first offer and/or refusal, if any are provided for in this Lease, shall be null and void.

 

20.                               TENANT’S BANKRUPTCY OR INSOLVENCY.

 

20.1                        If at any time and for so long as Tenant shall be subjected to the provisions of the United States Bankruptcy Code or other law of the United States or any state thereof for the protection of debtors as in effect at such time (each a “Debtor’s Law”):

 

20.1.1              Tenant, Tenant as debtor-in-possession, and any trustee or receiver of Tenant’s assets (each a “Tenant’s Representative”) shall have no greater right to assume or assign this Lease or any interest in this Lease, or to sublease any of the Premises than accorded to Tenant in Article 9, except to the extent Landlord shall be required to permit such assumption, assignment or sublease by the provisions of such Debtor’s Law.  Without limitation of the generality of the foregoing, any right of any Tenant’s Representative to assume or assign this Lease or to sublease any of the Premises shall be subject to the conditions that:

 

20.1.1.1    Such Debtor’s Law shall provide to Tenant’s Representative a right of assumption of this Lease which Tenant’s Representative shall have timely exercised and Tenant’s Representative shall have fully cured any default of Tenant under this Lease.

 

20.1.1.2    Tenant’s Representative or the proposed assignee, as the case shall be, shall have deposited with Landlord as security for the timely payment of rent an amount equal to the larger of:  (a) three (3) months’ rent and other monetary charges accruing under this Lease; and (b) any sum specified in Article 5; and shall have provided Landlord with adequate other assurance of the future performance of the obligations of the Tenant under this

 

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Lease.  Without limitation, such assurances shall include, at least, in the case of assumption of this Lease, demonstration to the satisfaction of the Landlord that Tenant’s Representative has and will continue to have sufficient unencumbered assets after the payment of all secured obligations and administrative expenses to assure Landlord that Tenant’s Representative will have sufficient funds to fulfill the obligations of Tenant under this Lease; and, in the case of assignment, submission of current financial statements of the proposed assignee, audited by an independent certified public accountant reasonably acceptable to Landlord and showing a net worth and working capital in amounts determined by Landlord to be sufficient to assure the future performance by such assignee of all of the Tenant’s obligations under this Lease.

 

20.1.1.3    The assumption or any contemplated assignment of this Lease or subleasing any part of the Premises, as shall be the case, will not breach any provision in any other lease, mortgage, financing agreement or other agreement by which Landlord is bound.

 

20.1.1.4    Landlord shall have, or would have had absent the Debtor’s Law, no right under Article 9 to refuse consent to the proposed assignment or sublease by reason of the identity or nature of the proposed assignee or sublessee or the proposed use of the Premises concerned.

 

21.                               QUIET ENJOYMENT.  Landlord represents and warrants that it has full right and authority to enter into this Lease and that Tenant, while paying the rental and performing its other covenants and agreements contained in this Lease, shall peaceably and quietly have, hold and enjoy the Premises for the Term without hindrance or molestation from Landlord subject to the terms and provisions of this Lease.  Landlord shall not be liable for any interference or disturbance by other tenants or third persons, nor shall Tenant be released from any of the obligations of this Lease because of such interference or disturbance; provided however that Landlord shall use commercially reasonable efforts to enforce the terms of other tenant leases insofar as Tenant’s use and enjoyments of the Premises is adversely affected by a breach by such other tenant.

 

22.                               CASUALTY

 

22.1                        In the event the Premises or the Building are damaged by fire or other cause and in Landlord’s reasonable estimation such damage can be materially restored within one hundred eighty (180) days, Landlord shall forthwith repair the same and this Lease shall remain in full force and effect, except that Tenant shall be entitled to a proportionate abatement in rent from the date of such damage.  Such abatement of rent shall be made pro rata in accordance with the extent to which the damage and the making of such repairs shall interfere with the use and occupancy by Tenant of the Premises from time to time.  Within forty-five (45) days from the date of such damage, Landlord shall notify Tenant, in writing (“Casualty Notice’’), of Landlord’s reasonable estimation of the length of time within which material restoration can be made, and Landlord’s determination shall be binding on Tenant.  For purposes of this Lease, the Building or Premises shall be deemed “materially restored” if they are in such condition as would not prevent or materially interfere with Tenant’s use of the Premises for the purpose for which it was being used immediately before such damage.

 

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22.2                        If such repairs cannot, in Landlord’s reasonable estimation, be made within one hundred eighty (180) days, Landlord and Tenant shall each have the option of giving the other, at any time within ninety (90) days after Tenant’s receipt of the Casualty Notice, notice terminating this Lease as of the date of such damage.  In the event of the giving of such notice, this Lease shall expire and all interest of the Tenant in the Premises shall terminate as of the date of such damage as if such date had been originally fixed in this Lease for the expiration of the Term.  In the event that neither Landlord nor Tenant exercises its option to terminate this Lease, then Landlord shall repair or restore such damage, this Lease continuing in full force and effect, and the rent hereunder shall be proportionately abated as provided in Section 22.1.

 

22.3                        Landlord shall not be required to repair or replace any damage or loss by or from fire or other cause to any panelings, decorations, partitions, additions, railings, ceilings, floor coverings, office fixtures or any other property or improvements installed on the Premises by, or belonging to, Tenant.  Any insurance which may be carried by Landlord or Tenant against loss or damage to the Building or Premises shall be for the sole benefit of the party carrying such insurance and under its sole control.

 

22.4                        In the event that Landlord should fail to complete such repairs and material restoration within thirty (30) days after the date estimated by Landlord therefor in the Casualty Notice as extended by this Section 22.4, Tenant may at its option and as its sole remedy terminate this Lease by delivering written notice to Landlord, within thirty (30) days after the expiration of said period of time, whereupon the Lease shall end on the date of such notice or such later date fixed in such notice as if the date of such notice was the date originally fixed in this Lease for the expiration of the Term; provided, however, that if construction is delayed because of changes, deletions or additions in construction requested by Tenant, strikes, lockouts, casualties, Acts of God, war, material or labor shortages, government regulation or control or other similar causes beyond the reasonable control of Landlord, the period for restoration, repair or rebuilding shall be extended for the amount of time Landlord is so delayed (such extension not to exceed thirty (30) days).

 

22.5                        Notwithstanding anything to the contrary contained in this Article:  (a) Landlord shall not have any obligation whatsoever to repair, reconstruct, or restore the Premises when the damages resulting from any casualty covered by the provisions of this Article 22 occur during the last twelve ( 12) months of the Term or any extension thereof, but if Landlord determines not to repair such damages Landlord shall notify Tenant and if such damages shall render any material portion of the Premises untenantable Tenant shall have the right to terminate this Lease by notice to Landlord within sixty (60) days after receipt of Landlord’s notice; and (b) in the event the holder of any indebtedness secured by a mortgage or deed of trust covering the Premises or Building requires that any insurance proceeds be applied to such indebtedness, then Landlord shall have the right to terminate this Lease by delivering written notice of termination to Tenant within sixty (60) days after such requirement is made by any such holder, whereupon this Lease shall end on the date of such damage as if the date of such damage were the date originally fixed in this Lease for the expiration of the Term.

 

22.6                        In the event of any damage or destruction to the Building or Premises by any peril covered by the provisions of this Article 22, it shall be Tenant’s responsibility to properly secure the Premises and upon notice from Landlord to remove forthwith, at its sole cost and expense,

 

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such portion of all of the property belonging to Tenant or its licensees from such portion or all of the Building or Premises as Landlord shall request.

 

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23.                               EMINENT DOMAIN.  If all or any substantial part of the Premises shall be taken or appropriated by any public or quasi-public authority under the power of eminent domain, or conveyance in lieu of such appropriation, either party to this Lease shall have the right, at its option, of giving the other, at any time within thirty (30) days after such taking, notice terminating this Lease, except that Tenant may only terminate this Lease by reason of taking or appropriation, if such taking or appropriation shall be so substantial as to materially interfere with Tenant’s use and occupancy of the Premises.  If neither party to this Lease shall so elect to terminate this Lease, the rental thereafter to be paid shall be adjusted on a fair and equitable basis under the circumstances.  In addition to the rights of Landlord above, if any substantial part of the Building shall be taken or appropriated by any public or quasi-public authority under the power of eminent domain or conveyance in lieu thereof, and regardless of whether the Premises or any part thereof are so taken or appropriated, Landlord shall have the right, at its sole option, to terminate this Lease.  Landlord shall be entitled to any and all income, rent, award, or any interest whatsoever in or upon any such sum, which may be paid or made in connection with any such public or quasi-public use or purpose, and Tenant hereby assigns to Landlord any interest it may have in or claim to all or any part of such sums, other than any separate award which may be made with respect to Tenant’s trade fixtures and moving expenses; Tenant shall make no claim for the value of any unexpired Term.

 

24.                               SALE BY LANDLORD.  In event of a sale or conveyance by Landlord of the Building, the same shall operate to release Landlord from any future liability upon any of the covenants or conditions, expressed or implied, contained in this Lease in favor of Tenant, and in such event Tenant agrees to look solely to the responsibility of the successor in interest of Landlord in and to this Lease.  Except as set forth in this Article 24, this Lease shall not be affected by any such sale and Tenant agrees to attorn to the purchaser or assignee.  If any security has been given by Tenant to secure the faithful performance of any of the covenants of this Lease, Landlord may transfer or deliver said security, as such, to Landlord’s successor in interest and thereupon Landlord shall be discharged from any further liability with regard to said security.

 

25.                               ESTOPPEL CERTIFICATES.  Within fifteen (15) days following any written request which Landlord may make from time to time, Tenant shall execute and deliver to Landlord or mortgagee or prospective mortgagee a sworn statement certifying:  (a) the date of commencement of this Lease; (b) the fact that this Lease is unmodified and in full force and effect (or, if there have been modifications to this Lease, that this Lease is in full force and effect, as modified, and stating the date and nature of such modifications); (c) the date to which the rent and other sums payable under this Lease have been paid; (d) the fact that there are no current defaults under this Lease by either Landlord or Tenant except as specified in Tenant’s statement; and (e) such other matters as may be reasonably requested by Landlord.  Landlord and Tenant intend that any statement delivered pursuant to this Article 25 may be relied upon by any mortgagee, beneficiary or purchaser.  Tenant irrevocably agrees that if Tenant fails to execute and deliver such certificate within such fifteen (15) day period Landlord or Landlord’s beneficiary or agent may execute and deliver such certificate on Tenant’s behalf, and that such certificate shall be fully binding on Tenant.

 

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26.                               SURRENDER OF PREMISES.

 

26.1                        Tenant shall arrange to meet Landlord for two (2) joint inspections of the Premises, the first to occur at least thirty (30) days (but no more than sixty (60) days) before the last day of the Term, and the second to occur not later than forty-eight (48) hours after Tenant has vacated the Premises.  In the event of Tenant’s failure to arrange such joint inspections and/or participate in either such inspection, Landlord’s inspection at or after Tenant’s vacating the Premises shall be conclusively deemed correct for purposes of determining Tenant’s responsibility for repairs and restoration.

 

26.2                        All alterations, additions, and improvements in, on, or to the Premises made or installed by or for Tenant, including, without limitation, carpeting (collectively, “Alterations”), shall be and remain the property of Tenant during the Term.  Upon the expiration or sooner termination of the Term, all Alterations shall become a part of the realty and shall belong to Landlord without compensation, and title shall pass to Landlord under this Lease as by a bill of sale.  At the end of the Term or any renewal of the Term or other sooner termination of this Lease, Tenant will peaceably deliver up to Landlord possession of the Premises, together with all Alterations by whomsoever made, in the same conditions received or first installed, broom clean and free of all debris, excepting only ordinary wear and tear and damage by fire or other casualty.  Notwithstanding the foregoing, if Landlord elects by notice given to Tenant at least ten (10) days prior to expiration of the Term, Tenant shall, at Tenant’s sole cost, remove any Alterations, including carpeting, so designated by Landlord’s notice, and repair any damage caused by such removal.  (At the time that Tenant requests approval of any proposed Alterations, or proposes to make any Alterations which do not require Landlord’s consent, Tenant may also inquire as to whether Tenant will be required to remove same upon expiration of the Term, and Landlord shall notify Tenant whether or not and to what extent Landlord will require that such Alterations be removed pursuant to this paragraph.  For the elimination of doubt, the parties agree that Landlord may require Tenant to remove any cooler or freezer units installed by Tenant during the Term.) Tenant must, at Tenant’s sole cost, remove upon termination of this Lease, any and all of Tenant’s furniture, furnishings, equipment, movable partitions of less than full height from floor to ceiling and other trade fixtures and personal property, as well as all data/telecommunications cabling and wiring installed by or on behalf of Tenant, whether inside walls, under any raised floor or above any ceiling (collectively, “Personalty”).  Personalty not so removed shall be deemed abandoned by the Tenant and title to the same shall thereupon pass to Landlord under this Lease as by a bill of sale, but Tenant shall remain responsible for the cost of removal and disposal of such Personalty, as well as any damage caused by such removal.

 

26.3                        All obligations of Tenant under this Lease not fully performed as of the expiration or earlier termination of the Term shall survive the expiration or earlier termination of the Term Upon the expiration or earlier termination of the Term, Tenant shall pay to Landlord the amount, as estimated by Landlord, necessary to repair and restore the Premises as provided in this Lease and/or to discharge Tenant’s obligation for unpaid amounts due or to become due to Landlord.  All such amounts shall be used and held by Landlord for payment of such obligations of Tenant, with Tenant being liable for any additional costs upon demand by Landlord, or with any excess to be returned to Tenant after all such obligations have been determined and satisfied.  Any otherwise unused Security Deposit shall be credited against the amount payable by Tenant under this Lease.

 

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27.                               NOTICES.  Any notice or document required or permitted to be delivered under this Lease shall be addressed to the intended recipient, by fully prepaid registered or certified United States Mail return receipt requested, or by reputable independent contract delivery service furnishing a written record of attempted or actual delivery, and shall be deemed to be delivered when tendered for delivery to the addressee at its address set forth on the Reference Pages, or at such other address as it has then last specified by written notice delivered in accordance with this Article 27, or if to Tenant at either its aforesaid address or its last known registered office or home of a general partner or individual owner, whether or not actually accepted or received by the addressee.  Any such notice or document may also be personally delivered if a receipt is signed by and received from, the individual, if any, named in Tenant’s Notice Address.

 

28.                               TAXES PAYABLE BY TENANT.  In addition to rent and other charges to be paid by Tenant under this Lease, Tenant shall reimburse to Landlord, upon demand, any and all taxes payable by Landlord (other than net income taxes) whether or not now customary or within the contemplation of the parties to this Lease:  (a) upon, allocable to, or measured by or on the gross or net rent payable under this Lease, including without limitation any gross income tax or excise tax levied by the State, any political subdivision thereof, or the Federal Government with respect to the receipt of such rent; (b) upon or with respect to the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy of the Premises or any portion thereof, including any sales, use or service tax imposed as a result thereof; (c) upon or measured by the Tenant’s gross receipts or payroll or the value of Tenant’s equipment, furniture, fixtures and other personal property of Tenant or leasehold improvements, alterations or additions located in the Premises; or (d) upon this transaction or any document to which Tenant is a party creating or transferring any interest of Tenant in this Lease or the Premises.  In addition to the foregoing, Tenant agrees to pay, before delinquency, any and all taxes levied or assessed against Tenant and which become payable during the term hereof upon Tenant’s equipment, furniture, fixtures and other personal property of Tenant located in the Premises.

 

29.                               RELOCATION OF TENANT.  Intentionally deleted.

 

30.                               DEFINED TERMS AND HEADINGS.  The Article headings shown in this Lease are for convenience of reference and shall in no way define, increase, limit or describe the scope or intent of any provision of this Lease.  Any indemnification or insurance of Landlord shall apply to and inure to the benefit of all the following “Landlord Entities”, being Landlord, Landlord’s investment manager, and the trustees, boards of directors, officers, general partners, beneficiaries, stockholders, employees and agents of each of them.  Any option granted to Landlord shall also include or be exercisable by Landlord’s trustee, beneficiary, agents and employees, as the case may be.  In any case where this Lease is signed by more than one person, the obligations under this Lease shall be joint and several.  The terms “Tenant” and “Landlord” or any pronoun used in place thereof shall indicate and include the masculine or feminine, the singular or plural number, individuals, firms or corporations, and their and each of their respective successors, executors, administrators and permitted assigns, according to the context hereof.  The term “rentable area” shall mean the rentable area of the Premises or the Building as calculated by the Landlord on the basis of the plans and specifications of the Building including a proportionate share of any common areas.  Tenant hereby accepts and agrees to be bound by the figures for the rentable square footage of the Premises and Tenant’s Proportionate Share shown on the Reference Pages.  The term “Building” refers to the structure in which the

 

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Premises are located and the common areas (parking lots, sidewalks, landscaping, etc.) appurtenant thereto.  If the Building is part of a larger complex of structures, the term “Building” may include the entire complex, where appropriate (such as shared Expenses or Taxes) and subject to Landlord’s reasonable discretion.

 

31.                               TENANT’S AUTHORITY.  If Tenant signs as a corporation, partnership, trust or other legal entity each of the persons executing this Lease on behalf of Tenant represents and warrants that Tenant has been and is qualified to do business in the state in which the Building is located, that the entity has full right and authority to enter into this Lease, and that all persons signing on behalf of the entity were authorized to do so by appropriate actions.  Tenant agrees to deliver to Landlord, simultaneously with the delivery of this Lease, a corporate resolution, proof of due authorization by partners, opinion of counsel or other appropriate documentation reasonably acceptable to Landlord evidencing the due authorization of Tenant to enter into this Lease.

 

Tenant hereby represents and warrants that neither Tenant, nor any persons or entities holding any legal or beneficial interest whatsoever in Tenant, are (i) the target of any sanctions program that is established by Executive Order of the President or published by the Office of Foreign Assets Control, U.S. Department of the Treasury (“OFAC”); (ii) designated by the President or OFAC pursuant to the Trading with the Enemy Act, 50 U.S.C. App.§ 5, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, the Patriot Act, Public Law 107-56, Executive Order 13224 (September 23, 2001) or any Executive Order of the President issued pursuant to such statutes; or (iii) named on the following list that is published by OFAC: “List of Specially Designated Nationals and Blocked Persons.” If the foregoing representation is untrue at any time during the Term, an Event of Default will be deemed to have occurred, without the necessity of notice to Tenant.

 

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32.                               FINANCIAL STATEMENTS AND CREDIT REPORTS.  At Landlord’s request, Tenant shall deliver to Landlord a copy, certified by an officer of Tenant as being a true and correct copy, of Tenant’s most recent audited financial statement, or, if unaudited, certified by Tenant’s chief financial officer as being true, complete and correct in all material respects.  Tenant hereby authorizes Landlord to obtain one or more credit reports on Tenant at any time, and shall execute such further authorizations as Landlord may reasonably require in order to obtain a credit report.

 

33.                               COMMISSIONS.  Each of the parties represents and warrants to the other that it has not dealt with any broker or finder in connection with this Lease, except as described on the Reference Pages.  Landlord is solely responsible for paying all commissions owed to the brokers described on the Reference Pages.

 

34.                               TIME AND APPLICABLE LAW.  Time is of the essence of this Lease and all of its provisions.  This Lease shall in all respects be governed by the laws of the state in which the Building is located.

 

35.                               SUCCESSORS AND ASSIGNS.  Subject to the provisions of Article 9, the terms, covenants and conditions contained in this Lease shall be binding upon and inure to the benefit of the heirs, successors, executors, administrators and assigns of the parties to this Lease.

 

36.                               ENTIRE AGREEMENT.  This Lease, together with its exhibits, contains all agreements of the parties to this Lease and supersedes any previous negotiations.  There have been no representations made by the Landlord or any of its representatives or understandings made between the parties other than those set forth in this Lease and its exhibits.  This Lease may not be modified except by a written instrument duly executed by the parties to this Lease.

 

37.                               EXAMINATION NOT OPTION.  Submission of this Lease shall not be deemed to be a reservation of the Premises.  Landlord shall not be bound by this Lease until it has received a copy of this Lease duly executed by Tenant and has delivered to Tenant a copy of this Lease duly executed by Landlord, and until such delivery Landlord reserves the right to exhibit and lease the Premises to other prospective tenants.  Notwithstanding anything contained in this Lease to the contrary, Landlord may withhold delivery of possession of the Premises from Tenant until such time as Tenant has paid to Landlord any security deposit required by Article 5, the first month’s rent as set forth in Article 3 and any sum owed pursuant to this Lease.

 

38.                               RECORDATION.  Tenant shall not record or register this Lease or a short form memorandum hereof without the prior written consent of Landlord, and then shall pay all charges and taxes incident such recording or registration.

 

39.                               RENEWAL OPTION.  Tenant shall, provided the Lease is in full force and effect and there exists no Event of Default under any of the other terms and conditions of the Lease at the time of notification or commencement, have one (1) option to renew the Term of this Lease for two (2) consecutive terms of five (5) years each, for the portion of the Premises being leased by Tenant as of the date the renewal term is to commence, on the same terms and conditions set forth in the Lease, except as modified by the terms, covenants and conditions as set forth below:

 

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39.1                        If Tenant elects to exercise said option, then Tenant shall provide Landlord with written notice no earlier than the date which is twelve (12) months prior to the expiration of the then current term of the Lease but no later than the date which is nine (9) months prior to the expiration of the then current term of this Lease.  If Tenant fails to provide such notice, Tenant shall have no further or additional right to extend or renew the term of the Lease.

 

39.2                        The Annual Rent and Monthly Installment in effect at the expiration of the then current term of the Lease shall be adjusted to reflect the current fair market rental for comparable space in the Building and in other similar buildings in the same rental market as of the date the renewal term is to commence, taking into account the specific provisions of the Lease which will remain constant.  Landlord shall advise Tenant of the new Annual Rent and Monthly Installment for the Premises no later than thirty (30) days after receipt of Tenant’s written request therefor.  Said request shall be made no earlier than thirty (30) days prior to the first date of which Tenant may exercise its option under this Paragraph.  Said notification of the new Annual Rent may include a provision for its adjustment to provide for a change in fair market rental between the time of notification and the commencement of the renewal term.  If Tenant and Landlord arc unable to agree on a mutually acceptable rental rate not later than sixty (60) days prior to the expiration of the then current term, then Landlord and Tenant shall each appoint a qualified MAI appraiser doing business in the area, in turn those two independent MAI appraisers shall appoint a third MAI appraiser and the majority shall decide upon the fair market rental for the Premises as of the expiration of the then current term.  Landlord and Tenant shall equally share in the expense of this appraisal except that in the event the Annual Rent and Monthly Installment is found to be within fifteen percent (15%) of the original rate quoted by Landlord, then Tenant shall bear the full cost of all the appraisal process.

 

39.3                        This option is not transferable; the parties hereto acknowledge and agree that they intend that the aforesaid option to renew this Lease shall be “personal” to Tenant as set forth above and that in no event will any assignee or sublessee have any rights to exercise the aforesaid option to renew.

 

39.4                        As each renewal option provided for above is exercised, the number of renewal options remaining to be exercised is reduced by one and upon exercise of the last remaining renewal option Tenant shall have no further right to renew the Lease.

 

40.                               SIGNAGE.  Tenant shall be permitted to install identification signage on the exterior of the Building.  All such signage (1) shall be consistent in size, style, materials, color, quality and, if applicable (lighting) with existing and previous such signage at the Building, (2) shall be installed at Tenant’s sole expense, and only after first receiving Landlord’s approval of plans and specifications therefor, not to be unreasonably withheld, as well as any necessary permits, and (3) must comply will all applicable laws, codes and ordinances.  At the expiration or earlier termination of the Term, Tenant shall remove all such signage and repair any damage caused by such removal, all at Tenant’s sole cost and expense.

 

41.                               INCENTIVES.

 

41.1                        This Lease, and Tenant’s obligations hereunder, arc conditioned upon Tenant and its proposed operations at the Premises to be accepted by the New Jersey Economic

 

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Development Authority (“EDA”) as eligible for certain tax credits under its “Grow NJ Assistance Program” (the “Program”).  To the extent it has not already done so, promptly upon execution and delivery of this Lease, Tenant shall apply to EDA for assistance under the Program, provide all required forms and information and pay all applicable fees.  Tenant shall diligently and in good faith pursue its application for assistance under the Program, and Landlord shall cooperate reasonably with Tenant but at no expense to Landlord.  Tenant shall have a period of ninety (90) days from the date of execution and delivery of this Lease (the “Application Period”) to pursue its application for assistance under the Program.  If Tenant determines in its sole and absolute discretion that it will not be accepted into the Program, it may terminate this Lease by delivering written notice to Landlord prior to the expiration of the Application Period, whereupon this Lease shall terminate, and, subject to the following Section 41.2, the Security Deposit and all prepaid rent shall be returned to Tenant and neither party shall have any further obligation to the other.  If Tenant fails to timely deliver such notice, Tenant’s right to terminate shall be conclusively deemed to be waived, and the Lease shall continue in full force and effect without reference to this Article 41.  Without Landlord’s prior written consent, which may be withheld at Landlord’s sole and absolute discretion, Tenant may not occupy the Premises or commence any work in or about the Premises until the condition of this Section shall be satisfied or waived.

 

41.2                        If Tenant exercises its termination option under Section 41.1, Tenant shall be responsible for all Costs (defined below) incurred up to the date of Landlord’s receipt of Tenant’s termination notice, shall reimburse Landlord for any and all Costs incurred, and shall indemnify and hold Landlord and its agents harmless from and against any all Costs.  “Costs” means the following costs and expenses actually incurred by Landlord in connection with this Lease to the date of such termination notice: (i) construction costs and all other hard costs of Landlord’s Work, and (ii) attorneys’ fees incurred in connection with the execution and delivery of this Lease.  Landlord may deduct the Costs from the Security Deposit and other prepaid amounts prior to returning same to Tenant.  This Section 41.2 shall survive the termination of this Lease under Section 41.1, but shall be null and void upon Tenant’s satisfaction or waiver of the conditions of Section 41.1.

 

42.                               WATERFRONT COMMISSION.  Tenant has been advised that the Building is potentially within the jurisdiction of the Waterfront Commission of New York Harbor (the “Commission”), and, as such, could potentially be subject to the Commission’s rulemaking authority and enforcement powers concerning hiring practices and other matters.  Tenant has made such inquiries as it has deemed prudent with respect to the Commission, and has relied on such inquiries in entering into this Lease, and has satisfied itself as to the costs and expenses, and/or restrictions, regulations or limitations on its operations, if any, it might incur or be subject to under authority of the Commission.  Tenant hereby releases Landlord, its agents and employees, from any and all liability and claims with respect to any costs, expenses or liabilities incurred by Tenant, resulting from the rulemaking or enforcement activities of, or in any way connected with, the Commission.

 

43.                               LIMITATION OF LANDLORD’S LIABILITY.  Redress for any claim against Landlord under this Lease shall be limited to and enforceable only against and to the extent of Landlord’s interest in the Building and the underlying land.  The obligations of Landlord under this Lease are not intended to be and shall not be personally binding on, nor shall any resort be

 

33

 

had to the private properties of, any of its or its investment manager’s trustees, directors, officers, partners, beneficiaries, members, stockholders, employees, or agents, and in no case shall Landlord be liable to Tenant hereunder for any lost profits, damage to business, or any form of special, indirect or consequential damages.

 

	
LANDLORD:
    	
TENANT:
    
	
 
    	
 
    
	
CABOT ACQUISITION, LLC,   a Delaware limited liability company
    	
BLUE APRON, INC.,   a Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ David F. Crane
    	
 
    	
By:
    	
/s/ Matt Salzberg
    
	
 
    	
 
    	
 
    
	
Name: David F. Crane
    	
Name: Matt Salzberg
    
	
 
    	
 
    
	
Title: Vice President
    	
Title: CEO
    
	
 
    	
 
    
	
Dated: March 31, 2014
    	
Dated: March 27, 2014
    
					

 

34

 

EXHIBIT A — PLAN DEPICTING THE PREMISES AND THE BUILDING

 

attached to and made a part of Lease bearing the
 Lease Reference Date of March 27, 2014 between
 CABOT ACQUISITION, LLC, as Landlord and
 BLUE APRON, INC., as Tenant

 

202 Port Jersey Blvd., Jersey City, New Jersey

 

Exhibit A is intended only to show the general layout of the Premises as of the beginning of the Term of this Lease.  It does not in any way supersede any of Landlord’s rights set forth in Article 17 with respect to arrangements and/or locations of public parts of the Building and changes in such arrangements and/or locations.  It is not to be scaled; any measurements or distances shown should be taken as approximate.

 

 

A-1

 

EXHIBIT B — INITIAL ALTERATIONS

 

attached to and made a part of Lease bearing the
 Lease Reference Date of March 27, 2014 between
 CABOT ACQUISITION, LLC, as Landlord and
 BLUE APRON, INC., as Tenant

 

202 Port Jersey Blvd., Jersey City, New Jersey

 

1.                                      Delivery of Premises; Landlord’s Work.  Landlord shall deliver the Premises to Tenant as and when provided for in the Lease and subject to all of the terms and conditions thereof.  Except as provided in this paragraph, the Premises shall be delivered “as is” with no additional improvements, repairs or alterations and Tenant acknowledges that it has inspected the Premises and agrees to accept the Premises in its existing condition and that Landlord shall have no obligation to construct any improvements therein.  Landlord shall perform the following items (“Landlord’s Work”:

 

1.1                               Landlord shall leave all existing cooler infrastructure in place.  Landlord covenants that the cooler units will be in good working condition as of the delivery of possession, but otherwise said units are delivered “as is” and without warranty or representation.

 

1.2                               Landlord shall deliver the Premises with all mechanical systems (excluding the coolers), plumbing, electrical systems, fire sprinkler systems, lighting, HVAC systems and other utilities serving the Premises in good working order, leak free, and in good “broom swept” condition.

 

1.3                               The offices will be painted and carpeted, using Building-standard materials.

 

1.4                               Any holes or significant damage to the floor will be patched.

 

1.5                               All dock doors and grade level doors shall be in good operating condition.

 

2.                                      Plans and Specifications.

 

2.1                               Tenant shall employ such consultants designated by Tenant from time to time, with the approval of Landlord, which shall not be unreasonably withheld or delayed (“Consultants”) for preparation of the necessary architectural, mechanical and electrical plans, drawings and specifications pertaining to the construction work which Tenant intends to perform in the Premises (the “Work”).  Tenant, at its expense, shall furnish Landlord with architectural and design plans and specifications (the “Tenant’s Plans”) prepared first in preliminary form (“Preliminary Plans”), and thereafter in working form (“Working Drawings”), and covering the Work.  Tenant shall pay all costs and expenses relating to Tenant’s Plans.

 

2.2                               Upon submittal of any portion of Tenant’s Plans, Landlord shall review Tenant’s Plans and shall either approve Tenant’s Plans or advise Tenant in writing of any aspect of the design, engineering, construction or installation which is not acceptable to Landlord.  Landlord shall not unreasonably withhold, condition or delay its approval of Tenant’s Plans.  Landlord shall advise Tenant of its approval or comments on the Tenant’s Plans within fifteen (15) days

 

B-1

 

after Landlord’s receipt of the Tenant’s Plans.  In the event that Landlord shall disapprove of any portion of Tenant’s Plans, Tenant shall, after Landlord’s notification of its disapproval, revise Tenant’s Plans and resubmit them to Landlord.  Landlord shall advise Tenant of its approval or comments of any revised Tenant’s Plans within ten (10) days after its receipt of same, until said Tenant’s Plans are approved.  In the event Landlord fails to approve or disapprove Tenant’s Plans or any changes thereto within the time period set forth above, and if such failure continues thereafter for five (5) days after Landlord’s receipt of notice from Tenant requesting action on Tenant’s Plans, Tenant’s Plans or the changes shall be deemed to be approved.

 

2.3                               After approval of Tenant’s Plans or any portion thereof, Tenant shall not in any way materially modify, revise or change such Tenant’s Plans without the prior written consent of Landlord.  If Landlord approves such request, the entire cost of such change, including the cost of revising Tenant’s Plans or preparing new plans, shall be borne by Tenant and any delay occasioned thereby shall not delay the Commencement Date.

 

2.4                               Except for such matters, if any, as shall have been required by Landlord and not requested by Tenant, it shall be Tenant’s responsibility that the Plans comply with all applicable governmental and municipal codes and regulations and to procure and deliver to Landlord upon request all such licenses, permits and approvals from all governmental authorities as are necessary to permit the Work to be commenced and continued to completion and the so constructed Premises to be occupied.

 

3.                                      Cost Estimates and Payment Protection; Allowance.

 

3.1                               Tenant expects that its Work will proceed in two phases, Phase I and Phase II.  Phase I will constitute work necessary for Tenant’s immediate use and occupancy of the Premises, and Phase II will constitute optional work such installation of freezers and/or new cooler units.  Prior to commencing either Phase of the Work, Tenant shall submit to Landlord a written estimate of the cost of such Phase, based upon competitive bids or a fixed-price contract (an “Estimate”).  The ratio, expressed as a percentage, of the Maximum TI Allowance (defined below) to the total amount of the Estimate is referred to as “Landlord’s Percentage,” and the ratio of the amount by which the Estimate exceeds the Maximum TI Allowance to the total amount of the Estimate is referred to as “Tenant’s Percentage.” By way of example, if the cost of Phase I is exactly $175,000, Landlord’s Percentage would be 100%.  Nothing herein shall preclude Tenant from exhausting the entire Maximum TI Allowance on Phase I.

 

3.2                               At Landlord’s option, the Maximum TI Allowance may be disbursed through a construction escrow al a title insurance company selected by Landlord.

 

3.3                               Tenant shall submit draw requests for Landlord’s disbursement of the Maximum TI Allowance, not more frequently than monthly, in accordance with the terms of this paragraph.  Upon satisfaction of the conditions stated below, Landlord shall pay Landlord’s Percentage of the total amount set forth in the applicable application for payment, until the Maximum TI Allowance is entirely disbursed, and Tenant shall be responsible for Tenant’s Percentage of such amount.  Landlord’s funds shall be paid either directly to the contractor, or, if Tenant has previously paid such amount to the contractor, Landlord’s funds shall be paid to Tenant in reimbursement for amounts spent by Tenant.  Each disbursement shall be subject to satisfaction

 

B-2

 

of each of the following conditions as of the time of such disbursement (any final disbursement from the escrow will also be conditioned upon Tenant’s satisfaction of its obligations under Paragraph 5 below):

 

3.3.1                     Landlord’s reasonable satisfaction that the Work completed as of the date of such disbursement has an aggregate value at least equal to the aggregate amount of proceeds then to be disbursed plus the total amount thereof previously disbursed;

 

3.3.2                     Receipt by Landlord and the title insurer of sworn statements, waivers of lien and other documents and assurances pertaining to the Work sufficient to protect Landlord against mechanics’ and other liens;

 

3.3.3                     Tenant is then in full compliance with all the terms and provisions of the Lease and has not committed or suffered any act or omission which constitutes, or will constitute with the passage of time, an event of default of Tenant under the Lease or a breach by Tenant of any term or provision of this Agreement.

 

3.4                               Landlord shall be entitled to deduct any sums properly due Landlord from Tenant hereunder from the amounts held by Landlord or in escrow or from any other sums due to Tenant under the Lease, but in such event Landlord shall notify Tenant of such deduction and provide Tenant with appropriate information substantiating Landlord’s claim.

 

3.5                               Provided the Lease is in full force and effect and there is no uncured Event of Default thereunder, Landlord hereby agrees to pay to Tenant toward the cost of the Work the amount equal to the lesser of:  (i) the actual cost of the Work; or (ii) $175,000.00 (such lesser amount the “Maximum TI Allowance”).  Such amount will be paid to Tenant through the escrow and disbursement procedure provided for in Paragraphs 3.2 and 3.3.  If Tenant does not utilize the entire Maximum TI Allowance in connection with Phase I, the remainder shall be available to Tenant in connection with Phase II, but all of the conditions of disbursement must be satisfied by December 31, 2016, failing which Tenant shall forfeit the right to disbursement of any then undisbursed Maximum TI Allowance.

 

3.6                               Landlord shall be entitled to a management and supervision fee payable by Tenant in the amount of 0.75% of the cost of the Work.

 

4.                                      Contracts and Contractors for the Work.  Tenant shall make all such contracts and arrangements as shall be necessary or desirable for the construction and installation of the Work.  Tenant agrees to retain contractors, subcontractors and materialmen who are of good reputation and experienced in and favorably known for the construction of space comparable to the Premises in the metropolitan area where the Building is located and that are properly licensed for the work they are to perform.  Tenant shall provide Landlord with a list of all contractors, subcontractors and materialmen to be utilized by or for Tenant with respect to the Work and provide true, correct and complete copies of all contracts relating to the Work.  Such contractors, subcontractors, materialmen and contracts must be satisfactory to Landlord in Landlord’s reasonable discretion, and shall not be employed or executed, as the case may be, without Landlord’s written approval first obtained.  Tenant and Tenant’s contractors shall use qualified craftsmen and laborers who are compatible with the trade unions operating in the Building (if

 

B-3

 

any) and Tenant shall take promptly upon Landlord’s demand all measures necessary to avoid labor unrest in the Premises and in the Building which is caused by Tenant or Tenant’s contractors.

 

5.                                      Construction.  Promptly upon Landlord’s approval of the Plans, Tenant shall apply for, and supply to Landlord upon issuance, a building permit and any other required governmental permits, licenses or approvals.  Upon issuance of such approvals, Tenant shall commence the Work and shall diligently prosecute the Work to completion.  Tenant agrees to cause the Work to be constructed in a good and workmanlike manner using first-class quality materials, at its sole cost and expense in accordance with the provisions of the Lease.  Any costs incurred by Landlord in providing utilities or other services needed for the accomplishment of the Work shall be reimbursed by Tenant to Landlord.  Upon completion of the Work, Tenant shall provide to Landlord:  (i) an architect’s certificate of final completion; (ii) copies of all necessary governmental permits, including, but not limited to, a certificate of occupancy; (iii) the sworn statement of the general contractor; (iv) final lien waivers from all contractors, subcontractors and materialmen; and (v) any other information or documentation reasonably requested by Landlord to evidence lien-free completion of construction and payment of all of the cost thereof.  Landlord shall have the right to observe the performance of the Work and Tenant shall take all such actions with respect thereto as Landlord may, in its good faith determination, deem advisable from time to time to assure that the Work and the manner of performance thereof shall not be injurious to the engineering and construction of the Building or the electrical, plumbing, heating, mechanical, ventilating or air-conditioning systems of the Building and shall be in accordance with the Plans and the provisions of this Lease.

 

6.                                      Miscellaneous.

 

6.1                               All rights and remedies of Landlord herein created or otherwise existing at law or equity are cumulative, and the exercise of one or more such rights or remedies shall not be deemed to exclude or waive the right to the exercise of any other rights or remedies.  All such rights and remedies may be exercised and enforced concurrently and whenever and as often as deemed desirable.

 

6.2                               This Exhibit B shall not be deemed applicable to any additional space added to the original Premises at any time or from time to time, whether by any options under the Lease or otherwise, or to any portion of the original Premises or any additions thereto in the event of a renewal or extension of the original term of the Lease, whether by any options under the Lease or otherwise.

 

6.3                               Tenant shall, before commencing any of the Work, and for so long as any Work shall continue, comply with the insurance requirements in Schedule I.  In the event Tenant fails to so comply, Landlord shall have the option, but not the obligation to procure the required insurance and charge Tenant the cost of such compliance as additional rent.

 

In the event of a conflict between the terms of this Exhibit B and the Lease, the terms of this Exhibit B shall control.

 

B-4

 

SCHEDULE I

 

INSURANCE REQUIREMENTS

 

1.                                      Tenant shall cause to be maintained for Landlord’s benefit insurance in an insurance company or companies which are “A” rated, Class VII or better in Best’s Key Rating Guide or such lesser standard as shall be acceptable to Landlord and authorized to transact business in the state in which the Building is located, protecting Landlord against liabilities arising out of the operations of subcontractors and sub-subcontractors as well as Tenant’s contractor (“Contractor”) with respect to all the Work, including at least and in amounts not less than:

 

1.1                               Worker’s Compensation & Employers Liability:  Statutory limits required by applicable Worker’s Compensation Law and $500,000 per occurrence for Employers Liability, without limitation including all liability arising under any applicable structural work act and any other statute for the protection of employees.

 

1.2                               Commercial or Comprehensive Liability including Landlord’s and Contractor’s Protective, products, and completed operations coverage, contractual liability including Contractor’s indemnity agreements contained in the Contract Documents, personal injury (employees’ exclusion deleted) $5,000,000 per occurrence Bodily Injury and Property Damage, $5,000,000 combined single limit.  Landlord may require deletion of the “x, c, u” exclusion, if applicable.

 

1.3                               Comprehensive Auto Liability including owned, non-owned, or hired vehicles coverage:  $1,000,000 per occurrence Bodily Injury and Property Damage Liability (Combined Single Limit).

 

1.4                               Builder’s Risk in an “all risk” form covering the Tenant Work against loss by fire and other casualty in an amount equal to the full insurable value of the Tenant Work.

 

2.                                      Contractor shall either have the Landlord added as an additional named insured to the preceding Commercial or Comprehensive General Liability insurance policy or shall supply a separate Landlord’s Protective policy, with limits as specified, naming the Landlord as named insured, and said General Liability or Landlord’s Protective policy shall be maintained in force until the completion of the Work.

 

3.                                      Each insurance policy shall be written to cover all claims arising out of occurrences taking place within the period of coverage; insurance written to cover only claims made within the policy period is not acceptable without the express advance written consent of Landlord.  To the extent the policy is not a Landlord’s Protective policy, it shall be endorsed to indicate that it is primary as respects Landlord, not contributory with any other insurance available to the Landlord and not subject to reduction of coverage as to Landlord by reason of any claim asserted against Contractor other than in connection with the Work or by reason of any misstatement, act or omission of any party other than Landlord applying for or insured by such insurance.

 

B-5

 

4.                                      Each insurance policy and any certificate furnished in lieu of a policy shall state that it will not be cancelled, reduced or materially changed without twenty (20) days’ prior written notice to Landlord.  In the event Tenant fails to provide replacement coverage at least fifteen (15) days prior to the expiration of any policy of insurance, Landlord may at its option secure such insurance and Tenant shall reimburse Landlord for the cost thereof as additional rent; but Landlord shall not have any obligation to secure any such insurance.

 

5.                                      If and so long as any monies shall be or be about to be owed to any lender upon the security of an interest in the Premises or the Building, at Landlord’s request any insurance required hereunder for Landlord’s protection shall also protect Landlord’s mortgagee and whenever Landlord is to be an additional insured, Landlord’s mortgagee shall also be so insured.

 

6.                                      Each of the aforesaid insurance coverages shall be placed into effect before any of the Work is commenced and shall be maintained in force at all times while and for at least so long as any of the Work is carried on, including without limitation, any and all activities performed in fulfillment of any obligation of Contractor or any Subcontractor to correct defects in the Work or under any other warranty.  Before commencing any of the Work, and as often thereafter as reasonably requested by Landlord, Tenant shall supply Landlord with either the policies themselves or certificates of insurance satisfactory to Landlord, evidencing compliance with all the foregoing requirements.

 

7.                                      No insurance policy purporting to insure Landlord or Landlord’s lender, as the case may be, shall without the prior written consent of said party be so written as to limit or condition any of the insurer’s obligations to said party with respect to any insured loss or liability by any condition or requirement that said party bear, assume or pay any portion of such loss or liability before the insurer’s obligation to said party shall come into effect.

 

B-6

 

EXHIBIT C - COMMENCEMENT DATE MEMORANDUM

 

attached to and made a part or Lease bearing the
 Lease Reference Date of March 27, 2014 between
 CABOT ACQUISITION, LLC, as Landlord and
 BLUE APRON, INC., as Tenant

 

202 Port Jersey Blvd., Jersey City, New Jersey

 

COMMENCEMENT DATE MEMORANDUM

 

THIS MEMORANDUM, made as of         , 2014, by and between CABOT ACQUISITION, LLC, a Delaware limited liability company (“Landlord”) and BLUE APRON, INC., a Delaware corporation (“Tenant”).

 

Recitals:

 

Landlord and Tenant are parties to that certain Lease, dated for reference March 27, 2014 (the “Lease”) for certain premises (the “Premises”) consisting of approximately 112,709 square feet at the building commonly known as 202 Port Jersey Blvd., Jersey City, NJ 07305-4522

 

A.

 

B.                                    Tenant is in possession of the Premises and the Term of the Lease has commenced.

 

C.                                    Landlord and Tenant desire to enter into this Memorandum confirming the Commencement Date, the Termination Date and other matters under the Lease.

 

NOW, THEREFORE, Landlord and Tenant agree as follows:

 

1.                                      The actual Commencement Date is             .

 

2.                                      The actual Termination Date is             .

 

3.                                      The schedule of the Annual Rent and the Monthly Installment of Rent set forth on the Reference Pages is deleted in its entirety, and the following is substituted therefor:

 

[insert rent schedule]

 

C-1

 

4.                                      Capitalized terms not defined herein shall have that same meaning as set forth in the Lease.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written.

 

	
LANDLORD:
    	
TENANT:
    
	
 
    	
 
    
	
CABOT ACQUISITION, LLC,   a Delaware limited liability company
    	
BLUE APRON, INC.,   a Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name: Mark P. Sabatino
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Title: Vice President
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
Dated:                                                     ,   2014
    	
Dated:                                                          ,   2014
    

 

C-2

 

EXHIBIT D — RULES AND REGULATIONS

 

attached to and made a part or Lease bearing the
 Lease Reference Date of March 27, 2014 between
 CABOT ACQUISITION, LLC, as Landlord and
 BLUE APRON, INC., as Tenant

 

202 Port Jersey Blvd., Jersey City, New Jersey

 

1.                                      No sign, placard, picture, advertisement, name or notice (collectively referred to as “Signs”) shall be installed or displayed on any part of the outside of the Building without the prior written consent of the Landlord which consent shall be in Landlord’s sole discretion.  All approved Signs shall be printed, painted, affixed or inscribed at Tenant’s expense by a person or vendor approved by Landlord and shall be removed by Tenant at Tenant’s expense upon vacating the Premises.  Landlord shall have the right to remove any Sign installed or displayed in violation of this rule at Tenant’s expense and without notice.

 

2.                                      If Landlord objects in writing to any curtains, blinds, shades or screens attached to or hung in or used in connection with any window or door of the Premises or Building, Tenant shall immediately discontinue such use.  No awning shall be permitted on any part of the Premises.  Tenant shall not place anything or allow anything to be placed against or near any glass partitions or doors or windows which may appear unsightly, in the opinion of Landlord, from outside the Premises.

 

3.                                      Tenant shall not alter any lock or other access device or install a new or additional lock or access device or bolt on any door of its Premises without the prior written consent of Landlord.  Tenant, upon the termination of its tenancy, shall deliver to Landlord the keys or other means of access to all doors.

 

4.                                      If Tenant requires telephone, data, burglar alarm or similar service, the cost of purchasing, installing and maintaining such service shall be borne solely by Tenant.  No boring or cutting for wires will be allowed without the prior written consent of Landlord.  Landlord shall direct electricians as to where and how telephone, data, and electrical wires are to be introduced or installed.  The location of burglar alarms, telephones, call boxes or other office equipment affixed to the Premises shall be subject to the prior written approval of Landlord.

 

5.                                      Tenant shall not place a load upon any floor of its Premises, including mezzanine area, if any, which exceeds the load per square foot that such floor was designed to carry and that is allowed by law.  Heavy objects shall stand on such platforms as determined by Landlord to be necessary to properly distribute the weight.  Landlord will not be responsible for loss of or damage to any such equipment or other property from any cause, and all damage done to the Building by maintaining or moving such equipment or other property shall be repaired at the expense of Tenant.

 

6.                                      Tenant shall not install any radio or television antenna, satellite dish, loudspeaker or other device on the roof or exterior walls of the Building without Landlord’s prior written consent which consent shall be in Landlord’s sole discretion.

 

D-1

 

7.                                      Tenant shall not mark, drive nails, screw or drill into the partitions, woodwork, plaster or drywall (except for pictures and general office uses) or in any way deface the Premises or any part thereof.  Tenant shall not affix any floor covering to the floor of the Premises or paint or seal any floors in any manner except as approved by Landlord.  Tenant shall repair any damage resulting from noncompliance with this rule.

 

8.                                      No cooking shall be done or permitted on the Premises, except that Underwriters’ Laboratory approved microwave ovens or equipment for brewing coffee, tea, hot chocolate and similar beverages shall be permitted, provided that such equipment and use is in accordance with all applicable federal, state and city laws, codes, ordinances, rules and regulations.

 

9.                                      Tenant shall not use any hand trucks except those equipped with the rubber tires and side guards, and may use such other material-handling equipment as Landlord may approve.  Tenant shall not bring any other vehicles of any kind into the Building.  Forklifts which operate on asphalt areas shall only use tires that do not damage the asphalt.

 

10.                               Tenant shall not use the name of the Building or any photograph or other likeness of the Building in connection with or in promoting or advertising Tenant’s business except that Tenant may include the Building name in Tenant’s address.  Landlord shall have the right, exercisable without notice and without liability to any tenant, to change the name and address of the Building.

 

11.                               All trash and refuse shall be contained in suitable receptacles at locations approved by Landlord.  Tenant shall not place in the trash receptacles any personal trash or material that cannot be disposed of in the ordinary and customary manner of removing such trash without violation of any law or ordinance governing such disposal.

 

12.                               Tenant shall comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any governing authority.

 

13.                               Tenant assumes all responsibility for securing and protecting its Premises and its contents including keeping doors locked and other means of entry to the Premises closed.

 

14.                               Tenant shall not use any method of heating or air conditioning other than that supplied by Landlord without Landlord’s prior written consent.

 

15.                               No person shall go on the roof without Landlord’s permission.

 

16.                               Tenant shall not permit any animals, other than seeing-eye dogs, to be brought or kept in or about the Premises or any common area of the property.

 

17.                               Tenant shall not permit any motor vehicles to be washed or mechanical work or maintenance of motor vehicles to be performed on any portion of the Premises or parking lot.

 

18.                               These Rules and Regulations are in addition to, and shall not be construed to in any way modify or amend, in whole or in part, the terms, covenants, agreements and conditions of any lease of any premises in the Building.  Landlord may waive any one or more of these Rules and

 

D-2

 

Regulations for the benefit of any tenant or tenants, and any such waiver by Landlord shall not be construed as a waiver of such Rules and Regulations for any or all tenants.

 

19.                               Landlord reserves the right to make such other and reasonable rules and regulations as in its judgment may from time to time be needed for safety and security, for care and cleanliness of the Building and for the preservation of good order in and about the Building.  Tenant agrees to abide by all such rules and regulations herein stated and any additional rules and regulations which are adopted.  Tenant shall be responsible for the observance of all of the foregoing rules by Tenant’s employees, agents, clients, customers, invitees and guests.

 

20.                               Any toilet rooms, toilets, urinals, wash bowls and other apparatus shall not be used for any purpose other than that for which they were constructed and no foreign substance of any kind whatsoever shall be thrown into them.  The expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the Tenant who, or whose employees or invitees, shall have caused it.

 

21.                               Tenant shall not permit smoking or carrying of lighted cigarettes or cigars in areas reasonably designated by Landlord or any applicable governmental agencies as non-smoking areas.

 

22.                               Any directory of the Building or project of which the Building is a part (“Project Area”), if provided, will be exclusively for the display of the name and location of tenants only and Landlord reserves the right to charge for the use thereof and to exclude any other names.

 

23.                               Canvassing, soliciting, distribution of handbills or any other written material in the Building or Project Area is prohibited and each tenant shall cooperate to prevent the same.  No tenant shall solicit business from other tenants or permit the sale of any goods or merchandise in the Building or Project Area without the written consent of Landlord.

 

24.                               Any equipment belonging to Tenant which causes noise or vibration that may be transmitted to the structure of the Building or to any space therein to such a degree as to be objectionable to Landlord or to any tenants in the Building shall be placed and maintained by Tenant, at Tenant’s expense, on vibration eliminators or other devices sufficient to eliminate the noise or vibration.

 

25.                               Driveways, sidewalks, halls, passages, exits, entrances and stairways (“Access Areas”) shall not be obstructed by tenants or used by tenants for any purpose other than for ingress to and egress from their respective premises.  Access areas are not for the use of the general public and Landlord shall in all cases retain the right to control and prevent access thereto by all persons whose presence, in the judgment of Landlord, shall be prejudicial to the safety, character, reputation and interests of the Building or its tenants.

 

26.                               Landlord reserves the right to designate the use of parking areas and spaces.  Tenant shall not park in visitor, reserved, or unauthorized parking areas.  Tenant and Tenant’s guests shall park between designated parking lines only and shall not park motor vehicles in those areas designated by Landlord for loading and unloading.  Vehicles in violation of the above shall be subject to being towed at the vehicle owner’s expense.  Vehicles parked overnight without prior written consent of the Landlord shall be deemed abandoned and shall be subject to being towed

 

 

D-3

 

at vehicle owner’s expense.  Tenant will from time to time, upon the request of Landlord, supply Landlord with a list of license plate numbers of vehicles owned or operated by its employees or agents.

 

27.                               No trucks, tractors or similar vehicles can be parked anywhere other than in Tenant’s own truck dock area.  Tractor-trailers which must be unhooked or parked with dolly wheels beyond the concrete loading areas must use steel plates or wood blocks under the dolly wheels to prevent damage to the asphalt paving surfaces.  No parking or storing of such trailers will be permitted in the parking areas or on streets adjacent thereto.

 

28.                               During periods of loading and unloading, Tenant shall not unreasonably interfere with traffic flow and loading and unloading areas of other tenants.  All products, materials or goods must be stored within the Tenant’s Premises and not in any exterior areas, including, but not limited to, exterior dock platforms, against the exterior of the Building, parking areas and driveway areas.  Tenant agrees to keep the exterior of the Premises clean and free of nails, wood, pallets, packing materials, barrels and any other debris produced from their operation.

 

In the event of any conflict between the Rules and Regulations and the terms of the Lease, the terms of the Lease shall control.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

D-4

 

EXHIBIT E — FORM OF LETTER OF CREDIT

 

attached to and made a part of Lease bearing the
 Lease Reference Date of March 27, 2014 between
 CABOT ACQUISITION, LLC, as Landlord and
 BLUE APRON, INC., as Tenant

 

202 Port Jersey Blvd., Jersey City, New Jersey

 

[to come]

 

E-1

 

FIRST AMENDMENT TO LEASE

 

THIS FIRST AMENDMENT TO LEASE, dated as of May 30, 2014 (this “Amendment”), between CABOT ACQUISITION, LLC, a Delaware limited liability company (“Landlord”), and BLUE APRON, INC., a Delaware corporation (“Tenant”).

 

RECITALS:

 

A.                                    Landlord and Tenant entered into that certain Multi-Tenant Industrial Net Lease dated for reference March 27, 2013 (as amended, the “Lease”) for approximately 112,709 rentable square feet (the “Premises”) in the building commonly known as Port Industrial Marine Center V, 202 Port Jersey Blvd., Jersey City, New Jersey (the “Building”).

 

B.                                    Landlord was not able to deliver possession of the Premises by the Scheduled Commencement Date specified in the Lease.

 

C.                                    Landlord and Tenant now wish to amend the Lease so as provide for certain modifications to the Term and the rent schedule related to late delivery.

 

D.                                    All terms, covenants and conditions contained in this Amendment shall have the same meaning as in the Lease, and, shall govern should a conflict exist with previous terms and conditions.

 

AGREEMENT:

 

NOW, THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows

 

1.                                      Recitals.  The recitals set forth above are hereby incorporated herein as if fully set forth.

 

2.                                      Capitalized Terms.  All capitalized terms used herein shall have the same meanings ascribed to them in the Lease, unless otherwise defined in this Amendment.

 

3.                                      Reference Page Revisions.  The Reference Page items “SCHEDULED COMMENCEMENT DATE,” “TERM OF LEASE,” “TERMINATION DATE” and “ANNUAL RENT and MONTHLY INSTALLMENT OF RENT” are amended and restated in their entirety as follows:

 

	
SCHEDULED COMMENCEMENT DATE:
    	
 
    	
June 9, 2014
    
	
 
    	
 
    	
 
    
	
TERM OF LEASE:
    	
 
    	
Approximately ten (10) years and seven (7) months,   beginning on the Commencement Date and ending on the Termination Date. The   period from the Commencement Date to the last day of the same month is the
    

 

 

	
 
    	
 
    	
“Commencement Month.”
    
	
 
    	
 
    	
 
    
	
TERMINATION DATE:
    	
 
    	
The last day of the one hundred twenty-seventh (127th) full calendar   month after (if the Commencement Month is not a full calendar month), or from   and including (if the Commencement Month is a full calendar month), the   Commencement Month
    

 

ANNUAL RENT and MONTHLY
 INSTALLMENT OF RENT(Article 3):

 

	
Period
    	
 
    	
Rentable Square
    	
 
    	
Annual Rent
    	
 
    	
 
    	
 
    	
Monthly Installment
    	
 
    
	
From
    	
 
    	
To
    	
 
    	
Footage
    	
 
    	
Per Square Foot
    	
 
    	
Annual Rent
    	
 
    	
of Rent
    	
 
    
	
Month 1
    	
Month 14
    	
 
    	
112,709
    	
 
    	
$
    	
5.50
    	
 
    	
$
    	
619,899.50
    	
 
    	
$
    	
51,658.29
    	
 
    
	
Month 15
    	
Month 26
    	
 
    	
112,709
    	
 
    	
$
    	
5.62
    	
 
    	
$
    	
633,424.58
    	
 
    	
$
    	
52,785.38
    	
 
    
	
Month 27
    	
Month 38
    	
 
    	
112,709
    	
 
    	
$
    	
5.75
    	
 
    	
$
    	
648,076.75
    	
 
    	
$
    	
54,006.40
    	
 
    
	
Month 39
    	
Month 50
    	
 
    	
112,709
    	
 
    	
$
    	
5.88
    	
 
    	
$
    	
662,728.92
    	
 
    	
$
    	
55,227.41
    	
 
    
	
Month 51
    	
Month 62
    	
 
    	
112,709
    	
 
    	
$
    	
6.01
    	
 
    	
$
    	
677,381.09
    	
 
    	
$
    	
56,448.42
    	
 
    
	
Month 63
    	
Month 74
    	
 
    	
112,709
    	
 
    	
$
    	
6.15
    	
 
    	
$
    	
693,160.35
    	
 
    	
$
    	
57,763.36
    	
 
    
	
Month 75
    	
Month 86
    	
 
    	
112,709
    	
 
    	
$
    	
6.29
    	
 
    	
$
    	
708,939.61
    	
 
    	
$
    	
59,078.30
    	
 
    
	
Month 87
    	
Month 98
    	
 
    	
112,709
    	
 
    	
$
    	
6.43
    	
 
    	
$
    	
724,718.87
    	
 
    	
$
    	
60,393.24
    	
 
    
	
Month 99
    	
Month 110
    	
 
    	
112,709
    	
 
    	
$
    	
6.57
    	
 
    	
$
    	
740,498.13
    	
 
    	
$
    	
61,708.18
    	
 
    
	
Month 111
    	
Month 122
    	
 
    	
112,709
    	
 
    	
$
    	
6.72
    	
 
    	
$
    	
757,404.48
    	
 
    	
$
    	
63,117.04
    	
 
    
	
Month 123
    	
Month 127
    	
 
    	
112,709
    	
 
    	
$
    	
6.87
    	
 
    	
$
    	
774,310.83
    	
 
    	
$
    	
64,525.90
    	
 
    

 

Month 1 is the period beginning on the Commencement Date and ending at the end of the first (1st) full calendar month of the Term (by way of example only, if the Commencement Date were June 9, 2014, Month 1 would be the period June 9, 2014 through July 31, 2014; if the Commencement Date were July 1, 2014, Month 1 would be the period from July 1, 2014 through July 31 2014).  Month 2 is the calendar month period immediately following Month 1; Month 3 is the calendar month following Month 2; and so forth, up to the Termination Date.

 

Provided that an Event of Default has not occurred and is then continuing, the Monthly Installment of Rent and rent adjustments under Article 4 (Tenant to be responsible for its utilities, however) will be abated for the first seven (7) full calendar months of the Term.  If the Commencement Month is a partial calendar month, prorated rent for the Commencement Month will be due and payable with the rent for the first full calendar month after the rent abatement period for which rent is payable (by way of example only, if the Commencement Date were June 15, 2014, then rent would be abated for the seven (7) full calendar month period of July, 2014 through January, 2015, and rent for the partial month of June, 2014 would be due and payable with the March, 2015 rent, the February, 2015 rent having been prepaid per Section 3.2).

 

4.                                      Termination Right for Non-Delivery.  The last grammatical sentence of Section 2.2 of the Lease is hereby deleted in its entirety.  The second grammatical sentence of Section 2.2 of the Lease is deleted in its entirety and is replaced by the following:

 

No such failure to give possession on the Scheduled Commencement Date shall affect the other obligations of Tenant under this Lease, except that if Landlord is unable to deliver possession of the Premises by June 30, 2014, Tenant shall have the option to terminate this Lease upon written notice to Landlord, unless Landlord delivers possession prior to the termination date specified in such notice.

 

 

5.                                      Letter of Credit.  Landlord hereby confirms that it is in receipt of a letter of credit for the Security Deposit which is in compliance with all the terms and conditions of the Lease.  Landlord agrees that it shall return the entire cash Security Deposit, which is in the amount of $280,269.71, to Tenant by no later than June 4, 2014.

 

6.                                      Incorporation.  Except as modified herein, all other terms and conditions of the Lease shall continue in full force and effect and Tenant hereby ratifies and confirms its obligations thereunder.

 

7.                                      Limitation of Landlord Liability.  Redress for any claim against Landlord under this Lease shall be limited to and enforceable only against and to the extent of Landlord’s interest in the Building and the underlying land.  The obligations of Landlord and Tenant under this Lease are not intended to be and shall not be personally binding on, nor shall any resort be had to the private properties of, any of its or its investment manager’s trustees, directors, officers, partners, beneficiaries, members, stockholders, employees, or agents.

 

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

 

	
LANDLORD:
    	
TENANT:
    
	
 
    	
 
    
	
CABOT ACQUISITION, LLC, a   Delaware limited liability company
    	
BLUE APRON, INC.,   a Delaware corporation
    
	
 
    	
 
    
	
By:
    	
/s/ Mark Sabatino
    	
 
    	
By:
    	
/s/ Matt Salzberg
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:   Mark P. Sabatino
    	
Name:
    	
Matt Salzberg
    
	
 
    	
 
    	
 
    
	
Title: Vice President
    	
Title:
    	
CEO
    
	
 
    	
 
    	
 
    
	
 Dated: 8/3, 2014
    	
Dated:  6/2, 2014
    

 

 

SECOND AMENDMENT TO LEASE

 

THIS SECOND AMENDMENT TO LEASE dated as of July 22, 2014 (this “Amendment”), between CABOT ACQUISITION, LLC, a Delaware limited liability company (“Landlord”), and BLUE APRON, INC., a Delaware corporation (“Tenant”).

 

RECITALS:

 

A.                                    Landlord and Tenant entered into that certain Multi-Tenant Industrial Net Lease dated for reference March 27, 2014, as amended by that certain First Amendment to Lease dated as of May 30, 2014 (as further amended, collectively, the “Lease”) for approximately 112,709 rentable square feet (the “Premises”) in the building commonly known as Port Industrial Marine Center V, 202 Port Jersey Blvd., Jersey City, New Jersey (the “Building”).

 

B.                                    Subject to all the terms and conditions of this Amendment and in consideration of Tenant’s agreements hereunder, Landlord has agreed to pay all actual, third party costs and expenses associated with:  creating legal egress to and throughout the Premises as contemplated and directed by Tenant as a part of the Work and in compliance with all applicable laws, rules and regulations to enable Tenant to obtain a certificate of occupancy with respect to the Premises (the “Egress Work”).

 

C.                                    Landlord and Tenant now wish to amend the Lease to reflect that Landlord shall pay all actual, third party costs and expenses associated with the Egress Work.

 

D.                                    All terms covenants and conditions contained in this Amendment shall have the same meaning as in the Lease, and, shall govern should a conflict exist with previous terms and conditions.

 

AGREEMENT:

 

NOW, THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

 

1.                                      Recitals.  The recitals set forth above are hereby incorporated herein as if fully set forth.

 

2.                                      Capitalized Terms.  All capitalized terms used herein shall have the same meanings ascribed to them in the Lease, unless otherwise defined in this Amendment.

 

3.                                      Egress Work.  The Lease is hereby amended to reflect that notwithstanding anything in the Lease to the contrary, Tenant shall perform all work associated with the Egress Work.  Subject to the terms and conditions of this Paragraph 3, Landlord shall pay all actual, third party costs and expenses associated with the Egress Work in accordance with subparagraph (c) below.  Landlord’s payment and reimbursement obligations hereunder shall continue until such time as the Egress Work is completed and paid in full.  The Landlord’s obligation to pay all actual, third party costs and expenses associated with the Egress Work is separate and apart from and in addition to the Maximum TI Allowance (it being understood that the Maximum TI

 

 

Allowance shall not be applied to the costs and expenses associated with the Egress Work).  Landlord and Tenant further agree:

 

(a)                                 Tenant’s design, engineering and performance of the Egress Work shall be subject to the terms and conditions of Paragraph 2, 4 and 5 of Exhibit B to the Lease.  Without limiting the generality of the foregoing.  Landlord may disapprove any plans if it reasonably concludes that a less expensive option would be available which would nevertheless satisfy the purposes of the Egress Work consistent with Tenant’s proposed construction and operation in the Premises, and Landlord provides reasonable evidence of such less expensive option to Tenant.

 

(b)                                 Landlord’s obligation to pay the cost of the Egress Work is subject to Landlord’s reasonable approval of the cost of such Work, in the form of lump sum contracts responsive to the approved plans and specifications.  Unless Landlord agrees otherwise, Tenant must obtain competitive bids from not less than three (3) contractors reasonably acceptable to Landlord, and Landlord shall have the right to designate at least one (1) contractor who will have the opportunity to bid.  The low bid shall be accepted.

 

(c)                                  Landlord’s disbursement of funds towards the cost of the Egress Work shall be in accordance with the procedures and conditions set forth in Paragraphs 3.3 and 5 of Exhibit B to the Lease, mutatis mutandis (“cost of the Egress Work” being substituted for the “Maximum TI Allowance”; Landlord’s Percentage being 100% and Tenant’s Percentage being 0%).

 

4.                                      Condition of the Premises.  Excepting only Landlord’s obligations under the Lease as amended with respect to (i) the Egress Work, (ii) to the extent not completed as of the date hereof, Landlord’s Work under Paragraph 1 of Exhibit B to the Lease (which Landlord’s Work, exclusive of dock doors and levelers, has in fact been completed; Landlord shall use commercially reasonable efforts to complete the docks doors and leveler work within the 30 day period beginning with the execution and delivery of this Amendment), (iii) latent defects and (iv) ongoing repair obligations under Article 7 of the Lease, Tenant, having had full and complete opportunity to inspect the Premises, hereby accepts the Premises in its “AS IS” condition and as being in good order, condition and repair and in the condition in which Landlord is obligated to deliver them.  Without limiting the generality of the foregoing, Tenant accepts the existing coolers (structure, casings, panels, motor, condensers, tubing and all other components making up the coolers) in their existing condition and acknowledges that all Landlord obligations with respect to the coolers have been satisfied.  Tenant shall be solely responsible for any mold remediation necessary or desirable in connection with Tenant’s intended use of the coolers, including, without limitation, replacement of panels if necessary.  Tenant shall notify Landlord, and describe in detail, as to any remediation work it intends to perform.

 

5.                                      Commencement Date.  The parties hereto acknowledge and agree that for all purposes of the Lease, the Commencement Date shall be July 1, 2014.

 

6.                                      Waiver of Termination Rights.  In consideration of Landlord’ s agreements hereunder, Tenant hereby irrevocably waives any and all rights to terminate the Lease under Section 2.2 of the Lease and under Article 41 of the Lease.  Tenant acknowledges and agrees that it has accepted possession of the Premises.

 

 

7.                                      Landlord Representations.  Landlord represents, to its actual knowledge, that (i) there is neither an existing Event of Default under the Lease nor a default by Tenant of any of its obligations under the Lease which, with the giving of notice, the passage of time or both, would become an Event of Default, and (ii) Tenant has submitted insurance certificates adequate to satisfy its initial delivery obligations under Article 11 of the Lease.

 

8.                                      Incorporation.  Except as modified herein, all other terms and conditions of the Lease shall continue in full force and effect and Tenant hereby ratifies and confirms its obligations thereunder.

 

9.                                      Limitation of Landlord Liability.  Redress for any claim against Landlord under this Lease shall be limited to and enforceable only against and to the extent of Landlord’s interest in the Building and the underlying land.  The obligations of Landlord and Tenant under this Lease are not intended to be and shall not be personally binding on, nor shall any resort be had to the private properties of, any of its or its investment manager’s trustees, directors, officers, partners, beneficiaries, members, stockholders, employees, or agents.

 

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

 

	
LANDLORD:
    	
 
    	
TENANT:
    
	
 
    	
 
    	
 
    
	
CABOT   ACQUISITION, LLC, a  Delaware limited liability company
    	
 
    	
BLUE   APRON, INC., a   Delaware corporation 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/   Mark P. Sabatino 
    	
 
    	
By:   
    	
/s/   Matthew Salzberg 
    
	
Name: Mark P. Sabatino 
    	
 
    	
Name:   Matt Salzberg 
    
	
Title:   Vice President 
    	
 
    	
Title:   CEO 
    
	
Dated:   8/4, 2014
    	
 
    	
Dated:   7/22, 2014Exhibit 10.16

 

AIR COMMERCIAL REAL ESTATE ASSOCIATION
 STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE—NET
 (DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)

 

1.                                      Basic Provisions (“Basic Provisions”).

 

1.1                               Parties:  This Lease (“Lease”), dated for reference purposes August 1, 2014, is made by and between DF/HILLTOP, LLC, a California limited liability company (“Lessor”) and BLUE APRON, INC., a Delaware corporation (“Lessee”) (collectively the “Parties,” or individually a “Party”).

 

1.2                               Premises:  That certain real property including all improvements therein or to be provided by Lessor under the terms of this Lease and located at 2301 Centennial Drive, in the City of Arlington located in the County of Tarrant State of Texas, and generally described as (describe briefly the nature of the property and, if applicable, the “Project” if the property is located is located within a Project) comprised of a parcel of land totaling approximately 4.4 acres of land, as set forth on Exhibit “A” attached hereto, with an approximately 103,500 square feet warehouse and office building located thereon (“Premises”).  (See also Paragraph 2)

 

1.3                               Term:  Ten (10) years and zero (0) months (“Term”) commencing upon the Commencement Date (as defined in Paragraph 1.3 of the Addendum) and ending as of the tenth (10th) anniversary of the Commencement Date (“Expiration Date”).  (See also Paragraph 3)

 

1.4                               Early Possession:  N/A (“Early Possession Date”).  (See also Paragraphs 3.2 and 3.3)

 

1.5                               Base Rent:  $36,085.26 per month (“Base Rent”) payable on the first (1st) day of each month commencing on the Commencement Date (see Addendum).  (See also paragraph 4)

 

x If this box is checked there are provisions in this Lease for the Base Rent to be adjusted.

 

1.6                               Base Rent and Other Monies paid Upon Execution:

 

(a)                                 Base Rent: $36,085.26  for the first (1st) month of the term.

(b)                                 Security Deposit: $43,125.23 (“Security Deposit”).  (See also Paragraph 5)

(c)                                  Association Fees:  $N/A for the period.

(d)                                 Other:  $        for                                                                                          .

(e)                                  Total Due Upon Execution of this Lease:  $79,210.49.

 

1.7                               Agreed Use:  Food manufacturing and related storage warehouse, and ancillary office space related thereto, and any other use permitted by Applicable Requirements.  (See also Paragraph 6)

 

1.8                               Insuring Party:  Lessor is the “Insuring Party” unless otherwise stated herein.  (See also Paragraph 8)

 

	
 
    	
 
    	
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1

 

1.9                               Real Estate Brokers:  (See also Paragraph 15)

 

(a)                                 Representation:  The following real estate brokers (the “Brokers”) and brokerage relationships exist in this transaction (check applicable boxes):

 

o N/A represents Lessor exclusively (“Lessor’s Broker”),

x Lee & Associates represents Lessee exclusively (“Lessee’s Broker); or

o N/A represents both Lessor and Lessee (“Dual Agency).

 

(b)                                 Payment to Brokers:  Upon execution and delivery of this Lease by both Parties, Lessor shall pay to Lessee’s Broker the sum of $60,000 for the brokerage services rendered by Lessee’s Broker, which amount shall be paid within 5 business days following the mutual execution and delivery of this Lease, and Lessee’s payment to Lessor of the amount provided in Paragraph 1.6(e) above.

 

1.10                        Guarantor.  The obligations of the Lessee under this Lease are to be guaranteed by None.(Guarantor”).  (See also Paragraph 37)

 

1.11                        Attachments.  Attached hereto are the following, all of which constitute a part of this Lease:

 

x an Addendum.

o a plot plan depicting the Premises.

o a current set of the Rules and Regulations.

x other (specify) Exhibit “A” — Legal Description.

 

2.                                      Premises.

 

2.1                               Letting.  Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at the rental, and upon all of the terms, covenants and conditions set forth in this Lease.  Unless otherwise provided herein, any statement of size set forth in this Lease, or that may have been used in calculating Rent, is an approximation which the Parties agree is reasonable and any payments based thereon are not subject to revision whether or not the actual size is more or less.  Note:  Lessee is advised to verify the actual size prior to executing this Lease.

 

2.2                               [Intentionally Omitted]

 

2.3                               [Intentionally Omitted]

 

2.4                               Acknowledgements.  Lessee acknowledges that:  (a) it has been advised by Lessor to satisfy itself with respect to the condition of the Premises (including but not limited to the electrical, heating, ventilation and air-conditioning systems (“HVAC”) and fire sprinkler systems, security, environmental aspects, and compliance with building codes, applicable laws, covenants or restrictions of record, regulations and ordinances (“Applicable Requirements”) and the Americans with Disabilities Act), and their suitability for Lessee’s intended use, (b) Lessee has made such investigation as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to its occupancy of the Premises, and (c) neither Lessor nor Lessor’s agents have made any oral or written representations or warranties with respect to said matters other than as set forth in the Lease.

 

	
 
    	
 
    	
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2

 

2.5                               AS-IS Condition of Premises.  Lessee hereby acknowledges that prior to the Commencement Date, Lessee shall have fully inspected and investigated the Premises and satisfied itself with respect thereto, including without limitation, the condition of the Premises and its suitability for Lessee’s intended use thereof.  Accordingly, on the Commencement Date, except as otherwise expressly provided in this Lease, Lessee shall accept the Premises in its currently existing “AS-IS’ condition, without any representation or warranty whatsoever.  Except as expressly provided otherwise, Lessee shall be responsible for any necessary corrective work.

 

3.                                      Term.

 

3.1                               Term.  The Commencement Date, Expiration Date and Term of this Lease are as specified in Paragraph 1.3.

 

3.2                               [Intentionally Omitted]

 

3.3                               [Intentionally Omitted]

 

3.4                               [Intentionally Omitted]

 

4.                                      Rent.

 

4.1                               Rent Defined.  All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to be rent (“Rent”).

 

4.2                               Payment.  Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without offset or deduction (except as specifically permitted in this Lease), on or before the day on which it is due.  In the event that any invoice prepared by lessor is inaccurate such inaccuracy shall not constitute a waiver and Lessee shall be obligated to pay the amount set forth in this Lease.  Rent for any period during the term hereof which is for less than one full calendar month shall be prorated based upon the actual number of days of said month.  Payment of Rent shall be made to Lessor at its address stated herein or to such other persons or place as Lessor may from time to time designate in writing.  Acceptance of a payment which is less than the amount then due shall not be a waiver of Lessor’s rights to the balance of such Rent, regardless of Lessor’s endorsement of any check so stating.  In the event that any check, draft, or other instrument of payment given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any Late Charge and Lessor, at its option, may require all future Rent be paid by cashier’s check.  Payments will be applied first to accrued late charges and attorney’s fees, second to accrued interest, then to Base Rent, and any remaining amount to any other outstanding charges or costs.

 

4.3                               [Intentionally Omitted]

 

5.                                      Security Deposit.  Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee’s faithful performance of its obligations under this Lease.  If Lessee fails to pay Rent, or otherwise breaches this Lease, Lessor may use, apply or retain all or any portion of said Security Deposit for the payment of any amount due Lessor or to reimburse or compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or incur by reason thereof.  If Lessor uses or applies all or any portion of the Security Deposit, Lessee shall within 15 days after written request therefor deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease.  Lessor shall not be required to

 

	
 
    	
 
    	
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3

 

keep the Security Deposit separate from its general accounts.  Within 14 days after the expiration or termination of this Lease, if Lessor elects to apply the Security Deposit only to unpaid Rent, and otherwise within 30 days after the Premises have been vacated pursuant to Paragraph 7.4(c) below, Lessor shall return that portion of the Security Deposit not used or applied by Lessor.  No part of the Security Deposit shall be considered to be held in trust, to bear interest or to be prepayment for any monies to be paid by Lessee under this Lease.  Lessee hereby waives the provisions of Sections 93.005 and 93.006 of the Texas Property Code and all other provisions of law, now or hereafter in force, which provide that Lessor may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of rent, to repair damage caused by Lessee or to clean the Premises.  Notwithstanding the foregoing, in the event of any bankruptcy filing by Lessor, Lessee’s claim to the Security Deposit shall be superior to the claims of any creditor of Lessor and in no event shall the Security Deposit constitute part of Lessor’s bankruptcy estate.  Additionally, the Security Deposit shall not be used to correct any ordinary wear and tear except to the extent expressly provided in this Lease.

 

6.                                      Use.

 

6.1                               Use.  Lessee shall use and occupy the Premises only for the Agreed Use and for no other purpose.  Lessee shall not use or permit the use of the Premises in a manner that is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of or causes damage to neighboring premises or properties.  Other than guide, signal and seeing eye dogs, Lessee shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles.

 

6.2                               Hazardous Substances

 

(a)                                 Reportable Uses Require Consent.  The term “Hazardous Substance” as used in this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or release, either by itself or in combination with other materials expected to be on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the environment or the Premises, (ii) regulated or monitored by any governmental authority, or (iii) a basis for potential liability of Lessor to any governmental agency or third party under any applicable statute or common law theory.  Hazardous Substances shall include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-products or fractions thereof.  Lessee shall not engage in any activity in or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee’s expense) with all Applicable Requirements.  “Reportable Use” shall mean (i) the installation or use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan is required to be filed with, any governmental authority, and/or (iii) the presence at the Premises of a Hazardous Substance with respect to which any Applicable Requirements requires that a notice be given to persons entering or occupying the Premises or neighboring properties.  Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the Agreed Use, ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning

 

	
 
    	
 
    	
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4

 

materials, so long as such use is in compliance with all Applicable Requirements, is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any liability therefor.  In addition, Lessor may condition its consent to any Reportable Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect itself, the public, the Premises and/or the environment against damage, contamination, injury and/or liability, including, but not limited to, the installation (and removal on or before Lease expiration or termination) of protective modifications (such as concrete encasements) and/or increasing the Security Deposit.

 

(b)                                 Duty to Inform Lessor.  If Lessee knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Premises, other than as previously consented to by Lessor, Lessee shall immediately give written notice of such fact to Lessor, and provide Lessor with a copy of any report, notice, claim or other documentation which it has concerning the presence of such Hazardous Substance.

 

(c)                                  Lessee Remediation.  Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under or about the Premises (including through the plumbing or sanitary sewer system) and shall promptly, at Lessee’s expense, comply with all Applicable Requirements and take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamination of and for the maintenance, security and/or monitoring of the Premises or neighboring properties, that was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought onto the Premises during the term of this Lease, by or for Lessee or any of its any employees, agents, contractors or invitees.

 

(d)                                 Lessee Indemnification.  Lessee shall indemnify, defend and hold Lessor, its agents, employees, lenders and ground lessor, if any, harmless from and against any and all loss of rents and/or damage, liabilities, judgments, claims, expenses, penalties, and attorneys’ and consultants’ fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or any of its employees, agents, contractors or invitees (provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance under the Premises from adjacent properties not caused or contributed to by Lessee).  Lessee’s obligations shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of the Lease.  No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from its obligation under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in writing at the time of such agreement.

 

(e)                                  Lessor Indemnification.  Lessor and its successors and assigns shall indemnify, defend, reimburse and hold Lessee, its employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation which result from Hazardous Substances which existed on the Premises prior to Lessee’s occupancy or which are caused by Lessor, its agents or employees or any third parties for which Lessee is not expressly responsible under Paragraph 6.2(c) above.  Lessor’s obligations as and when required by the Applicable Requirements shall include, but not be limited to, the cost of investigation, removal, 

 

	
 
    	
 
    	
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remediation, restoration and/or abatement and shall survive the expiration or termination of this Lease.

 

(f)                                   Investigations and Remediations.  Lessor shall retain the responsibility and pay for any investigations or remediation measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to Lessee’s occupancy or caused by third parties for which Lessee is not expressly responsible under Paragraph 6.2(c) above, but if such remediation measure is required as a result of Lessee’s use (including “Alterations”, as defined in paragraph 7.3(a) below) of the Premises, then Lessee shall be responsible for such payment.  Lessee shall cooperate fully in any such activities at the request of Lessor, including allowing Lessor and Lessor’s agents to have reasonable access to the Premises at reasonable times in order to carry out Lessor’s investigative and remedial responsibilities.

 

(g)                                  [Intentionally Omitted]

 

6.3                               Lessee’s Compliance with Applicable Requirements.  Except as otherwise provided in this Lease, Lessee shall, at Lessee’s sole expense, fully, diligently and in a timely manner, materially comply with all Applicable Requirements, the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Lessor’s engineers and/or consultants which relate in any manner to the such Requirements without regard to whether such Requirements are now in effect or become effective after the Commencement Date.  Lessee shall, within 20 days after receipt of Lessor’s written request, provide Lessor with copies of all permits and other documents, and other information evidencing Lessee’s compliance with any Applicable Requirements specified by Lessor and shall immediately upon receipt, notify Lessor in writing (with copies of any documents involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements.  Likewise, Lessee shall immediately give written notice to Lessor of: (i) any water damage to the Premises and any suspected seepage, pooling, dampness or other condition conducive to the production of mold; or (ii) any mustiness or other odors that might indicate the presence of mold in the Premises.

 

6.4                               Inspection; Compliance.  Lessor and Lessor’s “Lender” (as defined in Paragraph 30) and consultants shall have the right to enter into Premises at any time, in the case of an emergency, and otherwise at reasonable times after reasonable notice and only during business hours, for the purpose of inspecting the condition of the Premises and for verifying compliance by Lessee with this Lease.  The cost of any such inspections shall be paid by Lessor, unless a violation of Applicable Requirements by Lessee, or a Hazardous Substance Condition (see paragraph 9.1) is found to exist or be imminent and caused by Lessee.  In such case Lessee shall upon request reimburse Lessor for the cost of such inspection, so long as such inspection is reasonably related to the violation or contamination.  In addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to Lessor within 20 days of the receipt of a written request therefor.

 

7.                                      Maintenance; Repairs, Utility Installations; Trade Fixtures and Alterations.

 

7.1                               Lessee’s Obligations.

 

	
 
    	
 
    	
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(a)                                 In General.  Subject to the provisions of Paragraph 6.3 (Lessee’s Compliance with Applicable Requirements), 7.2 (Lessor’s Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall at Lessee’s sole expense, keep the Premises, Utility Installations (intended for Lessee’s exclusive use, no matter where located), and Alterations in good order, condition and repair (whether or not the portion of the Premises requiring repairs, or the means of repairing the same, are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of Lessee’s use, any prior use, the elements or the age of such portion of the Premises), including, but not limited to, all equipment or facilities, such as plumbing, HVAC equipment, electrical, lighting facilities, boilers, pressure vessels, fire protection system, fixtures, interior walls, ceilings, roof drainage systems, floors, windows, doors, plate glass, skylights, retaining walls, signs, located in, on, or adjacent to the Premises.  Lessee, in keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices, specifically including the procurement and maintenance of the service contracts required by Paragraph 7.1(b) below.  Lessee’s obligations shall include restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order, condition and state of repair.  Lessee shall, during the term of this Lease, keep the exterior appearance of the any building on the Premises (“Building”) in a first-class condition (including, e.g. graffiti removal) consistent with the exterior appearance of other similar facilities of comparable age and size in the vicinity, including, when necessary, the exterior repainting of the Building.

 

(b)                                 Service Contracts.  Lessee shall, at Lessee’s sole expense, procure and maintain contracts, with copies to Lessor, in customary form and substance for, and with contractors specializing and experienced in the maintenance of the following equipment and improvements, if any, and when installed on the Premises:  (i) HVAC equipment, (ii) boiler, and pressure vessels, (iii) fire extinguishing systems, including fire alarm and/or smoke detection, (iv) [Intentionally Omitted], (v) roof covering and drains, (vi) clarifiers, (vii) basic utility feed to the perimeter of the Building, and (viii) any other equipment, if reasonably required by Lessor.  However, Lessor reserves the right, upon notice to Lessee, to procure and maintain any or all of such service contracts, and Lessee shall reimburse Lessor, upon demand, for the cost thereof.

 

(c)                                  Failure to Perform.  If Lessee fails to perform Lessee’s obligations under this Paragraph 7.1, Lessor may enter upon the Premises after 10 days’ prior written notice to Lessee (except in the case of an emergency, in which case no notice shall be required), perform such obligations on Lessee’s behalf, and put the Premises in good order, condition and repair, and Lessee shall promptly pay to Lessor a sum equal to 100% of the actual and reasonable cost thereof.

 

(d)                                 [Intentionally Omitted]

 

7.2                               Lessor’s Obligations.  Subject to the provisions of Paragraphs 9 (Damage or Destruction) and 14 (Condemnation), it is intended by the Parties hereto that Lessor have no obligation, in any manner whatsoever, to repair and maintain the Premises, or the equipment therein, all of which obligations are intended to be that of the Lessee, except that Lessor shall be solely responsible for maintaining the Building roof, structure and foundation at Lessor’s sole cost and expense.  It is the intention of the Parties that the terms of this Lease govern the respective obligations of the parties as to maintenance and repair of the Premises, and they

 

	
 
    	
 
    	
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expressly waive the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the terms of this Lease.  Notwithstanding the foregoing, Lessor shall be responsible for maintaining the landscaping and parking areas and driveways of the Premises, provided that Lessee shall be responsible for reimbursing Lessor for all expenses incurred by Lessor in connection therewith following 20 days written request therefor.

 

7.3                               Utility Installations; Trade Fixtures; Alterations.

 

(a)                                 Definitions.  The term “Utility Installations” refers to all floor and window coverings, air and/or vacuum lines, power panels, electrical distribution, security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises.  The term “Trade Fixtures” shall mean Lessee’s machinery and equipment that can be removed without doing material damage to the Premises.  The term “Alterations” shall mean any modification of the improvements, other than Utility Installations or Trade Fixtures, whether by addition or deletion.  “Lessee Owned Alterations and/or Utility Installations” are defined as Alterations and/or Utility Installations (“Equipment”) made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).

 

(b)                                 Consent.  Lessee shall provide written notice to Lessor of all alterations and improvements constructed by or for Lessee at the Premises, provided that Lessor’s prior consent to any alternations and improvements shall only be required to the extent they affect the Building roof, structure, foundation, or fire-life safety system.  To the extent Lessor’s consent is required, Lessor may, as a precondition to granting such approval, require Lessee to utilize a contractor reasonably chosen and/or approved by Lessor.  Any Alterations or Utility Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written form with detailed plans.  Consent shall be deemed conditioned upon Lessee’s: (i) acquiring all applicable governmental permits, (ii) furnishing Lessor with copies of both the permits and the plans and specifications prior to commencement of the work, and (iii) compliance with all conditions of said permits and other Applicable Requirements in a prompt and expeditious manner.  Any Alterations or Utility Installations shall be performed in a workmanlike manner with good and sufficient materials and in compliance with all Applicable Requirements.  Lessee shall promptly upon completion furnish Lessor with as-built plans and specifications.  For work which costs an amount in excess of $250,000 (but including Lessee’s initial improvements), Lessor may condition its consent upon Lessee providing a lien and completion bond in an amount equal to 150% of the estimated cost of such Alteration or Utility Installation.

 

(c)                                  Liens; Bonds.  Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use on the Premises, which claims are or may be secured by any mechanic’s or materialmen’s lien against the Premises or any interest therein.  Lessee shall give Lessor not less than 10 days notice prior to the commencement of any work in, on or about the Premises, and Lessor shall have the right to post notices of non-responsibility.  If Lessee shall contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense defend and protect itself, Lessor and the Premises against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof.  If Lessor shall require, Lessee shall furnish a

 

	
 
    	
 
    	
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surety bond in an amount equal to 150% of the amount of such contested lien, claim or demand, indemnifying Lessor against liability for the same.

 

7.4                               Ownership; Removal; Surrender; and Restoration.

 

(a)                                 Ownership.  Subject to Lessor’s right to require removal or elect ownership as hereinafter provided, all Alternations and Utility Installations made by Lessee shall be the property of Lessee, but considered a part of the Premises.  Lessor may, at any time, elect in writing to be the owner of all or any specified part of the Lessee Owned Alterations and Utility Installations.  Unless otherwise instructed per paragraph 7.4(b) hereof, all Lessee Owned Alterations and Utility Installations shall, at the expiration or termination of this Lease, become the property of Lessor and be surrendered by Lessee with the Premises.

 

(b)                                 Removal.  By delivery to Lessee of written notice from Lessor not earlier than 1 year and not later than 3 months prior to the end of the term of this Lease, Lessor may require that any or all Lessee Owned Alterations or Utility Installations be removed by the expiration or termination of  this Lease.  Lessor may require the removal at any time of all or any part of any Lessee Owned Alterations or Utility Installations made without the required consent.  With respect to items for which Lessor’s consent is required, Lessee’s request for consent may request that Lessor make such determination at the time of Lessor’s consent.

 

(c)                                  Surrender; Restoration.  Lessee shall surrender the Premises by the Expiration Date or any earlier termination date, with all of the improvements, parts and surfaces thereof broom clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and tear excepted.  “Ordinary wear and tear” shall not include any damage or deterioration that would have been prevented by good maintenance practice.  Lessee shall repair any damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee Owned Alterations and/or Utility Installations, furnishings, and equipment as well as the removal of any storage tank installed by or for Lessee.  Lessee shall completely remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee or any of its employees, agents, contractors or invitees (except Hazardous Substances which were deposited via underground migration from areas outside of the Premises, or if applicable, the Premises) even if such removal would require Lessee to perform or pay for work that exceeds statutory requirements.  Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee.  Any personal property of Lessee not removed on or before the Expiration Date or any earlier termination date shall be deemed to have been abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire.  The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph 26 below.

 

8.                                      Insurance; Indemnity.

 

8.1                               Payment For Insurance.  Lessee shall pay for all insurance required under paragraph 8 except to the extent of the cost attributable to liability insurance carried by Lessor under Paragraph 8.2(b) in excess of $2,000,000 per occurrence.  Premiums for policy periods commencing prior to or extending beyond the Lease term shall be prorated to correspond to the Lease term.  Payment shall be made by Lessee to Lessor within 10 days following receipt of an invoice.

 

	
 
    	
 
    	
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8.2                               Liability Insurance.

 

(a)                                 Carried by Lessee.  Lessee shall obtain and keep in force a Commercial General Liability policy of insurance protecting Lessee and Lessor as an additional insured against claims for bodily injury, personal injury and property damage based upon or arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto.  Such insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $2,000,000 per occurrence with an annual aggregate of not less than $5,000,000.  Lessee shall add Lessor, Lessor’s Lender and any other party reasonably specified by Lessor, as additional insureds by means of an endorsement on Form CG2026 or equivalent, and coverage shall also be extended to include damage caused by heat, smoke or fumes from a hostile fire.  The policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an “insured contract” for the performance of Lessee’s indemnity obligations under this Lease.  The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder.  Lessee shall provide an endorsement on its liability policy(ies) which provides that its insurance shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall be considered excess insurance only.  Lessee shall have the right to satisfy its insurance obligations under this Paragraph 8.2(a) through its umbrella insurance policy.

 

(b)                                 Carried by Lessor.  Lessor shall maintain liability insurance, in addition to, and not in lieu of, the insurance required to be maintained by Lessee.  Lessee shall not be named as an additional insured therein.

 

8.3                               Property Insurance - Building, Improvements and Rental Value.

 

(a)                                 Building and Improvements.  Lessor shall obtain and keep in force a policy or policies in the name of Lessor, with loss payable to Lessor, any ground-lessor, and to any Lender insuring loss of damage to the Premises.  The amount of such insurance shall be equal to the full insurable replacement cost of the Premises, as the same shall exist from time to time.  If Lessor is the Insuring Party, however, Lessee Owned Alterations and Utility Installations, Trade Fixtures, and Lessee’s personal property shall be insured by Lessee under Paragraph 8.4 rather than by Lessor.  If the coverage is available and commercially appropriate, such policy or policies shall insure against all risks of direct physical loss or damage (including the perils of flood and/or earthquake), including coverage for debris removal and the enforcement of any Applicable Requirements requiring the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss.  Said policy or policies shall also contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation, and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises are located.  If such insurance coverage has a deductible clause, the deductible amount shall not exceed $10,000 per occurrence (except for the perils of flood and/or earthquake), and Lessee shall be liable for such deductible amount in the event of an Insured Loss.

 

(b)                                 Rental Value.  The Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor with loss payable to Lessor and any Lender, insuring the loss of

 

	
 
    	
 
    	
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the full Rent for one year with an extended period of indemnity for an additional 180 days (“Rental Value Insurance”).  Said insurance shall contain an agreed valuation provision in lieu of any coinsurance clause, and the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period.  Lessee shall be liable for any deductible amount in the event of such loss.

 

(c)           [Intentionally Omitted]

 

8.4          Lessee’s Property

 

(a)           Property Damage.  Lessee shall obtain and maintain insurance coverage on all of Lessee’s personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations.  Such insurance shall be full replacement cost coverage with a deductible of not to exceed $5,000 per occurrence.  The proceeds from any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures, equipment and Lessee Owned Alterations and Utility Installations.  Lessee shall provide Lessor with written evidence that such insurance is in force.

 

(b)           Business Interruption.  Lessee shall obtain and maintain business interruption and/or extra expense insurance in amounts as will reimburse Lessee for extra expenses and direct or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees in the business of Lessee or attributable to prevention of access to the Premises as a result of such perils.

 

(c)           Worker’s Compensation.  Lessee shall, at its sole expense, maintain a policy or polices of Worker’s Compensation and Employer’s Liability Insurance to the extent required under any Applicable Requirements.  Such policy or policies must include a waiver of subrogation in favor of Lessor.

 

(d)           No Representation of Adequate Coverage.  Lessor makes no representation that the limits or forms of coverage of insurance specified herein are adequate to cover Lessee’s property, business operators or obligations under this Lease.

 

8.5          Insurance Policies.  Insurance required herein shall be by companies duly licensed or admitted to transact business in the state where the Premises are located, and maintaining during the policy term a “General Policyholders Rating” of at least A, as set forth in the most current issue of “Best’s Insurance Guide”.  Lessee shall not do or permit to be done anything which invalidates the required insurance policies.  Lessee shall, prior to Lessor’s delivery of possession of the Premises, deliver to Lessor certified copies of policies of such insurance or certificates evidencing the existence and amounts of the insurance which Lessee is required to carry under this Paragraph 8.  No such policy shall be cancelable or subject to modification unless the carrier has made good faith efforts to provide 30 days prior written notice to Lessor.  Lessee shall, at least 10 days prior to the expiration or earlier termination of such policies, furnish Lessor with evidence of renewals or “insurance binders” evidencing renewal thereof, or Lessor may order such insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon demand.  Such policies shall be for a term of at least one year, or the length of the remaining term of this Lease, whichever is less.  If Lessee shall fail to procure and maintain the insurance required to be carried by it, Lessor may, but shall not be required to, procure and maintain such insurance and seek reimbursement from Lessee.

 

	
 
    	
 
    	
 
    	
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8.6          Waiver of Subrogation.  Without affecting any other rights or remedies, Lessee and Lessor each hereby release and relieve the other, and waive their entire right to recover damages against the other, for loss of or damage to its respective property.  The effect of such releases and waivers is not limited by the amount of insurance carried or required, or by any deductibles applicable hereto.  The Parties agree to have their respective insurance carriers required herein waive any right to subrogation that such companies may have against Lessor or Lessee, as the case may be.

 

8.7          Indemnity.  Except for Lessor’s gross negligence or willful misconduct, Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor and its agents, Lessor’s master or ground lessor, partners and Lenders, from and against any and all claims, injuries, loss of rents and/or damages, liens, judgments, penalties, attorneys’ and consultants’ fees, expenses and/or liabilities arising out of, involving, or in connection with, the use and/or occupancy of the Premises by Lessee.  If any action or proceeding is brought against Lessor by reason of any of the foregoing matters, Lessee shall upon notice defend the same at Lessee’s expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense.  Lessor need not have first paid any such claim in order to be defended or indemnified.

 

8.8          Exemption of Lessor and its Agents from Liability.  Neither Lessor nor its agents shall be liable under any circumstances for: (i) injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee’s employees, contractors, invitees, customers, or any other person in or about the Premises, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, indoor air quality, the presence of mold or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether the said injury or damages results from conditions arising upon the Premises or upon other portions of the building of which the Premises are a part, or from other sources or places unless such injury or damages are caused by the gross negligence or willful misconduct of Lessor or its agents, or (ii) injury to Lessee’s business or for any loss of income or profit therefrom.  Instead, it is intended that Lessee’s sole recourse in the event of such damages or injury be to file a claim on the insurance policy(ies) that Lessee is required to maintain pursuant to the provisions of paragraph 8.  Notwithstanding the foregoing, Lessor shall protect, indemnify and hold the Lessee and its employees, agents, representatives, and officers harmless from and against any and all loss, claims, liability or costs (including court costs and attorney’s fees) incurred by reason of any breach or default on the part of Lessor in the performance of any covenant or agreement on the part of the Lessor to be performed pursuant to this Lease.

 

8.9          Failure to Provide Insurance.  Lessee acknowledges that any failure on its part to obtain or maintain the insurance required herein will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain.  If Lessee shall fail to procure the insurance required by this Lease, or to deliver policies or certificates to Lessor evidencing such insurance, Lessor may, at its option, in addition to all of its other rights and remedies under this Lease, and without regard to any notice and cure periods set forth in Section 13.2, procure such policies for the account of Lessee, and the cost thereof shall be paid to Lessor as Rent within ten (10) days after delivery of bills therefor.

 

	
 
    	
 
    	
 
    	
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9.             Damage or Destruction.

 

9.1          Definitions.

 

(a)           “Premises Partial Damage” shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations, which can reasonably be repaired in 6 months or less from the date of the damage or destruction.  Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.

 

(b)           “Premises Total Destruction” shall mean damage or destruction to the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which cannot reasonably be repaired in 6 months or less from the date of the damage or destruction.  Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total (the “Partial/Total Notice”).

 

(c)           “Insured Loss” shall mean damage or destruction to improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a), irrespective of any deductible amounts or coverage limits involved.

 

(d)           “Replacement Cost” shall mean the cost to repair or rebuild the improvements owned by Lessor at the time of the occurrence to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Applicable Requirements, and without deduction for depreciation.

 

(e)           “Hazardous Substance Condition” shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the Premises which requires repair, remediation, or restoration.

 

9.2          Partial Damage — Insured Loss.  If a Premises Partial Damage that is an Insured Loss occurs, then Lessor shall, at Lessor’s expense, repair such damage (but not Lessee’s Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and Lease shall continue in full force and effect; provided, however, that Lessee shall, at Lessor’s election, make the repair of any damage or destruction the total cost to repair of which is $10,000 or less, and, in such event, Lessor shall make insurance proceeds equal to the amount of the damage (less any deductible for which Lessee shall be responsible) available to Lessee for that purpose.  Notwithstanding the foregoing, if the required insurance was not in force or the insurance proceeds are not sufficient to effect such repair, Lessor shall promptly contribute the shortage in proceeds (except as to the deductible which is Lessee’s responsibility) as and when required to complete said repairs.  In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost insurance coverage was not commercially reasonable and available, Lessor shall have no obligation to pay for the shortage in insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate assurance thereof, within 10 days following receipt of written notice of such shortage and request therefor.  If Lessor receives said funds or adequate assurance thereof within said 10 day period, the party responsible for making the repairs shall complete them as soon as reasonably possible and this Lease shall remain in full force and effect.  If such funds or assurance are not received, Lessor may

 

	
 
    	
 
    	
 
    	
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nevertheless elect by written notice to Lessee within 10 days thereafter to:  (i) make such restoration and repair as is commercially reasonable with Lessor paying any shortage in proceeds, in which case this Lease shall remain in full force and effect, or (ii) have this Lease terminate 30 days thereafter.  Lessee shall not be entitled to reimbursement of any funds contributed by Lessee to repair any such damage or destruction.  Premises Partial Damage due to flood or earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be some insurance coverage, but the net proceeds of any such insurance shall be made available for the repairs if made by either Party.

 

9.3          Partial Damage — Uninsured Loss.  If a Premises Partial Damage that is not an Insured Loss occurs, Lessor may either: (i) repair such damage as soon as reasonably possible at Lessor’s expense, in which event this Lease shall continue in full force and effect, or (ii) terminate this Lease by giving written notice to Lessee within 30 days after receipt by Lessor of knowledge of the occurrence of such damage.  Such termination shall be effective 60 days following the date of such notice.  In the event Lessor elects to terminate this Lease, Lessee shall have the right within 10 days after receipt of the termination notice to give written notice to Lessor of Lessee’s commitment to pay for the repair of such damage without reimbursement from Lessor.  Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days after making such commitment.  In such event this Lease shall continue in full force and effect, and Lessor shall proceed to make such repairs as soon as reasonably possible after the required funds are available.  If Lessee does not make the required commitment, this Lease shall terminate as of the date specified in the termination notice.

 

9.4          Total Destruction.  See Addendum.

 

9.5          Damage Near End of Term.  If at any time during the last 6 months of this Lease there is damage for which the cost to repair exceeds four month’s Base Rent, whether or not an Insured Loss, then either Lessor or Lessee may terminate this Lease effective 60 days following the date of occurrence of such damage by giving a written termination notice to the other party within 30 days after the date of occurrence of such damage.  Notwithstanding the foregoing, if Lessee at that time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may preserve this Lease by, (a) exercising such option and (b) providing Lessor with any shortage in insurance proceeds (or adequate assurance thereof) needed to make the repairs on or before the earlier of (i) the date which is 10 days after Lessee’s receipt of Lessor’s written notice purporting to terminate this Lease, or (ii) the day prior to the date upon which such option expires.  If Lessee duly exercises such option during such period and provides Lessor with funds (or adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessor’s commercially reasonable expense, repair such damage as soon as reasonably possible and this Lease shall continue in full force and effect.  If Lessee fails to exercise such option and provide such funds or assurance during such period, then this Lease shall terminate on the date specified in the termination notice and Lessee’s option shall be extinguished.

 

9.6          Abatement of Rent; Lessee’s Remedies.

 

(a)           Abatement.  In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition which is not intentionally caused by Lessee, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be abated in proportion to the degree to which Lessee’s use of the Premises is

 

	
 
    	
 
    	
 
    	
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impaired.  All other obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability for any such damage, destruction, remediation, repair or restoration except as provided herein.

 

(b)           Remedies.  If Lessor shall be obligated to repair or restore the Premises and does not commence, in a substantial and meaningful way, such repair or restoration within 60 days after such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice, of Lessee’s election to terminate this Lease on a date not less than 60 days following the  giving of such notice.  If Lessee gives such notice and such repair or restoration is not commenced within 30 days thereafter, this Lease shall terminate as of the date specified in said notice.  If the repair or restoration is commenced within such 30 days, this Lease shall continue in full force and effect.  “Commence” shall mean either the unconditional authorization of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs.  Additionally, of any repairs required of Lessor hereunder are not substantially completed within 12 months following Lessor’s notice of such damage (provided that such 12 month period shall be subject to extension on a day-to-day basis on account of any tenant delays), then Lessee shall have the right to terminate the Lease by delivering written notice of such election to Lessor following the expiration of such 12 month period (as the same may be extended hereunder), but prior to Lessor’s substantial completion of the repairs.

 

9.7          Termination; Advance Payments.  Upon termination of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made concerning advance Base Rent and any other advance payments made by Lessee to Lessor.  Lessor shall, in addition, return to Lessee so much of Lessee’s Security Deposit as has not been, or is not then required to be, used by Lessor.

 

9.8          Waive Statutes.  Lessor and Lessee agree that the terms of this Lease shall govern the effect of any damage to or destruction of the Premises with respect to the termination of this Lease and hereby waive the provisions of any present or future statute to the extent inconsistent herewith.

 

10.          Real Property Taxes.

 

10.1        Definition.  As used herein, the term “Real Property Taxes” shall include any form of assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other than inheritance, personal income, capital gains taxes or estate taxes), improvement bond; and/or license fee imposed upon or levied against any legal or equitable interest of Lessor in the Premises or the Project, Lessor’s right to other income therefrom, and/or Lessor’s business of leasing (including, without limitation, all taxes levied pursuant to Chapter 171 of the Texas Tax Code or any amendment, adjustment or replacement thereof), by any authority having the direct or indirect power to tax and where the funds are generated with reference to the Building address and where the proceeds so generated are to be applied by the city, county or other local taxing authority of a jurisdiction within which the Premises are located.  Real Property Taxes shall also include any tax, fee, levy, assessment or charge, or any increase therein:  (i) imposed by reason of events occurring during the term of this Lease, (but expressly excluding a change in the ownership of the Premises (other than the change in ownership pursuant to which Lessor is

 

	
 
    	
 
    	
 
    	
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acquiring the Project), and (ii) levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to this Lease.

 

10.2        Payment of Taxes.  In addition to Base Rent, Lessee shall pay to Lessor an amount equal to the Real Property Tax installment due at least 20 days prior to the applicable delinquency date, provided that Lessee shall be provided with a copy of the relevant tax bill within 30 days of Lessor’s receipt of such bill.  If any such installment shall cover any period of time prior to or after the expiration or termination of this Lease, Lessee’s share of such installment shall be prorated.  In the event Lessee incurs a late charge on any Rent payment, Lessor may estimate the current Real Property Taxes, and require that such taxes be paid in advance to Lessor by Lessee monthly in advance with the payment of the Base Rent.  Such monthly payments shall be an amount equal to the amount of the estimated installment of taxes divided by the number of months remaining before the month in which said installment becomes delinquent.  When the actual amount of the applicable tax bill is known, the amount of such equal monthly advance payments shall be adjusted as required to provide the funds needed to pay the applicable taxes.  If the amount collected by Lessor is insufficient to pay such Real Property Taxes when due, Lessee shall pay Lessor, upon demand, such additional sum as is necessary. Advance payments may be intermingled with other moneys of Lessor and shall not bear interest.  In the event of a Breach by Lessee in the performance of its obligations under this Lease, then any such advance payments may be treated by Lessor as an additional Security Deposit.

 

10.3        Joint Assessment.  If the Premises are not separately assessed, Lessee’s liability shall be an equitable proportion of the Real Property Taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be conclusively determined by Lessor from the respective valuations assigned in the assessor’s work sheets or such other information as may be reasonably available.

 

10.4        Personal Property Taxes.  Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon Lessee Owned Alterations, Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee.  When possible, Lessee shall cause its Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Lessor.  If any of Lessee’s said property shall be assessed with Lessor’s real property, Lessee shall pay Lessor the taxes attributable to Lessee’s property within 30 days after receipt of a written statement setting forth the taxes applicable to Lessee’s property.

 

10.5        Tax Protest.  For property tax purposes, Lessee waives all rights to protest or appeal the appraised value of the Premises and all rights to receive notices of reappraisement as set forth in Sections 41.413 and 42.015 of the Texas Tax Code.

 

11.          Utilities and Services.  Lessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises, together with any taxes thereon.  If any such services are not separately metered or billed to Lessee, Lessee shall pay a reasonable proportion, to be determined by Lessor, of all charges jointly metered or billed.  Except as expressly provided otherwise in this Lease, there shall be no abatement of rent and Lessor shall not be liable in any respect whatsoever for the inadequacy, stoppage, interruption or

 

	
 
    	
 
    	
 
    	
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discontinuance of any utility or service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor’s reasonable control or in cooperation with governmental request or directions.

 

12.          Assignment and Subletting.

 

12.1        Lessor’s Consent Required.

 

(a)           Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively “assign or assignment”) or sublet all or any part of Lessee’s  interest in this Lease or in the Premises without Lessor’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.

 

(b)           [Intentionally Omitted]

 

(c)           [Intentionally Omitted]

 

(d)           An assignment or subletting which requires Lessor’s consent and which is made without consent shall, at Lessor’s option, be a Default curable after notice per Paragraph 13.1(d).

 

(e)           Lessee’s remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory damages and/or injunctive relief.

 

(f)            Lessor may reasonably withhold consent to a proposed assignment or subletting if Lessee is in Breach at the time consent is requested.

 

(g)           Notwithstanding the foregoing, allowing a diminimus portion of the Premises, ie. 20 square feet or less, to be used by a third party vendor in connection with the installation of a vending machine or payphone shall not constitute a subletting.

 

12.2        Terms and Conditions Applicable to Assignment and Subletting.

 

(a)           Regardless of Lessor’s consent, no assignment or subletting shall:  (i) be effective without the express written assumption by such assignee or sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of any obligations hereunder, or (iii) alter the primary liability of Lessee for the payment of Rent or for the performance of any other obligations to be performed by Lessee.

 

(b)           Lessor may accept Rent or performance of Lessee’s obligations from any person other than Lessee pending approval or disapproval of an assignment.  Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute a waiver or estoppel of Lessor’s right to exercise its remedies for Lessee’s Default or Breach.

 

(c)           Lessor’s consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting.

 

(d)           In the event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone else responsible for the performance of Lessee’s obligations under this Lease, including any assignee or sublessee, without first exhausting Lessor’s remedies against any other person or entity responsible therefor to Lessor, or any security held by Lessor.

 

(e)           Each request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor’s determination as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including

 

	
 
    	
 
    	
 
    	
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but not limited to the intended use and/or required modification of the Premises, if any, together with a fee of $500 as consideration for Lessor’s considering and processing said request.  Lessee agrees to provide Lessor with such other or additional information and/or documentation as may be reasonably requested.  (See also Paragraph 36).

 

(f)            Any assignee of, or sublessee under,  this Lease shall, by reason of accepting such assignment, entering into such sublease, or entering into possession of the Premises or any portion thereof, be deemed to have assumed and agreed to conform and comply with each and every term, covenant, condition and obligation herein to be observed or performed by Lessee  during the term of said assignment or sublease, other than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented to in writing.

 

(g)           Lessor’s consent to any assignment or subletting shall not transfer to the assignee or sublessee any Option granted to the original Lessee by this Lease unless such transfer is specifically consented to by Lessor in writing.  (See Paragraph 39.2)

 

12.3        Additional Terms and Conditions Applicable to Subletting.  The following terms and conditions shall apply to any subletting by Lessee of all or any part of the Premises and shall be deemed included in all subleases under the Lease whether or not expressly incorporated therein:

 

(a)           Lessee hereby assigns and transfers to Lessor all of Lessee’s interest in all Rent payable on any sublease, and Lessor may collect such Rent and apply same toward Lessee’s obligations under this Lease; provided, however, that until a Breach shall occur in the performance of Lessee’s obligations, Lessee may collect said Rent.  In the event that the amount collected by Lessor exceeds Lessee’s then outstanding obligations any such excess shall be refunded to Lessee.  Lessor shall not, by reason of the foregoing or any assignment of such sublease, nor by reason of the collection of Rent, be deemed liable to the sublessee for any failure of Lessee to perform and comply with any of Lessee’s obligations to such sublessee.  Lessee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Lessor stating that a Breach exists in the performance of Lessee’s obligations under this Lease, to pay to Lessor all Rent due and to become due under the sublease.  Sublessee shall rely upon any such notice from Lessor and shall pay all Rents to Lessor without any obligation or right to inquire as to whether such Breach exists, notwithstanding any claim from Lessee to the contrary.

 

(b)           In the event of a Breach by Lessee, Lessor may, at its option, require sublessee to attorn to Lessor, in which event Lessor shall undertake the obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration of such sublease; provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for any prior Defaults or Breaches of such sublessor.

 

(c)           Any matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor.

 

(d)           No sublessee shall further assign or sublet all or any part of the premises without Lessor’s prior written consent.

 

	
 
    	
 
    	
 
    	
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(e)           Lessor shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who shall have the right to cure the Default of Lessee within the grace period, if any, specified in such notice.  The sublessee shall have a right to reimbursement and offset from and against Lessee for any such Defaults cured by the sublessee.

 

13.          Default; Breach; Remedies.

 

13.1        Default; Breach.  A “Default” is defined as a failure by the Lessee to comply with or perform any of the terms, covenants, conditions or Rules and Regulations under this Lease.  A “Breach” is defined as the occurrence of one or more of the following Defaults, and the failure of Lessee to cure such Default within any applicable grace period:

 

(a)           The abandonment of the Premises for more than 90 days; or the vacating of the premises for more than 90 days without providing a commercially reasonable level of security.

 

(b)           The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, where such failure continues for a period of 3 business days following written notice to Lessee..

 

(c)           The commission of waste act or acts constituting public or private nuisance, and/or an illegal activity on the Premises by Lessee, where such actions continue for a period of 5 business days following written notice to Lessee.

 

(d)           The failure by Lessee to provide (i) reasonable written evidence of compliance with Applicable Requirements, (ii) the service contracts, (iii) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate, (v) a requested subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 42, (viii) material safety data sheets (MSDS), or (ix) any other documentation or information which Lessor may reasonably require of Lessee under the terms of this Lease, where any such failure continues for a period of 10 business days following written notice to Lessee.

 

(e)           A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof, other than those described in subparagraphs 13.1(a), (b), (c) or (d), above, where such Default continues for a period of 30 days after written notice; provided, however, that if the nature of Lessee’s Default is such that more than 30 days are reasonably required for its cure, then it shall not be deemed to be a Breach if Lessee commences such cure within said 30 day period and thereafter diligently prosecutes such cure to completion.

 

(f)            The occurrence of any of the following events:  (i) the making of any general arrangement or assignment for the benefit of creditors; (ii) becoming a “debtor” as defined in 11 U.S.C. §101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where possession is not restored to Lessee within 30 days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where such seizure is not discharged within 30 days; provided, however, in the event that any provision of this subparagraph is

 

	
 
    	
 
    	
 
    	
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contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions.

 

(g)           The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false.

 

(h)           If the performance of Lessee’s obligations under this Lease is guaranteed:  (i) the death of a Guarantor, (ii) the termination of a Guarantor’s liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a Guarantor’s becoming insolvent or the subject of a bankruptcy filing, (iv) a Guarantor’s refusal to honor the guaranty, or (v) a Guarantor’s breach of its guaranty obligation on an anticipatory basis, and Lessee’s failure, within 60 days following written notice of any such event, to provide written alternative assurance or security, which, when coupled with the then existing resources of Lessee, equals or exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of execution of this Lease.

 

13.2        Remedies.  If Lessee fails to perform any of is affirmative duties or obligations, within 10 business days after written notice (or in case of an emergency, without notice), Lessor may, at its option, perform such duty or obligation on Lessee’s behalf, including but not limited to the obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or approvals.  Lessee shall pay to Lessor an amount equal to 100% of the actual and reasonable costs and expenses incurred by Lessor in such performance upon receipt of an invoice therefor.  In the event of a Breach, Lessor may, with or without further notice or demand, and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach:

 

(a)           Terminate Lessee’s right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession to Lessor.  In such event Lessor shall be entitled to recover from Lessee:  (i) the unpaid Rent which had been earned at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided; (iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that the Lessee proves could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor for all the detriment proximately caused by the Lessee’s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including but not limited to the cost of recovering possession of the Premises, expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorneys’ fees, and that portion of any leasing commission paid by Lessor in connection with this Lease applicable to the unexpired term of this Lease.  The worth at the time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus one percent.  Efforts by Lessor to mitigate damages caused by Lessee’s Breach of this Lease shall not waive Lessor’s right to recover damages under Paragraph 12.  If termination of this Lease is obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to recover in such

 

	
 
    	
 
    	
 
    	
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proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the right to recover all or any part thereof in a separate suit.  If a notice and grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute shall also constitute the notice required by Paragraph 13.1.  In such case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for in this Lease and/or by said statute.

 

(b)                                 Continue the Lease and Lessee’s right to possession and recover the Rent as it becomes due, in which event Lessee may sublet or assign, subject only to reasonable limitations.  Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor’s interests, shall not constitute a termination of the Lessee’s right to possession.

 

(c)                                  Pursue any other remedy now or hereafter available under the laws or judicial decisions of the state wherein the Premises are located.  The expiration or termination of this Lease and/or the termination of Lessee’s right to possession shall not relieve Lessee from liability under any indemnity provisions of this lease as to matters occurring or accruing during the term hereof or by reason of Lessee’s occupancy of the Premises.

 

(d)                                 The provisions hereof shall override and control any conflicting provisions of Section 93.002 of the Texas Property Code (as amended).

 

(e)                                  Notwithstanding anything in this Lease to the contrary, Lessee shall never be liable under this Lease to Lessor for consequential damages, punitive damages, exemplary damages or special damages.

 

13.3                        [Intentionally Omitted]

 

13.4                        Late Charges.  Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain.  Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Lessor by any Lender.  Accordingly, if any Rent shall not be received by Lessor within 5 days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall immediately pay to Lessor a one-time late charge (“Late Charge”) equal to 5% of each such overdue amount or $100, whichever is greater.  The Parties hereby agree that such Late Charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of such late payment.  Acceptance of such  Late Charge by Lessor shall in no event constitute a waiver of  Lessee’s Default or Breach with respect to such overdue amount, nor prevent the exercise of any of the other rights and remedies granted hereunder.

 

13.5                        Interest.  Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, when due as to scheduled payments (such as Base Rent) or within 30 days following the date on which it was due for non-scheduled payment, shall bear interest from the date when due, as to scheduled payments, on the 31st day after it was due as to non-scheduled payments.  The interest (“Interest”) charged shall be computed at the rate of 5% per annum but shall not exceed the maximum rate allowed by law.  Interest is payable in addition to the potential late charge provided for in Paragraph 13.4.

 

	
 
    	
 
    	
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13.6                        Breach of Lessor.

 

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

 

(b)                                 Performance by Lessee on Behalf of Lessor.  In the event that neither Lessor nor Lender cures said breach within 30 days after receipt of said notice, or if having commenced said cure they do not diligently pursue it to completion, then Lessee may elect to cure said breach at Lessee’s expense and offset from Rent the actual and reasonable cost to perform such cure, provided, however, that such offset shall not exceed an amount equal to two month’s Base Rent, reserving Lessee’s right to seek reimbursement from Lessor for any such expense in excess of such offset.  Lessee shall document the cost of said cure and supply said documentation to Lessor.

 

(c)                                  Lessee’s Remedies.  Notwithstanding anything in this Lease to the contrary, Lessor shall never be liable under this lease for consequential damages, punitive damages, exemplary damages or special damages.

 

14.                               Condemnation.  If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power (collectively “Condemnation”), this Lease shall terminate as to the part taken as of the date the condemning authority takes title or possession, whichever first occurs.  If a substantial portion of the Building, or the Premises is taken by Condemnation such that Lessee is prevented from using the remainder of the Premises or the Building for the Agreed Use, Lessee may, at Lessee’s option, to be exercised in writing within 30 days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within 30 days after the condemning authority shall have taken possession) terminate this Lease as of the date the condemning authority takes such possession.  If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the Base Rent shall be reduced in proportion to the reduction in utility of the  Premises caused by such Condemnation.  Condemnation awards and/or payments shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold, the value of the part taken, or for severance damages; provided, however, that Lessee shall be entitled to any compensation for Lessee’s relocation expenses, loss of business goodwill and/or Trade Fixtures, without regard to whether or not this Lease is terminated pursuant to the provisions of this Paragraph.  All Alterations and Utility Installations made to the Premises by Lessee, for purposes of Condemnation only, shall be  considered the property of the Lessee and Lessee shall be entitled to any and all compensation which is payable therefor.  In the event that

 

	
 
    	
 
    	
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this Lease is not terminated by reason of Condemnation, Lessor shall repair any damage to the Premises caused by such Condemnation.

 

15.                               Brokerage Fees.

 

15.1                        [Intentionally Omitted]

 

15.2                        [Intentionally Omitted]

 

Lessee and Lessor each represent and warrant to the other that it has had no dealings with any person, firm, broker or finder (other than Lessee’s Broker) in connection with this Lease, and that no one other than said named Brokers is entitled to any commission or finder’s fee in connection herewith.  Lessee and Lessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys’ fees reasonably incurred with respect thereto.

 

16.                               Estoppel Certificates.

 

(a)                                 Each Party (as “Responding Party”) shall within 10 days after written notice from the other Party (the “Requesting Party”) execute, acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current “Estoppel Certificate” form published by the AIR Commercial Real Estate Association, plus such additional information, confirmation and/or statements as may be reasonably requested by the Requesting Party.

 

(b)                                 If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10 day period, the Requesting Party may execute an Estoppel Certificate stating that:  (i) the Lease is in full force and effect without modification except as may be represented by the Requesting Party, (ii) there are no uncured defaults in the Requesting Party’s performance, and (iii) if Lessor is the Requesting Party, not more than one month’s rent has been paid in advance.  Prospective purchasers and encumbrancers may rely upon the Requesting Party’s Estoppel Certificate, and the Responding Party shall be estopped from denying the truth of the facts contained in said Certificate.

 

(c)                                  If Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee and all Guarantors shall deliver to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably required by such lender or purchaser, including but not limited to Lessee’s financial statements for the past 3 years.  All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein set forth.

 

17.                               Definition of Lessor.  The term “Lessor” as used herein shall mean the owner or owners at the time in question of the fee title to the Premises, or, if this is a sublease, of the Lessee’s interest in the prior lease.  In the event of a transfer of Lessor’s title or interest in the Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor.  Except as provided in Paragraph 15, upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved

 

	
 
    	
 
    	
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of all liability with respect to the obligations and/or covenants under this Lease thereafter to be performed by the  Lessor.  Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove defined.

 

18.                               Severability.  The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof.

 

19.                               Days.  Unless otherwise specifically indicated to the contrary, the word “days” as used in this Lease shall mean and refer to calendar days.

 

20.                               Limitation on Liability.  The obligations of Lessor under this Lease shall not constitute personal obligations of Lessor or its partners, members, directors, officers or shareholders, and Lessee shall look to the Premises, and to no other assets of Lessor, for the satisfaction of any liability of Lessor with respect to this Lease, and shall not seek recourse against Lessor’s partners, members, directors, officers or shareholders, or any of their personal assets for such satisfaction.

 

21.                               Time of Essence.  Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease.

 

22.                               No Prior or Other Agreements; Broker Disclaimer.  This Lease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective.

 

23.                               Notices.

 

23.1                        Notice Requirements.  All notices required or permitted by this Lease or applicable law shall be in writing and may be delivered in person (by hand or by courier including nationally recognized overnight courier) or may be sent by certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission, and shall be deemed sufficiently given if served in a manner specified in this Paragraph 23.  Either Party may by written notice to the other specify a different address for notice, except that upon Lessee’s taking possession of the Premises, the Premises shall constitute Lessee’s address for notice.  A copy of all notices to Lessor shall be concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate in writing.  See Addendum Paragraph 23.3

 

23.2                        Date of Notice.  Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or if no delivery date is shown, the postmark thereon.  Notices delivered by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed given as of the next business day after delivery of the same to the Postal Service or courier.  Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is also delivered

 

	
 
    	
 
    	
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via delivery or mail.  If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.

 

24.                               Waivers.  No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant or condition hereof.  Lessor’s consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor’s consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent.  The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee.  Any payment by Lessee may be accepted by Lessor on account of moneys or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment.

 

25.                               Intentionally Omitted.

 

26.                               No Right To Holdover.  Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of this Lease.  In the event that Lessee holds over, then the Base Rent shall be increased to 150% of the Base Rent applicable immediately preceding the expiration or termination.  Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee.

 

27.                               Cumulative Remedies.  No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

 

28.                               Covenants and Conditions; Construction of Agreement.  All provisions of this Lease to be observed or performed by Lessee are both covenants and conditions.  In construing this Lease, all headings and titles are for the convenience of the Parties only and shall not be considered a part of this Lease.  Whenever required by the context, the singular shall include the plural and vice versa.  This Lease shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole as if both parties had prepared it.

 

29.                               Binding Effect; Choice of Law.  This Lease shall be binding upon the Parties, their personal representatives, successors and assigns and be governed by the laws of the State in which the Premises are located.  Any litigation between the Parties hereto concerning this Lease shall be initiated in the county in which the Premises are located.

 

30.                               Subordination; Attornment; Non-Disturbance.

 

30.1                        Subordination.  This Lease and any Option granted hereby shall be subject and subordinate to any ground lease, mortgage deed of trust, or other hypothecation or security device (collectively “Security Device”), now or hereafter placed upon the Premises, to any and all advances made on the security thereof, and to all renewals, modifications, and extensions

 

	
 
    	
 
    	
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thereof.  Lessee agrees that the holders of any such Security Devices (in this Lease together referred as “Lender”) shall have no liability or obligation to perform any of the obligations of Lessor under this Lease.  Any Lender may elect to have this Lease and/or any Option granted hereby superior to the lien of its Security Device by giving written notice thereof to Lessee, whereupon this Lease and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates of the documentation or recordation thereof.

 

30.2                        Attornment.  In the event that Lessor transfers title to the Premises, or the Premises are acquired by another upon the foreclosure or termination of a Security Device to which this Lease is subordinated (i) Lessee shall, subject to the non-disturbance provisions of Paragraph 30.3 attorn to such new owner, and this Lease will automatically become a new lease between Lessee and such new owner for the remainder of the term hereof, and (ii) Lessor shall thereafter be relieved of any further obligations hereunder and such new owner shall assume all of Lessor’s obligations, except that such new owner shall not:  (a) be liable for any act or omission of any prior lessor or with respect to events occurring prior to acquisition of ownership; (b) be subject to any offsets or defenses which Lessee might have against any prior lessor, (c) be bound by prepayment of more than one month’s rent, or (d) be liable for the return of any security deposit paid to any prior lessor.

 

30.3                        Non-Disturbance.  With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee’s subordination of this Lease shall be subject to receiving a commercially reasonable subordination, non-disturbance and attornment agreement (a “Non-Disturbance Agreement”) from the Lender which Non-Disturbance Agreement provides that Lessee’s possession of the Premises, and this Lease, including any options to extend the term hereof will not be disturbed so long as Lessee is not in Breach hereof and attorns to the record owner of the Premises.

 

30.4                        Self-Executing.  Subject to the terms and requirements of Paragraph 30.3 above, the agreements contained in this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that, upon written request from Lessor or Lender in connection with a sale, financing or refinancing of the Premises, Lessee and Lessor shall execute such further writings as may be reasonably required to separately document any subordination, attornment and/or Non-Disturbance Agreement provided for herein.

 

31.                               Attorneys’ Fees.  If any Party brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys’ fees.  Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment.  The term “Prevailing Party” shall include, without limitation, a Party who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party of its claim or defense.  The attorneys’ fees award shall not be computed in accordance with any court fee schedule but be such as to fully reimburse all attorneys’ fees reasonably incurred.

 

	
 
    	
 
    	
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26

 

32.                               Lessor’s Access; Showing Premises; Repairs.  Lessor and Lessor’s agents shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times after reasonable prior notice for the purpose of showing the same to prospective purchasers, lenders, or tenants, and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through the Premises and/or other premises as long as there is no material adverse effect to Lessee’s use of the Premises.  All such activities shall be without abatement of rent or liability to Lessee.

 

33.                               Auctions.  Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.  Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction.

 

34.                               Signs.  Lessor may place on the Premises ordinary “For Sale” signs at any time and ordinary “For Lease” signs during the last 6 months of the term hereof.  Lessee shall have the right to install, at Lessee’s sole cost and expense, Building signage on the Premises displaying Lessee’s business or trade name and certain brand identified signs, provided that all such signs must comply with all Applicable Requirements, and Lessee shall remove such signage upon the expiration of the Term or earlier termination of the Lease, and Lessee shall repair any damage to the Building or Premises resulting from the removal of such signage.

 

35.                               Termination; Merger.  Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or lesser estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies.  Lessor’s failure within 10 days following any such event to elect to the contrary by written notice to the holder of any lesser interest, shall constitute Lessor’s election to have such event constitute the termination of such interest.

 

36.                               Consents.  Except as otherwise provided herein, wherever in this Lease the consent of a Party is required to an act by or for the other Party such consent shall not be unreasonably withheld or delayed.  Lessor’s actual reasonable costs and expenses (including but not limited to architects’, attorneys’, engineers’ and other consultants’ fees) incurred in the consideration of, or response to, a request by Lessee for any Lessor consent, including but not limited to consents to an assignment, a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and supporting documentation therefor.  Lessor’s consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such consent.  The failure to specify herein any particular condition to Lessor’s consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent is

 

	
 
    	
 
    	
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being given.  In the event that either Party disagrees with any determination made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish it reasons in writing and in reasonable detail within 10 business days following such request.

 

37.                               Guarantor.

 

37.1                        [Intentionally Omitted]

 

37.2                        [Intentionally Omitted]

 

38.                               Quiet Possession.  Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee’s part to be observed and performed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof.

 

39.                               Intentionally Omitted.

 

40.                               [Intentionally Omitted]

 

41.                               Security Measures.  Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or other security measures and that Lessor shall have no obligation whatsoever to provide same.  Lessee assumes all responsibility for the protection of the Premises, Lessee, its agents and invitees and their property from the acts of third parties.

 

42.                               Reservations.  Lessor reserves to itself the right, from time to time, to grant, without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Lessee.  Lessee agrees to sign any documents reasonably requested by Lessor to effectuate any such easement rights, dedication, map or restrictions.

 

43.                               Performance Under Protest.  If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the provisions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make payment “under protest” and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum.  If it shall be adjudged that there was no legal obligation on the part of said Party to pay such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay.  A Party who does not initiate suit for the recovery of sums paid “under protest” within 6 months shall be deemed to have waived its right to protest such payment.

 

44.                               Authority; Multiple Parties; Execution.

 

(a)                                 If either Party hereto is a corporation, trust, limited liability company, partnership, or similar entity each individual executing this Lease on behalf of such entity

 

	
 
    	
 
    	
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28

 

represents and warrants that he or she is duly authorized to execute and deliver this Lease on its behalf.  Each Party shall, within 30 days after request, deliver to the other Party satisfactory evidence of such authority.

 

(b)                                 If this Lease is executed by more than one person or entity as “Lessee” each such person or entity shall be jointly and severally liable hereunder.  It is agreed that any one of the named Lessees shall be empowered to execute any amendment to this Lease or other document ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same as if all of the named Lessees had executed such document.

 

(c)                                  This Lease may be executed by the Parties in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

 

45.                               Conflict.  Any conflict between the printed provisions of this Lease and typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions.

 

46.                               Offer.  Preparation of this Lease by either Party or their agent and submission of same to the other Party shall not be deemed an offer to lease to the other Party.  This Lease is not intended to be binding until executed and delivered by all Parties hereto.

 

47.                               Amendments.  This Lease may be modified only in writing signed by the Parties in interest at the time of the modification.

 

48.                               Waiver of Jury Trial.  THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.

 

49.                               Mediation and Arbitration of Disputes.  An Addendum requiring the Mediation and/or the Arbitration of all disputes between the Parties and/or Brokers arising out of this Lease o is x is not attached to this Lease.

 

50.                               Americans with Disabilities Act.  Since compliance with the Americans with Disabilities Act (ADA) is dependent upon Lessee’s specific use of the Premises, except as expressly otherwise provided under this Lease, Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar legislation.  In the event that Lessee’s use of the Premises requires modifications or additions to the Premises in order to be in ADA compliance, except as expressly otherwise provided under this Lease, Lessee agrees to make any such necessary modifications and/or additions at Lessee’s expense.

 

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO.  THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE

 

	
 
    	
 
    	
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THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.

 

ATTENTION:  NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES.  THE PARTIES ARE URGED TO;

 

1.                                      SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

 

2.                                      RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES.  SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO:  THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR LESSEE’S INTENDED USE.

 

WARNING:  IF THE PREMISES IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED.

 

The Parties hereto have executed this Lease at the place and on the dates specified above their respective signatures.

 

	
By LESSOR:
    	
 
    	
By LESSEE:
    
	
 
    	
 
    	
 
    
	
DF/HILLTOP, LLC,
    	
 
    	
BLUE APRON, INC.,
    
	
a California limited liability   company
    	
 
    	
a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By
    	
SEE   ATTACHED SIGNATURE PAGE
    	
 
    	
By
    	
SEE ATTACHED SIGNATURE PAGE
    
	
Name   Printed:
    	
 
    	
 
    	
Name Printed:
    	
 
    
	
Title:
    	
 
    	
 
    	
Title:
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
Name   Printed:
    	
 
    	
 
    	
Name Printed:
    	
 
    
	
Title:
    	
 
    	
 
    	
Title:
    	
 
    
							

 

	
 
    	
 
    	
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NOTE:  These forms are often modified to meet the changing requirements of law and industry needs.  Always write or call to make sure you are utilizing the most current form:  AIR COMMERCIAL REAL ESTATE ASSOCIATION, 700 So. Flower Street, Suite 600, Los Angeles, California 90017.  (213) 687-8777.  Fax No. (213) 687-8616

 

©Copyright 2001 — By AIR Commercial Real Estate Association.  All Rights reserved.
 No part of these works may be reproduced in any form without permission in writing.
 JLL UPDATED Dreisbach-Blue Apron Single Tenant Lease (373858-00003)

 

	
 
    	
 
    	
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SIGNATURE PAGE

 

This signature page is attached to that certain STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE-NET (“Addendum”) made and entered into by and between DF/HILLTOP, LLC, a California limited liability company (“LESSOR”), and BLUE APRON, INC., a Delaware corporation (“Lessee”), and dated as of the date first written above.

 

	
 
    	
“LESSOR”
    	
DF/HILLTOP, LLC,
    
	
 
    	
 
    	
a California limited   liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Jason W. Dreisbach
    
	
 
    	
 
    	
Name:
    	
Jason W. Dreisbach
    
	
 
    	
 
    	
Its:
    	
Attorney in Fact   Dreisbach Family Trust
    
	
 
    	
 
    	
 
    
	
 
    	
“LESSEE”
    	
BLUE APRON, INC.
    
	
 
    	
 
    	
a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Matt Salzberg
    
	
 
    	
 
    	
Name:
    	
Matt Salzberg
    
	
 
    	
 
    	
Its:
    	
CEO
    

 

 

EXHIBIT A

 

LEGAL DESCRIPTION
 (TERRANT COUNTY)

 

BEING a tract of land situated in the M. Harris Survey, Abstract No. 704, City of Arlington, Tarrant County, Texas, the subject tract being all of Site 29, Sub-Tract 8-Z, Tract VIII, Six Flags Business Park, according to the plat recorded in Volume 388-106, Page 59 of the Plat Records, Tarrant County, Texas (PRTCT), the subject tract being more particularly described as follows:

 

BEGINNING at 1⁄2” iron rod found on the south line of the T. & P. G.S.C. Railroad, a 53 foot right-of-way, for the northeast corner of said Site 29 and being the northwest corner of Site 30, Sub-Tract 8-Z, Tract VIII, Six Flags Business Park, according to the plat recorded in Volume 388-107, Page 30 PRTCT;

 

THENCE S 14o46’34” E, 340.00 feet along the common line thereof to an “X” set in concrete on the north line of Centennial Drive, a 60 foot public right-of-way, for the common corner between Site 29 and Site 30;

 

THENCE S 75o13’26” W, 357.81 feet along the north line thereof to an “X” set in concrete;

 

THENCE continuing along the north line thereof, around a tangent curve to the right having a central angle of 14o11’30”, a radius of 860.68 feet a chord of S 82o19’11” W — 212.64 feet an arc length of 213.18 feet to a point from which a 5/8” iron rod found bears N 67o49’34” W, 0.86 feet, said point being the south end of a corner clip being the intersection of Centennial Drive with the east line of Six Flags Drive, a 60 foot public right-of-way;

 

THENCE along said corner clip, around a compound curve to the right having a central angle of 90o00’00”, a radius of 25.00 feet a chord of N 45o35’04” W — 35.36 feet an arc length of 39.27 feet to a 1⁄2” iron rod with plastic cap stamped “SPIARSENG” set;

 

THENCE N 00o35’04” W, 345.00 feet along the east line of Six Flags Drive to a 1⁄2” iron rod with plastic cap stamped “SPIARSENG” set at the intersection said east line with the south line of said railroad;

 

THENCE N 89o24’56” E, 147.54 feet along the south line thereof to a 5/8” iron rod found;

 

THENCE continuing along the south line thereof, around a tangent curve to the left having a central angle of 14o11’30”, a radius of 489.28 feet a chord of N 82o19’11” E — 120.88 feet an arc length of 121.19 feet to a 1⁄2” iron rod found;

 

THENCE N 75o13’26” E, 239.35 feet continuing along the south line thereof to the POINT OF BEGINNING with the subject tract containing 192,640 square feet or 4.422 acres of land.

 

 

ADDENDUM TO STANDARD INDUSTRIAL/COMMERCIAL
 SINGLE-TENANT LEASE - NET

 

THIS ADDENDUM TO STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE-NET (“Addendum”) is made and entered into by and between DF/HILLTOP, LLC, a California limited liability company (“Lessor”), and BLUE APRON, INC., a Delaware corporation (“Lessee”), as of the date set forth on the first page of that certain Standard Industrial/Commercial Single-Tenant Lease - Net (the “Lease”) between Lessor and Lessee to which this Addendum is attached and incorporated.  The terms, covenants and conditions set forth herein are intended to and shall have the same force and effect as if set forth at length in the body of the Lease.  To the extent that the provisions of this Addendum are inconsistent with any provisions of the Lease, the provisions of this Addendum shall supersede and control.

 

1.3                               Commencement Date; Contingency.  Lessee hereby acknowledges that, as of the date hereof, Lessor is under contract to purchase the Premises (the “Acquisition”), but as of the date hereof, Lessor has not yet closed on such purchase and does not yet own the Premises.  As referenced in this Lease, the “Commencement Date” shall be the closing date for the Acquisition.  The effectiveness of this Lease is subject to and conditioned upon the closing of the Acquisition whereby Lessor shall acquire fee title to the Premises (the “Contingency”).  In the event the Contingency is not satisfied on or before sixty (60) days after the date hereof, either Lessor or Lessee may terminate this Lease by written notice provided to the other party (“Contingency Notice”).  This Lease shall be null and void as of the delivery of any such Contingency Notice and Lessor shall thereafter return to Lessee the Security Deposit and the prepaid monthly Base Rent, and neither party shall have any further obligations to the other hereunder.

 

1.5                               Base Rent.  Throughout the Term, Lessee shall pay monthly installments of Base Rent for the Premises in the amounts set forth below.  For purposes of the Lease, “Lease Year” shall mean each consecutive twelve (12) month period during the Term commencing on the Commencement Date.

 

	
Lease Year
    	
 
    	
Annual Base Rent
    	
 
    	
Monthly Installment of Base
   Rent
    	
 
    
	
1
    	
 
    	
$
    	
433,023.17
    	
 
    	
$
    	
36,085.26
    	
 
    
	
2
    	
 
    	
$
    	
441,683,64
    	
 
    	
$
    	
36,806.97
    	
 
    
	
3
    	
 
    	
$
    	
450,517.31
    	
 
    	
$
    	
37,543.11
    	
 
    
	
4
    	
 
    	
$
    	
459,527.66
    	
 
    	
$
    	
38,293.97
    	
 
    
	
5
    	
 
    	
$
    	
468,718.21
    	
 
    	
$
    	
39,059.85
    	
 
    
	
6
    	
 
    	
$
    	
478,092.57
    	
 
    	
$
    	
39,841.05
    	
 
    
	
7
    	
 
    	
$
    	
487,654.42
    	
 
    	
$
    	
40,637.87
    	
 
    
	
8
    	
 
    	
$
    	
497,407.51
    	
 
    	
$
    	
41,450.63
    	
 
    
	
9
    	
 
    	
$
    	
507,355.66
    	
 
    	
$
    	
42,279.64
    	
 
    
	
10
    	
 
    	
$
    	
517,505.78
    	
 
    	
$
    	
43,125.23
    	
 
    

 

2.5                               Lessor Work.  Notwithstanding anything contained in the Lease to the contrary, Lessor shall complete the following improvements (collectively, the “Lessor Work”), at Lessor’s sole cost and expense, following full execution and delivery of this Lease:  (i) replace the existing roof or install new roofing material over the existing roof of the building located at

 

1

 

the Premises  (the “Building”) which is adequate to cause the Building roof to be water-tight for a duration equal to or longer than the Term; (ii) repair, as needed, the dock doors, enclosures, levelers, high speed doors and cooler man doors to the extent required to cause such items to be in good working order; (iii) repair the pit drainage system to the extent required to cause such item to be in good working order; (iv) power wash the interior of the Building’s cooler, (v) cause the existing HVAC, plumbing and electrical systems to be in working order upon delivery, provided that any upgrades or replacements of such systems required in connection with any improvements or alterations to the Premises made by Lessee shall be Lessee’s sole obligation, (vi) remove and replace portions of the Building concrete flooring which has been damaged by battery acid, and (vii) perform the initial power wash of the interior of coolers.  Lessee acknowledges and agrees that (a) the cooler panels and curbing, and (b) the refrigeration and floor heating systems shall be its sole responsibility.  The Lessor Work shall be substantially completed by Lessor on or before the date which is ninety (90) days following the Commencement Date (provided that such date shall be subject to extension on a day-for-day basis on account of any tenant delays) (the “Lessor Work Completion Date”), and Lessee shall receive an abatement of rent for each day following the Lessor Work Completion Date (as the same may be extended hereunder) that (i) the Lessor Work is not substantially completed, and (ii) such failure to timely substantially complete the Lessor Work interferes with Lessee’s use and enjoyment of the Premises or its ability to operate its business from the Premises.

 

2.6                               Lessee Improvements.  Notwithstanding anything to the contrary in Paragraph 2, Lessee shall be entitled to a one-time improvement allowance (the “Lessee Improvement Allowance”) in the amount of One Hundred Twenty-Five Thousand Dollars ($125,000.00) for costs relating to the repair of the existing refrigeration system located within the Building as of the date of this Lease (the “Lessee Improvements”).  In no event shall Lessor be obligated to make disbursements pursuant to this Paragraph 2.6 in a total amount which exceeds the Lessee Improvement Allowance.  Lessee shall not be entitled to receive any cash payment or credit against Rent or otherwise for any portion of the Lessee Improvement Allowance which is not used to pay for the Lessee Improvement Allowance Items (as hereinafter defined).  The Lessee Improvement Allowance shall be disbursed to Lessee within thirty (30) days after Lessor’s receipt of:  (i) reasonably particularized written invoices for such costs; (ii) executed mechanic’s lien releases from all of Lessee’s subcontractors, laborers, materialmen, and suppliers used in connection with the Lessee Improvements, which shall comply with the appropriate provisions, as reasonably determined by Lessor, of Texas law; and (iii) all other information reasonably requested by Lessor.  Lessee shall provide written notice to Lessor of all alterations and improvements constructed by or for Lessee at the Premises, provided that Lessor’s prior consent to any alterations and improvements shall only be required to the extent they affect the Building roof, structure, foundation, or fire-life safety system.

 

9.4                               Total Destruction.  Notwithstanding any other provision hereof, if a Premises Total Destruction shall occur, Lessor shall have the right, in Lessor’s sole discretion, to terminate the Lease, in which event Lessor shall within thirty (30) days following delivery of the Partial/Total Notice (as defined in Paragraph 9.l(b) of the Lease) (the “Lessor Notice Date”), give notice of such termination to Lessee, and thereupon the Lease shall terminate ten (10) days after such notice is given and Lessee shall vacate the Premises and surrender the same to Lessor.  In the event a Premises Total Destruction shall occur and Lessor does not elect to terminate the Lease as provided in the immediately preceding sentence, Lessee may elect, no later than thirty

 

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(30) days after the Lessor Notice Date, to terminate this Lease by written notice to Lessor effective as of the date specified in the notice, which date shall not be less than thirty (30) days nor more than sixty (60) days after the date such notice is given by Lessee.  Additionally, in the event a Premises Total Destruction shall occur and neither Lessor nor Lessee has elected to terminate the Lease as provided above, and the repairs to the Premises are not substantially complete within one hundred eighty (180) days from the date of such Premises Total Destruction, then Lessee shall have the right to terminate the Lease upon delivery of notice to Lessor not more than thirty (30) days after the expiration of the foregoing one hundred eighty (180) day period, which termination shall be effective as of the date of the delivery of such written notice to Lessor.

 

10.6                        Real Property Tax Assessments.  In the event that any special tax assessments are permitted by the governing taxing authority or by applicable law to be paid in installments, Lessee shall have the right to pay such special tax assessments in the maximum number of installments permitted by such governing taxing authority or applicable law; provided, however, in the event that any such special tax assessments is assessed against the Premises relates solely to the period of time consisting of the Term of this Lease (as the same shall be extended pursuant to the terms of Paragraph 1.3, above), then notwithstanding the foregoing, Lessee shall pay the entire of amount of such special tax assessments prior to the expiration of the Term of this Lease.  Lessor shall be obligated to pay any installment of such special tax assessments which is applicable to any period following the expiration of this Lease.

 

11.                               Interruption of Utilities.  In the event that any utility service provided to the Premises shall cease or be interrupted and such interruption renders the Premises untenantable for the uses permitted under this Lease and thereby prevents Lessee from (and Lessee, in fact ceases) conducting its business operations therein and such cessation or interruption results from a failure by Lessor to perform any of its obligations hereunder, then if such cessation or interruption and the resulting untenantability continues for a period of five (5) consecutive business days after Lessee gives Lessor written notice of said interruption or cessation, then Lessee shall be entitled to an appropriate abatement of rent from the fifth (5th) day after said notice is received by Lessor until the service is restored and the Premises rendered tenantable.

 

12.3                        Terms and Conditions Applicable to Subletting.  If the rent and other monies payable by any sublessee to Lessee, on a per rentable square foot basis, for or in connection with the use and occupancy of any sublet space shall be in excess of the Rent payable by Lessee under this Lease on a per rentable square foot basis, Lessee shall so notify Lessor and Lessee shall pay to Lessor fifty percent (50%) of all such excess received by Lessee, after deducting the reasonable expenses incurred by Lessee for (i) reasonable changes, alterations and improvements in the Premises in connection with such sublease, (ii) reasonable brokerage commissions incurred in connection with such sublease, (iii) any free rent reasonably provided to such sublessee, and (iv) any reasonable marketing fees incurred in connection with such sublease.

 

Notwithstanding anything to the contrary in Paragraph 12, Lessee shall be permitted to assign this Lease, or sublet all or a portion of the Premises, to an Affiliate (as hereinafter defined) of Lessee without the prior consent of Lessor, if all of the following conditions are satisfied:

 

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(a)                                 an event of Breach by Lessee does not then exist;

 

(b)                                 a fully executed copy of such assignment or sublease, the assumption of this Lease by the assignee or acceptance of the sublease by the sublessee, and such other information regarding the assignment or sublease as Lessor may reasonably request, shall have been delivered to Lessor;

 

(c)                                  any such assignment is not conducted as a subterfuge to avoid the obligations of Lessee under Paragraph 12 or otherwise under the Lease;

 

(d)                                 Lessee gives Lessor at least 30 days prior written notice of any such assignment or sublease to an Affiliate; and

 

(e)                                  Lessee shall remain fully liable for all obligations to be performed by Lessee under this Lease notwithstanding any such assignment or transfer.

 

As used herein the term “Affiliate” shall mean (i) an entity which directly or indirectly controls, is controlled by, or is under common control with, Lessee, (ii) a successor-in-interest to Lessee by way of merger or consolidation, or by sale of all or substantially all of the stock of Lessee or of all of the assets of Lessee, or (iii) any entity to which a majority of the capital stock, partnership or other equity or legal or beneficial interest of Lessee are transferred, so long as the tangible net worth of the surviving or successor entity following such transaction is at least as much as the tangible net worth of Lessee immediately preceding the transaction or at the Commencement Date, whichever is lesser.  “Control” shall mean ownership of fifty-one percent (51%) or more of the voting securities or rights of the controlled entity.

 

23.3                        Notice Requirements.  All notices shall be sent to the following addresses:

 

	
If to Lessor:
    	
 
    	
DF/Hilltop, LLC
    
	
 
    	
 
    	
2530 East 11th Street
    
	
 
    	
 
    	
Oakland, California 94601
    
	
 
    	
 
    	
Attn: Mr. Jason Dreisbach
    
	
 
    	
 
    	
Facsimile No.: (510) 533-6600
    
	
 
    	
 
    	
 
    
	
with a copy to:
    	
 
    	
Allen Matkins Leck Gamble Mallory & Natsis   LLP
    
	
 
    	
 
    	
1901 Avenue of the Stars, Suite 1800
    
	
 
    	
 
    	
Los Angeles, California 90067
    
	
 
    	
 
    	
Attn: Alain M. R’bibo, Esq.
    
	
 
    	
 
    	
Facsimile No.: (310) 788-2410
    
	
 
    	
 
    	
 
    
	
If to Lessee:
    	
 
    	
Blue Apron, Inc.
    
	
 
    	
 
    	
5 Crosby Street, 3rd Floor
    
	
 
    	
 
    	
New York, New York 10013
    
	
 
    	
 
    	
Attn: Mr. Matt Salzberg
    
	
 
    	
 
    	
Facsimile No.:
    

 

51.                               Financial Statements and Other Information.  Lessee shall provide Lessor and any of Lessor’s mortgagee(s) or lender(s) audited or reviewed financial statements compiled by a

 

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certified public accountant to the extent requested by Lessor or Lessor’s lender or prospective  lender in connection with any financing transaction of Lessor.  Lessee shall also deliver such additional financial information as may reasonably be requested by Lessor’s mortgagee(s) or lender(s), provided the same is of a type normally maintained by Lessee or can be obtained without undue cost or burden on Lessee’s personnel.

 

52.                               DTPA Waiver.  Lessee certifies that it is not a “consumer” within the meaning of the Texas Deceptive Trade Practices - Consumer Protection Act, Subchapter E of Chapter 17, Section 17.41, et seq., of the Texas Business and Commerce Code, as amended, or any similar state statute relating to the protection of consumers (“DTPA”).  LESSEE ACKNOWLEDGES THAT IF ANY DTPA IS APPLICABLE TO THIS LEASE, THEN LESSEE, AFTER CONSULTATION WITH ATTORNEYS OF ITS OWN SELECTION, HEREBY VOLUNTARILY WAIVES AND RELEASES ALL OF ITS RIGHTS AND REMEDIES UNDER ANY DTPA THAT MAY BE APPLICABLE TO THE TRANSACTIONS CONTEMPLATED BY THIS LEASE.

 

53.                               Excluded Expenses.  Notwithstanding anything in the Lease to the contrary, in no event shall Lessor have the right to seek reimbursement from Lessee for the cost of any of the following:  (a) ground rents and loan prepayment penalties, premiums, fees or other charges in connection therewith and other non-operating debts of Lessor; (b) omitted or additional real estate taxes assessed during the Term but relating to a period prior to the Commencement Date or after the Expiration Date; (c) expenses which are reimbursed by insurance or warranties; (d) the amount of any refundable deposits; (e) Federal, State or local income, revenue or excise taxes imposed on Lessor or any inheritance, estate, succession, transfer, gift, capital stock, franchise, or excess profit taxes; (f) annual management fees in excess of 1.5% of the annual Base Rent then in effect under the Lease; (g) costs of repairs, replacements and alterations for which and to the extent that Lessor is actually reimbursed therefor; (h) expenses arising from the gross negligence or willful misconduct of Lessor or its agents, servants or employees or from Lessor’s breach of its obligations under this Lease and that would not have otherwise been incurred but for such gross negligence, willful misconduct or breach; (i) costs and expenses incurred by Lessor to remove, enclose or encapsulate hazardous substances existing in the Premises as of the Commencement Date in violation of any laws, rules and regulations then in effect; (j) fines, penalties, interest or legal fees incurred as a result of Lessor’s late payment of taxes, utility bills or any other costs of the Premises; or (k) any capital improvements performed by Lessor in connection with the Building structure, roof or foundation.

 

54.                               Fire-Life Safety System.  Notwithstanding anything in the Lease to the contrary, the repair and maintenance of the fire-life safety system for the Building shall be the responsibility of Lessor, provided that Lessee shall reimburse Lessor for any costs incurred by Lessor in connection with such repair and maintenance within thirty (30) days following Lessor’s written request therefor.

 

55.                               Hazardous Substances.  Notwithstanding anything in the Lease to the contrary, Lessor shall be responsible, at Lessor’s sole cost and expense, for the removal and remediation of any Hazardous Substances existing at the Premises as of the Commencement Date to the extent that the presence of such Hazardous Substances violates Applicable Requirements or interferes with Lessee’s use of the Premises, provided that Lessee shall be solely responsible for

 

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any  remediation of Hazardous Substances which is necessitated or triggered by any improvements or alterations performed by Lessee in the Premises, or Lessee’s particular use of the Premises.

 

56.                               Removal of Personal Property.  Notwithstanding anything in the Lease to the contrary, Lessee acknowledges and agrees that upon the Commencement Date, the Premises are being delivered with certain existing racking and refrigeration equipment (collectively, the “Existing FF&E”) and Lessee shall not remove, dispose of or replace such Existing FF&E without prior written notice to Lessor.  In the event that Lessee elects to dispose of any portion of the Existing FF&E which constitutes racking equipment, then Lessor shall have the right to recover such racking equipment and shall cause such racking equipment to be stored and/or delivered away from the Premises at Lessor’s sole cost and expense.  In the event that Lessee elects to dispose of any portion of the Existing FF&E which constitutes refrigeration equipment, then upon the expiration or earlier termination of the Lease, Lessee shall replace such refrigeration equipment with refrigeration equipment comparable to the Existing FF&E refrigeration equipment (in the condition of such equipment as of the Commencement Date) to Lessor’s reasonable satisfaction.  Subject to the foregoing, upon the expiration or earlier termination of the Lease, Lessee shall have the right to remove any furniture, fixtures or equipment installed by Lessee in the Premises which were paid for by Lessee.

 

57.                               Compliance with Applicable Requirements.  Notwithstanding anything in the Lease to the contrary, to the extent that any improvements are required at the Premises to cause the Premises to comply with Applicable Requirements, then Lessor shall be responsible, at Lessor’s sole cost and expense, for making any such improvements to the extent such improvements (i) pertain to any Applicable Requirement which is in effect as of the Commencement Date, (ii) are required in the absence of any improvements or alterations performed by Lessee at the Premises and are not triggered by any Lessee improvements or alterations, (iii) are not required to correct any “grandfathered” or similar legal non-conforming portions of the Premises, and (iv) are then being required by any applicable governmental authority, or are required in order for Lessee to use the Premises as intended for its business operations.  Except for Lessor’s express obligations hereinabove, Lessee shall otherwise be responsible for causing the Premises to comply with Applicable Requirements.

 

58.                               Capital Improvements.  Notwithstanding anything in the Lease to the contrary, and except for any capital improvements pertaining to the Building structure, roof or foundation for which Lessee shall have no obligation, to the extent that during the Term, any capital improvements are required at the Premises (including the replacement of base building systems such HVAC, electrical and plumbing), such improvements shall be coordinated with Lessor (including Lessor’s prior written approval of plans and specifications) and made by Lessee at Lessee’s sole cost and expense, provided that Lessor shall deliver payment to Lessee, within 30 days following receipt of written request therefor together with reasonable supporting documentation, in an amount equal to the percentage of the cost of such item which is equal to the percentage of the useful life of such item (as determined by GAAP) which occurs following the Expiration Date.  The terms of this Paragraph 58 shall not apply with respect to Lessee’s initial improvements at the Premises for which Lessor shall have no responsibility.

 

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59.                               Efforts to Relet Upon Termination of Lease.  Notwithstanding anything in the Lease to the contrary, in the event of the termination of the Lease as a result of any Breach by Lessee, and provided that Lessee has vacated the Premises, Lessor shall use commercially reasonable efforts to relet the Premises by listing the Premises with a reputable real estate broker for lease at market rates.

 

60.                               Property Management Fee.  Notwithstanding anything in the Lease to the contrary, Lessor shall have the right to charge Lessee a monthly property management fee in an amount equal to 1.5% of the monthly Base Rent then in effect under the Lease, and which amount shall be paid within 30 days of Lessor’s written request therefor or paid together with any other pass through expenses billed by Lessor to Lessee in accordance with the terms of the Lease.

 

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IN WITNESS WHEREOF, Lessor and Lessee have executed this Addendum concurrently with the Lease of even date herewith.

 

	
 
    	
“LESSOR”
    	
DF/HILLTOP, LLC,
    
	
 
    	
 
    	
a California limited   liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Jason W. Dreisbach
    
	
 
    	
 
    	
Name:
    	
Jason W. Dreisbach
    
	
 
    	
 
    	
Its: 
    	
Attorney in Fact   Dreisbach Family Trust
    
	
 
    	
 
    	
 
    
	
 
    	
“LESSEE”
    	
BLUE APRON, INC.
    
	
 
    	
 
    	
a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By: 
    	
/s/ Matt Salzberg
    
	
 
    	
 
    	
Name:
    	
Matt Salzberg
    
	
 
    	
 
    	
Its:
    	
CEO
    

 

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