Document:

Exhibit 10.5

 

OFFICE LEASE

 

This Office Lease (this “Lease”), dated as of the date set forth in Section 1.1, is made by and between VII Pac Shores Investors, L.L.C., a Delaware limited liability company (“Landlord”), and ROCKET FUEL INC., a Delaware corporation (“Tenant”). The following exhibits are incorporated herein and made a part hereof: Exhibits A-1, A-2 and A-3 (Outlines of Suites 100, 300 and 400); Exhibit B (Work Letter); Exhibit B-1 (Proposed Initial Alterations); Exhibit C (Form of Confirmation Letter); Exhibit D (Rules and Regulations); Exhibit E (Judicial Reference); Exhibit F (Additional Provisions); Exhibit F-1 (Form of Letter of Credit); Exhibit F-2 (Outline of Potential Offering Space); Exhibits G, G-1 and G-2 (Notice to Tenants and Transferees of Current or Future Uses of Adjacent Port Property); Exhibit H (Notice to Pacific Shores Tenants, Lessees, Successors, Assigns And Transferees Regarding Current or Future Uses of Adjacent RMC Lonestar and Port of Redwood City Property); and Exhibit I (Certain HVAC Repairs).

 

1                                         BASIC LEASE INFORMATION

 

	
1.1
    	
Date:   
    	
 
    	
August 7, 2013
    
	
 
    	
 
    	
 
    	
 
    
	
1.2
    	
Premises.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.2.1
    	
“Building”:
    	
1900   Seaport Boulevard, Redwood City, CA 94063, commonly known as Pacific Shores   Center — Building Number 3.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.2.2
    	
“Premises”:
    	
Subject   to Section 2.1.1. 105,775 rentable square feet of space   consisting of (i) 34,966 rentable square feet of space located on the 1st floor of the Building and commonly known as   Suite 100, the outline and location of which is set forth in Exhibit A-1; (ii) 35,405   rentable square feet of space located on the 3rd floor of the Building and commonly known as   Suite 300, the outline and location of which is set forth in Exhibit A-2; and   (iii) the 35,405 rentable square feet of space located on the 4th floor of the Building and commonly known as   Suite 400, the outline and location of which is set forth in Exhibit A-3. If the Premises   include any floor in its entirety, all corridors and restroom facilities   located on such floor shall be considered part of the Premises. In addition,   if the Premises comprise 100% of the rentable square footage of the Building,   then the portion of the Building located on the first (1st) floor of the Building   and designated on Exhibit A-1   as “Common Area” shall be considered part of the Premises.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.2.3
    	
“Property”:
    	
The   Building, the parcel(s) of land upon which it is located, and, at   Landlord’s discretion, any parking facilities and other improvements serving   the Building and the parcel(s) of land upon which such parking facilities   and other improvements are located.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.2.4
    	
“Project”:
    	
The   Property or, at Landlord’s discretion, any project containing the Property   and any other land, buildings or other improvements (including, without   limitation, that land, those buildings and those improvements located at   1100, 1200, 1300, 1400, 1500, 1600, l700, 1800, 1900, 2000 and 2100 Seaport   Boulevard, Redwood City, CA 94063).
    
	
 
    	
 
    	
 
    	
 
    
	
1.3
    	
Term
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.3.1
    	
Term:   
    	
The   term of this Lease (the “Term”) shall   commence on the Commencement Date and end on the Expiration Date (or any   earlier date on which this Lease is terminated as provided herein).
    

 

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1.3.2
    	
“Commencement   Date”:
    	
The   earlier of (i) the first date on which Tenant conducts business in the   Premises, or (ii) the Outside Date (defined below). As used herein, “Outside Date” means January 1, 2014; provided,   however, that (a) if Landlord fails to cause the Delivery Date (defined   below) to occur by the Required Delivery Date (defined below), then, as   Tenant’s sole remedy for such failure, the Outside Date shall be postponed by   one (1) day for each day by which the Delivery Date follows the Required   Delivery Date, and (b) the Outside Date shall be subject to Section 2.5   of Exhibit B. As used herein, “Delivery Date” means the date on which Landlord tenders   possession of the Premises to Tenant free from occupancy by any party. As   used herein, “Required Delivery Date” means   the date occurring one (1) business day after the mutual execution and   delivery hereof. During the period beginning on the Delivery Date and ending   on the date immediately preceding the Commencement Date, all provisions of   this Lease shall apply (and, without limiting the foregoing, Tenant shall   have access to the Premises and the right to perform Alterations (defined in Section 7.2)   in accordance with the terms hereof) as if the Commencement Date had occurred;   provided, however, that (a) during such period Tenant shall not be   required to pay Monthly Rent (defined in Section 3); and   (b) during the period beginning on the Delivery Date and ending on the   earlier of (i) the date immediately preceding the Commencement Date, or   (ii) August 31, 2013. Tenant shall not be required to pay for   electricity consumed in the Premises.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.3.3
    	
“Expiration   Date”:
    	
The   last day of the 72nd full calendar month commencing on or after   the Commencement Date.
    
	
 
    	
 
    	
 
    	
 
    
	
1.4
    	
“Base   Rent”:
    	
 
    

 

	
Period During
   Term
    	
 
    	
Monthly Base
   Rent Per
   Rentable Square
   Foot (rounded to
   the nearest 100th
   of a dollar)
    	
 
    	
Monthly
   Installment
   of Base Rent
    	
 
    
	
Commencement Date through   last day of 12th full calendar month of Term
    	
 
    	
$
    	
3.25
    	
 
    	
$
    	
343,769.69
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
13th through 24th full calendar months of Term
    	
 
    	
$
    	
3.35
    	
 
    	
$
    	
354,082.78
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
25th through 36th full calendar months of Term
    	
 
    	
$
    	
3.45
    	
 
    	
$
    	
364,705.26
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
37th through 48th full calendar months of Term
    	
 
    	
$
    	
3.55
    	
 
    	
$
    	
375,646.42
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
49th through 60th full calendar months of Term
    	
 
    	
$
    	
3.66
    	
 
    	
$
    	
386,915.81
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
61st full calendar month of Term through   Expiration Date
    	
 
    	
$
    	
3.77
    	
 
    	
$
    	
598,523.29
    	
 
    

 

Notwithstanding the foregoing, Tenant shall be entitled to an abatement of Base Rent, in the amount of $343,769.69 per month, for the first 10 full calendar months of the Term.

 

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1.5
    	
“Additional   Fees”:
    	
Collectively,   the Management Fee (defined below) and the Athletic Facility Fee (defined   below). The term “Management Fee”   shall mean a monthly fee equal to 3% of the monthly installment of Base Rent   payable hereunder for such month (as determined without taking into   consideration any abatement of Base Rent for such month). The term “Athletic Facility Fee” shall mean a monthly fee equal to   Tenant’s Share (defined below) of the product of (A) a fraction (the   numerator of which is the Building Rentable Square Footage (defined below)   and the denominator of which is 1,672,073 rentable square feet) multiplied by   (B) the product of (i) the monthly Base Rent per rentable square foot   payable hereunder for such month (as determined without taking into consideration   any abatement of Base Rent for such month) multiplied by (ii) 38,000   rentable square feet.
    
	
 
    	
 
    	
 
    
	
1.6
    	
“Tenant’s   Share”:
    	
74.9223%   (representing the percentage obtained by dividing the rentable square footage   of the Premises by 141,180 rentable square feet (i.e., the total rentable   square footage of the Building (the “Building Rentable Square   Footage”)).
    
	
 
    	
 
    	
 
    
	
1.7
    	
“Permitted   Use”:
    	
General   office use or any other use that: (a) is limited to research and   development; (b) is legally permitted; (c) is not a retail use;   (d) does not generate (i) foot traffic exceeding that normally   associated with general office use, (ii) any noise or odor detectable   outside the Premises that is not normally associated with general office use,   (iii) any burden on any Building system exceeding that normally   associated with general office use, or (iv) any risk to the Building or   to the safety or health of its occupants that is not normally associated with   general office use; (e) does not adversely affect Landlord’s or Tenant’s   insurance coverage; (f) does not include a wet lab; (g) does not   involve the introduction, use, Storage or disposal of any type or quantity of   hazardous material not customarily associated with general office use; and   (h) in all other respects is consistent with a first-class   office/R&D building.
    
	
 
    	
 
    	
 
    
	
1.8.
    	
“Security   Deposit”:
    	
$0.00.
    
	
 
    	
 
    	
 
    
	
 
    	
Prepaid   Base Rent:
    	
$343,769.69,   as more particularly described in Section 3.
    
	
 
    	
 
    	
 
    
	
 
    	
Prepaid   Additional Rent:
    	
$142,796.64,   as more particularly described in Section 3.
    
	
 
    	
 
    	
 
    
	
1.9
    	
Parking:
    	
The   Applicable Number (defined below) of unreserved parking spaces, at the rate   of $0.00 per space per month. As used in this Section 1.9, “Applicable Number” means, at any time, the lowest whole   number that equals or exceeds the number obtained by multiplying (a) the   quotient obtained by dividing (i) three (3) by (ii) 1,000   rentable square feet, by (b) the rentable square footage of the   Premises.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Zero   (0) reserved parking space(s), at the rate of $N/A per space per month.
    
	
 
    	
 
    	
 
    
	
1.10
    	
Address   of Tenant:
    	
Before   the Commencement Date:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Rocket   Fuel Inc.
    
	
 
    	
 
    	
350   Marine Parkway
    
	
 
    	
 
    	
Redwood   City, CA 94065
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
From   and after the Commencement Date: the Premises.
    

 

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1.11
    	
Address   of Landlord:
    	
Equity   Office 
   2655 Campus Drive, Suite 100
   San Mateo, California 94403 
   Attn: Building manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
with   copies to:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Equity   Office 
   2655 Campus Drive, Suite 100
   San Mateo, California 94403 
   Attn: Managing Counsel
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Equity   Office 
   Two North Riverside Plaza 
   Suite 2100 Chicago, IL 60606 
   Attn: Lease Administration
    
	
 
    	
 
    	
 
    
	
1.12
    	
Broker(s):
    	
Cornish &   Carey Commercial, a California corporation (“Tenant’s   Broker”), representing Tenant, and Cassidy Turley Northern   California, Inc., a California corporation (“Landlord’s   Broker”), representing Landlord.
    
	
 
    	
 
    	
 
    
	
1.13   
    	
Building   HVAC Hours and Holidays:
    	
“Building HVAC   Hours” means 7:00 a.m. to 6:00 p.m., Monday   through Friday, excluding the day of observation of New Year’s Day,   Presidents Day, Memorial Day, Independence Day, Labor Day, Thanksgiving   Day, Christmas Day, and, at Landlord’s discretion, any other locally or   nationally recognized holiday that is observed by other buildings comparable   to and in the vicinity of the Building (collectively, “Holidays”).
    
	
 
    	
 
    	
 
    
	
1.14
    	
 “Transfer Radius”:
    	
None.
    
	
 
    	
 
    	
 
    
	
1.15
    	
“Initial Alterations”:
    	
Defined   in Exhibit B.
    
	
 
    	
 
    	
 
    
	
1.16
    	
“Guarantor”:
    	
None.
    
	
 
    	
 
    	
 
    
	
1.17   
    	
Letter   of Credit:
    	
Concurrently   with its execution and delivery of this Lease, Tenant shall deliver to   Landlord a letter of credit in the amount of One Million Six Hundred Thousand   Dollars ($1,600,000.00) as more particularly described in Section 3   of Exhibit F.
    

 

2                                       PREMISES AND COMMON AREAS.

 

2.1                               The Premises.

 

2.1.1                     Subject to the terms hereof, Landlord hereby leases the Premises in Tenant and Tenant hereby leases the Premises from Landlord. Landlord and Tenant acknowledge that the rentable square footage of the Premises is as set forth in Section 1.2.2 and the rentable square footage of the Building is as set forth in Section 1.6. At any time Landlord may deliver to Tenant a notice substantially in the form of Exhibit C, as a confirmation of the information set forth therein. Tenant shall execute and return (or, by notice to Landlord, reasonably object to) such notice within 10 days after receiving it, and if Tenant fails to do so, Tenant shall be deemed to have executed and returned it without exception.

 

2.1.2                     Except as expressly provided herein (including Sections 6.3 and 7), the Premises are accepted by Tenant in their configuration and condition existing on the date hereof, without any obligation of Landlord to perform or pay for any alterations to the Premises, and without any representation or warranty regarding the configuration or condition of the Premises, the Building or the Project or their suitability for Tenant’s business. Landlord shall deliver the Premises to Tenant with the floors cleared of trash and swept and free from occupancy by any party.

 

2.2                               Common Areas. Tenant may use, in common with Landlord and third parties and subject to the Rules and Regulations (defined in Exhibit D), the access roads, driveways and parking areas that are located on the Property and serve the Premises on the date hereof, together with any other portions of the

 

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Property that are designated from time to time by Landlord for such use (the “Common Areas”). During any period in which the Premises comprise 100% of the rentable square footage of the Building, Landlord shall not designate any portion of the Building for common use by Tenant and third parties.

 

3                 RENT. Tenant shall pay all Base Rent and Additional Rent (defined below) (collectively, “Rent”) to Landlord or Landlord’s agent, without prior notice or demand or any setoff or deduction, at the place Landlord may designate from time to time, in money of the United States of America that, at the time of payment, is legal tender for the payment of all obligations. As used herein, “Additional Rent” means all amounts, other than Base Rent, that Tenant is required to pay Landlord hereunder. Monthly payments of Base Rent and monthly payments of Additional Rent for Expenses (defined in Section 4.2.2). Taxes (defined in Section 4.2.3) and Additional Fees (collectively, “Monthly Rent”) shall be paid in advance on or before the first day of each calendar month during the Term; provided, however, that the installment of Base Rent for the first full calendar month for which such Base Rent is payable hereunder and the installment of Additional Rent for Expenses and Taxes and Additional Fees for the first full calendar month for which such Additional Rent is payable hereunder shall be paid upon Tenant’s execution and delivery hereof, Except as otherwise provided herein, all other items of Additional Rent shall be paid within 30 days after Landlord’s request for payment. Rent for any partial calendar month shall be prorated based on the actual number of days in such month. Without limiting Landlord’s other rights or remedies, (a) if any installment of Rent is not received by Landlord or its designee within five (5) business days after its due date. Tenant shall pay Landlord a late charge equal to 5% of the overdue amount (provided, however, that such late charge shall not apply to any such delinquency unless either (i) such delinquency is not cured within five (5) business days after notice from Landlord, or (ii) Tenant previously received notice from Landlord of a delinquency that occurred earlier in the same calendar year); and (b) any Rent that is not paid within 10 days after its due date shall hear interest, from its due date until paid, at the lesser of 12% per annum or the highest rate permitted by Law (defined in Section 5). Tenant’s covenant to pay Rent is independent of every other covenant herein.

 

4                                         EXPENSES AND TAXES.

 

4.1                               General Terms. In addition to Base Rent, Tenant shall pay, in accordance with Section 4.4, for each Expense Year (defined in Section 4.2.1), an amount equal to the sum of (a) Tenant’s Share of Expenses for such Expense Year, plus (b) Tenant’s Share of Taxes for such Expense Year. Tenant’s Share of Expenses and Tenant’s Share of Taxes for any partial Expanse Year shall be prorated based on the number of days in such Expense Year.

 

4.2                               Definitions. As used herein, the following terms have the following meaning:

 

4.2.1                     “Expense Year” means each calendar year in which any portion of the Term occurs.

 

4.2.2                     “Expenses” means fill expenses, costs and amounts that Landlord pays or incurs during any Expense Year because of or in connection with the ownership, management, maintenance, security, repair, replacement, restoration or operation of the Property. Landlord shall act in a reasonable manner in incurring Expenses. Expenses shall include (i) the cost of supplying all utilities, the cost of operating, repairing, maintaining and renovating the utility, telephone, mechanical, sanitary, storm-drainage, and elevator systems, and the cost of maintenance and service contracts in connection therewith; (ii) the cost of licenses, certificates, permits and inspections, the cost of contesting any Laws that may affect Expenses, and the costs of complying with any transportation-management program required under any Law; (iii) the cost of all commercially reasonable insurance premiums and deductibles; (iv) the cost of landscaping and relamping; (v) the cost of parking-area operation, repair, restoration, and maintenance; (vi) fees and costs, including consulting fees, legal fees and accounting fees, of all contractors and consultants in connection with the management, operation, maintenance and repair of the Property; (vii) payments under any equipment-rental agreements and the fair rental value of any management office space; (viii) wages, salaries and other compensation, expenses and benefits, including taxes levied thereon, of all persons to the extent engaged in the operation, maintenance and security of the Property, and costs of training, uniforms, and employee enrichment for such persons; (ix) the costs of operation, repair, maintenance and replacement of all systems and equipment (and components thereof) of the Property; (x) the cost of janitorial, alarm, security and other services, replacement of wall and floor coverings, ceiling files and fixtures in Common Areas, maintenance and replacement of curbs and walkways, repair to roofs and re-roofing; (xi) rental or acquisition costs of supplies, tools, equipment, materials and personal property used in the maintenance, operation and repair of the Property; (xii) the cost of capital improvements or any other items that are (A) intended to effect economics in the operation or maintenance of the Property, reduce current or future Expenses, enhance the safety or security of the Property or its occupants, or enhance the environmental sustainability of the Property’s operations, (B) replacements or modifications of the nonstructural portions of the Base Building (defined in Section 7) or Common Areas that are required to keep the Base Building or Common Areas in good condition, or (C) required under any Law; (xiii) the cost of tenant-relation programs reasonably established by Landlord; and (xiv) payments or costs under any existing or future reciprocal easement agreement, transportation management agreement, landscape maintenance agreement, cost-sharing agreement or other covenant, condition, restriction or similar instrument affecting the Property (including

 

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any such agreement relating to the Athletic Facility).

 

Notwithstanding the foregoing, Expenses shall not include;

 

(a) capital expenditures not described in clauses (xi) or (xii) above (in addition, any capital expenditure shall be amortized (including actual or imputed interest on the amortized cost) over the useful life of the item purchased through such capital expenditure, as reasonably determined by Landlord in accordance with generally accepted accounting principles, consistently applied);

 

(b) depreciation;

 

(c) payments of mortgage or other non-operating debts of Landlord;

 

(d) costs of repairs to the extent Landlord is reimbursed by insurance or condemnation proceeds;

 

(e) except as provided in clause (xiii) above, costs of leasing space in the Project, including brokerage commissions, lease concessions, rental abatements and construction allowances granted to specific tenants, and costs of constructing (as distinguished from repairing) tenant improvements for specific tenants;

 

(f) costs of selling, financing or refinancing the Building;

 

(g) fines, penalties or interest resulting from late payment of Taxes or Expenses;

 

(h) organizational expenses of creating or operating the entity that constitutes Landlord;

 

(i) damages paid to Tenant hereunder or to other tenants of the Building under their respective leases;

 

(j) that portion of any management fee paid to a manager of the Building which is based upon a percentage of the revenues or income generated from the Building (as distinguished from any expenses of such manager which are reimbursed by Landlord);

 

(k) reserves;

 

(l) costs of cleaning up Hazardous Materials (defined below), except for routine cleanup performed as part of the ordinary operation and maintenance of the Property, and costs resulting from the presence of Hazardous Materials at the Property in amounts or conditions that violate applicable Laws (as used herein. “Hazardous Materials” means any material now or hereafter defined or regulated by any Law or governmental authority as radioactive, toxic, hazardous, or waste, or a chemical known to the state of California to cause cancer or reproductive toxicity, including (1) petroleum and any of its constituents or byproducts, (2) radioactive materials, (3) asbestos in any form or condition, and (4) materials regulated by any of the following, as amended from time to time, and any rules promulgated thereunder: the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §§9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. §§6901, et seq.; the Toxic Substances Control Act, 15 U.S.C. §§2601, et seq.; the Clean Water Act, 33 U.S.C. §§1251 et seq.; the Clean Air Act, 42 U.S.C. §§7401 et seq.; The California Health and Safety Code; The California Water Code; The California Labor Code; The California Public Resources Code; and The California Fish and Game Code.);

 

(m) insurance deductibles other than (a) earthquake insurance deductibles up to the amount (the “Annual Limit”) of 0.5% of the total insurable value of the Property per occurrence (provided, however, that, notwithstanding any contrary provision hereof, if, for any occurrence, the earthquake insurance deductible exceeds the Annual Limit, then, after such deductible is included (up to the Annual Limit) in Expenses for the applicable Expense Year, such excess may be included (up to the Annual Limit) in Expenses for the immediately succeeding Expense Year, and any portion of such excess that is not so included in Expenses for such immediately succeeding Expense Year may be included (up to the Annual Limit) in Expenses for the next succeeding Expense Year, and so on with respect to each succeeding Expense Year; provided further, however, that in no event shall the portions of such deductible that are included in Expenses for any one or more Expense Years exceed, in the aggregate, 5.0% of the total insurable value of the Property), and (b) any other insurance deductibles up to $50,000.00 per occurrence;

 

(n) any cost of repairing damage resulting from a Casualty (defined in Section 11), other than (i) any insurance deductible (subject to clause (m) above), and (ii) if such damage is not covered by Landlord’s insurance (as determined without regard to any deductible), any portion of such cost that does not exceed the maximum amount of the insurance deductible for such damage that would not have been excluded from Expenses under clause (m) above if such damage had been covered by earthquake or terrorism insurance or any other type of insurance generally maintained by owners of Comparable

 

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Buildings;

 

(o) costs of services of benefits made available to other tenants of the Building but not to Tenant;

 

(p) any cost of repairing damage resulting from a Taking (defined in Section 13);

 

(q) co-insurance payments;

 

(r) fines or penalties resulting from any violations of Law, negligence or willful misconduct of Landlord or its employees, agents or contractors.

 

(s) amounts (other than management fees) paid to Landlord’s affiliates for services, but only to the extent such amounts exceed the prices charged for such services by unaffiliated third parties having similar skill and experience;

 

(t) any expense for which Landlord has received actual reimbursement (other than from a tenant of the Building pursuant to its lease);

 

(u) costs of curing defects in design or original construction of the property;

 

(v) any management fee exceeding the Management Fee (it being agreed that, as used herein, “management fee” does not include any costs — such as salaries, hourly labor costs, and telephone bills — that would customarily be reimbursed to the manager under a third-party management agreement); or

 

(w) costs of complying with any transportation-management program not existing on the date of mutual execution and delivery hereof, except to the extent such program is required by Law (but excluding any Law imposed as a result of any new construction, change in use, or similar voluntary act by Landlord or any tenant of Landlord at the Project occurring after the date of mutual execution and delivery hereof).

 

If, during any portion of any Expense Year, the Building is not 100% occupied (or a service provided by Landlord to Tenant is not provided by Landlord to a tenant that provides such service itself, or any tenant of the Building is entitled to free rent, rent abatement or this like), Expenses for such Expense Year shall be determined as if the Building had been 100% occupied (and all services provided by Landlord to Tenant had been provided by Landlord to all tenants, and no tenant of the Building had been entitled to free rent, rent abatement or the like) during such portion of such Expense Year.

 

4.2.3                     “Taxes” means all federal, state, county or local governmental or municipal taxes, fees, charges, assessments, levies, licenses or other impositions, whether general, special, ordinary or extraordinary, that are paid or accrued during any Expense Year (without regard to any different fiscal year used by such governmental or municipal authority) because of or in connection with the ownership, leasing or operation of the Property, including, without limitation, those imposed by any improvement district or any community facilities district (including with respect to a district established for purposes of constructing the Seaport Boulevard improvements and other improvements as required in the development agreement related to the Project or by the City of Redwood City). Taxes shall include (a) real estate taxes; (b) general and special assessments; (c) transit taxes; (d) leasehold taxes; (e) personal property taxes imposed upon the fixtures, machinery, equipment, apparatus, systems, appurtenances, furniture and other personal property used in connection with the Property; (f) any tax on the rent, right to rent or other income from any portion of the Property or as against the business of leasing any portion of the Property; and (g) any assessment, tax, fee, levy or charge imposed by any governmental agency, or by any non-governmental entity pursuant to any private cost-sharing agreement, in order to fund the provision or enhancement of any fire-protection, street-, sidewalk- or road-maintenance, refuse-removal or other service that is (or, before the enactment of Proposition 13, was) normally provided by governmental agencies to property owners or occupants without charge (other than through real property taxes). Any costs and expenses (including reasonable attorneys’ and consultants’ fees) incurred in attempting to protest, reduce or minimize Taxes shall be included in Taxes for the year in which they are incurred. Notwithstanding any contrary provision hereof, Taxes shall be determined without regard to any “green building” credit and shall exclude (i) all excess profits taxes, franchise taxes, gift taxes, transfer taxes, capital stock taxes, inheritance and succession taxes, estate taxes, federal and state income taxes, and other taxes to the extent (x) applicable to Landlord’s general or net income (as opposed to rents, receipts or income attributable to operations at the property), or (y) measured solely by the square footage, rent, fees, services, tenant allowances or similar amounts, rights or obligations described or provided in or under any particular lease, license or similar agreement or transaction at the Building; (ii) any Expenses, and (iii) any items required to be paid or reimbursed by Tenant under Section 4.5. Notwithstanding the foregoing, if Landlord receives a “green building” credit against Taxes for any Expense Year as a result, in whole or in part, of Landlord’s incurrence of any amount(s) included in Expenses for any Expense Year(s) (collectively, the “Tenant-Paid Cost”), then, to the extent such credit is fairly attributable to the Tenant-Paid Cost, Taxes for such Expense Year shall be reduced by the lesser of (x) the amount of such credit, or (y) the Tenant-Paid Cost. If any assessment included in Taxes can be

 

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paid by Landlord in installments, such assessment shall not be included in Taxes in any calendar year in an amount exceeding that which would be included in Taxes in such calendar year if such assessment were paid in the maximum number of installments permitted by Law.

 

4.3                       Allocation. Landlord, in its reasonable discretion, may equitably allocate Expenses among office, retail or other portions or occupants of the Property. If Landlord incurs Expenses or Taxes for the Property together with another property, Landlord, in its reasonable discretion, shall equitably allocate such shared amounts between the Property and such other property.

 

4.4                        Calculation and Payment of Expenses and Taxes.

 

4.4.1                    Statement of Actual Expenses and Taxes; Payment by Tenant. Landlord shall give to Tenant, after the end of each Expense Year, a statement (the “Statement”) setting forth the actual Expenses and Taxes for such Expense Year. If the amount paid by Tenant for such Expense Year pursuant to Section 4.4.2 is less or more than the sum of Tenant’s Share of the actual Expenses plus Tenant’s Share of the actual Taxes (as such amounts are set forth in such Statement), Tenant shall pay Landlord the amount of such underpayment, or receive a credit in the amount of such overpayment, with or against the Rent then or next due hereunder, provided, however, that if this Lease has expired or terminated and Tenant has vacated the Premises, Tenant  shall pay Landlord the amount of such underpayment, or Landlord shall pay Tenant the amount of such overpayment (less any Rent due), within 30 days after delivery of such Statement. Landlord shall use reasonable efforts to deliver the Statement on or before June 30 of the calendar year immediately following the Expense Year to which it applies. Any failure of Landlord to timely deliver the Statement for any Expense Year shall not diminish either party’s rights under this Section 4. Notwithstanding the foregoing, if (a) Landlord fails to furnish a Statement on or before October 31 of the calendar year following the Expense Year to which such Statement applies, (b) Tenant, after October 31 of such calendar year, provides Landlord with notice of such failure (which notice shall expressly include the text of this sentence), and (c) Landlord fails to furnish such Statement by the later of (i) December 31 of such calendar year, or (ii) the date occurring 30 days after Landlord’s receipt of such notice from Tenant, then Tenant shall not be required to pay Landlord any underpayment for such Expense Year, except as provided in Section 4.4.3. Except as provided in Section 4.4.3 and 4.6, the Statement shall be deemed to be final and binding upon both Landlord and Tenant.

 

4.4.2                    Statement of Estimated Expenses and Taxes. Landlord shall give to Tenant, for each Expense year, a statement (the “Estimate Statement”) setting forth Landlord’s reasonable estimates of the Expenses (the “Estimated Expenses”) and Taxes (the “Estimated Taxes”) for such Expense Year. Upon receiving an Estimate Statement, Tenant shall pay, with its next installment of Base Rent coming due at least 30 days after such receipt, an amount equal to the excess of (a) the amount obtained by multiplying (i) the sum of Tenant’s Share of the Estimated Expenses plus Tenant’s Share of the Estimated Taxes (as such amounts are set forth in such Estimate Statement), by (ii) a fraction, the numerator of which is the number of months that have elapsed in the applicable Expense Year (including the month of such payment) and the denominator of which is 12, over (b) any amount previously paid by Tenant for such Expense Year pursuant to this Section 4.4.2. Until Landlord delivers a new Estimate Statement (which Landlord may do at any time), Tenant shall pay monthly, with the monthly Base Rent installments, an amount equal to one-twelfth (1/12) of the sum of Tenant’s Share of the Estimated Expenses plus Tenant’s Share of the Estimated Taxes, as such amounts are set forth in the previous Estimate Statement. Any failure of Landlord to timely deliver any Estimate Statement shall not diminish Landlord’s rights to receive payments and revise any previous Estimate Statement under this Section 4.

 

4.4.3                    Retroactive Adjustment of Taxes. Notwithstanding any contrary provision hereof, if, after Landlord’s delivery of any Statement, an increase or decrease in Taxes occurs for the applicable Expense Year (whether by reason of reassessment, error, or otherwise), Taxes for such Expense Year shall be retroactively adjusted. If, as a result of such adjustment, it is determined that Tenant has under-or overpaid Tenant’s Share of such Taxes, Tenant shall pay Landlord the amount of such underpayment, or receive a credit in the amount of such overpayment, with or against the Rent then or next due hereunder; provided, however, that if this Lease has expired or terminated and Tenant has vacated the Premises, Tenant shall pay Landlord the amount of such underpayment, or Landlord shall pay Tenant the amount of such overpayment (less any Rent due), within 30 days after such adjustment is made.

 

4.5                     Charges for Which Tenant Is Directly Responsible. Tenant shall pay, 10 days before delinquency, any taxes levied against Tenant’s equipment, furniture, fixtures and other personal property located in or about the Premises. If any such taxes are levied against Landlord or its property (or if the assessed value of Landlord’s property is increased by the inclusion therein of a value placed upon such equipment, furniture, fixtures or other personal property of Tenant), Landlord may pay such taxes (or such increased assessment) regardless of their (or its) validity, in which event Tenant, upon demand, shall repay to Landlord the amount so paid. If, during any period in which the Premises comprise less than 100% of the rentable square footage of the Building, the Leasehold Improvements (defined in Section 7.1) are assessed for real property tax purposes at a valuation higher than the valuation at which tenant improvements conforming to Landlord’s “building standard” in other space in the Building are

 

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assessed, the Taxes levied against Landlord or the Property by reason of such excess assessed valuation shall be deemed taxes levied against Tenant’s personal property for purposes of this Section 4.5. For purposes of the preceding sentence. Landlord acknowledges that the Proposed Initial Alterations (defined in Section 2.2.2 of Exhibit B) conform to Landlord’s “building standard.” Notwithstanding any contrary provision hereof, Tenant shall pay 10 days before delinquency (or reimburse to Landlord upon demand, if the same is required by Law to be paid by Landlord); (i) any rent tax, sales tax, service tax, transfer tax, value added tax, use tax, business tax, gross income tax, gross receipts tax, or other tax, assessment, fee, levy or charge measured solely by the square footage, Rent, services, tenant allowances or similar amounts, rights or obligations described or provided in or under this Lease, and (ii)any taxes assessed upon the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of any portion of the Property.

 

4.6                     Books and Records. Within 60 days after receiving any Statement (the “Review Notice Period”), Tenant may give Landlord notice (“Review Notice”) stating that Tenant elects to review Landlord’s calculation of the Expenses and/or Taxes for the Expense Year to which such Statement applies and identifying with reasonable specificity the records of Landlord reasonably relating to such matters that Tenant desires to review. Within a reasonable time after receiving a timely Review Notice (and, at Landlord’s option, an executed confidentiality agreement as described below), Landlord shall deliver to Tenant, or make available for inspection at a location reasonably designated by Landlord, copies of such records. Within 60 days after such records are made available to Tenant (the “Objection Period”), Tenant may deliver to Landlord notice (an “Objection Notice”) stating with reasonable specificity any objections to the Statement, in which event Landlord and Tenant shall work together in good faith to resolve Tenant’s objections. Tenant may not deliver more than one Review Notice or more than one Objection Notice with respect to any Expense Year. If Tenant fails to give Landlord a Review Notice before the expiration of the Review Notice Period or fails to give Landlord an Objection Notice before the expiration of the Objection Period, Tenant shall be deemed to have approved the Statement. If Tenant retains an agent to review Landlord’s records, the agent must be with a CPA firm licensed to do business in the State of California and its fees shall not be contingent, in whole or in part, upon the outcome of the review. Tenant shall be responsible for all costs of such review. The records and any related information obtained from Landlord shall be treated as confidential, and as applicable only to the Premises, by Tenant, its auditors, consultants, and any other parties reviewing the same on behalf of Tenant (collectively, “Tenant’s Auditors”). Before making any records available for review, Landlord may require Tenant and Tenant’s Auditors to execute a reasonable confidentiality agreement, in which event Tenant shall cause the same to be executed and delivered to Landlord within 30 days after receiving it from Landlord, and if Tenant fails to do so, the Objection Period shall be reduced by one day for each day by which such execution and delivery follows the expiration of such 30-day period. Notwithstanding any contrary provision hereof, Tenant may not examine Landlord’s records or dispute any Statement if any Rent remains unpaid past its due date. If, for any Expense Year, Landlord and Tenant determine that the sum of Tenant’s Share of the actual Expenses plus Tenant’s Share of the actual Taxes is less or more than the amount reported, Tenant shall receive a credit in the amount of its overpayment against Rent then or next due hereunder; provided, however, that if this Lease has expired or terminated and Tenant has vacated the Premises, Landlord shall pay Tenant the amount of its overpayment (less any Rent due), or Tenant shall pay Landlord the amount of its underpayment, within 30 days after such determination.

 

5                           USE; COMPLIANCE WITH LAWS.

 

5.1                     Tenant’s Obligations. Tenant shall not (a) use the Premises for any purpose other than the Premises Use, or (b) do anything in or about the Premises that violates any of the Rules and Regulations, damages the reputation of the Project, interferes with, injures or unreasonably annoys other occupants of the Project, or constitutes a nuisance. Tenant, at its expense (expect as provided in Exhibit B), shall comply with all Laws relating to (i) the operation of its business at the Project, (ii) the use, condition, configuration or occupancy of the Premises, (iii) any Supplemental Systems (defined below) exclusively serving the Premises, or (iv) the portions of Base Building Systems (defined below) located in the Premises; provided, however, that nothing in this sentence shall be deemed to require Tenant to make (A) any change to any Common Area, the Building structure, or any Building system other than (1) any Supplemental System exclusively serving the Premises, and (2) the portions of Base Building Systems located in the Premises, or (B) any change to any portion of a Base Building System located in the Premises that is required by Law on the date of mutual execution and delivery hereof unless, in the case of this clause (iv)(B), such requirement is enforced as a result of a Tenant-Insured Improvement (defined in Section 10.2.2), the installation of a trade fixture, or a particular use (as distinguished from general office/R&D use) of the Premises. If, in order to comply with any such Law, Tenant must obtain or deliver any permit, certificate or other document evidencing such compliance. Tenant shall provide a copy of such document of Landlord promptly after obtaining or delivering it. Except as provided in Exhibit B, if a change to any Common Area, the Building structure, or any Building system (other than a Supplemental system exclusively serving the Premises or a portion of a Base Building System located in the Premises) becomes required under Law (or if any such requirement is enforced) as a result of any Tenant-Insured Improvement, the installation of any trade fixture, or any particular use of the Premises (as distinguished from general office/R&D use), then Tenant, upon demand, shall (x) at Landlord’s

 

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option, either make such change at Tenant’s cost or pay Landlord the cost of making such change, and (y) pay Landlord a coordination fee equal to 3% of the cost of such change. As used herein, “Law” means any existing or future law, ordinance, regulation or requirement of any governmental authority having jurisdiction over the Project or the parties. As used herein, “Supplemental System” means each of the following, in each case wherever located (whether inside or outside of the Premises or the Building) and whenever and by whomever installed: (i) any system that serves only a particular use (as distinguished from general office/R&D use) within the Building (such as the operation of a computer-server room, “clean room” or laboratory space), including any Unit (defined in Section 25.5) and any supplemental fire-suppression system, and (ii) any other Building system that would not customarily be considered part of the base building of a first-class multi-tenant office/R&D building, such as a kitchen (including any hot water heater, dishwasher, garbage disposal, insta-hot dispenser, or plumbing) or any similar facility. As used herein, “Base Building System” means any mechanical (including HVAC), electrical, plumbing or fire/life-safety system serving the Building, other than a Supplemental System.

 

5.2                     Landlord’s Obligations. Landlord, at its expense (subject to section 4), shall cause the Base Building (except for portions of Base Building Systems located in the Premises, other than any change described in clause (iv)(B) of the second sentence of Section 5.1, which change shall not be excluded from Landlord’s obligations under this sentence) and the Common Areas to comply with all Laws (including the Americans with Disabilities Act, as amended (the “ADA”)) to the extent that (a) such compliance is necessary for Tenant to use the Premises for general office/R&D use in a normal and customary manner and for Tenant’s employees and visitors to have reasonably safe access to and from the Premises, or (b) Landlord’s failure to cause such compliance would impose liability upon Tenant under Law; provided, however, that Landlord shall not be required to perform or pay for such compliance to the extent that (x) Tenant is required to perform or pay for such compliance under Section 5.1 or 7.3 or any other provision hereof, or (y) such compliance is required under any provision of the ADA other than Title III thereof. Notwithstanding the foregoing, Landlord may contest any alleged violation in good faith, including by applying for and obtaining a waiver or deferment of compliance, asserting any defense allowed by Law, and appealing any order or deferment of compliance, asserting any defense allowed by Law, and appealing any order or judgment to the extent permitted by Law; provided, however, that after exhausting any rights to contest or appeal, Landlord shall perform any work necessary to comply with any final order or judgment.

 

5.3                     Landlord’s Representation. Landlord represents and warrants to Tenant that, as of the date hereof, Landlord has not received written notice from any governmental agency, and Landlord does not otherwise have actual knowledge (without inquiry), that the existing configuration or condition of the Premises, the Building or the Property (including any Building system) violates the ADA or any other applicable Law.

 

6                           SERVICES.

 

6.1                     Standard Services. Landlord shall provide the following services on all days (unless otherwise stated below); (a) subject to limitations imposed by Law, customary heating, ventilation and air conditioning (“HVAC”) in season during Building HVAC Hours; (b) electricity supplied by the applicable public utility, stubbed to the Premises; (c) water supplied by the applicable public utility (i) for use in lavatories and any drinking facilities located in Common Areas within the Building, and (ii) stubbed to the Building core for use in any plumbing fixtures located in the Premises; (d) janitorial services to the Building (other than the Premises), except on weekends and Holidays; (e) elevator service (subject to scheduling by Landlord, and payment of Landlord’s standard usage fee, for any freight service); and (f) access to the Building for Tenant and its employees, 24 hours per day/7 days per week, subject to the terms hereof and such security or monitoring systems as Landlord may reasonably impose, including sign-in procedures and/or presentation of identification cards.

 

6.2                     Electricity Costs and Above-Standard Use. Electricity used by Tenant in the Premises shall, at Landlord’s option, be paid for by Tenant either: (a) through inclusion in Expenses (except as provided for excess usage, and unless the Premises comprise 100% of the rentable square footage of the Building, in which event this clause (a) shall not apply); (b) by a separate charge payable by Tenant to Landlord; or (c) by separate charge billed by the applicable utility company and payable directly by Tenant. If electricity used by Tenant in the Premises is paid for pursuant to clause (b) or (c) of the preceding sentence. Landlord shall be solely responsible for any costs of installing, operating and maintaining any equipment that is installed in order to measure such electricity. If (i) electricity used by Tenant in the Premises is paid for pursuant to clause (a) of the first sentence of this Section 6.2. (ii) the Premises comprise less than 100% of the rentable square footage of the Building; and (iii) Tenant’s consumption of electricity exceeds the rate Landlord reasonably deems to be standard for the Building, then Tenant shall pay Landlord, upon billing, the cost of such excess consumption, including any costs of installing (to the extant not already installed), operating and maintaining any equipment that is installed in order to supply or measure such excess electricity. The connected electrical load of Tenant’s incidental-use equipment shall not exceed the Building-standard electrical design load, and Tenant’s electrical usage shall not exceed the capacity of the feeders to the Project or the risers or wiring installation. If, during any period in which the Premises comprise less than 100% of the rentable square footage of the Building, Tenant’s consumption of water exceeds the rate Landlord reasonably deems to be standard for the

 

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Building, Tenant shall pay Landlord, upon billing, the cost of such excess consumption, including any costs of installing (to the extent not already installed), operating and maintaining any equipment that is installed in order to supply or measure such excess water. Landlord shall provide HVAC service outside Building HVAC Hours if Tenant gives Landlord such prior notice and pays Landlord such hourly cost as Landlord may require, provided, however, that (a) the minimum period of time for which Tenant may request HVAC service outside Building HVAC Hours is three (3) hours, and (b) Tenant shall not be required to pay any such hourly cost for HVAC service outside Building HVAC Hours if the Premises comprise 100% of the rentable square footage of the Building. The parties acknowledge that, as of the date hereof, Landlord’s charge for HVAC service outside Building HVAC Hours is $35.00 per hour, subject to change from time to time. Tenant shall not, without Landlord’s prior consent, use equipment that may affect the temperature maintained by the air conditioning system or consume above-Building-standard amounts of any water furnished for the Premises by Landlord pursuant to Section 6.1.

 

6.3                     Interruption. Subject to Section 11, any failure to furnish, delay in furnishing, or diminution in the quality or quantity of any Landlord service resulting from any application of Law, failure of equipment, performance of maintenance, repairs, improvements or alterations, utility interruption or event of Force Majeure (each, a “Service Interruption”) shall not render Landlord liable to Tenant, constitute a constructive eviction, or excuse Tenant from any obligation hereunder. Notwithstanding the foregoing, if all or a material portion of the Premises is made untenantable or inaccessible for more than the Applicable Number (defined below) of consecutive business days after notice from Tenant to Landlord by a Service Interruption that does not result from a Casualty, a Taking, or an Act of Tenant (defined in Section 10.1), then, as Tenant’s sole remedy (except as provided below in this Section 6.3). Monthly Rent shall abate for the period beginning on the day immediately following such Applicable Number of consecutive business days and ending on the day such Service Interruption ends (or, if later, for the period of equal length beginning on the first day on which Monthly Rent first becomes payable hereunder), but only in proportion to the percentage of the rentable square footage of the Premises made untenantable or inaccessible. As used in this Section 6.3. “Application Number” means (a) three (3) (unless the Service Interruption occurs on the Delivery Date, in which event the Applicable Number shall be zero (o)), if the Service Interruption results from any negligence, willful misconduct or breach of Section 7.1 of or by any Landlord Party (defined in Section 10.1), or (b) 45, if the Service Interruption does not result from any negligence, willful misconduct, or breach of Section 7.1 of or by any Landlord Party. Notwithstanding the foregoing, if (a) all or a material portion of the Premises is made untenantable or inaccessible for 30 consecutive days after notice from Tenant to Landlord by a Service Interruption that (i) does not result from a Casualty, a Taking, or an Act of Tenant, and (ii) can be corrected through Landlord’s reasonable efforts, and (b) Landlord is not diligently pursuing the correction of such Service Interruption, them nothing in this Section 6.3 shall diminish any remedy of constructive eviction Tenant may have based on such Service Interruption.

 

6.4                     Janitorial Service to Premises. Tenant at its expense, shall provide to the Premises all trash-disposal, janitorial, and customary cleaning service (other than exterior window washing), on a daily basis (except on weekends and Holidays) and in a manner customarily provided by owners of Comparable Buildings (defined in Section 25.10), together with all necessary interior pest control service, so that the Premises are kept in a reasonably neat, clean and pest-free condition. Without limiting the foregoing, trash, garbage and other waster shall be kept only in sanitary containers, and all containers and equipment for the storage or disposal of such material shall be kept in a clean and sanitary condition.

 

7                           REPAIRS AND ALTERATIONS.

 

7.1                     Repairs.

 

7.1.1                      Tenant’s Obligations. Subject to Sections 11 and 13. Tenant, at its expense, shall perform all maintenance and repairs (including replacements) to the Premises, and keep Premises in as good condition and repair as existed when Tenant took possession and as thereafter improved by Landlord and/or Tenant, except for reasonable wear and tear and repairs that are Landlord’s express responsibility hereunder. Tenant’s maintenance and repair obligations shall include (a) all leasehold improvements in the Premises, whenever and by whomever installed or paid for, including any Alterations (defined in Section 7.2), and any leasehold improvements installed pursuant to any prior lease, but excluding the Base Building (the “Leasehold Improvements”); (b) all Supplemental Systems exclusively serving the Premises; and (c) all Lines (defined in Section 23) and trade fixtures. In addition, during any period in which the Premises comprise 100% of the rentable square footage of the Building; (w) Tenant’s maintenance and repair obligations shall include all Base Building Systems; provided, however, that, as applied to Base Building Systems, the first sentence of this Section 7.1.1 shall be deemed to be amended by replacing the words “when Tenant took possession” with the words “when the Premises first comprised 100% of the rentable square footage of the Building”; (x) without limiting the foregoing, in the case of any Base Building System that is an elevator, a heating, ventilation and air-conditioning system, or a portion thereof (each, a “Designated System”). Tenant, subject to Section 11 and 13, and at its expense, shall (i) keep such Designated System in as good working order and condition as existed upon its installation (or, if later, on the date on which the Premises first comprised 100% of the reniable square footage of the Building), subject to normal wear and tear and repairs that are Landlord’s

 

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express responsibility hereunder (other than under Section 7.1.2.A); (ii) maintain in effect, with a contractor reasonably approved by Landlord, a contract for the maintenance and repair of such Designated System (which contract shall require the contractor, at least once every three (3) months, to (A) inspect such Designated System and provide to Tenant a report of any defective conditions, together with any recommendations for maintenance, repair or parts-replacement, all in accordance with the manufacturer’s recommendations, and (B) replace fillers, oil and lubricate machinery, replace parts, adjust drive belts, change oil and perform other preventive maintenance, including, as applicable, annual maintenance of duct work and interior unit drains, and annual caulking of sheet metal and re-caulking of jacks and vents); (iii) follow all reasonable recommendation of such contractor, and (iv) promptly provide to Landlord a copy of such contract and each report issued thereunder, (y) Tenant shall have the benefit of any warranties available to Landlord regarding the Base Building Systems to the extent such warranties cover maintenance and repairs for which Tenant is responsible hereunder, and (z) if access to the roof of the Building is required in order to perform any of Tenant’s obligations under this sentence, such access shall be subject to such reasonable rules and procedures as Landlord may impose, and Tenant shall maintain the affected portion of the roof in a clean and orderly condition and shall not interfere with use of the roof by Landlord. Notwithstanding the foregoing. if Tenant fails to perform such maintenance and repairs as required hereunder, Landlord may, in its option, after notifying Tenant (except in an emergency), perform such work on Tenant’s behalf, in which case Tenant shall pay Landlord, upon demand, the cost of such work plus a coordination fee equal to 5% of such cost.

 

7.1.2                      Landlord’s Obligations.

 

A.            Generally. Landlord shall perform all maintenance and repairs to, and keep in good condition and repair, (i) the roof and exterior walls and windows of the Building, (ii) the Base Building (subject to Section 7.1.1 during any period in which the Premises comprise 100% of the rentable square footage of the Building), and (iii) the Common Areas. As used herein, “Base Building” means the structural portions of the Building, together with all Base Building Systems.

 

B.            Landlord’s Limited Warranty of Building Systems. If, at any time during the period beginning on the Delivery Date and ending 120 days after the Commencement Date, any Building System existing on the Delivery Date fails to operate as designed and such failure does not result from any Casualty. Act of Tenant, or Alteration, the Landlord, at its expense (which expense, notwithstanding any contrary provision hereof, shall not be included in Expenses), promptly after notice from Tenant, shall commence and diligently prosecute to completion such maintenance, repair and/or replacement as shall be sufficient (in the absence of any Casualty, Act of Tenant, or Alteration) to cause such Building system to operate as designed for at least 30 days.

 

C.            Certain Landlord Repairs. Not later than January 1,2014, Landlord, at its expense (which shall not be included in Expenses), shall perform, one time only, the repairs to the Building’s HVAC system described in Exhibit I.

 

D.            Certain Capital Items. Notwithstanding Section 7.1.1, during any period in which the Premises comprise 100% of the rentable square footage of the Premises, Landlord shall perform any necessary repair or replacement of any Base Building System if such repair of replacement (i) is capital in nature (as reasonably determined by Landlord in accordance with GAAP), and (ii) is not made necessary by any Casualty, Act of Tenant, or Alteration. Notwithstanding any contrary provision hereof (but subject to Section 7.1.2.B), the cost of any such repair or replacement shall be included in Expenses, subject to amortization in accordance with clause (a) of the second paragraph of Section 4.2.2.

 

7.2                     Alterations. Tenant may not make any improvement, alteration, addition or change to the Premises or to any mechanical, plumbing or HVAC facility or other system serving the Premises (an “Alteration”) without Landlord’s prior consent, which consent shall be requested by Tenant not less than 15 business days before commencement of work and shall not be unreasonably withheld by Landlord. Notwithstanding the foregoing, Landlord’s prior consent shall not be required for any Alteration (a “Cosmetic Alteration”) that does not adversely or otherwise materially any system or structural component of the Building, is not visible from outside the Premises, and costs less than $25,000.00. For any Alteration. Tenant shall deliver to Landlord completion affidavits, full and final lien waivers, all governmental approvals, and “as built” drawings (in CAD format, if requested by Landlord), provided, however, that for a Cosmetic Alteration, Tenant may deliver marked-up plans rather than “as built” drawings. For any Alteration other than a Cosmetic Alteration, (a) Tenant, before commencing work, shall deliver to Landlord, and obtain Landlord’s approval (which shall not be unreasonably withheld) of, any applicable plans and specifications, and (b) Tenant shall pay Landlord upon demand Landlord’s reasonable out-of-pocket expenses actually incurred in reviewing the work; provided, however, that this clause (b) shall not apply to any Initial Alterations.

 

7.3                     Tenant Work. Before commencing any repair or Alteration or any work affecting Lines (“Tenant Work”), other than any Tenant Work consisting of a repair that does not affect vertical Lines and is reasonably estimated to cost less than $50,000.00. Tenant shall deliver to Landlord, and obtain Landlord’s approval (which shall not be unreasonably withheld) of, (a)names of contractors,

 

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subcontractors, mechanics, laborers and materialmen; (b) evidence of contractors’ and subcontractors’ insurance; and (c) any required governmental permits. Tenant shall perform all Tenant work (i) in a good and workmanlike manner using materials of a quality reasonably approved by Landlord; (ii) in compliance with any approved plans and specifications, all Laws, the National Electric Code, and Landlord’s construction rules and regulations; and (iii) in a manner that does not impair the Base Building. If, as a result of any Tenant Work, Landlord becomes required under Law to perform any inspection, give ay notice, or cause such Tenant Work to be performed in any particular manner. Tenant shall comply with such requirement and promptly provide Landlord with reasonable documentation of such compliance. Landlord’s approval of Tenant’s plans and specifications shall not relieve Tenant from any obligation under this Section 7.3. In performing any Tenant Work, Tenant shall not use contractors, services, labor, materials or equipment that, in Landlord’s reasonable judgment, would disturb labor harmony with any workforce or trades engaged in performing other work or services at the Project.

 

8                           LANDLORD’S PROPERTY. All Leasehold improvements (excluding Tenant’s Property (defined below)) shall become Landlord’s property upon installation and without compensation to Tenant. Notwithstanding the foregoing. If any Tenant-Insured Improvements are Specialty Improvements (defined below), then except as otherwise notified by Landlord, Tenant, at its expense and before the expiration or earlier termination hereof, shall remove such Tenant-Insured Improvements (other than (i) any supplemental HVAC unit, which shall be governed by Section 25.5. and (ii) any Proposed Initial Alterations), repair any resulting damage to the Premises or Building, and restore the affected portion of the Premises to its configuration and condition existing before the installation of such Tenant-Insured Improvements. If Tenant fails to timely perform any work required under the preceding sentence. Landlord may perform it at Tenant’s expense. When Landlord approves any Tenant-Insured Improvements (or, in the case of any Alterations that do not require Landlord’s approval hereunder, if Tenant specifically requests that Landlord do so, then, within 10 business days after such request), Landlord shall identify any such Tenant-Insured improvements that will be required to be removed pursuant to this section 8, and any such Tenant-Insured improvements that are not so identified by Landlord shall not be required to be removed pursuant to this Section 8. As used herein, “Specialty Improvements” means any Tenant-Insured Improvements that , in Landlord’s reasonable judgment, are not customary multi-tenant office/R&D installations, including equipment racks; classrooms; bathrooms (other than the base Building bathrooms); file rooms, libraries or other rooms with reinforced flooring; workout/fitness rooms; shower rooms; locker rooms; kitchen facilities (other than coffee bar kitchenettes); server rooms; safes; laboratories; vaults, and areas without drop ceilings. Nothing herein shall be deemed to (a) transfer to Landlord ownership of any of Tenant’s trade fixtures, furniture, equipment or other personal property installed in the Premises (“Tenant’s Property”), (b) create any contractual lien or “landlord’s lien” in any of Tenant’s Property, or (c) prohibit Tenant from removing Tenant’s Property from the Premises, provided that Tenant repairs all damage caused by its installation or removal.

 

9                           LIENS. Tenant shall keep the Project free form any lien arising out of any work performed, material furnished or obligation incurred by or on behalf of Tenant. Tenant shall remove any such lien within 10 business days after notice from Landlord, and if Tenant fails to do so, Landlord, without limiting its remedies, may pay the amount necessary to cause such removal, whether or not such lien is valid. The amount so paid, together with reasonable attorneys’ fees and expenses, shall be reimbursed by Tenant upon demand.

 

10                    INDEMNIFICATION; INSURANCE.

 

10.1              Waiver and Indemnification. Tenant waives all claims against Landlord, its Security Holders (defined in Section 17), Landlord’s managing agent(s), their (direct or indirect) owners, and the beneficiaries, trustees, officers, directors, employees and agents of each of the foregoing (including Landlord, the “Landlord Parties”) for (i) any damage to person or property (or resulting from the loss of use thereof), except to the extent such damage is caused by any negligence, willful misconduct or breach of this Lease of or by any Landlord party, or (ii) any failure to prevent or control any criminal or otherwise wrongful conduct by any third party or to apprehend any third party who has engaged in such conduct. Tenant shall indemnify, defend, protect, and hold the Landlord Parties harmless from any obligation, loss, claim, action, liability, penalty, damage, cost or expense (including reasonable attorneys’ and consultants’ fees and expenses) (each, a “Claim”) that is imposed or asserted by any third party and arises from any negligence, willful misconduct or breach of this Lease of or by, Tenant, any party claiming by, through or under Tenant, their (direct or indirect) owners, licensees or invitees (an “Act of Tenant”), except to the extent such Claim arises from any negligence, willful misconduct or breach of this Lease of or by any Landlord Party. Landlord shall indemnify, defend, protect, and hold Tenant, its (direct or indirect) owners, and their respective beneficiaries, trustees, officers, directors, employees and agents (including Tenant, the “Tenant Parties”) harmless from any Claim that is imposed or asserted by any third party and arises from any arises from any negligence, willful misconduct or breach of this Lease of or by any Landlord Party, except to the extent such Claim arises from an Act of Tenant.

 

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10.2              Tenant’s Insurance. Tenant shall maintain the following coverages in the following amounts:

 

10.2.1              Commercial General Liability Insurance covering claims of bodily injury, personal injury and property damage arising out of Tenant’s operations and contractual liabilities, including coverage formerly known as broad from, on an occurrence basis, with combined primary and excess/umbrella limits of $3,000,000 each occurrence and $4,000,000 annual aggregate.

 

10.2.2              Property Insurance covering (i) all office furniture, trade fixtures, office equipment, free-standing cabinet work, movable partitions, merchandise and all other items of Tenant’s property in the Premises installed by, for, or at the expense of Tenant, and (ii) any Leasehold Improvements installed by or for the benefit of Tenant pursuant to this Lease (“Tenant-Insured Improvements”). Such insurance shall be written on a special cause of loss form for physical loss or damage, for the full replacement cost value (subject to reasonable deductible amounts) new without deduction for depreciation of the covered items and in amounts that meet any co-insurance clauses of the polices of insurance, and shall include coverage for damage or other loss caused by fire or other peril, including vandalism and malicious mischief, theft, water damage of any type, including sprinkler leakage, bursting or stoppage of pipes, and explosion, and providing business interruption coverage for a period of one year.

 

10.2.3              Workers’ Compensation statutory limits and Employers’ Liability limits of $1,000,000.

 

10.3              Form of Policies. The minimum limits of insurance required to be carried by Tenant shall not limit Tenant’s liability. Such insurance shall be issued by an insurance company that has an A.M Best rating of not less than A-VIII and shall be in form and content reasonably acceptable to Landlord. Tenant’s Commercial General Liability Insurance shall (a) name the Landlord Parties and any other party designated by Landlord (“Additional Insured Parties”) as additional insureds; and (b) be primary insurance as to all claims thereunder and provide that any insurance carried by Landlord is excess and non-contributing with Tenant’s insurance. Landlord shall be designated as a loss payee with respect to Tenant’s Property Insurance on any Tenant-Insured Improvements. Tenant shall deliver to Landlord, on or before the Commencement Date and at least 15 days before the expiration dates thereof, certificates from Tenant’s insurance company on the forms currently designated “ACORD 25” (Certificate of Liability Insurance) and “ACORD 28” (Evidence of Commercial Property Insurance) or the equivalent, Attached to the ACORD 25 (or equivalent) there shall be an endorsement naming the Additional Insured Parties as additional insureds, and attached to the ACORD 28 (or equivalent) there shall be an endorsement designating Landlord as a loss payee with respect to Tenant’s Property Insurance on any Tenant-Insured Improvements, and each such endorsement shall be binding on Tenant’s insurance company. Upon Landlord’s request. Tenant shall deliver to Landlord, in lieu of such certificates, copies of the policies of insurance required to be carried under Section 10.2 showing that the Additional Insured Parties are named as additional insureds and that Landlord is designated as a loss payee with respect to Tenant’s Property Insurance on any Tenant-Insured Improvements.

 

10.4              Subrogation. Notwithstanding any contrary provision hereof (but subject to Section 11), each party waives, and shall cause its insurance carrier to waive, any right of recovery against the other party, any of its (direct or indirect) owners, or any of their respective beneficiaries, trustees, officers, directors, employees or agents for any loss of or damage to property which loss or damage is (or, if the insurance required hereunder had been carried, would have been) covered by the waiving party’s property insurance, without regard to any negligence of any party so released. For purposes of this Section 10.4 only, (a) any deductible with respect to a party’s insurance shall be deemed covered by, and recoverable by such party under, valid and collectable policies of insurance, and (b) any contractor retained by Landlord to install, maintain or monitor a fire or security alarm for the Building shall be deemed an agent of Landlord.

 

10.5              Additional Insurance Obligations. Tenant shall maintain such increased amounts of the insurance required to be carried by Tenant under this Section 10, and such other types and amounts of insurance covering the Premises and Tenant’s operations therein, as may be reasonably requested by Landlord, but not in excess of the amounts and types of insurance then being required by landlords of buildings comparable to and in the vicinity of the Building.

 

10.6              Landlord’s Insurance. Landlord shall maintain the following insurance, together with such other insurance coverage as Landlord, in its reasonable judgment, may elect to maintain, the premiums of which shall be included in Expenses. (a) Commercial General Liability insurance applicable to the Property, Building and Common Areas providing, on an occurrence basis, a minimum combined single limit of at least $3,000,000,00; (b) Special Cause of Loss Insurance on the Building at replacement cost value as reasonably estimated by Landlord; (c) Worker’s Compensation insurance to the extent required by Law; and (d) Employers Liability Coverage to the extent required by Law. Nothing in this Section 10.6 shall be deemed to require Landlord to maintain earthquake insurance.

 

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11                    CASUALTY DAMAGE.

 

11.1              With reasonable promptness after discovering any damage to the promises (other than trade Fixtures), or to any Common Area or Building System necessary for access to or tenantability of the Promises, resulting from any fire or other casualty (a “Casualty”, Landlord shall notify Tenant of Landlord’s reasonable estimate of the time required to substantially complete repair of such damage (the “Landlord Repairs”). If, according to such estimate, the Landlord Repairs cannot substantially Completed within 270 days after the date of the Casualty, either party may terminate this Lease upon 60 days’ notice to the other party delivered within 10 days after Landlord’s delivery of such estimate. Within 90 days after discovering any damage to the Property resulting from any Casualty, Landlord may terminate this Lease by notifying Tenant if (i) the cost of the Landlord Repairs exceeds (any such excess, a “Shortfall”) the sum of (a) the proceeds of Landlord’s insurance (other than with respect to any Tenant-Insured Improvements), less any portion thereof that is lawfully required by any Security Holder to be used to pay any mortgage debt; plus (b) if any insurance required under Section 10.6 is not carried by Landlord, then any proceeds of such insurance (other than with respect to any Tenant-Insured Improvements) that would have been available to Landlord (any could not have lawfully required by any Security Holder to be used to pay any mortgage debt) if Landlord had carried such insurance (subject to maximum commercially reasonable deductibles), plus (c) any applicable deductibles (other than with respect to earthquake damage), plus (d) any insurance proceeds or other amounts paid to Landlord pursuant to Section 11.2, plus (e) 5% of the replacement cost of the Building, as reasonably determined by Landlord: or (ii) Landlord is not legally permitted to rebuild the Building and Common Areas in substantially the same configuration structurally and architecturally; or (iii) the damage occurs during the last 12 months of the Term and Landlord estimates that the Landlord Repairs cannot be substantially completed within the period beginning on the date of the Causalty and having a duration equal to 20% of the balance of the Term remaining on such date. Notwithstanding the foregoing, any notice of termination of this Lease pursuant to clause (l) of the preceding sentence (a “Shortfall Termination Notice”) shall be ineffective if (x) Tenant, within 10 business days after receiving such Shortfall Termination Notice, notifies Landlord that Tenant agrees to pay, and provides Landlord with evidence reasonably satisfactory to Landlord of Tenant’s ability to pay, the Shortfall; and (y) the Shortfall does not exceed 5% of the replacement cost of the Building, as reasonably determined by Landlord. If any shortfall Termination Notice becomes ineffective by operation of the preceding sentence and this Lease is not otherwise terminated pursuant to this Section 11.1, then (i) Tenant, within three (3) business days after Landlord’s request (which shall not be made more frequently than once per calendar month), shall deliver to Landlord, as Additional Rent, in addition to any amounts required to be paid to Landlord under Section 11.2, cash in an amount equal to (a) the Shortfall multiplied by a fraction, the numerator of which is the total cost of the Landlord Repairs incurred by Landlord to date, and the denominator of which is Landlord’s reasonable estimate of the total cost of the Landlord Repairs, less (b) the total amount of the payments previously made by Tenant to Landlord pursuant to this sentence; (ii) if Landlord’s reasonable estimate of the total cost of the Landlord Repairs changed to reflect the total actual cost of the Landlord Repairs, then the Shortfall and the amounts payable pursuant to this sentence shall be adjusted equitably; and (iii) Tenant shall not, by reason of Tenant’s delivery of such amounts, acquire any ownership, equitable mortgage or similar interest in any part of the Property or otherwise become entitled to reimbursement from Landlord, it being hereby acknowledged and agreed by Tenant that Landlord’s agreement to perform the Landlord Repairs as required under this Section 11, together with the other terms and conditions hereof, shall be deemed adequate consideration for such delivery.

 

11.2              If this Lease is not terminated pursuant to Section 11.1. Landlord shall promptly and diligently perform the Landlord Repairs, subject to reasonably delays for insurance adjustment and other events of Force Majeure. The Landlord Repairs shall restore the Premises (other than trade fixtures) and any Common Area or Building system necessary for access to or tenantability of the Premises to substantially the same condition that existed when the Casualty occurred, except for (a) any modifications required by Law or any Security Holder, and (b) any modifications to the Common Areas that are deemed desirable by Landlord, are consistent with the character of the Project, and do not materially impair access to or tenantability of the Premises. Notwithstanding Section 10.4, if this Lease is not terminated pursuant to Section 11.1, Tenant shall assign to Landlord (or its designee) all insurance proceeds payable to Tenant under Tenant’s insurance required under Section 10.2 with respect to any Tenant-Insured Improvements, and if the estimated or actual cost of restoring any Tenant-Insured Improvements, exceeds the insurance proceeds received by Landlord from Tenant’s insurance carrier. Tenant shall pay such excess to Landlord within 15 days after Landlord’s demand. No Casualty and no restoration performed as required hereunder shall render Landlord liable to Tenant, constitute a constructive eviction, or excuse Tenant from any obligation hereunder, provided, however, that if the Premises (other than trade fixtures) or any Common Area or Building system necessary for access to or tenantability of the Premises is damaged by a Casualty, then, during any time that, as a result of such damage, any portion of the Premises is inaccessible or untenantable and is not occupied by Tenant, Monthly Rent shall be abated in proportion to the rentable square footage of such portion of the Premises. If Landlord does not substantially complete the Landlord Repairs on or before the Outside Restoration Date (defined below), then, provided that the Casualty was not caused by the willful misconduct of Tenant or any party claiming by, through or under Tenant, Tenant may terminate this Lease by notifying Landlord within 15 days after the Outside Restoration Date. As used herein, “Outside Restoration Date” means the date occurring

 

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two (2) months after the later of (a) the expiration of the time set forth in Landlord’s estimate described in the first sentence of Section 11.1, or (b) the date occurring 270 days after the date of the Casualty: provided, however, that the Outside Restoration Date shall be extended to the extent of (i) any delay (not to exceed 60 days) caused by the insurance adjustment process, (ii) any other delay (not to exceed 60 days) caused by events of Force Majeure, and (iii) any delay caused by Tenant or any party claiming by, through or under Tenant. Notwithstanding the foregoing, if Landlord determines in good faith that it will be unable to substantially complete the Landlord Repairs on or before the Outside Restoration Date, Landlord may cease its performance of the Landlord Repairs and provide Tenant with notice (the “Restoration Date Extension Notice”) stating such inability and identifying the date on which Landlord reasonably believes such substantial completion will occur, in which event Tenant may terminate this Lease by notifying Landlord within five (5) business days after receiving the Restoration Date Extension Notice. If Tenant does not terminate this Lease within such 5-business day period, the Outside Restoration Date shall be automatically amended to be the date identified in the Restoration Date Extension Notice.

 

12                          NONWAIVER. No provision hereof shall be deemed waived by either party unless it is waived by such party expressly and in writing, and no waiver of any breach of any provision hereof shall be deemed a waiver of any subsequent breach of such provision or any other provision hereof. Landlord’s acceptance of Rent shall not be deemed a waiver of any preceding breach of any provision hereof, other than Tenant’s failure to pay the particular Rent so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of such acceptance. No acceptance of payment of an amount less than the Rent due hereunder shall be deemed a waiver of Landlord’s right to receive the full amount of Rent due, whether or not any endorsement or statement accompanying such payment purports to effect an accord and satisfaction. No receipt of monies by Landlord from Tenant after the giving of any notice, the commencement of any suit, the issuance of any final judgment, or the termination hereof shall affect such notice, suit or judgment, or reinstate or extend the Term or Tenant’s right of possession hereunder.

 

13                          CONDEMNATION. If any part of the Premises, Building or Property is taken for any public of quasi-public use by power of eminent domain or by private purchase in lieu thereof (a “Taking”) for more than 180 consecutive days, Landlord may terminate this Lease. If more than 15% of the rentable square footage of the Premises is Taken, or access to or parking for the Premises is substantially impaired as a result of a Taking, for more than 180 consecutive days. Tenant may terminate this Lease. Any such termination shall be effective as of the date possession must be surrendered to the authority, and the terminating party shall provide termination notice to the other party within 45 days after receiving written notice of such surrender date. Except as provided above in this Section 13, neither party may terminate this Lease as a result of a Taking. Tenant shall not assert any claim for compensation because of any Taking; provided, however, that Tenant may file a separate claim for (a) any Taking of Tenant’s personal property of any fixtures that Tenant is entitled to remove upon the expiration hereof, (b) moving and relocation expenses, and (c) the unamortized portion of the lesser of (i) any amount paid by Tenant, without reimbursement by Landlord, for the construction of any then-existing Tenant-Insured Improvements that were installed pursuant hereto and taken in such Taking, or (ii) the amount obtained by multiplying (A) the amount described in the preceding clause (c)(i), by (B) a fraction, the numerator of which is the value of such Tenant-Insured Improvements, as determined in accordance with applicable Law, and the denominator of which is the total amount paid by Tenant and Landlord for such Tenant-Insured Improvements, so long as such claim does not diminish the award available to Landlord or any Security Holder (except to the extent of the amount described in the preceding clause (c)) and is payable separately to Tenant. For purposes of the preceding sentence, the amortization of any amount paid for Tenant-Insured Improvements shall be computed over the period commencing upon the substantial completion of such Tenant-Insured Improvements and expiring at the end of the initial Term (or, if such Tenant-Insured Improvements are installed during an extension Term, at the end of such extension Term). If this Lease is terminated pursuant to this Section 13, all Rent shall be apportioned as of the date of such termination. If a Taking occurs and this Lease is not so terminated, Monthly Rent shall be abated for the period of such Taking in proportion to the percentage of the rentable square footage of the Premises, if any, that is subject to, or rendered inaccessible by, such Taking.

 

14                          ASSIGNMENT AND SUBLETTING.

 

14.1        Transfers. Tenant shall not, without Landlord’s prior consent, assign, mortgage, pledge, hypothecate, encumber, cause any lien to attach to, or otherwise transfer this Lease or any interest hereunder, permit any assignment or other transfer hereof or any interest hereunder by operation of law, enter into any sublease or license agreement, otherwise permit the occupancy or use of any part of the Premises by any persons other than Tenant and its employees and contractors, or permit a Change of Control (defined in Section 14.6) to occur (each, a “Transfer”). If Tenant desires Landlord’s consent to any Transfer, Tenant shall provide Landlord with (i) notice of the terms of the proposed Transfer, including its proposed effective date (the “Contemplated Effective Date”), a description of the portion of the Premises to be transferred (the “Contemplated Transfer Space”), a calculation of the Transfer Premium (defined in Section 14.3), and a copy of all existing executed and/or proposed documentation pertaining to the proposed Transfer, and (ii) current financial statements of the proposed transferee (or, in the case of a Change of Control, of the proposed new controlling party(ies)) certified by an officer or

 

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owner thereof and any other information reasonably required by Landlord in order to evaluate the proposed Transfer (collectively, the “Transfer Notice”). Within 15 business days after receiving the Transfer Notice, Landlord shall notify Tenant of (a) its consent to the proposed Transfer, or (b) its refusal to consent to the proposed Transfer. Any Transfer made without Landlord’s prior consent shall, at Landlord’s option, be void. Tenant shall pay Landlord a fee of $1,500.00 for Landlord’s review of any proposed Transfer, whether or not Landlord consents to it.

 

14.2        Landlord’s Consent. Subject to Section 14.4. Landlord shall not unreasonably withhold its consent to any proposed Transfer. Without limiting other reasonable grounds for withholding consent, it shall be deemed reasonable for Landlord to withhold its consent to a proposed Transfer if:

 

14.2.1              The proposed transferee is not a party of reasonable financial strength in light of the responsibilities to be undertaken in connection with the Transfer on the date the Transfer Notice is received; or

 

14.2.2              The proposed transferee has a character or reputation or is engaged in a business that is not consistent with the quality of the Building or the Project; or

 

14.2.3              The proposed transferee is a governmental entity or a nonprofit organization; or

 

14.2.4              [Intentionally Omitted]; or

 

14.2.5              The proposed transferee or any of its Affiliates, on the date the Transfer Notice is received, leases or occupies (or, at any time during the 3-month period ending on the date the Transfer Notice is received, has provided Landlord with a written proposal or request for proposal to lease) space in the Project and Landlord has (or believes in good faith, based on the scheduled expiration dates of existing leases and/or its rights to relocate existing tenants, that it will have) space available that, in its good faith judgment, will meet the proposed transferee’s leasing needs.

 

Notwithstanding any contrary provision hereof, (a) if Landlord consents to any Transfer pursuant to this Section 14.2 but Tenant does not enter into such Transfer within six (6) months thereafter, such consent shall no longer apply and such Transfer shall not be permitted unless Tenant again obtains Landlord’s consent thereto pursuant and subject to the terms of this Section 14; and (b) if Landlord unreasonably withholds its consent under this Section 14.2, Tenant’s sole remedies shall be contract damages (subject to Section 20) or specific performance, and Tenant waives all other remedies, including any right to terminate this Lease.

 

14.3        Transfer Premium. If Landlord consents to a Transfer (other than a Permitted Transfer (defined in Section 14.8) or a Change of Control), Tenant shall pay Landlord an amount equal to 50% of any Transfer Premium (defined below). As used herein, “Transfer Premium” means (a) in the case of an assignment, any consideration (including payment for Leasehold Improvements, but excluding any fair market value payment for personal property) paid by the assignee for such assignment, less any reasonable and customary expenses directly incurred by Tenant on account of such assignment, including brokerage fees, legal fees, and Landlord’s review fee; and (b) in the case of a sublease, license or other occupancy agreement, for each month of the term of such agreement, the amount by which all rent and other consideration paid by the transferee to Tenant pursuant to such agreement (less all reasonable and customary expenses directly incurred by Tenant on account of such agreement, including brokerage fees, legal fees, construction costs and Landlord’s review fee) exceeds the Monthly Rent payable by Tenant hereunder with respect to the Contemplated Transfer Space. Payment of Landlord’s share of the Transfer Premium shall be made (x) in the case of an assignment, within 10 days after Tenant receives the consideration described above, and (y) in the case of a sublease, license or other occupancy agreement, for each month of the term of such agreement. within five (5) business days after Tenant receives the rent and other consideration described above.

 

14.4        [Intentionally Omitted.]

 

14.5        Effect of Consent. If Landlord consents to a Transfer, (i) such consent shall not be deemed a consent to any further Transfer, (ii) Tenant shall deliver to Landlord, promptly after execution, an executed copy of all documentation pertaining to the Transfer in form reasonably acceptable to Landlord, and (iii) Tenant shall deliver to Landlord, upon Landlord’s request, a complete statement, certified by an independent CPA or Tenant’s chief financial officer, setting forth in detail the computation of any Transfer Premium. In the case of an assignment, the assignee shall assume in writing, for Landlord’s benefit, all of Tenant’s obligations hereunder. No Transfer, with or without Landlord’s consent, shall relieve Tenant or any guarantor hereof from any liability hereunder. Notwithstanding any contrary provision hereof, Tenant, with or without Landlord’s consent, shall not enter into, or permit any party claiming by, through or under Tenant to enter into, any sublease, license or other occupancy agreement that provides for payment based in whole or in part on the net income or profit of the subtenant, licensee or other occupant thereunder.

 

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14.6        Change of Control. As used herein, “Change of control” means (a) if Tenant is a closely held professional service firm, the withdrawal or change (Whether voluntary, involuntary or by operation of law) of more than 50% of its equity owners within a 12-month period; and (b) in all other cases, any transaction(s) resulting in the acquisition of a Controlling Interest (defined below) by one or more parties that did not own a Controlling Interest immediately before such transaction(s). As used herein, “Controlling Interest” means any direct or indirect equity or beneficial ownership interest in Tenant that confers upon its holder(s) the direct or indirect power to direct the ordinary management and policies of Tenant, whether through the ownership of voting securities, by contract or otherwise (but not through the ownership of voting securities listed on a recognized securities exchange). (Landlord acknowledges that, by operation of the definitions of “Transfer,” “Change of Control” and “Controlling Interest,” no stock of Tenant listed on a recognized securities exchange shall be deemed a Controlling Interest, and, therefore, no issuance of Tenant’s stock in an offering or sale on a recognized securities exchange shall be deemed a Change of Control or a Transfer.)

 

14.7        Effect of Default. If Tenant is in Default (defined in Section 19.1), Landlord is irrevocably authorized, as Tenant’s agent and attorney-in-fact, to direct any transferee under any sublease, license or other occupancy agreement to make all payments under such agreement directly to Landlord (which Landlord shall apply towards Tenant’s obligations hereunder) until such Default is cured. Such transferee shall rely upon any representation by Landlord that Tenant is in Default, whether or not confirmed by Tenant.

 

14.8        Permitted Transfers. Notwithstanding any contrary provision hereof, if Tenant is not in Default, Tenant may, without Landlord’s consent pursuant to Section 14.1, (i) sublease any portion of the Premises to an Affiliate of Tenant, (ii) assign this Lease to (a) an Affiliate of Tenant (other than pursuant to a merger or consolidation), (b) a successor to Tenant by merger or consolidation, or (c) a successor to Tenant by purchase of all or substantially all of Tenant’s assets, or (iii) permit a Change of Control to occur (a “Permitted Transfer”), provided that (i) at least 10 business days before the Transfer, Tenant notifies Landlord of such Transfer and delivers to Landlord any documents or information reasonably requested by Landlord relating thereto, including reasonable documentation that the Transfer satisfies the requirements of this Section 14.8; (ii) in the case of a sublease, the subtenant executes and delivers to Landlord, at least 10 business days before taking occupancy, an agreement reasonably acceptable to Landlord which (A) requires the subtenant to assume all of Tenant’s release, waiver, indemnity and insurance obligations hereunder with respect to the Contemplated Transfer Space and to be bound by each provision hereof that limits the liability of any Landlord Party, and (B) provides that if either a Landlord Party or the subtenant institutes a suit against the other for violation of or to enforce agreement, or in connection with any matter relating to the sublease or the subtenant’s occupancy of the Contemplated Transfer Space, the prevailing party shall be entitled to all of its costs and expenses, including reasonable attorneys’ fees; (iii) in the case of an assignment pursuant to clause (ii)(a) or (ii)(c) above, the assignee executes and delivers to Landlord, at least 10 business days before the assignment, a commercially reasonable instrument pursuant to which the assignee assumes, for Landlord’s benefit, all of Tenant’s obligations hereunder; (iv) in the case of an assignment pursuant to clause (ii)(b) above, (A) the successor entity has a net worth (as determined in accordance with GAAP, but excluding intellectual property and any other intangible assets (“Net Worth”)) immediately after the Transfer that is not less than the Net Worth of Tenant immediately before the Transfer, and (B) if Tenant is a closely held professional service firm, at least 50% of its equity owners existing 12 months before the Transfer are also equity owners of the successor entity; (v) except in the case of a Change of Control, the transferee is qualified to conduct business in the State of California; (vi) in the case of a Change of Control, (A) Tenant is not a closely held professional service firm, and (B) Tenant’s Net Worth immediately after the Change of Control is not less than its Net Worth immediately before the Change of Control; and (vii) the Transfer is made for a good faith operating business purpose and not in order to evade the requirements of this Section 14. As used herein “Affiliate” means, with respect to any party, a person or entity that controls, is under common control with, or is controlled by such party.

 

15                          SURRENDER. Upon the expiration or earlier termination hereof, and subject to Sections 8 and 11 and this Section 15, Tenant shall surrender possession of the Premises to Landlord in as good condition and repair as existed when Tenant took possession and as thereafter improved by Landlord and/or Tenant, except for reasonable wear and tear and repairs that are Landlord’s express responsibility hereunder. Before such expiration or termination, Tenant, without expense to Landlord, shall (a) remove from the Premises all debris and rubbish and all furniture, equipment, trade fixtures, Lines, free-standing cabinet work, movable partitions and other articles of personal property that are owned or placed in the Premises by Tenant or any party claiming by, through or under Tenant (except for any Lines not required to be removed under Section 23), and (b) repair all damage to the Premises and Building resulting from such removal. If Tenant fails to timely perform such removal and repair, Landlord may do so at Tenant’s expense (including storage costs). If Tenant fails to remove such property from the Premises, or from storage, within 30 days after notice from Landlord, any part of such property shall be deemed, at Landlord’s option, either (x) conveyed to Landlord without compensation, or (y) abandoned.

 

16                          HOLDOVER. If Tenant fails to surrender the Premises upon the expiration or earlier termination hereof, Tenant’s tenancy shall be subject to the terms and conditions hereof; provided, however,

 

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that such tenancy shall be a tenancy at sufferance only, for entire Premises, and Tenant shall pay Monthly Rent (prorated on a per-diem basis for any partial month) at a rate equal to the Applicable Percentage (defined below) of the Monthly Rent applicable during the last calendar month of the Term. As used herein, “Applicable Percentage” means, for any holdover, (a) 125% during the first 30 days of such holdover, and (b) 150% during the balance of such holdover. Nothing in this, Section 16 shall limit Landlord’s rights or remedies or be deemed a consent to any holdover. If Landlord is unable to deliver possession of the Premises to a new tenant or to perform improvements for a new tenant as a result of Tenant’s holdover. Tenant shall be liable for all resulting damages, including lost profits, incurred by Landlord.

 

17                          SUBORDINATION: ESTOPPEL CERTIFICATES.

 

17.1        This Lease shall be subject and subordinate to all existing and future ground or underlying leases, mortgages, trust deeds and other encumbrances against the Building or Project, all renewals, extensions, modifications, consolidations and replacements thereof (each, a “Security Agreement”), and all advances made upon the security of such mortgages or trust deeds, unless in each case the holder of such Security Agreement (each, a “Security Holder”) requires in writing that this Lease be superior thereto, Upon any termination or foreclosure (or any delivery of a deed in lien of foreclosure) of any Security Agreement. Tenant, upon request, shall attorn, without deduction or set-off, to the Security Holder or purchaser or any successor thereto and shall recognize such party as the lessor hereunder and agree to continue this Lease as a direct lease between Tenant, as tenant, and such party, as landlord, provided that such party agrees to recognize Tenant’s rights as tenant hereunder and continue this lease as a direct lease between such party, as landlord, and Tenant as tenant (provided, however, that such party shall not be (i) bound by any payment of Rent for more than one (1) month in advance; (ii) liable for (A) the return of any security deposit, letter of credit or other collateral, except to the extent it was received by such party, or (B) any act, omission, representation, warranty of default of any prior landlord (including Landlord); or (iii) subject to any offset or defense that Tenant might have against any prior landlord (including Landlord); provided further, however, that nothing in the preceding clauses (ii)(B) or (iii) shall limit the liability of such party for any default by such prior landlord to the extent it continues following the acquisition of such prior landlord’s interest hereunder by such party, unless such default consists of (x) a breach of an obligation relating to the design, construction, or repair of any defect in any Leasehold Improvements or other improvements to the Building, or (y) a failure to disburse, pay or reimburse any funds to Tenant). Within 10 days after request by Landlord. Tenant shall execute such further instruments as Landlord may reasonably deem necessary to evidence the subordination or superiority of this Lease to any Security Agreement. Tenant waives any right it may have under Law to terminate or otherwise adversely affect this Lease or Tenant’s obligations hereunder upon a foreclosure. Within 10 business days after Landlord’s request. Tenant shall execute and deliver to Landlord a commercially reasonable estoppel certificate in favor of such parties as Landlord may reasonably designate, including current and prospective Security Holders and prospective purchasers.

 

17.2        Notwithstanding Section 17.1. Tenant’s agreement to subordinate this Lease to a future Security Agreement shall not be effective unless Landlord has provided Tenant with a commercially reasonable non-disturbance agreement from the Security Holder. For purposes of the preceding sentence, a non-disturbance agreement shall not be deemed commercially reasonable unless it provides that: (a) so long as no Default exists, this Lease and Tenant’s right to possession hereunder shall remain in full force and effect; (b) the Security Holder shall have additional time (not to exceed 90 days after written notice from Tenant) to cure any default of Landlord; and (c) neither the Security Holder nor any successor in interest shall be (i) bound by (A) any payment of Rent for more than one (1) month in advance, or (B) any amendment of this Lease made without the written consent of the Security Holder or such successor in interest; (ii) liable for (A) the return of any security deposit, letter of credit or other collateral, except to the extent it was received by the Security Holder, or (B) any act, omission, representation, warranty or default of any prior landlord (including Landlord); or (iii) subject to any offset or defense that Tenant might have against any prior landlord (including Landlord); provided, however, that nothing in the preceding clauses (c)(ii)(B) or (c)(iii) shall limit the liability of the Security Holder or such successor in interest for any default by such prior landlord to the extent it continues following the acquisition of such prior landlord’s interest hereunder by the Security Holder or such successor in interest, unless such default consists of (x) a breach of an obligation relating to the design, construction, or repair of any defect in any Leasehold Improvements or other improvements to the Building, or (y) a failure to disburse, pay or reimburse any funds to Tenant.

 

17.3        The parties acknowledge that before entering into this Lease Landlord has provided to Tenant the standard form of SNDA used by Landlord’s existing Security Holder (“Existing Security Holder”), Promptly upon receiving Tenant’s written comments to such form of SNDA. Landlord shall forward the same to Existing Security Holder, request Existing Security to execute the SNDA, and provide Tenant with the contact information for Existing Security Holder’s attorney. Tenant shall promptly reimburse Landlord for (or, upon Landlord’s request, promptly pay directly to Existing Security Holder or its attorney, as the case may be) all expenses and costs, including attorney’s fees, that Landlord becomes required to pay to Existing Security Holder in connection with any negotiation, preparation execution or

 

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delivery of such SNDA.

 

18                          ENTRY BY LANDLORD. At all reasonable times and upon reasonable notice to Tenant, or in an emergency, Landlord may enter the Premises to (i) inspect the Premises; (ii) show the Premises to prospective purchasers, current or prospective Security Holders or insurers, or, during the last 12 months of the Term for while an uncured Default exists), prospective tenants; (iii) post notices of non-responsibility; or (iv) perform maintenance, repairs or alterations. Upon reasonable prior notice to Tenant (which notice, notwithstanding Section 25.1, may be delivered by e-mail, fax, telephone or orally and in person), Landlord may enter the Premises to perform any required services. If reasonably necessary, Landlord may temporarily close any portion of the Premises to perform maintenance, repairs or (to the extent required by Law or reasonably required for the construction of tenant improvements for another tenant of the Building) alterations. In an emergency, Landlord may use any means it deems proper to open doors to and in the Premises. Except in an emergency, Landlord shall use reasonable efforts to minimize interference with Tenant’s use of the Premises. Except in an emergency, Landlord shall comply with any reasonable security procedures of Tenant (which shall be limited to procedures requiring identification of the person(s) entering the Premises, accompaniment by a Tenant employee, and/or the wearing of a badge). No entry into or closure of any portion of the Premises pursuant to this Section 18 shall render Landlord liable to Tenant, constitute a constructive eviction, or excuse Tenant from any obligation hereunder.

 

19                          DEFAULTS; REMEDIES.

 

19.1        Events of Default. The occurrence of any of the following shall constitute a “Default”:

 

19.1.1              Any failure by Tenant to pay any Rent when due unless such failure is cured within five (5) business days after notice from Landlord of such failure; or

 

19.1.2              Except where a specific time period is otherwise set forth for Tenant’s cure herein (in which event Tenant’s failure to cure within such time period shall be a Default), and except as otherwise provided in this Section 19.1, any breach by Tenant of any other provision hereof where such breach continues for 30 days after notice from Landlord; provided that if such breach cannot reasonably be cured within such 30-day period, Tenant shall not be in Default as a result of such breach if Tenant diligently commences such cure within such period, thereafter diligently pursues such cure, and completes such cure within 60 days after Landlord’s notice; or

 

19.1.3              Abandonment of the Premises by Tenant; or

 

19.1.4              Any breach by Tenant of Sections 5, 14, 17, 18 or 25.3 where such breach continues for more than five (5) business days after notice from Landlord.

 

If (a) Tenant breaches a particular provision hereof (other than a provision requiring payment of Rent), and Landlord notifies Tenant of such breach, on three (3) separate occasions during any 12-month period; (b) such breaches harm any tenants, prospective tenants, occupants of adjacent property, or other third parties; and (c) such breaches are collectively material, then Tenant’s subsequent breach of such provision shall be, at Landlord’s option, an incurable Default. To the extent the notice periods provided herein satisfy any notice periods provided by Law, Landlord shall not be required to give any additional notice in order to be entitled to commence an unlawful detainer proceeding.

 

19.2        Remedies Upon Default. Upon any Default, Landlord shall have, in addition to any other remedies available to Landlord at law or in equity (which shall be cumulative and nonexclusive), the option to pursue any one or more of the following remedies (which shall be cumulative and nonexclusive) without any notice or demand.

 

19.2.1              Landlord may terminate this Lease, in which event Tenant shall immediately surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy it may have for possession or arrearages in Rent, enter upon and take possession of the Premises and expel or remove Tenant and any other person who may be occupying the Premises or any part thereof; without being liable for prosecution or any claim or damages therefor, and Landlord may recover from Tenant the following:

 

(a)                       The worth at the time of award of the unpaid Rent which has been earned at the time of such termination; plus

 

(b)                       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 Tenant proves could have been reasonably avoided; plus

 

(c)                        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 Rent loss that Tenant proves

 

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could have been reasonably avoided; plus

 

(d)                       Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s failure to perform its obligations hereunder or which in the ordinary course of things would be likely to result therefrom, including (but only to the extent reasonably attributable to the remaining Term) brokerage commissions, advertising expenses, expenses of remodeling any portion of the Premises for a new tenant (whether for the same or a different use), and any special concessions made to obtain a new tenant; plus

 

(e)                        At Landlord’s option, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by Law.

 

As used in Sections 19.2.1(a) and (b), the “worth at the time of award” shall be computed by allowing interest at a rate per annum equal to the lesser of (i) the annual “Bank Prime Loan” rate cited in the Federal Reserve Statistical Release Publication G.13(415), published on the first Tuesday of each calendar month (or such other comparable index as Landlord shall reasonably designate if such rate ceases to be published) plus two (2) percentage points, or (ii) the highest rate permitted by Law. As used in Section 19.2.1(c), the “worth at the time of award” shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus 1%.

 

19.2.2              Landlord shall have the remedy described in California Civil Code § 1951.4 (lessor may continue lease in effect after lessee’s breach and abandonment and recover Rent as it becomes due, if lessee has the right to sublet or assign, subject only to reasonable limitations). Accordingly, if Landlord does not elect to terminate this Lease on account of any default by Tenant, Landlord may, from time to time, without terminating this Lease, enforce all of its rights and remedies hereunder, including the right to recover all Rent as it becomes due.

 

19.2.3              Landlord shall at all times have the rights and remedies (which shall be cumulative with each other and cumulative and in addition to those rights and remedies available under Sections 19.2.1 and 19.2.2, or any Law or other provision hereof), without prior demand or notice except as required by Law, to seek any declaratory, injunctive or other equitable relief, and specifically enforce this Lease, or restrain or enjoin a violation or breach of any provision hereof.

 

19.3        Efforts to Relet. Unless Landlord provides Tenant with express notice to the contrary, no re-entry, repossession, repair, maintenance, change, alteration, addition, reletting, appointment of a receiver or other action or omission by Landlord shall (a) be construed as an election by Landlord to terminate this Lease or Tenant’s right to possession, or to accept a surrender of the Premises, or (b) operate to release Tenant from any of its obligations hereunder. Tenant waives, for Tenant and for all those claiming by, through or under Tenant, California Civil Code § 3275 and California Code of Civil procedure §§ 1174(c) and 1179 and any existing or future rights to redeem or reinstate, by order or judgment of any court or by any legal process or writ, this Lease or Tenant’s right of occupancy of the Premises after any termination hereof.

 

19.4        Landlord Default.

 

19.4.1              Landlord shall not be in default hereunder unless it breaches any provision hereof where such breach continues for 30 days after notice from Tenant; provided that if such breach cannot reasonably be cured within such 30-day period, Landlord shall not be in default hereunder as a result of such breach if Landlord diligently commences such cure within such period, thereafter diligently pursues such cure, and completes such cure within 90 days after Tenant’s notice.

 

19.4.2              If Landlord becomes in default hereunder (as provided in Section 19.4.1) as a result of any breach by Landlord of its obligations under Section 7.1.2.A to keep in good condition and repair the roof of the Building, the exterior walls and windows of the Building, or any system of the Building for which Landlord is responsible under Section 7.1.2.A, and if such default materially and adversely affects the conduct of Tenant’s business in the Premises, then Tenant may thereafter provide Landlord with a notice (in addition to those required under Section 19.4.1 in order for Landlord to become in default) stating that if Landlord does not perform such obligation then Tenant will exercise its right to do so under this Section 19.4.2, and if Landlord does not commence performance of such obligation within 10 business days after such notice and thereafter diligently pursue such performance until completion, Tenant may perform such obligation. If Tenant performs any such obligation of Landlord, then (a) Tenant shall do so (i) in a first-class manner using materials of the same (or better) quality as those being repaired or replaced, (ii) using, where commercially reasonable, Landlord’s approved contractors, (iii) in compliance with all Laws, and (iv) in a manner that does not impair the Base Building; (b) if, as a result of such work, Landlord becomes required under Law to perform any inspection, give any notice, or cause such Tenant Work to be performed in any particular manner, Tenant shall comply with such requirement and promptly provide Landlord with reasonable documentation of such compliance; (c) Tenant shall promptly provide Landlord with copies of any governmental permits required to perform the work; and (d) to the extent Landlord is responsible hereunder for the maintenance or repair of any

 

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item repaired or installed by Tenant. Tenant shall promptly make available to Landlord the benefit of any warranties received in connection therewith, If Tenant performs any such obligation of Landlord in accordance with this Section 19.4.2, then (x) Landlord shall reimburse Tenant, within 10 business days after receiving demand therefor and reasonable documentation thereof, the reasonable out-of-pocket costs incurred by Tenant in so performing such obligation; and (y) if Landlord fails to provide such reimbursement within such 10-business-day period. Tenant, after 30 days’ notice to Landlord, may withhold the amount Landlord failed to reimburse as required hereunder from the next due installment(s) of Rent until Tenant is fully reimbursed.

 

19.4.3              Notwithstanding any contrary provision hereof, before exercising any remedies for a default by Landlord, Tenant shall give notice and a reasonable time to cure to any Security Holder of which Tenant has been notified.

 

20                          LANDLORD EXCULPATION. Notwithstanding any contrary provision hereof, (a) the liability of the Landlord Parties to Tenant shall be limited to an amount equal to the lesser of (i) the value of Landlord’s interest in the Building, or (ii) the value of the equity interest Landlord would have in the Building if the Building were encumbered by third-party debt in an amount equal to 80% of the value of the Building (as such value is determined by Landlord); (b) Tenant shall look solely to Landlord’s interest in the Building for the recovery of any judgment of award against any Landlord Party; (c) no Landlord Party shall have any personal liability for any judgment or deficiency, and Tenant waives and releases such personal liability on behalf of itself and all parties claiming by, through or under Tenant; and (d) no Landlord Parry shall be liable for any injury or damage to, or interference with, Tenant’s business, including loss of profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use, or for any form of special or consequential damage. For purposes of this Section 20. “Landlord’s interest in the Building” shall include rents paid by tenants, insurance proceeds, condemnation proceeds, and proceeds from the sale of the Building (collectively, “Owner Proceeds”); provided, however, that Tenant shall not be entitled to recover Owner Proceeds from any Landlord Party (other than Landlord) or any other third party after they have been distributed or paid to such party; provided further, however, that nothing in this sentence shall diminish any right Tenant may have under Law, as a creditor of Landlord, to initiate or participate in an action to recover Owner Proceeds from a third party on the grounds that such third party obtained such Owner Proceeds when Landlord was, or could reasonably be expected to become, insolvent or in a transfer that was preferential or fraudulent as to Landlord’s creditors.

 

21                          [Intentionally Omitted.]

 

22                          [Intentionally Omitted.]

 

23                          COMMUNICATIONS AND COMPUTER LINES. All Lines shall be (a) installed in accordance with Section 7; and (b) clearly marked with adhesive plastic labels (or plastic tags attached to such Lines with wire) to show Tenant’s name, suite number, and the purpose of such Lines (i) every six (6) feet outside the Premises (including the electrical room risers and any Common Areas), and (ii) at their termination points. Landlord may designate specific contractors for work relating to vertical Lines. Sufficient space for additional cables shall be maintained for other occupants, as reasonably determined by Landlord. Unless otherwise notified by Landlord. Tenant, at its expense and before the expiration or earlier termination hereof, shall remove all Lines and repair any resulting damage. As used herein. “Lines” means all communications or computer wires and cables serving the Premises and installed by or for the benefit of Tenant.

 

24                          PARKING. Tenant may park in the Building’s parking facilities (the “Parking Facility”), in common with other parties, upon the following terms and conditions. Tenant shall not use more than the number of unreserved and/or reserved parking spaces set forth in Section 1.9. Tenant shall not be required to pay any additional rental for such use of such parking spaces. Landlord shall not be liable to Tenant, not shall this Lease be affected, if any parking is impaired by (or any parking charges are imposed as a result of) any Law. Tenant shall comply with all reasonable rules and regulations established by Landlord from time to time for the orderly operation and use of the Parking Facility, including any reasonable sticker or other identification system and the prohibition of vehicle repair and maintenance activities in the Parking Facility. Landlord may, in its reasonable discretion, allocate and assign parking passes among Tenant and the other tenants in the Building provided that such allocation and assignment does not materially increase Tenant’s obligations or materially reduce Tenant’s rights hereunder. Tenant’s use of the Parking Facility shall be at Tenant’s sole risk, and Landlord shall have no duty to prevent any third party from causing any damage to or theft of any vehicles or other property occurring in the Parking Facility or otherwise in connection with any use of the Parking Facility by Tenant or its employees or invitees. Landlord may alter the size, configuration, design, layout or any other aspect of the Parking Facility without abatement of Rent or liability to Tenant provided that such alteration does not materially impair Tenant’s rights under this Section 24. In addition, for purposes of facilitating any such alteration, Landlord may temporarily deny or restrict access to the Parking Facility, without abatement of Rent or liability to Tenant, provided that Landlord uses commercially reasonable efforts to make reasonable substitute parking available to Tenant. Landlord may delegate its

 

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responsibilities hereunder to a parking operator, in which case (i) such parking operator shall have all the right, of control reserved herein by Landlord, (ii) Tenant shall enter into a commercially reasonable parking agreement with such parking operator on substantially the same terms and conditions as those set forth herein with respect to the parking spaces, (iii) Tenant shall pay such parking operator, rather than Landlord, any amounts required to be paid hereunder with respect to the parking spaces, and (iv) Landlord shall have no liability for claims arising through acts or omissions of such parking operator except to the extent caused by Landlord’s negligence or willful misconduct. Tenant’s parking rights under this Section 24 are solely for the benefit of Tenant’s employees and invitees and such rights may not be transferred without Landlord’s prior consent, except pursuant to a Transfer permitted under Section 14.

 

25                          MISCELLANEOUS.

 

25.1                  Notices. Except as provided in Section 18, no notice, demand, statement, designation, request, consent, approval, election or other communication given hereunder (“Notice”) shall he binding upon either party unless (a) it is in writing; (b) it is (i) sent by certified or registered mail, postage prepaid, return receipt requested, (ii) delivered by a nationally recognized courier service, or (iii) delivered personally; and (c) it is sent or delivered to the address set forth in Section 1.10 or 1.11, as applicable, or to such other place (other than a P.O. box) as the recipient may from time to time designate in a Notice to the other party. Any Notice shall be deemed received on the earlier of the date of actual delivery or the date on which delivery is refused, or, if Tenant is the recipient and has vacated its notice address without providing a new notice address, three (3) business days after the date the Notice is deposited in the U.S. mail or with a courier service as described above. No provision of this Lease expressly requiring a particular Notice to be in writing shall limit the generality of clause (a) of the first sentence of this Section 25.1.

 

25.2                  Force Majeure. If either party is prevented from performing any obligation hereunder by any strike, act of God, war, terrorist act, shortage of labor or materials, governmental action, civil commotion or other similar cause beyond such party’s reasonable control (“Force Majeure”), such obligation shall be excused during (and any time period for the performance of such obligation shall be extended by) the period of such prevention; provided, however, that this Section 25.2 shall not (a) permit Tenant to hold over in the Premises after the expiration or earlier termination hereof, (b) excuse any of Tenant’s obligations under Sections 3, 4, 5, 21 or 25.3 or any of Tenant’s obligations whose nonperformance would interfere with another occupant’s use occupancy or enjoyment of its premises or the Project, or (c) except as may be expressly provided herein, extend any period of time whose expiration results, under the express terms hereof, in an abatement of Rent or a right to terminate this Lease.

 

25.3                  Representations and Covenants. Tenant represents, warrants and covenants that (a) Tenant is, and at all times during the Term will remain, duly organized, validly existing and in good standing under the Laws of the state of its formation and qualified to do business in the state of California; (b) neither Tenant’s execution of not its performance under this Lease will cause Tenant to be in violation of any agreement or Law; (c) Tenant (and any guarantor hereof) has not, and at no time during the Term will have, (i) made a general assignment for the benefit of creditors, (ii) filed a voluntary petition in bankruptcy; (iii) suffered the filing by creditors of an involuntary petition in bankruptcy which is not dismissed within 30 days; (iv) suffered the appointment of a receiver to take possession of all or substantially all of its assets, (v) suffered the attachment or other judicial seizure of all or substantially all of its assets, (vi) admitted in writing its inability to pay its debts as they come due, or (vii) made an offer of settlement, extension or composition to its creditors generally; and (d) no party that (other than through the passive ownership of interests traded on a recognized securities exchange) constitutes, owns, controls, or is owned or controlled by Tenant, any guarantor hereof or any subtenant of Tenant is, or any time during the Term will be, (i) in violation of any Laws relating to terrorism or money laundering, or (ii) among the parties identified on any list compiled pursuant to Executive Order 13224 for the purpose of identifying suspected terrorists or on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, http://www.treas.gov/ofac/tllsdn.pdf or any replacement website or other replacement official publication of such list, with the result that it becomes unlawful for Landlord to do business with Tenant.

 

25.4                  Signs. Landlord shall include Tenant’s name in any tenant directory located in the lobby on the first floor of the Building. If any part of the Premises is located on a multi-tenant floor, Landlord, at Tenant’s cost, shall provide identifying suite signage for Tenant comparable to that provided by Landlord on similar floors in the Building Tenant may not install (a) any signs outside the Premises, or (b) without Landlord’s prior consent in its sole and absolute discretion, any signs, window coverings, blinds or similar items that are visible from outside the Premises (provided, however, that Landlord shall not unreasonably withhold its consent to the placement of a sign showing the Tenant Name (defined in Section 5.1 of Exhibit F) in the portion of the Premises on the first (1st) floor of the Building that serves as Tenant’s reception area). Landlord shall not install (or permit any other party to install) in any Common Area located on the ground floor of the Building any sign other than a directory or directional sign.

 

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25.5                  Supplemental HVAC. If any supplemental HVAC unit (a “Unit”) serves the Premises, then (a) Tenant shall pay the costs of all electricity consumed in the Unit’s operation, together with the cost of installing a meter to measure such consumption; (b) Tenant, at its expense, shall (i) operate and maintain the Unit in compliance with all applicable Laws and such reasonable rules and procedures as Landlord may impose; (ii) keep the Unit in as good working order and condition as exists upon its installation (or, if later, on the date Tenant takes possession of the Premises), subject to normal wear and tear and damage resulting from Casualty; (iii) maintain in effect, with a contractor reasonably approved by Landlord, a contract for the maintenance and repair of the Unit, which contract shall require the contractor, at least once every three (3) months, to inspect the Unit and provide to Tenant a report of any defective conditions, together with any recommendations for maintenance, repair or parts-replacement; (iv) follow all reasonable recommendation of such contractor, and (v) promptly provide to Landlord a copy of such contract and each report issued thereunder (provided, however, that Tenant shall not be required to perform any repair or replacement of any Unit if such repair or replacement is capital in nature (as reasonably determined by Landlord in accordance with GAAP) and is not made necessary by any Alteration or Act of Tenant, except to the extent. If any, that such repair or replacement is necessary in order to put such Unit into a configuration or condition that complies with Law and does not pose an unreasonable hazard to person or property); (c) the Unit shall become Landlord’s property upon installation and without compensation to Tenant, provided, however, that if the Unit does not exist on the date hereof, then at the expiration or earlier termination hereof, Tenant, at its expense, shall remove the Unit and repair any resulting damage; (d) the Unit shall be deemed (i) a Leasehold Improvement (except for purposes of Section 8), and (ii) for purposes of Section 11, part of the Premises; (e) if the Unit exists on the date of mutual execution and delivery hereof, Tenant accepts the Unit in its “as is” condition, without representation or warranty as to quality, condition, fitness for use or any other matter; (f) [Intentionally Omitted]; and (g) if any portion of the Unit is located on the roof, then (i) Tenant’s access to the roof shall be subject to such reasonable rules and procedures as Landlord may impose; (ii) Tenant shall maintain the affected portion of the roof in a clean and orderly condition and shall not interfere with use of the roof by Landlord or any other tenants or licensees; and (iii) Landlord may relocate the Unit and/or temporarily interrupt its operation, without liability to Tenant, as reasonably necessary to maintain and repair the roof or otherwise operate the Building.

 

25.6                  Attorneys’ Fees. In any action or proceeding between the parties, including any appellate or alternative dispute resolution proceeding, the prevailing party may recover from the other party all of its costs and expenses in connection therewith, including reasonable attorneys’ fees and costs. Tenant shall pay all reasonable attorneys’ fees and other fees and costs that Landlord incurs in enforcing this Lease (a) where Tenant has failed to pay Rent when due, or (b) in any bankruptcy case, assignment for the benefit of creditors, or other insolvency, liquidation or reorganization proceeding involving Tenant or this Lease.

 

25.7                  Brokers. Tenant represents to Landlord that it has dealt only with Tenant’s Broker as its broker in connection with this Lease. Tenant shall indemnify, defend, and hold Landlord harmless from all claims of any brokers, other than Tenant’s Broker, claiming to have represented Tenant in connection with this Lease. Landlord shall indemnify, defend and hold Tenant harmless from all claims of any brokers, including Landlord’s Broker, claiming to have represented Landlord in connection with this Lease. Tenant acknowledges that any Affiliate of Landlord that is involved in the negotiation of this Lease is representing only Landlord, and that any assistance rendered by any agent or employee of such Affiliate in connection with this Lease or any subsequent amendment or other document related hereto has been or will be rendered as an accommodation to Tenant solely in furtherance of consummating the transaction on behalf of Landlord, and not as agent for Tenant.

 

25.8                  Governing Law; WAIVER OF TRIAL BY JURY. This Lease shall be construed and enforced in accordance with the Laws of the State of California. THE PARTIES WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW. THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING TO THIS LEASE. THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT’S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE OR ANY EMERGENCY OR STATUTORY REMEDY.

 

25.9                  Waiver of Statutory Provisions. Each party waives California Civil Code §§ 1932(2) and 1933(4). Tenant waives (a) any rights under (i) California Civil Code §§ 1932(1), 1941, 1942, 1950.7 or any similar Law, or (ii) California Code of Civil Procedure § 1265.130; and (b) any right to terminate this Lease under California Civil Code § 1995.310.

 

25.10           Interpretation. As used herein, the capitalized term “Section” refers to a section hereof unless otherwise specifically provided herein. As used in this Lease the terms “herein,” “hereof,” “hereto” and “hereunder” refer to this Lease and the term “include” and its derivatives are not limiting. Any reference herein to “any part” or “any portion” of the Premises, the Property or any other property shall be construed to refer to all or any part of such property. Wherever this Lease requires Tenant to comply with any Law, rule, regulation, procedure or other requirement or prohibits Tenant from engaging in any particular conduct this Lease shall be deemed also to require Tenant to cause each of its employees, licensees, invitees and subtenants, and any other party claiming by, through or under

 

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Tenant, to comply with such requirement or refrain from engaging in such conduct, as the case may be. Wherever this Lease requires Landlord to provide a customary service or to act in a reasonable manner (whether in incurring an expense, establishing a rule or regulation, providing an approval or consent, or performing any other act), this Lease shall be deemed also to provide that whether such service is customary or such conduct is reasonable shall be determined by reference to the practices of owners of buildings that (i) are comparable to the Building in size, age, class, quality and location, and (ii) at Landlord’s option, have been, or are being prepared to be, certified under the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system or a similar rating system (“Comparable Buildings”) Tenant waives the benefit of any rule that a written agreement shall be construed against the drafting party. Whenever this Lease requires all approval, consent, selection or judgment by either Landlord or Tenant, unless another standard (such as “good faith”) is expressly set forth, such approval, consent, selection or judgment shall not be unreasonably withheld or delayed. For purposes hereof, (a) a matter (such as the application or violation of a Law) shall be deemed to result from a particular use (as distinguished from general office/R&D use) of the Premises if and only if such matter results from such use and a different office/R&D use could be made of the Premises without resulting in such matter; and (b) a matter (such as compliance with a Law) shall be deemed to be required for a particular use (as distinguished from general office/R&D use) of the Premises if and only if such matter is required for such use and a different office/R&D use could be made of the Premises without requiring such matter. For purposes hereof, a portion of the Premises shall be deemed to be untenantable during any period in which it cannot be used for any office/R&D use and is not used by Tenant other than to store Tenant’s property.

 

25.11           Entire Agreement. This Lease sets forth the entire agreement between the parties relating to the subject matter hereof and supersedes any previous agreements (none of which shall be used to interpret this Lease). Tenant acknowledges that in entering into this Lease it has not relied upon any representation, warranty or statement, whether oral or written, not expressly set forth herein. This Lease can be modified only by a written agreement signed by both parties.

 

25.12           Other. Landlord, at its option, may cure any Default, without waiving any right or remedy or releasing Tenant from any obligation, in which event Tenant shall pay Landlord, upon demand, the cost of such cure. If any provision hereof is void or unenforceable, no other provision shall be affected. Submission of this instrument for examination or signature by Tenant does not constitute an option or offer to lease, and this instrument is not binding until it has been executed and delivered by both parties. If Tenant is comprised of two or more parties, their obligations shall be joint and several. Time is of the essence with respect to the performance of every provision hereof in which time of performance is a factor. So long as Tenant performs its obligations hereunder, Tenant shall have peaceful and quiet possession of the Premises against any party claiming by, through or under Landlord, subject to the terms hereof. Landlord may transfer its interest herein, in which event Landlord shall be released from, and Tenant shall look solely to the transferee for the performance of, all of Landlord’s obligations arising hereunder after the date of such transfer (including the return of any Security Deposit), but only to the extent the transferee has assumed such obligations (whether by agreement or by operation of Law), and Tenant shall attorn to the transferee. If Tenant (or any party claiming by, through or under Tenant) pays directly to the provider for any energy consumed at the Property, Tenant, promptly upon request, shall deliver to Landlord (or, at Landlord’s option, execute and deliver to Landlord an instrument enabling Landlord to obtain from such provider) any data about such consumption that Landlord, in its reasonable judgment, is required to disclose to a prospective buyer, tenant or Security Holder under California Public Resources Code § 25402.10 or any similar Law. Landlord reserves all rights not expressly granted to Tenant hereunder, including the right to make alterations to the Project. No rights to any view of to light or air over any property are granted to Tenant hereunder. Landlord reserves to itself the right, from time to time, to grant such easements, rights and dedications that Landlord deems necessary or desirable, and to cause the recordation of Parcel Maps and conditions, covenants and restrictions, so long as such easements, rights, dedications. Parcel Maps and conditions, covenants and restrictions do not (a) unreasonably interfere with Tenant’s use of the Premises, the Common Area or the Parking Facility, including access thereto, or (b) materially increase Tenant’s obligations or materially reduce Tenant’s rights hereunder. Upon 10 days prior written request, Tenant shall sign any such documents, and take such other actions, which are reasonably necessary or appropriate to accomplish such granting, recordation and subordination of this Lease to same. The expiration or termination hereof shall not relieve either party of any obligation that accrued before, or continues to accrue after, such expiration or termination.

 

25.13           Athletic Facility. Subject to the provisions of this Section 25.13, Landlord shall provide Tenant with the Applicable Number (defined below) of memberships to the athletic facility located at 1100 Seaport Boulevard, Redwood City, California (the “Athletic Facility “). Such memberships shall be for the non-exclusive use of the Athletic Facility by Tenant’s employees during the Term. Such memberships shall be provided at no additional periodic charge beyond that required under Sections 1.5 and 3, provided, however that subject to the terms of such memberships, additional charges for particular services or privileges may apply. Any Tenant employee electing to use one of the memberships and the Athletic Facility first shall execute and deliver to Landlord (or the owner or operator of such Athletic Facility) Landlord’s (or such owner’s or operator’s) then-standard form of license or other agreement

 

25

 

governing such use. The use of the Athletic Facility shall be subject to the reasonable rules and regulations (including rules regarding hours of use) established from time to time by Landlord (or the owner or operator of such Athletic Facility). Tenant shall indemnify, defend, protect, and hold the Landlord Parties harmless from any Claim that is imposed or asserted by any third party and arises from (a) any negligence or willful misconduct of Tenant’s employee(s) in connection with the use of the Athletic Facility, or (b) any breach by Tenant’s employee(s) of any representation, covenant or other term contained in the license or other agreement governing such employee’s use of the Athletic Facility. The costs of operating, maintaining and repairing the Athletic Facility shall be included as part of Expenses, subject to the terms and conditions of Section 4. For purposes of this Section 25.13, “Applicable Number” means the largest whole number not exceeding the number obtained by multiplying Tenant’s Project Share (defined below) by 6,400. As used herein, “Tenant’s Project Share” means the percentage obtained by dividing the rentable square footage of the Premises by the rentable square footage of the Project, as determined by Landlord from time to time. The parties acknowledge that, as of the date hereof, (a) the rentable square footage of the Project is 1,672,073 rentable square feet; and (b) Tenant’s Project Share is 6.3361%.

 

25.14                         Project Declaration. The parties acknowledge that (a) all provisions of this Lease are subject and subordinate to the terms of the Project Declaration (defined below), and (b) under the Project Declaration, the Declarant (as defined in the Project Declaration) or the Association (as defined in the Project Declaration) is responsible, by itself or through the Manager (as defined in the Project Declaration), for maintaining, repairing, replacing, restoring, operating and maintaining (“Operating”) the Project Common Areas (defined below) on the terms and conditions of, and subject to the allocation and assessment of costs incurred as provided in, the Project Declaration. Accordingly, the parties agree that, notwithstanding any contrary provision in this Lease, (i) Tenant’s rights hereunder are subject and subordinate to the terms of the Project Declaration; (ii) to the extent Landlord is no longer the Declarant nor the Manager (or to the extent the Project Common Areas are owned or Operated by the Association), Landlord’s obligations hereunder to provide Tenant (or Tenant’s employees) with rights to use the Project Common Areas shall be limited to the obligation to use commercially reasonable efforts to enforce the obligations of such parties under the Project Declaration to provide Tenant (or Tenant’s employees) with such rights; (iii) to the extent Landlord is no longer the Declarant nor the Manager (or to the extent the Project Common Areas are owned or Operated by the Association), Landlord’s obligations hereunder to Operate the Project Common Areas as described herein shall be limited to the obligations to (A) use commercially reasonable efforts to enforce the obligations of such parties under the Project Declaration to so Operate the Project Common Areas, and (B) perform any obligations to so Operate the Project Common Areas that Landlord may have under the Project Declaration; and (iv) all “Assessments” (as defined in the Project Declaration) attributable to the Property shall be included in Expenses, subject to the terms and conditions of Section 4. Landlord shall have no liability for claims arising from acts or omissions of the Association nor, to the extent Landlord is no longer the Declarant nor the Manager, for the acts or omissions of any such parties. Without limiting the foregoing, Landlord shall not be liable to Tenant, and Tenant shall not be entitled to any abatement of Rent, as a result of a person or entity exercising its rights under the Project Declaration. Tenant shall not breach, nor cause Landlord to be in breach of, the terms of the Project Declaration. Without limitation, Tenant, at its sole cost and expense, shall comply with the following terms of the Project Declaration to the extent applicable to the Tenant’s use and occupancy of the Premises and/or Tenant’s use of the Building or Project Common Areas: Sections 6.2, 6.3, 6.4, 7.1, 7.3, 7.4, 7.6, 7.10, 7.11, 7.12, 7.13, 7.14, 7.15, 7.16, 7.17, 7.18 and 7.19; provided, however, that Tenant shall not submit any plans for approval by the Committee (as defined in the Project Declaration) without the prior written consent of Landlord. As used herein, “Project Common Areas” means the areas defined in the Project Declaration as “Common Areas.” As used herein, “Project Declaration” means that certain Declaration of Covenants, Conditions, Restrictions, Easements and Charges for Commercial Planned Development dated June 9, 2000 and recorded July 21, 2000 as Instrument No. 2000-089122 in the Official Records of the County of San Mateo, California, as amended by (1) that certain First Amendment to Declaration of Covenants, Conditions, Restrictions, Easements and Charges for Commercial Planned Development dated as of December 6, 2006 and recorded December 7, 2006 as Instrument No. 2006-185322 in the Official Records of the County of San Mateo, California and (2) that certain Second Amendment to Declaration of Covenants, Conditions, Restrictions, Easements and Charges for Commercial Planned Development dated as of April    , 2007 and recorded April 11, 2007 as Instrument No. 2007-055324 in the Official Records of the County of San Mateo, California.

 

25.15                         Underlying Documents. Tenant agrees that (i) Tenant’s rights under this Lease are subject and subordinate to the Underlying Documents (defined below), (ii) Tenant shall not cause Landlord to be in breach of the Underlying Documents, and (iii) to the extent applicable to Tenant’s use and occupancy of the Premises and/or Tenant’s use of the Building and the Common Areas, Tenant shall comply with the terms of the Underlying Documents at its sole cost and expense. As used herein, “Underlying Documents” means any covenants, conditions restrictions and other documents of record applicable to the Project (except for the Project Declaration and any Security Agreement, which documents are addressed elsewhere in this Lease).

 

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[SIGNATURES ARE ON THE FOLLOWING PAGE]

 

27

 

IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed the day and date first above written.

 

 

	
 
    	
LANDLORD:
    
	
 
    	
 
    
	
 
    	
VII   PAC SHORES INVESTORS, L.L.C., a
    
	
 
    	
Delaware   limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Kenneth   Young
    
	
 
    	
Name:
    	
Kenneth   Young
    
	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TENANT:
    
	
 
    	
 
    
	
 
    	
ROCKET   FUEL INC. a Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
N/A
    
	
 
    	
Name:
    	
N/A
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
[chairman]   [president] [vice-president]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   J. Peter Bardwick
    
	
 
    	
Name:
    	
J.   Peter Bardwick
    
	
 
    	
Title:
    	
CFO   
    	
8/5/2013
    
	
 
    	
 
    	
[secretary][assistant   secretary] [chief
    
	
 
    	
 
    	
financial   officer] [assistant treasurer]
    

 

28

 

EXHIBIT A-1

 

PACIFIC SHORES CENTER – BUILDING NUMBER 3

 

OUTLINE OF SUITE 100

 

[FLOOR PLAN]

 

1

 

Exhibit A-2

 

PACIFIC SHORES CENTER – Building Number 3

 

Outline of suite 300

 

[FLOOR PLAN]

 

1

 

EXHIBIT A-3

 

PACIFIC SHORES CENTER – BUILDING NUMBER 3

 

OUTLINE OF SUITE 400

 

[FLOOR PLAN]

 

1

 

EXHIBIT B

 

PACIFIC SHORES CENTER – BUILDING NUMBER 3

 

WORK LETTER

 

As used in the Exhibit B (this “Work Letter”), the following terms shall have the following meanings. “Initial Alterations” means all Alterations to be constructed in the Premises pursuant to this Work Letter, “Initial Alteration Work” means the construction of the Initial Alterations, together with any related work (including demolition) that is necessary to construct the Initial Alterations.

 

1                                 ALLOWANCE.

 

1.1               Allowance. Tenant shall be entitled to a one-time tenant improvement allowance (the “Allowance”) in the amount of $3,702,135.11 (i.e., $35.00 per rentable square foot of the Premises) to be applied toward (a) the TI Allowance Items (defined in Section 1.2.1 below), as more fully provided in Section 1.2.1 below, and (b) the Other Allowance Items (defined in Section 1.3 below), as more fully provided in Section 1.3 below. Tenant shall be responsible for all costs associated with the Initial Alteration Work, including the costs of the TI Allowance Items, to the extent such costs exceed the lesser of (a) the sum of the Allowance and the Space Planning Allowance (defined in Section 1.4 below), or (b) the aggregate amount that Landlord is required to disburse for such purpose pursuant to this Work Letter. Tenant shall be responsible for all costs associated with the Other Allowance Items to the extent such costs exceed the aggregate amount that Landlord is required to disburse for such purpose pursuant to this Work Letter. Notwithstanding any contrary provision of this Lease, if Tenant fails to use the entire Allowance by June 30, 2015, the unused amount shall revert to Landlord and Tenant shall have no further rights with respect thereto.

 

1.2               Disbursement of Allowance.

 

1.2.1                     TI Allowance Items. Except as otherwise provided in this Work Letter, the Allowance shall be disbursed by Landlord only for the following items (the “TI Allowance Items”) (a) the cost of planning, design and engineering of the Initial Alterations, including the fees of Tenant’s architect and engineers, if any, and any Review Fees (defined in Section 2.3 below); (b) plan-check, permit and license fees relating to performance of the Initial Alteration Work; (c) the cost of performing the Initial Alteration Work, including permitting, construction and installation costs, after hours charges, testing and inspection costs, freight elevator usage, hoisting and trash removal costs, contractors’ fees and general conditions, and project management fees; (d) the cost of any change to the base, shell or core of the Premises or Building required by Tenant’s plans and specifications (the “Plans”) (including if such change is due to the fact that such work is prepared on an unoccupied basis), including all direct architectural and/or engineering fees and expenses incurred in connection therewith; (e) the cost of any change to the Plans or Initial Alteration Work required by Law; (f) the Coordination Fee (defined in Section 2.3 below); and (g) sales and use taxes.

 

1.2.2                     Disbursement. Subject to the terms hereof, Landlord shall make monthly disbursements of the Allowance for TI Allowance Items as follows.

 

1.2.2.1                                   Monthly Disbursements. Not more frequently than once per calendar month. Tenant may deliver to Landlord: (i) a request for payment of Tenant’s contractor, approved by Tenant, in AIA G-702/G-703 format or another format reasonably requested by Landlord, showing the schedule of values, by trade, of percentage of completion of the Initial Alteration Work, detailing the portion of the work completed and the portion not completed (which approved request shall be deemed Tenant’s approval and acceptance of the work and materials described therein); (ii) copies of all third-party contracts (including change orders) pursuant to which the Initial Alteration Work has been performed. including paid invoices from all parties providing labor or materials to the Premises (collectively, the “Construction Contracts”); (iii) executed conditional mechanic’s lien releases from all parties providing labor or materials to the Premises (along with unconditional mechanic’s lien releases for any prior payments made pursuant to the paragraph) satisfying California Civil Code §§ 8132 and/or 8134, as applicable; and (iv) all other information reasonably requested by Landlord. Within 30 days after receiving such materials, Landlord shall deliver a check to Tenant, payable jointly to Tenant and its contractor, in the amount of the lesser of (a) Landlord’s Share (defined below) of the amount requested by Tenant pursuant to the preceding sentence, less a 10% retention (the aggregate amount of such retentions shall be referred to in this Work Letter as the “Final Retention”), or (b) the amount of any remaining portion of the Allowance (not including the Final Retention). Landlord’s payment of such amounts shall not be deemed Landlord’s approval or acceptance of the work or materials described in Tenant’s payment request. As used in this Section 1.2.2.1. “Landlord’s Share” means the lesser of (i) 100%, or (ii) the percentage obtained by dividing the Allowance by the estimated sum of all TI Allowance Items, as determined based on the Construction Contracts.

 

1

 

1.2.2.2                                   Final Retention. Subject to the terms hereof, Landlord shall deliver to Tenant a check for the Final Retention, together with any other undisbursed portion of the Allowance required to pay for the TI Allowance Items, within 30 days after the latest of (a) the completion of the Initial Alteration Work in accordance with the approved plans and specifications; (b) Landlord’s receipt of (i) copies of all Construction Contracts; (ii) executed unconditional mechanic’s lien releases satisfying California Civil Code § 8138; (iii) a certificate from Tenant’s architect, in a form reasonably acceptable to Landlord, certifying that the Initial Alteration Work has been substantially completed; (iv) evidence that all governmental approvals required for Tenant to legally occupy the Premises have been obtained, and (v) any other information reasonably requested by Landlord; (c) Tenant’s delivery to Landlord of “as built” drawings (in CAD format, if requested by Landlord); or (d) Tenant’s compliance with Landlord’s standard “close-out” requirements regarding city approvals, closeout tasks, Tenant’s contractor, financial close-out matters, and Tenant’s vendors. Landlord’s payment of the Final Retention shall not be deemed Landlord’s approval of acceptance of the work or materials described in Tenant’s payment requests.

 

1.3               Disbursement for Other Allowance Items. If any portion of the Allowance remains after the TI Allowance Items have been fully paid for, then, subject to the last sentence of Section 1.1 above, Landlord, upon Tenant’s request, shall disburse such portion of the Allowance, not to exceed $211,550.58 (i.e., $2.00 per rentable square foot of the Premises), to Tenant, to be applied toward the reasonable costs of purchasing and installing in the Premises Tenant’s Lines, furniture, equipment, fixtures and/or other personal property (collectively “Other Allowance Items”), within 30 days after receiving paid invoices from Tenant with respect to such costs.

 

1.4               Space Planning Allowance. In addition to providing the Allowance, Landlord shall reimburse Tenant an amount not to exceed $10,000.00 (the “Space Planning Allowance”) toward the cost of Tenant’s preparation of test-fits for the Premises. The Space Planning Allowance shall be paid to Tenant within 30 days following Landlord’s receipt of paid invoices for the test-fit costs incurred and a copy of full and final waivers of lien from the space planner and/or consultants retained by Tenant. If Tenant does not submit a request for payment of the entire Space Planning Allowance by June 30, 2015, any unused amount shall accrue to the sole benefit of Landlord, it being understood that Tenant shall not be entitled to any credit, abatement or other concession in connection therewith.

 

1.5               Landlord Costs. If the reasonable cost of the Initial Alteration Work is increased by reason of any Landlord Condition (defined below) and not by reason of any Act of Tenant, then the Allowance shall be increased by an amount equal to such cost increase. As used herein, “Landlord Condition” means (a) the existence in the Premises on the Delivery Date of (i) asbestos-containing materials, or (ii) Hazardous Materials in amounts or conditions that violate applicable Laws, or (b) any failure, on the Delivery Date, of the configuration or condition of the Base Building or the Common Areas of the Building or the Project to comply with the ADA or any other applicable Law, other than any such failure resulting from any particular use of the Premises (as distinguished from general office/R&D use).

 

1.6               Failure to Disburse. If Landlord fails to disburse any portion of the Allowance when due hereunder and such failure continues for 30 days after Tenant’s demand therefor (which demand shall reference, and quote verbatim in its entirety, this Section 1.6). Tenant may deduct such portion of the Allowance from the next due installment of Rent and each subsequent installment of Rent until Tenant is fully reimbursed for such portion of the Allowance.

 

2                                 MISCELLANEOUS.

 

2.1               Applicable Lease Provisions. Without limitation, the Initial Alteration Work shall be subject to Sections 7.2, 7.3 and 8 of this Lease. For purposes of Section 7.3 of this Lease, Landlord hereby approves Quezada Architecture as Tenant’s architect for the Initial Alteration Work.

 

2.2               Plans and Specifications.

 

2.2.1                     Generally. Landlord shall provide Tenant with notice approving or disapproving any proposed plans and specifications for the Initial Alteration Work within 10 business days after the later of Landlord’s receipt thereof from Tenant of the mutual execution and delivery of this Lease. Any such notice of disapproval shall describe with reasonable specificity the basis of disapproval and the changes that would be necessary to resolve Landlord’s objections.

 

2.2.2.                  Proposed Initial Alterations. Landlord shall not withhold its consent, pursuant to Section 7.2 of this Lease, to any Initial Alterations described with reasonable specificity in the preliminary Fit Plan dated July 18, 2013 prepared by Quezada Architects, a copy of which is attached as Exhibit B-1 (“Proposed Initial Alterations”); provided, however, that Landlord may impose reasonable conditions upon such consent, including the condition that Tenant, at its expense and pursuant to Section 8 of this Lease, remove such Proposed Initial Alterations before the expiration or earlier termination of this Lease.

 

2

 

2.3               Review Fees; Coordination Fee. Tenant shall reimburse Landlord, upon demand, for any fees reasonably incurred by Landlord for review of the Plans by Landlord’s third party consultants (“Review Fees”). In consideration of Landlord’s coordination of the Initial Alteration Work, Tenant shall pay Landlord a fee (the “Coordination Fee”) in an amount equal to 1.25% of the amount of the Allowance (excluding any increases in the Allowance pursuant to Section 1.5 above). Other than the Review Fees and the Coordination Fee. Tenant shall not be required to pay any construction management, profit or overhead charges or review fees of Landlord in connection with the Initial Alteration Work.

 

2.4               Tenant Default. Notwithstanding any contrary provision of this Lease, if Tenant defaults under this Lease before the Initial Alteration Work is completed, then (a) Landlord’s obligations under this Work Letter shall be excused, and Landlord may cause Tenant’s contractor to cease performance of the Initial Alteration Work, until such default is cured, and (b) Tenant shall be responsible for any resulting delay in the completion of the Initial Alteration Work.

 

2.5               Landlord Delay. If, as a result of (a) any negligence, willful misconduct or breach of this Lease of or by Landlord, or (b) any Landlord Condition, and not in either case because of any failure of Tenant to use reasonable efforts to mitigate the effects thereof or because of any Act of Tenant. Tenant’s substantial completion of the Initial Alteration Work is delayed beyond the Outside Date (a “Landlord Delay”), then, as Tenant’s sole remedy for such Landlord Delay, the Outside Date shall be postponed by one (1) day for each day of such Landlord Delay.

 

2.6               No Obligation to Perform Initial Alteration Work. Nothing in this Work Letter shall be deemed to require Tenant to design or perform any Initial Alteration Work.

 

2.7               Other. This Work Letter shall not apply to any space other than the Premises.

 

3

 

EXHIBIT B-1

 

PACIFIC SHORES CENTER – BUILDING NUMBER 3

 

PROPOSED INITIAL ALTERATIONS

 

See Attached

 

1

 

EXHIBIT C

 

PACIFIC SHORES CENTER – BUILDING NUMBER 3

 

CONFIRMATION LETTER

 

	
 
    	
, 20
    	
 
    
	
 
    	
 
    	
 
    
	
To:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

Re: Office Lease (the “Lease”) dated                    , 20       , between                                        , a                                        (“Landlord”), and                                 , a                                      (“Tenant”), concerning Suite                    on the               floor of the building located at 1900 Seaport Boulevard, Redwood City, CA 94063, commonly known as Pacific Shores Center - Building Number 3.

 

Lease ID:

Business Unit Number:

 

Dear                               :

 

In accordance with the Lease, Tenant accepts possession of the Premises and confirms that the Commencement Date is               and the Expiration Date is                        .

 

Please acknowledge the foregoing by signing all three (3) counterparts of this letter in the space provided below and returning two (2) fully executed counterparts to my attention. Please note that, pursuant to Section 2.1.1 of the Lease, if Tenant fails to execute and return (or, by notice to Landlord, reasonably object to) this letter within 10 days after receiving it, Tenant shall be deemed to have executed and returned it without exception.

 

 

	
 
    	
“Landlord”:
    
	
 
    	
 
    
	
 
    	
                                                ,
    
	
 
    	
a
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
Agreed and Accepted as of                             ,   20   .
    	
 
    
	
 
    	
 
    
	
“Tenant”:
    	
 
    
	
 
    	
 
    
	
                                                ,
    	
 
    
	
a
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    

 

1

 

 

EXHIBIT D

 

PACIFIC SHORES CENTER — BUILDING NUMBER 3

 

RULES AND REGULATIONS

 

Tenant shall comply with the following rules and regulations (as modified or supplemented from time to time, the “Rules and Regulations”). Landlord shall not be responsible to Tenant for the nonperformance of any of the Rules and Regulations by any other tenants or occupants of the Project. In the event of any conflict between the Rules and Regulations and the other provisions of this Lease, the latter shall control. Notwithstanding any contrary provision of this Exhibit D. Sections 2, 3 and 5 below shall not apply during any period in which the Premises comprise 100% of the rentable square footage of the Building.

 

1.                                      Tenant shall not alter any lock or install any new or additional locks or bolts on any doors or windows of the Premises without obtaining Landlord’s prior consent. Tenant shall bear the cost of any lock changes or repairs required by Tenant. Two (2) keys will be furnished by Landlord for the Premises, and any additional keys required by Tenant must be obtained from Landlord at a reasonable cost to be established by Landlord. Upon the termination of this Lease, Tenant shall restore to Landlord all keys of stores, offices and toilet rooms furnished to or otherwise procured by Tenant, and if any such keys are lost, Tenant shall pay Landlord the cost of replacing them or of changing the applicable locks if Landlord deems such changes necessary.

 

2.                                      All doors opening to public corridors shall be kept closed at all times except for normal ingress and egress to the Premises.

 

3.                                      Landlord may close and keep locked all entrance and exit doors of the Building during such hours as are customary for comparable buildings in the vicinity of the Building. Tenant shall cause its employees, agents, contractors, invitees and licensees who use Building doors during such hours to securely close and lock them after such use. Any person entering or leaving the Building during such hours, or when the Building doors are otherwise locked, may be required to sign the Building register, and access to the Building may be refused unless such person has proper identification or has a previously arranged access pass. Landlord will furnish passes to persons for whom Tenant requests them. Tenant shall be responsible for all persons for whom Tenant requests passes and shall be liable to Landlord for all acts of such persons. Landlord and its agents shall not be liable for damages for any error with regard to the admission or exclusion of any person to or from the Building. In case of invasion, mob, riot, public excitement or other commotion, Landlord may prevent access to the Building or the Project during the continuance thereof by any means it deems appropriate for the safety and protection of life and property.

 

4.                                      Landlord may prescribe the weight, size and position of all safes and other heavy property brought into the Building and also the times and manner of moving the same in and out of the Building. Safes and other heavy objects shall, if considered necessary by Landlord, stand on supports of such thickness as is necessary to properly distribute the weight. Landlord will not be responsible for loss of or damage to any such safe or property. Any damage to the Building, its contents, occupants or invitees resulting from Tenant’s moving or maintaining any such safe or other heavy property shall be the sole responsibility and expense of Tenant (notwithstanding Sections 7 and 10.4 of this Lease).

 

5.                                      No furniture, freight or equipment shall be brought into the Building without prior notice to Landlord. All moving activity into or out of the Building shall be scheduled with Landlord and done only at such time and in such manner as Landlord designates. No furniture, packages, supplies, equipment or merchandise will be received in the Building or carried up or down in the elevators, except between such hours, in such specific elevator and by such personnel as shall be designated by Landlord.

 

6.                                      Employees of Landlord shall not perform any work or do anything outside their regular duties unless under special instructions from Landlord.

 

7.                                      No sign, advertisement, notice or handbill shall be exhibited, distributed, painted or affixed by Tenant on any part of the Premises or the Building without Landlord’s prior consent. Tenant shall not disturb, solicit, peddle or canvass any occupant of the Project.

 

8.                                      The toilet rooms, 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 shall be thrown therein Notwithstanding Sections 7 and 10.4 of this Lease, Tenant shall bear the expense of any breakage, stoppage or damage resulting from any violation of this rule by Tenant or any of its employees, agents, contractors, invitees or licensees.

 

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9.                                      Tenant shall not overload the floor of the Premises, or mark, drive nails or screws or drill into the partitions, woodwork or (other than by reasonable methods in order to hang customary lightweight office decorations such as pictures and whiteboards) drywall of the Premises, or otherwise deface the Premises, without Landlord’s prior consent. Tenant shall not purchase bottled water, ice, towel, linen, maintenance or other like services from any person not on Landlord’s list of approved providers of such services or otherwise reasonably approved by Landlord.

 

10.                               Except for vending machines intended for the sole use of Tenant’s employees and invitees, no vending machine or machines other than fractional horsepower office machines shall be installed, maintained of operated in the Premises without Landlord’s prior consent.

 

11.                               Tenant shall not, without Landlord’s prior consent, use, store, install, disturb, spill, remove, release or dispose of, within or about the Premises or any other portion of the Project, any asbestos-containing materials, any solid, liquid of gaseous material now or subsequently considered toxic or hazardous under the provisions of 42 U.S.C. Section 9601 et seq. or any other applicable environmental Law, or any inflammable, explosive or dangerous fluid or substance provided, however, that Tenant may use, store and dispose of such substances in such amounts as are typically found in similar premises used for general office purposes provided that such use, storage and disposal does not damage any part of the Premises, Building or Project and is performed in a safe manner and in accordance with all Laws. Tenant shall comply with all Laws pertaining to and governing the use of such materials by Tenant and shall remain solely liable for the costs of abatement and removal. No burning candle or other open flame shall be ignited or kept by Tenant in or about the Premises, Building or Project.

 

12.                               Tenant shall not, without Landlord’s prior consent, use any method of healing of air conditioning other than that supplied by Landlord.

 

13.                               Tenant shall not use or keep any foul or noxious gas or substance in or on the Premises, or occupy or use the Premises in a manner offensive or objectionable to Landlord or other occupants of the Project by reason of noise, odors or vibrations, or interfere with other occupants or those having business therein, whether by the use of any musical instrument, radio, CD player or otherwise. Tenant shall not throw anything out of doors, windows or skylights or down passageways.

 

14.                               Tenant shall not bring into or keep within the Project, the Building or the Premises any animals (other than service animals), birds, aquariums, or, except in areas designated by Landlord, bicycles or other vehicles.

 

15.                               No cooking shall be done in the Premises, nor shall the Premises be used for lodging, for living quarters or sleeping apartments, or for any improper, objectionable or immoral purposes. Notwithstanding the foregoing, Underwriters’ laboratory-approved equipment and microwave ovens may be used in the Premises for heating food and brewing coffee, tea, hot chocolate and similar beverages for employees and invitees, provided that such use complies with all Laws.

 

16.                               The Premises shall not be used for manufacturing or for the storage of merchandise except to the extent such storage may be incidental to the Permitted Use. Tenant shall not occupy the Premises as an office for a messenger-type operation or dispatch office, public stenographer or typist, or for the manufacture or sale of liquor, narcotics or tobacco, or as a medical office, a barber or manicure shop, or an employment bureau, without Landlord’s prior consent. Tenant shall not engage or pay any employees in the Premises except those actually working for Tenant in the Premises, nor advertise for laborers giving an address at the Premises.

 

17.                               Landlord may exclude from the Project any person who, in Landlord’s judgment, is intoxicated or under the influence of liquor or drugs, or who violates any of these Rules and Regulations.

 

18.                               Tenant shall not loiter in or on the entrances, corridors, sidewalks, lobbies, courts, halls, stairways, elevators, vestibules or any Common Areas for the purpose of smoking tobacco products or for any other purpose, nor in any way obstruct such areas, and shall use them only as a means of ingress and egress for the Premises.

 

19.                               [Intentionally Omitted.]

 

20.                               Tenant shall store all its trash and garbage inside the Premises. No material shall be placed in the trash or garbage receptacles if, under Law, it may not be disposed of in the ordinary and customary manner of disposing of trash and garbage in the vicinity of the Building. All trash, garbage and refuse disposal shall be made only through entryways and elevators provided for such purposes at such times as Landlord shall designate. Tenant shall comply with Landlord’s recycling program, if any.

 

21.                               Tenant shall comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any governmental agency.

 

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22.                               Any persons employed by Tenant to do janitorial work (a) shall be subject to Landlord’s prior consent, and (b) shall not, in Landlord’s reasonable judgment, disturb labor harmony with any workforce or trades engaged to performing other work or services at the Project, and Tenant shall be responsible for all acts of such person.

 

23.                               No awning or other projection shall be attached to the outside walls of the Building without Landlord’s prior consent. Other than Landlord’s Building-standard window coverings, no curtains, blinds, shades or screens shall be attached to or hung in, or used in connection with, any window or door of the Premises. All electrical ceiling fixtures hung in the Premises or spaces along the perimeter of the Building must be fluorescent and/or of a quality, type, design and a warm white bulb color approved in advance by Landlord. Neither the interior nor exterior of any windows shall be coated or otherwise sunscreened without Landlord’s prior consent. Tenant shall abide by Landlord’s regulations concerning the opening and closing of window coverings.

 

24.                               Tenant shall not obstruct any sashes, sash doors, skylights, windows or doors that reflect or admit light or air into the halls, passageways or other public places in the Building, nor shall Tenant place any bottles, parcels or other articles on the windowsills.

 

25.                               Tenant must comply with requests by Landlord concerning the informing of their employees of items of importance to the Landlord.

 

26.                               Tenant must comply with the State of California “No-Smoking” law set forth in California Labor Code Section 6404.5 and with any local “No-Smoking” ordinance that is not superseded by such law.

 

27.                               Tenant shall cooperate in any reasonable safety or security program developed by Landlord or required by Law.

 

28.                               All office equipment of an electrical or mechanical nature shall be placed by Tenant in the Premises in settings approved by Landlord, to absorb or prevent any vibration, noise or annoyance.

 

29.                               Tenant shall not use my hand trucks except those equipped with rubber tires and rubber side guards.

 

30.                               No auction, liquidation, fire sale, going-out-of-business or bankruptcy sale shall be conducted in the Premises without Landlord’s prior consent.

 

31.                               Without Landlord’s prior consent, Tenant shall not use the name of the Project or Building or use pictures or illustrations of the Project or Building in advertising or other publicity or for any purpose other than as the address of the business to be conducted by Tenant in the Premises.

 

Landlord may from time to time modify or supplement these Rules and Regulations in a manner that, in Landlord’s reasonable judgment, is appropriate for the management, safety, care and cleanliness of the Premises, the Building, the Common Areas and the Project, for the preservation of good order therein, and for the convenience of other occupants and tenants thereof, provided that no such modification of supplement shall materially reduce Tenant’s rights or materially increase Tenant’s obligations hereunder. Landlord may waive any of these Rules and Regulations for the benefit of any tenant, but no such waiver shall be construed as a waiver of such Rule and Regulation in favor of any other tenant nor prevent Landlord from thereafter enforcing such Rule and Regulation against any tenant.

 

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EXHIBIT E

 

PACIFIC SHORES CENTER—BULDING NUMBER 3

 

JUDICIAL REFERENCE

 

IF THE JURY-WAIVER PROVISIONS OF SECTION 25.8 OF THIS LEASE ARE NOT ENFORCEABLE UNDER CALIFORNIA LAW, THE PROVISIONS SET FORTH BELOW SHALL APPLY.

 

It is the desire and intention of the parties to agree upon a mechanism and procedure under which controversies and disputes arising out of this Lease or related to the Premises will be resolved in a prompt and expeditious manner. Accordingly, except with respect to actions for unlawful or forcible detainer or with respect to the prejudgment remedy of attachment, any action, proceeding or counterclaim brought by either party hereto against the other (and/or against its officers, directors, employees, agents or subsidiaries or affiliated entities) on any matters arising out of or in any way connected with this Lease, Tenant’s use or occupancy of the Premises and/or any claim of injury or damage, whether sounding in contract, fort, or otherwise, shall be heard and resolved by a referee under the provisions of the California Code of Civil Procedure, Sections 638 — 645.1, inclusive (as same may be amended, or any successor statute(s) thereto) (the “Referee Sections”). Any fee to initiate the judicial reference proceedings and all fees charged and costs incurred by the referee shall be paid by the party initiating such procedure (except that if a reporter is requested by either party, then a reporter shall be present at all proceedings where requested and the fees of such reporter — except for copies ordered by the other parties — shall be borne by the party requesting the reporter); provided however, that allocation of the costs and fees, including any initiation fee, of such proceeding shall be ultimately determined in accordance with Section 25.6 of this Lease. The venue of the proceedings shall be in the county in which the Premises are located. Within 10 days of receipt by any party of a request to resolve any dispute or controversy pursuant to this Exhibit E, the parties shall agree upon a single referee who shall try all issues, whether of fact or law, and report a finding and judgment on such issues as required by the Referee Sections. If the parties are unable to agree upon a referee within such 10-day period, then any party may thereafter file a lawsuit in the county in which the Premises are located for the purpose of appointment of a referee under the Referee Sections. If the referee is appointed by the court, the referee shall be a neutral and impartial retired judge with substantial experience in the relevant matters to be determined, from Jams/Endispute, Inc., ADR Services, Inc. or a similar mediation/arbitration entity approved by each party in its sole and absolute discretion. The proposed referee may be challenged by any party for any of the grounds listed in the Referee Sections. The referee shall have the power to decide all issues of fact and law and report his or her decision on such issues, and to issue all recognized remedies available at law or in equity for any cause of action that is before the referee, including an award of attorneys’ fees and costs in accordance with this Lease. The referee shall not, however, have the power to award punitive damages, nor any other damages that are not permitted by the express provisions of this Lease, and the parties waive any right to recover any such damages. The parties may conduct all discovery as provided in the California Code of Civil Procedure, and the referee shall oversee discovery and may enforce all discovery orders in the same manner as any trial court judge, with rights to regulate discovery and to issue and enforce subpoenas, protective orders and other limitations on discovery available under California Law. The reference proceeding shall be conducted in accordance with California Law (including the rules of evidence), and in all regards, the referee shall follow California Law applicable at the time of the reference proceeding. The parties shall promptly and diligently cooperate with one another and the referee, and shall perform such acts as may be necessary to obtain a prompt and expeditious resolution of the dispute or controversy in accordance with the terms of this Exhibit E. In this regard, the parties agree that the parties and the referee shall use best efforts to ensure that (a) discovery be conducted for a period no longer than six (6) months from the date the referee is appointed, excluding motions regarding discovery, and (b) a trial date be set within 9 months of the date the referee is appointed. In accordance with Section 644 of the California Code of Civil Procedure, the decision of the referee upon the whole issue must stand as the decision of the court, and upon the filing of the statement of decision with the clerk of the court, or with the judge if there is no clerk, judgment may be entered thereon in the same manner as if the action had been tried by the court. Any decision of the referee and/or judgment or other order entered thereon shall be appealable to the same extent and in the same manner that such decision, judgment, or order would be appealable if rendered by a judge of the superior court in which venue is proper hereunder. The referee shall in his/her statement of decision set forth his/her findings of fact and conclusions of law. The parties intend this general reference agreement to be specifically enforceable in accordance with the Code of Civil Procedure. Nothing in this Exhibit E shall prejudice the right of any party to obtain provisional relief or other equitable remedies from a court of competent jurisdiction as shall otherwise be available under the Code of Civil Procedure and/or applicable court rules.

 

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EXHIBIT F

 

PACIFIC SHORES CENTER — BUILDING NUMBER 3

 

ADDITIONAL PROVISIONS

 

1.                                      Environmental Disclosure, Representation, and Indemnities.

 

1.1.                            Pursuant to Section 25359.7 of the California Health and Safety Code, Landlord hereby discloses to Tenant the condition of the Property described to that certain Phase I Environmental Site Assessment dated February, 2012, prepared by Enviro-Sciences (of Delaware), Inc. (the “Phase I Report”). Tenant acknowledges that Landlord has made a copy of such report available to Tenant (without warranty as to its accuracy or completeness), and the Tenant has fully reviewed such report.

 

1.2.                            Landlord represents and warrants to Tenant that, to Landlord’s actual knowledge (without inquiry other than review of the Phase I Report) as of the date hereof, and except as otherwise disclosed in the Phase I Report, the Property does not contain (a) any Hazardous Materials in amounts or conditions that violate applicable environmental Laws, (b) any asbestos-containing materials, or (c) any volatile organic compounds in the ground water of the Property that can reasonably be expected to cause material vapor intrusion into the Premises.

 

1.3.                            Without limiting its obligations under Section 10.1 of this Lease. Landlord shall indemnify, defend and hold harmless the Tenant Parties from and against (a) any fine or reasonable direct remedial cost or expense (including reasonable legal expenses and consultants’ fees) (collectively, “Costs”) that any Tenant Party may incur as a result of a cleanup, abatement, removal, or other remedial response (each, a “Remedial Response”) required of any Tenant Party by a governmental authority resulting from the introduction, production, use, generation, storage, treatment, disposal, discharge, release or other handling or disposition of any Hazardous Material on or about the Premises and/or the Property, and (b) any action or claim (a “Cost Claim”) asserted against any Tenant Party seeking to require such Tenant Party to pay any such Cost or perform any such Remedial Response. However, the foregoing indemnity obligation shall not apply to any Cost or Cost Claim to the extent arising from (i) any negligence or willful misconduct of any Tenant Party or any contractor of Tenant, (ii) any Hazardous Material introduced to or produced, stored or generated at the Premises and/or the Property by any Tenant Party or any contractor of Tenant, or (iii) any Known Hazardous Material (defined below) disturbed, distributed of exacerbated by any Tenant Party or any contractor of Tenant. As used herein, “Known Hazardous Material” means any Hazardous Material of whose existence at the Premises and/or the Property Tenant knows, has received notice, or should reasonably have known. In addition, the foregoing indemnity obligation shall not bind any party that acquires Landlord’s interest in the Property by foreclosure or deed in lieu of foreclosure, except to the extent of any Costs incurred as a result of any Remedial Response that such party was required under applicable Law to perform, but failed to perform, after such acquisition.

 

1.4.                            Without limiting its obligations under Section 10.1 of this Lease. Tenant shall indemnity, defend and hold harmless the Landlord Parties from and against (a) any Cost that any Landlord Party may incur as a result of a Remedial Response required of any Landlord Party by a governmental authority to the extent resulting from (i) the introduction, production, use, generation, storage, treatment, disposal, discharge, release, or other handling or disposition of any Hazardous Material on or about the Premises and/or the Property by any Tenant Party or any contractor of Tenant, or (ii) the disturbance, distribution or exacerbation of any Known Hazardous Material by any Tenant Party or any contractor of Tenant, and (b) any Cost Claim asserted against any Landlord Party seeking to require such Landlord Party to pay any such Cost or perform any such Remedial Response. However, the foregoing indemnity obligation shall not apply to any Cost or Cost Claim to the extent arising from any negligence or willful misconduct of any Landlord Party or any contractor of Landlord, or caused by the handling of any Hazardous Material on or about the Premises, the Building and/or the Property by any Landlord Party or any contractor of Landlord.

 

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2.                                     Acknowledgment of Notices.  Landlord has provided and Tenant hereby acknowledges receipt of the notices attached as Exhibit G and Exhibit H hereto, concerning the presence of certain uses and operations of neighboring parcels of land.

 

3.                                      Letter of Credit.

 

3.1.                               General Provisions.  Concurrently with Tenant’s execution of this Lease, Tenant shall deliver to Landlord, as collateral for the full performance by Tenant of all of its obligations under this Lease and for damages Landlord may suffer as a result of Tenant’s breach of one or more provisions of this Lease, including any damages arising under California Civil Code § 1951.2 following termination of this Lease, a standby, unconditional, irrevocable, transferable letter of credit (the “Letter of Credit”) in the form of Exhibit F-1 and containing the terms required herein, in the face amount of One Million Six Hundred Thousand Dollars ($1,600,000.00) (as such amount may be reduced pursuant to Section 3.6 below, the “Letter of Credit Amount”), naming Landlord as beneficiary, issued (or confirmed) by Comerica Bank or another financial institution acceptable to Landlord in Landlord’s reasonable discretion, permitting multiple and partial draws thereon, and otherwise in form acceptable to Landlord in its reasonable discretion. Tenant shall cause the Letter of Credit to be continuously maintained in effect (whether through replacement, renewal or extension) in the Letter of Credit Amount through the date (the “Final LC Expiration Date”) that is 60 days after the scheduled expiration date of the Term, as it may be extended from time to time. If the Letter of Credit held by Landlord expires before the Final LC Expiration Date (whether by reason of a stated expiration date or a notice of termination or non-renewal given by the issuing bank), Tenant shall deliver a new Letter of Credit or certificate of renewal or extension to Landlord not later than 45 days before the expiration date of the Letter of Credit then held by Landlord. In addition, if, at any time before the Final LC Expiration Date, the financial institution that issued (or confirmed) the Letter of Credit held by Landlord fails to meet the Minimum Financial Requirement (defined below), Tenant, within 10 business days after Landlord’s demand, shall deliver to Landlord, in replacement of such Letter of Credit, a new Letter of Credit issued (or confirmed) by a financial institution that meets the Minimum Financial Requirement and is otherwise acceptable to Landlord in Landlord’s sole discretion, whereupon Landlord shall return to Tenant the Letter of Credit that is being replaced. For purposes hereof, a financial institution shall be deemed to meet the “Minimum Financial Requirement” on a particular date if and only if, as of such date, such financial institution (i) has not been placed into receivership by the FDIC; and (ii) has a financial strength that, in Landlord’s good faith judgment, is not less than that which is then generally required by Landlord and its affiliates as a condition to accepting letters of credit in support of new leases. Any new Letter of Credit or certificate of renewal or extension (a “Renewal or Replacement LC”) shall comply with all of the provisions of this Section 3, shall be irrevocable, transferable and shall remain in effect for be automatically renewable) through the Final LC Expiration Date upon the same terms as the Letter of Credit that is expiring or being replaced.

 

3.2.                               Drawings under Letter of Credit.  If Tenant breaches any provision of this Lease, then (i) Landlord, without limiting its remedies, may draw upon the Letter of Credit in an amount necessary to satisfy any damages suffered by Landlord (including any damages arising under section California Civil Code § 1951.2 following termination of this Lease) as a result of such breach; and (ii) without limiting the preceding clause (i), if less than 45 days remain before the Final LC Expiration Date, then Landlord, without limiting its remedies, may draw upon the Letter of Credit in its entirety. In addition, if Tenant fails to furnish a Renewal or Replacement LC complying with all of the provisions of this Section 3 when required under this Section 3. Landlord, without limiting its remedies, may draw upon the Letter of Credit in us entirety: provided, however, that Landlord shall pay to Tenant any unapplied proceeds from such draw upon Tenant’s provision to Landlord of a Renewal or Replacement LC complying with all of the provisions of this Section 3. Proceeds of the Letter of Credit obtained through a draw permitted under this Section 3.2 may be held by Landlord, without segregation, in accordance with the terms of this Section 3 (the “LC Proceeds Account”) until applied to Landlord’s damages or paid to Tenant pursuant to this Section 3.

 

3.3.                               Use of Proceeds by Landlord.  The proceeds of the Letter of Credit shall constitute Landlord’s sole and separate property (and not Tenant’s property or the property of Tenant’s bankruptcy estate) and Landlord may, immediately upon any draw (and without notice to Tenant), apply or offset the proceeds of the Letter of Credit against (a) any Rent payable by Tenant under this Lease that is not paid when due; (b) all losses and damages

 

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that Landlord has suffered or that Landlord reasonably estimates that it may suffer as a result of Tenant’s failure to comply with one or more provisions of this Lease, including any damages arising under section California Civil Code § 1951.2 following termination of this Lease; (c) any costs incurred by Landlord in connection with this Lease (including attorneys’ fees); and (d) any other amount that Landlord may spend or become obligated to spend by reason of Tenant’s failure to comply with this Lease. Provided that Tenant has performed all of its obligations under this Lease, Landlord shall pay to Tenant, within 45 days after the Final LC Expiration Date, the amount of any proceeds of the Letter of Credit received by Landlord and not applied as provided above; provided, however, that if, before the expiration of such 45-day period, a voluntary petition is filed by Tenant or any Guarantor, or an involuntary petition is filed against Tenant or any Guarantor by any of Tenant’s or Guarantor’s creditors, under the Federal Bankruptcy Code, then such payment shall not be required until either all preference issues relating to payments under this Lease have been resolved in such bankruptcy or reorganization case or such bankruptcy or reorganization case has been dismissed, in each case pursuant to a final court order not subject to appeal or any stay pending appeal.

 

3.4.                              Additional Covenants of Tenant.  If, for any reason, the amount of the Letter of Credit becomes less than the Letter of Credit Amount, Tenant shall, within 10 business days thereafter, provide Landlord with additional letter(s) of credit in an amount equal to the deficiency (or a replacement letter of credit in the total Letter of Credit Amount), and any such additional (or replacement) letter of credit shall comply with all of the provisions of this Section 3, and if Tenant fails to comply with the foregoing, notwithstanding any contrary provision of this Lease, such failure shall constitute an incurable Default by Tenant. Tenant further covenants and warrants that it will neither assign nor encumber the Letter of Credit or any part thereof and that neither Landlord nor its successors or assigns will be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance.

 

3.5.                               Nature of Letter of Credit.  Landlord and Tenant (a) acknowledge and agree that in no event shall the Letter of Credit or any renewal thereof, any substitute therefor or any proceeds thereof (including the LC Proceeds Account) be deemed to be or treated as a “security deposit” under California Civil Code § 1950.7, as it may be amended or succeeded, or any other Law applicable to security deposits in the commercial context (“Security Deposit Laws”); (b) acknowledge and agree that the Letter of Credit (including any renewal thereof, any substitute therefor or any proceeds thereof) is not intended to serve as a security deposit and shall not be subject to the Security Deposit Laws; and (c) waive any and all lights, duties and obligations either party may now or, in the future, will have relating to or arising from the Security Deposit Laws. Tenant hereby waives the provisions of California Civil Code § 1950.7 and all other provisions of Law, now or hereafter in effect, which (i) establish the time frame by which Landlord must refund a security deposit under a lease, and/or (ii) provide that Landlord may claim from the security deposit only those sums reasonably necessary to remedy defaults in the payment of rent, to repair damage caused by Tenant or to clean the Premises, it being agreed that Landlord may, in addition, claim those sums specified above in this Section 3 and/or those sums reasonably necessary to compensate Landlord for any loss or damage caused by Tenant’s breach of this Lease or the acts or omission of Tenant or any other Tenant Related Parties, including any damages Landlord suffers following termination of this Lease.

 

3.6.                               Reduction in Letter of Credit Amount.  Subject to the terms of this Section 3.6, and provided that Tenant has completed an initial public offering (“IPO”). Tenant may reduce the Letter of Credit Amount so that the reduced Letter of Credit Amounts will be as follows: (a) One Million Five Hundred Thousand Dollars ($1,500,000.00) effective as of the first business day occurring after such IPO, unless clause (b) or (c) below applies; (b) One Million Dollars ($1,000,000.00) effective as of the third (3rd) anniversary of the Commencement Date, unless clause (c)(ii) below applies; and (c) Five Hundred Thousand Dollars ($500,000.00) effective as of the earlier of (i) the fourth (4th) anniversary of the Commencement Date, or (ii) the first business day occurring after Tenant provides Landlord with reasonable documentation that Tenant’s market capitalization has exceeded One Billion Dollars at the end of each of eight (8) consecutive calendar quarters occurring since such IPO. Notwithstanding any contrary provision hereof, if a monetary Default exceeding $10,000.00 or a material non-monetary Default occurs. Tenant shall have no further right to reduce the Letter of Credit Amount. Any reduction in the Letter of Credit Amount shall the accomplished by

 

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Tenant’s delivery to Landlord of a substitute letter of credit in the reduced amount or an amendment to the existing Letter of Credit reflecting the reduced amount.

 

4.                                      Extension Option.

 

4.1.                            Grant of Option; Conditions. Subject to the terms of this Section 4. Tenant shall have the right (the “First Extension Option”) to extend the Term for one (1) additional period of five (5) years commencing on the day following the Expiration Date and ending on the fifth (5th) anniversary of the Expiration Date (the “First Extension Term”). In addition, if Tenant exercises the First Extension Option and the Term is extended pursuant to such exercise, then, subject to the terms of this Section 4. Tenant shall have the right (the “Second Extension Option.” and together with the First Extension Option, each, an “Extension Option”) to extend the term of this Lease for an additional period of five (5) years commencing on the date immediately following the last day of the First Extension Term and ending on the 5th anniversary of the last day of the First Extension Term (the “Second Extension Term”, and together with the First Extension Term, each an “Extension Term”). Tenant my exercise an Extension Option only if:

 

(A)                               Tenant delivers written notice to Landlord (the “Extension Notice”) (i) electing to exercise the Extension Option and (ii) stating Tenant’s estimate of the Prevailing Market (defined in Section 4.5 below) rate for the Extension Term not less than 12 and not more than 15 full calendar months before the expiration of the previous term;

 

(B)                               no Default exists when Tenant delivers the Extension Notice;

 

(C)                               not more than 35,475 rentable square feet of the Premises is sublet (other than pursuant to a Permitted Transfer) when Tenant delivers the Extension Notice;

 

(D)                               this Lease has not been assigned (other than pursuant to a Permitted Transfer) before Tenant delivers the Extension Notice; and

 

(E)                                in the case of the Second Extension Option. Tenant has exercised the First Extension Option and the term of this Lease has been extended pursuant to such exercise.

 

4.2.                            Terms Applicable to Extension Term.

 

A.                                     During the Extension Term, (a) the Base Rent rate per rentable square foot shall be equal to the Prevailing Market rate per rentable square foot; (b) Base Rent shall increase, it at all, in accordance with the increases assumed in the determination of Prevailing Market rate; and (c) Base Rent shall be payable in monthly installments in accordance with the terms and conditions of this Lease.

 

B.                                    During the Extension Term Tenant shall pay Tenant’s Share of Expenses and Taxes for the Premises in accordance with this Lease.

 

4.3.                            Procedure for Determining Prevailing Market.

 

A.                                    Initial Procedure. Within 30 days after receiving the Extension Notice, Landlord shall give Tenant either (i) written notice (“Landlord’s Binding Notice”) accepting Tenant’s estimate of the Prevailing Market rate for the Extension Term stared in the Extension Notice, or (ii) written notice (“Landlord’s Rejection Notice”) rejecting such estimate and stating Landlord’s estimate of the Prevailing Market rate for the Extension Term. If Landlord gives Tenant a Landlord’s Rejection Notice, Tenant, within 15 days thereafter, shall give Landlord either (i) written notice (“Tenant’s  Binding Notice”) accepting Landlord’s estimate of the Prevailing Market rate for the Extension Term stated in such Landlord’s Rejection Notice, or (ii) written notice (“Tenant’s  Rejection Notice”) rejecting such estimate. If Tenant gives Landlord a Tenant’s Rejection Notice, Landlord and Tenant shall work together in good faith to agree in writing upon the Prevailing Market rate for the Extension Term. If, within 30 days after delivery of a Tenant’s Rejection Notice, the parties fail to agree in writing upon the Prevailing Market rate, the provisions of Section 4.3.B below shall apply.

 

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B.                                    Dispute Resolution Procedure.

 

1.                                      If, within 30 days after delivery of a Tenant’s Rejection Notice, the parties fail to agree in writing upon the Prevailing Market rate, Landlord and Tenant, within five (5) days thereafter, shall each simultaneously submit to the other, in a sealed envelope, its good faith estimate of the Prevailing Market rate for the Extension Term (collectively, the “Estimates”). Within seven (7) days after the exchange of Estimates, Landlord and Tenant shall each select an appraiser to determine which of the two Estimates most closely reflects the Prevailing Market rate for the Extension Term. Each appraiser so selected shall be certified as an MAI appraiser or as an ASA appraiser and shall have had at least five (5) years experience within the previous 10 years as a real estate appraiser working in Redwood City, California, with working knowledge of current rental rates and leasing practices relating to buildings similar to the Building. For purposes hereof, an “MAI” appraiser means an individual who holds an MAI designation conferred by, and is an independent member of, the American Institute of Real Estate Appraisers (or its successor organization, or in the event there is no successor organization, the organization and designation most similar), and an “ASA” appraiser means an individual who holds the Senior Member designation conferred by, and is an independent member of, the American Society of Appraisers (or its successor organization, or, in the event there is no successor organization, the organization and designation most similar).

 

2.                                      If each party selects an appraiser in accordance with Section 4.3.B.1 above, the parties shall cause their respective appraisers to work together in good faith to agree upon which of the two Estimates most closely reflects the Prevailing Market rate for the Extension Term. The Estimate, if any, so agreed upon by such appraisers shall be final and binding on both parties as the Prevailing Market rate for the Extension Term and may be entered in a court of competent jurisdiction. If the appraisers fail to reach such agreement within 20 days after their selection, then, within 10 days after the expiration of such 20-day period, the parties shall instruct the appraisers to select a third appraiser meeting the above criteria (and if the appraisers fail to agree upon such third appraiser within 10 days after being so instructed, either party may cause a court of competent jurisdiction to select such third appraiser). Promptly upon selection of such third appraiser, the parties shall instruct such appraiser (or, if only one of the parties has selected an appraiser within the 7-day period described above, then promptly after the expiration of such 7-day period the parties shall instruct such appraiser) to determine, as soon as practicable but in any case within 14 days after his selection, which of the two Estimates most closely reflects the Prevailing Market rate. Such determination by such appraiser (the “Final Appraiser”) shall be final and binding on both parties as the Prevailing Market rate for the Extension Term and may be entered in a court of competent jurisdiction. If the Final Appraiser believes that expert advice would materially assist him, be may retain one or more qualified persons to provide such expert advice. The parties shall share equally in the costs of the Final Appraiser and of any experts retained by the Final Appraiser. Any fees of any other appraiser, counsel or expert engaged by Landlord or Tenant shall be borne by the party retaining such appraiser, counsel or expert.

 

C.                                    Adjustment. If the Prevailing Market rate has not been determined by the commencement date of the Extension Term. Tenant shall pay Base Rent for the Extension Term upon the terms and conditions in effect during the last month ending on or before the expiration date of this Lease until such time as the Prevailing Market rate has been determined. Upon such determination, the Base Rent for the Extension Term shall be retroactively adjusted. If such adjustment results in an under- or overpayment of Base Rent by Tenant. Tenant shall pay Landlord the amount of such underpayment, or receive a credit in the amount of such overpayment, with or against the next Base Rent due under this Lease.

 

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4.4.                            Extension Amendment. If Tenant is entitled to and properly exercises its Extension Option, and if the Prevailing Market rate for the Extension Term is determined in accordance with Section 4.3 above, Landlord, within a reasonable time thereafter, shall prepare and deliver to Tenant an amendment (the “Extension Amendment”) reflecting changes in the Base Rent, the Term, the expiration date of this Lease, and other appropriate terms, and Tenant shall execute and return the Extension Amendment to Landlord within 15 days after receiving it. Notwithstanding the foregoing, upon determination of the Prevailing Market rate for the Extension Term in accordance with Section 4.3 above, an otherwise valid exercise of the Extension Option shall be fully effective whether or not the Extension Amendment is executed.

 

4.5.                            Definition of Prevailing Market. For purposes of this Extension Option, “Prevailing Market” shall mean the arms-length, fair-market, annual rental rate per rentable square foot under extension and renewal leases and amendments entered into on or about the date on which the Prevailing Market is being determined hereunder for space comparable to the Premises in the Building and office buildings comparable to the Building in the Project. The determination of Prevailing Market shall take into account (i) any material economic differences between the terms of this Lease and any comparison lease or amendment, such as rent abatements, construction costs and other concessions, and the manner, if any, in which the landlord under any such lease is reimbursed for operating expenses and taxes; (ii) any material differences in configuration or condition between the Premises and any comparison space, including any cost that would have to be incurred in order to make the configuration or condition of the comparison space similar to that of the Premises; and (iii) any reasonably anticipated changes in the Prevailing Market rate from the time such Prevailing Market rate is being determined and the time such Prevailing Market rate will become effective under this Lease.

 

5.                                      Monument Signage.

 

5.1.                            Tenant’s Right to Monument Signage. Subject to the terms of this Section 5, from and after the Commencement Date, Tenant shall have the exclusive right to have signage (“Tenant’s Monument Signage”) bearing Tenant’s Name (defined below) installed on the Building’s monument sign (the “Monument Sign”) As used herein, “Tenant Name” means, at any time, at Tenant’s discretion, (i) the name of Tenant set forth in the first paragraph of this Lease (“Tenant’s Existing Name”), or (ii) if Tenant’s name is not then Tenant’s Existing Name, then Tenant’s name, provided that such name is compatible with a first-class office building, as determined by Landlord in its reasonable discretion, and/or (iii) Tenant’s logo, provided that such logo is then being used by Tenant on a substantially nationwide basis and is compatible with a first-class office building, as determined by Landlord in its reasonable discretion.

 

5.2.                            Landlord’s Approval. Any proposed Tenant’s Monument Signage shall comply with all applicable Laws and shall be subject to Landlord’s prior written consent. Without limitation, Landlord may withhold consent to any Tenant’s Monument Signage that, in Landlord’s sole judgment, is not harmonious with the design standards of the Building and Monument Sign, and Landlord may require that Tenant’s Monument Signage be of the same size and style as the other signage on the Monument Sign. To obtain Landlord’s consent, Tenant shall submit design drawings to Landlord showing the type and sizes of all lettering; the colors, finishes and types of materials used in Tenant’s Monument Signage; and (if applicable and Landlord consents thereto) any arrangements for illumination.

 

5.3.                            Fabrication; Installation; Maintenance; Removal; Costs. Landlord shall (a) fabricate (substantially in accordance with Tenant’s design approved by Landlord), install and, at the expiration or earlier termination of Tenant’s rights under this Section 5, remove Tenant’s Monument Signage; and (b) maintain, repair, and (if applicable) illuminate the Monument Sign. Tenant shall reimburse Landlord, promptly upon demand, for (x) all costs incurred by Landlord in fabricating, installing or removing Tenant’s Monument Signage, and (y) Tenant’s pro rata share (as determined taking into account any other parties using the Monument Sign) of all costs incurred by Landlord in maintaining, repairing and (if applicable) illuminating the Monument Sign.

 

6.                                      Building Signage.

 

6.1.                            Tenant’s Right to Building Signage. Subject to the terms of this Section 6, from and after the Commencement Date, Tenant shall have the exclusive right to install, maintain, repair, replace and operate the Building Signage (defined below). As used herein, “Building

 

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Signage” means a sign that bears the Tenant Name and is located at the top of any one or more exterior sides of the Building selected by Tenant.

 

6.2.                            Landlord’s Approval. The size, color, materials and all other aspects of the Building Signage, including the manner in which it is attached to the Building and any provisions for illumination, shall be subject to Landlord’s approval, which may be withheld in Landlord’s reasonable discretion; provided, however, that Landlord’s approval as to aesthetic matters may be withheld in Landlord’s sole and absolute (but good faith) discretion.

 

6.3.                            General Provisions. Tenant, at its expense, shall design, fabricate, locate, install, maintain, repair, replace, operate and remove the Building Signage, in each case in a first class manner consistent with a first-class office building and in compliance with all applicable Laws. Without limiting the foregoing, Tenant shall not install or modify the Building Signage until after obtaining and providing copies to Landlord of all permits and approvals necessary therefor. Tenant shall be solely responsible, at its expense, for obtaining such permits and approvals; provided, however, that Landlord shall reasonably cooperate with Tenant, at no material cost or liability to Landlord, in executing permit applications and performing any other ministerial acts reasonably necessary to enable Tenant to obtain such permits and approvals. Tenant hereby acknowledges that, notwithstanding Landlord’s approval of the Building Signage, Landlord has made no representation or warranty to Tenant that Tenant will be able to obtain such permits or approvals. Within 30 days after the expiration or earlier termination of this Lease, Tenant, at its expense, shall remove the Building Signage and restore all damage to the Building caused by its installation, operation or removal, Notwithstanding any contrary provision of this Lease. Tenant, not Landlord, shall, at its expense. (i) cause its property insurance policy to cover the Building Signage, and (ii) promptly repair the Building Signage if it is damaged by fire or any other casualty. Except as may be expressly provided in this Section 6, the installation, maintenance, repair, replacement, removal and any other work performed by Tenant affecting the Building Signage shall be governed by the provisions of Sections 7.2 and 7.3 of this Lease as if such work were an Alteration. If an emergency results from Tenant’s failure to maintain, repair, replace, operate or remove the Building Signage as required under this Section 6, then, without limiting Landlord’s remedies, Landlord, at its option, with notice to Tenant (by telephone, e-mail, fax or any other reasonable method, notwithstanding Section 25.1 of this Lease), may perform such maintenance, repair, replacement, operation or removal, in which event Tenant shall reimburse Landlord for the reasonable cost thereof upon Landlord’s demand. The costs of any utilities consumed in operation of the Building Signage shall be paid by Tenant upon Landlord’s demand in accordance with Section 3 of this Lease.

 

7.                                      Right of First offer.

 

7.1.                            Grant of Option; Conditions.

 

A.                                    Subject to the terms of this Section 7, Tenant shall have a right of first offer (“Right of First Offer”) with respect to the following suite (and with respect to each portion of such suite) (such suit or portion thereof, a “Potential Offering Space”); the 35,405 rentable square feet known as Suite 200 on the 2nd floor of the Building shown on the demising plan attached to this Lease as Exhibit F-2. Tenant’s Right of First Offer shall be exercised as follows: At any time after Landlord has determined that a Potential Offering Space has become Available (defined below), but before leasing such Potential Offering Space a third party, Landlord, subject to the terms of this Section 7, shall provide Tenant with a written notice (for purposes of this Section 7, an “Advice”) advising Tenant of the material terms on which Landlord is prepared to lease such Potential Offering Space (sometimes referred to herein as an “Offering Space”) to Tenant, which terms shall be consistent with Section 7.2 below. For purposes hereof, a Potential Offering Space shall be deemed to become “Available” as follows: (i) if such Potential Offering Space is not leased to a third party as of the date of mutual execution and delivery of this Lease, such Potential Offering Space shall be deemed to become Available when Landlord has received from a prospective tenant a written proposal to lease such Potential Offering Space; (ii) if such Potential Offering Space is leased to a third party as of, or at any time after, the date of mutual execution and delivery of this Lease, such Potential Offering Space shall be deemed to become Available when Landlord has determined that such third-party tenant, and any occupant of such Potential Offering Space claiming under such third-party tenant, will not extend or renew the term of its lease, or enter into a new lease, for such Potential Offering Space; and (iii) if,

 

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after such Potential Offering Space becomes Available, Landlord becomes entitled to lease such Potential Offering Space to a third party pursuant to Section 7.1.B or 7.1.C below but fails to do so within 180 days, then such Potential Offering Space shall be deemed to become Available again at the expiration of such 180-day period. If the term for the Offering Space, as set forth in the Advice, extends beyond the expiration date for the balance of the Premises, Landlord, at its option, may state in the Advice that if Tenant exercises its Right of First Offer based on the Advice, the term for the balance of the Premises shall be extended to be coterminous with the term for the Offering Space, as provided in Section 7.2.E below). Upon receiving an Advice, Tenant may lease the Offering Space, in its entirety only, under the terms set forth in the Advice, by delivering to Landlord a written notice of exercise satisfying any applicable requirements of Section 7.2.E below (for purposes of this Section 7, a “Notice of Exercise”) within 10 days after receiving the Advice.

 

B.                                If Tenant receives art Advice but does not deliver a Notice of Exercise within the period of time required under Section 7.1.A above. Landlord may lease the Offering Space to any party on any terms determined by Landlord in its sole and absolute discretion.

 

C.                                Notwithstanding any contrary provision hereof, (i) Landlord shall not be required to provide Tenant with an Advice if any of the following conditions exists when Landlord would otherwise deliver the Advice; and (ii) if Tenant receives an Advice from Landlord. Tenant shall not be entitled to lease the Offering Space based on such Advice if any of the following conditions exists:

 

(1)             a Default exists:

 

(2)             more then 35,475 rentable square feet of the Premises is sublet (other than pursuant to a Permitted Transfer);

 

(3)             this Lease has been assigned (other than pursuant to a Permitted Transfer): or

 

(4)             Tenant is not occupying the Premises.

 

If by operation of the preceding sentence, Landlord is not required to provide Tenant with an Advice, or Tenant, after receiving an Advice, is not entitled to lease the Offering Space based on such Advice, then Landlord may lease the Offering Space to any party on any terms determined by Landlord in its sole and absolute discretion.

 

7.2.                            Terms for Offering Space.

 

A.                                 The term for the Offering Space shall be such period as Landlord, in its sole and absolute discretion, may set forth in the Advice: provided, however, that such term shall be not less than coterminous with the term for the balance of the Premises and not more than 60 months. Except as provided in Section 7.2.E below, Section 4 above shall not apply to the Offering Space unless the term for the Offering Space is coterminous with the term for the balance of the Premises.

 

B.                                 The term for the Offering Space shall commence on the commencement date stated in the Advice and thereupon the Offering Space shall be considered a part of the Premises subject to the provisions of this Lease: provided, however, that the provisions of the Advice (including the provision of the Advice establishing the expiration date for the Offering Space) shall prevail to the extent they conflict with the provisions of this Lease.

 

C.                                 Tenant shall pay Monthly Rent for the Offering Space in accordance with the provisions of the Advice. The Advice shall reflect the Prevailing Market (defined in Section 7.4 below) rate for the Offering Space as determined in Landlord’s reasonable judgment and shall include a market tenant improvement allowance and market free rent, as reasonably determined by Landlord.

 

D.                                 Except as may be otherwise provided in the Advice, (i) the Offering Space (including improvements and personally, if any) shall be accepted by Tenant in

 

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its configuration and condition existing on the earlier of the date Tenant takes possession of the Offering Space or the commencement date for the Offering Space; and (ii) if Landlord is delayed in delivering possession of the Offering Space by any holdover or unlawful possession of the Offering Space by any party, Landlord shall use reasonable efforts to obtain possession of the Offering Space and any obligation of Landlord to tender possession of, permit entry to, or perform alterations to the Offering Space shall be deferred until after Landlord has obtained possession of the Offering Space.

 

E.                                 If the term for the Offering Space extends beyond the expiration date for the balance of the Premises, then (i) at Landlord’s option (which Landlord may exercise by so stating in the Advice), the term for the balance of the Premises shall be extended to be coterminous with the term for the Offering Space (the period of such extension shall be referred to hereinafter as the “Offering Extension Term”); and (ii) if Landlord exercises such option, then Tenant shall include in the Notice of Exercise a statement of Tenant’s estimate of the Prevailing Market (defined in Section 4.5 above) rate for the Offering Extension Term, and (b) the terms of such extension shall be governed by Sections 4.2, 4.3 and 4.5 above, as if the Offering Extension Term were an “Extension Term” within the meaning of Section 4.1 above; provided, however, that as applied to such extension, (1) all references in such Sections to the “Extension Term” shall be deemed to refer to the Offering Extension Term; (2) all references in such Sections to the “Extension Notice” shall be deemed to refer to the Notice of Exercise; and (3) all references in such Sections to the “Extension Option” shall be deemed to refer to the Right of First Offer.

 

7.3.                            Ongoing Right.

 

A.                                    [Intentionally Omitted.]

 

B.                                If (i) Landlord lease a Potential Offering Space to a third party as permitted under Section 7.1 above and subsequently determines that such Potential Offering Space has again become Available, or (ii) a Potential Offering Space becomes Available again because Landlord fails to lease it to a third party within 180 days after becoming entitled to do so under Section 7.1.B or 7.1.C above, then, subject to Section 7.1.3.A above, the provisions of this Section 7 shall apply again to such Potential Offering Space.

 

7.4.                            Offering Amendment. If Tenant validly exercises its Right of First Offer, Landlord, within a reasonable period of time thereafter; shall prepare and deliver to Tenant an amendment (the “Offering Amendment”) adding the Offering Space to the Premises on the terms set forth in the Advice and reflecting the changes in the Base Rent, the rentable square footage of the Premises, Tenant’s Share, the term for the balance of the Premises (if applicable), and other appropriate terms in accordance with this Section 7. Tenant shall execute and return the Offering Amendment to Landlord within 15 days after receiving it, but an otherwise valid exercise of the Right of First Offer shall be fully effective whether or not the Offering Amendment is executed.

 

7.5.                            Definition of Prevailing Market. For purposes of this Section 7, “Prevailing Market” means the arms-length, fair-market, annual rental rate per rentable square foot, under renewal and expansion leases and amendments entered into on or about the date on which the Prevailing Market is being determined hereunder, for space comparable to the Offering Space in the Building and office buildings comparable to the Building in the Project. The determination of Prevailing Market shall take into account (i) any material economic differences between the terms of this Lease and any comparison lease or amendment, such as rent abatements, construction costs and other concessions, and the manner, if any, in which the landlord under any such lease is reimbursed for operating expenses and taxes; and (ii) any material differences in configuration or condition between the Offering Space and any comparison space, including any cost that would have to be incurred in order to make the configuration or condition of the comparison space similar to that of the Offering Space.

 

7.6.                            Subordination. If Landlord, as permitted under Section 7.1.B or 7.1.C above, leases any Potential Offering Space to a third party on terms including a right of first offer, right of first refusal, expansion option or other expansion right with respect to any other Potential Offering Space (and if, in the case of any such lease permitted under Section 7.1.B above,

 

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such expansion right was disclosed in the Advice received by Tenant), then Tenant’s Right of First Offer with respect to such other Potential Offering Space shall be subject and subordinate to such expansion right in favor of such third party.

 

8.                                      Rooftop Space.

 

8.1.                            Subject to the terms of this Section 8, during the Term Tenant may use the Roof Space (defined below) for the purpose of installing, operating, maintaining and removing a 36 inch Dish/Antenna or other communication device approved by the Landlord (the “Dish/Antenna”). As used herein, “Roof Space” means space on the roof of the Building, not exceeding 25 square feet in size, and otherwise reasonably designated by Landlord. Landlord may relocate the Roof Space from time to time as reasonably necessary during the Term.

 

8.2.                            Tenant’s design and installation of the Dish/Antenna shall be subject to Sections 7.2 and 7.3 of this Lease as if the Dish/Antenna were being installed in the Premises. Without limiting the foregoing, Landlord shall have the right to approve Tenant’s plans and specifications for the Dish/Antenna, the manner in which the Dish/Antenna is attached to the roof of the Building, and the manner in which any cables are run to and from the Dish/Antenna. Tenant shall be responsible for obtaining all necessary governmental and regulatory approvals and for the cost of installing, operating, maintaining and removing the Dish/Antenna. The Dish/Antenna shall be tagged with weatherproof labels showing manufacturer, model, frequency range, and Tenant’s name. All cable connected to the Dish/Antenna (the “Dish/Antenna Cable”) shall be tagged in the telecom closet on each floor with a label showing Tenant’s name and phone number. Tenant shall notify Landlord upon completion of the installation of the Dish/Antenna. If Landlord determines that the Dish/Antenna equipment does not comply with the approved plans and specifications, that the installation was defective, or that the Building has been damaged during installation of the Dish/Antenna, Tenant shall cure such defective condition promptly upon Landlord’s request. If Tenant fails to promptly perform such cure, Landlord may do so, in which event Tenant shall pay Landlord, upon demand, the reasonable cost of such cure. If at any time Landlord, in its sole discretion, deems it necessary, Tenant, at its expense, shall provide and install appropriate aesthetic screening, reasonably satisfactory to Landlord, for the Dish/Antenna (the “Aesthetic Screening”).

 

8.3.                            Tenant, after reasonable notice to Landlord, may access the roof of the Building and the Roof Space for the purpose of installing, maintaining, repairing and removing the Dish/Antenna. Dish/Antenna Cable, the appurtenances and the Aesthetic Screening, if any (collectively, the “Dish/Antenna Items”). Notwithstanding the foregoing, only authorized engineers, employees or properly authorized contractors of Tenant, FCC inspector, or persons under their direct supervision shall have access to the roof of the Building and the Roof Space. Tenant shall use diligent efforts to minimize the number of people having access to the roof of the Building and the Roof Space and the frequency of their visits.

 

8.4.                            Tenant shall ensure that the installation, maintenance, operation and removal of the Dish/Antenna Items does not damage, or unreasonably interfere with Landlord’s or any other licensee’s use of, the roof of the Building. Notwithstanding Sections 7 and 10.4 of this Lease, Tenant shall be responsible for any damage caused to the roof or any other part of the Building that may be caused by Tenant or any of its agents or representatives in exercising Tenant’s rights or performing Tenant’s obligations under this Section 8. For purposes of Sections 5, 7 and 10 of this Lease, the Roof Space shall be deemed part of the Premises.

 

8.5.                            Tenant shall install only equipment of types and frequencies that will not unreasonably interfere with Landlord. If Tenant’s equipment causes such interference, Tenant shall change the frequency on which it transmits and/or receives and take any other steps necessary to eliminate the interference. If, in Landlord’s reasonable judgment, such interference cannot be eliminated within a reasonable period of time, Tenant shall remove the Dish/Antenna from the Roof Space and remove such other Dish/Antenna Items as Landlord may request.

 

8.6.                            Tenant at its expense, shall install, operate and maintain the Dish/Antenna Items in a good and workmanlike manner, and in compliance with all Building, electric, communication, and safety codes, ordinances, standards, regulations and requirements,

 

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now in effect or hereafter promulgated, of the Federal Government, including the Federal Communications Commission (the “FCC”), the Federal Aviation Administration (“FAA”) or any successor agency of either the FCC or FAA having jurisdiction over radio or telecommunications, and of the state, city and county in which the Building is located. No Landlord Party shall be responsible for any licensing, operation or maintenance of Tenant’s equipment. Tenant shall be responsible for performing any obligations under its FCC license. The Dish/Antenna shall be connected to Landlord’s power supply in strict compliance with all applicable Building, electrical, fire and safety codes. No Landlord Party shall be liable for any stoppage or shortage of electrical power furnished to the Dish\Antenna or the Roof Space because of (i) any act, omission or requirement of the public utility serving the Building, (ii) any act or omission of any other tenant, invitee or licensee or their respective agents, employees or contractors, or (iii) any other cause beyond Landlord’s reasonable control, and Tenant shall not be entitled to any rental abatement for any such stoppage or shortage of electrical power. No Landlord Party shall have any liability for the conduct or safety of any of Tenant’s representatives, repair, maintenance and engineering personnel while in or on any part of the Building or the Roof Space.

 

8.7.                            The Dish/Antenna ltems shall remain the personal property of Tenant, and shall be removed by Tenant at its own expense at the expiration or earlier termination of this Lease or Tenant’s right to possession hereunder. Tenant shall repair any damage caused by such removal, including by patching any holes to match, as closely as possible, the color surrounding the area where the equipment and appurtenances were attached. Tenant shall maintain the Dish/Antenna Items in a safe and aesthetically satisfactory condition, as reasonably determined by Landlord, and in good operating condition. Tenant shall keep the roof of the Building and the Roof Space free of all trash or waste materials produced by Tenant or Tenant’s agents, employees or contractors.

 

8.8.                            Before commencing any installation, operation, repair or removal of the Dish/Antenna Items, Tenant shall (a) obtain Landlord’s reasonable approval of the service provider retained to perform such work for Tenant, and (b) notify Landlord of such work and coordinate such work with Landlord in order to avoid impairing any warranties relating to the roof. For the performance of any such work affecting the roof, Tenant, upon Landlord’s request, shall, at Tenant’s expense, retain (or cause its contractor to retain) any contractor having a then existing warranty in effect relating to the roof. Except in an emergency, Landlord shall notify Tenant 30 days before commencing any roof repairs that could interrupt Tenant’s telecommunication service or otherwise adversely affect Tenant’s Dish/Antenna.

 

8.9.                            Tenant shall not allow any provider of telecommunication, video, data or related services the (“Communication Services”) claiming by, through or under Tenant to locate any equipment on the roof of Building or in the Roof Space for any purpose, nor may Tenant use the Roof Space and/or Dish/Antenna to provide Communication Services to an unaffiliated tenant, occupant or licensee of another building, or to facilitate the provision of Communication Services on behalf of another Communication Services provider to an unaffiliated tenant, occupant or licensee of the Building or any other building.

 

8.10.                     If a Default occurs as a result of any failure by Tenant to perform any obligation under this Section 8, Landlord, without limiting any other rights or remedies, may remove all or any of the Dish/Antenna Items and restore the affected portions of the Building and the Roof Space to the conditions existing before the Dish/Antenna Items were installed, in which event Tenant shall reimburse Landlord, upon demand, for all reasonable expenses of such removal and restoration.

 

8.11.                     Tenant’s rights under this Section 8 may not be transferred to any other party except in connection with a Transfer permitted under this Lease. If Landlord establishes a standard license agreement with respect to the use of roof space by tenants of the Building, Tenant, upon Landlord’s request, shall enter into such license agreement with Landlord provided that such license agreement does not materially reduce Tenant’s rights or increase Tenant’s obligations under this Section 8.

 

9.                                     Use of Building Areas for Lines and Supplemental HVAC. Subject to Sections 7.2, 7.3 and 23 of this Lease, Tenant may use (i) in common with other occupants of the Building, the Shared Cable Pathways (defined below) for the installation, maintenance, replacement, use and removal of Lines, and (ii) such shafts and other areas in the Building as Landlord shall reasonably

 

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designate for the installation, maintenance, replacement, use and removal of duets, pipes and other components of any Units(defined in Section 25.5 of this Lease). As used herein, “Shared Cable Pathways” means such raceways and users located in the Common Areas of the Building as Landlord reasonably designates for the placement of Lines linking the Premises to any point of entry to the Building that is used, with Landlord’s prior consent, by the telecommunications provider retained by Tenant to provide telecommunications to the Premises.

 

10.                               Emergency Generator. During the Term, Tenant, at no additional charge payable to Landlord but otherwise at Tenant’s expense, and subject to the provisions of this Lease and such reasonable rules and procedures as may be imposed by Landlord, may use, in its current location(s), the entirety of the system containing the generator that serves the Building and is located outside the Building (collectively, the “Emergency Generator”). The Emergency Generator is accepted by Tenant in its condition and configuration existing on the date hereof. without any obligation of Landlord to perform or pay for any repairs or alterations to the Emergency Generator, and without any representation or warranty regarding the condition of the Emergency Generator or its suitability for Tenant’s business. Any utilities consumed in the operation of the Emergency Generator shall be provided and paid for by Tenant, it being acknowledged that, as of the date of this Lease, such utilities are not separately metered but are billed to the Building as part of the overall utility charges for the Building. The areas in which the Emergency Generator is located shall be used only for the operation and maintenance of the Emergency Generator and kept reasonably free of debris. The Emergency Generator shall remain Landlord’s property. Tenant shall ensure that its operation and maintenance of the Emergency Generator shall not damage the Premises, Building or Project and shall comply with all applicable Laws. To the maximum extent permitted by Law, Tenant’s use of the Emergency Generator shall be at Tenant’s sole risk. Tenant shall use and maintain the Emergency Generator in such a manner as to avoid any unreasonable interference with any other tenants of the project or Landlord or any occupants of adjacent property. Any alterations to the Emergency Generator or the areas in which the Emergency Generator is located shall be governed by Sections 7.2 and 7.3 of this Lease. Without limiting its obligations under Section 7.1 of this Lease, Tenant shall maintain in good condition and repair any cage or similar enclosure surrounding the Emergency Generator. The Emergency Generator shall be tested only at such times as Landlord shall reasonably approve, and all electricity generated by the Generator may be consumed only by Tenant in the Premises. Tenant shall have no right to assign its interest under this Section 10, or otherwise permit any other party to use the Emergency Generator, except in connection with a Transfer permitted under Section 14 of this Lease.

 

11.                               California Civil Code Section 1938. Pursuant to California Civil Code § 1938. Landlord hereby states that the Premises have not undergone inspection by a Certified Access Specialist (CASp) (defined in California Civil Code § 55.52).

 

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EXHIBIT F-1

 

PACIFIC SHORES CENTER — BUILDING NUMBER 3

 

FORM OF LETTER OF CREDIT

 

	
 
    	
 
    	
 
    
	
 
    	
[Name of Financial Institution]
    	
 
    

 

	
 
    	
Irrevocable Standby
    
	
 
    	
Letter of Credit
    
	
 
    	
No:
    	
 
    
	
 
    	
Issuance Date:
    	
 
    
	
 
    	
Expiration Date:
    	
 
    
	
 
    	
Applicant:
    	
 
    
				

 

Beneficiary

 

	
[Insert Name of Landlord]
    	
 
    
	
[Insert Building   management office address].
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

Ladies/Gentlemen:

 

We hereby establish our Irrevocable Standby Letter of Credit in your favor for the account of the above referenced Applicant in the amount of                         U.S. Dollars ($                         ) available for payment at sight by your draft drawn on us when accompanied by the following documents.

 

1.                                      An original copy of this Irrevocable Standby Letter of Credit.

 

2.                                      Beneficiary’s dated statement purportedly signed by an authorized signatory or agent reading: “This draw in the amount of                        U.S. Dollars ($                        ) under your Irrevocable Standby Letter of Credit No                        represents funds due and owing to us pursuant to the terms of that certain lease by and between                         , as landlord. and                        , as tenant, and/or any amendment to the lease or any other agreement between such parties related to the lease.”

 

It is a condition of this Irrevocable Standby Letter of Credit that it will be considered automatically renewed for a one year period upon the expiration date set forth above and upon each anniversary of such date, unless at least 60 days prior to such expiration date or applicable anniversary thereof, we notify you in writing, by certified mail return receipt requested or by recognized overnight courier service, that we elect not to so renew this Irrevocable Standby Letter of Credit. A copy of any such notice shall also be sent, in the same manner, to Equity Office, 2 North Riverside Plaza, Suite 2100, Chicago, Illinois 60606, Attention: Treasury Department. In addition to the foregoing, we understand and agree that you shall be entitled to draw upon this Irrevocable Standby Letter of Credit in accordance with 1 and 2 above in the event that we elect not to renew this Irrevocable Standby Letter of Credit and, in addition, you provide us with a dated statement purportedly signed by an authorized signatory or agent of Beneficiary stating that the Applicant has failed to provide you with an acceptable substitute irrevocable standby letter of credit in accordance with the terms of the above referenced lease. We further acknowledge and agree that: (a) upon receipt of the documentation required herein, we will honor your draws against this Irrevocable Standby Letter of Credit without inquiry into the accuracy of Beneficiary’s signed statement and regardless of whether Applicant disputes the content of such statement; (b) this Irrevocable Standby Letter of Credit shall permit partial draws and, in the event you elect to draw upon less than the full stated amount hereof, the stated amount of this Irrevocable Standby Letter of Credit shall be automatically reduced by the amount of such partial draw; and (c) you shall be entitled to transfer your interest in this Irrevocable Standby Letter of Credit from time to time and more than one time without our approval and without charge. In the event of a transfer, we reserve the right to require reasonable evidence of such transfer as a condition to any draw hereunder.

 

This Irrevocable Standby Letter of Credit is subject to the International Standby Practices (ISP98) ICC Publication No.590.

 

1

 

We hereby engage with you to honor drafts and documents drawn under and in compliance with the terms of this Irrevocable Standby Letter of Credit.

 

All communications to us with respect to this Irrevocable Standby Letter of Credit must be addressed to our office located at                                          to the attention of                                           

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[name]
    
	
 
    	
 
    
	
 
    	
[title]
    

 

2

 

EXHIBIT F-2

 

PACIFIC SHORES CENTER — BUILDING NUMBER 3

 

POTENTIAL OFFERING SPACE

 

[FLOOR PLAN]

 

1

 

EXHIBIT G

 

PACIFIC SHORES CENTER — BUILDING NUMBER 3

 

NOTICE TO TENANTS AND TRANSFEREES OF

CURRENT OR FUTURE USES OF ADJACENT PORT PROPERTY

 

Notice is hereby given to all lessees, tenants and transferees of land or interests in land located within the project commonly referred to as the “Pacific Shores Center” of the presence or potential future presence of Port (defined below) related industrial activities on the Port Parcel (defined below). All recipients of this notice should be aware of the following facts:

 

1. The parcel of Port property adjacent to Pacific Shores Center to the northwest (as more particularly shown on the Exhibit G-1 attached hereto, the “Port Parcel”) is now or may be developed for port related maritime and industrial uses similar to those occupying other properties along the west side of Seaport Boulevard and to the west of Pacific Shores Center.

 

2. Such Port related maritime and industrial activities are those which are permitted by the general industrial zoning of the City of Redwood City and may include heavy industrial land uses, including uses which involve the receipt, transport, storage or management of hazardous wastes, aggregates, cement, gravel and similar materials, including the outdoor storage and handling of such materials.

 

3. Pacific Shores Center Limited Partnership, on behalf of itself, its successors and assigns, has recognized, accepted and approved such uses of the Port Parcel subject to the utilization of Best Available Management Practices (defined on Exhibit G-2 hereof) in the development and use of the Port Parcel, Capitalized terms used but not defined in Exhibit G-2 hereof shall have meaning(s) given to such term(s) in that certain Agreement of Covenants Running With The Land dated March 27, 1988, between the City of Redwood City, a municipal corporation, acting by and through its Board of Port Commissioners (“Port”) and Pacific Shores Center Limited Partnership, a Delaware limited partnership, recorded March 27, 1998 as Instrument No. 98-042844 in the Official Records of San Mateo County.

 

4. Despite the use of Best Available Management Practices on the Port Parcel by the Port and its lessees and licensees and despite Pacific Shores Center Limited Partnership’s efforts (and the efforts of its successors and assigns) to ensure compatibility between such uses and those in Pacific Shores Center, it is possible that such uses will cause emissions into the air of dust or other particulate matter, or noise or odorous substances which may be offensive to or be perceived as a nuisance by occupants of Pacific Shores Center.

 

5. Pursuant to covenants made by Pacific Shores Center Limited Partnership on behalf of its successors and assigns, tenants and lessees, the tenants, lessees and transferees of Pacific Shores Center Limited Partnership have approved and accepted such neighboring uses subject to their utilization of Best Available Management Practices.

 

6. Any actions to enjoin the continuation of such uses or to recover any damages to persons or property related to their operations are subject to a requirement for prior notice found in recorded covenants by Pacific Shores Center Limited Partnership. The following language is excerpted from such covenants:

 

“In the event that either party hereto believes that the other has failed to perform any covenant made herein in favor of the other, at least ten (10) days prior to the commencement of any action to enforce the covenants hereunder or to recover damages for the breach thereof, that party who believes that a failure to perform has occurred (the ‘Complaining Party’) shall give written notice (the ‘Notice’) to the party alleged not to have performed the covenant (the ‘Non-Complaining Party’) of the specific nature of the alleged failure and of the intent of the Complaining Party to take action to remedy the breach by the Non-Complaining Party. In the event that the nature of the alleged failure to perform is such that the same cannot reasonably be cured within ten (10) days after receipt of the Notice (the ‘Notice Period’), the Non-Complaining Party shall not be deemed to be in violation of its covenants and no action shall be commenced by the Complaining Party if, within the Notice Period, the Non-Complaining Party commences such cure and thereafter diligently and continuously prosecutes the same to completion within a reasonable time, Provided, however, that the Complaining Party shall not be precluded from recovering any actual damages suffered by reason of the alleged failure to

 

1

 

perform prior to or after delivery of the Notice, whether or not such failure is thereafter cured”

 

2

 

EXHIBIT G-1

 

PACIFIC SHORES CENTER—BUILDING NUMBER 3

 

[MAP]

 

1

 

EXHIBIT G-2

 

PACIFIC SHORES CENTER — BUILDING NUMBER 3

 

“Best Available Management Practices” (“BAMP”) means the following:

 

1.                                      Compliance with all laws, rules and regulations, and operating permits, whether Federal, state or local, applicable to the uses of the Exchange Parcel and Industrial operations thereon, including without limitation all laws, rules and regulations and operating permits applicable to emissions into the air of gases, substances and particulate matter, the generation or release of odors or odorous substances into the air, and the generation of noise.

 

2.                                      Initiation and maintenance of reasonable precautions to minimize emission and transport of dust from the Exchange Parcel and the New Road Access onto the Project Site. As used herein the term “reasonable precautions” shall mean the use of materials, techniques and equipment reasonably available at the time of commencement of a use or operation and designed to minimize emission during predictably adverse climatic conditions common in the area (collectively, “initial measures”) plus the addition of one or more of the following additional measures if not already in use and if initial measures prove inadequate to achieve minimization of emission and transport of dust onto the Project Site:

 

(a)                                 Paving of surfaces used for active operations where the absence of such paving causes emission and transport of dust onto the Project Site;

 

(b)                                 Installation of wind fences to a height of not less than 20 feet with 50% porosity around areas of open storage and areas of active dust-generating uses causing emission and transport of dust onto the Project Site;

 

(c)                                  Use of storage silos, open-ended enclosures or water spray equipment for the outdoor storage and handling of materials, such as rock, concrete, soil, mineral substances, and similar materials, causing emission and transport of dust onto the Project Site;

 

(d)                                 Installation of enclosures or use of water or foam spray bars both above and below the belt surface of all conveyors used for loading and unloading materials, causing emission and transport of dust onto the Project Site; and

 

3.                                      Initiation of a reasonable, regularly scheduled sweeping program for the New Road Access to minimize accumulation of dust and dirt and/or installation of dust trops, wheel washes or other methods of minimizing the tracking of dust onto the Road Access Area and resulting emission and transport of dust onto the Project Site.

 

1

 

EXHIBIT H

 

PACIFIC SHORES CENTER — BUILDING NUMBER 3

 

NOTICE TO PACIFIC SHORES TENANTS, LESSEES,

SUCCESSORS, ASSIGNS AND TRANSFEREES REGARDING

CURRENT OR FUTURE USES OF ADJACENT RMC LONESTAR AND PORT OF REDWOOD CITY PROPERTY

 

Notice is hereby given to all tenants, lessees, successors, assigns and transferees of land or interest in land located within the project commonly referred to as the “Pacific Shores Center” of the presence or potential future presence of maritime and industrial activities on RMC Lonestar and Port of Redwood City property west and adjacent to Pacific Shores Center (as more particularly shown on Exhibit G-1 hereto). Recipients of this notice should be aware of the following;

 

1.       The RMC Lonestar and Port of Redwood City properties are now devoted to, or will be developed for, maritime and industrial uses.

 

2.       These maritime and industrial uses are those which are permitted by the ‘‘Heavy Industry’’ General Plan designation and general industrial zoning of the City of Redwood City. These uses include, by way of example and not limitation, uses involving the receipt, transport, storage, handling, processing or management of aggregates, cement, concrete, asphalt, soil or other landscaping materials, recyclable metals and plastics, recyclable concrete and asphalt, chemicals, petroleum products, hazardous wastes, and similar materials, including indoor storage, mixing and handling of these materials.

 

3.       These uses may cause, on either a regular or intermittent basis, air emissions, including, without limitation, dust and other particulates, odors, vibrations, loud noises, and heavy truck, rail or marine vessel traffic. These uses may have visual, aesthetic or other aspects that may be offensive or perceived as a nuisance by occupants of Pacific Shores Center.

 

1

 

EXHIBIT I

 

PACIFIC SHORES CENTER — BUILDING NUMBER 3

 

CERTAIN HVAC REPAIRS

 

See Attached

 

1

 

	
 
    	
Legacy Mechanical & Energy   Services, Inc.
    
	
 
    	
111 Deerwood Road, Suite 220
    
	
 
    	
San Ramon, CA 94583
    
	
 
    	
California License # 808022
    
	
 
    	
Phone: 925- 820- 6938
    
	
[LEGACY MECHANICAL & 
    	
Fax: 925- 820- 6258
    
	
ENERGY SERVICES, INC. LETTERHEAD]
    	
Email: cquinn@legacymechanical.com
    

 

	
June 7, 2013
    	
 
    
	
 
    	
 
    
	
Mr. Mike Jackson
    	
 
    
	
Chief Engineer
    	
 
    
	
Equity Office Properties
    	
 
    
	
1700 Seaport Suite 100
    	
 
    
	
Redwood City, CA 94063
    	
 
    

 

RE: 1900 Seaport- RWC - HVAC Operational Report (June 2013)

 

Legacy Mechanical & Energy Services performed an in depth operational inspection of the HVAC Primary Equipment located at 1900 Seaport Boulevard in Redwood City. This operational inspection was performed on June 5, 2013 per your request.

 

System Overview-

 

Four (4) Large Trune VAV AC units providing comfort cooling. Two (2) stairwell air conditioning units and One (1) elevator room air conditioning unit. There is one (1) Teledyne Laars boiler providing hot water to a closed loop for reheat coils. These buildings have DDC controls for the core HVAC equipment and the zone level air distribution. There are five (5) exhaust fans serving the building. There are seven (7) split systems that provide auxiliary cooling to server rooms located on floors 2 through 4. This equipment is approximately 11 years old (Vintage 2000/2001).

 

AC1- Trane Rooftop 105-tonVAV Unit

 

Checked operation and ran through cooling cycles and economizer cycles. Unit is in good condition.

·      Found one failed economizer actuator. Cost to replace actuator motor $1,480.00

 

AC2- Trane Rooftop 105-tonVAV Unit

 

Checked operation and ran through cooling cycles and economizer cycles. Unit is in good condition.

·      Found one failed 2B crank case heater. Cost to replace failed CCH is $300.00

 

AC3- Trane Rooftop 105-tonVAV Unit

 

Checked operation and ran through cooling cycles and economizer cycles. Unit is in good condition.

 

AC4- Trane Rooftop 105-tonVAV Unit

 

Checked operation and ran through cooling cycles and economizer cycles. Unit is in good condition.

·      Found one failed 1A crank case heater. Cost to replace failed CCH is $300.00

·      Remove & replace EF fan motor bearings, Cost to replace bearings $1,400.00

 

 

AC 5 & AC6- Both Units are in good operating condition

 

AC7- Elevator Equipment Room AC Unit-

 

·      Found one failed CFM & CF Blade, and a failed Compressor.

Cost to make these repairs is $4,400.00

 

EF1, EF2, EF3, EF4, EF5- All exhaust fans are in good operating condition.

 

Boiler - Teledyne Laars

 

·      This unit is fully operational & in good working condition.

 

Split System Server Room AC Units (7 total)

 

·      These units are fully operational and in good condition.

 

[GRAPHIC]

 

[GRAPHIC]

 

 

[GRAPHIC]

 

Total cost for recommended necessary repairs $7,880.00

 

Overall this equipment is in good operating condition. This equipment is of high quality and with the proper level of preventive maintenance should remain in good working order for several years to come.

 

Thank you for allowing us the opportunity to submit this for your review.

 

 

Sincerely,

 

Chris Quinn

SF/Peninsula Regional Supervisor

Legacy Mechanical & Energy Services Inc.Exhibit 10.6

 

LEASE

 

between

 

VNO 100 WEST 33RD STREET LLC,

 

Landlord,

 

and

 

ROCKET FUEL INC.,

 

Tenant,

 

100 West 33rd Street

New York, New York 10001

 

as of July 31 , 2013

 

 

TABLE OF CONTENTS

 

	
Article/Section
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Article 1 DEMISE, TERM, FIXED RENT
    	
 
    	
1
    
	
 
    	
1.1.
    	
 
    	
Demise
    	
 
    	
1
    
	
 
    	
1.2.
    	
 
    	
Commencement Date
    	
 
    	
1
    
	
 
    	
1.3.
    	
 
    	
Rent Commencement Date
    	
 
    	
2
    
	
 
    	
1.4.
    	
 
    	
Fixed Rent
    	
 
    	
2
    
	
 
    	
1.5.
    	
 
    	
Payments of Fixed Rent
    	
 
    	
3
    
	
 
    	
1.6.
    	
 
    	
Certain Definitions
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 2 ESCALATION RENT
    	
 
    	
6
    
	
 
    	
2.1.
    	
 
    	
Operating Expense Definitions
    	
 
    	
6
    
	
 
    	
2.2.
    	
 
    	
Calculation of Operating Expenses
    	
 
    	
10
    
	
 
    	
2.3.
    	
 
    	
Operating Expense Payment
    	
 
    	
13
    
	
 
    	
2.4.
    	
 
    	
Auditing of Operating Expense Statements
    	
 
    	
16
    
	
 
    	
2.5.
    	
 
    	
Tax Definitions
    	
 
    	
17
    
	
 
    	
2.6.
    	
 
    	
Tax Payment
    	
 
    	
19
    
	
 
    	
2.7.
    	
 
    	
Tax Reduction Proceedings
    	
 
    	
21
    
	
 
    	
2.8.
    	
 
    	
Condominium Conversion
    	
 
    	
22
    
	
 
    	
2.9.
    	
 
    	
Building Additions
    	
 
    	
23
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 3 USE
    	
 
    	
24
    
	
 
    	
3.1.
    	
 
    	
Permitted Use
    	
 
    	
24
    
	
 
    	
3.2.
    	
 
    	
Limitations
    	
 
    	
25
    
	
 
    	
3.3.
    	
 
    	
Rules
    	
 
    	
25
    
	
 
    	
3.4.
    	
 
    	
Tenant’s Signs
    	
 
    	
26
    
	
 
    	
3.5.
    	
 
    	
Risers
    	
 
    	
26
    
	
 
    	
3.6.
    	
 
    	
Promotional Displays
    	
 
    	
27
    
	
 
    	
3.7.
    	
 
    	
Core Toilets
    	
 
    	
27
    
	
 
    	
3.8.
    	
 
    	
Wireless Internet Service
    	
 
    	
27
    
	
 
    	
3.9.
    	
 
    	
Telecommunications
    	
 
    	
28
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 4 SERVICES
    	
 
    	
28
    
	
 
    	
4.1.
    	
 
    	
Certain Definitions
    	
 
    	
28
    
	
 
    	
4.2.
    	
 
    	
Elevator Service
    	
 
    	
28
    
	
 
    	
4.3.
    	
 
    	
Heat, Ventilation and Air-Conditioning
    	
 
    	
29
    
	
 
    	
4.4.
    	
 
    	
Cleaning
    	
 
    	
30
    
	
 
    	
4.5.
    	
 
    	
Water
    	
 
    	
31
    
	
 
    	
4.6.
    	
 
    	
Directory
    	
 
    	
31
    
	
 
    	
4.7.
    	
 
    	
No Other Services
    	
 
    	
32
    
	
 
    	
4.8.
    	
 
    	
Labor Harmony
    	
 
    	
32
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 5 ELECTRICITY
    	
 
    	
32
    
	
 
    	
5.1.
    	
 
    	
Capacity
    	
 
    	
32
    
	
 
    	
5.2.
    	
 
    	
Electricity for the Building
    	
 
    	
32
    
	
 
    	
5.3.
    	
 
    	
Submetering
    	
 
    	
32
    

 

ii

 

	
 
    	
5.4.
    	
 
    	
Termination of Electric Service
    	
 
    	
35
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 6 INITIAL CONDITION OF THE PREMISES
    	
 
    	
35
    
	
 
    	
6.1.
    	
 
    	
Condition of Premises
    	
 
    	
35
    
	
 
    	
6.2.
    	
 
    	
Landlord’s Work
    	
 
    	
36
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 7 ALTERATIONS
    	
 
    	
36
    
	
 
    	
7.1.
    	
 
    	
General
    	
 
    	
36
    
	
 
    	
7.2.
    	
 
    	
Basic Alterations and Minor Alterations
    	
 
    	
37
    
	
 
    	
7.3.
    	
 
    	
Approval Process
    	
 
    	
38
    
	
 
    	
7.4.
    	
 
    	
Performance of Alterations
    	
 
    	
39
    
	
 
    	
7.5.
    	
 
    	
Financial Integrity
    	
 
    	
41
    
	
 
    	
7.6.
    	
 
    	
Effect on Building
    	
 
    	
43
    
	
 
    	
7.7.
    	
 
    	
Time for Performance of Alterations
    	
 
    	
44
    
	
 
    	
7.8.
    	
 
    	
Removal of Alterations and Tenant’s Property
    	
 
    	
44
    
	
 
    	
7.9.
    	
 
    	
Contractors and Supervision
    	
 
    	
45
    
	
 
    	
7.10.
    	
 
    	
Pantry
    	
 
    	
46
    
	
 
    	
7.11.
    	
 
    	
Window Coverings
    	
 
    	
46
    
	
 
    	
7.12.
    	
 
    	
Tenant Fund
    	
 
    	
46
    
	
 
    	
7.13.
    	
 
    	
Air-Cooled HVAC Installations
    	
 
    	
49
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 8 REPAIRS
    	
 
    	
49
    
	
 
    	
8.1.
    	
 
    	
Landlord’s Repairs
    	
 
    	
49
    
	
 
    	
8.2.
    	
 
    	
Tenant’s Repairs
    	
 
    	
49
    
	
 
    	
8.3.
    	
 
    	
Certain Limitations
    	
 
    	
50
    
	
 
    	
8.4.
    	
 
    	
Overtime
    	
 
    	
50
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 9 ACCESS; LANDLORD’S CHANGES
    	
 
    	
51
    
	
 
    	
9.1.
    	
 
    	
Access
    	
 
    	
51
    
	
 
    	
9.2.
    	
 
    	
Landlord’s Obligation to Minimize Interference
    	
 
    	
52
    
	
 
    	
9.3.
    	
 
    	
Reserved Areas
    	
 
    	
52
    
	
 
    	
9.4.
    	
 
    	
Ducts, Pipes and Conduits
    	
 
    	
53
    
	
 
    	
9.5.
    	
 
    	
Keys
    	
 
    	
53
    
	
 
    	
9.6.
    	
 
    	
Landlord’s Changes
    	
 
    	
53
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 10 UNAVOIDABLE DELAYS AND   INTERRUPTION OF SERVICE
    	
 
    	
54
    
	
 
    	
10.1.
    	
 
    	
Unavoidable Delays
    	
 
    	
54
    
	
 
    	
10.2.
    	
 
    	
Interruption of Services
    	
 
    	
55
    
	
 
    	
10.3.
    	
 
    	
Rent Credit
    	
 
    	
55
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 11 REQUIREMENTS
    	
 
    	
56
    
	
 
    	
11.1.
    	
 
    	
Tenant’s Obligation to Comply with Requirements
    	
 
    	
56
    
	
 
    	
11.2.
    	
 
    	
Landlord’s Obligation to Comply with Requirements
    	
 
    	
57
    
	
 
    	
11.3.
    	
 
    	
Certificate of Occupancy
    	
 
    	
57
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 12 QUIET ENJOYMENT
    	
 
    	
58
    
	
 
    	
12.1.
    	
 
    	
Quiet Enjoyment
    	
 
    	
58
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 13 SUBORDINATION
    	
 
    	
58
    
	
 
    	
13.1.
    	
 
    	
Subordination
    	
 
    	
58
    

 

iii

 

	
 
    	
13.2.
    	
 
    	
Terms of Nondisturbance Agreements
    	
 
    	
59
    
	
 
    	
13.3.
    	
 
    	
Attornment
    	
 
    	
61
    
	
 
    	
13.4.
    	
 
    	
Amendments to this Lease
    	
 
    	
62
    
	
 
    	
13.5.
    	
 
    	
Tenant’s Estoppel Certificate
    	
 
    	
62
    
	
 
    	
13.6.
    	
 
    	
Rights to Cure Landlord’s Default
    	
 
    	
62
    
	
 
    	
13.7.
    	
 
    	
Zoning Lot Merger Agreement
    	
 
    	
63
    
	
 
    	
13.8.
    	
 
    	
Tenant’s Financial Statements
    	
 
    	
63
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 14 INSURANCE
    	
 
    	
64
    
	
 
    	
14.1.
    	
 
    	
Tenant’s Insurance
    	
 
    	
64
    
	
 
    	
14.2.
    	
 
    	
Landlord’s Insurance
    	
 
    	
65
    
	
 
    	
14.3.
    	
 
    	
Mutual Waiver of Subrogation
    	
 
    	
66
    
	
 
    	
14.4.
    	
 
    	
Evidence of Insurance
    	
 
    	
66
    
	
 
    	
14.5.
    	
 
    	
No Concurrent Insurance
    	
 
    	
66
    
	
 
    	
14.6.
    	
 
    	
Tenant’s Obligation to Comply with Landlord’s Fire   and Casualty Insurance
    	
 
    	
67
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 15 CASUALTY
    	
 
    	
67
    
	
 
    	
15.1.
    	
 
    	
Notice
    	
 
    	
67
    
	
 
    	
15.2.
    	
 
    	
Landlord’s Restoration Obligations
    	
 
    	
67
    
	
 
    	
15.3.
    	
 
    	
Rent Abatement
    	
 
    	
68
    
	
 
    	
15.4.
    	
 
    	
Landlord’s Termination Right
    	
 
    	
68
    
	
 
    	
15.5.
    	
 
    	
Tenant’s Termination Right
    	
 
    	
69
    
	
 
    	
15.6.
    	
 
    	
Termination Rights at End of Term
    	
 
    	
70
    
	
 
    	
15.7.
    	
 
    	
No Other Termination Rights
    	
 
    	
70
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 16 CONDEMNATION
    	
 
    	
71
    
	
 
    	
16.1.
    	
 
    	
Effect of Condemnation
    	
 
    	
71
    
	
 
    	
16.2.
    	
 
    	
Condemnation Award
    	
 
    	
72
    
	
 
    	
16.3.
    	
 
    	
Temporary Taking
    	
 
    	
72
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 17 ASSIGNMENT AND SUBLETTING
    	
 
    	
73
    
	
 
    	
17.1.
    	
 
    	
General Limitations
    	
 
    	
73
    
	
 
    	
17.2.
    	
 
    	
Landlord’s Expenses
    	
 
    	
74
    
	
 
    	
17.3.
    	
 
    	
Recapture Procedure
    	
 
    	
75
    
	
 
    	
17.4.
    	
 
    	
Certain Transfer Rights
    	
 
    	
80
    
	
 
    	
17.5.
    	
 
    	
Preliminary Approval
    	
 
    	
82
    
	
 
    	
17.6.
    	
 
    	
Transfer Taxes
    	
 
    	
83
    
	
 
    	
17.7.
    	
 
    	
Transfer Profit
    	
 
    	
83
    
	
 
    	
17.8.
    	
 
    	
Permitted Transfers
    	
 
    	
85
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 18 TENANT’S RIGHT OF FIRST OFFER TO   LEASE
    	
 
    	
87
    
	
 
    	
18.1.
    	
 
    	
Right of First Offer
    	
 
    	
87
    
	
 
    	
18.2.
    	
 
    	
Option Notice
    	
 
    	
87
    
	
 
    	
18.3.
    	
 
    	
Option Procedure
    	
 
    	
88
    
	
 
    	
18.4.
    	
 
    	
Certain Limitations
    	
 
    	
88
    
	
 
    	
18.5.
    	
 
    	
Lease Provisions Apply
    	
 
    	
90
    
	
 
    	
18.6.
    	
 
    	
Delivery
    	
 
    	
90
    

 

iv

 

	
Article 19 TENANT’S RIGHT TO LEASE ADDITIONAL   SPACE
    	
 
    	
91
    
	
 
    	
19.1.
    	
 
    	
Additional Space
    	
 
    	
91
    
	
 
    	
19.2.
    	
 
    	
Option
    	
 
    	
91
    
	
 
    	
19.3.
    	
 
    	
Certain Limitations
    	
 
    	
91
    
	
 
    	
19.4.
    	
 
    	
Lease Provisions Apply
    	
 
    	
92
    
	
 
    	
19.5.
    	
 
    	
Delivery
    	
 
    	
93
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 20 RENEWAL
    	
 
    	
93
    
	
 
    	
20.1.
    	
 
    	
Renewal Option
    	
 
    	
93
    
	
 
    	
20.2.
    	
 
    	
Lease Provisions Apply
    	
 
    	
94
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 21 FAIR MARKET RENT
    	
 
    	
94
    
	
 
    	
21.1.
    	
 
    	
Certain Definitions
    	
 
    	
94
    
	
 
    	
21.2.
    	
 
    	
Fair Market Rent Assumptions
    	
 
    	
95
    
	
 
    	
21.3.
    	
 
    	
Fair Market Procedure
    	
 
    	
95
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 22 DEFAULT
    	
 
    	
97
    
	
 
    	
22.1.
    	
 
    	
Events of Default
    	
 
    	
97
    
	
 
    	
22.2.
    	
 
    	
Termination
    	
 
    	
98
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 23 TENANT’S INSOLVENCY
    	
 
    	
98
    
	
 
    	
23.1.
    	
 
    	
Assignments pursuant to the Bankruptcy Code
    	
 
    	
98
    
	
 
    	
23.2.
    	
 
    	
Replacement Lease
    	
 
    	
99
    
	
 
    	
23.3.
    	
 
    	
Insolvency Events
    	
 
    	
100
    
	
 
    	
23.4.
    	
 
    	
Effect of Stay
    	
 
    	
102
    
	
 
    	
23.5.
    	
 
    	
Rental for Bankruptcy Purposes
    	
 
    	
102
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 24 REMEDIES AND DAMAGES
    	
 
    	
102
    
	
 
    	
24.1.
    	
 
    	
Certain Remedies
    	
 
    	
102
    
	
 
    	
24.2.
    	
 
    	
No Redemption
    	
 
    	
103
    
	
 
    	
24.3.
    	
 
    	
Calculation of Damages
    	
 
    	
103
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 25 LANDLORD’S EXPENSES AND LATE   CHARGES
    	
 
    	
105
    
	
 
    	
25.1.
    	
 
    	
Landlord’s Costs
    	
 
    	
105
    
	
 
    	
25.2.
    	
 
    	
Interest on Late Payments
    	
 
    	
105
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 26 SECURITY
    	
 
    	
106
    
	
 
    	
26.1.
    	
 
    	
Security Deposit
    	
 
    	
106
    
	
 
    	
26.2.
    	
 
    	
Landlord’s Rights
    	
 
    	
106
    
	
 
    	
26.3.
    	
 
    	
Return of Security
    	
 
    	
107
    
	
 
    	
26.4.
    	
 
    	
Transfer of Letter of Credit
    	
 
    	
107
    
	
 
    	
26.5.
    	
 
    	
Renewal of Letter of Credit
    	
 
    	
107
    
	
 
    	
26.6.
    	
 
    	
Reduction in Security Amount
    	
 
    	
108
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 27 END OF TERM
    	
 
    	
108
    
	
 
    	
27.1.
    	
 
    	
End of Term 
    	
 
    	
108
    
	
 
    	
27.2.
    	
 
    	
Holdover
    	
 
    	
108
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 28 NO WAIVER
    	
 
    	
109
    
	
 
    	
28.1.
    	
 
    	
No Surrender
    	
 
    	
109
    

 

v

 

	
 
    	
28.2.
    	
 
    	
No Waiver by Landlord
    	
 
    	
109
    
	
 
    	
28.3.
    	
 
    	
No Waiver by Tenant
    	
 
    	
110
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 29 JURISDICTION
    	
 
    	
110
    
	
 
    	
29.1.
    	
 
    	
Governing Law
    	
 
    	
110
    
	
 
    	
29.2.
    	
 
    	
Submission to Jurisdiction
    	
 
    	
110
    
	
 
    	
29.3.
    	
 
    	
Waiver of Trial by Jury; Counterclaims
    	
 
    	
111
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 30 NOTICES
    	
 
    	
111
    
	
 
    	
30.1.
    	
 
    	
Addresses; Manner of Delivery
    	
 
    	
111
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 31 BROKERAGE
    	
 
    	
112
    
	
 
    	
31.1.
    	
 
    	
Broker
    	
 
    	
112
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 32 INDEMNITY
    	
 
    	
113
    
	
 
    	
32.1.
    	
 
    	
Tenant’s Indemnification of the Landlord Indemnitees
    	
 
    	
113
    
	
 
    	
32.2.
    	
 
    	
Landlord’s Indemnification of the Tenant   Indemnitees
    	
 
    	
114
    
	
 
    	
32.3.
    	
 
    	
Indemnification Procedure
    	
 
    	
114
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 33 LANDLORD’S CONSENTS; ARBITRATION
    	
 
    	
116
    
	
 
    	
33.1.
    	
 
    	
Certain Limitations
    	
 
    	
116
    
	
 
    	
33.2.
    	
 
    	
Expedited Arbitration
    	
 
    	
116
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article 34 ADDITIONAL PROVISIONS
    	
 
    	
118
    
	
 
    	
34.1.
    	
 
    	
Tenant’s Property Delivered to Building Employees
    	
 
    	
118
    
	
 
    	
34.2.
    	
 
    	
Not Binding Until Execution
    	
 
    	
118
    
	
 
    	
34.3.
    	
 
    	
No Third Party Beneficiaries
    	
 
    	
118
    
	
 
    	
34.4.
    	
 
    	
Extent of Landlord’s Liability
    	
 
    	
118
    
	
 
    	
34.5.
    	
 
    	
Extent of Tenant’s Liability
    	
 
    	
118
    
	
 
    	
34.6.
    	
 
    	
Survival
    	
 
    	
119
    
	
 
    	
34.7.
    	
 
    	
Recording
    	
 
    	
119
    
	
 
    	
34.8.
    	
 
    	
Entire Agreement
    	
 
    	
119
    
	
 
    	
34.9.
    	
 
    	
Counterparts
    	
 
    	
119
    
	
 
    	
34.10.
    	
 
    	
Exhibits
    	
 
    	
119
    
	
 
    	
34.11.
    	
 
    	
Gender; Plural
    	
 
    	
119
    
	
 
    	
34.12.
    	
 
    	
Divisibility
    	
 
    	
119
    
	
 
    	
34.13.
    	
 
    	
Vault Space
    	
 
    	
120
    
	
 
    	
34.14.
    	
 
    	
Adjacent Excavation
    	
 
    	
120
    
	
 
    	
34.15.
    	
 
    	
Captions
    	
 
    	
120
    
	
 
    	
34.16.
    	
 
    	
Parties Bound
    	
 
    	
120
    
	
 
    	
34.17.
    	
 
    	
Authority
    	
 
    	
120
    
	
 
    	
34.18.
    	
 
    	
Rent Control
    	
 
    	
121
    
	
 
    	
34.19.
    	
 
    	
Consequential Damages
    	
 
    	
121
    
	
 
    	
34.20.
    	
 
    	
Tenant’s Advertising
    	
 
    	
122
    
	
 
    	
34.21.
    	
 
    	
Specially Designated Nationals; Blocked Persons;   Embargoed Persons
    	
 
    	
122
    

 

vi

 

DEFINED TERMS

 

	
Term
    	
 
    	
Page
    
	
Additional   Space
    	
 
    	
91
    
	
Additional   Space Commencement Date
    	
 
    	
93
    
	
Additional   Space Notice
    	
 
    	
91
    
	
Additional   Space Option
    	
 
    	
91
    
	
Additional   Space Tenant Fund
    	
 
    	
93
    
	
Additional   Space Term
    	
 
    	
91
    
	
Affiliate
    	
 
    	
3
    
	
Alterations
    	
 
    	
36
    
	
Alterations   Notice
    	
 
    	
38
    
	
Amortized   Transfer Expenses
    	
 
    	
76
    
	
Applicable   Area
    	
 
    	
94
    
	
Applicable   Date
    	
 
    	
95
    
	
Applicable   Option Space
    	
 
    	
87
    
	
Applicable   Rate
    	
 
    	
3
    
	
Appraiser
    	
 
    	
96
    
	
Assessed   Valuation
    	
 
    	
17
    
	
Average   Cost per Kilowatt Hour
    	
 
    	
12
    
	
Average   Cost per Peak Demand Kilowatt
    	
 
    	
12
    
	
Bank   Requirements
    	
 
    	
106
    
	
Bankruptcy   Code
    	
 
    	
98
    
	
Base   Electrical Capacity
    	
 
    	
32
    
	
Base   Operating Expense Year
    	
 
    	
6
    
	
Base   Operating Expenses
    	
 
    	
6
    
	
Base   Rate
    	
 
    	
4
    
	
Base   Tax Period
    	
 
    	
18
    
	
Base   Taxes
    	
 
    	
18
    
	
Basic   Alteration
    	
 
    	
38
    
	
Basic   Sublease Provisions
    	
 
    	
82
    
	
Broker
    	
 
    	
112
    
	
Building
    	
 
    	
1
    
	
Building   Change
    	
 
    	
43
    
	
Building   Hours
    	
 
    	
28
    
	
Building   Systems
    	
 
    	
28
    
	
Business   Days
    	
 
    	
4
    
	
Casualty   Statement
    	
 
    	
69
    
	
Claim
    	
 
    	
115
    
	
Claim   Against Landlord
    	
 
    	
113
    
	
Claim   Against Tenant
    	
 
    	
114
    
	
Commencement   Date
    	
 
    	
2
    
	
Condominium   Board
    	
 
    	
58
    
	
Condominium   Declaration
    	
 
    	
59
    
	
Consumer   Price Index
    	
 
    	
4
    
	
Control
    	
 
    	
4
    

 

vii

 

	
Decorative   Alterations
    	
 
    	
37
    
	
Deficiency
    	
 
    	
104
    
	
Disbursement   Request
    	
 
    	
47
    
	
Electricity   Additional Rent
    	
 
    	
33
    
	
Electricity   Inclusion Charge
    	
 
    	
34
    
	
Embargoed   Person
    	
 
    	
122
    
	
Escalation   Rent
    	
 
    	
4
    
	
Event   of Default
    	
 
    	
97
    
	
Excluded   Amounts
    	
 
    	
18
    
	
Exempt   Sublease
    	
 
    	
80
    
	
Expedited   Arbitration Proceeding
    	
 
    	
117
    
	
Expiration   Date
    	
 
    	
1
    
	
Fair   Market Rent
    	
 
    	
94
    
	
Fixed   Expiration Date
    	
 
    	
1
    
	
Fixed   Rent
    	
 
    	
2
    
	
GAAP
    	
 
    	
4
    
	
Governmental   Authority
    	
 
    	
56
    
	
Holidays
    	
 
    	
4
    
	
HVAC
    	
 
    	
28
    
	
HVAC   Hours
    	
 
    	
29
    
	
HVAC   Overtime Periods
    	
 
    	
29
    
	
HVAC   Systems
    	
 
    	
28
    
	
Indemnitee
    	
 
    	
115
    
	
Indemnitor
    	
 
    	
115
    
	
Initial   Alterations
    	
 
    	
37
    
	
Initial   Tenant Requirement
    	
 
    	
5
    
	
Insolvency   Events
    	
 
    	
101
    
	
Insolvency   Party
    	
 
    	
98
    
	
ISO
    	
 
    	
64
    
	
Landlord
    	
 
    	
1
    
	
Landlord   Indemnitees
    	
 
    	
114
    
	
Landlord’s   Post-Commencement Work
    	
 
    	
36
    
	
Landlord’s   Work
    	
 
    	
36
    
	
Landlord’s   Determination
    	
 
    	
95
    
	
Landlord’s   Pre-Commencement Work
    	
 
    	
36
    
	
Landlord’s   Property Policy
    	
 
    	
65
    
	
Lessor
    	
 
    	
59
    
	
Letter   of Credit
    	
 
    	
106
    
	
List
    	
 
    	
122
    
	
Maximum   Disbursement Amount
    	
 
    	
47
    
	
Minimum   Demise Requirement
    	
 
    	
5
    
	
Minimum   Occupancy Requirement
    	
 
    	
5
    
	
Minor   Alteration
    	
 
    	
38
    
	
Minor   Alterations Threshold
    	
 
    	
38
    
	
Monthly   Operating Expense Payment Amount
    	
 
    	
14
    

 

viii

 

	
Monthly   Tax Payment Amount
    	
 
    	
19
    
	
Mortgage
    	
 
    	
59
    
	
Mortgagee
    	
 
    	
59
    
	
Net   Worth Assignment Requirement
    	
 
    	
85
    
	
Nondisturbance   Agreement
    	
 
    	
59
    
	
Occupancy   Agreement
    	
 
    	
73
    
	
OFAC
    	
 
    	
122
    
	
Operating   Expense Payment
    	
 
    	
10
    
	
Operating   Expense Statement
    	
 
    	
10
    
	
Operating   Expense Year
    	
 
    	
10
    
	
Operating   Expenses
    	
 
    	
6
    
	
Option
    	
 
    	
88
    
	
Option   Cutoff Date
    	
 
    	
89
    
	
Option   Notice
    	
 
    	
87
    
	
Option   Response Notice
    	
 
    	
88
    
	
Option   Space
    	
 
    	
87
    
	
Option   Space Commencement Date
    	
 
    	
90
    
	
Option   Term
    	
 
    	
88
    
	
Out-of-Pocket   Costs
    	
 
    	
5
    
	
Overtime   Periods
    	
 
    	
28
    
	
Permitted   Party
    	
 
    	
73
    
	
Person
    	
 
    	
5
    
	
Predecessor   Tenant
    	
 
    	
100
    
	
Premises
    	
 
    	
1
    
	
Property   Management Charge
    	
 
    	
6
    
	
Proposed   Transfer Terms
    	
 
    	
75
    
	
Prospective   Operating Expense Statement
    	
 
    	
13
    
	
Prospective   Tax Statement
    	
 
    	
19
    
	
Qualified   Alteration
    	
 
    	
45
    
	
Real   Property
    	
 
    	
1
    
	
Recapture   Date
    	
 
    	
76
    
	
Recapture   Procedure
    	
 
    	
75
    
	
Recapture   Space
    	
 
    	
75
    
	
Recapture   Sublease
    	
 
    	
76
    
	
Recapture   Sublease Notice
    	
 
    	
76
    
	
Recapture   Subtenant
    	
 
    	
76
    
	
Recapture   Termination
    	
 
    	
78
    
	
Recapture   Termination Notice
    	
 
    	
78
    
	
Reminder   Notice
    	
 
    	
91
    
	
Renewal   Notice
    	
 
    	
93
    
	
Renewal   Option
    	
 
    	
93
    
	
Renewal   Term
    	
 
    	
93
    
	
Rent   Commencement Date
    	
 
    	
2
    
	
Rent   Notice
    	
 
    	
95
    
	
Rentable   Area
    	
 
    	
5
    

 

ix

 

	
Rental
    	
 
    	
2
    
	
Requirements
    	
 
    	
56
    
	
Reserved   Areas
    	
 
    	
52
    
	
Restroom   Alterations
    	
 
    	
46
    
	
Risers
    	
 
    	
26
    
	
Rules
    	
 
    	
25
    
	
Scheduled   Additional Space Commencement Date
    	
 
    	
91
    
	
Scheduled   Option Space Commencement Date
    	
 
    	
87
    
	
Second   Bite Date
    	
 
    	
69
    
	
Settlement
    	
 
    	
115
    
	
Short-Term   Sublease
    	
 
    	
76
    
	
Soft   Costs
    	
 
    	
46
    
	
Specialty   Alterations
    	
 
    	
37
    
	
Substantial   Completion
    	
 
    	
37
    
	
Successor
    	
 
    	
59
    
	
Successor   Limitation Items
    	
 
    	
61
    
	
Superior   Lease
    	
 
    	
59
    
	
Tax   Payment
    	
 
    	
19
    
	
Tax   Statement
    	
 
    	
19
    
	
Tax   Year
    	
 
    	
19
    
	
Taxes
    	
 
    	
18
    
	
Tenant
    	
 
    	
1
    
	
Tenant   Fund
    	
 
    	
46
    
	
Tenant   Indemnitees
    	
 
    	
114
    
	
Tenant   Obligor
    	
 
    	
101
    
	
Tenant’s   Auto Policy
    	
 
    	
64
    
	
Tenant’s   Determination
    	
 
    	
95
    
	
Tenant’s   Liability Policy
    	
 
    	
64
    
	
Tenant’s   Operating Expense Share
    	
 
    	
10
    
	
Tenant’s   Property
    	
 
    	
37
    
	
Tenant’s   Property Policy
    	
 
    	
64
    
	
Tenant’s   Signs
    	
 
    	
26
    
	
Tenant’s   Statements
    	
 
    	
63
    
	
Tenant’s   Tax Share
    	
 
    	
19
    
	
Tenant’s   Worker’s Compensation Policy
    	
 
    	
64
    
	
Term
    	
 
    	
1
    
	
Term   Sheet
    	
 
    	
83
    
	
Transfer
    	
 
    	
73
    
	
Transfer   Date
    	
 
    	
75
    
	
Transfer   Expenses
    	
 
    	
75
    
	
Transfer   Inflow
    	
 
    	
84
    
	
Transfer   Notice
    	
 
    	
75
    
	
Transfer   Outflow
    	
 
    	
84
    
	
Transfer   Profit
    	
 
    	
84
    
	
Transferee
    	
 
    	
75
    

 

x

 

	
Transferor
    	
 
    	
75
    
	
Unavoidable   Delays
    	
 
    	
54
    
	
Usable   Area
    	
 
    	
5
    
	
Utility   Company
    	
 
    	
12
    
	
Work   Access
    	
 
    	
51
    
	
Work   Deposit
    	
 
    	
42
    

 

xi

 

EXHIBITS

 

Exhibit “A” - Premises

 

Exhibit “3.3” - Rules

 

Exhibit “3.4” - Tenant’s Signs

 

Exhibit “4.4” - Cleaning Specifications

 

Exhibit “6.2” - Landlord’s Pre-Commencement Work

 

Exhibit “7.2” — Space Plan for Initial Alterations

 

Exhibit “18.1” - Option Space

 

Exhibit “19.1” - Additional Space

 

xii

 

THIS LEASE, dated as of the                    day of July, 2013, by and between VNO 100 WEST 33RD STREET LLC, a Delaware limited liability company, having an address c/o Vornado Office Management LLC, 888 Seventh Avenue, New York, New York 10019, as landlord, and ROCKET FUEL INC., a Delaware corporation, having an address at 350 Marine Parkway, Redwood City, California 94065, as tenant (the Person that holds the interest of the landlord hereunder at any particular time being referred to herein as “Landlord”; subject to Section 17.1(F) hereof, the Person that holds the interest of the tenant hereunder at any particular time being referred to herein as “Tenant”).

 

WITNESSETH:

 

WHEREAS, Landlord wishes to demise and let unto Tenant, and Tenant wishes to hire and take from Landlord, on the terms and subject to the conditions set forth herein, the premises on the third (3rd) floor of the building that is known by the street address of 100 West 33rd Street, New York, New York 10001, as shown on Exhibit “A” attached hereto and made a part hereof (such premises being collectively referred to herein as the “Premises”; such building being referred to herein as the ‘‘Building”; the Building, together with the plot of land on which the Building is constructed, being collectively referred to herein as the “Real Property”).

 

NOW, THEREFORE, in consideration of the premises, and other good and valuable consideration, the mutual receipt and legal sufficiency of which the parties hereto hereby acknowledge, Landlord and Tenant hereby agree as follows:

 

Article 1

DEMISE, TERM, FIXED RENT

 

1.1.                            Demise.

 

Subject to the terms hereof, Landlord hereby demises and lets to Tenant and Tenant hereby hires and takes from Landlord the Premises for the term to commence on the Commencement Date and to end on the last day of the calendar month during which occurs the day immediately preceding the date that is ten (10) years after the Rent Commencement Date (the “Fixed Expiration Date”; the Fixed Expiration Date, or such earlier or later date that the term of this Lease expires or otherwise terminates pursuant to the terms hereof or pursuant to law, being referred to herein as the “Expiration Date”; the term commencing on the Commencement Date and ending on the Expiration Date being referred to herein as the “Term’’).

 

1.2.                            Commencement Date.

 

(A)                               Subject to Section 1.2(B) hereof, the term of this Lease shall commence on the date that Landlord delivers vacant and exclusive possession of the Premises to Tenant in accordance with this Lease and with Landlord’s Pre-Commencement Work Substantially Complete (such date that Landlord delivers vacant and exclusive possession of the Premises to Tenant with Landlord’s Pre-Commencement Work Substantially Complete being referred to

 

1

 

herein as the “Commencement Date”). Notwithstanding anything to the contrary contained herein, in the event that the Commencement Date shall not occur within one twenty (120) days following the date hereof (which period shall be extended by periods of Unavoidable Delays but not more than thirty (30) days in the aggregate) then Tenant as its sole remedy shall have the right to give Landlord notice by the one hundred twentieth (120th) day (as so extended) (time being of the essence) which notice shall refer to this Lease and shall stale in bold and capital letters as follows: THE LEASE SHALL BE DEEMED TERMINATED UNLESS THE COMMENCEMENT DATE SHALL OCCUR WITHIN FIVE (5) BUSINESS DAYS OF THIS NOTICE. In the event that the Commencement Date shall not occur by the fifth (5th) Business Day following such notice, this Lease shall be deemed terminated and of no further force and effect, whereupon any monies previously paid by Tenant to Landlord shall be reimbursed to Tenant, and thereafter neither party shall have any rights or obligations hereunder except those surviving the Expiration Date.

 

(B)                             Landlord shall cause Landlord’s Pre-Commencement Work to be Substantially Completed on or prior to the Commencement Date.

 

(C)                             The term “Rental” shall mean, collectively, the Fixed Rent, the Escalation Rent the additional rent payable by Tenant to Landlord hereunder, and all other amounts payable by Tenant to Landlord hereunder.

 

1.3.                            Rent Commencement Date.

 

The term “Rent Commencement Date” shall mean the same numerical day as the Commencement Date that occurs in the fourteenth (14th) month thereafter.

 

1.4.                            Fixed Rent.

 

(A)                               The annual fixed rent for the Premises (the annual fixed rent payable hereunder for the Premises at any particular time being referred lo herein as the “Fixed Rent”) shall be:

 

(1)                                 Two Million Three Hundred Seventy-Seven Thousand Nine Hundred Twenty Dollars and No Cents ($2,377,920.00) ($198,160.00 per month) for the period commencing on the Rent Commencement Date and ending on the day immediately preceding the date that is five (5) years after the Rent Commencement Date; and

 

(2)                                 Two Million Six Hundred Twenty-Five Thousand Six Hundred Twenty Dollars and No Cents ($2,625,620.00) ($218,801.67 per month) for the period commencing on the date that is five (5) years after the Rent Commencement Date and ending on the Fixed Expiration Date.

 

2

 

1.5.                            Payments of Fixed Rent.

 

(A)                               Subject to Section 1.5(E) hereof, Tenant shall pay the Fixed Rent in lawful money of the United States of America that is legal tender in payment of all debts and dues, public and private, at the time of payment, in equal monthly installments, in advance, on the first (1st) day of each calendar month during the Term commencing on the Rent Commencement Date, at the office of Landlord or such other place as Landlord may designate from time to time on at least thirty (30) days of advance notice to Tenant, without any set-off, offset, abatement or deduction whatsoever (except to the extent otherwise expressly set forth herein).

 

(B)                               Landlord shall have the right to require Tenant to pay the Fixed Rent and any other items of Rental when due by wire transfer of immediately available funds to an account that Landlord designates from time to time on at least thirty (30) days of advance notice to Tenant.

 

(C)                               Subject to Section 1.5(B) hereof, Tenant shall have the right to pay the Fixed Rent and any other items of Rental by wire transfer of immediately available funds to an account that Landlord designates from time to time on at least thirty (30) days of advance notice to Tenant. Landlord shall so designate an account within thirty (30) days after Tenant’s request therefor from time to time.

 

(D)                               If the Rent Commencement Date is not the first (1st) day of a calendar month, then (x) the Fixed Rent due hereunder for the calendar month during which the Rent Commencement Date occurs shall be adjusted appropriately based on the number of days in such calendar month, and (y) subject to Section 1.5(E) hereof, Tenant shall pay to Landlord such amount (adjusted as aforesaid for such calendar month) on the Rent Commencement Date. If the Expiration Date is not the last day of a calendar month, then the Fixed Rent due hereunder for the calendar month during which the Expiration Date occurs shall be adjusted appropriately based on the number of days in such calendar month.

 

(E)                                Tenant shall pay to Landlord on the date hereof an amount equal to One Hundred Ninety-Eight Thousand One Hundred Sixty Dollars and No Cents ($198,160.00), which Landlord shall apply to the Fixed Rent that first comes due hereunder from and after the Rent Commencement Date until such amount is exhausted.

 

1.6.                            Certain Definitions.

 

(A)                               The term “Affiliate” shall mean a Person that (1) Controls, (2) is under the Control of, or (3) is under common Control with, the Person in question.

 

(B)                               The term “Applicable Rate” shall mean, at any particular time, the lesser of (x) four hundred (400) basis points above the Base Rate at such time, and (y) the maximum rate permitted by applicable law at such time.

 

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(C)                               The term “Base Rate” shall mean the rate of interest announced publicly from time to time by Citibank, N.A., or its successor, as its “prime lending rate” (or such other term as may be used by Citibank, N.A. (or its successor), from time to time, for the rate presently referred to as its “prime lending rate”).

 

(D)                               The term “Business Days” shall mean all days, excluding Saturdays, Sundays and Holidays.

 

(E)                                The term “Consumer Price Index” shall mean the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the United States Department of Labor, All Items (1982-84 = 100), seasonally adjusted, for the most specific area that includes the location of the Building (which the parties acknowledge is currently New York — Northern New Jersey — Long Island, NY — NJ — CT — PA), or any successor index thereto. If the Consumer Price Index is converted to a different standard reference base or otherwise revised, then the determination of adjustments provided for herein shall be made with the use of such conversion factor, formula or table for converting the Consumer Price Index as may be published by the Bureau of Labor Statistics or, if said Bureau docs not publish such conversion factor, formula or table, then with the use of such conversion factor, formula or table as may be published by Prentice-Hall, Inc. or any other nationally recognized publisher of similar statistical information. If the Consumer Price Index ceases to be published, and there is no successor thereto, then Landlord and Tenant shall use diligent efforts, in good faith, to agree upon a substitute index for the Consumer Price Index. Either party shall have the right to submit the issue of the designation of such substitute index to an Expedited Arbitration Proceeding.

 

(F)                                 The term “Control” shall mean direct or indirect ownership of more than fifty percent (50%) of the outstanding voting stock of a corporation or other majority equity interest if not a corporation and the possession of power to direct or cause the direction of the management and policy of such corporation or other entity, whether through the ownership of voting securities, by statute or by contract.

 

(G)                               The term “Escalation Rent” shall mean the Rental payable to Landlord under Article 2 hereof.

 

(H)                              The term “GAAP” shall mean generally accepted accounting principles, consistently applied, except that if, at any time from and after the date hereof, the American Institute of Certified Public Accountants adopts international financial reporting standards as the basis for financial reporting in the United States, then references in this Lease to GAAP shall be deemed to be references to such international financial reporting standards, consistently applied.

 

(I)                                   The term “Holidays” shall mean all days observed as legal holidays by either (x) the State of New York, (y) the United States of America, or (z) the labor unions that service the Building; provided, however, that if (x) all of the labor unions that service the Building do not observe a particular day as a holiday, and (y) the State of New York or the United States of America do not otherwise observe such day as a holiday, then such day shall

 

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constitute a Holiday for purposes hereof only to the extent that Landlord requires the services that are provided by members of the particular labor union to perform the corresponding service for Tenant hereunder (so that if, for example, (x) the labor union for office cleaning personnel observes a particular day as a holiday but the labor union for the engineers that operate the HVAC System does not observe such day as a holiday, and (y) the State of New York or the United States of America does not otherwise observe such day as a holiday, then such day shall constitute a Holiday for purposes of determining whether Landlord is required to provide office cleaning services on such day, but such day shall not constitute a Holiday for purposes of determining whether Landlord is required to provide HVAC services on such day).

 

(J)                                   The term “Initial Tenant Requirement” shall mean the requirement that Tenant is the Person that executed and delivered this Lease initially as the tenant hereunder or a Person that succeeds to such Person pursuant to the terms of Section 17.8 hereof.

 

(K)                              The term “Minimum Demise Requirement” shall mean the requirement that this Lease demises at least forty-nine thousand five hundred forty (49,540) square feet of Rentable Area.

 

(L)                                The term “Minimum Occupancy Requirement” shall mean (i) with respect to Article 18 hereof, the requirement that Tenant occupies at least fifty percent (50%) of the Premises for the conduct of its business and (ii) with respect to Article 20 hereof, the requirement that Tenant (or an Affiliate of Tenant) occupies at least seventy-five percent (75%) of the Rentable Area that is demised by this Lease for the conduct of business.

 

(M)                            The term “Out-of-Pocket Costs” shall mean costs that a Person pays to a third party that is not an Affiliate of such Person (and, accordingly, Out-of-Pocket Costs shall not include (i) the costs that such Person incurs in compensating its own employees to perform a service or supervise work within the scope of their employment, or (ii) the administrative costs that such Person incurs in operating its own offices).

 

(N)                               The term “Person” shall mean any natural person or persons or any legal form of association, including, without limitation, a partnership, a limited partnership, a corporation, and a limited liability company.

 

(O)                               The term “Rentable Area” shall mean, with respect to a particular floor area, the area thereof (expressed as a particular number of square feet), as determined in accordance with the standards that the parties used to calculate that the area of the Premises is forty-nine thousand five hundred forty (49,540) square feet in the aggregate.

 

(P)                                 The term “Usable Area” shall mean, with respect to a particular floor area, the usable area thereof (expressed as a particular number of square feet), as determined in accordance with The Recommended Method of Floor Measurement of Office Buildings, Effective January 1, 1987, Revised December 2003, as published by The Real Estate Board of New York, Inc.

 

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Article 2

ESCALATION RENT

 

2.1.                            Operating Expense Definitions.

 

(A)                               The term “Base Operating Expenses” shall mean the Operating Expenses for the Base Operating Expense Year.

 

(B)                               The term “Base Operating Expense Year” shall mean the 2014 calendar year.

 

(C)                               The term “Operating Expenses” shall mean, subject to the terms of this Section 2.1 and to Section 2.2(F) hereof, the expenses paid or incurred by or on behalf of Landlord in insuring, maintaining, repairing, managing and operating the Real Property (and employing personnel therefor) as reflected on Landlord’s books (which Landlord shall keep in accordance with GAAP). Landlord shall have the right to include in Operating Expenses for a particular Operating Expense Year a property management charge in an amount not to exceed the product obtained by multiplying (i) three percent (3%), by (ii) the gross rents that Landlord collects from Tenant and the other tenants in the Building during such Operating Expense Year (such amount being referred to herein as the “Property Management Charge”). Operating Expenses shall exclude:

 

(1)                                 Taxes,

 

(2)                                 Excluded Amounts,

 

(3)                                 subject to Section 2.2(F) hereof, payments of fees, interest or principal in respect of Landlord’s debt (including, without limitation, any debt that is secured by Mortgages),

 

(4)                                 expenses that relate to leasing space in the Building (including, without limitation, the cost of tenant improvements (or allowances that Landlord provides to a tenant therefor), the cost of performing improvements to prepare a particular portion of the Building for occupancy by a tenant, the cost of rent concessions, advertising expenses, leasing commissions and the cost of lease buy-outs),

 

(5)                                 expenses that Landlord incurs in selling, purchasing, financing or refinancing the Real Property,

 

(6)                                 the cost of any repairs, replacements or improvements to the Building (including, without limitation, the facade thereof) that are required to be capitalized by GAAP (including, without limitation, lease obligations that are required to be capitalized under GAAP) (except in each case as otherwise provided in Section 2.2(F) hereof),

 

(7)                                 depreciation or amortization expense (subject, however, to Section 2.2(F) hereof),

 

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(8)                                 the cost of electricity that is furnished to the portions of the Building that Landlord has leased, that Landlord is offering for lease, or that otherwise constitutes leasable space that is not used for the general benefit of the occupants the Building (it being understood that Operating Expenses shall include the cost of electricity that is required to operate the Building Systems as provided in Section 2.2(B) hereof),

 

(9)                                 salaries and the cost of benefits in either case for personnel above the grade of building manager,

 

(10)                          charges for the general overhead costs that Landlord incurs in managing, operating, maintaining, or staffing its offices that are not located at the Building.

 

(11)                          rent paid or payable under Superior Leases (except to the extent that (I) such rent that is paid or payable under Superior Lease is for Taxes or Operating Expenses, and (II) Landlord has not otherwise included such Taxes or Operating Expenses in the calculation of Escalation Rent under this Article 2),

 

(12)                          subject to Section 2.2 hereof, any expense for which Landlord is otherwise compensated, whether by virtue of insurance proceeds, condemnation proceeds, claims under warranties, Tenant or other tenants in the Building making payment directly to Landlord for Landlord’s services in the Building or otherwise (other than by virtue of other tenants in the Building making payments to Landlord for Operating Expenses as escalation rental),

 

(13)                          the cost of providing any level of service that exceeds the level of service that Landlord furnishes to Tenant hereunder,

 

(14)                          legal or arbitration fees and disbursements that are paid or incurred in connection with the negotiation of, or disputes arising out of, any lease for space in the Real Property,

 

(15)                          costs that Landlord incurs in restoring or repairing the Building after the occurrence of a tire or other casualty or after a partial condemnation thereof,

 

(16)                          costs that Landlord incurs in performing, or correcting defects in, Landlord’s Work;

 

(17)                          advertising, entertainment and promotional costs that are paid or incurred for the Building,

 

(18)                          management fees that Landlord pays to a property manager (it being understood, however, that nothing in this clause (18) limits Landlord’s right to include in Operating Expenses the Property Management Charge),

 

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(19)                          the expenses paid or incurred by or on behalf of Landlord in owning, maintaining, repairing, managing and operating the portion of the Real Property that is used for retail purposes,

 

(20)                          any fee or expenditure that is paid or payable to any Affiliate of Landlord to the extent that such fee or expenditure exceeds the amount that would be reasonably expected to be paid in the absence of such relationship,

 

(21)                          interest, penalties and late charges that in either case are paid or incurred as a result of late payments made by Landlord or by reason of Landlord’s failure to comply with Requirements (to the extent that Landlord is required to comply with such Requirements pursuant to the terms hereof),

 

(22)                          costs incurred in operating any sign or other similar device designed principally for advertising or promotion to the extent that Landlord leases or licenses to a third party such sign or device, or the portion of the Building where such sign or device is installed,

 

(23)                          the cost of any judgment, settlement, or arbitration award resulting from any liability of Landlord (other than liability for amounts otherwise includible in Operating Expenses hereunder) and all expenses incurred in connection therewith,

 

(24)                          amounts payable by Landlord for withdrawal liability or unfunded pension liability to a multi-employer pension plan (under Title IV of the Employee Retirement Income Security Act of 1974, as amended),

 

(25)                          costs incurred by Landlord which result from Landlord’s breach of this Lease or Landlord’s negligence or willful misconduct,

 

(26)                          costs that Landlord incurs to correct a representation made by Landlord in this Lease,

 

(27)                          fines or penalties that are assessed against Landlord by a Governmental Authority by virtue of violations at the Building of applicable Requirements,

 

(28)                          fees, dues or contributions that Landlord pays voluntarily to civic organizations, charities, political parties or political action committees,

 

(29)                          the cost of providing HVAC during Overtime Periods to portions of the Building that Landlord has leased, that Landlord is offering for lease, or that otherwise constitutes leasable space that is not used for the general benefit of the occupants the Building (except that Landlord shall have the right to include in Operating Expenses the cost of providing HVAC during Overtime Periods that Landlord ordinarily supplies to the Building generally in accordance with good management practices),

 

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(30)                          the cost of providing freight elevator or loading dock service during Overtime Periods (except that Landlord shall have the right to include in Operating Expenses the cost of providing freight elevator or loading dock service during Overtime Periods that Landlord ordinarily supplies to the Building generally in accordance with good management practices),

 

(31)                          the cost of objects of fine art that Landlord installs in the Building, other than the retail portion thereof, (with the understanding, however, that (x) Landlord shall have the right to include in Operating Expenses the cost of fine art that Landlord installs in the Building, other than the retail portion thereof, to the extent that such installation is required by applicable Requirements (subject, however, to Section 2.2(F) hereof), and (y) nothing contained in this clause (31) precludes Landlord from including in Operating Expenses the cost of maintaining and repairing objects of fine art that Landlord installs in the common areas of the Building, other than the retail portion thereof),

 

(32)                          costs associated with the construction, installation, repair or operation of any broadcasting facility, conference center, luncheon club, athletic facility, child care facility, auditorium, cafeteria, or any other similar specialty facility, except to the extent that any such facility exists in the Building as of the date hereof for the general benefit of tenants in the Building,

 

(33)                          costs that Landlord incurs in operating an ancillary service in the Building in respect of which users pay a separate charge (such as a shoe shine stand, a newsstand, a stationery store or a parking facility),

 

(34)                          costs that are duplicative of any other cost that is included in Operating Expenses,

 

(35)                          costs that Landlord incurs in organizing or maintaining in good standing the entity that constitutes Landlord, or in authorizing Landlord to do business in the jurisdiction where the Building is located,

 

(36)                          the portion of any costs that are properly allocable to any building other than Building,

 

(37)                          costs incurred in connection with the acquisition or sale of air rights, transferable development rights, easements or other real property interests,

 

(38)                          costs incurred in connection with expanding the Rentable Area of the Building,

 

(39)                          costs incurred to remove, encapsulate, or otherwise abate hazardous materials that are located in the Building as of the date hereof to the extent that a Requirement requires such removal, encapsulation or abatement as of the date hereof (it being understood, however, that (I) nothing in this clause (39) limits Landlord’s right to include in Operating Expenses the costs that Landlord incurs to test and monitor such hazardous materials in the

 

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common areas of the Building, and (II) in no event shall Landlord have the right to include in Operating Expenses the cost of removing, encapsulating or Otherwise abating asbestos),

 

(40)                          expense reserves,

 

(41)                          costs related to the removal or abatement of petroleum or other chemicals, that are deemed to be “hazardous materials” released at the Building in violation of Requirements by another tenant or occupant of the Building or a contractor of such other tenant or occupant, and

 

(42)                          costs to comply with any violation of any Requirements applicable to the Real Property as of the date hereof or insurance Requirements in effect as of the date hereof.

 

(D)                               The term “Operating Expense Payment” shall mean, with respect to any Operating Expense Year, the product obtained by multiplying (i) the excess (if any) of (A) the Operating Expenses for such Operating Expense Year, over (B) the Base Operating Expenses, by (ii) Tenant’s Operating Expense Share.

 

(E)                                The term “Operating Expense Statement” shall mean a statement that shows the Operating Expense Payment for a particular Operating Expense Year.

 

(F)                                 The term “Operating Expense Year” shall mean the Base Operating Expense Year and each subsequent calendar year.

 

(G)                               The term “Tenant’s Operating Expense Share” shall mean, subject to the terms hereof, six and ninety-eight one-thousandths percent (6.098%).

 

2.2.                            Calculation of Operating Expenses.

 

(A)

 

(1)                                 Subject to the terms of this Section 2.2(A), if the entire Rentable Area of the Building (other than the retail portion thereof) is not occupied by Persons conducting business therein for the entire Operating Expense Year, then, for purposes of calculating the Operating Expense Payment, Landlord shall have the right to increase Operating Expenses including, without limitation (but without duplication), the Property Management Charge, that vary based on the extent to which the Building is so occupied by the amount that Landlord would have included in Operating Expenses if the entire Rentable Area of the Real Property (other than the retail portion thereof) was occupied by Persons conducting business therein for the entire Operating Expense Year.

 

(2)                                 Subject to the terms of this Section 2.2(A), if (i) for any particular period, Landlord performs a particular service or a particular level of service for the benefit of Tenant in operating the Real Property, (ii) Tenant does not otherwise pay to Landlord additional rent for the costs incurred by Landlord in performing such service or such level of service, (iii) Landlord

 

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includes the cost of performing such service or such level of service in Operating Expenses for purposes of calculating the Operating Expense Payment for the applicable Operating Expense Year, and (iv) Landlord does not perform such service or such level of service for the benefit of all of the other portions of the Real Property that are occupied by Persons conducting business therein for the applicable period (it being understood that Landlord’s obligations under Section 8.1 hereof are not superseded by this Section 2.2(A)(2)), then, for purposes of calculating the Operating Expense Payment, Landlord shall have the right to increase Operating Expenses that vary based on the extent to which Landlord performs such service or such level of service for the benefit of occupants of the Building by the amount that Landlord would have included in Operating Expenses if Landlord performed such service or such level of service for the entire Rentable Area of the Real Property (other than the retail portion thereof) that is occupied by Persons conducting business therein for the applicable period.

 

(3)                                 Subject to the terms of this Section 2.2(A), if (x) a lease for the leasable space in the Building (or a portion thereof) is in effect, and (y) Landlord does not collect rent therefor for any reason (including, without limitation, the effectiveness of a rent abatement or the tenant’s default under the applicable lease), then Landlord shall calculate the Property Management Charge as provided in this Section 2.2(A)(3) at the rental rate that applies thereunder (it being understood that if a rental abatement is in effect, then the Property Management Charge shall be calculated at the rental rate that applies immediately after the last day of the abatement period).

 

(4)                                 Subject to the terms of this Section 2.2(A), if Landlord, during a particular Operating Expense Year (or a portion thereof), does not perform repair and maintenance on a particular element of the Building because such element of the Building is out of service or not fully in use, then Landlord shall have the right to increase Operating Expenses to reflect the amount of expenses that Landlord would have incurred if Landlord had performed such repair and maintenance for the entire Operating Expense Year. Accordingly, if, for example, during a particular Operating Expense Year, Landlord does not incur costs to repair and maintain the finishes in the lobby of the Building because the lobby is not in service for such Operating Expense Year, then Landlord shall have the right to include in Operating Expenses for such Operating Expense Year the costs that Landlord would have incurred in repairing and maintaining the finishes in the lobby of the Building for the entire Operating Expense Year.

 

(5)                                 Landlord shall increase the Operating Expenses for the Base Operating Expense Year as described in this Section 2.2(A), For purposes of calculating the Operating Expenses for the Base Operating Expense Year, any fee or expenditure that otherwise constitutes an Operating Expense and that is paid or payable to any Affiliate of Landlord shall not be less than the amount that would be reasonably expected to be paid in the absence of such relationship.

 

(B)                               Landlord shall have the right to include in Operating Expenses (and Landlord shall include in Base Operating Expenses), for the electricity supplied to the Building

 

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Systems and other common elements of the Building, an amount equal to one hundred three percent (103%) of the sum of:

 

(1)                                 the product obtained by multiplying (i) the Average Cost per Peak Demand Kilowatt, by (ii) the number of kilowatts that constituted the peak demand for electricity for the Building Systems and the other common elements of the Building for the applicable period (as registered on a submeter or submeters, or, at Landlord’s option, as determined from time to time by a survey prepared by an independent and reputable electrical consultant) (it being understood that such number of kilowatts as described in clause (ii) above shall not include the number of kilowatts that are attributable to the operation of the Building Systems to the extent that Tenant (or other tenants in the Building) make separate payment to Landlord therefor), and

 

(2)                                 the product obtained by multiplying (i) the Average Cost per Kilowatt Hour, by (ii) the number of kilowatt hours of electricity used by the Building Systems and the other common elements of the Building for the applicable period (as registered on a submeter or submeters, or, at Landlord’s option, as determined by a survey prepared by an independent and reputable electrical consultant) (it being understood that such number of kilowatt hours as described in clause (ii) above shall not include the number of kilowatt hours that are attributable to the operation of the Building Systems to the extent that Tenant (or other tenants in the Building) make separate payment to Landlord therefor).

 

(C)                               The term “Average Cost per Peak Demand Kilowatt” shall mean, with respect to any particular period, the quotient obtained by dividing (x) the aggregate charge imposed by the Utility Company on Landlord for the Utility Company’s making available electricity that satisfies the Building’s peak demand for electricity during such period, by (y) the number of kilowatts that constituted such peak demand, as reflected on the electric meter or meters for the Building.

 

(D)                               The term “Average Cost per Kilowatt Hour” shall mean, with respect to any particular period, the quotient obtained by dividing (x) the aggregate charge imposed by the Utility Company on Landlord for the electricity supplied to the Building for such period (other than the aggregate charge imposed by the Utility Company on Landlord for the Utility Company’s making available electricity that satisfies the Building’s peak demand for electricity during such period), by (y) the number of kilowatt hours of electricity used in the Building during such period, as reflected on the electric meter or meters for the Building.

 

(E)                                The term “Utility Company” shall mean, collectively, the local electrical energy distribution company and the competitive energy provider with which Landlord has made arrangements to obtain electric service for the Building; provided, however, that if Landlord makes arrangements to produce electricity to satisfy all or a portion of the requirements of the Building, then (1) Utility Company shall also refer to the producer of such electricity, and (II) the charges imposed by such producer shall be included in the calculation of Average Cost per Kilowatt Hour and Average Cost per Peak Demand Kilowatt to the extent that such charges do not exceed the charges that Landlord would have otherwise incurred if Landlord had made

 

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arrangements to satisfy all of the Building’s electrical requirements from a local electrical energy distribution company and a competitive energy provider.

 

(F)                                 If (i) Landlord makes an improvement to the Real Property or a replacement of equipment at the Real Property in either case in connection with the maintenance, repair, management or operation thereof, (ii) GAAP requires Landlord to capitalize the cost of such improvement or such replacement, and (iii) such improvement or replacement is made (a) to comply with a Requirement that is first enacted after the date hereof, (b) in lieu of repairs, or (e) for the purpose of saving or reducing Operating Expenses (such as, for example, an improvement that reduces labor costs or an improvement that saves energy costs), then Landlord shall have the right to include in Operating Expenses for each Operating Expense Year the amount that amortizes the cost of such improvement or such replacement, together with interest on the unamortized portion thereof that is calculated at two hundred (200) basis points in excess of the Base Rate, in equal annual installments over the useful life of such improvement or such equipment as determined in accordance with GAAP (until the cost of such improvement or such equipment is amortized fully); provided, however, that (1) for any such improvement or replacement that Landlord makes for the purpose of saving or reducing Operating Expenses, Landlord shall have the right to include in Operating Expenses for each Operating Expense Year the amount that amortizes the cost of such improvement or such replacement, together with interest on the unamortized portion of the cost of such improvement or replacement that is calculated at two hundred (200) basis points in excess of the Base Rate, in equal annual installments over the period that Landlord reasonably determines that the cost of such improvement or replacement (and such interest) will equal the aggregate amount of the reduction in other Operating Expenses for each Operating Expense Year that derives from such improvement or such replacement (with the understanding, however, that such period shall in no event exceed the useful life of such improvement or replacement as determined in accordance with GAAP), and (11) for any such improvement or replacement that Landlord makes in lieu of a repair (and that Landlord docs not make to comply with a Requirement or for the purpose of saving or reducing Operating Expenses), the aforesaid amount that Landlord includes in Operating Expenses for any particular Operating Expense Year shall not exceed the cost of the repairs that Landlord would have otherwise made if Landlord did not make such improvement or replacement.

 

2.3.                            Operating Expense Payment.

 

(A)                               From and after the first (1st) anniversary of the Commencement Date, Tenant shall pay the Operating Expense Payment to Landlord in accordance with the terms of this Section 2.3.

 

(B)                               Landlord shall have the right to give a statement to Tenant from time to time pursuant to which Landlord sets forth Landlord’s good faith estimate of the Operating Expense Payment for a particular Operating Expense Year (any such statement that Landlord gives to Tenant being referred to herein as a “Prospective Operating Expense Statement”; one-twelfth (1/12th) of the Operating Expense Payment shown on a Prospective Operating Expense

 

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Statement being referred to herein as the “Monthly Operating Expense Payment Amount”). If Landlord gives to Tenant a Prospective Operating Expense Statement (or Landlord is deemed to have given to Tenant a Prospective Operating Expense Statement pursuant to Section 2.3(C) hereof), then Tenant shall pay to Landlord, as additional rent, on account of the Operating Expense Payment due hereunder for such Operating Expense Year, the Monthly Operating Expense Payment Amount, on the first (1st) day of each subsequent calendar month for the remainder of such Operating Expense Year, in the same manner as the monthly installments of the Fixed Rent hereunder (it being understood that Tenant shall not be required to commence such payments of the Monthly Operating Expense Payment Amount (x) before the first (1st) day of the Operating Expense Year to which relates the applicable Monthly Operating Expense Payment Amount, or (y) earlier than the thirtieth (30th) day after the date that Landlord gives the Prospective Operating Expense Statement to Tenant), If Landlord gives (or is deemed to have given) to Tenant a Prospective Operating Expense Statement after the first (1st) day of the applicable Operating Expense Year, then Tenant shall also pay to Landlord, within thirty (30) days after the date that Landlord gives the Prospective Operating Expense Statement to Tenant, an amount equal to the excess of (I) the product obtained by multiplying (x) the Monthly Operating Expense Payment Amount, by (y) the number of calendar months that have theretofore elapsed during such Operating Expense Year, over (11) the aggregate amount theretofore paid by Tenant to Landlord on account of the Operating Expense Payment for such Operating Expense Year. If Landlord gives (or is deemed to have given) to Tenant a Prospective Operating Expense Statement for a particular Operating Expense Year, then Landlord shall also provide to Tenant, within two hundred seventy (270) days after the last day of such Operating Expense Year, an Operating Expense Statement for such Operating Expense Year.

 

(C)                               Tenant shall pay to Landlord an amount equal to the excess (if any) of (i) the Operating Expense Payment as reflected on an Operating Expense Statement that Landlord gives to Tenant, over (ii) the aggregate amount that Tenant has theretofore paid to Landlord on account of the Operating Expense Payment (if any) as contemplated by Section 2.3(B) hereof, within thirty (30) days after the date that Landlord gives such Operating Expense Statement to Tenant. Tenant shall have the right to credit against the Rental thereafter coming due hereunder an amount equal to the excess (if any) of (i) the aggregate amount that Tenant has theretofore paid to Landlord on account of the Operating Expense Payment as contemplated by Section 2.3(B) hereof, over (ii) the Operating Expense Payment as reflected on such Operating Expense Statement, provided, however, that if the Expiration Date occurs prior to the date that such credit is exhausted, then Landlord shall pay to Tenant the unused portion of such credit on or prior to the thirtieth (30th) day after the Expiration Date (it being understood that Landlord’s obligation to make such payment to Tenant shall survive the Expiration Date). If Landlord gives Tenant an Operating Expense Statement, then, unless Landlord otherwise specifies in such Operating Expense Statement, Landlord shall be deemed to have given to Tenant a Prospective Operating Expense Statement for the Operating Expense Year immediately succeeding the Operating Expense Year that is covered by such Operating Expense Statement, that reflects an Operating Expense Payment for such immediately succeeding Operating Expense Year in an amount equal to the Operating Expense Payment for such Operating Expense Year that is covered by such Operating Expense Statement.

 

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(D)                                  If the Rent Commencement Date occurs later than the first (1st) day of the Operating Expense Year that immediately succeeds the Base Operating Expense Year, then the Operating Expense Payment for the Operating Expense Year during which the Rent Commencement Date occurs shall be an amount equal to the product obtained by multiplying (X) the Operating Expense Payment that would have been due hereunder if the Rent Commencement Date was the first (1st) day of such Operating Expense Year, by (Y) a fraction, the numerator of which is the number of days in the period beginning on the Rent Commencement Date and ending on the last day of such Operating Expense Year, and the denominator of which is three hundred sixty-five (365) (or three hundred sixty-six (366), if such Operating Expense Year is a leap year).

 

(E)                                If the Expiration Date is not the last day of an Operating Expense Year, then the Operating Expense Payment for the Operating Expense Year during which the Expiration Date occurs shall be an amount equal to the product obtained by multiplying (X) the Operating Expense Payment that would have been due hereunder if the Expiration Date was the last day of such Operating Expense Year, by (Y) a fraction, the numerator of which is the number of days in the period beginning on the first (1st) day of such calendar year and ending on the Expiration Date, and the denominator of which is three hundred sixty-five (365) (or three hundred sixty-six (366), if such Operating Expense Year is a leap year).

 

(F)                                 Landlord’s failure to give Tenant an Operating Expense Statement or a Prospective Operating Expense Statement for any Operating Expense Year shall not impair Landlord’s right to give Tenant an Operating Expense Statement or a Prospective Operating Expense Statement for any other Operating Expense Year. Landlord shall not have the right to require Tenant to make an Operating Expense Payment for a particular Operating Expense Year unless Landlord gives to Tenant an Operating Expense Statement for such Operating Expense Year within two (2) years after the last day of such Operating Expense Year.

 

(G)                               Landlord shall have the right to give to Tenant an Operating Expense Statement at any time after the last day of the Base Operating Expense Year that reflects the Base Operating Expenses (regardless of whether such Operating Expense Statement reflects a payment that is due from Tenant on account of the Operating Expense Payment).

 

(H)                              If the Operating Expenses for the Base Operating Expense Year are redetermined at any time after the date that Landlord gives an Operating Expense Statement to Tenant for an Operating Expense Year, then Landlord shall give to Tenant a revised Operating Expense Statement that recalculates the Operating Expense Payment for an Operating Expense Year (using the Operating Expenses that reflects such redetermination for the Base Operating Expense Year). If such revised Operating Expense Statements indicates that Tenant has underpaid the Operating Expense Payment for any Operating Expense Year, then Tenant shall pay to Landlord an amount equal to the amount of such underpayment within thirty (30) days after Landlord gives such revised Operating Expense Statement to Tenant. If such revised Operating Expense Statement indicates that Tenant has overpaid the Operating Expense Payment for any Operating Expense Year, then Tenant shall have the right to credit against the Rental

 

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thereafter coming due hereunder an amount equal to the amount of such overpayment; provided, however, that if the Expiration Date occurs prior to the date that such credit is exhausted, then Landlord shall pay to Tenant the unused portion of such credit on or prior to the thirtieth (30th) day after the Expiration Date (it being understood that (I) Landlord’s obligation to make such payment to Tenant shall survive the Expiration Date, and (II) nothing contained in this Section 2.3(H) limits Tenant’s rights under Section 2.4 hereof).

 

(1)                                 If, during any particular Operating Expense Year, Landlord receives a reimbursement, rebate or refund of an Operating Expense that Landlord incurred in a prior Operating Expense Year that occurs after the Base Operating Expense Year, then Landlord shall (x) adjust the Operating Expenses for such Operating Expense Year retroactively, and (y) give promptly to Tenant a revised Operating Expense Statement for such Operating Expense Year. If such revised Operating Expense Statement indicates that Tenant overpaid the Operating Expense Payment for such Operating Expense Year, then Tenant shall be entitled to credit the amount of such overpayment of the Operating Expense Payment against the Rental thereafter coming due hereunder, together with interest thereon calculated at the Base Rate from the date that Tenant paid such overpayment to Landlord to the date that Tenant uses such credit. If (x) Tenant is entitled to a credit against Rental pursuant to this Section 2.3(I), and (y) the Expiration Date occurs prior to the date that such credit is exhausted, then Landlord shall pay to Tenant the unused portion of such credit on or prior to the thirtieth (30th) day after the Expiration Date (and Landlord’s obligation to make such payment shall survive the Expiration Date).

 

2.4.                            Auditing of Operating Expense Statements.

 

(A)                               Any Operating Expense Statement that Landlord gives to Tenant shall be binding upon Tenant conclusively unless, within one hundred eighty (180) days after the date that Landlord gives Tenant such Operating Expense Statement. Tenant gives a notice to Landlord objecting to such Operating Expense Statement. Tenant’s right to give such notice (and conduct the audit contemplated by this Section 2.4(A)) shall survive the Expiration Date (to the extent that the Expiration Date occurs earlier than the one hundred eightieth (180th) day after the date that Landlord gives the applicable Operating Expense Statement to Tenant). Tenant shall have the right to audit the Base Operating Expenses as contemplated by this Section 2.4(A) only after receiving the first Operating Expense Statement that sets forth the Base Operating Expenses (including, without limitation, an Operating Expense Statement that Landlord gives to Tenant as described in Section 2.3(F) hereof), and. accordingly, once Tenant’s right to so audit Base Operating Expenses lapses. Tenant shall not have the right to thereafter audit Base Operating Expenses, notwithstanding that Base Operating Expenses is included in the calculation of the Operating Expense Payment for subsequent Operating Expense Years, unless Landlord subsequently changes Base Operating Expense in which event Tenant shall have one hundred eighty (180) days after such change to audit Base Operating Expenses. If Tenant gives such notice to Landlord, then, subject to the terms of this Section 2.4(A). Tenant may examine Landlord’s books and records relating to such Operating Expense Statement to determine the accuracy thereof, provided that Tenant uses Tenant’s diligent efforts to consummate such examination within a reasonable period after the date that Tenant gives such notice to Landlord.

 

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Tenant may perform such examination on reasonable advance notice to Landlord, at reasonable times, in Landlord’s office or, at Landlord’s option, at the office of Landlord’s managing agent or accountants. Tenant shall not have the right to conduct an audit of Landlord’s books and records as described in this Section 2.4 during the period that an Event of Default has occurred and is continuing. Tenant shall have the right to conduct such examination using Tenant’s own employees. Tenant, in performing such examination, shall also have the right to be accompanied by a certified public accountant from one of the “big-4” firms of certified public accountants (or their successors), or, at Tenant’s option, a certified public accountant from a reputable firm that is reasonably acceptable to Landlord; provided, however, that Tenant shall not be entitled to be so accompanied by any certified public accountant unless Tenant and such certified public accountant certify to Landlord in a written instrument that is reasonably satisfactory to Landlord that the compensation being paid by Tenant to such certified public accountant is not conditioned or otherwise contingent (in whole or in part) on the extent of any reduction in the Operating Expense Payment that derives from such examination. Tenant shall not have the right to conduct any such audit unless Tenant delivers to Landlord a statement, in a form reasonably designated by Landlord, signed by Tenant and Tenant’s certified public accountant to which such books and records are proposed to be disclosed, pursuant to which Tenant and such certified public accountants agree to maintain the information obtained from such examination in confidence (subject, however, to the disclosure of the information that Tenant or Tenant’s certified public accountant derive from such examination as required by law or to Tenant’s counsel or other professional advisors that in either case agree to maintain such information in confidence).

 

(B)                               If it is determined ultimately that (i) Landlord, in an Operating Expense Statement, overstated the Operating Expense Payment, and (ii) Tenant overpaid the Operating Expense Payment for a particular Operating Expense Year, then Tenant shall be entitled to credit the amount of such overpayment of the Operating Expense Payment against the Rental thereafter coming due hereunder; and, if Tenant’s audit reveals that Landlord overstated Operating Expenses for a particular Operating Expense Year by more than five percent (5%), then Landlord shall reimburse Tenant for the reasonable Out-of-Pocket Costs paid or incurred by Tenant in performing Tenant’s audit of Landlord’s books and records which reimbursement shall be made within thirty (30) days after Tenant gives Landlord reasonable supporting documentation describing the aforesaid costs of Tenant’s audit. If (x) Tenant is entitled to a credit against Rental pursuant to this Section 2.4(B), and (y) the Expiration Date occurs prior to the date that such credit is exhausted, then Landlord shall pay to Tenant the unused portion of such credit on or prior to the thirtieth (30th) day after the Expiration Date (and Landlord’s obligation to make such payment shall survive the Expiration Date).

 

(C)                               Nothing contained in this Section 2.4 shall constitute an extension of the date by which Tenant is required to pay the Operating Expense Payment to Landlord hereunder.

 

2.5.                            Tax Definitions.

 

(A)                               The term “Assessed Valuation” shall mean the amount for which the Real Property is assessed pursuant to applicable provisions of the New York City Charter and of the

 

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Administrative Code of The City of New York, in either case for the purpose of calculating all or any portion of the Taxes.

 

(B)                               The term “Base Taxes” shall mean the quotient obtained by dividing (i) the Taxes for the Base Tax Period, by (ii) the number of Tax Years in the Base Tax Period.

 

(C)                               The term “Base Tax Period” shall mean the period consisting of two (2) fiscal years commencing on July 1, 2013 and ending on June 30, 2015.

 

(D)                               The term “Excluded Amounts” shall mean (w) any taxes imposed on Landlord’s income, (x) franchise, estate, inheritance, capital stock, excise, excess profits, gift, payroll or stamp taxes imposed on Landlord, (y) any transfer taxes or mortgage taxes that are imposed on Landlord in connection with the conveyance of the Real Property or granting or recording a mortgage lien thereon, and (z) any other similar taxes imposed on Landlord.

 

(E)                                Subject to the terms of this Section 2.5(E), the term “Taxes” shall mean the aggregate amount of real estate taxes and any general or special assessments that in each case are imposed upon the Real Property, including, without limitation, (i) any fee, tax or charge imposed by any Governmental Authority for any vaults or vault spaces that in either case are appurtenant to the Real Property (except that Taxes shall not include such fee, tax or charge to the extent that Landlord leases or licenses such vaults or vault spaces to a third party), and (ii) any taxes, fees or assessments levied, in whole or in part, for public benefits to the Real Property (including, without limitation, any business improvement district taxes, fees and assessments and taxes, fees and assessments that are levied based on the use of water or energy by Landlord and/or the Building). Taxes shall be calculated without taking into account (a) any discount that Landlord receives by virtue of any early payment of Taxes, (b) any penalties or interest that the applicable Governmental Authority imposes for the late payment of such real estate taxes or assessments, (c) any Excluded Amounts, (d) any real estate taxes that are separately assessed against a sign or billboard that is affixed to the Building or otherwise located on the Real Property, and (c) any exemption or deferral of Taxes to which the Real Property is entitled under any program that a Governmental Authority adopts to promote the improvement or redevelopment of real property. If, because of any change in the taxation of real estate, any other tax or assessment, however denominated (including, without limitation, any franchise, income, profits, sales, use, occupancy, gross receipts or rental tax), is imposed upon the Real Property, the owner thereof, or the occupancy, rents or income derived therefrom, in substitution for any of the Taxes (to the extent that such substitution is evidenced by either the terms of the legislation imposing such tax or assessment, the legislative history thereof, or other documents or evidence that reasonably demonstrate that the applicable Governmental Authority intended for such tax or assessment to constitute a substitution for any Taxes), then such other lax or assessment to the extent substituted shall be included in Taxes for purposes hereof (assuming that the Real Property is Landlord’s sole asset and the income therefrom is Landlord’s sole income). If any such real estate taxes or assessments are payable in installments without penalty, then Landlord shall include in Taxes for any particular Tax Year only the installment of such real estate taxes or

 

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assessments that the applicable Governmental Authority requires Landlord to pay (and that Landlord actually pays) during such Tax Year.

 

(F)                                 The term “Tax Payment” shall mean, with respect to any Tax Year, the product obtained by multiplying (i) the excess of (A) Taxes for such Tax Year, over (B) the Base Taxes, by (ii) Tenant’s Tax Share (it being understood that the Tax Payment shall be due with respect to each Tax Year following the first Tax Year in the Base Tax Period).

 

(G)                               The term “Tax Statement” shall mean a statement that shows the Tax Payment for a particular Tax Year.

 

(H)                              The term “Tax Year” shall mean the first period from July 1 through June 30 (or such other period as hereinafter may be duly adopted by the Governmental Authority then imposing Taxes as its fiscal year for real estate tax purposes) in the Base Tax Period and each subsequent period from July 1 through June 30 (or such other period as hereinafter may be duly adopted by the Governmental Authority then imposing Taxes as its fiscal year for real estate tax purposes).

 

(I)                                   The term “Tenant’s Tax Share” shall mean, subject to the terms hereof, five and six hundred forty-one ten-thousandths percent (5.0641%).

 

2.6.                            Tax Payment.

 

(A)                               Subject to the provisions of this Section 2.6, Tenant shall pay to Landlord, as additional rent, the Tax Payment.

 

(B)                               Landlord shall have the right to give a statement to Tenant from time to time pursuant to which Landlord sets forth Landlord’s good faith estimate of the Tax Payment for a particular Tax Year (any such statement that Landlord gives to Tenant being referred to herein as a “Prospective Tax Statement”; one-twelfth (1/12th) of the Tax Payment shown on a Prospective Tax Statement being referred to herein as the “Monthly Tax Payment Amount”). If Landlord gives (or is deemed to have given) to Tenant a Prospective Tax Statement, then, subject to the terms of this Section 2.6(B), Tenant shall pay to Landlord, as additional rent, on account of the Tax Payment due hereunder for such Tax Year, the Monthly Tax Payment Amount, on the first (1st) day of each subsequent calendar month until Tenant has paid to Landlord, pursuant to this Section 2.6(B), the full amount of the Tax Payment as so estimated in the Prospective Tax Statement. Tenant shall pay the Monthly Tax Payment Amount to Landlord in the same manner as the monthly installments of the Fixed Rent hereunder. Landlord shall not have the right to require Tenant to commence Tenant’s payment of the Monthly Tax Payment Amount for a particular Tax Year earlier than the one hundred fiftieth (150th) day of the immediately preceding Tax Year. If Landlord gives (or is deemed to have given) to Tenant a Prospective Tax Statement after the one hundred fiftieth (150th) day of the immediately preceding Tax Year, then Tenant shall also pay to Landlord, within thirty (30) days after the date that Landlord gives the Prospective Tax Statement to Tenant, an amount equal to the excess of (I) the product obtained

 

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by multiplying (x) the Monthly Tax Payment Amount, by (y) the number of calendar months that have theretofore elapsed since the one hundred fiftieth (150th) day of the immediately preceding Tax Year, over (II) the aggregate amount theretofore paid by Tenant to Landlord on account of the Tax Payment for the Tax Year to which the Prospective Tax Statement relates. Landlord shall not have the right to use this Section 2.6(B) to collect more than fifty percent (50%) of the Tax Payment shown on a particular Prospective Tax Statement earlier than the thirtieth (30th) day before the date that the first installment of Taxes is due to the applicable Governmental Authority for a particular Tax Year. If Landlord gives (or is deemed to have given) to Tenant a Prospective Tax Statement for a particular Tax Year, then Landlord shall also provide to Tenant, within one hundred eighty (180) days after the last day of such Tax Year, a Tax Statement for such Tax Year.

 

(C)                               Tenant shall pay to Landlord an amount equal to the excess (if any) of (i) the Tax Payment as reflected on a Tax Statement that Landlord gives to Tenant, over (ii) the aggregate amount that Tenant has theretofore paid to Landlord on account of the Tax Payment (if any) as contemplated by Section 2.6(B) hereof, within thirty (30) days after the date that Landlord gives such Tax Statement to Tenant. Tenant shall have the right to credit against the Rental thereafter coming due hereunder an amount equal to the excess (if any) of (i) the aggregate amount that Tenant has theretofore paid to Landlord on account of the Tax Payment as contemplated by Section 2.6(B) hereof, over (ii) the Tax Payment as reflected on such Tax Statement; provided, however, that if the Expiration Date occurs prior to the date that such credit is exhausted, then Landlord shall pay to Tenant the unused portion of such credit on or prior to the thirtieth (30th) day after the Expiration Date (it being understood that Landlord’s obligation to make such payment to Tenant shall survive the Expiration Date). If Landlord gives Tenant a Tax Statement, then, unless Landlord otherwise specifies in such Tax Statement. Landlord shall be deemed to have given to Tenant a Prospective Tax Statement, for the Tax Year immediately succeeding the Tax Year that is covered by such Tax Statement, that reflects a Tax Payment for such immediately succeeding Tax Year in an amount equal to the Tax Payment for such Tax Year that is covered by such Tax Statement.

 

(D)                               If the Rent Commencement Date occurs later than the first (1st) day of the Tax Year that immediately succeeds the first Tax Year of the Base Tax Period, then the Tax Payment for the Tax Year during which the Rent Commencement Date occurs shall be an amount equal to the product obtained by multiplying (X) the Tax Payment that would have been due hereunder if the Rent Commencement Date was the first (1st) day of such Tax Year, by (Y) a fraction, the numerator of which is the number of days in the period beginning on the Rent Commencement Date and ending on the last day of such Tax Year, and the denominator of which is three hundred sixty-five (365) (or three hundred sixty-six (366), if such Tax Year includes the month of February in a leap year).

 

(E)                                If the Expiration Date is not the last day of a Tax Year, then the Tax Payment for the Tax Year during which the Expiration Date occurs shall be an amount equal to the product obtained by multiplying (X) the Tax Payment that would have been due hereunder if the Expiration Date was the last day of such Tax Year, by (Y) a fraction, the numerator of which

 

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is the number of days in the period beginning on the first (1st) day of such Tax Year and ending on the Expiration Date, and the denominator of which is three hundred sixty-five (365) (or three hundred sixty-six (366), if such Tax Year includes the month of February in a leap year).

 

(F)                                 The Tax Payment shall be computed initially on the basis of the Assessed Valuation in effect on the date that Landlord gives the applicable Tax Statement to Tenant (as the Taxes may have been settled or finally adjudicated prior to such time) regardless of any then pending application, proceeding or appeal to reduce the Assessed Valuation, but shall be subject to subsequent adjustment as provided in Section 2.7 hereof.

 

(G)                               Tenant shall pay the Tax Payment regardless of whether Tenant is exempt, in whole or part, from the payment of any Taxes by reason of Tenant’s diplomatic status or otherwise.

 

(H)                              If Taxes are required to be paid on any date or dates other than as presently required by the Governmental Authority imposing Taxes, then the due date of the installments of the Tax Payment shall be adjusted so that each such installment is due from Tenant to Landlord thirty (30) days prior to the date that the corresponding payment is due to the Governmental Authority (with the understanding, however, that Tenant shall not be required to pay a Tax Payment to Landlord earlier than the thirtieth (30th) day after the date that Landlord gives the applicable Tax Statement to Tenant).

 

(I)                                   Landlord’s failure to give to Tenant a Tax Statement for any Tax Year shall not impair Landlord’s right to give to Tenant a Tax Statement for any other Tax Year.

 

(J)                                   Landlord shall give to Tenant a copy of the relevant tax bill for each Tax Year (to the extent that the applicable Governmental Authority has issued such tax bill to Landlord) promptly after Tenant’s request therefor from time to time.

 

2.7.                            Tax Reduction Proceedings.

 

(A)                               Landlord (and not Tenant) shall be eligible to institute proceedings to reduce the Assessed Valuation.

 

(B)                               If, after a Tax Statement has been sent to Tenant, an Assessed Valuation that Landlord used to compute the Tax Payment for a Tax Year is reduced, and, as a result thereof, a refund of Taxes is actually received by, or credited to, Landlord, then Landlord, promptly after Landlord’s receipt of such refund (or such refund is credited to Landlord, as the case may be), shall send to Tenant a Tax Statement adjusting the Taxes for such Tax Year and setting forth, based on such adjustment, the portion of such refund for which Tenant is entitled a credit as set forth in this Section 2.7(B). Landlord shall have the right to deduct from such refund the Out-of-Pocket Costs that Landlord incurs in obtaining such refund (so that Landlord, in calculating the adjusted Tax Payment, takes into account only the net proceeds of such refund that Landlord receives (or that is credited to Landlord)), Landlord shall credit the portion of such

 

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refund to which Tenant is entitled against the Rental thereafter coming due hereunder. If (x) Tenant is entitled to a credit against Rental pursuant to this Section 2.7(B), and (y) the Expiration Date occurs prior to the date that such credit is exhausted, then Landlord shall pay to Tenant the unused portion of such credit on or prior to the thirtieth (30th) day after the Expiration Date (and Landlord’s obligation to make such payment shall survive the Expiration Date). If (i) Landlord receives such refund (or a credit therefor) after the Expiration Date, and (ii) Tenant is entitled to a portion thereof as contemplated by this Section 2.7(B), then Landlord shall pay to Tenant an amount equal to Tenant’s share of such refund (or such credit) within thirty (30) days after the date that such refund is paid to Landlord (or such refund is credited to Landlord, as the case may be) (and Landlord’s obligation to make such payment shall survive the Expiration Date).

 

(C)

 

(1)                                 If the Assessed Valuation for a Tax Year in the Base Tax Period is reduced at any time after the date that Landlord gives a Tax Statement to Tenant for a Tax Year, then Landlord shall have the right to give to Tenant a revised Tax Statement that recalculates the Tax Payment for a Tax Year (using the Taxes that reflect such reduction in such Assessed Valuation). Tenant shall pay to Landlord an amount equal to the excess of (i) the Tax Payment as reflected on such revised Tax Statement, over (ii) the Tax Payment as reflected on the prior Tax Statement, within thirty (30) days after Landlord gives such revised Tax Statement to Tenant.

 

(2)                                 If the Assessed Valuation for a Tax Year in the Base Tax Period is increased at any time after the date that Landlord gives a Tax Statement to Tenant for a Tax Year, then Landlord shall give to Tenant a revised Tax Statement that recalculates the Tax Payment for a Tax Year (using the Taxes that reflect such increase in such Assessed Valuation). Landlord shall credit against the Rental thereafter coming due hereunder an amount equal to Tenant’s overpayment of the Tax Payment (calculated as aforesaid using such increased Assessed Valuation). If (x) Tenant is entitled to a credit against Rental pursuant to this Section 2.7(C)(2), and (y) the Expiration Date occurs prior to the date that such credit is exhausted, then Landlord shall pay to Tenant the unused portion of such credit on or prior to the thirtieth (30th) day after the Expiration Date (and Landlord’s obligation to make such payment shall survive the Expiration Date). If (i) such increase in such Assessed Valuation occurs after the Expiration Date, and (ii) Tenant is entitled to a credit against Rental as contemplated by this Section 2.7(C)(2). then Landlord shall pay to Tenant an amount equal to such credit within thirty (30) days after the date that such increase in such Assessed Valuation occurs (and Landlord’s obligation to make such payment shall survive the Expiration Date).

 

2.8.                            Condominium Conversion.

 

(A)                               If Landlord files a Condominium Declaration, then, with respect to the portion of the Term from and after the date that Taxes are imposed separately on (i) the condominium unit that comprises or the condominium units that comprise the Premises, or (ii) the condominium unit or condominium units of which the Premises is a part, as the case may be,

 

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(I) Tenant’s Tax Share shall be recalculated as of the date that Taxes are so imposed separately as the quotient (expressed as a percentage) that is obtained by dividing (x) the number of square feet of Rentable Area in the Premises, by (y) the number of square feet of Rentable Area in the applicable condominium unit, (II) Base Taxes shall be deemed to be an amount equal to the product obtained by multiplying (x) Base Taxes immediately prior to the date that Taxes are imposed separately on such condominium unit, by (y) a fraction, the numerator of which is the number of square feet of Rentable Area comprising such condominium unit, and the denominator of which is the number of square feet of Rentable Area in the Building, and (III) Taxes shall be deemed to mean only the Taxes that are imposed on such condominium unit.

 

(B)                               If Landlord files a Condominium Declaration, then, with respect to the period from and after the date that the Condominium Declaration is effective. (I) Tenant’s Operating Expense Share shall be recalculated as of such date that the Condominium Declaration is declared effective as the quotient (expressed as a percentage) that is obtained by dividing (x) the number of square feet of Rentable Area in the Premises, by (y) the number of square feet of Rentable Area in the applicable condominium unit (other than any retail portion thereof), (II) Base Operating Expenses shall be deemed to be an amount equal to the product obtained by multiplying (x) Base Operating Expenses immediately prior to the date that the Condominium Declaration is effective, by (y) a fraction, the numerator of which is the number of square feet of Rentable Area comprising such condominium unit (other than the retail portion thereof), and the denominator of which is the number of square feet of Rentable Area in the Building (other than the retail portion thereof), and (III) Operating Expenses shall be deemed to mean only the Operating Expenses that apply to such condominium unit (it being understood that the common charges that the Condominium Board assesses against such condominium unit shall constitute Operating Expenses for purposes hereof to the extent that the costs and expenses that comprise such common charges would not have been otherwise excluded from Operating Expenses in accordance with the terms hereof).

 

2.9.                            Building Additions.

 

(A)                               If, prior to Landlord’s filing of a Condominium Declaration, Landlord makes improvements to the Building to expand the Rentable Area thereof, then, with respect to the period from and after the date that Taxes are assessed on the Building to reflect such improvements. (I) Tenant’s Tax Share shall be recalculated as of the date that Taxes are so assessed as the quotient (expressed as a percentage) that is obtained by dividing (x) the number of square feet of Rentable Area in the Premises, by (y) the number of square feet of Rentable Area in the Building (after taking into account such expansion of the Rentable Area thereof) and (II) Base Taxes shall be an amount equal to the product obtained by multiplying (x) Base Taxes immediately prior to the date that Taxes are assessed on the Building to reflect such improvements, by (y) a fraction, the numerator of which is the Taxes that are assessed against the Building (after taking such improvements into account), and the denominator of which is the Taxes that are assessed against the Building (before taking such improvements into account).

 

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(B)                               If, prior to Landlord’s filing of a Condominium Declaration, Landlord makes improvements to the Building to expand the Rentable Area thereof, then, with respect to the period from and after the date that such improvements are Substantially Completed. (I) Tenant’s Operating Expense Share shall be recalculated as of the date that such improvements are Substantially Completed as the quotient (expressed as a percentage) that is obtained by dividing (x) the number of square feet of Rentable Area in the Premises, by (y) the number of square feet of Rentable Area in the Building (other than any retail portion thereof) (after taking such expansion into account) and (II) Base Operating Expenses shall be deemed to be an amount equal to the product obtained by multiplying (x) Base Operating Expenses prior to the date that such improvements are Substantially Completed, by (y) a fraction, the numerator of winch is the Operating Expenses for the Building (after such improvements are Substantially Completed), and the denominator of which is the Operating Expenses for the Building (prior to such improvements being Substantially Completed).

 

Article 3

USE

 

3.1.                            Permitted Use.

 

(A)                               Subject to Section 3.2 hereof, Tenant shall use the Premises, and Tenant shall cause any other Person claiming by, through or under Tenant to use the Premises, in either case only as general, administrative and executive offices, research and development and for uses reasonably ancillary thereto.

 

(B)                               Landlord acknowledges that the following items qualify as uses that are ancillary to Tenant’s use of the Premises as general, administrative and executive offices, and research and development (provided that Tenant’s use of the Premises for such purposes supports Tenant’s primary use of the Premises as general, administrative and executive offices, and research and development):

 

(1)                                 pantries and vending machines;

 

(2)                                 conference rooms and board rooms;

 

(3)                                 data processing centers;

 

(4)                                 duplicating and photographic reproduction facilities;

 

(5)                                    mailroom and messenger facilities; and

 

(6)                                 secured storage facilities for Tenant’s Property, including, without limitation, equipment, records and files.

 

Nothing contained in this Section 3.1(B) impairs Tenant’s obligation to perform Alterations in accordance with the provisions of Article 7 hereof. Landlord and Tenant acknowledge that the

 

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parties’ description of particular ancillary uses in this Section 3.1(B) does not impair Tenant’s right to use the Premises for other uses that are otherwise reasonably ancillary to Tenant’s use of the Premises as general, administrative and executive offices and research and development as provided in this Section 3.1.

 

3.2.                            Limitations.

 

Tenant shall not use the Premises or any pan thereof, or permit the Premises or any part thereof to be used:

 

(1)                                 for the conduct of “off-the-street” retail trade;

 

(2)                                 by any Governmental Authority or any other Person having sovereign or diplomatic immunity (it being understood, however, that this clause (2) shall not prohibit a Permitted Party from permitting representatives of a Governmental Authority to enter a portion of the Premises temporarily to perform audits or other similar regulatory review of such Permitted Party’s business);

 

(3)                                 for the sale, storage, preparation, service or consumption of food or beverages in any manner whatsoever (except that a Permitted Party has the right to store, prepare, and serve food and beverages, by any reasonable means (including, without limitation, by means of customary vending machines), for consumption by such Permitted Party’s personnel and business guests in the Premises);

 

(4)                                 as an employment agency, executive search firm or similar enterprise, labor union, school, or vocational training center (except for the training of employees of a Permitted Party who are employed at the Premises); or

 

(5)                                 for gaming or gambling.

 

3.3.                            Rules.

 

Subject to the terms of this Section 3.3. Tenant shall comply with, and Tenant shall cause any other Person claiming by, through or under Tenant to comply with, the rules set forth in Exhibit “3.3” attached hereto and made a part hereof, and other reasonable rules that Landlord hereafter adopts from time to time on reasonable advance notice to Tenant, including, without limitation, rules that govern the performance of Alterations (such rules that are attached hereto, and such other rules, being collectively referred to herein as the “Rules”). Landlord shall not have any obligation to enforce the Rules or the terms of any other lease against any other tenant, and Landlord shall not be liable to Tenant for violation thereof by any other tenant. Landlord shall not enforce any Rule against Tenant (i) that Landlord is not then enforcing against all other office tenants in the Building, or (ii) in a manner that differs in any material respect from the manner in which Landlord is enforcing the applicable Rule against other office tenants in the Building. If a conflict or inconsistency exists between the Rules and the provisions of the

 

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remaining portion of this Lease, then the provisions of the remaining portion of this Lease shall control.

 

3.4.                            Tenant’s Signs.

 

(A)                               Subject to the terms of this Section 3.4, Tenant shall have the right to erect and maintain signs containing only Tenant’s name and logo on the inside of the windows of the Premises at the locations described in, and in accordance with the specifications described in, Exhibit “3.4” attached hereto and made a part hereof or if no specifications are set forth therein such signage shall be subject to Landlord’s prior written approval which shall not be unreasonably withheld provided that such signage is otherwise in conformance with the terms of this Section 3.4 (any such signs erected by Tenant being collectively referred to herein as “Tenant’s Signs”). Tenant’s installation of Tenant’s Signs shall be performed at Tenant’s cost in accordance with the provisions set forth in Article 7 hereof. Tenant shall not have the right to erect Tenant’s Signs that would create the impression in the mind of a reasonable person that the Building is named for Tenant. Tenant shall be permitted to erect and maintain Tenant’s Signs only during the period that the Minimum Demise Requirement is satisfied and the Initial Tenant Requirement is satisfied. Tenant, at Tenant’s expense, shall operate, maintain and repair any Tenant’s Signs that Tenant erects pursuant to this Section 3.4 in accordance with customary standards for first-class office buildings in the vicinity of the Building and in compliance with all applicable Requirements. Tenant, at Tenant’s expense, shall remove Tenant’s Signs promptly upon the earlier to occur of (x) the Expiration Date, and (y) the date that Tenant has no further right to erect or maintain Tenant’s Signs pursuant to this Section 3.4. and shall repair any damage caused by the installation of Tenant’s Signs or such removal.

 

(B)                               Tenant shall have the right to install and maintain during the Term a sign containing only Tenant’s name and logo (i) on the door of the Premises and (ii) in the third floor elevator lobby outside of the entrance to the Premises in a location reasonably acceptable to Landlord, provided that any such signs shall be subject to Landlord’s prior written consent.

 

3.5.                            Risers.

 

Subject to the terms of this Section 3.5, Landlord hereby consents to Tenant’s installing and maintaining, at Tenant’s option, in connection with the performance of the Initial Alterations, electrical lines, telecommunications and computer lines and cabling which may be lawfully installed therein provided such other equipment is used in connection with Tenant’s business conducted at the Premises in shafts reasonably designated by Landlord with access to the Premises (collectively, the “Risers”). Landlord shall provide Tenant with reasonably necessary access in accordance with good construction practice for the installation, operation and maintenance of the Risers, provided that such access shall (i) not unreasonably interfere with or interrupt the operation and maintenance of the Building, and (ii) be upon such other terms reasonably designated by Landlord. Tenant shall install the Risers at Tenant’s expense. Tenant shall perform such installation in accordance with the provisions of this Lease, including, without limitation, the provisions pertaining to the performance of Alterations. If Tenant

 

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exercises Tenant’s right to install the Risers as contemplated by this Section 3.5, then Tenant, at Tenant’s expense, shall maintain the Risers in good condition during the Term. Landlord, at Landlord’s cost and expense and at no cost to Tenant, and upon reasonable prior notice to Tenant of not less than ninety (90) days, may, to the extent reasonably necessary, at any time and from time to time during the Term, reasonably relocate any of the Risers; provided, however, that Landlord shall (i) so relocate such Risers to a location reasonably acceptable to Tenant and Landlord, (ii) perform such relocation outside of ordinary business hours or on days other than Business Days and in a manner that does not interfere with the operation of Tenant’s business in any material respect or does not unreasonably interfere with Tenant’s use of the Premises for the use permitted under Section 3.1 hereof. Tenant, upon Expiration Date, shall not be required to remove the Risers; provided, however, that Landlord shall have the right to require Tenant to remove the Risers upon the Expiration Date to the extent required by any Requirement.

 

3.6.                            Promotional Displays.

 

Except as expressly permitted by Section 3.4 hereof but subject to the terms thereof. Tenant shall not have the right to use any window in the Premises for any sign or other display that is designed principally for advertising or promotion.

 

3.7.                            Core Toilets.

 

Tenant shall have the right to use the toilets that are located in the core area of the Building on any floor of the Building where the Premises is located and where the Premises does not include the entire Rentable Area of such floor (in common with the other occupants of such floor of the Building).

 

3.8.                            Wireless Internet Service.

 

Subject to the terms of this Section 3.8. Tenant shall have the right to install wireless systems in the Premises, including, without limitation, wireless systems that enable users to access the Internet or cellular telephone systems. Tenant shall not solicit other occupants of the Building to use wireless services that emanate from the Premises. Tenant shall not permit the signals of Tenant’s wireless systems (if any) to emanate beyond the Premises in a manner that interferes in any material respect with any Building Systems or with any other occupant’s use of other portions of the Building. Tenant shall operate Tenant’s wireless systems (if any) in accordance with applicable Requirements. Tenant acknowledges that Landlord may establish Rules in accordance with Section 3.3 hereof to coordinate the use of wireless systems by occupants of the Building (it being understood that such Rules may allocate radio frequencies among occupants of the Building to the extent permitted by applicable Requirements and to the extent reasonably practicable). Tenant shall provide to Landlord from time to time, reasonably promptly after Landlord’s request, a description of technical specifications of the wireless systems (if any) that Tenant uses in the Premises. Nothing contained in this Section 3.8 diminishes Tenant’s obligation to perform Alterations in accordance with the provisions of Article 7 hereof.

 

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3,9.                            Telecommunications.

 

Landlord shall permit Tenant to gain access to the facilities of the telecommunications provider that services the Building from time to time through the telecommunication closet on the floor of the Building where the Premises is located (it being understood that Landlord’s granting such access to Tenant shall not constitute Landlord’s agreement to provide telecommunications services to Tenant or to otherwise have responsibility for the operation or security thereof).

 

Article 4

SERVICES

 

4.1.                            Certain Definitions.

 

(A)                               The term “Building Hours” shall mean the period from 8:00 am to 6:00 pm on Business Days and the period from 8:00 am to 1:00 pm on Saturdays that are not Holidays.

 

(B)                               The term “Building Systems” shall mean the service systems of the Building, including, without limitation, the mechanical, gas, steam, electrical, sanitary, HVAC, elevator, plumbing, and life-safety systems of the Building (it being understood that the Building Systems shall not include any systems that Tenant installs in the Premises as an Alteration).

 

(C)                               The term “HVAC” shall mean heat, ventilation and air-conditioning.

 

(D)                               The term “HVAC Systems” shall mean the Building Systems that provide HVAC.

 

(E)                                The term “Overtime Periods” shall mean any times that do not constitute Building Hours; provided, however, that the Overtime Periods for the freight elevator shall also include the lunch period of the personnel who operate the freight elevator or the related loading facility.

 

4.2.                            Elevator Service.

 

(A)                               Subject to the terms of Section 9.6(C) hereof. Article 10 hereof and this Section 4.2. Landlord shall provide Tenant with passenger elevator service for the Premises using the Building Systems therefor. Tenant’s use of the passenger elevators shall be in common with other occupants of the Building. Tenant shall have the use of the passenger elevators that service the Premises at all times, except that Landlord, during Overtime Periods, shall have the right to limit reasonably the passenger elevators that Landlord makes available to service the Premises (provided that there is available to Tenant on a non-exclusive basis at all times at least one (1) passenger elevator that services the Premises). Tenant shall use the passenger elevators only for purposes of transporting persons to and from the Premises.

 

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(B)                               Subject to the terms of Section 9.6(C) hereof, Article 10 hereof and this Section 4.2, Landlord shall provide Tenant with freight elevator service for the Premises using the Building Systems therefor. Tenant’s use of the freight elevator shall be in common with other occupants of the Building. Landlord shall have the right to prescribe reasonable rules from time to time regarding the rights of the occupants in the Building (including, without limitation, Tenant) to use the freight elevator (governing, for example, the responsibility of occupants of the Building to reserve freight elevator use in advance, particularly for Overtime Periods). Tenant shall use the freight elevator in accordance with applicable Requirements. If Tenant uses the freight elevator during Overtime Periods, then, only during such Overtime Periods, Tenant shall pay to Landlord, as additional rent, an amount calculated at the reasonable hourly rates that Landlord charges from time to time therefor, within thirty (30) days after Landlord’s giving to Tenant an invoice therefor; provided, however, that Tenant shall not be required to pay for the first sixty (60) hours of Tenant’s overtime use of the freight elevator only for Tenant’s initial move into the Premises or Tenant’s performance of the Initial Alterations (but not for purposes associated with the ordinary conduct of Tenant’s business). Landlord shall have the right to charge Tenant for a particular minimum number of hours of usage of the freight elevator during Overtime Periods to the extent that the applicable union contract or service contract requires Landlord to engage the necessary personnel (including, without limitation, a freight elevator operator and loading dock attendant) for such minimum number of overtime hours which, as of the date hereof, is four (4) hours unless contiguous to Building Hours in which event there is no minimum, If (x) Tenant requests Landlord to provide Tenant with freight elevator service during Overtime Periods as provided in this Section 4.2(B), and (y) another tenant in the Building also uses, or other tenants in the Building also use, the applicable freight elevator during such Overtime Period, then Landlord shall allocate equitably the charges described in this Section 4.2(B) among Tenant and such other tenant or tenants. Landlord’s hourly rate for the freight elevator as of the date of this Lease is One Hundred Dollars ($100).

 

4.3.                            Heat, Ventilation and Air-Conditioning.

 

(A)                               Subject to the terms of Article 10 hereof and this Section 4.3, Landlord shall operate the HVAC System to provide HVAC at the perimeter of the Premises during the hours of 8:00 am to 8:00 pm on Business Days and 8:00 am to 1:00 pm on Saturdays that are not Holidays (such hours collectively, the “HVAC Hours”). Landlord shall not be required to make any installations in the Premises to distribute HVAC within the Premises. Landlord shall not be required to repair or maintain during the Term (i) any installations that exist in the Premises on the Commencement Date that distribute within the Premises HVAC that the HVAC System provides, or (ii) any system that is located in the Premises on the Commencement Date that provides supplemental HVAC for the Premises (in addition to the HVAC provided by the HVAC System). Tenant shall keep closed the curtains, blinds, shades or screens that Tenant installs on the windows of the Premises in accordance with the terms hereof to the extent reasonably necessary to reduce the interference of direct sunlight with the operation of the HVAC System.

 

(B)                               Landlord shall operate the HVAC System for Tenant’s benefit during periods that are not HVAC Hours (“HVAC Overtime Periods”) if Tenant so advises Landlord

 

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not later than 2:00 pm on the Business Day immediately preceding the day on which Tenant requires HVAC during HVAC Overtime Periods. If Landlord so provides HVAC to the Premises during HVAC Overtime Periods (as so requested by Tenant), then Tenant shall pay to Landlord, as additional rent, an amount calculated at the reasonable hourly rates that Landlord charges from time to time therefor, within thirty (30) days after Landlord gives to Tenant an invoice therefor. Landlord shall have the right to charge Tenant for a particular minimum number of hours of usage of the HVAC System during HVAC Overtime Periods to the extent that the applicable union contract or service contract requires Landlord to engage the necessary personnel (including, without limitation, a building engineer) for such minimum number of overtime hours. No such hourly rate shall be payable to Landlord with respect to any supplemental HVAC unit in the Premises provided that Tenant shall be obligated to pay for all electricity used in connection therewith.

 

4.4.                            Cleaning.

 

(A)                               Subject to the terms of Article 10 hereof and this Section 4.4, Landlord shall cause the Premises to be cleaned substantially in accordance with the standards set forth in Exhibit “4.4” attached hereto and made a part hereof. Landlord shall not be required to clean the portions of the Premises (if any) (x) that Tenant uses for the storage, preparation, service or consumption of food or beverages, (y) in which Tenant is performing Alterations, or (z) in which the interior installation has been demolished in all material respects. Tenant shall pay to Landlord, as additional rent, the reasonable costs incurred by Landlord in removing from the Building any of Tenant’s refuse and rubbish to the extent exceeding the amount of refuse and rubbish usually generated by a tenant that uses the Premises for ordinary office purposes. Tenant shall make such payments to Landlord not later than the thirtieth (30th) day after the date that Landlord gives to Tenant an invoice therefor from time to time.

 

(B)                               Tenant, at Tenant’s expense, shall exterminate the portions of the Premises that Tenant uses for the storage, preparation, service or consumption of food against infestation by insects and vermin regularly and, in addition, whenever there is evidence of infestation. Tenant shall engage Persons to perform such exterminating that are approved by Landlord, which approval Landlord shall not unreasonably withhold, condition or delay. Tenant shall cause such Persons to perform such exterminating in a manner that is reasonably satisfactory to Landlord.

 

(C)                               Tenant, at Tenant’s expense, shall clean daily all portions of the Premises used for the storage, preparation, service or consumption of food or beverages. Tenant shall not have the right to perform any cleaning services (or any other similar facilities management services such as, for example, matron services or handyman services) in the Premises using any Person other than the cleaning contractor that Landlord has engaged from time to time to perform cleaning services in the Building for Landlord; provided, however, that (x) Landlord shall not have the right to require Tenant to use such cleaning contractor unless the rates that such cleaning contractor agrees to charge Tenant for such additional cleaning services are commercially reasonable, and (y) subject to Section 4.8 hereof, Tenant shall have the right to use

 

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Tenant’s own employees for such additional cleaning services. If such cleaning contractor does not agree to charge Tenant for such additional cleaning services (or such similar services) at commercially reasonable rates, then Tenant may employ to perform such additional cleaning services (or such similar services) another cleaning contractor that Landlord approves, which approval Landlord shall not unreasonably withhold, condition or delay.

 

(D)                               Tenant shall comply with any refuse disposal program (including, without limitation, any waste recycling program) that Landlord imposes reasonably after having given Tenant reasonable advance notice of the effectiveness thereof or that is required by Requirements.

 

(E)                                Tenant shall not clean any window in the Premises, nor require, permit, suffer or allow any window in the Premises to be cleaned, in either case from the outside in violation of Section 202 of the New York Labor Law, any other Requirement, or the rules of the Board of Standards and Appeals, or of any other board or body having or asserting jurisdiction.

 

4.5.                            Water.

 

Landlord shall provide, through the Building Systems, hot and cold water at one (1) connection point at the perimeter of the Premises only for ordinary drinking, pantry, cleaning and lavatory purposes. Landlord shall not be required to make any installations in the Premises to distribute water within the Premises. Landlord shall not be required to repair or maintain during the Term any installations that exist in the Premises on the Commencement Date that distribute water in the Premises. Nothing contained in this Section 4.5 limits the provisions of Article 10 hereof.

 

4.6.                            Directory.

 

Subject to the terms of this Section 4.6, Landlord shall make available to Tenant, from and after the Commencement Date, the computerized directory in the lobby of the Building for purposes of listing the names of the personnel of Permitted Parties. Landlord shall reprogram such directory to add or delete names of the personnel or Permitted Parties promptly after Tenant’s request from time to time, except that Tenant shall not have the right to make any such request more frequently than once in any particular period of ninety (90) days. Tenant shall pay to Landlord, as additional rent, a reasonable charge for any such reprogramming requested by Tenant, within thirty (30) days after the date that Landlord gives to Tenant an invoice therefor (it being understood that Tenant shall not be required to pay such charge for the initial programming of such computerized directory). If Landlord replaces the computerized directory with a standard directory in the lobby of the Building, then Tenant shall be entitled to Tenant’s Operating Expense Share of such listings on such directory for purposes of listing the names of the personnel of Permitted Parties as provided in this Section 4.6. Landlord reserves the right to remove the directory in the lobby of the Building at any time (without making a replacement thereof).

 

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4.7.                            No Other Services.

 

Landlord shall not be required to provide any services to support Tenant’s use and occupancy of the Premises, except to the extent expressly set forth herein.

 

4.8.                            Labor Harmony.

 

If (i) Tenant employs, or permits the employment of, any contractor, mechanic or laborer in the Premises, whether in connection with any Alteration or otherwise, (ii) such employment interferes or causes any conflict with other contractors, mechanics or laborers engaged in the maintenance, repair, management or operation of the Building or any adjacent property owned or managed by Landlord, and (iii) Landlord gives Tenant notice thereof (which notice may be given verbally to the person employed by Tenant with whom Landlord’s representative ordinarily discusses matters relating to the Premises), then Tenant shall cause all contractors, mechanics or laborers causing such interference or conflict to leave the Building promptly and shall take such other action us may be reasonably necessary to resolve such conflict.

 

Article 5

ELECTRICITY

 

5.1.                            Capacity.

 

Subject to the terms of this Article 5 and Article 10, Landlord shall provide Tenant access at all times to the electrical closet on the floor of the Building where the Premises is located, for Tenant’s use, six and 0/100 (6) watts of electrical capacity (demand load) per square foot of Usable Area in the Premises (such electrical capacity being referred to herein as the “Base Electrical Capacity”). Tenant, during the Term, shall use electricity in the Premises only in such manner that complies with the requirements of the Utility Company. Tenant shall not permit the demand for electricity in the Premises to exceed the Base Electrical Capacity.

 

5.2.                            Electricity for the Building.

 

Landlord shall arrange with a Utility Company to provide electricity for the Building. Landlord shall not be liable to Tenant for any failure or defect in the supply or character of electricity furnished to the Building, except to the extent that such failure or defect results from Landlord’s negligence or willful misconduct. Landlord shall not be required to make any installations in the Premises to distribute electricity within the Premises. Landlord shall not be required to maintain or repair during the Term any installations that exist in the Premises on the Commencement Date that distribute electricity within the Premises.

 

5.3.                            Submetering.

 

(A)                               Subject to the provisions of this Section 5.3, Landlord shall measure Tenant’s demand for and consumption of electricity in the Premises (including, without limitation, in connection with any supplemental HVAC unit in the Premises) and for HVAC

 

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during HVAC Overtime Periods using a submeter that is, or submeters that are, installed and maintained by Landlord. Landlord shall pay the cost of installing such submeter or submeters. If, at any time during the Term, Tenant performs Alterations that require modifications to the aforesaid submeter or submeters that Landlord installs, or that require a supplemental submeter or supplemental submeters, then Tenant shall perform such modification, or the installation of such supplemental submeter or submeters, at Tenant’s cost, as part of the applicable Alteration.

 

(B)                               Tenant shall pay to Landlord, as additional rent, an amount (the “Electricity Additional Rent”) equal to one hundred three percent (103%) of the sum of:

 

(1)                                 the product obtained by multiplying (x) the Average Cost per Peak Demand Kilowatt, by (y) the number of kilowatts that constituted the peak demand for electricity in the Premises for the applicable billing period, as registered on the submeter or submeters for the Premises, and

 

(2)                                 the product obtained by multiplying (x) the Average Cost per Kilowatt Hour, by (y) the number of kilowatt hours of electricity used in the Premises for the applicable billing period, as registered on the submeter or submeters for the Premises.

 

(C)                               Subject to Section 5.3(D) hereof, Landlord shall give Tenant an invoice for the Electricity Additional Rent from time to time (but no less frequently than quarter-annually). Tenant shall pay the Electricity Additional Rent to Landlord on or prior to the thirtieth (30th) day after the date that Landlord gives to Tenant each such invoice. Tenant shall not have the right to object to Landlord’s calculation of the Electricity Additional Rent unless Tenant gives Landlord notice of any such objection on or prior to the ninetieth (90th) day after the date that Landlord gives Tenant the applicable invoice for the Electricity Additional Rent. If Tenant gives Landlord a notice objecting to Landlord’s calculation of the Electricity Additional Rent, as aforesaid, then Tenant shall have the right to review Landlord’s submeter readings and Landlord’s calculation of the Electricity Additional Rent, at Landlord’s offices or, at Landlord’s option, at the offices of Landlord’s managing agent, in either case at reasonable times and on reasonable advance notice to Landlord. Either party shall have the right to submit a dispute regarding the Electricity Additional Rent to an Expedited Arbitration Proceeding.

 

(D)                               If a submeter measuring Tenant’s electrical demand and consumption in the Premises has not been installed in the Premises, or the submeters measuring Tenant’s electrical demand and consumption in the Premises have not been installed in the Premises, in either case on or prior to the date hereof, then (x) Landlord shall order such submeter or such submeters promptly after the date hereof, and (y) Landlord shall install such submeter or such submeters promptly after the Commencement Date. Landlord and Tenant shall cooperate with each other in good faith to coordinate the installation of such submeter or such submeters with Tenant’s performance of the Initial Alterations. Landlord, in installing such submeter or such submeters, shall have the right to interrupt electrical service to the Premises temporarily and in accordance with good construction practice provided any such interruptions do not materially

 

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interfere with Tenant’s use of or access to the Premises during normal business hours for the use permitted under Section 3.1 hereof.

 

(E)                                Subject to the terms of this Section 5.3(E), if, prior to Landlord’s installing a submeter or the submeters in the Premises, Tenant commences the performance of the Initial Alterations, then Tenant shall pay to Landlord, as additional rent, a fee for electricity service in an amount equal to the product obtained by multiplying (I) $0.0041, by (II) the number of square feet of Rentable Area in the Premises (or the portion thereof in which Tenant is performing the Initial Alterations), by (III) the number of days in the period commencing on the date that Tenant so commences the Initial Alterations and ending on the earlier of (a) the date immediately preceding the date that Tenant first occupies the Premises (or the applicable portion thereof) for the conduct of business, and (b) the date immediately preceding the date that the submeter for the Premises (or the applicable portion thereof) is operational or the submeters for the Premises (or the applicable portion thereof) are operational. Landlord shall give Tenant an invoice for the aforesaid fee from time to time (but not less frequently than monthly). Tenant shall pay the aforesaid fee to Landlord on or prior to the thirtieth (30th) day after the date that Landlord gives each such invoice to Tenant.

 

(F)                                 Subject to the terms of this Section 5.3(F), if, prior to Landlord’s installing a submeter or submeters in the Premises. Tenant occupies all or any portion of the Premises for the conduct of business, then Tenant shall pay to Landlord, as additional rent, a fee for electricity service in an amount equal to the product obtained by multiplying (I) $0.0048 (which amount shall be increased on each anniversary of the Commencement Date to reflect the percentage increase, if any, in the Consumer Price Index from the Consumer Price Index that is in effect on Commencement Date), by (II) the number of square feet of Rentable Area in the Premises (or the portion thereof that Tenant is occupying for the conduct of business), by (III) the number of days in the period commencing on the date that Tenant occupies the Premises (or the applicable portion thereof) for the conduct of business and ending on the date immediately preceding the date that the submeter for the Premises or the applicable portion thereof is operational or that the submeters for the Premises or the applicable portion thereof are operational (such fee being referred to herein as the “Electricity Inclusion Charge’’). Landlord shall give Tenant an invoice for the Electricity Inclusion Charge from time to time (but not less frequently than monthly). Tenant shall pay the Electricity Inclusion Charge to Landlord on or prior to the thirtieth (30th) day after the date that Landlord gives each such invoice to Tenant. If (I) the monthly amount that Tenant would have paid to Landlord as the Electricity Additional Rent for the period that Tenant occupies the Premises or the applicable portion thereof for the conduct of business prior to the date that the submeter is, or the submeters are, operational (as determined using the average monthly submeter readings for the period of three (3) months after the date that the submeter is, or the submeters are, operational), exceeds (II) the Electricity Inclusion Charge for any particular period of one (1) month, then Tenant shall pay to Landlord an amount equal to such excess for each such month within thirty (30) days after Landlord gives to Tenant an invoice therefor. If (I) the Electricity Inclusion Charge for any particular period of one (l) month, exceeds (II) the monthly amount that Tenant would have paid to Landlord as the Electricity Additional Rent for the period that Tenant occupies the Premises or the applicable

 

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portion thereof for the conduct of business prior to the date that the submeter is, or the submeters are, operational (as determined using the average monthly submeter readings for the period of three (3) months after the date that the submeter is, or the submeters are, operational), then Landlord, at Landlord’s option, shall either (x) refund promptly to Tenant an amount equal to such excess for each such month, or (y) credit such excess for each such month against the monthly installments of Rental next becoming due and payable hereunder (together with interest on such excess calculated at the Base Rate from the date that Tenant is entitled to such credit). If Landlord gives Tenant such credit for such excess, and the Expiration Date occurs before the date that such credit is exhausted, then Landlord shall pay to Tenant the unused portion of such credit on or prior to the thirtieth (30th) day after the Expiration Date (and Landlord’s obligation to make such payment shall survive the Expiration Date).

 

5.4.                            Termination of Electric Service.

 

(A)                               If Landlord is required by any Requirement to discontinue furnishing electricity to the Premises as contemplated by this Lease, then this Lease shall continue in full force and effect and shall be unaffected thereby, except that from and after the effective date of any such Requirement, (x) Landlord shall not be obligated to furnish electricity to the Premises, and (y) Tenant shall not be obligated to pay to Landlord the charges for electricity as described in this Article 5.

 

(B)                               If Landlord discontinues Landlord’s furnishing electricity to the Premises pursuant to a Requirement, then Tenant shall use Tenant’s diligent efforts to obtain electricity for the Premises directly from the Utility Company. Tenant shall pay directly to the Utility Company the cost of such electricity. Tenant shall have the right to use the electrical facilities that then exist in the Building to obtain such direct electric service (without Landlord having any liability or obligation to Tenant in connection therewith). Nothing contained in this Section 5.4 shall permit Tenant to use electrical capacity in the Building that exceeds the Base Electrical Capacity. Tenant, at Tenant’s expense, shall make any additional installations that are required for Tenant to obtain electricity from the Utility Company.

 

(C)                               Landlord shall not discontinue furnishing electricity to the Premises as contemplated by this Section 5.4 (to the extent permitted by applicable Requirements) until Tenant obtains electric service directly from the Utility Company.

 

Article 6

INITIAL CONDITION OF THE PREMISES

 

6.1.                            Condition of Premises.

 

Subject to Section 8.1 hereof and Section 6.2 hereof, (a) Tenant shall accept possession of the Premises in the condition that exists on the Commencement Date “as is,” and (b) Landlord shall have no obligation to perform any work or make any installations in order to prepare the Building or the Premises for Tenant’s occupancy. Except as expressly set forth herein, Landlord

 

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has made no representations or promises with respect to the Building, the Real Property or the Premises. Promptly following the date hereof, Landlord shall give Tenant a Form ACP-5 covering the Premises. On the Commencement Date, the Building Systems serving the Premises shall be in good working order and points of connection to all Building Systems for Tenant’s use shall be available on the floor on which the Premises is located.

 

6.2.                            Landlord’s Work.

 

Landlord shall perform, at Landlord’s expense, the work as described on Exhibit “6.2” attached hereto and made a part hereof (such work being collectively referred to herein as “Landlord’s Pre-Commencement Work”). Landlord shall Substantially Complete Landlord’s Pre-Commencement Work on or prior to the Commencement Date. On or prior to the date on which the Initial Alterations are Substantially Complete, Landlord shall, at Landlord’s expense, perform the work required to Substantially Complete the fixtures and finishes of the common area elevator lobby of the third (3rd) floor of the Building and the common area corridors on such floor (using Building standard colors and qualities of materials) (such work, “Landlord’s Post-Commencement Work” and together with Landlord’s Pre-Commencement Work, “Landlord’s Work”). Landlord shall perform Landlord’s Work in accordance with all applicable Requirements and in a good and workmanlike manner. Landlord shall obtain commercially available warranties in connection with Landlord’s Work, shall transfer any so obtained in connection with Landlord’s Pre-Commencement Work to Tenant and shall enforce any so obtained in connection with Landlord’s Post-Commencement Work. Within thirty (30) days of Substantial Completion of each of Landlord’s Pre-Commencement Work and Landlord’s Post-Commencement Work, Tenant shall have the right to request that Landlord and Tenant together examine Landlord’s Pre-Commencement Work or Landlord’s Post-Commencement Work, as the case may be, and Landlord shall make its representative reasonably available promptly following such request. Landlord and Tenant shall then so examine Landlord’s Pre-Commencement Work or Landlord’s Post-Commencement Work, as the case may be, and create a punch list of unfinished or defective items in connection therewith. Landlord shall promptly thereafter repair any such items.

 

Article 7

ALTERATIONS

 

7.1.                            General.

 

(A)                               Except as otherwise provided in this Article 7, Tenant shall not make any Alterations without Landlord’s prior consent.

 

(B)                               Tenant may make Decorative Alterations without Landlord’s prior consent.

 

(C)                               The term “Alterations” shall mean alterations, installations, improvements, additions or other physical changes in each case in or to the Premises that are made by or on

 

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behalf of Tenant or any other Person claiming by, through or under Tenant; provided, however, that Alterations shall not include Landlord’s Work.

 

(D)                                The term “Decorative Alterations” shall mean Alterations that constitute merely decorative changes to the Premises (such as, for example, the installation of carpeting or other customary floor coverings or painting or the installation of customary wall coverings) that in each case do not involve electrical, plumbing or mechanical connections.

 

(E)                                The term “Initial Alterations” shall mean any Alterations made by Tenant to prepare the Premises for Tenant’s initial occupancy.

 

(F)                                 The term “Specialty Alterations” shall mean Alterations that (i) perforate a floor slab in the Premises or a wall that encloses the core of the Building, (ii) require the reinforcement of a floor slab in the Premises, (iii) consist of the installation of a raised flooring system, (iv) consist of the installation of a vault or other similar device or system that is intended to secure the Premises or a portion thereof in a manner that exceeds the level of security that a reasonable Person uses for ordinary office space, or (v) involve material plumbing connections (such as kitchens and executive bathrooms outside of the Building core).

 

(G)                               The term “Substantial Completion” or words of similar import shall mean that the applicable work has been substantially completed in accordance with the applicable plans and specifications, if any, it being agreed that (i) such work shall be deemed substantially complete notwithstanding the fact that minor or insubstantial details of construction or demolition, mechanical adjustment or decorative items remain to be performed, and (ii) with respect to work that is being performed in the Premises, such work shall be deemed substantially complete only if the incomplete elements thereof do not interfere materially with Tenant’s use and occupancy of the Premises for the conduct of business.

 

(H)                              The term “Tenant’s Property” shall mean Tenant’s personal property (other than fixtures), including, without limitation, Tenant’s movable fixtures, movable partitions, telephone equipment, computer equipment, furniture, furnishings and decorations.

 

7.2.                            Basic Alterations and Minor Alterations.

 

(A)                               Subject to the provisions of Section 7.1(B) hereof and this Section 7.2, Landlord shall not unreasonably withhold, condition or delay its consent to any proposed Alteration, provided that such Alteration (i) is not visible in any material respect, at street level, from the outside of the Building, (ii) does not affect adversely any part of the Building other than the Premises, (iii) does not require any alterations, installations, improvements, additions or other physical changes to be performed in or made to any portion of the Building other than the Premises, (iv) does not affect adversely the proper functioning of any Building System, (v) does not reduce the value or utility of the Building, (vi) does not affect the structure of the Building, (vii) does not impede Landlord’s access to Reserved Areas in any material respect, and (viii) does not violate or render invalid the certificate of occupancy for the Building or any part thereof

 

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(any Alteration that satisfies the requirements described in clauses (i) through (viii) above being referred to herein as a “Basic Alteration”).

 

(B)                               Tenant shall not be required to obtain Landlord’s prior consent to a particular Basic Alteration if the sum of (X) the “hard” construction cost of such Basic Alteration, and (Y) the “hard” construction cost of any other Basic Alterations performed during the immediately preceding period of twelve (12) months without Landlord’s consent as contemplated by this Section 7.2, does not exceed the Minor Alterations Threshold (any such Basic Alteration for which Landlord’s prior consent is not required being referred to herein as a “Minor Alteration”). The term “Minor Alterations Threshold” shall mean One Hundred Fifty Thousand Dollars and No Cents ($150,000,00), except that on each anniversary of the Commencement Date, the Minor Alterations Threshold shall be adjusted to reflect the percentage increase in the Consumer Price Index from the Consumer Price Index that is in effect on the Commencement Date. Nothing contained in this Section 7.2(B) limits Tenant’s liability to Landlord if (i) Tenant performs an Alteration without Landlord’s consent, and (ii) it is determined ultimately that such Alteration does not constitute a Minor Alteration.

 

(C)                               Landlord hereby approves in concept the proposed Initial Alterations as more particularly shown in the space plan attached hereto as Exhibit “7.2”.

 

(D)                               Nothing contained in this Section 7.2 limits the provisions of Section 7.11 hereof.

 

7.3.                            Approval Process.

 

(A)                               Tenant shall not perform any Alteration (other than Decorative Alterations) unless Tenant first gives to Landlord a notice thereof (an “Alterations Notice”) that (i) refers specifically to this Section 7.3, (ii) includes six (6) copies of the plans and specifications for the proposed Alteration (including, without limitation, layout, architectural, mechanical and structural drawings, to the extent applicable) in CADD format that contain sufficient detail for Landlord and Landlord’s consultants to reasonably assess the proposed Alteration, (iii) indicates whether Tenant considers the proposed Alterations to constitute a Basic Alteration, (iv) indicates whether Tenant considers the proposed Alteration to constitute a Minor Alteration and whether Tenant intends to perform the proposed Alteration without Landlord’s consent as contemplated by this Article 7, and (v) includes with such notice a bona fide estimate issued by a reputable and independent construction company of the “hard” construction cost of performing the proposed Alteration (if Tenant considers the proposed Alteration to constitute a Minor Alteration and plans to perform such Alteration without Landlord’s consent).

 

(B)                               Landlord shall have the right to object to a proposed Alteration only by giving notice thereof to Tenant, and setting forth in such notice a statement in reasonable detail of the grounds for Landlord’s objections.

 

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(C)                               Landlord shall have the right to (a) disapprove any plans and specifications for a particular Alteration in part, (b) reserve Landlord’s approval of items shown on such plans and specifications pending Landlord’s review of other plans and specifications that Tenant is otherwise required to provide to Landlord hereunder, and (c) condition Landlord’s approval of such plans and specifications upon Tenant’s making revisions to the plans and specifications or supplying additional information (which Landlord shall have the right to request only reasonably if the applicable Alteration constitutes a Basic Alteration). Nothing contained in this Section 7.3(C) limits the provisions of Section 7.2 hereof or Section 7.3(B) hereof.

 

(D)                               Tenant acknowledges that (i) the review of plans or specifications for an Alteration by or on behalf of Landlord, or (ii) the preparation of plans or specifications for an Alteration by Landlord’s architect or engineer (or any architect or engineer designated by Landlord), is solely for Landlord’s benefit, and, accordingly, Landlord makes no representation or warranty that such plans or specifications comply with any Requirements or are otherwise adequate or correct.

 

7.4.                            Performance of Alterations.

 

(A)                               Tenant, at Tenant’s expense, prior to the performance of any Alteration, shall obtain all permits, approvals and certificates required by any Governmental Authorities in connection therewith. Landlord shall have the right to require Tenant to make all filings with Governmental Authorities to obtain such permits, approvals and certificates using an expeditor designated reasonably by Landlord (provided that the charges imposed by such expeditor are commercially reasonable). Landlord shall execute any applications for any permits, approvals or certificates required to be obtained by Tenant in connection with any permitted Alteration (provided that the applicable Requirement requires Landlord to execute such application) within ten (10) Business Days after Tenant’s request from time to time and shall otherwise cooperate reasonably with Tenant in connection therewith. Tenant shall not have the right to require Landlord to so execute such applications prior to the date that Landlord approves the applicable Alteration (to the extent that this Article 7 requires Tenant to obtain Landlord’s approval of the applicable Alteration). Tenant shall reimburse Landlord for any reasonable Out-of-Pocket Costs, including, without limitation, reasonable attorneys’ fees and disbursements, that Landlord incurs in so executing such applications and cooperating with Tenant, within thirty (30) days after the date that Landlord gives to Tenant an invoice therefor from time to time.

 

(B)                               Prior to performing any Alteration, Tenant shall maintain or cause its contractors (of any tier) and vendors to maintain (1) worker’s compensation and disability insurance in amounts not less than the statutory limits required by Requirements (covering all persons to be employed by Tenant, and Tenant’s contractors, subcontractors, and vendors in connection with such Alteration); (2) commercial general liability insurance (covering bodily injury including death, personal injury and property damage), in each case in customary form, and in amounts that are not less than Five Million Dollars ($5,000,000) per occurrence and in the annual policy aggregate with respect to general contractors and Three Million Dollars ($3,000,000) per occurrence and in the annual policy aggregate with respect to subcontractors,

 

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such policies shall he endorsed to name the Landlord Indemnitees as additional insureds; and (3) commercial auto liability insurance, if the contractor or vendor uses a vehicle at the Real Property, covering all vehicles with a minimum combined single limit of One Million Dollars ($1,000,000). A contractor’s or vendor’s liability shall in no way be limited by the amount of insurance recovery or the amount of insurance in force, or available, or required by any provisions of this Lease. The limits listed above are minimum requirements only. Tenant shall include in any agreement that Tenant consummates with a contractor or vendor in either case for a particular Alteration, and Tenant shall cause any contractor to include in any agreement that such contractor consummates with a subcontractor regarding the applicable Alteration, a provision pursuant to which the contractor, subcontractor or vendor agrees to indemnify the Landlord Indemnitees, and hold the Landlord Indemnitees harmless, from and against, any Claim Against Landlord that arises from any wrongful act or wrongful omission of such contractor, such subcontractor or such vendor, and such provision shall state expressly that the Landlord Indemnitees constitute third-party beneficiaries thereof. Prior to the start of any such Alterations and prior to the expiration of any policy, Tenant shall deliver to Landlord certificates of insurance (on a form reasonably acceptable to Landlord) along with copies of endorsements naming Landlord Indemnitees as additional insureds. The liabilities of any contractor or vendor shall survive and not be terminated, reduced or otherwise limited by any expiration or termination of such insurance coverage. Neither approval nor failure to disapprove insurance furnished by the contractor or vendor shall relieve the contractor, its subcontractors or vendors from responsibility to provide insurance as required herein.

 

(C)                               Within thirty (30) days after the Substantial Completion of each Alteration (other than Decorative Alterations). Tenant, at Tenant’s expense, shall (1) obtain certificates of final approval for each Alteration to the extent required by any Governmental Authority, (2) furnish Landlord with copies of such certificates, and (3) give to Landlord copies of the “as-built” plans and specifications for such Alterations in CADD format (or, if the applicable Alteration constitutes a Minor Alteration, appropriate record drawings or shop drawings therefor).

 

(D)                               All Alterations (other than Decorative Alterations) shall be made and performed substantially in accordance with the plans and specifications therefor as approved by Landlord (to the extent such approval of Landlord is required under this Article 7). All Alterations shall be made and performed in accordance with all Requirements and the Rules. All materials and equipment incorporated in the Premises as a result of any Alterations shall be first-quality.

 

(E)                                Subject to the terms of this Section 7.4(E), Landlord shall deliver to Tenant, in connection with Tenant’s applications to the applicable Governmental Authority for a building permit regarding any Alterations, a Form ACP-5, duly executed by an appropriate party and covering the Premises. If (x) any asbestos or asbestos-containing materials are located in the Premises, and (y) applicable Requirements mandate that such asbestos or asbestos-containing materials be abated in connection with Landlord’s Work, any repair or maintenance that Tenant is performing or any Alteration that Tenant proposes to perform, then Landlord, at Landlord’s

 

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expense, shall perform such abatement, with reasonable diligence, in accordance with good construction practice and in compliance with all applicable Requirements (it being agreed that Landlord’s obligation to deliver such Form ACP-5 shall be adjourned until Landlord performs such abatement). Landlord shall not be required to (A) deliver such Form ACP-5 for the portion of the Premises in which Tenant, or any Person claiming by, through or under Tenant, installs asbestos or asbestos-containing materials from and after the Commencement Date, or (B) remove any such asbestos or asbestos-containing materials to the extent that such asbestos or asbestos-containing materials are installed in the Premises by Tenant, or any other Person claiming by, through or under Tenant, after the Commencement Date. If in performing any such abatement pursuant to this Section 7.4(E) actually delays Tenant in the performance of the Initial Alterations then Tenant shall be entitled to apply (until exhausted) a credit against Rental that is otherwise due hereunder in an amount equal to the product obtained by multiplying (I) the number of days that the existence of such asbestos or asbestos-containing materials or Landlord’s performance of such abatement actually so delayed Tenant’s performance of the Initial Alterations by (II) the quotient obtained by dividing (A) the Fixed Rent that is due hereunder, by (B) three hundred sixty-five (363) by (C) the number of square feet of Rentable Area of the Premises, by (III) the number of square feet of Rentable Area of the Premises in respect of which Tenant was so actually delayed. Any such period of delay in Tenant’s performing the Initial Alterations shall not be deemed to commence unless (x) Tenant gives Landlord notice of such delay and (y) Tenant includes in such notice a reasonable description of the extent of the impact of the existence of asbestos or asbestos containing materials on Tenant’s performance of the Initial Alterations.

 

7.5.                            Financial Integrity.

 

(A)

 

(1)                                 Tenant shall not permit any materials or equipment that are incorporated as fixtures into the Premises in connection with any Alterations to be subject to any lien, encumbrance, chattel mortgage or title retention or security agreement.

 

(2)                                 Subject to the terms of this Section 7.5(A)(2) and Section 7.5(A)(3) hereof, Tenant shall not make any Alteration at a cost for labor and materials (as reasonably estimated by Landlord’s architect, engineer or contractor) in excess of One Hundred Thousand Dollars ($100,000.00), either individually or in the aggregate with any other Alterations constructed in any particular period of twelve (12) consecutive months, prior to Tenant’s delivering to Landlord a performance bond and a payment bond that covers Tenant’s obligation to pay the applicable contractor and the applicable contractor’s obligation to pay its subcontractors (in either case issued by a surety company and in form reasonably satisfactory to Landlord), each in an amount equal to one hundred twenty percent (120%) of such estimated cost; provided, however, that (i) on each anniversary of the Commencement Date, the aforesaid amount of One Hundred Thousand Dollars ($100,000.00) shall be adjusted to reflect the percentage increase in the Consumer Price Index from the Consumer Price Index that is in effect on the Commencement Date, and (ii) Tenant shall not be required to post such bonds for the

 

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Initial Alterations. Tenant shall not be required to deliver a performance bond or payment bond as provided in this Section 7.5(A)(2) to the extent that Tenant has the right to use the Tenant Fund to cover the cost of the applicable Alteration.

 

(3)                                 If Tenant is obligated to deliver a performance bond and a payment bond to Landlord as provided in Section 7.5(A)(2) hereof, then Tenant shall have the right to deposit with Landlord an amount in cash equal to the amount of such bonds that is otherwise required by Section 7.5(A)(2) hereof (such amount in cash being referred to herein as the “Work Deposit”). If Tenant deposits the Work Deposit with Landlord, then (i) Tenant shall not have the obligation to deliver to Landlord the performance bond and the payment bond as provided in Section 7.5(A)(2) hereof for the applicable Alteration, and (ii) Landlord shall disburse the Work Deposit (or the applicable portion thereof) to Tenant or Tenant’s designee from time to time, within ten (10) days after Tenant’s request therefor (but in no event more frequently than once during any particular calendar month), provided that Tenant delivers to Landlord, simultaneously with each such disbursement, waivers of lien from all contractors, subcontractors, materialmen, architects, engineers and other Persons who may file a lien against the Real Property for material theretofore supplied, or labor or services theretofore performed, in connection with the applicable Alterations. If any mechanic’s lien is filed against the Real Property for work claimed to have been done for, or for materials claimed to have been furnished to, Tenant (or any Person claiming by, through or under Tenant), then Landlord shall have the right (but not the obligation) to use the Work Deposit to discharge such mechanic’s lien. Nothing contained in this Section 7.5(A)(3) diminishes Tenant’s obligations under Section 7.5(A)(4) hereof. Landlord shall pay to Tenant any remaining balance of the Work Deposit for a particular Alteration within ten (10) days after the date that (x) Tenant has Substantially Completed the applicable Alteration, and (y) Tenant has delivered to Landlord waivers of lien from all contractors, subcontractors, materialmen, architects, engineers and other Persons who may file a lien against the Real Property in connection with such Alterations. Notwithstanding anything herein to the contrary with respect to the Initial Alterations the provisions of Sections 7.5(A)(2) and (3) hereof shall not be applicable.

 

(4)                                 Tenant shall discharge of record any mechanic’s lien that is filed against the Real Property for work claimed to have been done for, or for materials claimed to have been furnished to, Tenant (or any Person claiming by, through or under Tenant) within ten (10) days after Tenant has received notice thereof, at Tenant’s expense, by payment or filing the bond required by law. Nothing contained in this Section 7.5(A)(4) (x) limits Tenant’s right to challenge the claim that is made by the Person that files a mechanic’s lien, provided that Tenant discharges such lien of record as aforesaid, or (y) obligates Tenant to discharge of record any mechanic’s lien that derives from Landlord’s acts or omissions. If (i) any mechanic’s lien is filed against the Real Property for work claimed to have been done for, or for materials claimed to have been furnished to. Tenant (or any Person claiming by, through or under Tenant), and (ii) Tenant does not discharge such lien within ten (10) days after Tenant has received notice thereof, at Tenant’s expense, by payment or filing the bond required by law, then Landlord shall have the right to use the Tenant Fund (or the portion thereof that Landlord has not theretofore disbursed to or on behalf of Tenant as provided in Section 7.12 hereof, as the case may be) to so discharge

 

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such lien (it being understood that (x) if Landlord so uses the Tenant Fund (or such undisbursed portion thereof) to discharge such lien in full, then Tenant’s failure to discharge such line initially shall not continue to constitute a default by Tenant hereunder, and (y) Landlord’s aforesaid right to use the Tenant Fund (or such undisbursed portion thereof) to discharge such lien shall be in addition to the rights and remedies that are available to Landlord at law, in equity or as otherwise set forth herein by reason of an Event of Default that derives from Tenant’s failure to so discharge such lien).

 

(B)                               Subject to the terms of this Section 7.5(B), within thirty (30) days after the Substantial Completion of any Alterations (other than Decorative Alterations). Tenant shall deliver to Landlord: (i) waivers of lien from all contractors, subcontractors, materialmen, architects, engineers and other Persons who may file a lien against the Real Property in connection with such Alterations, and (ii) a certificate from a licensed architect that Tenant engages in accordance with the terms of this Article 7 certifying that, in his or her opinion, the Alterations have been Substantially Completed in substantial accordance with the final detailed plans and specifications for such Alterations as approved by Landlord (to the extent Landlord’s approval was required under this Article 7). Tenant shall not be required to deliver to Landlord any waiver of lien if Tenant is disputing in good faith the payment which would otherwise entitle Tenant to such waiver, provided that (x) Tenant keeps Landlord advised in a timely fashion of the status of such dispute and the basis therefor, and (y) Tenant delivers to Landlord the waiver of lien promptly after the date that the dispute is settled. Nothing contained in this Section 7.5(B), however, shall relieve Tenant from complying with the provisions of Section 7.5(A)(4) hereof.

 

7.6.                            Effect on Building.

 

Subject to the terms of this Section 7.6, if (i) as a result of any Alterations, any alterations, installations, improvements, additions or other physical changes are required to be performed in or made to any portion of the Building other than the Premises in order to comply with any Requirements (any such alterations, installations, improvements, additions or changes being referred to herein as a “Building Change”), and (ii) such Building Change would not otherwise have had to be performed or made pursuant to applicable Requirements at such time, then (x) Landlord may perform such Building Change, and (y) Tenant shall pay to Landlord the reasonable Out-of-Pocket Costs thereof, as additional rent, within thirty (30) days after Landlord gives to Tenant an invoice therefor together with reasonable supporting documentation for the charges set forth therein. Landlord shall seek to accomplish any such Building Change that minimizes the cost thereof to the extent reasonably practicable. Landlord shall give Tenant reasonable advance notice of Landlord’s performance of the Building Change, and shall consult reasonably from time to time with Tenant in connection therewith (with the understanding that such consultations shall include, without limitation, Landlord’s providing Tenant with the information that Landlord has in its possession regarding the expected cost of such Building Change). Tenant shall not be required to pay for the cost of performing a Building Change as contemplated by this Section 7.6 if (a) Tenant submits to Landlord for Landlord’s approval the plans and specifications for the applicable Alteration, (b) the representative of Landlord who has

 

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principal responsibility for approving the applicable Alteration has personal knowledge that the applicable Alteration requires such Building Change, and (c) Landlord fails to advise Tenant of such Building Change concurrently with Landlord’s approval of the applicable Alteration.

 

7.7.                            Time for Performance of Alterations.

 

If the performance of any Alteration by or on behalf of Tenant, or any other Person claiming by, through or under Tenant, during Building Hours interferes with or interrupts the maintenance, repair, management or operation of the Building in any material respect or interferes with or interrupts the use and occupancy of the Building by other tenants in the Building in any material respect, then Landlord shall have the right to require Tenant to perform such Alteration at other times that Landlord reasonably designates from time to time.

 

7.8.                            Removal of Alterations and Tenant’s Property.

 

(A)                               On or prior to the Expiration Date, Tenant, at Tenant’s expense, shall remove Tenant’s Property from the Premises, and, subject to Section 7.12(E) hereof, at Tenant’s option, Tenant also may remove, at Tenant’s expense, all Alterations made by or on behalf of Tenant or any other Person claiming by, through or under Tenant; provided, however, in any case, that Tenant shall repair and restore in a good and workmanlike manner to good condition any damage to the Premises or the Building caused by such removal. Landlord, upon notice to Tenant given at least sixty (60) days prior to the Expiration Date, may require Tenant to remove any Specialty Alterations from the Premises, and to repair and restore in a good and workmanlike manner to good condition any damage to the Premises or the Building caused by such removal; provided, however, that Landlord shall not have the right to require Tenant to remove any Qualified Alterations. If (x) the Expiration Date is not the Fixed Expiration Date, or the last day of the Renewal Term, as the case may be, and (y) Landlord gives a notice to Tenant on or prior to the thirtieth (30th) day after the Expiration Date to the effect that Landlord does not wish to retain a particular Specialty Alteration, then Tenant shall pay to Landlord the reasonable Out-of-Pocket Costs that are incurred by Landlord in so removing such Specialty Alterations, and in so repairing and restoring any such damage to the Building or the Premises, within thirty (30) days after Landlord submits to Tenant an invoice therefor together with reasonable supporting documentation for the charges set forth therein; provided, however, that Landlord shall not have the right to give any such notice to Tenant in respect of Qualified Alterations. Any Alterations that remain in the Premises after the Expiration Date shall be deemed to be the property of Landlord (with the understanding, however, that Tenant shall remain liable to Landlord for any default of Tenant in respect of Tenant’s obligations under this Section 7.8(A)).

 

(B)                               Prior to Tenant’s performance of a Specialty Alteration (including, without limitation, any Initial Alteration that is a Specialty Alteration) that Landlord has otherwise approved in accordance with the terms of this Article 7, Tenant shall have the right to request that Landlord designate that Tenant shall not he required to remove (or pay the cost to remove) such Specialty Alteration upon the expiration or earlier termination of the Term provided that

 

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any such request contains a caption in bold and capital letters as follows: “LANDLORD TO ADVISE TENANT IF TENANT IS OBLIGATED TO REMOVE THE SPECIALTY ALTERATIONS DESCRIBED IN THIS REQUEST”. Landlord shall have the right to approve or deny any such request in Landlord’s sole discretion. If (i) Tenant makes any such request, and (ii) Landlord either approves such request, or fails to respond to Tenant’s aforesaid request on or prior to the fifteenth (15th) Business Day after the date that Tenant gives such request to Landlord, then Landlord shall not have the right to require Tenant to remove (or pay the cost to remove) such Specialty Alteration upon the expiration or earlier termination of the Term (any such Specialty Alteration which Tenant shall not be required to remove (or to pay the cost of removal) as aforesaid and the raised flooring existing in the Premises on the date hereof being collectively referred to herein as a “Qualified Alteration’’).

 

7.9.                            Contractors and Supervision.

 

(A)                               All Alterations (other than Decorative Alterations) that require Landlord’s consent shall be performed only under the supervision of a licensed architect that Landlord approves, which approval Landlord shall not unreasonably withhold, condition or delay. Landlord hereby approves Quezada Architecture as Tenant’s architect for the Initial Alterations.

 

(B)                               Subject to the provisions of this Section 7.9(B), Tenant shall perform all Alterations (other than Decorative Alterations) using contractors, subcontractors, engineers and mechanics that in each case Landlord designates from time to time and charge commercially reasonable prices. Landlord shall give Tenant a notice containing a list of such contractors, such subcontractors and such engineers that Landlord designates promptly after Tenant’s request therefor from time to time (it being understood that Landlord shall include in such list the names of at least three (3) subcontractors for each trade and at least three (3) general contractors).

 

(C)                               Tenant shall have the right to request that Landlord perform supervisory project management services for any Alterations that Tenant performs during the Term in accordance with the terms of this Article 7. If Tenant makes any such request, then Landlord and Tenant shall seek in good faith to determine the terms of Tenant’s engagement of Landlord to perform such services (it being understood that such terms shall include, without limitation, the payment of a fee by Tenant to Landlord for such supervisory services on market terms).

 

(D)                               Tenant shall pay to Landlord, from time to time, as additional rent, the reasonable Out-of-Pocket Costs incurred by Landlord in connection with an Alteration (other than Decorative Alterations) (including, without limitation, the reasonable Out-of-Pocket Costs that Landlord incurs in reviewing the plans and specifications for such Alterations, and inspecting the progress of such Alterations), within thirty (30) days after Landlord gives Tenant an invoice therefor together with reasonable supporting documentation for the charges set forth therein.

 

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7.10.                     Pantry.

 

Landlord shall not unreasonably withhold, condition or delay Landlord’s approval of an Alteration consisting of the installation of a pantry in the Premises for the purpose of warming food for Tenant’s personnel and business guests (but not for use as a public restaurant). Any vending machines that Tenant installs in the Premises and that involve plumbing connections shall have a waterproof pun located thereunder, connected to a drain.

 

7.11.                     Window Coverings.

 

Tenant shall install on the windows of the Premises only the curtains, blinds, shades or screens that Landlord approves, which approval Landlord shall not unreasonably withhold, condition or delay (it being understood that Landlord, in considering whether to grant such approval, shall have the right to take into account the impact of Tenant’s proposed installation on the exterior appearance of the Building).

 

7.12.                     Tenant Fund.

 

(A)                               Subject to the terms of this Section 7.12 and Section 7.5(A)(4) hereof, Landlord shall pay to or on behalf of Tenant an amount equal to (x) Three Million Two Hundred Twenty Thousand One Hundred Dollars and No Cents ($3,220,100.00) (the “Tenant Fund”) for the costs that Tenant incurs in performing the Initial Alterations and (y) One Hundred Thousand Dollars and No Cents ($100,000,00) (the “Restroom Fund”) for the costs that Tenant incurs in performing Alterations that are cosmetic upgrades to the core restrooms on the third (3rd) floor of the Building or constructing a new core restroom and/or shower on the third (3rd) floor of the Building (collectively, the “Restroom Alterations”) to the extent that such Alterations are performed during the performance of the Initial Alterations. Tenant hereby agrees to perform the Restroom Alterations during the performance of the Initial Alterations. Tenant may use no more than fifteen percent (15%) of each of the Tenant Fund and the Restroom Fund for costs that Tenant incurs in connection with the Initial Alterations or the Restroom Alterations, respectively, that do not constitute “hard” construction costs, including, without limitation, architect’s and engineer’s fees, permit fees, expediter’s fees and designers’ fees in each case relating to the Initial Alterations or the Restroom Alterations, respectively (such costs which do not constitute the “hard” construction costs of the Initial Alterations being collectively referred to herein as “Soft Costs”). If Landlord exercises Landlord’s rights to consummate a Recapture Termination for Recapture Space that does not constitute the entire Premises in accordance with the terms of Section 17.3 hereof, then the Tenant Fund and the Restroom Fund shall each be adjusted equitably to reflect the deletion of the Recapture Space from the Premises; provided, however, that in no event shall Tenant have any obligation to make any repayment to Landlord to the extent that the amount of the Tenant Fund or the Restroom Fund that Landlord has theretofore disbursed exceeds the amount of the Tenant Fund, as so redetermined.

 

(B)                               Tenant may request disbursements of the Tenant Fund or the Restroom Fund, as the case may be, only by delivering to Landlord a Disbursement Request. Subject to the

 

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terms of this Section 7.12, Landlord shall disburse a portion of the Tenant Fund or the Restroom Fund, as the case may be, to Tenant from time to time, within thirty (30) days after the date that Tenant gives to Landlord the applicable Disbursement Request. Tenant shall not be entitled to any disbursements of the Tenant Fund or the Restroom Fund if an Event of Default has occurred and is continuing. If a particular Disbursement Request requests Landlord to disburse more than fitly percent (50%) of the Tenant Fund or the Restroom Fund, as the case may be, then Landlord shall not be required to make the disbursement of the Tenant Fund or the Restroom Fund, as the case may be, that is contemplated thereby unless all contractors, subcontractors, materialmen, architects, engineers and other Persons who may file a lien against the Real Property in connection with the performance of the Initial Alterations or the Restroom Alterations, as the case may be, provide to Landlord waivers of lien concurrently with such disbursement of the Tenant Fund or the Restroom Fund, as the case may be (it being understood that Landlord shall accept partial waivers of lien to the extent that the applicable contractor, subcontractor, materialman, architect, engineer or other Person has not received payment in full). Landlord shall not be required to make disbursements of the Tenant Fund or the Restroom Fund more frequently than once during any particular calendar month. Tenant shall not have the right to request disbursements of the Tenant Fund or the Restroom Fund, as the case may be, in an amount that is greater than the excess of (1) the aggregate amounts that Tenant has theretofore paid or that then remain payable in each case to Tenant’s contractors, subcontractors, materialmen, suppliers or consultants, as the case may be, for either (a) materials that have been delivered to the Premises for the Initial Alterations or the third (3rd) floor for the Restroom Alterations, (b) labor that has been performed in the Premises for the Initial Alterations or in the applicable restrooms for the Restroom Alterations, or (c) the services from which are derived Sort Costs that have been performed for the Initial Alterations or the Restroom Alterations, as the case may be, over (II) the aggregate amount of disbursements theretofore made by Landlord from the Tenant Fund or the Restroom Fund, as the case may be (such excess at any particular time being referred to herein as the “Maximum Disbursement Amount”).

 

(C)                               The term “Disbursement Request” shall mean a request for a disbursement of the Tenant Fund or the Restroom Fund, as the case may be, signed by the chief financial officer of Tenant (or another officer of Tenant who performs the functions ordinarily performed by a chief financial officer), together with:

 

(1)                                 such officer’s certification that the amount so requested does not exceed the Maximum Disbursement Amount,

 

(2)                                 copies of the contracts, work orders, purchase orders, change orders and other documents pursuant to which Tenant has engaged third parties to perform the Initial Alterations or the Restroom Alterations (or provide materials or services in connection therewith) (except to the extent that Tenant has provided such copies to Landlord with a prior Disbursement Request),

 

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(3)                                 copies of reasonable documentation (such as bills and invoices) that indicate that the applicable work has been completed, the applicable materials have been furnished, or the applicable services have been performed, as the case may be.

 

(4)                                 waivers of lien from all contractors, subcontractors, materialmen, architects, engineers and other Persons who may file a lien against the Real Property in connection with the performance of the Initial Alterations or the Restroom Alterations, as the case may be, and for which previous disbursements of the Tenant Fund or the Restroom Fund, as the case may be, have been made (except to the extent Tenant gave such waivers of lien to Landlord in connection with a prior Disbursement Request), and

 

(5)                                 in connection with a disbursement of the Tenant Fund or the Restroom Fund, as the case may be, for costs which do not constitute Soft Costs, a certificate of Tenant’s licensed architect that Tenant engages in accordance with the terms of this Article 7 stating that, in his or her opinion, the portion of the Initial Alterations or the Restroom Alterations, as the case may be, theretofore substantially completed and for which the disbursement is requested was performed in a good and workmanlike manner and substantially in accordance with the plans and specifications for such Initial Alterations or such Restroom Alterations, as the case may be, as approved by Landlord.

 

(D)                               Landlord makes no representation or warranty that the Tenant Fund is sufficient to pay the cost of the Initial Alterations or the Restroom Fund is sufficient to pay the cost of the Restroom Alterations. Tenant shall pay the amount of any excess of the cost of the Initial Alterations over the Tenant Fund and any excess of the cost of the Restroom Alterations over the Restroom Fund.

 

(E)                                Landlord and Tenant acknowledge the Initial Alterations and the Restroom Alterations shall constitute the property of Landlord to the extent that Tenant performs the Initial Alterations or the Restroom Alterations, as the case may be, using the proceeds of the Tenant Fund or the Restroom Fund, as the case may be, as provided in this Section 7.12, subject, nevertheless, to Tenant’s rights to use such Initial Alterations as part of the Premises and the Restroom Alterations during the Term in accordance with the terms of this Lease, Tenant, during the Term, shall not remove the Initial Alterations or the Restroom Alterations (or a portion thereof) that Tenant performs using the proceeds of the Tenant Fund or the Restroom Fund, as the case may be (or Alterations that replace such Initial Alterations or such Restroom Alterations, as the case may be (or such portion thereof)) unless Tenant replaces the Initial Alterations or the Restroom Alterations, as the case may be (or such portion thereof), or such other Alterations, as the case may be, with Alterations that have a fair value that is equal to or greater than the Tenant Fund or the Restroom Fund, as the case may be (it being understood that such Alterations that Tenant performs to replace the Initial Alterations or the Restroom Alterations, as the case may be (or such portion thereof), or such other Alterations, as the case may be, shall constitute the property of Landlord as contemplated by this Section 7.12(E)). Nothing contained in this 7.12(E) limits Landlord’s right to require Tenant to remove Specialty Alterations as provided in Section 7.8 hereof.

 

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(F)                                 If (i) Landlord fails to make a disbursement of the Tenant Fund or the Restroom Fund when due, and (ii) such failure continues for more than thirty (30) days after the date that Tenant give Landlord notice thereof, then Tenant shall have the right to offset against the Rental due hereunder the amount that Landlord so fails to disburse to Tenant,.

 

7.13.                     Air-Cooled HVAC Installations.

 

Tenant shall not have the right to install a supplementary HVAC system for the Premises that requires vents or louvers to be installed on the exterior of the Building.

 

Article 8

REPAIRS

 

8.1.                            Landlord’s Repairs.

 

Subject to the terms of this Article 8 and to Article 15 hereof and Article 16 hereof, Landlord shall maintain and make all necessary repairs to and replacements of (i) the Building Systems that service the Premises, (ii) the structural portions of the Building, (iii) the roof of the Building, (iv) the sidewalks that are adjacent to the Building, (v) the exterior walls of the Premises, (vi) the windows of the Premises, (vii) the public portions of the Building, and (viii) the Premises (to the extent that the necessity for such repair derives from a Work Access) in each case in conformity with the standards that are customary for first-class office buildings in the vicinity of the Building. Nothing contained in this Section 8.1 requires Landlord to maintain or repair the systems within the Premises that distribute within the Premises electricity, HVAC or water.

 

8.2.                            Tenant’s Repairs.

 

(A)                               Subject to the terms of this Article 8 and to Article 15 hereof and Article 16 hereof, Tenant, at Tenant’s expense, shall take good care of the Premises (including, without limitation, (i) the fixtures and equipment that are installed in the Premises on the Commencement Date, (ii) the Alterations, and (iii) the systems within the Premises that distribute within the Premises electricity, HVAC or water). Tenant shall make all repairs to the Premises as and when needed to preserve the Premises in good condition, except for reasonable wear and tear, obsolescence and damage for which Tenant is not responsible pursuant to the provisions of Article 15 hereof. Nothing contained in this Section 8.2(A) shall require Tenant to perform any repairs to the Premises that are Landlord’s obligation to perform under Section 8.1 hereof. All repairs made by Tenant a us contemplated by this Section 8.2(A) shall be in conformity with the standards that are customary for first-class office buildings in the vicinity of the Building. Tenant shall perform such repairs in accordance with the terms of Article 7 hereof.

 

(B)                               Subject to the terms of this Section 8.2(B), if (a) Landlord gives Tenant a notice that Tenant has failed to perform a repair that this Section 8.2 obligates Tenant to perform, and (b) Tenant fails to proceed with reasonable diligence to make such repair within thirty (30)

 

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days after the date that Landlord gives such notice to Tenant (or such shorter period that Landlord designates in such notice to the extent reasonably required under the circumstances to alleviate an imminent threat to persons or property), then (i) Landlord may make such repair, and (ii) Tenant shall pay to Landlord, as additional rent, the reasonable Out-of-Pocket Costs thereof, with interest thereon at the Applicable Rate calculated from the date that Landlord incurs such expenses, within thirty (30) days after Landlord gives Tenant an invoice therefor together with reasonable supporting documentation for the charges set forth therein. If (x) a particular repair that this Section 8.2 obligates Tenant to perform cannot be performed with reasonable diligence during the aforesaid period of thirty (30) days (or during such shorter period that Landlord designates, as the case may be), and (y) Tenant commences such repair during such period of thirty (30) days (or such shorter period that Landlord designates), then Landlord shall not have the right to perform such repair on Tenant’s behalf as otherwise described in this Section 8.2(B) unless Tenant fails to pursue such repair with reasonable continuity and diligence. Nothing contained in this Section 8.2(B) limits the remedies that are available to Landlord after the occurrence of an Event of Default.

 

8.3.                            Certain Limitations.

 

(A)                               Tenant, at Tenant’s expense, shall repair in accordance with the terms set forth in Section 8.2 hereof all damage to the Premises, or to any other part of the Building or the Building Systems, in each case to the extent resulting from the negligence or willful misconduct of, or Alterations made by, Tenant or any other Person claiming by, through or under Tenant; provided, however, that Landlord shall have the right to perform any such repair to the extent that such repair affects the structure of the Building or such repair affects any Building System, in which case Tenant shall pay to Landlord an amount equal to the Out-of-Pocket Costs that Landlord reasonably incurs in performing such repair, on or prior to the thirtieth (30th) day after the date that Landlord gives to Tenant an invoice therefor together with reasonable supporting documentation for the charges set forth therein. Nothing contained in this Section 8.3(A) limits the provisions of Section 14.3 hereof.

 

(B)                               Landlord, at Landlord’s expense, shall repair promptly all damage to the Premises that results from Landlord’s negligence or willful misconduct. Nothing contained in this Section 8.3(B) limits the provisions of Section 14.3 hereof.

 

8.4.                            Overtime.

 

Subject to the provisions of this Section 8.4, Landlord shall have no obligation to employ contractors or labor at overtime or premium pay rates in connection with Landlord’s making repairs as contemplated by this Article 8. If Landlord’s repair (or the condition that Landlord is required to repair) (i) denies Tenant from having reasonable access to the Premises, (ii) threatens the health or safety of any occupant of the Premises, or (iii) materially interferes with Tenant’s ability to conduct its business in the Premises during Tenant’s ordinary business hours, then Landlord shall employ contractors or labor at overtime or premium pay rates to the extent reasonably necessary, Landlord, at Tenant’s request, shall also perform any other repair that this

 

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Article 8 requires Landlord to perform, to the extent reasonably practicable, using contractors or labor at overtime or premium pay rates, in which case Tenant shall pay to Landlord, as additional rent, an amount equal to the excess of (x) the Out-of-Pocket Costs that Landlord incurs in performing such repair (using contractors or labor at overtime or premium pay rates), over (y) the Out-of-Pocket Costs that Landlord would have incurred in performing such repair without using contractors at overtime or premium pay rates, within thirty (30) days after the date that Landlord gives to Tenant an invoice therefor together with reasonable supporting documentation for the charges set forth therein (it being understood that if more than one tenant requests that Landlord perform any such repair using contractors or labor at overtime or premium pay rates, then Landlord shall allocate such costs among such tenants equitably).

 

Article 9

ACCESS; LANDLORD’S CHANGES

 

9.1.                            Access.

 

(A)                               Subject to the terms of this Lease, Tenant, during the Term, shall have access to the Premises at all times, twenty-four (24) hours per day, every day of the year.

 

(B)                               Subject to the terms of this Section 9.1(B), Landlord and Landlord’s designees may enter the Premises at reasonable times upon one (1) Business Day prior notice to Tenant (which notice may be given verbally to the person employed by Tenant with whom Landlord’s representative ordinarily discusses matters relating to the Premises) to (i) examine the Premises, (ii) show the Premises to prospective tenants during the last twelve (12) months of the Term, (iii) show the Premises to prospective purchasers or master lessees of Landlord’s interest in the Real Property, (iv) show the Premises to Mortgagees or Lessors (or prospective Mortgagees or Lessors), (v) gain access to Reserved Areas, or (vi) make repairs, alterations, improvements, additions or restorations that (I) Landlord is required to make pursuant to the terms of this Lease (including, without limitation, Landlord’s Work), or (II) are reasonably necessary in connection with the maintenance, repair, or operation of the Real Property (Landlord’s entry upon the Premises to perform such repairs, alterations, improvements, additions or restorations being referred to herein as a “Work Access”). Landlord shall not be required to give Tenant advance notice of the entry by Landlord or Landlord’s designees into the Premises as contemplated by this Section 9.1(B) to the extent necessary by reason of the occurrence of an emergency (with the understanding, however, that Landlord shall give Tenant notice of such emergency access as promptly as reasonably practicable thereafter). Landlord, in connection with a Work Access, shall have the right to bring into the Premises, and store in the Premises in a reasonable manner for the duration of the Work Access, the materials and tools that Landlord reasonably requires to perform the applicable repair, alteration, improvement, addition or restoration. Landlord shall have no liability to Tenant for any loss sustained by Tenant by reason of Landlord’s entry upon the Premises; provided, however, that (w) nothing contained in this Section 9.1(B) diminishes Landlord’s obligation to repair the Premises (to the extent that the necessity for such repair derives from a Work Access) as provided in Section 8.1 hereof, (x) subject to Section 14.3 hereof, Landlord shall remain liable to Tenant for personal

 

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injury or property damage that derives from Landlord’s negligence or wilful misconduct in connection with any such entry upon the Premises, and (y) nothing contained in this Section 9.1(B) limits Tenant’s rights to an abatement of Rental after a fire or other casualty as provided herein.

 

9.2.                            Landlord’s Obligation to Minimize Interference.

 

(A)                               Subject to Section 9.2(B) hereof, Landlord shall use commercially reasonable efforts to minimize interference with Tenant’s use of the Premises in connection with Landlord’s accessing the Premises as contemplated by Section 9.1 hereof.

 

(B)                               Subject to the provisions of this Section 9.2(B), Landlord shall have no obligation to employ contractors or labor at overtime or premium pay rates in connection with a Work Access as contemplated by this Article 9. If a Work Access (i) denies Tenant from having reasonable access to the Premises, (ii) threatens the health or safety of any occupant of the Premises, or (iii) materially interferes with Tenant’s ability to conduct its business in the Premises during Tenant’s ordinary business hours, then Landlord shall employ contractors or labor at overtime or premium pay rates to the extent reasonably necessary, Landlord, at Tenant’s request, shall also conduct a Work Access, to the extent reasonably practicable, using contractors or labor at overtime or premium pay rates, in which case Tenant shall pay to Landlord, as additional rent, an amount equal to the excess of (x) the Out-of-Pocket Costs that Landlord incurs in conducting such Work Access (using contractors or labor at overtime or premium pay rates), over (y) the Out-of-Pocket Costs that Landlord would have incurred in conducting such Work Access without using contractors at overtime or premium pay rates, within thirty (30) days after the date that Landlord gives to Tenant an invoice therefor together with reasonable supporting documentation for the charges set forth therein (it being understood that if more than one tenant requests that Landlord conduct such Work Access using contractors or labor at overtime or premium pay rates, then Landlord shall allocate such costs among such tenants equitably).

 

9.3.                            Reserved Areas.

 

The Premises shall not include (i) the demising walls of the Premises (except for the interior face thereof), (ii) the walls of the Premises that constitute the curtain wall for the Building (except for the interior face thereof), (iii) balconies, terraces and roofs that are adjacent to the Premises, and (iv) space that is used for Building Systems or other purposes associated with the operation, repair, management or maintenance of the Real Property, including, without limitation, shafts, stacks, stairways, chutes, pipes, conduits, ducts, fan rooms, mechanical rooms, plumbing facilities, and service closets (the areas described in clauses (iii) and (iv) above being collectively referred to herein as the “Reserved Areas”). Notwithstanding the foregoing, Tenant shall have the rights to install lines and cabling in the walls and ceiling areas of the Premises subject to and in accordance with Section 3.5 of this Lease.

 

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9.4.                            Ducts, Pipes and Conduits.

 

Landlord shall have the right to install, use and maintain ducts, cabling, pipes and conduits in and through the Premises, provided that (a) such ducts, cabling, pipes and conduits are concealed within or above partitioning columns, walls or ceilings, except that if such ducts, cabling, pipes or conduits are installed in areas that are utility areas (such as storage areas, mailrooms or mud rooms), then such ducts, cabling, pipes or conduits may also be installed on partitioning walls, columns or ceilings, (b) such ducts, cabling, pipes and conduits do not reduce the Usable Area of the Premises by more than a de minimis amount, and (c) Landlord installs such ducts, cabling, pipes and conduits in a manner that minimizes, to the extent reasonably practicable, any adverse effect on an Alteration theretofore performed in the Premises. If Landlord requires access to the Premises to make the installations as contemplated by this Section 9.4, then Landlord shall perform such installations in accordance with the terms hereof that govern a Work Access.

 

9.5.                            Keys.

 

Tenant shall provide Landlord, from time to time, with the keys to the Premises (or with the appropriate means to access the Premises using Tenant’s electronic security systems).

 

9.6.                            Landlord’s Changes.

 

(A)                               Subject to Section 9.6(B) hereof, Tenant shall have the right to use, in common with the other occupants of the Building, the portions of the Building that Landlord dedicates from time to time as common area for the general use of the occupants of the Building.

 

(B)                               Landlord, from time to time, shall have the right to change the arrangement or location of the public portions of the Building, including, without limitation, lobbies, entrances, passageways, doors, corridors, stairs and toilets that in each case are not located in the Premises, provided any such change does not (a) unreasonably reduce or unreasonably interfere with Tenant’s access to the Building or the Premises, (b) reduce the floor area of the Premises (except to a de minimis extent), or (c) reduce to a material extent the level or quality of services that are available to Tenant on the Commencement Date.

 

(C)                               Landlord, from time to time, shall have the right to change, or reduce the number of, the passenger or freight elevators serving the Premises, provided that such change or reduction does not reduce to a material extent the passenger or freight elevator service standards that the passenger and freight elevators meet on the date hereof.

 

(D)                               Landlord, from time to time, shall have the right to change the name, number or designation by which the Building is commonly known.

 

(E)

 

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(I)                                   Landlord shall have the right, from time to time, to close, obstruct or darken the windows of the Premises temporarily to the extent required to comply with a Requirement or to perform repairs, maintenance, alterations, or improvements to the Building. Landlord shall have the right to close, obstruct or darken the windows of the Premises permanently to the extent required to comply with a Requirement that does not become applicable to the Building by virtue of Landlord’s performance of elective construction in the Building; provided, however, if fifty percent (50%) or more of the windows of the Premises are permanently darkened pursuant to Requirements then Tenant, as its sole remedy, shall have the right to terminate this Lease by giving Landlord notice thereof by the earlier to occur of the thirtieth (30th) day following (x) the date of such darkening and (y) Landlord giving notice to Tenant thereof, time being of the essence with respect to the giving of such notice by Tenant and in such event this Lease shall be deemed terminated on the sixtieth (60th) day following the giving of Tenant’s notice of termination as aforesaid and Tenant shall vacate the Premises by such date as if same were the Expiration Date and neither party shall have any farther obligations hereunder except for those that survive the Expiration Date.

 

(2)                                 If, at any time, the windows of the Premises are closed, obstructed or darkened temporarily, as aforesaid, then Landlord shall perform (or cause to be performed) such repairs, maintenance, alterations or improvements, or shall comply with the applicable Requirement (or cause such Requirement to be complied with), in each case with reasonable diligence, and otherwise take such action as may be reasonably necessary to minimize the period during which such windows are temporarily closed, obstructed or darkened (it being understood, however, that subject to Section 8.4 hereof, Landlord shall not be required to perform such repairs, maintenance, alterations or improvements using contractors or labor at overtime or premium pay rates).

 

Article 10

UNAVOIDABLE DELAYS AND INTERRUPTION OF SERVICE

 

10.1.                     Unavoidable Delays.

 

Subject to Article 15 hereof and Article 16 hereof, this Lease and the obligation of Tenant to pay Rental hereunder and to perform all of Tenant’s other covenants shall not be affected, impaired or excused, and Landlord shall not have any liability to Tenant, to the extent that Landlord is unable to perform Landlord’s covenants under this Lease by reason of any cause beyond Landlord’s reasonable control, including, without limitation, strikes, labor troubles, acts of terrorism or the occurrence of an act of God (any of the foregoing referred to herein as “Unavoidable Delays”); provided, however, that Landlord shall not have the right to claim under this Section 10.1 that Landlord’s failure to have funds available to make a payment of money constitutes an excuse for Landlord’s performance of an obligation of Landlord hereunder.

 

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10.2.                     Interruption of Services.

 

Landlord, from time to time, shall have the right to interrupt or curtail the level of service provided by the Building Systems to the extent reasonably necessary to accommodate the performance of repairs, additions, alterations, replacements or improvements that in Landlord’s reasonable judgment are desirable or necessary. Landlord shall give Tenant reasonable advance notice of any such interruption or curtailment (to the extent that Landlord does not need to arrange for such interruption or curtailment to manage an emergency) and schedule any such interruption or curtailment at times that minimizes, to the extent reasonably practicable, the effect of such interruption or curtailment on Tenant’s ability to conduct its business in the Premises during Tenant’s ordinary business hours. If such interruption or curtailment of the level of service provided by the Building Systems (i) denies Tenant from having reasonable access to the Premises, (ii) threatens the health or safety of any occupant of the Premises, or (iii) materially interferes with Tenant’s ability to conduct its business in the Premises during Tenant’s ordinary business hours, then Landlord shall employ contractors or labor at overtime or premium pay rates to the extent reasonably necessary, Landlord, at Tenant’s request, shall also schedule any such interruption or curtailment, to the extent reasonably practicable, using contractors or labor at overtime or premium pay rates, in which case Tenant shall pay to Landlord, as additional rent, an amount equal to the excess of (x) the Out-of-Pocket Costs that Landlord incurs in so scheduling such interruption or curtailment (using contractors or labor at overtime or premium, pay rates), over (y) the Out-of-Pocket Costs that Landlord would have incurred in scheduling such interruption or curtailment without using contractors at overtime or premium pay rates, within thirty (30) days after the date that Landlord gives to Tenant an invoice therefor together with reasonable supporting documentation for the charges set forth therein (it being understood that if more than one tenant requests that Landlord conduct such Work Access using contractors or labor at overtime or premium pay rates, then Landlord shall allocate such costs among such tenants equitably).

 

10.3.                     Rent Credit.

 

Subject to the terms of this Section 10.3, if (I) (i) Landlord fails to perform Landlord’s covenants hereunder, (ii) Landlord by its acts or omissions causes the interruption or curtailment of the level of service provided by Building Systems as contemplated by Section 10.2 hereof, or (iii) Landlord performs repairs, alterations, improvements, additions or restorations in the Building, and (II) Tenant, by reason of the event described in clause (I) above, is unable for at least seven (7) consecutive Business Days to operate Tenant’s business in the Premises (or a portion thereof) in substantially the same manner that Tenant conducted its business prior to such event, then Tenant shall be entitled to a credit to apply against the Fixed Rent and the Escalation Rent thereafter coming due hereunder in an amount equal to the product obtained by multiplying (A) the quotient obtained by dividing (a) the sum of the Fixed Rent and the Escalation Rent for the Premises, by (b) three hundred sixty-five (365) (or three hundred sixty-six (366) in a leap year), by (c) the number of square feet of Rentable Area in the Premises, by (B) the number of square feet of Rentable Area of the portion of the Premises which is unusable, as aforesaid, by (C) the number of days in the period commencing on (and including) the date immediately

 

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following the date that is seven (7) Business Days after the event that is described in clause (I) above and ending on the date that such portion of the Premises becomes usable. If (x) Tenant is entitled to a credit against Rental pursuant to this Section 10.3, and (y) the Expiration Date occurs prior to the date that such credit is exhausted, then Landlord shall pay to Tenant the unused portion of such credit on or prior to the thirtieth (30th) day after the Expiration Date (and Landlord’s obligation to make such payment shall survive the Expiration Date). This Section 10.3 shall not apply in respect of the occurrence of a fire or other casualty or in respect of a condemnation. This Section 10.3 shall not limit the provisions of Section 5.2 hereof.

 

Article 11

REQUIREMENTS

 

11.1.                     Tenant’s Obligation to Comply with Requirements.

 

(A)                               Subject to the terms of this Article 11, Tenant, at Tenant’s expense, shall comply with all Requirements applicable to the Premises, including, without limitation, (i) Requirement that are applicable to the performance of Alterations, (ii) Requirements that become applicable by reason of Alterations having been performed, and (iii) Requirements that are applicable by reason of the specific nature or type of business operated by Tenant (or any other Person claiming by, through or under Tenant) in the Premises. Tenant shall not be required to make any Alteration or other changes to the structural components of the Building or to the Building Systems in either case to comply with any Requirement unless (a) such Alteration other change is required by reason of Alterations having been performed by Tenant (or another Person claiming by, through or under Tenant), or (b) such Alteration or other change is required by reason of the specific nature of the use of the Premises by Tenant (or such other Person) (as opposed to the use of the Premises for the general purposes otherwise permitted under Section 3.1 hereof).

 

(B)                               The term “Requirements” shall mean, collectively, (i) all present and future laws, rules, orders, ordinances, regulations, statutes, requirements, codes and executive orders of all Governmental Authorities, and of any applicable fire rating bureau, or other body exercising similar functions, and (ii) all requirements that the issuer of Landlord’s Property Policy imposes (including, without limitation, any such requirements that such issuer requires as the basis for the premium that such issuer charges Landlord for Landlord’s Property Policy), provided that such requirements that the issuer of Landlord’s Property Policy imposes are reasonably consistent with the requirements imposed by reputable insurers of comparable properties in The City of New York.

 

(C)                               The term “Governmental Authority” shall mean the United States of America, the State of New York, The City of New York, any political subdivision thereof and any agency, department, commission, board, bureau or instrumentality of any of the foregoing, or any quasi-governmental authority, now existing or hereafter created, having jurisdiction over the Real Property or any portion thereof.

 

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(D)                               Subject to the terms of this Section 11.1(D), if (a) Landlord gives Tenant a notice that Tenant has failed to comply with a Requirement as required by this Section 11.1, and (b) Tenant fails to proceed with reasonable diligence to comply with such Requirement within twenty (20) days after the date that Landlord gives such notice to Tenant (or such shorter period that Landlord designates in such notice to the extent reasonably required under the circumstances to alleviate an imminent threat to persons or property), then (i) Landlord may perform the work and otherwise take steps that are required to comply with such Requirement, and (ii) Tenant shall pay to Landlord, as additional rent, the reasonable Out-of-Pocket Costs thereof, with interest thereon at the Applicable Rate calculated from the date that Landlord incurs such expenses, within thirty (30) days after Landlord gives Tenant an invoice therefor together with reasonable supporting documentation for the charges set forth therein. If (x) Tenant’s compliance with a particular Requirement as required by this Section 11.1 cannot be accomplished with reasonable diligence daring the aforesaid period of twenty (20) days (or during such shorter period that Landlord designates, us the case may be), and (y) Tenant commences such compliance during such period of twenty (20) days (or such shorter period that Landlord designates), then Landlord shall not have the right to perform the work and otherwise take steps that are required to comply with such Requirement on Tenant’s behalf as otherwise described in this Section 11.1(D) unless Tenant fails to pursue such compliance with reasonable continuity and diligence. Nothing contained in this Section 11.l(D) limits the remedies that are available to Landlord after the occurrence of an Event of Default.

 

11.2.                     Landlord’s Obligation to Comply with Requirements.

 

Landlord shall comply with all Requirements applicable to the Premises and the Building (including, without limitation, Requirements in respect of which the violation thereof impedes Tenant’s performance of Alterations in the Premises) other than the Requirements with respect to which Tenant is required to comply pursuant to Section 11.1 hereof, subject, however, to Landlord’s right to contest in good faith the applicability or legality thereof (provided that Landlord’s contesting such Requirements does not interfere in any material respect with Tenant’s use and occupancy of the Premises).

 

11.3                        Certificate of Occupancy.

 

(A)                               Subject to the terms of this Section 11.3(A), Landlord covenants that from and after the Commencement Date a temporary or permanent certificate of occupancy covering the Premises (or such other certificate as may be required by Requirements from time to time to lawfully occupy the Premises) shall be in full force and effect permitting the Premises to be used for the general purposes that are permitted under Article 3 hereof. Nothing contained herein constitutes Landlord’s covenant, representation or warranty that the Premises or any part thereof lawfully may be used or occupied for any particular purpose or in any particular manner; provided, however, that Landlord shall not have the right to amend the certificate of occupancy for the Premises (or such other certificate as may he required by Requirements from time to time to lawfully occupy the Premises) in a manner that limits the uses that Tenant may perform in the Premises in accordance with Article 3 hereof. Landlord shall have no liability to Tenant under

 

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this Section 1l.3(A) to the extent such certificate of occupancy (or such other certificate) is not in full force and effect by reason of Tenant’s default hereunder or by reason of Alterations.

 

(B)                               Tenant shall use the Premises only in a manner that conforms with the certificate of occupancy that is in effect for the Premises. Tenant shall not have the right to amend the certificate of occupancy for the Premises or the Building without Landlord’s prior approval.

 

Article 12

QUIET ENJOYMENT

 

12.1.                     Quiet Enjoyment.

 

Landlord covenants that Tenant may peaceably and quietly enjoy the Premises for the Term, subject, nevertheless, to the terms and conditions of this Lease.

 

Article 13

SUBORDINATION

 

13.1.                     Subordination.

 

(A)                               This Lease shall be subject and subordinate to the priority of each Superior Lease that hereafter exists (and does not exist as of the date hereof) in respect of which the Lessor is not an Affiliate of Landlord. This Lease shall be subject and subordinate to the lien of each Mortgage that hereafter exists (and does not exist as of the date hereof) in respect of which the Mortgagee is not an Affiliate of Landlord. This Lease shall be subject and subordinate to a Condominium Declaration (with the understanding that Landlord shall not permit any such Condominium Declaration to impair Tenant’s rights under this Lease, or to expand Tenant’s obligations under this Lease, except, in either case, to a de minimis extent). Landlord shall request that each Mortgagee execute and deliver to Tenant a Nondisturbance Agreement (and shall otherwise use Landlord’s reasonable efforts to obtain a Nondisturbance Agreement from such Mortgagee in a form reasonably satisfactory to Tenant, with the understanding, however, that (i) Landlord has no obligation to institute any legal proceeding against such Mortgagee to obtain such Nondisturbance Agreement, and (ii) Landlord shall not be required to incur any unreasonable costs or expenses in seeking to obtain such Nondisturbance Agreement). Landlord shall obtain a Nondisturbance Agreement from any future Mortgagee and any future Lessor and the subordination of this Lease to any future Mortgage shall be conditioned on Landlord obtaining such a Nondisturbance Agreement. Tenant, at Tenant’s own cost and expense, shall execute and deliver promptly the Nondisturbance Agreement or any other agreement that Landlord may reasonably request in confirmation of such subordination.

 

(B)                               The term “Condominium Board” shall mean the board that governs the business and affairs of the condominium that is created by the Condominium Declaration.

 

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(C)                               The term “Condominium Declaration” shall mean a condominium declaration that submits the ownership of the fee interest in the Premises to a condominium form of ownership in accordance with Article 9-B of the New York Real Property Law (as such declaration may be amended from time to time).

 

(D)                               The term “Lessor” shall mean a lessor under a Superior Lease.

 

(E)                                The term “Mortgage” shall mean any trust indenture or mortgage which now or hereafter encumbers Landlord’s estate in the Premises.

 

(F)                                 The term “Mortgagee” shall mean any trustee, mortgagee or holder of a Mortgage.

 

(G)                               The term “Nondisturbance Agreeement” shall mean, subject to Section 13.2 hereof, an agreement, in recordable form, between a Mortgagee and Tenant, to the effect that (i) if there is a foreclosure of the Mortgage, then the successor to Landlord by virtue of the foreclosure will not eviet Tenant, disturb Tenant’s possession under this Lease, or terminate or disturb Tenant’s leasehold estate or rights hereunder, and will recognize Tenant as the direct tenant of such successor to Landlord on the same terms and conditions as are contained in this Lease.

 

(H)                              The term “Superior Lease” shall mean any lease pursuant to which Landlord now or hereafter obtains or retains its interest in the Premises (to the extent that Landlord’s interest in the Premises is a leasehold estate).

 

13.2.                     Terms of Nondisturbance Agreements.

 

Subject to the terms of this Section 13.2, any Nondisturbance Agreement may provide that the Person that succeeds to Landlord by reason of the foreclosure of a Mortgage the termination of a Superior Lease, as the case may be (any such Person being referred to herein as the “Successor”) shall not be:

 

(A)                               liable for any act or omission of any prior landlord (including, without limitation, the then defaulting landlord), except to the extent that (i) such act or omission continues after the date that the Successor succeeds to Landlord’s interest in the Real Property, and (ii) such act or omission of such prior landlord is of a nature that the Successor can cure by performing a service or making a repair,

 

(B)                               subject to any defenses or offsets that Tenant has against any prior landlord (including, without limitation, the then defaulting landlord), except that the Successor shall be subject to any offsets that are expressly permitted under this Lease,

 

(C)                               bound by any payment of Rental that Tenant has made to any prior landlord (including, without limitation, the then defaulting landlord) more than thirty (30) days in advance of the date that such payment is due (other than the Rental that Tenant pays in

 

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advance pursuant to Section 1.5(E) hereof or Article 2 hereof) (except to the extent that the Successor actually receives payment thereof),

 

(D)                               bound by any obligation to make any payment to or on behalf of Tenant to the extent that such obligation accrues prior to the date that the Successor succeeds to Landlord’s interest in the Real Property,

 

(E)                                bound by any obligation to perform any work or to make improvements to the Premises, except for:

 

(1)                                 Landlord’s Work,

 

(2)                                 repairs and maintenance that Landlord is required to perform pursuant to the provisions of this Lease and that first become necessary, or the need for which continues, after the date that the Successor succeeds to Landlord’s interest in the Real Property,

 

(3)                                 repairs to the Premises that become necessary by reason of a fire or other casualty that occurs from and after the date that the Successor succeeds to Landlord’s interest in the Real Property and that Landlord is required to perform pursuant to Article 15 hereof,

 

(4)                                 repairs to the Premises that become necessary by reason of a fire or other casualty that occurs prior to the date that the Successor succeeds to Landlord’s interest in the Real Property and that Landlord is required to perform pursuant to Article 15 hereof, to the extent that the net proceeds of Landlord’s Property Policy that are actually made available to the Successor are sufficient to cover the cost of such repairs (with the understanding, however, that if (i) a fire or other casualty occurs prior to the date that the Successor succeeds to Landlord’s interest in the Real Property, (ii) Landlord is required to repair the resulting damage to the Building pursuant to Article 15 hereof, and (iii) such net proceeds are not sufficient to cover the cost of such repairs, then Tenant shall have the right to terminate this Lease by giving notice thereof to the Successor within fifteen (15) days after the date that the Successor gives Tenant notice that the Successor does not intend to perform such repairs),

 

(5)                                 repairs to the Premises as a result of a partial condemnation that occurs from and after the date that the Successor succeeds to Landlord’s interest in the Real Property and that Landlord is required to perform pursuant to Article 16 hereof, and

 

(6)                                 repairs to the Premises as a result of a partial condemnation that occurs prior to the date that the Successor succeeds to Landlord’s interest in the Real Property and that Landlord is required to perform pursuant to Article 16 hereof, to the extent that the net proceeds of any condemnation award that is made available to the Successor is sufficient to cover the cost of such repairs (with the understanding, however, that if (i) a partial condemnation occurs prior to the date that the Successor succeeds to Landlord’s interest in the Real Property, (ii) Landlord is required to make repairs to the Building pursuant to Article 16 hereof by reason of such partial condemnation, and (iii) such net proceeds are not sufficient to cover the cost of such repairs, then

 

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Tenant shall have the right to terminate this Lease by giving notice thereof to the Successor within fifteen (15) days after the date that the Successor gives Tenant notice that the Successor does not intend to perform such repairs),

 

(F)                                 bound by any amendment or modification of this Lease made without the consent of the Mortgagee, or

 

(G)                               bound to return the Letter of Credit until the Letter of Credit has come into the Successor’s actual possession and Tenant is entitled to the Letter of Credit pursuant to the terms of this Lease

 

(the aforesaid items in clause (A) through clause (G) above for which a Successor is not liable being referred to herein as the “Successor Limitation Items”).

 

Any Nondisturbance Agreement may also contain other terms and conditions that are reasonably required by the Mortgagee, as the case may be, that do not (i) increase Tenant’s monetary obligations under this Lease, (ii) adversely affect or diminish Tenant’s rights under this Lease (except in either case to a de minimis extent), or (iii) increase Tenant’s other obligations under this Lease (except to a de minimis extent). A Successor that is an Affiliate of the Person that constitutes Landlord shall not have the right to include in a Nondisturbance Agreement the Successor Limitation Items, or such other terms and conditions.

 

13.3.                     Attornment.

 

(A)                               If, at any time prior to the Expiration Date, a Successor succeeds to Landlord’s interest in the Real Property, then Tenant, at the Successor’s election, shall attorn, from time to time, to the Successor, in either case upon the then executory terms of this Lease, for the remainder of the Term. If the Successor is not an Affiliate of the Person that constituted Landlord immediately prior to such Successor’s obtaining an interest in the Premises, then the Successor shall not have liability for the Successor Limitation Items from and after the date that Tenant so attorns to the Successor.

 

(B)                               The provisions of this Section 13.3 shall apply notwithstanding that, as a matter of law, this Lease terminates upon the termination of any Superior Lease or the foreclosure of a Mortgage. No further instrument shall be required to give effect to Tenant’s attorning to a Successor as contemplated by this Section 13.3. Tenant, however, upon demand of any Successor, shall execute, from time to time, instruments, in a recordable form and in a form reasonably satisfactory to the Successor, confirming the foregoing provisions of this Section 13.3. A Mortgagee shall have the right to include such provisions in a Nondisturbance Agreement. Nothing contained in this Section 13.3 limits the obligations of the Successor under a Nondisturbance Agreement.

 

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13.4.                     Amendments to this Lease.

 

Tenant shall execute and deliver, from time to time, amendments to this Lease, promptly after Landlord’s request, to the extent that (x) such amendments are reasonably required by a Mortgagee or a Lessor that in either case is not an Affiliate of Landlord (or are reasonably required by a proposed Mortgagee or proposed Lessor that in either case is not an Affiliate of Landlord and that consummates the applicable Mortgage or the applicable Superior Lease contemporaneously with Tenant’s execution and delivery of such amendment hereof), and (y) Landlord gives to Tenant reasonable evidence to the effect that such Mortgagee or Lessor requires such amendments; provided, however, that Tenant shall not be required to agree to any such amendments to this Lease that (i) increase Tenant’s monetary obligations under this Lease, (ii) adversely affect or diminish Tenant’s rights under this Lease (except in either case to a de minimis extent), or (iii) increase Tenant’s other obligations under this Lease (except to a de minimis extent).

 

13.5.                     Tenant’s Estoppel Certificate.

 

Tenant, within ten (10) Business Days after Landlord’s request from time to time (but not more frequently than three (3) times in any particular period of twelve (12) months), shall deliver to Landlord a written statement executed by Tenant, in form reasonably satisfactory to Landlord, (1) stating that this Lease is then in full force and effect and has not been modified (or if this Lease is not in full force and effect, stating the reasons therefor, or if this Lease is modified, setting forth all modifications), (2) setting forth the date to which the Fixed Rent, the Escalation Rent and other items of Rental have been paid, (3) stating whether, to the actual knowledge of Tenant (without having made any investigation), Landlord is in default under this Lease, and, if Landlord is in default, setting forth the specific nature of all such defaults, and (4) stating any other matters reasonably requested by Landlord and related to this Lease. Tenant acknowledges that any such statement that Tenant delivers to Landlord pursuant to this Section 13.5 may be relied upon by (x) any purchaser or owner of the Real Property or any interest therein (including, without limitation, any Lessor), or (y) any Mortgagee.

 

13.6.                     Rights to Cure Landlord’s Default.

 

If (x) a Superior Lease or Mortgage exists, (y) the Lessor or Mortgagee is not an Affiliate of Landlord, and (z) Landlord gives Tenant notice thereof, then Tenant shall not seek to terminate this Lease by reason of Landlord’s default hereunder until Tenant has given written notice of such default to such Lessor or such Mortgagee in either case at the address that has been furnished to Tenant. If any such Lessor or Mortgagee notifies Tenant, within ten (10) Business Days after the date that such Lessor or Mortgagee receives such notice from Tenant, that such Lessor or Mortgagee intends to remedy such act or omission of Landlord, then Tenant shall not have the right to so terminate this Lease unless such Lessor or Mortgagee fails to immediately thereafter commence to remedy such act or omission of Landlord and thereafter diligently continues to remedy such act or omission of Landlord and prosecute same to completion within a reasonable period of time after the date that such Lessor or Mortgagee gives

 

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such notice to Tenant (it being understood that such Lessor or Mortgagee shall not have any liability to Tenant for the failure of such Lessor or Mortgagee to so remedy such act or omission of Landlord during such period).

 

13.7.                     Zoning Lot Merger Agreement.

 

Tenant hereby waives irrevocably any rights that Tenant may have in connection with any zoning lot merger or transfer of development rights with respect to the Real Property, including, without limitation, any rights that Tenant may have to be a party to, to contest, or to execute any Declaration of Restrictions (as such term is used in Section 12-10 of the Zoning Resolution of The City of New York effective December 15, 1961, as amended) with respect to the Real Property, which would cause the Premises to be merged with or unmerged from any other zoning lot pursuant to such Zoning Resolution or to any document of a similar nature and purpose. Tenant agrees that this Lease shall be subject and subordinate to any Declaration of Restrictions or any other document of similar nature and purpose now or hereafter affecting the Real Property (it being understood, however, that Landlord shall not permit such Declaration of Restrictions or any such other document to impair Tenant’s rights hereunder, or expand Tenant’s obligations hereunder, except, in either case, to a de minimis extent). In confirmation of such subordination and waiver, Tenant, from time to time, shall execute and deliver promptly any certificate or instrument that Landlord reasonably requests.

 

13.8.                     Tenant’s Financial Statements.

 

Subject to the terms of this Section 13.8, Tenant shall provide to Landlord, at the request of Landlord not more frequently than twice in any twelve (12) month period (a) the balance sheet of Tenant and each Predecessor Tenant (if any) in either case dated as of the last day of each fiscal year (to the extent that the last day of each such fiscal year occurs during the Term), and (b) the income statement of Tenant and each Predecessor Tenant (if any) for each such fiscal year that occurs, in whole or in part, during the Term (such financial statements being collectively referred to herein as “Tenant’s Statements”). Tenant shall cause Tenant Statements to be prepared in accordance with GAAP. For a period of one (1) year after Tenant gives to Landlord a particular Tenant’s Statement, Landlord shall not disclose Tenant’s Statements to any third party, except that Landlord may disclose Tenant’s Statements (i) to Persons who are directors, members, partners, trustees, employees, agents or advisors to Landlord or Landlord’s Affiliates and who have been directed to maintain the confidentiality of Tenant’s Statements in accordance with the terms hereof, (ii) to Persons that provide (or that propose to provide), directly or indirectly, debt or equity capital to Landlord or Landlord’s Affiliates and that have been directed to maintain the confidentiality of Tenant’s Statements in accordance with the terms hereof, (iii) to Persons that purchase (or that propose to purchase) the Real Property or any portion thereof and that have been directed to maintain the confidentiality of Tenant’s Statements in accordance with the terms hereof, (iv) to Lessors (or prospective Lessors) that have been directed to maintain the confidentiality of Tenant’s Statements in accordance with the terms hereof, (v) to Landlord’s attorneys and accountants, (vi) to the extent required by law, rule, regulation or requirement of a stock exchange, rating agency or regulator or in connection with

 

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any legal or regulatory proceeding, and (vii) to the extent reasonably required by Landlord in enforcing Landlord’s rights under Articles 24 and 25 hereofsy. Tenant shall not have any obligation to provide Tenant’s Statements to Landlord as provided in this Section 13.8 during the period that (x) the stock of Tenant is publicly traded on a recognized stock exchange, and (y) Tenant’s Statements are available to the general public under filings that Tenant makes with the Securities and Exchange Commission.

 

Article 14

INSURANCE

 

14.1.                     Tenant’s Insurance.

 

(A)                               Tenant, at Tenant’s expense, shall obtain and keep in full force and effect (i) an insurance policy for Tenant’s Property and the Specialty Alterations, in either case to the extent insurable under “Special Form” property insurance policies, covering the perils listed in the special causes of loss form CP 10 30 (June, 1995 edition or newer) that is issued by the Insurance Services Office, Inc. (“ISO”), including, without limitation, coverage for acts of terrorism (if such coverage for acts of terrorism is available on commerecially reasonable terms as reasonably determined by Tenant in its commercially reasonable discretion), in an amount equal to one hundred percent (100%) of the replacement value thereof (subject, however, at Tenant’s option, to a reasonable deductible) (the insurance policy described in this clause (i) being referred to herein as “Tenant’s Property Policy”), (ii) a policy of worker’s compensation insurance, to the extent required by law (such policy being referred to herein as “Tenant’s Worker’s Compensation Policy”), (iii) a commercial automobile liability policy covering any vehicle that Tenant brings upon the Real Property (regardless of whether Tenant owns or hires such vehicle) with a combined single limit of not less than One Million Dollars ($ 1,000,000) (such policy being referred to herein as “Tenant’s Auto Policy”, and (iv) a policy of commercial general liability insurance on an occurrence basis, providing coverage that is at least as broad as ISO Form CG 00 01 12 04 or equivalent (the insurance policy described in this clause (iii) being collectively referred to herein as “Tenant’s Liability Policy”). Tenant’s Property Policy and Tenant’s Liability Policy shall name Tenant as the insured. Tenant’s Liability Policy (including, without limitation, any policy that Tenant obtains as described in Section 14.1(D) hereof) and Tenant’s Auto Policy shall be endorsed to name the Landlord Indemnitees as additional insureds thereunder.

 

(B)                               If Tenant receives any notice of cancellation or any other notice from the insurance carrier which may adversely affect the coverage of the insureds under Tenant’s Property Policy or Tenant’s Liability Policy, then Tenant shall promptly deliver to Landlord a copy of such notice. Tenant’s Liability Policy shall have standard exclusions limiting liability assumed under an insured’s contract (including tort liability of another assumed by the insured in a business contract). The minimum limits of liability under Tenant’s Liability Policy shall be Five Million Dollars ($5,000,000) per occurrence for bodily injury (or death), personal injury and/or damage to property, which minimum amount Landlord may increase from time to time (but not more than once in any five (5) year period) to the amount of insurance that in Landlord’s

 

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reasonable judgment is then being customarily required by prudent landlords of first-class buildings in the vicinity of the Building from tenants leasing space similar in size, nature and location to the Premises.

 

(C)                               Tenant shall cause Tenant’s Liability Policy, Tenant’s Worker’s Compensation Policy, Tenant’s Auto Policy and Tenant’s Property Policy to be issued by reputable insurers that are (x) permitted to do business in the State of New York, and (y) rated in Best’s Insurance Guide, or any successor thereto, as having a general policyholder rating of A and a financial rating of at least XII (it being understood that if such ratings are no longer issued, then such insurer’s financial integrity shall conform to the standards that constitute such ratings from Best’s Insurance Guide as of the date hereof).

 

(D)                               Tenant has the right to satisfy Tenant’s obligation to carry Tenant’s Liability Policy with an umbrella insurance policy. Tenant has the right to satisfy Tenant’s obligation to carry Tenant’s Property Policy with a blanket insurance policy if such blanket insurance policy provides, on a per occurrence basis, that a loss that relates to any other location does not impair or reduce the level of protection available for the Premises below the amount required by this Lease.

 

(E)                                Tenant’s liability hereunder is not limited to the amount of Tenant’s insurance recovery, to the amount of insurance that Tenant maintains in force, to the amount of insurance that Tenant is required to maintain in accordance with the terms of this Section 14.1, or to the amount of any insurance that Tenant is required to carry, or that Tenant is permitted to carry, under applicable Requirements. Landlord’s review of, or approval of, any insurance that Tenant carries shall not limit Tenant’s obligation to carry the insurance that this Section 14.1 requires Tenant to carry.

 

14.2.                     Landlord’s Insurance.

 

(A)                               Subject to the terms of this Section 14.2, Landlord shall obtain and keep in full force and effect covering the Building and the Alterations other than the Specialty Alterations, to the extent insurable on commercially reasonable terms under then available standard forms of “Special Form” insurance policies, covering the perils insured under the ISO special causes of loss form CP 10 30 (June, 1995 edition or newer), including, without limitation, coverage for acts of terrorism (if such coverage for acts of terrorism is available on commercially reasonable terms), in an amount equal to one hundred percent (100%) of the replacement value thereof or, at Landlord’s option, in such lesser amount as will avoid co-insurance (such insurance being referred to herein as “Landlord’s Property Policy”). Tenant acknowledges that (i) Landlord’s Property Policy may encompass rent insurance, and (ii) Landlord may also obtain a commercial general liability insurance policy.

 

(B)                               Landlord shall not be liable to Tenant for any failure to insure any Alterations unless Tenant notifies Landlord of the completion of such Alterations and the cost thereof, and maintains adequate records with respect to such Alterations to facilitate the

 

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adjustment of any insurance claims with respect thereto. Landlord shall have the right to provide that the coverage of Landlord’s Property Policy is subject to a reasonable deductible. Tenant shall cooperate with Landlord and Landlord’s insurance companies in the adjustment of any claims for any damage to the Building or the Alterations. Landlord shall not be required to carry insurance on Tenant’s Property or the Specialty Alterations. Landlord shall not be required to carry insurance against any loss suffered by Tenant due to the interruption of Tenant’s business.

 

14.3.                     Mutual Waiver of Subrogation.

 

Subject to the provisions of this Section 14.3, Landlord and Tenant shall each obtain an appropriate clause in, or endorsement on, Landlord’s Property Policy or Tenant’s Property Policy (as the case may be) pursuant to which the insurance companies waive subrogation or consent to a waiver of right of recovery. Notwithstanding anything to the contrary contained herein, Landlord and Tenant also hereby release the Landlord Indemnitees and the Tenant Indemnitees, as the case may be, from and agree that, they shall not make any claim against or seek to recover from the Landlord Indemnities or the Tenant Indemnitees (as the case may be) for any loss or damage to its property or the property of others resulting from fire or other hazards covered by (or required to be covered by) Landlord’s Property Policy or Tenant’s Property Policy (as the case may be) (with the understanding, therefore, that the party that sustains such loss or damage shall not have a claim against the other party to reimburse the party that sustains such loss or damage for the amount of such party’s deductible or self-insured retention). Any obligation of Landlord to indemnify Tenant with respect to loss or damage to Tenant’s Property and any obligation of Tenant to indemnity Landlord with respect to loss or damage to the Building shall be subject to this Section 14.3.

 

14.4.                     Evidence of Insurance.

 

On or prior to the Commencement Date, each party shall deliver to the other party appropriate certificates of insurance required to be carried by the parties pursuant to this Article 14, including copies or endorsements or clauses in the applicable insurance policies that evidence waivers of subrogation and naming of additional insureds in either case as required by Section 14.3 hereof (it being understood that Acord 25 shall suffice for Tenant’s Liability Policy, Tenant’s Auto Policy and Tenant’s Worker’s Compensation Policy and Acord 27 or 28 shall suffice for Tenant’s Property Policy and Landlord’s Property Policy). Each party shall deliver to the other party evidence of each renewal or replacement of a policy prior to the expiration of such policy.

 

14.5.                     No Concurrent Insurance.

 

Tenant shall not obtain any property insurance (under Tenant’s Property Policy or otherwise) that covers the property that is covered by Landlord’s Property Policy.

 

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14.6.                     Tenant’s Obligation to Comply with Landlord’s Fire and Casualty Insurance.

 

If (i) Tenant (or any other Person claiming by, through or under Tenant) uses the Premises for any purpose other than general office use, and (ii) the use of the Premises by Tenant (or such other Person) causes the premium for Landlord’s Property Policy to exceed the premium that would have otherwise applied therefor if Tenant (or such Person) used the Premises for general office use, then Tenant shall pay to Landlord, as additional rent, an amount equal to such excess, on or prior to the thirtieth (30th) day after the date that Landlord gives to Tenant an invoice therefor, together with reasonable supporting documentation for the charges set forth therein. Nothing contained in this Section 14.6 expands Tenant’s rights under Article 3 hereof.

 

Article 15

CASUALTY

 

15.1.                     Notice.

 

Tenant shall notify Landlord promptly of any fire or other casualty that occurs in the Premises.

 

15.2.                     Landlord’s Restoration Obligations.

 

Subject to the terms of this Section 15.2, Landlord, with reasonable diligence, shall repair the damage to (i) the Premises (including, without limitation, the Alterations), (ii) the Building Systems that service the Premises, and (iii) the common elements of the Building that Tenant uses to gain access to the Premises, in each ease to the extent caused by fire or other casualty. The restoration work to be performed by Landlord shall include, without limitation, any portion of Landlord’s Work that Landlord did not Substantially Complete on the date that the fire or other casualty occurred. Landlord shall commence the performance of such repairs as promptly as reasonably practicable after the occurrence of such fire or other casualty. Landlord shall use commercially reasonable efforts to perform such repairs diligently, in a good and workmanlike manner, and in a manner that minimizes to the extent reasonably practicable interference with Tenant’s use and occupancy of any portion of the Premises that remains tenantable. Landlord shall not be required to restore Tenant’s Property or the Specialty Alterations. Landlord shall not be required to commence such restoration until Tenant gives Landlord the notice described in Section 15.1 hereof (unless Landlord otherwise has received actual notice of the fire or other casualty). Landlord shall not be obligated to restore any Alterations unless (i) Tenant has Substantially Completed the performance thereof, (ii) Tenant has given Landlord notice to the effect that Tenant has Substantially Completed such Alterations, (iii) Tenant has given Landlord notice of the cost incurred by Tenant in performing such Alterations, and (iv) Tenant has maintained records with respect to such Alterations in a form that allows Landlord to make a full insurance recovery therefor under Landlord’s Property Policy. Landlord shall have the right to adapt the restoration of the Premises as contemplated by this Section 15.2 to comply with applicable Requirement that are then in effect. Landlord shall not be obligated to restore the

 

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Premises as provided in this Section 15.2 to the extent that this Lease terminates by reason of such fire or other casualty as provided in this Article 15.

 

15.3.                     Rent Abatement.

 

(A)                               Subject to Section 15.3(B) hereof, the Fixed Rent and the Escalation Rent that is otherwise due and payable hereunder shall be reduced in the proportion that the number of square feet of Rentable Area of the part of the Premises that is not reasonably usable for the uses permitted under Section 3.1 hereof by Tenant by reason of such fire or other casualty bears to the total Rentable Area of the Premises immediately prior to such fire or other casualty, for the period commencing on the date of such fire or other casualty and ending on the date that Landlord Substantially Completes the restoration described in Section 15.2 hereof or the applicable portion of the Premises becomes accessible, as the case may be.

 

(B)                               If a fire or other casualty occurs in the Premises after the Commencement Date and prior to the Rent Commencement Date, then the aggregate abatement of Fixed Rent and the Escalation Rent to which Tenant is entitled as contemplated by Section 15.3(A) hereof (from and after the Rent Commencement Date) shall be an amount equal to the aggregate abatement of Fixed Rent and the Escalation Rent to which Tenant would have been entitled under Section 15.3(A) hereof if the Rent Commencement Date had occurred immediately prior to such fire or other casualty. Notwithstanding anything to the contrary in this Lease, Tenant shall not be required to reimburse Landlord for any insurance deductible following a casualty if this Lease is terminated as a result of such casualty.

 

15.4.                     Landlord’s Termination Right.

 

If the Building is so damaged by fire or other casualty that, in Landlord’s opinion, substantial alteration, demolition, or reconstruction of the Building is required (regardless of whether the Premises have been damaged or rendered untenantable), then Landlord may terminate this Lease by giving Tenant notice thereof on or prior to the ninetieth (90th) day after such fire or other casually; provided, however, that it the Premises ore not substantially damaged or rendered substantially untenantable by such fire or other casualty, then Landlord may not so terminate this Lease unless Landlord elects to terminate leases (including this Lease) affecting at least seventy-five percent (75%) of the leasable area of the Building (excluding any portion of the Building leased to or occupied by Landlord or Landlord’s Affiliates). Landlord also shall have the right to terminate this Lease if the owners of the condominium established by the Condominium Declaration do not make the election contemplated by Section 339-ee of the New York Real Property Law to restore the Building after a fire or other casualty (to the extent that such election is required to be made by such unit owners). If Landlord elects to terminate this Lease as aforesaid, then (I) the Term shall expire on a date set by Landlord that (A) is not sooner than (i) the tenth (10th) day after the date that Landlord gives such notice (if all or substantially all of the Premises is rendered untenantable by such fire or other casualty), and (ii) the ninetieth (90th) day after the date that Landlord gives such notice (if less than all or substantially all of the Premises is rendered untenantable by such fire or other casualty), and (B) is not later than the

 

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first (1st) anniversary of the date on which such fire or other casualty occurs, and (II) Tenant, on such date set by Landlord, shall vacate the Premises and surrender the Premises to Landlord in accordance with the terms of this Lease that govern Tenant’s obligations upon the expiration or earlier termination of the Term. Upon the termination of this Lease under this Section 15.4, the Rental shall be apportioned and any prepaid portion of the Rental for any period after the date that the abatement of Rental as described in Section 15.3 hereof becomes effective shall be refunded promptly by Landlord to Tenant (and Landlord’s obligation to make such refund shall survive the Expiration Date).

 

15.5.                     Tenant’s Termination Right.

 

(A)                               Landlord, within forty-five (45) days after the earlier to occur of (x) the date that Tenant gives Landlord notice of the occurrence of a fire or other casualty as contemplated by Section 15.2 hereof, and (y) the date that Landlord otherwise has actual notice of such fire or other casualty, shall give to Tenant a statement prepared by a reputable and independent contractor setting forth such contractor’s estimate in good faith as to the time required for Landlord to Substantially Complete the restoration described in Section 15.2 hereof (such statement that Landlord gives to Tenant being referred to herein as the “Casualty Statement”); provided, however, that Landlord shall not be required to give Tenant a Casualty Statement if Landlord has theretofore exercised Landlord’s right to terminate this Lease under Section 15.4 hereof. If the estimated time period as set forth in the Casualty Statement exceeds twelve (12) months from the date of the applicable fire or other casualty, then Tenant may elect to terminate this Lease by giving notice to Landlord not later than the thirtieth (30th) day after the date that Landlord gives the Casualty Statement to Tenant. If Tenant makes such election to so terminate this Lease, then the Term shall expire on the thirtieth (30th) day after Tenant gives such notice to Landlord.

 

(B)                               This Lease shall terminate if (i) a fire or other casualty occurs, and, by reason thereof, Landlord has an obligation to perform a restoration as contemplated by Section 15.2 hereof, (ii) Tenant does not exercise Tenant’s right to terminate this Lease under Section 15.5(A) hereof in connection with such fire or other casualty (or Tenant does not have the right to terminate this Lease under Section 15.5(A) hereof in connection with such fire or other casualty), (iii) Landlord fails to Substantially Complete the performance of the restoration work that Landlord is required to perform on or prior to the date that is thirty (30) days after the last day of the estimated time period set forth in the Casualty Statement (the date described in this clause (iii) being referred to herein as the “Second Bite Date”), (iv) Tenant gives Landlord notice no earlier than the Second Bite Date to the effect that this Lease will terminate under this Section 15.5(B) if Landlord fails to Substantially Complete the restoration within thirty (30) days after the Second Bite Date, and (v) Landlord fails to Substantially Complete the restoration within thirty (30) days after the Second Bite Date.

 

(C)                               If the Term terminates as provided in this Section 15.5, then (I) Tenant shall vacate the Premises and surrender the Premises to Landlord on the date of such termination “as is” and otherwise in accordance with the terms of this Lease that govern Tenant’s obligations

 

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upon the expiration or earlier termination of the Term, (II) any Rental due hereunder shall be apportioned as of the date of such termination, and (III) any portion of the Rental that is then prepaid by Tenant and relates to the period after the date that the abatement of Rental as described in Section 15.3 hereof becomes effective shall be promptly refunded by Landlord to Tenant (with the understanding that Landlord’s obligation to make any such refund shall survive such termination of this Lease).

 

15.6.                     Termination Rights at End of Term.

 

Subject to the terms of this Section 15.6, if the Premises are substantially damaged by a fire or other casualty that occurs during the period of twelve (12) months immediately preceding the Fixed Expiration Date, or the last day of the Renewal Term, as the case may be, then either Landlord or Tenant may elect to terminate this Lease by notice given to the other party within thirty (30) days after such fire or other casualty occurs. If either party makes such election, then the Term shall expire on the thirtieth (30th) day after the notice of such election is given, and, accordingly, Tenant, on or prior to such thirtieth (30th) day, shall vacate the Premises and surrender the Premises to Landlord in accordance with the provisions of this Lease that govern Tenant’s obligation to deliver vacant and exclusive possession of the Premises to Landlord upon the expiration of the Term. Upon the termination of this Lease under this Section 15.6, the Rental shall be apportioned and any prepaid portion of the Rental for any period after the Expiration Date shall be refunded promptly by Landlord to Tenant (and Landlord’s obligation to make such refund shall survive the Expiration Date). For purposes of this Section 15.6, the term “substantially damaged” shall mean that: (a) a fire or other casualty precludes Tenant from using more than thirty percent (30%) of the Premises for the conduct of its business, and (b) Tenant’s inability to so use the Premises (or the applicable portion thereof) is reasonably expected to continue until at least the earlier to occur of (i) the Fixed Expiration Date, or the last day of the Renewal Term, as the case may be, and (ii) the ninetieth (90th) day after the date that such fire or other casualty occurs. If (x) the Premises are substantially damaged by a fire or other casualty that occurs during the period of twelve (12) months immediately preceding the Fixed Expiration Date, and (y) Landlord exercises Landlord’s right to terminate this Lease under this Section 15.6, then Tenant shall have the right to make Landlord’s aforesaid termination ineffective by exercising the Renewal Option within five (5) Business Days after the date that Landlord exercises Landlord’s aforesaid right to terminate this Lease under this Section 15.6 (as to which period of five (5) Business Days time shall be of the essence) (it being understood, however, that nothing contained in this Section 15.6 (I) extends the date by which Tenant has the right to exercise the Renewal Option pursuant to Article 20 hereof, or (II) limits Landlord’s right to terminate this Lease under Section 15.4 hereof).

 

15.7.                     No Other Termination Rights.

 

Tenant shall have no right to cancel this Lease by virtue of a fire or other casualty except to the extent specifically set forth herein. This Article 15 is intended to constitute an “express agreement to the contrary” for purposes of Section 227 of the New York Real Property Law.

 

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Article 16

CONDEMNATION

 

16.1.                     Effect of Condemnation.

 

(A)                               Subject to the provisions of Section 16.2 hereof, if the entire Real Property, the entire Building or the entire Premises is condemned or otherwise acquired by the exercise of the power of eminent domain, then this Lease shall terminate as of the date that such condemnation or acquisition is consummated.

 

(B)                               If only a part of the Real Property and not the entire Premises is so acquired or condemned, then:

 

(1)                                 except as hereinafter provided in this Section 16.1, this Lease shall remain effective, and, from and after the date that the condemnation or acquisition is consummated, (w) the Fixed Rent shall be reduced in the proportion that the number of square feet of Rentable Area of the part of the Premises so acquired or condemned bears to the total Rentable Area of the Premises immediately prior to such acquisition or condemnation, (x) Tenant’s Tax Share shall be redetermined based upon the proportion that the number of square feet of Rentable Area of the Premises that is remaining after such acquisition or condemnation bears to the number of square feet of Rentable Area of the Building that is remaining after such acquisition or condemnation, and (y) Tenant’s Operating Expense Share shall be redetermined based upon the proportion that the number of square feet of Rentable Area of the Premises remaining after such acquisition or condemnation bears to the number of square feet of Rentable Area of the Building remaining after such acquisition or condemnation (other than any retail portion of the Building);

 

(2)                                 on or prior to the sixtieth (60th) day after the date that the condemnation or acquisition is consummated, Landlord shall have the right to terminate this Lease by giving notice to Tenant if either (i) at least fifteen percent (15%) of the Usable Area of the Premises is so acquired or condemned, or (ii) Landlord terminates leases (including this Lease) for at least seventy-five percent (75%) of the Usable Area of the Building (excluding any portion of the Building leased to or occupied by Landlord or Landlord’s Affiliates); and

 

(3)                                 if (a) the part of the Real Property so acquired or condemned contains more than fifteen percent (15%) of the Usable Area of the Premises immediately prior to such acquisition or condemnation, or (b) by reason of such acquisition or condemnation, Tenant no longer has reasonable means of access to the Premises, then Tenant may elect to terminate this Lease by giving notice to Landlord on or prior to the sixtieth (60th) day after the date that Tenant is given notice of such acquisition or condemnation being consummated.

 

The Term shall expire on the thirtieth (30th) day after the date that Landlord or Tenant give any such notice to terminate this Lease.

 

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(C)                               Landlord shall refund to Tenant, promptly after the date that such taking or acquisition becomes effective, any Rental that Tenant has theretofore paid for the Premises (or the applicable portion thereof that is so taken or acquired) to the extent that such Rental is properly allocable to the period after the date that such taking or acquisition becomes effective (and Landlord’s obligation to make such refund shall survive the Expiration Date).

 

(D)                               If this Lease terminates pursuant to the provisions of this Section 16.1, then the Rental for the portion of the Premises that is not taken or acquired shall be apportioned as of the termination date. Landlord shall refund promptly to Tenant any Rental that Tenant has theretofore paid for any period after the date that such termination becomes effective (and Landlord’s obligation to make such refund shall survive the Expiration Date).

 

(E)                                If a part of the Premises is so acquired or condemned and this Lease and the Term is not terminated pursuant to the foregoing provisions of this Section 16.1, then Landlord, at Landlord’s expense, shall restore the part of the Premises that is not so acquired or condemned to a self-contained rental unit inclusive of Alterations that Tenant has theretofore Substantially Completed, except that if such acquisition or condemnation occurs prior to the Substantial Completion of the Initial Alterations, then Landlord shall only be required to restore the part of the Premises not so acquired or condemned to a self-contained rental unit exclusive of any Alterations.

 

16.2.                     Condemnation Award.

 

Subject to Section 16.3 hereof, Landlord shall be entitled to receive the entire award for any such acquisition or condemnation of all or any part of the Real Properly. Tenant shall have no claim against Landlord or the condemning authority for the value of any unexpired portion of the Term, and, accordingly, Tenant hereby expressly assigns to Landlord all of its right in and to any such award. Nothing contained in this Section 16.2 shall be deemed to prevent Tenant from making a separate claim in any condemnation proceedings for the value of any Tenant’s Property included in such taking, for any moving expenses or for the costs incurred by Tenant in performing the Initial Alterations (prior to Tenant’s Substantial Completion thereof) in the portion of the Premises that is not so condemned or acquired.

 

16.3.                     Temporary Taking.

 

If the whole or any part of the Premises is acquired or condemned temporarily during the Term, then (a) Tenant shall give prompt notice thereof to Landlord, (b) the Term shall not be reduced or affected in any way, (c) Tenant shall continue to pay in full all items of Rental payable by Tenant hereunder without reduction or abatement, and (d) Tenant shall be entitled to receive for itself any award or payments for such use, provided, however, that if the acquisition or condemnation is for a period extending beyond the Term, then such award or payment shall be apportioned equitably between Landlord and Tenant. Tenant, at Tenant’s expense, shall make Alterations to restore the Premises to the condition existing prior to any such temporary acquisition or condemnation.

 

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Article 17

ASSIGNMENT AND SUBLETTING

 

17.1.                     General Limitations.

 

(A)                               Subject to the terms of this Article 17, without the prior consent of Landlord in each instance, Tenant shall not, and Tenant shall not permit any other Permitted Party to, consummate a Transfer. The term “Transfer” shall mean:

 

(1)                                 (a) an assignment of a Permitted Party’s rights under, or a delegation of such Permitted Party’s duties under, the applicable Occupancy Agreement by express assignment or by operation of law or by other means, (b) a mortgage or other encumbrance of such Permitted Party’s interest in the applicable Occupancy Agreement, in whole or in part, (c) a subletting, or further subletting, of the Premises or any part thereof, or (d) the occupancy of the Premises or any part thereof by any Person other than such Permitted Party; and

 

(2)                                 any transaction that modifies or supplements (or further modifies or supplements) an Occupancy Agreement to decrease the rental that is payable thereunder, to change the premises that is demised thereby, or to change the term thereof, in either case in any material respect (it being understood that (i) a termination or cancellation of an Occupancy Agreement shall not constitute a Transfer for purposes hereof, and (ii) such modification or supplement shall be treated for purposes hereof as a transaction on the terms of such Occupancy Agreement, as so modified or supplemented, for the balance of the term thereof).

 

(B)                               The term “Occupancy Agreement” shall mean the lease, sublease, license or other agreement pursuant to which a Permitted Party has the right to occupy the Premises (or the applicable portion thereof).

 

(C)                               The term “Permitted Party” shall mean Tenant and any other Person that has the right to occupy the Premises (or any pan thereof) in accordance with the terms of this Article 17 (other than a Person that has the right to occupy the Premises (or the applicable part thereof) by virtue of Landlord’s exercising Landlord’s rights under Section 17.3 hereof).

 

(D)                               Subject to Section 17.8 hereof, the transfer of Control in a Permitted Party, however accomplished, whether in a single transaction or in a series of unrelated or related transactions, shall constitute an assignment of such Permitted Party’s interest in the applicable Occupancy Agreement for purposes of this Article 17.

 

(E)                                The consent by Landlord to any Transfer shall not relieve Tenant from its obligation to obtain the prior consent of Landlord to any other Transfer to the extent required by this Lease.

 

(F)                                 The assignment by any Person that constitutes Tenant of the tenant’s interest under this Lease shall not relieve such Person of the obligations of the tenant under this Lease. Such Person’s liability under this Lease shall continue notwithstanding (x) the subsequent

 

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release of any other Person that constitutes Tenant from liability under this Lease, (y) any limitation on any such other Person’s liability hereunder by virtue of the Bankruptcy Code, or (z) any modification or amendment of this Lease that Landlord consummates with any such other Person that constitutes Tenant subsequently; provided, however, that if such other Person is not an Affiliate of such Person, then any such modification or amendment shall not expand such Person’s liability hereunder.

 

(G)                               Notwithstanding anything to the contrary contained herein, Tenant shall not, and Tenant shall not permit any other Permitted Party to, enter into any lease, sublease, license, concession or other agreement for use or occupancy of the Premises or any portion thereof which provides for a rental or other payment for such use or occupancy based in whole or in part on the net income or profits derived by any Person from the property leased, occupied or used, or which would require the payment of any consideration that would not qualify as “rents from real property,” as that term is defined in Section 856(d) of the Internal Revenue Code of 1986, as amended.

 

(H)                              If Tenant assigns the tenant’s interest under this Lease in violation of the terms of this Article 17, then such assignment shall be void and of no force and effect against Landlord; provided, however, that Landlord (x) may collect an amount equal to the then Rental from the assignee as a fee for such assignee’s use and occupancy, and (y) shall apply the net amount collected to the Rental reserved in this Lease. If the Premises or any part thereof are sublet to, occupied by, or used by any Person other than Tenant (regardless of whether such subletting, occupancy or use violates this Article 17), then Landlord (a) after the occurrence of an Event of Default, may collect amounts from the subtenant, user or occupant as a fee for its use and occupancy, and (b) shall apply the net amount collected to the Rental reserved in this Lease. No such assignment, subletting, occupancy or use, with or without Landlord’s prior consent, nor any such collection or application of fees for use and occupancy, shall (i) be deemed a waiver by Landlord of any term, covenant or condition of this Lease, (ii) be deemed the acceptance by Landlord of such assignee, subtenant, occupant or user as tenant hereunder, or (iii) relieve Tenant of the obligations of the tenant under this Lease.

 

17.2.                     Landlord’s Expenses.

 

Tenant shall reimburse Landlord for a reasonable processing fee, any reasonable Out-of-Pocket Costs that Landlord incurs in connection with any proposed Transfer, including, without limitation, reasonable attorneys’ fees and disbursements, and the reasonable costs of making investigations as to the acceptability of the proposed Transferee, within thirty (30) days after Landlord gives to Tenant an invoice therefor together with reasonable supporting documentation for the charges set forth therein.

 

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17.3.                     Recapture Procedure.

 

(A)                               Tenant shall have the right to institute the procedure described in this Section 17.3 (the “Recapture Procedure”) only by giving to Landlord notice thereof (a “Transfer Notice”), which:

 

(1)                                 refers expressly to this Section 17.3 and indicates that such notice constitutes a Transfer Notice,

 

(2)                                 sets forth a description of the Premises (or the portion thereof) that is involved in the proposed Transfer (the Premises, or the portion thereof, that is involved in the proposed Transfer being referred to herein as the “Recapture Space”).

 

(3)                                 sets forth the material terms under which Tenant intends to consummate the Transfer (including, for example, (a) the rental to be paid by a subtenant, (b) the consideration to be paid by or to an assignee, (c) the work allowance to which a subtenant is entitled, (d) the term of a proposed sublease, and the nature and cost of any work that Tenant intends to perform to prepare

 

(4)                                 sets forth the date on which Tenant proposes that the term of a Transfer that constitutes a sublease, license or other similar agreement that grants occupancy rights will commence, or that a Transfer that constitutes an assignment will occur, as the case may be (such date being referred to herein as the “Transfer Date”) (it being understood that the Transfer Date shall be no sooner than thirty (30) days, and no later than two hundred seventy (270) days, after the date that Tenant gives the Transfer Notice to Landlord) (the material terms of a proposed Transfer as set forth in the Transfer Notice being referred to herein as the “Proposed Transfer Terms”).

 

Tenant shall not be required to identify, in the Transfer Notice, the Person to which Tenant intends to make the Transfer (the Person to which a Transfer is made being referred to herein as the “Transferee”). Nothing contained in this Section 17.3 limits Tenant’s right to give to Landlord, simultaneously, a Transfer Notice and a notice that requests Landlord’s approval of a particular Transfer pursuant to Section 17.4 hereof.

 

(B)                               The term “Transfer Expenses” shall mean the actual Out-of-Pocket Costs that the Permitted Party that makes the applicable Transfer (the “Transferor”) pays solely in consummating a Transfer, including, without limitation, (i) brokerage commissions, (ii) allowances that a Transferor makes available to the Transferee to fund the cost of Alterations that the Transferee makes to the Premises (or the applicable portion thereof that is involved in the Transfer), (iii) costs that a Transferor pays in making Alterations to prepare the Premises (or the applicable portion thereof that is involved in the Transfer) solely for the Transferee’s initial occupancy, (iv) the amount payable to Landlord under Section 17.2 hereof for such Transfer, (v) reasonable attorneys’ fees and disbursements that a Transferor pays in connection with

 

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consummating such Transfer, and (vi) the transfer taxes (and other similar charges and fees) that Tenant pays pursuant to Section 17.6 hereof.

 

(C)                                       The term “Amortized Transfer Expenses” shall mean, with respect to any period, the amount of the Transfer Expenses that amortize during such period if the Transfer Expenses are amortized, in equal monthly installments, with interest calculated at the Base Rate, over the period that the Transferee is obligated to make payments to a Transferor in respect of the applicable Transfer.

 

(D)                                       The term “Recapture Date” shall mean the thirtieth (30(lh)) day after the date that Tenant gives the Transfer Notice to Landlord.

 

(E)

 

(1)                                         If (x) Tenant gives a Transfer Notice to Landlord, and (y) the Transfer described in the Transfer Notice constitutes a sublease for the Recapture Space with respect to which the term thereof expires on or prior to the date that is twelve (12) months before the Fixed Expiration Date, but excluding an Exempt Sublease (any sublease that expires before such date being referred to herein as a “Short-Term Sublease”), then Landlord shall have the right to sublease (or to cause the Recapture Subtenant to sublease) the Recapture Space from Tenant, on the terms set forth in this Section 17.3(E), by giving notice thereof (the “Recapture Sublease Notice”) to Tenant not later than the Recapture Date (as to which date time shall be of the essence) (any such sublease of the Recapture Space that Landlord elects to consummate under this Section 17.3(E) being referred to herein as a “Recapture Sublease”).

 

(2)                                          If Landlord gives a Recapture Sublease Notice to Tenant, then Tenant shall, and Landlord shall (or Landlord shall cause the Recapture Subtenant to), consummate a Recapture Sublease for the Recapture Space on the following terms:

 

(a)                                 Landlord shall give to Tenant, within twenty (20) days after the date that Landlord gives to Tenant the Recapture Sublease Notice, a proposed sublease that conforms with the terms set forth in this Section 17.3(E) and is otherwise on the terms set forth in this Lease. Tenant shall execute and deliver such sublease promptly after Landlord’s submission thereof to Tenant. Landlord shall execute and deliver (or cause the Recapture Subtenant to execute and deliver) such sublease promptly after Tenant delivers to Landlord the counterpart thereof that is executed by Tenant.

 

(b)                                 Landlord shall have the right to designate that the subtenant under the Recapture Sublease is a Person other than Landlord (the Person that constitutes the subtenant under a Recapture Sublease being referred to herein as the “Recapture Subtenant”).

 

(c)                                  The rental payable by the Recapture Subtenant to Tenant shall be calculated on either of the following methods, as designated by Landlord (with the understanding

 

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that Landlord shall be deemed to have elected clause (i) below if Landlord does not designate otherwise in the Recapture Sublease Notice):

 

(i)                                     the excess of (I) the rental that would have been payable by the Transferee for the applicable calendar month as contemplated by the Proposed Transfer Terms, over (II) the Amortized Transfer Expenses for such month that would have resulted from the Proposed Transfer Terms; or

 

(ii)                                  the Fixed Rent and the Escalation Rent that is due under this Lease for the Recapture Space.

 

(d)                                 The term of the Recapture Sublease shall commence on the Transfer Date and shall extend for the term set forth in the Transfer Notice as part of the Proposed Transfer Terms (with the understanding that the Recapture Subtenant shall have the right to extend the term of the Recapture Sublease for a term that corresponds, or for terms that correspond, to any renewal right or renewal rights that are set forth in the Transfer Notice as part of the Proposed Transfer Terms).

 

(e)                                  If, during the term of the Recapture Sublease (or during the period that the Recapture Subtenant, or any Person claiming by, through or under the Recapture Subtenant, remains in occupancy of the Recapture Space after the term of the Recapture Sublease expires or earlier terminates), an event or circumstance occurs that is attributable to the Recapture Subtenant (or a Person claiming by, through or under the Recapture Subtenant), then such event or circumstance shall not constitute a default by Tenant hereunder (and, accordingly, Tenant shall not have liability to Landlord in connection therewith).

 

(f)                                   Tenant shall have the right to offset against the Rental due hereunder an amount equal to the rental that the Recapture Subtenant fails to pay when due to Tenant.

 

(g)                                  The Recapture Subtenant (and any Person claiming by, through or under the Recapture Subtenant), during the term of the Recapture Sublease, shall have the right to make alterations to the Recapture Space; provided, however, that the Recapture Subtenant shall be required to restore the Recapture Space upon the expiration of the term of the Recapture Sublease to the extent required by the applicable Proposed Transfer Terms.

 

(h)                                 If the Recapture Space does not constitute the entire Premises, then Tenant, at Tenant’s expense, shall cause the Recapture Space to be demised separately from the remainder of the Premises on or prior to the Transfer Date (except that Landlord shall so demise the Recapture Space separately from the remainder of the Premises, at Landlord’s cost, to the extent provided in the applicable Proposed Transfer Terms).

 

(i)                                     The Recapture Subtenant shall have the right to further sublease the Recapture Space, or assign the Recapture Subtenant’s rights as subtenant under the Recapture

 

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Sublease, to any third party, without Tenant having any rights to consent thereto or to receive additional payments from the Recapture Subtenant in connection therewith.

 

(j)                                    The Recapture Subtenant shall not have the right to receive from Tenant any free rent, tenant improvement allowance or other similar concession that constitutes part of the Proposed Transfer Terms.

 

(F)

 

(1)                                 If (x) Tenant gives a Transfer Notice to Landlord, and (y) the Transfer described in the Transfer Notice constitutes either a sublease for the Recapture Space (other than a Short-Term Sublease or an Exempt Sublease) or an assignment, then Landlord shall have the right to terminate this Lease with respect to the Recapture Space, on the terms set forth in this Section 17.3(F), by giving notice thereof (the “Recapture Termination Notice”) to Tenant not later than the Recapture Date (any such termination of this Lease with respect to the Recapture Space being referred to herein as a “Recapture Termination”).

 

(2)                                 If (x) Landlord gives to Tenant a Recapture Termination Notice, and (y) the Recapture Space constitutes the entire Premises, then the Term shall terminate on the Transfer Date. If the Term so terminates on the Transfer Date, then Tenant, on the Transfer Date, shall vacate the Premises and deliver exclusive possession thereof to Landlord in accordance with the terms of this Lease that govern Tenant’s obligations upon the expiration or earlier termination of the Term.

 

(3)                                 If (x) Landlord gives to Tenant a Recapture Termination Notice, and (y) the Recapture Space does not constitute the entire Premises, then:

 

(a)                                 Tenant, at Tenant’s expense, shall demise the Recapture Space separately from the remainder of the Premises on or prior to the Transfer Date (except that Landlord shall so demise the Recapture Space separately from the remainder of the Premises, at Landlord’s cost, to the extent provided in the applicable Proposed Transfer Terms),

 

(b)                                 effective as of the Transfer Date. Tenant’s Operating Expense Share shall be redetermined based on the ratio that (I) the number of square feet of Rentable Area of the Premises that remains after excluding therefrom the Recapture Space, bears to (II) the number of square feet of Rentable Area of the Building (other than any retail portion thereof),

 

(c)                                  effective as of the Transfer Date, Tenant’s Tax Share shall be redetermined based on the ratio that (I) the number of square feet of Rentable Area of the Premises that remains after excluding therefrom the Recapture Space, bears to (II) the number of square feet of Rentable Area of the Building (including, without limitation, the retail portion thereof),

 

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(d)                                 the Fixed Rent as set forth in Article 2 hereof from and after the Transfer Date shall be reduced by an amount equal to the Fixed Rent that would have been due under this Lease for the applicable portion of the Premises that constitutes the Recapture Space, and

 

(e)                                  Tenant, on the Transfer Date, shall vacate the Recapture Space and deliver exclusive possession thereof to Landlord in accordance with the terms of this Lease that govern Tenant’s obligations upon the expiration or earlier termination of the Term; and

 

(f)                                   effective as of the Transfer Date, the references in this Lease to the Premises shall be deemed to be references to the Premises (other than the Recapture Space).

 

(4)                                 If (x) Landlord elects to consummate a Recapture Termination, and (y) the Transfer described in the applicable Transfer Notice constitutes a sublease or sublicense, then Tenant shall pay to Landlord, as additional rent, on the first day of each calendar month during the period from the Transfer Date to the date that the term of such sublease or sublicense would have expired under the Proposed Transfer Terms, an amount equal to the excess (if any) of:

 

(a)                                 the Fixed Rent and the Escalation Rent that would have otherwise been due under this Lease since the Transfer Date for the Premises (or the applicable portion thereof that constitutes the Recapture Space), over

 

(b)                                 the sum of (A) the excess of (I) the rental that would have been payable by the Transferee since the Transfer Date as contemplated by the Proposed Transfer Terms, over (II) the Amortized Transfer Expenses under the Proposed Transfer Terms that would have theretofore accrued, and (B) the amounts theretofore paid by Tenant to Landlord under this Section 17.3(F)(4) in respect of such Recapture Termination.

 

Tenant’s obligation to pay such amount to Landlord shall survive the termination of this Lease (or the termination of this Lease only with respect to the Recapture Space, as the case may be).

 

(5)                                 If (x) Landlord elects to consummate a Recapture Termination, and (y) the Transfer described in the applicable Transfer Notice constitutes an assignment of Tenant’s interest under this Lease, then Tenant shall pay to Landlord the sum of:

 

(a)                                 the present value of the consideration (if any) that would have been payable by Tenant to the Transferee under the Proposed Transfer Terms (calculated as of the Transfer Date using a discount rate equal to the Base Rate), and

 

(b)                                 the excess, if any. of (I) the present value of the Transfer Expenses that Tenant would have incurred under the Proposed Transfer Terms, over (II) the present value of the consideration (if any) that would have been payable by the Transferee to Tenant under the Proposed Transfer Terms (in either case calculated as of the Transfer Date using a discount rate equal to the Base Rate).

 

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Tenant shall pay the amounts described in clauses (a) and (b) above on the Transfer Date, Tenant’s obligation to pay such amounts to Landlord shall survive the termination of this Lease (or the termination of this Lease only with respect to the Recapture Space, as the case may be).

 

(G)                               The term “Exempt Sublease” shall mean (x) with respect to clause 17.3(E) a sublease that (i) has a term of four (4) years or less (after taking into account any renewal options that available to the subtenant thereunder), and (ii) demises to the subtenant no more than twenty-four thousand seven hundred seventy (24,770) square feet of Rentable Area (after taking into account any expansion or rights of first offer options that are available to the subtenant).

 

17.4.                     Certain Transfer Rights.

 

Subject to Section 17.8 hereof, Landlord shall not unreasonably withhold, condition or delay Landlord’s consent to a Permitted Party’s consummating a Transfer, provided that:

 

(A)                               Tenant has theretofore instituted the Recapture Procedure for such Transfer; provided, however, that Tenant shall not be required to have instituted the Recapture Procedure for (i) a Transfer that is proposed to be consummated by a Permitted Party other than Tenant or (ii) an Exempt Sublease;

 

(B)                               Landlord’s right to elect to consummate a Recapture Sublease or a Recapture Termination (as the case may be) with respect to the proposed Transfer has lapsed (without Landlord’s having exercised Landlord’s rights to consummate a Recapture Sublease or a Recapture Termination (as the case may be)); provided, however, that this Section 17.4(B) shall not apply for (i) a Transfer that is proposed to be consummated by a Permitted Party other than Tenant or (ii) an Exempt Sublease;

 

(C)                               the net economic benefit of the Transfer to the Transferor is no less than ninety-five percent (95%) of the net economic benefit of the Proposed Transfer Terms to the Transferor; provided, however, that this Section 17.4(C) shall not apply for (i) a Transfer that is proposed to be consummated by a Permitted Party other than Tenant or (ii) an Exempt Sublease;

 

(D)                               the Transfer occurs no earlier than the thirtieth (30th) day before the Transfer Date and no later than the thirtieth (30th) day after the Transfer Date; provided, however, that this Section 17.4(D) shall not apply for (i) a Transfer that is proposed to be consummated by a Permitted Party other than Tenant or (ii) an Exempt Sublease;

 

(E)                                Tenant submits to Landlord a counterpart of the documents that the Transferor intends to use to consummate the proposed Transfer, which have been executed and delivered by the proposed Transferor and the proposed Transferee, and which are subject to no conditions to the effectiveness thereof (other than Landlord’s granting Landlord’s consent thereto);

 

(F)                                 the Premises (or the applicable portion thereof) has not been listed or otherwise publicly advertised at a rental rate that is less than the prevailing rental rate set by

 

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Landlord for comparable space in the Building, or, if there is no comparable space, the prevailing rental rate reasonably determined by Landlord (it being agreed that nothing contained in this clause (F) prohibits a Permitted Party from (I) consummating a Transfer at a rental rate that is less than such prevailing rate, or (II) disseminating broker’s fliers or other marketing materials that indicate that the rental rate for the Premises (or the applicable portion thereof) is available upon request);

 

(G)                               no Event of Default has occurred and is continuing;

 

(H)                              the proposed Transferee has a financial standing (taking into consideration the obligations of the Transferee under the applicable Occupancy Agreement) that is reasonably satisfactory to Landlord;

 

(I)                                   the proposed Transferee is of a character, is engaged in a business, and proposes to use the Premises (or the applicable portion thereof) in a manner that in each case is in keeping with the standards of a first-class office building in the vicinity of the Building;

 

(J)                                   the proposed Transferee, or any Affiliate of the proposed Transferee, does not occupy any space in the Building (if Landlord has or reasonably expects that it shall have within the next four (4) months space available in the Building that is reasonably comparable to the Premises (or the portion thereof involved in such Transfer) and Landlord promptly provides Tenant with reasonably evidence of such comparable space and such availability;

 

(K)                              neither the proposed Transferee, nor an Affiliate of the proposed Transferee, is a Person with whom Landlord is then engaged in bona fide negotiations regarding the leasing or subleasing of space in the Building (if Landlord has or reasonably expects that it shall have within the next six (6) months space available in the Building that is reasonably comparable to the Premises (or the portion thereof involved in such Transfer);

 

(L)                                the Transferor and each other Permitted Party (if any) whose interest is superior to the interest of the Transferor, and the Transferee, executes and delivers to Landlord a consent to the Transfer in a form reasonably designated by Landlord;

 

(M)                            if the Transfer constitutes an assignment of the tenant’s interest under this Lease, the assignee has expressly assumed all of the obligations of Tenant hereunder to the extent accruing from and after the date that the Transfer is effective; and

 

(N)                               if the Transfer constitutes a sublease (or a further sublease), such sublease provides expressly that (i) such sublease is subject and subordinate to the Lease (and to the terms thereof), and (ii) if this Lease terminates, then Landlord, at Landlord’s option, may take over all of the right, title and interest of the Transferor under such sublease, and the Transferee, at Landlord’s option, shall attorn to Landlord pursuant to the then executory provisions of such sublease, except that Landlord shall not be:

 

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(1)                                 liable for any act or omission of the Transferor under such sublease (except for any such acts or omissions that (x) continue after the date that Landlord succeeds to the interest of the Transferor under such sublease, and (y) may be remedied by the providing a service or performing a repair),

 

(2)                                 subject to any defense or offsets which the Transferee may have against the Transferor that accrue prior to the date that Landlord succeeds to the interest of the Transferor,

 

(3)                                 bound by any previous payment that the Transferee made to the Transferor more than thirty (30) days in advance of the date that such payment was due,

 

(4)                                 bound by any obligation to make any payment to or on behalf of the Transferee that accrues prior to the date that Landlord succeeds to the interest of the Transferor under such sublease,

 

(5)                                 bound by any obligation to perform any work or to make improvements to the Premises, or the applicable portion thereof demised by such sublease (other than the obligation to perform maintenance, repairs or restoration that in each case first becomes necessary from and after the date that Landlord succeeds to the interest of the Transferor under such sublease) (with the understanding, however, that if (I) the Premises, or the applicable portion thereof, is damaged by fire or other casualty, or affected by condemnation, prior to the date that Landlord succeeds to the interest of the Transferor under such sublease, (II) Landlord would have otherwise been required to perform the restoration of the Premises, or the applicable portion thereof, that is required by virtue of such fire or other casually, or such condemnation, in accordance with the terms hereof, and (III) Landlord does not elect to perform such restoration by giving notice thereof to the subtenant on or prior to the tenth (I0th) day after the date that Landlord so succeeds, then such subtenant shall have the right to terminate such sublease (and such subtenant’s obligation to so attorn to Landlord, as aforesaid) by giving notice thereof to Landlord within ten (10) days after the last day of such period of ten (10) days during which Landlord has the right to give such notice to such subtenant),

 

(6)                                 bound by any amendment or modification of such sublease made without Landlord’s consent, or

 

(7)                                 bound to return the Transferee’s security deposit, if any, until such deposit has come into Landlord’s actual possession and the Transferee is entitled to such security deposit pursuant to the terms of such sublease (the requirements of a proposed sublease as set forth in this Section 17.4(N) being collectively referred to herein as the “Basic Sublease Provisions”).

 

17.5.                     Preliminary Approval.

 

Tenant shall have the right to submit to Landlord a statement that describes in reasonable detail the basic terms of a proposed Transfer that a Permitted Party proposes to consummate, and

 

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that identifies, and provides reasonable information that describes, the prospective Transferee (any such statement being referred to herein as a “Term Sheet”). Landlord shall not unreasonably withhold, condition or delay Landlord’s approval of the transaction described in the Term Sheet, provided that the transaction as described therein satisfies the requirements set forth in clauses (A), (C), (D), (F), (G), (H), (I), (J), (K), (L) and (M) of Section 17.4 hereof. Tenant acknowledges that the applicable Transfer shall remain subject to Landlord’s approval pursuant to Section 17.4 hereof (except that the scope of Landlord’s review of the applicable Transfer under Section 17.4 hereof shall be limited as provided in this Section 17.5). If (i) Tenant gives to Landlord a Term Sheet in respect of a particular proposed Transfer as contemplated by this Section 17.5, (ii) Landlord approves (or is deemed to have approved) such Transfer under this Section 17.5, (iii) Tenant submits to Landlord a counterpart of the definitive documents that the applicable Permitted Party proposes to use for the applicable Transfer within one hundred eighty (180) days after the date that Tenant submits the Term Sheet to Landlord, and (iv) the terms of such definitive documents are consistent in all material respects with the terms set forth in the Term Sheet, then Landlord shall not have the right to withhold consent to the applicable Transfer pursuant to clauses (A), (C), (D), (F), (G), (H), (I), (J), (K), (L) and (M) of Section 17.4 hereof (it being understood, however, that Landlord shall retain the right to object to the proposed Transfer to the extent that the applicable Transfer does not satisfy the requirements set forth in clauses (E), (L), (M) and (N) of Section l7.4 hereof). If Tenant gives Landlord a Term Sheet in respect of a particular proposed Transfer and Landlord does not exercise its rights under Section 17.3 hereof within thirty (30) days after receipt of such Term Sheet, then Landlord shall be deemed to have waived its rights under Section 17.3 hereof with respect to such proposed Transfer, and notwithstanding anything to the contrary in Section 17.4 hereof, Tenant shall not be required to provide Landlord with a separate Recapture Notice with respect to such transaction provided that such Term Sheet shall provide in bold and capital letters: “THIS TERM SHEET SHALL BE DEEMED TO BE A RECAPTURE NOTICE UNDER THE LEASE PURSUANT TO SECTION 17.5 THEREOF”.

 

17.6.                     Transfer Taxes.

 

Tenant shall pay any transfer taxes (and other similar charges and fees) that any Governmental Authority imposes in connection with any Transfer (including, without limitation. any such transfer taxes, charges or fees that a Governmental Authority imposes in connection with Landlord’s exercising Landlord’s rights to consummate a Recapture Sublease or a Recapture Termination (as the case may be)).

 

17.7.                     Transfer Profit.

 

(A)                               Subject to the terms of this Section 17.7 and Section 17.8 hereof, Tenant shall pay as additional rent to Landlord, on the first (1st) day of each calendar month during the Term in the same manner as Fixed Rent, an amount equal to the excess of (I) fifty percent (50%) of the Transfer Profit for each Transfer that is determined as of the last day of the immediately preceding calendar month, over (II) the aggregate amount of the payments that Tenant has theretofore paid to Landlord for such Transfer under this Section 17.7(A).

 

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(B)

 

(1)                                 The term “Transfer Profit” shall mean, with respect to any particular Transfer, the excess (if any) of (x) the Transfer Inflow for such Transfer for the period beginning on the first (1st) day of the term of the applicable Transfer (if such Transfer is a sublease or sublicense) or the date that such Transfer becomes effective (if such Transfer is an assignment of the tenant’s interest under this Lease or an assignment of the subtenant’s interest under a sublease or a sublicense (or further sublease or sublicense)) (as the case may be), over (y) the sum of (a) the Transfer Outflow for such Transfer for such period, and (b) the Amortized Transfer Expenses for such Transfer for such period.

 

(2)                                 The term “Transfer Inflow” shall mean, with respect to any particular Transfer for any particular period, the amount that the Transferor receives during such period from or on behalf of the Transferee attributable to the applicable Transfer (including, without limitation, amounts received by the Transferor which are nominally for something other than real property or personal property and which are in substance received in exchange for leasing the Premises or the applicable portion thereof).

 

(3)                                 The term “Transfer Outflow” shall mean:

 

(a)                                 with respect to any Transfer that is a sublease or sublicense (or a further sublease or sublicense), the aggregate amount that the Transferor pays during the applicable period for the Premises (or the applicable portion thereof that is involved in the Transfer) to the counterparty under the Occupancy Agreement through which the Transferor derives its rights to the Premises (or the applicable portion thereof that is involved in the Transfer), and

 

(b)                                 with respect to any Transfer that is an assignment of the tenant’s interest under this Lease or the subtenant’s interest under a sublease or sublicense (or further sublease or sublicense), zero.

 

(C)                             If the Transferor (or an Affiliate thereof) receives in a transaction that occurs concurrently with the applicable Transfer consideration from the Transferee (or an Affiliate thereof) for the sale or lease of personal property or for services that the Transferor (or an Affiliate thereof) agrees to provide for the Transferee (or an Affiliate thereof), then (I) the Transfer Inflow shall include (in addition to the consideration that the Transferor receives for the Transfer) an amount equal to such other consideration, and (II) the Transfer Outflow shall include (in addition to the items that are otherwise includible in Transfer Outflow for purposes hereof) (a) the cost that the Transferor (or such Affiliate thereof) incurs in acquiring the personal property that the Transferor (or such Affiliate thereof) sells to the Transferee (or an Affiliate thereof) in such concurrent transaction (to the extent that such cost has not theretofore been amortized in accordance with GAAP), (b) the amortization of the cost that the Transferor (or such Affiliate thereof) incurs in acquiring any personal property that the Transferor (or such

 

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Affiliate thereof) leases to the Transferee, or (c) the cost that the Transferor (or an Affiliate thereof) incurs in providing such services, as the case may be.

 

17.8.                     Permitted Transfers.

 

(A)                               The term “Net Worth Assignment Requirement” shall mean the requirement that Tenant has provided to Landlord, not later than the tenth (10th) Business Day after the applicable assignment has been consummated a current balance sheet for the applicable Permitted Party and the assignee that reflects that the assignee’s tangible net worth, as determined in accordance with GAAP, immediately after the applicable Transfer has been consummated is not less than the tangible net worth of the Permitted Party on the immediately preceding the date that the applicable Transfer has been consummated.

 

(B)                               A Permitted Party shall have the right to assign such Permitted Party’s entire interest under the applicable Occupancy Agreement to an Affiliate of such Permitted Party without (x) Landlord’s prior approval, (y) Landlord’s having the right to consummate a Recapture Termination in respect thereof, and (z) Tenant’s being required to pay Transfer Profit to Landlord in connection therewith, provided that in each case (i) Tenant gives to Landlord, not later than the tenth (10th) Business Day after any such assignment is consummated, an instrument, duly executed by such Permitted Party and the aforesaid Affiliate of such Permitted Party, in form reasonably satisfactory to Landlord, to the effect that such Affiliate assumes all of the obligations of such Permitted Party under such Occupancy Agreement to the extent arising from and after the date of such assignment, (ii) Tenant, with such notice, provides Landlord with reasonable evidence to the effect that the Person to which such Permitted Party is so assigning such Permitted Party’s interest under such Occupancy Agreement constitutes an Affiliate of such Permitted Party, and (iii) the Net Worth Assignment Requirement is satisfied.

 

(C)                               The merger or consolidation of a Permitted Party into or with another Person shall be permitted without (x) Landlord’s prior approval, (y) Landlord’s having the right to consummate a Recapture Termination in respect thereof, and (z) Tenant’s being required to pay Transfer Profit to Landlord in connection therewith, provided that in each case (i) such merger or consolidation is not principally for the purpose of transferring such Permitted Party’s interest in the applicable Occupancy Agreement, (ii) Tenant gives Landlord notice of such merger or consolidation not later than the tenth (10th) Business Day after the occurrence thereof, (iii) Tenant, within ten (10) Business Days after such merger or consolidation, provides Landlord with reasonable evidence that the requirement described in clause (i) above has been satisfied, and (iv) the Net Worth Assignment Requirement is satisfied.

 

(D)                               The assignment of a Permitted Party’s entire interest under the applicable Occupancy Agreement in connection with the sale of all or substantially all of the assets of such Permitted Party shall be permitted without (x) Landlord’s prior approval, (y) Landlord’s having the right to consummate a Recapture Termination in respect thereof, and (z) Tenant’s being required to pay Transfer Profit to Landlord in connection therewith, provided that in each case (i) Tenant gives to Landlord, not later than the tenth (10th) Business Day after any such assignment

 

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is consummated, an instrument, duly executed by such Permitted Party and the Transferee, in form reasonably satisfactory to Landlord, to the effect that such Transferee assumes all of the obligations of such Permitted Party to the extent arising under the applicable Occupancy Agreement from and after the date of such assignment, (ii) such sale of all or substantially all of the assets of such Permitted Party is not principally for the purpose of transferring such Permitted Party’s interest in such Occupancy Agreement, (iii) Tenant, within ten (10) Business Days after such sale, provides Landlord with reasonable evidence that the requirement described in clause (ii) above has been satisfied, and (iv) the Net Worth Assignment Requirement is satisfied.

 

(E)                                The direct or indirect transfer of shares or equity interests in a Permitted Party which result in a transfer of Control in such Permitted Party (including, without limitation, the issuance of treasury stock, or the creation or issuance of a new class of stock, but excluding in the context of an initial public offering that is accomplished through the public “over the counter” securities market or through any recognized stock exchange or in the context of a subsequent offering of equity securities or an equity financing) shall be permitted without (x) Landlord’s prior approval, (y) Landlord’s having the right to consummate a Recapture Termination in respect thereof, and (z) Tenant’s being required to pay Transfer Profit to Landlord in connection therewith, provided that in each case (i) such transfer is not principally for the purpose of transferring the interest of such Permitted Party under the applicable Occupancy Agreement, (ii) Tenant gives Landlord notice of such transfer not later than the tenth (10th) Business Day after the occurrence thereof, and (iii) Tenant, within ten (10) Business Days after the date that such transfer occurs, provides Landlord with reasonable evidence that the requirement described in clause (i) has been satisfied (except that Tenant shall not be required to comply with clauses (ii) and (iii) hereof to the extent that such direct or indirect transfer of shares or equity interests which results in a transfer of Control is accomplished through the public “over-the-counter” securities market or through any recognized stock exchange or occurs in the context of an equity financing).

 

(F)                                 A Permitted Party shall have the right to sublease or license (or further sublease or sublicense) the Premises, or any portion thereof, to an Affiliate of such Permitted Party, without (x) Landlord’s prior approval, (y) Landlord’s having the right to consummate a Recapture Termination or a Recapture Sublease in respect thereof, and (z) Tenant’s being required to pay Transfer Profit to Landlord in connection therewith, provided that in each case (i) Tenant gives to Landlord a copy of such sublease or license, not later than the tenth (10th) Business Day after any such sublease or license is consummated, (ii) Tenant, with such copy of such sublease or license, provides Landlord with reasonable evidence to the effect that the Person to which such Permitted Party is so subleasing or licensing the Premises or a portion thereof constitutes an Affiliate of such Permitted Party, and (iii) such sublease includes the Basic Sublease Provisions.

 

(G)                               If (I) (i) a Permitted Party assigns such Permitted Party’s entire interest under the applicable Occupancy Agreement to an Affiliate of such Permitted Party, or (ii) a Permitted Party subleases or licenses (or further subleases or sublicenses) all or part of the

 

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Premises to an Affiliate of such Permitted Party, in either case without Landlord’s consent as provided in this Section 17.8 and without paying to Landlord any Transfer Profit that derives therefrom, and (II) the assignee or subtenant or sublicensee subsequently assigns the interest of such assignee or such subtenant or sublicensee under the applicable Occupancy Agreement to a third party in a Transfer that is not governed by the provisions of this Section 17.8 or further subleases or sublicenses all or part of the Premises to a third party in a Transfer that is not governed by the provisions of this Section 17.8, then, for purposes of calculating the Transfer Profit that is due to Landlord for such subsequent assignment or sublease or sublicense, the parties shall assume that the assignment or sublease or sublicense that the Permitted Party consummated without Landlord’s approval under this Section 17.8 did not occur previously (and, accordingly, the parties, in calculating Transfer Profit for such Transfer that is not governed by this Section 17.8, shall include any Transfer Profit that resulted from the prior Transfer from the Permitted Party to its Affiliate).

 

Article 18

TENANT’S RIGHT OF FIRST OFFER TO LEASE

 

18.1.                     Right of First Offer.

 

(A)                               Landlord shall not lease to any Person other than Tenant the Option Space (or a part thereof) at any time during the Term, without first instituting the procedure described in, and subject to the limitations set forth in, this Article 18.

 

(B)                               The term “Option Space” shall mean the leasable space in the Building that is located on the third (3rd) floor of the Building as more particularly shown on Exhibit “18.2” attached hereto and made a part hereof. It being understood and agreed that if Tenant elects not to exercise the Additional Space Option pursuant to Article 19 hereof or does not otherwise lease the Additional Space then the Additional Space shall be deemed Option Space subject to and in accordance with this Article 18 and the Option Space shall be deemed Additional Space for the one hundred eighty (180) day period following the Commencement Date subject to and in accordance with Article 19 hereof.

 

18.2.                     Option Notice.

 

Landlord shall institute the procedure described in this Article 18 by giving notice thereof (the “Option Notice”) to Tenant, which Option Notice shall (i) describe the Option Space (or the applicable portion thereof) (the Option Space (or such portion thereof) that is described in a particular Option Notice being referred to herein as the “Applicable Option Space”), (ii) have attached thereto a floor plan depicting the Applicable Option Space, (iii) set forth the date that Landlord reasonably expects that the Applicable Option Space will be vacant and available for Tenant’s occupancy (such date designated by Landlord being referred to herein as the “Scheduled Option Space Commencement Date”), and (iv) set forth Landlord’s calculation of the number of square feet of Rentable Area in the Applicable Option Space.

 

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18.3.                     Option Procedure.

 

Tenant shall have the option (the “Option”) to lease the Applicable Option Space for a term (the “Option Term”) commencing on the Option Space Commencement Date and expiring on the Expiration Date by giving notice thereof (the “Option Response Notice”) to Landlord not later than the ten (10) Business Days after the date that Landlord gives the Option Notice to Tenant. Time shall be of the essence as to the date by which Tenant must give the Option Response Notice to Landlord to exercise the Option. If Tenant does not give the Option Response Notice to Landlord on or prior to the tenth (10th) Business Day after the date that Landlord gives the Option Notice to Tenant, then Landlord shall thereafter have the right to lease the Applicable Option Space (or any part thereof) to any other Person on terms acceptable to Landlord in Landlord’s sole discretion without being required to make any other offer to Tenant regarding the Applicable Option Space under this Article 18 (and, accordingly, such Applicable Option Space shall not thereafter constitute Option Space). Tenant shall not have the right to revoke an Option Response Notice given to Landlord pursuant to this Article 18.

 

18.4.                     Certain Limitations.

 

(A)                               Tenant shall not have the right to exercise the Option (and, accordingly (x) Landlord shall have no obligation to give an Option Notice to Tenant, and (y) Landlord shall have the right to lease the Applicable Option Space to any other Person without first offering the Applicable Option Space to Tenant as contemplated by this Article 18) if, on the date that Landlord offers the Space for lease to the general public:

 

(1)                                 the Minimum Occupancy Requirement is not satisfied; provided, however, that the Minimum Occupancy Requirement shall not apply during the first eighteen (18) months of the Term,

 

(2)                                 the Initial Tenant Requirement is not satisfied,

 

(3)                                 the Minimum Demise Requirement is not satisfied, or

 

(4)                                 the Applicable Option Space constitutes Recapture Space with respect to which Landlord exercised its rights under Section 17.3 hereof.

 

(B)                               Tenant shall not have the right to exercise the Option prior to (x) Landlord’s leasing the Option Space (or the applicable portion thereof) to any Person that then occupies the Option Space (or such portion thereof) (regardless of whether such leasing is pursuant to an option or right contained in such Person’s lease), or (y) Landlord’s leasing the Option Space (or the applicable portion thereof) to any Person in the first transaction that Landlord consummates from and after the date hereof, and, accordingly. (I) Landlord shall have no obligation to give an Option Notice to Tenant with respect to the Option Space (or such portion thereof), and (II) Landlord shall have the right to lease the Option Space (or such portion

 

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thereof) to any such Person without first offering the Option Space (or the applicable portion thereof) to Tenant as contemplated by this Article 18.

 

(C)                               Tenant’s exercise of the Option shall be ineffective if, on the date that Tenant gives the Option Response Notice, an Event of Default has occurred and is continuing. If (i) Tenant exercises the Option, and (ii) at any time prior to the Option Space Commencement Date, an Event of Default has occurred and is continuing, (x) the Minimum Demise Requirement is not satisfied, (y) the Minimum Occupancy Requirement is not satisfied; provided, however, that the Minimum Occupancy Requirement shall not apply during the first eighteen (18) months of the Term or (z) the Initial Tenant Requirement is not satisfied, then, at any time prior to the Option Space Commencement Date. Landlord shall have the right to declare Tenant’s exercise of the Option ineffective by giving notice thereof to Tenant, in which case Landlord shall have the right to lease the Applicable Option Space (or any portion thereof) to any other Person on terms acceptable to Landlord in Landlord’s sole discretion.

 

(D)                               Tenant shall not have the right to exercise the Option from and after the Option Cutoff Date, and, accordingly, from and after the Option Cutoff Date, (I) Landlord shall have no obligation to give an Option Notice to Tenant with respect to the Option Space (or any portion thereof), and (II) Landlord shall have the right to lease the Option Space (or such portion thereof) to any other Person without first offering the Option Space (or such portion thereof) to Tenant as contemplated by this Article 18. The term “Option Cutoff Date” shall mean the date that is three (3) years before the Fixed Expiration Date, except that if Tenant exercises the Renewal Option, then the Option Cutoff Date shall be the date that is three (3) years before the last day of the Renewal Term.

 

(E)                                Subject to the terms of this Section 18.4(E), any Option Response Notice that Tenant gives to Landlord shall not be effective for purposes hereof (and shall be of no force or effect), if applicable subject to the terms of this Section 18.4(E), Tenant includes therewith an amendment to the Letter of Credit (in a form that is reasonably satisfactory to Landlord) that increases the amount of the Letter of Credit by an amount equal to the product obtained by multiplying (x) an amount equal to the first installment of Fixed Rent for a full calendar month that becomes payable hereunder for the Applicable Option Space, by (y) six (6). Landlord and Tenant shall calculate initially the amount of the aforesaid increase in the Letter of Credit assuming that the Fixed Rent for the Applicable Option Space is an amount equal to the product obtained by multiplying (I) the quotient obtained by dividing (x) the Fixed Rent that is payable hereunder at such time (other than the Fixed Rent that is payable hereunder for the Applicable Option Space), by (y) the number of square feet of Rentable Area comprising the Premises at such time (other than the Rentable Area comprising the Applicable Option Space), by (II) the number of square feet of Rentable Area comprising the Applicable Option Space. Landlord and Tenant shall adjust the amount of the aforesaid increase in the Letter of Credit to the extent (if any) necessary within ten (10) Business Days after the date that the parties determine the Fair Market Rent for the Applicable Option Space in accordance with the terms of Article 21 hereof. Notwithstanding the foregoing, in the event that Tenant provides to Landlord an audited balance sheet that is dated no earlier than the last day of the most recently ended fiscal quarter (or the last

 

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day of the fiscal quarter that immediately precedes the most recently ended fiscal quarter, if the date of such Option Response Notice is less than sixty (60) days after the last day of the most recently ended fiscal quarter), and, such audited balance sheet of Tenant reflects that Tenant’s tangible net worth, as determined in accordance with GAAP, is less than One Hundred Million Dollars ($100,000,000) then, only in such event, Tenant shall be obligated to provide such amendment to the Letter of Credit.

 

18.5.                     Lease Provisions Apply.

 

If Tenant exercises the Option in accordance with the provisions of this Article 18, then, on the Option Space Commencement Date for the Applicable Option Space, the following provisions shall become effective:

 

(A)                               The Applicable Option Space shall be added to the Premises for purposes of this Lease (except as otherwise provided in this Section 18.5).

 

(B)                               Landlord shall not be obligated to perform any work or make any installations in the Applicable Option Space or grant Tenant a work allowance therefor.

 

(C)                               The Fixed Rent for the Applicable Option Space shall be an amount equal to the Fair Market Rent therefor.

 

18.6.                     Delivery.

 

Landlord shall deliver vacant and exclusive possession of the Applicable Option Space to Tenant on the Scheduled Option Space Commencement Date in broom clean condition with all Building Systems serving the Applicable Option Space in good working order; provided, however, that (x) if a Person remains in occupancy of the Applicable Option Space (or any portion thereof) on the Scheduled Option Space Commencement Date, then Landlord, at Landlord’s expense, shall use reasonable diligence to cause vacant and exclusive possession of the Applicable Option Space to be delivered to Tenant as promptly as reasonably practicable thereafter (the Scheduled Option Space Commencement Date, or such later date on which Landlord delivers vacant and exclusive possession of the Applicable Option Space to Tenant as contemplated by this Section 18.6, being referred to herein as the “Option Space Commencement Date”), and (y) if such Person’s right to remain in occupancy of the Applicable Option Space (or a portion thereof) terminates prior to the Scheduled Option Space Commencement Date, then Landlord shall have no liability to Tenant (except as otherwise set forth in clause (x) above), and Tenant shall have no right to terminate or rescind this Lease or Tenant’s exercise of the Option or reduce the Rental, in each case deriving from Landlord’s failure to deliver vacant and exclusive possession of the Applicable Option Space to Tenant on the Scheduled Option Space Commencement Date. Landlord and Tenant intend that this Section 18.6 constitutes an “express provision to the contrary” for purposes of Section 223-a of the New York Real Property Law.

 

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Article 19

TENANT’S RIGHT TO LEASE ADDITIONAL SPACE

 

19.1.                     Additional Space.

 

(A)                               The term “Additional Space” shall mean the space in the Building as shown by cross-hatching in Exhibit “19.1” attached hereto and made a part hereof.

 

(B)                               The term “Scheduled Additional Space Commencement Date” shall mean the day on Which Landlord reasonably anticipates that Landlord’s Pre-Commencement Work in the Additional Space shall be Substantially Complete.

 

19.2.                     Option.

 

On or promptly following the one hundred eightieth (180th) day following the Commencement Date, Landlord shall give Tenant a notice (the “Reminder Notice”) reminding Tenant that Tenant has the option (the “Additional Space Option”) to lease the Additional Space for a term (the “Additional Space Term”) commencing on the Additional Space Commencement Date and expiring on the Expiration Date. In addition to reminding Tenant of the Additional Space Option, the Reminder Notice shall set forth the Rentable Area of the Additional Space and the Scheduled Additional Space Commencement Date. Tenant shall have the right to exercise the Additional Space Option by giving notice thereof (the “Additional Space Notice”) to Landlord on or prior to the fifth (5th) Business Day following the date on which Landlord gives the Reminder Notice. Time shall be of the essence as to the date by which Tenant must give the Additional Space Notice to Landlord to exercise the Additional Space Option. If Tenant does not give the Additional Space Notice to Landlord on or prior to such date, then, subject to the terms of Article 18 hereof, Landlord shall thereafter have the right to lease the Additional Space (or any part thereof) to any other Person on terms acceptable to Landlord in Landlord’s sole discretion without being required to make any other offer to Tenant regarding the Additional Space under this Article 19. Tenant shall not have the right to revoke an Additional Space Notice given to Landlord pursuant to this Article 19. Tenant shall not have the right to exercise the Additional Space Option for only a portion of the Additional Space.

 

19.3.                     Certain Limitations.

 

(A)                               Tenant shall have the right to exercise the Additional Space Option only during the period that the Minimum Demise Requirement is satisfied and the Initial Tenant Requirement is satisfied.

 

(B)                               Tenant’s exercise of the Additional Space Option shall be ineffective if, on the date that Tenant gives the Additional Space Notice to Landlord, an Event of Default has occurred and is continuing. If (i) Tenant exercises the Additional Space Option, and (ii) at any time prior to the Additional Space Commencement Date, an Event of Default has occurred and is continuing, the Minimum Demise Requirement is not satisfied or the Initial Tenant Requirement

 

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is not satisfied, then, at any time prior to the Additional Space Commencement Date, Landlord shall have the right to declare Tenant’s exercise of the Additional Space Option ineffective by giving notice thereof to Tenant, in which case Landlord shall have the right to lease the Additional Space (or any portion thereof) to any other Person on terms acceptable to Landlord in Landlord’s sole discretion.

 

19.4.                     Lease Provisions Apply.

 

If Tenant exercises the Additional Space Option in accordance with the provisions of this Article 19, then, on the Additional Space Commencement Date, the following provisions shall become effective:

 

(A)                               The Additional Space shall be added to the Premises for purposes of this Lease (except as otherwise provided in this Section 19.4).

 

(B)                               The Fixed Rent for the Additional Space shall be due and payable from and after the Rent Commencement Date.

 

(C)                               The Fixed Rent for the Additional Space shall be (i) $48 per square foot of Rentable Area of the Additional Space for the period commencing on the Rent Commencement Date and ending on the day immediately preceding the date that is five (5) years after the Rent Commencement Date and (ii) $53 per square foot of Rentable Area of the Additional Space for the period commencing on the date that is five (5) years after the Rent Commencement Date and ending on the Fixed Expiration Date.

 

(D)                               The Tax Payment for each Tax Year from and after the Additional Space Commencement Date shall be increased to reflect the inclusion of the Additional Space in the Premises by an amount equal to the product obtained by multiplying (I) the ratio (expressed as a percentage) that the number of square feet of Rentable Area in the Additional Space bears to the number of square feet of Rentable Area in the Building, by (II) the excess of (x) Taxes for the applicable Tax Year, over (y) the quotient obtained by dividing (i) the Taxes for the two (2) fiscal years commencing on July 1, 2013 and ending on June 30, 2015, by (ii) two (2).

 

(E)                                The Operating Expense Payment for each Operating Expense Year from and after the Additional Space Commencement Date shall be increased to reflect the inclusion of the Additional Space in the Premises by an amount equal to the product obtained by multiplying (I) the ratio (expressed as a percentage) that the number of square feet of Rentable Area in the Additional Space bears to the number of square feet of Rentable Area in the Building (other than any retail portion thereof), by (II) the excess of (x) Operating Expenses for the applicable Operating Expense Year, over (y) the Operating Expenses for the 2014 calendar year.

 

(F)                                 Landlord shall not be obligated to perform any work or make any installations in the Additional Space or grant Tenant a work allowance therefor; provided, however, that (i) Landlord shall perform Landlord’s Pre-Commencement Work therein to the

 

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extent reasonably applicable, (ii) Landlord shall contribute to the cost of the Initial Alterations that Tenant performs in the Additional Space an amount equal to the product obtained by multiplying (x) Sixty-Five Dollars and No Cents ($65.00), by (y) the number of square feet of Rentable Area comprising the Additional Space (the amount described in this clause (ii) being referred to herein as the “Additional Space Tenant Fund”), (iii) Landlord shall disburse the Additional Space Tenant Fund to or on behalf of Tenant in accordance with the provisions of Section 7.12 hereof, and (iv) Tenant shall have the right to use no more than fifteen percent (15%) of the Additional Space Tenant Fund for Soft Costs.

 

19.5.                     Delivery.

 

(A)                               If Tenant exercises the Additional Space Option pursuant to this Article 19, then Landlord shall deliver vacant and exclusive possession of the Additional Space to Tenant on the Scheduled Additional Space Commencement Date in broom clean condition with all Building Systems serving the Additional Space in good working order; provided, however, that if Landlord’s Pre-Commencement Work in the Additional Space is not Substantially Complete by the Scheduled Additional Space Commencement Date, then Landlord shall deliver the Additional Space to Tenant on the date on which Landlord’s Pre-Commencement Work in the Additional Space is Substantially Complete (the Scheduled Additional Space Commencement Date, or such later date on which Landlord delivers vacant and exclusive possession of the Additional Space to Tenant as contemplated by this Section 19.5(A), being referred to herein as the “Additional Space Commencement Date”). Landlord shall have no liability to Tenant, and Tenant shall have no right to terminate or rescind this Lease or Tenant’s exercise of the Additional Space Option or reduce the Rental, in each case deriving from Landlord’s failure to deliver vacant and exclusive possession of the Additional Space to Tenant on the Scheduled Additional Space Commencement Date. Landlord and Tenant intend that this Section 19.5(A) constitutes an “express provision to the contrary” for purposes of Section 223-a of the New York Real Property Law.

 

Article 20

RENEWAL

 

20.1.                     Renewal Option.

 

(A)                               Subject to the terms of this Article 20, Tenant shall have the option (the “Renewal Option”) to extend the term of this Lease for the entire Premises for one (1) additional period of five (5) years (the “Renewal Term”), which Renewal Term shall commence on the day immediately succeeding the Fixed Expiration Date and end on the day that is five (5) years after the Fixed Expiration Date, provided that (a) this Lease has not been previously terminated as of the date that Tenant gives Landlord notice (the “Renewal Notice”) of Tenant’s election to exercise the Renewal Option, (b) no Event of Default has occurred and is continuing on the date that Tenant gives Landlord the Renewal Notice, (c) the Minimum Occupancy Requirement is satisfied on the date that Tenant gives the Renewal Notice to Landlord, and (d) the Initial Tenant Requirement is satisfied.

 

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(B)                               The Renewal Option shall be exercisable only by Tenant’s delivering the Renewal Notice to Landlord not later than the three hundred sixty-fifth (365th) day before the Fixed Expiration Date (as to which date time shall be of the essence). Landlord shall have the right to declare Tenant’s exercise of the Renewal Option ineffective if (a) an Event of Default has occurred and is continuing as of the Fixed Expiration Date, (b) the Minimum Demise Requirement is not satisfied as of the Fixed Expiration Date: (c) the Minimum Occupancy Requirement is not satisfied as of the Fixed Expiration Date, or (d) as of the Fixed Expiration Date, the Initial Tenant Requirement is not satisfied, in either case by giving notice thereof to Tenant during the period commencing on the Fixed Expiration Date and ending on the date that is fifteen (15) days after the Fixed Expiration Date (it being understood that (x) if Landlord so declares Tenant’s exercise of the Renewal Option ineffective, then the Term shall terminate on the fifteenth (15th) day after the date that Landlord gives Tenant notice of such declaration (in which case Tenant shall pay the Rental due hereunder in respect of the Renewal Term to the extent accruing during the period commencing on the first day of the Renewal Term and ending on the date that the Term so terminates), and (y) nothing contained in this Section 20.1(B) limits Landlord’s other rights or remedies after the occurrence of an Event of Default).

 

20.2.                     Lease Provisions Apply.

 

If Tenant exercises the Renewal Option, then the leasing of the Premises during the Renewal Term shall be upon the terms set forth herein, except that:

 

(A)                               the Fixed Rent for the Premises during the Renewal Term shall be the Fair Market Rent thereof;

 

(B)                               Landlord shall have no obligation to perform any work in connection with Tenant’s exercise of the Renewal Option;

 

(C)                               Landlord shall have no obligation to grant to Tenant any work allowance in connection with Tenant’s exercise of the Renewal Option; and

 

(D)                               the provisions of this Article 20 shall not be applicable to permit Tenant to further extend the Term.

 

Article 21

FAIR MARKET RENT

 

21.1.                     Certain Definitions.

 

(A)                               The term “Fair Market Rent” shall mean annual fair market rental value.

 

(B)                               The term “Applicable Area” shall mean:

 

(I)                                   the Premises, in connection with the determination of the Fair Market Rent thereof, and

 

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(2)                                 the Applicable Option Space, in connection with the determination of the Fair Market Rent thereof.

 

(C)                               The term “Applicable Date” shall mean:

 

(1)                                 the Fixed Expiration Date, in connection with the determination of the Fair Market Rent of the Premises, and

 

(2)                                 the Scheduled Option Space Commencement Date, in connection with the determination of the Fair Market Rent for the Applicable Option Space.

 

21.2.                     Fair Market Rent Assumptions.

 

The Fair Market Rent shall be determined as of the Applicable Date assuming that the Applicable Area is free and clear of all leases and tenancies (including this Lease), that the Applicable Area is available for the purposes permitted by this Lease in the then rental market, that Landlord has had a reasonable time to locate a tenant, and that neither Landlord nor the prospective tenant is under any compulsion to rent, and taking into account all relevant factors.

 

21.3.                     Fair Market Procedure.

 

If Tenant exercises the Renewal Option, or Tenant exercises the Option, then Landlord and Tenant shall each deliver simultaneously to the other, at Landlord’s office, a notice (each, a “Rent Notice”), on a date mutually agreed upon, but in no event later than:

 

(1)                                 one hundred eighty (180) days before the Fixed Expiration Date, with respect to the Rent Notice for the determination of the Fair Market Rent for the Premises, and

 

(2)                                 the later to occur of (I) three (3) months before the Scheduled Option Space Commencement Date, and (II) the thirtieth (30th) day after the date that Tenant gives the applicable Option Response Notice to Landlord, with respect to the Rent Notice for the determination of the Fair Market Rent for the Applicable Option Space, 

 

as the case may be, which Rent Notice shall set forth each of their respective determinations of the Fair Market Rent (Landlord’s determination of the Fair Market Rent is referred to as “Landlord’s Determination” and Tenant’s determination of the Fair Market Rent is referred to as “Tenant’s Determination”). If (i) Landlord fails to give Landlord’s Determination to Tenant, and (ii) Tenant tenders Tenant’s Determination to Landlord, then the Fair Market Rent for the Applicable Area shall be Tenant’s Determination. If (i) Tenant fails to give Tenant’s Determination to Landlord, and (ii) Landlord tenders Landlord’s Determination to Tenant, then the Fair Market Rent for the Applicable Area shall be Landlord’s Determination.

 

(B)                               If Tenant’s Determination is lower than Landlord’s Determination, then Landlord and Tenant shall attempt in good faith to agree upon the Fair Market Rent for a period of thirty (30) days after the date that Landlord gives Landlord’s Determination to Tenant, and

 

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Tenant gives Tenant’s Determination to Landlord. If Tenant’s Determination is higher than Landlord’s Determination, then the Fair Market Rent for the Applicable Area shall be the average of Landlord’s Determination and Tenant’s Determination. If Landlord and Tenant do not agree on the Fair Market Rent for the Applicable Area within thirty (30) days after the date that Landlord gives Landlord’s Determination to Tenant, and the date that Tenant gives Tenant’s Determination to Landlord, then Landlord and Tenant shall select jointly an independent real estate appraiser that (i) neither Landlord nor Tenant, nor any of their respective Affiliates, has engaged during the immediately preceding period of three (3) years, and (ii) has at least ten (10) years of experience in leasing properties that are similar in character to the Building (such appraiser being referred to herein as the “Appraiser”). Landlord and Tenant shall each pay fifty percent (50%) of the Appraiser’s fee. If Landlord and Tenant do not agree on the Appraiser within ten (10) days after the last day of such period of thirty (30) days, then either party shall have the right to institute an Expedited Arbitration Proceeding for the sole purpose of designating the Appraiser.

 

(C)                               The parties shall instruct the Appraiser to (i) conduct the hearings and investigations that he or she deems appropriate, and (ii) choose either Landlord’s Determination or Tenant’s Determination as the better estimate of Fair Market Rent for the Applicable Area, within thirty (30) days after the date that the Appraiser is designated. The Appraiser’s aforesaid choice shall be conclusive and binding upon Landlord and Tenant. Each party shall pay its own counsel fees and expenses, if any, in connection with the procedure described in this Article 21. The Appraiser shall not have the power to supplement or modify any of the provisions of this Lease.

 

(D)                               If the final determination of the Fair Market Rent is not made on or before the Applicable Date in accordance with the provisions of this Article 21, then, pending such final determination, the Fair Market Rent shall be deemed to be an amount equal to the average of Landlord’s Determination and Tenant’s Determination. If, based upon the final determination hereunder of the Fair Market Rent, the payments made by Tenant on account of the Rental for the period prior to the final determination of the Fair Market Rent were less than the Rental payable for such period, then Tenant, not later than the tenth (10th) day after Landlord’s demand therefor, shall pay to Landlord the amount of such deficiency, together with interest thereon at the Base Rate. If, based upon the final determination of the Fair Market Rent, the payments made by Tenant on account of the Rental for the period prior to the final determination of the Fair Market Rent were more than the Rental due hereunder for such period, then Landlord, not later than the tenth (10th) day after Tenant’s demand therefor, shall pay such excess to Tenant, together with interest thereon at the Base Rate (it being agreed that if Landlord fails to make such payment within thirty (30) days after Tenant’s demand therefor, then Tenant shall have the right to apply against the Rental thereafter coming due hereunder a credit in an aggregate amount equal to such excess and such interest, until such credit is exhausted).

 

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Article 22

DEFAULT

 

22.1.                     Events of Default.

 

The term “Event of Default” shall mean the occurrence of any of the following events:

 

(A)                               Tenant fails to pay any installment of Fixed Rent when due and such failure continues for five (5) Business Days after the date that Landlord gives notice of such failure to Tenant; provided, however, that if (x) Tenant fails to pay any installment of Fixed Rent when due, (y) Tenant has theretofore failed to pay at least three (3) installments of Fixed Rent when due during the immediately preceding period of twelve (12) months, and (z) Landlord has theretofore given Tenant notice of Tenant’s aforesaid failure to pay when due at least three (3) installments of Fixed Rent during such period of twelve (12) months, then Tenant’s failure to pay such installment of Fixed Rent shall constitute an Event of Default (without Landlord’s being required to first give Tenant notice of such failure and an opportunity to cure such failure, as aforesaid);

 

(B)                               Tenant fails to pay any installment of Rental (other than Fixed Rent) when due and such failure continues for seven (7) Business Days after the date that Landlord gives notice of such failure to Tenant;

 

(C)                               a Permitted Party’s interest under the applicable Occupancy Agreement devolves upon or passes to any other Person, whether by operation of law or otherwise, except as expressly permitted under Article 17 hereof, and such Transfer is not reversed within ten (10) days after the date that such Transfer occurs;

 

(D)                               Tenant defaults in respect of Tenant’s obligations under Section 4.8 hereof, and such default continues for more than three (3) Business Days after Landlord gives Tenant notice thereof;

 

(E)                                Tenant defaults in respect of Tenant’s obligations under Section 7.5(A)(4) hereof, and such default continues for more than five (5) Business Days after Landlord gives Tenant notice thereof;

 

(F)                                 Tenant fails to provide Landlord with a replacement Letter of Credit after Landlord presents the Letter of Credit for payment to apply the proceeds thereof after the occurrence of an Event of Default as provided in Section 26.2 hereof within five (5) Business Days after the date that Landlord gives Tenant notice demanding that Tenant provide such replacement;

 

(G)                               an Insolvency Event occurs;

 

(H)                              Tenant defaults in the observance or performance of any other covenant of this Lease on Tenant’s part to be observed or performed and Tenant fails to remedy such default

 

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within thirty (30) days after Landlord gives Tenant notice thereof, except that if (i) such default cannot be remedied with reasonable diligence during such period of thirty (30) days, (ii) Tenant takes reasonable steps during such period of thirty (30) days to commence Tenant’s remedying of such default, and (iii) Tenant prosecutes diligently Tenant’s remedying of such default to completion, then an Event of Default shall not occur by reason of such default; or

 

(I)                                   the Premises are abandoned.

 

22.2.                     Termination.

 

If (1) an Event of Default occurs, and (2) Landlord, at any time thereafter, at Landlord’s option, gives a notice to Tenant stating that this Lease and the Term shall expire and terminate on the third (3rd) Business Day after the date that Landlord gives Tenant such notice, then this Lease and the Term and all rights of Tenant under this Lease shall expire and terminate as of the third (3rd) Business Day after the date that Landlord gives Tenant such notice, and Tenant immediately shall quit and surrender the Premises, but Tenant shall nonetheless remain liable for all of its obligations hereunder, as provided in Article 24 hereof and Article 25 hereof; provided, however, that if the Event of Default derives from an Insolvency Event, then the provisions of Article 23 hereof shall apply.

 

Article 23

TENANT’S INSOLVENCY

 

23.1.                     Assignments pursuant to the Bankruptcy Code.

 

(A)                               The term “Bankruptcy Code” shall mean 11 U.S.C. Section 101 et seq., or any statute of similar nature and purpose.

 

(B)                               If Tenant, Tenant’s trustee or Tenant as debtor-in-possession (each, an “Insolvency Party”) proposes to assign the tenant’s interest hereunder pursuant to the provisions of the Bankruptcy Code to any Person that has made a bona fide offer to accept an assignment of the tenant’s interest under this Lease on terms acceptable to Tenant, then the Insolvency Party shall give to Landlord notice of such proposed assignment no later than twenty (20) days after the date that the Insolvency Party receives such offer, but in any event no later than ten (10) days before the date that the Insolvency Party makes application to a court of competent jurisdiction for authority and approval to consummate such assignment. Such notice given by the Insolvency Party to Landlord shall (a) set forth the name and address of such Person that has made such bona fide offer, (b) set forth all of the terms and conditions of such bona fide offer, and (c) confirm that such Person will provide to Landlord adequate assurance of future performance that conforms with the terms of Section 23.1(D) hereof. Landlord shall have the right to accept an assignment of this Lease upon the same terms and conditions and for the same consideration, if any, as the bona fide offer made by such Person (less any brokerage commissions that would otherwise be payable by the Insolvency Party out of the consideration to be paid by such Person in connection with such assignment of the tenant’s interest under this Lease), by giving notice

 

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thereof to the Insolvency Party at any time prior to the effective date of such proposed assignment.

 

(C)                               Tenant shall pay to Landlord an amount equal to the reasonable Out-of-Pocket Costs that Landlord incurs in connection with Tenant’s assignment of the tenant’s interest hereunder pursuant to the provisions of the Bankruptcy Code, within thirty (30) days after Landlord’s submission to Tenant of an invoice therefor that contains reasonable supporting documentation for the charges described therein.

 

(D)                               A Person that submits a bona fide offer to take by assignment the tenant’s interest under this Lease as described in Section 23.1(B) hereof shall be deemed to have provided Landlord with adequate assurance of future performance only if such Person (a) deposits with Landlord simultaneously with such assignee’s taking by assignment the tenant’s interest under this Lease an amount equal to the then annual Fixed Rent, as security for the faithful performance and observance by such assignee of the tenant’s obligations of this Lease (and such Person gives to Landlord, at least five (5) days prior to the date that the proposed assignment becomes effective, information reasonably satisfactory to Landlord that indicates that such Person has the ability to post such deposit), (b) gives to Landlord, at least five (5) days prior to the date that the proposed assignment becomes effective, such Person’s financial statements, audited by a certified public accountant in accordance with GAAP, for the three (3) fiscal years that immediately precede such assignment, that indicate that such Person has a tangible net worth of at least ten (10) times the then annual Fixed Rent for each of such three (3) years, and (c) gives to Landlord, at least five (5) days prior to the date that the proposed assignment becomes effective, such other information or takes such action that in either case Landlord, in its reasonable judgment, determines is necessary to provide adequate assurance of the performance by such assignee of the obligations of the tenant under this Lease; provided, however, that in no event shall such adequate assurance of future performance be less favorable to Landlord than the assurance contemplated by Section 365(b)(3) of the Bankruptcy Code (notwithstanding that this Lease may not be construed as a lease of real property in a shopping center).

 

(E)                                If Tenant’s interest under this Lease is assigned to any Person pursuant to the provisions of the Bankruptcy Code, then any such assignee shall (x) be deemed without further act or deed to have assumed all the obligations of the tenant arising under this Lease from and after the date of such assignment, and (y) execute and deliver to Landlord upon demand an instrument confirming such assumption.

 

(F)                                 Nothing contained in this Article 23 limits Landlord’s rights against Tenant under Article 17 hereof.

 

23.2.                     Replacement Lease.

 

If (i) Tenant is not the Person that constituted Tenant initially, and (ii) either (I) this Lease is disaffirmed or rejected pursuant to the Bankruptcy Code, or (II) this Lease terminates by reason of occurrence of an Insolvency Event, then, subject to the terms of this Section 23.2, the

 

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Persons that constituted Tenant hereunder previously, including, without limitation, the Person that constituted Tenant initially (each such Person that previously constituted Tenant hereunder (but does not then constitute Tenant hereunder), and with respect to which Landlord exercises Landlord’s rights under this Section 23.2, being referred to herein as a “Predecessor Tenant”) shall (1) pay to Landlord the aggregate Rental that is then due and owing by Tenant to Landlord under this Lease to and including the date of such disaffirmance, rejection or termination, and (2) enter into a new lease, between Landlord, as landlord, and the Predecessor Tenant, as tenant, for the Premises, and for a term commencing on the effective date of such disaffirmance, rejection or termination and ending on the Fixed Expiration Date (or the last day of the Renewal Term, if such disaffirmance, rejection or termination occurs during the Renewal Term), at the same Fixed Rent and upon the then executory terms that are contained in this Lease, except that (a) the Predecessor Tenant’s rights under the new lease shall be subject to the possessory rights of Tenant under this Lease and the possessory rights of any Person claiming by, through or under Tenant or by virtue of any statute or of any order of any court, and (b) such new lease shall require all defaults existing under this Lease to be cured by the Predecessor Tenant with reasonable diligence, Landlord shall have the right to require the Predecessor Tenant to execute and deliver such new lease on the terms set forth in this Section 23.2 only by giving notice thereof to Tenant and to the Predecessor Tenant within thirty (30) days after Landlord receives notice of any such disaffirmance or rejection (or, if this Lease terminates by reason of Landlord making an election to do so, then Landlord may exercise such right only by giving such notice to Tenant and the Predecessor Tenant within thirty (30) days after this Lease so terminates). If the Predecessor Tenant defaults in its obligation to enter into said new lease for a period of ten (10) days following Landlord’s request therefor, then, in addition to all other rights and remedies by reason of such default, either at law or in equity, Landlord shall have the same rights and remedies against such Predecessor Tenant as if such Predecessor Tenant had entered into such new lease and such new lease had thereafter been terminated as of the commencement date thereof by reason of such Predecessor Tenant’s default thereunder.

 

23.3.       Insolvency Events.

 

This Lease shall terminate automatically upon the occurrence of any of the following events:

 

(A)                               a Tenant Obligor commences or institutes any case, proceeding or other action (a) seeking relief on its behalf as debtor, or to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, or (b) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its property; or

 

(B)                               a Tenant Obligor makes a general assignment for the benefit of creditors; or

 

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(C)                               any case, proceeding or other action is commenced or instituted against a Tenant Obligor (a) seeking to have an order for relief entered against it as debtor or to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, or (b) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its property, which in either of such cases (i) results in any such entry of an order for relief, adjudication of bankruptcy or insolvency or such an appointment or the issuance or entry of any other order having a similar effect, and (ii) remains undismissed for a period of sixty (60) days; or

 

(D)                               any case, proceeding or other action is commenced or instituted against a Tenant Obligor seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its property which results in the entry of an order for any such relief which is not vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or

 

(E)                                a Tenant Obligor takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clauses (A), (B), (C), or (D) above; or

 

(F)                                 a trustee, receiver or other custodian is appointed for any substantial part of a Tenant Obligor’s assets, and such appointment is not vacated or stayed within fifteen (15) Business Days (the events described in this Section 23.3 being collectively referred to herein as “Insolvency Events”).

 

The term “Tenant Obligor” shall mean (a) Tenant, (b) any Person that comprises Tenant (if Tenant is comprised of more than one (1) Person), (c) any partner in Tenant (if Tenant is a general partnership), (d) any general partner in Tenant (if Tenant is a limited partnership), (e) any Person that has guarantied all or any part of the obligations of Tenant hereunder, and (f) any Person that previously constituted Tenant hereunder provided, however, if (i) Tenant’s tangible net worth, determined in accordance with generally accepted accounting principles, consistently applied, is equal to or greater than fifteen (15) times the annual Rental that is then payable hereunder as of the date that the Insolvency Event occurs, and (ii) Tenant, within forty-five (45) days after the occurrence of the Insolvency Event, gives to Landlord audited financial statements of Tenant for the fiscal quarter most recently ended that reflect such tangible net worth, then a Tenant Obligor shall not include any Person that previously constituted Tenant hereunder, unless such Person is an Affiliate of Tenant. If this Lease terminates pursuant to this Section 23.3, then (I) Tenant immediately shall quit and surrender the Premises, and (II) Tenant shall nonetheless remain liable for all of its obligations hereunder, as provided in Article 24 hereof and Article 25 hereof.

 

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23.4.                     Effect of Stay.

 

Notwithstanding anything to the contrary contained herein, if (i) Landlord’s right to terminate this Lease after the occurrence of an Event of Default, or the termination of this Lease upon the occurrence of an Insolvency Event, is stayed by order of any court having jurisdiction over an Insolvency Event, or by federal or state statute, (ii) the trustee appointed in connection with an Insolvency Event, or Tenant or Tenant as debtor-in-possession, fails to assume Tenant’s obligations under this Lease on or prior to the earliest to occur of (a) the last day of the period prescribed therefor by law, (b) the one hundred twentieth (120th) day after entry of the order for relief, or (c) a date that is otherwise designated by the court, or (iii) said trustee, Tenant or Tenant as debtor-in-possession fails to provide adequate protection of Landlord’s right, title and interest in and to the Premises or adequate assurance of the complete and continuous future performance of Tenant’s obligations under this Lease as provided in Section 23.1(D) hereof, then Landlord, to the extent permitted by law or by leave of the court having jurisdiction over such proceeding, shall have the right, at its election, to terminate this Lease on five (5) Business Days of advance notice to Tenant, Tenant as debtor-in-possession or said trustee, and, upon the expiration of said period of five (5) Business Days, this Lease shall cease and expire as aforesaid and Tenant, Tenant as debtor-in-possession or said trustee shall immediately quit and surrender the Premises as aforesaid.

 

23.5.                     Rental for Bankruptcy Purposes.

 

Notwithstanding anything contained in this Lease to the contrary, all amounts payable by Tenant to or on behalf of Landlord under this Lease, regardless of whether such amounts are expressly denominated as Rental, shall constitute rent for the purposes of Section 502(b)(6) of the Bankruptcy Code, and Tenant’s payment obligations with respect thereto shall constitute obligations to be timely performed pursuant to Section 365(d) of the Bankruptcy Code.

 

Article 24

REMEDIES AND DAMAGES

 

24.1.                     Certain Remedies.

 

(A)                               If (x) an Event of Default occurs and this Lease and the Term expires and comes to an end as provided in Article 22 hereof, or (y) this Lease terminates as provided in Section 23.3 hereof, then:

 

(1)                                 Tenant shall immediately quit and peacefully surrender the Premises to Landlord, and Landlord and its agents may, without prejudice to any other remedy which Landlord may have, (a) re-enter the Premises or any part thereof, without notice, either by summary proceedings, or by any other applicable action or proceeding, or by lawful force (without being liable to indictment, prosecution or damages therefor), (b) repossess the Premises and dispossess Tenant and any other Persons from the Premises, and (c) remove any and all of their property and effects from the Premises; and

 

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(2)                                 Landlord, at Landlord’s option, may relet the whole or any portion or portions of the Premises from time to time, either in the name of Landlord or otherwise, to such tenant or tenants, for such term or terms ending before, on or after the Fixed Expiration Date, at such rental or rentals and upon such other conditions, which may include concessions and free rent periods, as Landlord, in its sole discretion, may determine.

 

(B)                               Landlord shall have no obligation to relet the Premises or any part thereof and shall not be liable for refusal or failure to relet the Premises or any part thereof, or, in the event of any such reletting, for refusal or failure to collect any rent due upon any such reletting. Any such refusal or failure on Landlord’s part shall not relieve Tenant of any liability under this Lease or otherwise affect any such liability. Landlord, at Landlord’s option, may make such repairs, replacements, alterations, additions, improvements, decorations and other physical changes in and to the Premises as Landlord, in its sole discretion, considers advisable or necessary in connection with any such reletting or proposed reletting, without relieving Tenant of any liability under this Lease or otherwise affecting any such liability.

 

(C)                               In the event of a breach or threatened breach by Tenant, or any Persons claiming by, through or under Tenant, of any term, covenant or condition of this Lease, Landlord shall have the right to (1) enjoin or restrain such breach, (2) invoke any other remedy allowed by law or in equity as if re-entry, summary proceedings and other special remedies were not provided in this Lease for such breach, and (3) seek any declaratory, injunctive or other equitable relief, and specifically enforce this Lease. The right to invoke the remedies hereinbefore set forth are cumulative and nonexclusive and shall not preclude Landlord from invoking any other remedy allowed at law or in equity.

 

24.2.                     No Redemption.

 

Tenant, on its own behalf and on behalf of all Persons claiming by, through or under Tenant, including all creditors, does hereby waive any and all rights which Tenant and all such Persons might have under any present or future law to redeem the Premises, or to re-enter or repossess the Premises, or to restore the operation of this Lease, after (a) Tenant has been dispossessed by a judgment or by warrant of any court or judge, or (b) any re-entry by Landlord, or (c) any expiration or termination of this Lease and the Term, whether such dispossess, re-entry, expiration or termination is by operation of law or pursuant to the provisions of this Lease. The words “re-enter,” “re-entry” and “re-entered” as used in this Lease shall not be deemed to be restricted to their technical legal meanings.

 

24.3.                     Calculation of Damages.

 

(A)                               If this Lease terminates by reason of the occurrence of an Event of Default or by reason of the occurrence of an Insolvency Event, then Tenant shall pay to Landlord, on demand, and Landlord shall be entitled to recover:

 

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(1)                                 all Rental payable under this Lease by Tenant to Landlord (x) to the date that this Lease terminates, or (y) to the date of re-entry upon the Premises by Landlord, as the ease may be;

 

(2)                                 the excess of (a) the Rental for the period which otherwise would have constituted the unexpired portion of the Term, over (b) the net amount, if any, of rents collected under any reletting effected pursuant to the provisions of clause (2) of Section 24.1(A) hereof for any part of such period (such excess being referred to herein as a “Deficiency”), as damages (it being understood that (x) such net amount described in clause (b) above shall be calculated by deducting from the rents collected under any such reletting all of Landlord’s expenses in connection with the termination of this Lease, Landlord’s re-entry upon the Premises and such reletting, including, but not limited to, all repossession costs, brokerage commissions, legal expenses, attorneys’ fees and disbursements, alteration costs, contributions to work and other expenses of preparing the Premises for such reletting, (y) any such Deficiency shall be paid in monthly installments by Tenant on the days specified in this Lease for payment of installments of Fixed Rent or Escalation Rent (as the case may be), and (z) Landlord shall be entitled to recover from Tenant each monthly Deficiency as it arises, and no suit to collect the amount of the Deficiency for any month shall prejudice Landlord’s right to collect the Deficiency for any subsequent month by a similar proceeding); and

 

(3)                                 regardless of whether Landlord has collected any monthly Deficiency as aforesaid, and in lieu of any further Deficiency, as and for liquidated and agreed final damages, an amount equal to the excess (if any) of (a) the Rental for the period which otherwise would have constituted the unexpired portion of the Term (commencing on the date immediately succeeding the last date with respect to which a Deficiency, if any, was collected), over (b) the then fair and reasonable net effective rental value of the Premises for the same period (which is calculated by (X) deducting from the fair and reasonable rental value of the Premises the expenses that Landlord would reasonably expect to incur in reletting the Premises, including, but not limited to, all repossession costs, brokerage commissions, legal expenses, attorneys’ fees and disbursements, alteration costs, contributions to work and other expenses of preparing the Premises for such reletting, and (Y) taking into account the time period that Landlord would reasonably require to consummate a reletting of the Premises to a new tenant), both discounted to present value at the Base Rate. If, before presentation of proof of such liquidated damages to any court, commission or tribunal, the Premises, or any part thereof, have been relet by Landlord to any Person other than an Affiliate of Landlord for the period which otherwise would have constituted the unexpired portion of the Term, or any part thereof, then the amount of rent reserved upon such reletting shall be deemed, prima facie, to be the fair and reasonable rental value of the Premises (or the applicable part thereof) so relet during the term of the reletting.

 

(B)                               If the Premises, or any part thereof, are relet together with other space in the Building, then the rents collected or reserved under any such reletting and the expenses of any such reletting shall be equitably apportioned for the purposes of this Section 24.3. Tenant acknowledges and agrees that in no event shall it be entitled to any rents collected or payable under any reletting, regardless of whether such rents exceed the Rental reserved in this Lease.

 

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(C)                               Nothing contained in this Article 24 shall be deemed to limit or preclude the recovery by Landlord from Tenant of the maximum amount allowed to be obtained as damages by any applicable statute or rule of law, or of any sums or damages to which Landlord may be lawfully entitled in addition to the damages set forth in this Section 24.3.

 

Article 25

LANDLORD’S EXPENSES AND LATE CHARGES

 

25.1.                     Landlord’s Costs.

 

(A)                               Tenant shall pay to Landlord an amount equal to the reasonable costs that Landlord incurs in instituting or prosecuting any legal proceeding against Tenant (or any other Person claiming by, through or under Tenant) to the extent that such legal proceeding derives from the occurrence of an Event of Default, together with interest thereon calculated at the Applicable Rate from the date that Landlord incurs such costs, within thirty (30) days after Landlord gives to Tenant an invoice therefor (it being understood that (x) Landlord shall have the right to collect such amount from Tenant as additional rent to the extent that Landlord incurs such costs during the Term and as damages to the extent that Landlord incurs such costs after the Expiration Date, and (y) the amount that Landlord has the right to collect from Tenant under this Section 25.1(A) shall be adjusted appropriately to reflect the extent to which Landlord is successful in such legal proceeding).

 

(B)                               Tenant shall pay to Landlord an amount equal to the reasonable costs that Landlord incurs in defending successfully against a claim made by Tenant (or any other Person claiming by, through or under Tenant) against Landlord that relates to this Lease in a legal proceeding, together with interest thereon calculated at the Applicable Rate from the date that Landlord incurs such costs, within thirty (30) days after Landlord gives to Tenant an invoice therefor (it being understood that (x) Landlord shall have the right to collect such amount from Tenant as additional rent to the extent that Landlord incurs such costs during the Term and as damages to the extent that Landlord incurs such costs after the Expiration Date, and (y) the amount that Landlord has the right to collect from Tenant under this Section 25.1(B) shall be adjusted appropriately to reflect the extent to which Landlord is successful in defending against such claim).

 

25.2.                     Interest on Late Payments.

 

If Tenant fails to pay any item of Rental on or prior to the fifth (5th) day after the date that such payment is due, then Tenant shall pay to Landlord, in addition to such item of Rental, as a late charge and as additional rent, an amount equal to interest at the Applicable Rate on the amount unpaid, computed from the date such payment was due to and including the date of payment. Nothing contained in this Section 25.2 limits Landlord’s rights and remedies, by operation of law or otherwise, after the occurrence of an Event of Default. Notwithstanding the foregoing, before assessing any such late charge for the first time in any twelve (12) month

 

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period, Landlord shall provide Tenant notice of such failure to pay and shall waive such late charge if Tenant makes such payment within five (5) days of such notice.

 

Article 26

SECURITY

 

26.1.                     Security Deposit.

 

Subject to the terms of this Article 26, Tenant, on the date hereof, shall deposit with Landlord, as security for the performance of Tenant’s obligations under this Lease, an unconditional, irrevocable and transferable letter of credit (the “Letter of Credit”) that (i) is in the amount of One Million One Hundred Eighty-Eight Thousand Nine Hundred Sixty Dollars and No Cents ($1,188,960.00), (ii) is in a form that is reasonably satisfactory to Landlord, (iii) is issued for a term of not less than one (1) year, (iv) is issued for the account of Landlord, (v) automatically renews for periods of not less than one (1) year unless the issuer thereof otherwise advises Landlord on or prior to the thirtieth (30th) day before the applicable expiration date, and (vi) is issued by, and drawn on, a bank that (a) has a Standard & Poor’s rating of at least “AA” (or, if Standard & Poor’s hereafter ceases the publication of ratings for banks, a rating of a reputable rating agency as reasonably designated by Landlord that most closely approximates a Standard & Poor’s rating of “AA” as of the date hereof), (b) has not been declared insolvent or placed into receivership in either case by Federal Deposit Insurance Corporation or another governmental entity that has regulatory authority over such bank, and (c) that either (I) has an office in the city where the Building is located at which Landlord can present the Letter of Credit for payment, or (II) has an office in the United States and allows Landlord to draw upon the Letter of Credit without presenting a draft in person (such as, for example, by submitting a draft by fax or overnight delivery service) (the aforesaid requirements for the bank that issues the Letter of Credit being collectively referred to herein as the “Bank Requirements”).

 

26.2.                     Landlord’s Rights.

 

If (a) an Event of Default occurs and is continuing, (b) an Insolvency Event occurs, or (c) Tenant fails to vacate the Premises and surrender possession thereof in accordance with the terms of this Lease upon the Expiration Date, then Landlord may present the Letter of Credit for payment and apply the proceeds thereof (i) to the payment of any Rental that then remains unpaid, or (ii) to any damages to which Landlord is entitled hereunder and that Landlord incurs by reason of such Event of Default or such Insolvency Event or Tenant’s aforesaid failure to vacate the Premises or surrender possession thereof in accordance with the terms of this Lease upon the Expiration Date. If Landlord so applies any part of the proceeds of the Letter of Credit, then Tenant, upon demand, shall provide Landlord with a replacement Letter of Credit so that Landlord has the full amount of the required security at all times during the Term. If at any time the issuer of the Letter of Credit does not meet the Bank Requirements (it being understood that if Standard & Poor’s hereafter ceases the publication of ratings for banks, the parties, in determining whether the issuer of the Letter of Credit meets the Bank Requirements, shall substitute for the rating of Standard & Poor’s a rating of a reputable rating agency as reasonably

 

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designated by Landlord that most closely approximates a Standard & Poor’s rating of “AA” as of the date hereof), then Tenant shall deliver to Landlord a replacement Letter of Credit, issued by a bank that satisfies the Bank Requirements (and otherwise meets the requirements set forth in Section 26.1 hereof) within fifteen (15) days after the date that Landlord gives Tenant notice of such issuer’s failure to satisfy the Bank Requirements. If Tenant fails to deliver to Landlord such replacement Letter of Credit within such period of fifteen (15) days, then Landlord, in addition to Landlord’s other rights at law, in equity or as otherwise set forth herein, shall have the right to present the Letter of Credit for payment and retain the proceeds thereof as security in lieu of the Letter of Credit (it being agreed that Landlord shall have the right to use, apply and transfer such proceeds in the manner described in this Article 26). Tenant shall reimburse Landlord for any reasonable costs that Landlord incurs in so presenting the Letter of Credit for payment within thirty (30) days after Landlord submits to Tenant an invoice therefor. Nothing contained in this Section 26.2 limits Landlord’s rights or remedies in equity, at law, or as otherwise set forth herein.

 

26.3.                     Return of Security.

 

Landlord shall return to Tenant the Letter of Credit (to the extent not theretofore presented for payment in accordance with the terms hereof) within thirty (30) days after Tenant performs all of the obligations of Tenant hereunder upon the expiration or earlier termination of the Term. Landlord’s obligations under this Section 26.3 shall survive the expiration or earlier termination of the Term.

 

26.4.                     Transfer of Letter of Credit.

 

Tenant, at Tenant’s expense, shall cause the issuer of the Letter of Credit to amend the Letter of Credit to name a new beneficiary thereunder in connection with Landlord’s assignment of Landlord’s rights under this Lease to a Person that succeeds to Landlord’s interest in the Real Property, promptly after Landlord’s request from time to time.

 

26.5.                     Renewal of Letter of Credit.

 

If Tenant fails to provide Landlord with a replacement Letter of Credit that complies with the requirements of this Article 26 on or prior to the thirtieth (30th) day before the expiration date of the Letter of Credit that is then expiring, then Landlord may present the Letter of Credit for payment and retain the proceeds thereof as security in lieu of the Letter of Credit (it being agreed that Landlord shall have the right to use, apply and transfer such proceeds in the manner described in this Article 26). Tenant shall reimburse Landlord for any reasonable costs that Landlord incurs in so presenting the Letter of Credit for payment within thirty (30) days after Landlord submits to Tenant an invoice therefor. Landlord also shall have the right to so present the Letter of Credit and so retain the proceeds thereof as security in lieu of the Letter of Credit at any time from and after the thirtieth (30th) day before the Expiration Date if the Letter of Credit expires earlier than the ninetieth (90th) day after the Expiration Date.

 

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26.6.                     Reduction in Security Amount.

 

(A)                               Subject to the terms of Section 18.4(E) hereof, and this Section 26.6, Tenant shall have the right to reduce the amount of the Letter of Credit to Nine Hundred Ninety Thousand Eight Hundred Dollars and No Cents ($990,800.00) as of the date that is two (2) years after the Rent Commencement Date, and to further reduce the amount of the Letter of Credit to Seven Hundred Ninety-Two Thousand Six Hundred Forty Dollars and No Cents ($792,640.00) as of the date that is four (4) years after the Rent Commencement Date , and to further reduce the amount of the Letter of Credit to Five Hundred Ninety-Four Thousand Four Hundred Eighty Dollars and No Cents ($594,480.00) as of the date that is six (6) years after the Rent Commencement Date.

 

(B)                               Tenant shall have the right to request any such reduction only by giving notice thereof to Landlord at any time from and after the tenth (10th) day before the date that Tenant is entitled to such reduction. Tenant shall not be entitled to reduce the amount of the Letter of Credit if (I) an Event of Default has occurred and is continuing on the date that Tenant requests such reduction or the date that Landlord consummates such reduction, or (II) Landlord theretofore applied all or any portion of the security deposited hereunder. If Tenant requests and is entitled to any such reduction in accordance with the terms of this Section 26.6, then Landlord shall permit Tenant, at Tenant’s expense, to amend or replace the Letter of Credit to reflect such reduction.

 

Article 27

END OF TERM

 

27.1.                    End of Term.

 

On the Expiration Date, Tenant shall quit and surrender to Landlord the Premises, vacant, broom-clean, in good order and condition, ordinary wear and tear, casualty, condemnation and damage for which Tenant is not responsible under the terms of this Lease (including, casualty damage) excepted, and otherwise in compliance with the provisions hereof. Tenant expressly waives, for itself and for any Person claiming by, through or under Tenant, any rights which Tenant or any such Person may have under the provisions of Section 2201 of the New York Civil Practice Law and Rules and of any successor law of like import then in force in connection with any holdover summary proceedings that Landlord institutes to enforce the provisions of this Article 27.

 

27.2.                     Holdover.

 

If vacant and exclusive possession of the Premises is not surrendered to Landlord on the Expiration Date, then Tenant shall pay to Landlord on account of use and occupancy of the Premises, for each month (or any portion thereof) during which Tenant (or a Person claiming by, through or under Tenant) holds over in the Premises after the Expiration Date, an amount equal to (x) one hundred fifty percent (150%) of the aggregate Rental that was payable under this

 

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Lease during the last month of the Term, for the first two (2) months (or portion of any month) of such holdover and (y) two hundred percent (200%) of the aggregate Rental that was payable under this Lease during the last month of the Term, for each month or portion of a month thereafter. Landlord’s right to collect such amount from Tenant for use and occupancy shall be in addition to any other rights or remedies that Landlord may have hereunder or at law or in equity (including, without limitation, Landlord’s right to recover Landlord’s damages from Tenant that derive from vacant and exclusive possession of the Premises not being surrendered to Landlord on the Expiration Date). Nothing contained in this Section 27.2 shall permit Tenant to retain possession of the Premises after the Expiration Date or limit in any manner Landlord’s right to regain possession of the Premises, through summary proceedings or otherwise. Landlord’s acceptance of any payments from Tenant after the Expiration Date shall be deemed to be on account of the amount to be paid by Tenant in accordance with the provisions of this Article 27.

 

Article 28

NO WAIVER

 

28.1.                       No Surrender.

 

(A)                             Landlord shall be deemed to have accepted a surrender of the Premises only if Landlord executes and delivers to Tenant a written instrument providing expressly therefor.

 

(B)                                No employee of Landlord or of Landlord’s agents shall have any power to accept the keys to the Premises prior to the Expiration Date. The delivery of such keys to any employee of Landlord or of Landlord’s agents shall not operate as a termination of this Lease or a surrender of the Premises. If Tenant at any time desires to have Landlord sublet the Premises on Tenant’s account, then Landlord or Landlord’s agents are authorized to receive said keys for such purpose without releasing Tenant from any of Tenant’s obligations under this Lease.

 

28.2.                       No Waiver by Landlord.

 

(A)                             Landlord’s failure to seek redress for violation of, or to insist upon the strict performance of, any covenant or condition of this Lease, or any of the Rules, shall not be deemed to be a waiver thereof. The receipt by Landlord of Rental with knowledge of the breach of any covenant of this Lease by Tenant shall not be deemed a waiver of such breach.

 

(B)                                No payment by Tenant or receipt by Landlord of a lesser amount than the monthly Fixed Rent or other item of Rental herein stipulated shall be deemed to be other than on account of the earliest stipulated Fixed Rent or other item of Rental, or us Landlord may elect to apply such payment. No endorsement or statement on any check or any letter accompanying any check or payment as Fixed Rent or other item of Rental shall be deemed to be an accord and satisfaction. Landlord may accept such check or payment without prejudice to Landlord’s right

 

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to recover the balance of such Fixed Rent or other item of Rental or to pursue any other remedy provided in this Lease or otherwise available to Landlord at law or in equity.

 

(C)                             Landlord’s failure during the Term to prepare and deliver any invoices, and Landlord’s failure during the Term to make a demand for payment under any of the provisions of this Lease, shall not in any way be deemed to be a waiver of, or cause Landlord to forfeit or surrender, its rights to collect any item of Rental which may have become due during the Term (except to the extent otherwise expressly set forth herein). Tenant’s liability for such amounts shall survive the expiration or earlier termination of this Lease (except to the extent otherwise expressly set forth herein).

 

(D)                             No provision of this Lease shall be deemed to have been waived by Landlord, unless such waiver is in writing signed by Landlord.

 

28.3.                       No Waiver by Tenant.

 

(A)                             Tenant’s failure to seek redress for violation of, or to insist upon the strict performance of, any covenant or condition of this Lease on Landlord’s part to be performed, shall not be deemed to be a waiver. The payment by Tenant of any item of Rental or performance of any obligation of Tenant hereunder with knowledge of any breach by Landlord of any covenant of this Lease shall not be deemed a waiver of such breach, nor shall it prejudice Tenant’s right to pursue any remedy against Landlord in this Lease provided or otherwise available to Tenant in law or in equity. No provision of this Lease shall be deemed to have been waived by Tenant, unless such waiver is in writing signed by Tenant.

 

(B)                             Tenant’s failure during the Term to make a demand for payment under any of the provisions of this Lease shall not in any way be deemed to be a waiver of, or cause Tenant to forfeit or surrender, its rights to collect any amount which may have become due during the Term (except to the extent otherwise expressly set forth herein). Landlord’s liability for such amounts shall survive the expiration or earlier termination of this Lease (except to the extent otherwise expressly set forth herein).

 

Article 29

JURISDICTION

 

29.1.                       Governing Law.

 

This Lease shall be construed and enforced in accordance with the laws of the State of New York.

 

29.2.                       Submission to Jurisdiction.

 

Tenant hereby (a) irrevocably consents and submits to the jurisdiction of any federal, state, county or municipal court sitting in the State of New York for purposes of any action or proceeding brought therein by Landlord against Tenant concerning any matters relating to this

 

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Lease, (b) irrevocably waives all objections as to venue and any and all rights it may have to seek a change of venue with respect to any such action or proceedings, (c) agrees that the laws of the State of New York shall govern in any such action or proceeding and waives any defense to any action or proceeding granted by the laws of any other country or jurisdiction unless such defense is also allowed by the laws of the State of New York, and (d) agrees that any final unappealable judgment rendered against it in any such action or proceeding shall be conclusive and may be enforced in any other jurisdiction by suit on the judgment or in any other manner provided by law. Tenant further agrees that any action or proceeding by Tenant against Landlord concerning any matters arising out of or in any way relating to this Lease shall be brought only in the State of New York, County of New York.

 

29.3.                     Waiver of Trial by Jury; Counterclaims.

 

(A)                                  Landlord and Tenant hereby waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant. Tenant’s use or occupancy of the Premises, or for the enforcement of any remedy under any statute, emergency or otherwise.

 

(B)                                If Landlord commences any summary proceeding against Tenant, then Tenant shall not interpose any counterclaim of whatever nature or description in any such proceeding (except to the extent that applicable law precludes Tenant from asserting such counterclaim in another proceeding), and shall not seek to consolidate such proceeding with any other action which may have been or will be brought in any other court by Tenant. Nothing contained in this Section 29.3(B) limits Tenant’s right to assert claims against Landlord in a separate proceeding.

 

Article 30

NOTICES

 

30.1.                       Addresses; Manner of Delivery.

 

Except as otherwise expressly provided in this Lease, any bills, statements, consents, notices, demands, requests or other communications that a party desires or is required to give to the other party under this Lease shall (1) be in writing, (2) be deemed sufficiently given if (a) delivered by hand (against a signed receipt), (b) sent by registered or certified mail (return receipt requested), or (c) sent by a nationally-recognized overnight courier (with verification of delivery), and (3) be addressed in each case:

 

if to Tenant, at:

 

350 Marine Parkway

Redwood City, California 94065

 

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Attn.: Kirk Thompson

Director of Real Estate and Facilities

 

If to Landlord, at:

 

c/o Vornado Office Management LLC

888 Seventh Avenue

New York, New York 10019

 

Attn.: President - New York Division

 

with a copy to:

 

Vornado Realty Trust

210 Route 4 East

Paramus, New Jersey 07652

 

Attn: Chief Financial Officer

 

or to such other address or addresses as Landlord or Tenant may designate from time to time on at least ten (10) Business Days of advance notice given to the other in accordance with the provisions of this Article 30. Any such bill, statement, consent, notice, demand, request, or other communication shall be deemed to have been given (x) on the date that it is hand delivered, as aforesaid, or (y) three (3) Business Days alter the date that it is mailed, as aforesaid, or (z) on the first (1st) Business Day after the date that it is sent by a nationally-recognized courier, as aforesaid. Any such bills, statements, consents, notices, demands, requests or other communications that the Person that is the property manager for the Building gives to Tenant in accordance with the terms of this Article 30 shall be deemed to have been given by Landlord (except that Landlord, at any time and from time to time, shall have the right to terminate or suspend such property manager’s right to give such bills, statements, consents, notices, demands, requests or other communications to Tenant by giving not less than five (5) days of advance notice thereof to Tenant).

 

Article 31

BROKERAGE

 

31.1.                       Broker.

 

Landlord and Tenant each represent to the other that it has not dealt with any broker, finder or salesperson in connection with this Lease other than Newmark Grubb Knight Frank and its Affiliates (collectively, the “Broker”).

 

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Article 32

INDEMNITY

 

32.1.                     Tenant’s Indemnification of the Landlord Indemnitees.

 

(A)                                Subject to the terms of this Section 32.1, Tenant shall indemnify the Landlord Indemnitees, and hold the Landlord Indemnitees harmless, from and against, all losses, damages, liabilities, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) that are incurred by a Landlord Indemnitee and that derive from a claim (a “Claim Against Landlord”) made by a third party against such Landlord Indemnitee arising from or alleged to arise from:

 

(1)                               a wrongful act or wrongful omission of any Tenant Indemnitee during the Term (including, without limitation, claims that derive from a Permitted Party’s conducting such Permitted Party’s business in the Premises) (it being understood that Tenant shall not have responsibility under this clause (1) for any wrongful act or wrongful omission of a Recapture Subtenant);

 

(2)                               an event or circumstance that occurs during the Term in the Premises or in another portion of the Building with respect to which Tenant has exclusive use pursuant to the terms hereof (Subject, however, to Landlord’s rights of access under Article 9 hereof) (it being understood that Tenant’s liability under this clause (2) shall not apply to the extent that Landlord exercises Landlord’s rights under Section 17.3 hereof with respect to the Recapture Space);

 

(3)                                 the breach of any covenant to be performed by Tenant hereunder;

 

(4)                                    a misrepresentation made by Tenant hereunder (including, without limitation, a misrepresentation of Tenant under Section 31.1 hereof);

 

(5)                                 a Person with whom a Permitted Party has dealt making a claim for a leasing commission or other similar compensation in connection with a Transfer;

 

(6)                                    a Compliance Challenge (or Tenant’s delaying Tenant’s compliance with a Requirement during the pendency of a Compliance Challenge); or

 

(7)                                 Landlord’s cooperating with Tenant as contemplated by Section 7.4(A) hereof.

 

Tenant shall not be required to indemnify the Landlord Indemnitees, and hold the Landlord Indemnitees harmless, in either case as aforesaid, to the extent that it is finally determined that the negligence or wilful misconduct of a Landlord Indemnitee contributed to the loss or damage sustained by the Person making the Claim Against Landlord. Nothing contained in this Section 32.1 limits the provisions of Section 34.19 hereof.

 

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(B)                             The term “Landlord Indemnitees” shall mean, collectively, Landlord, Landlord’s managing agent, each Lessor, each Mortgagee and their respective partners, members, managers, shareholders, officers, directors, employees, trustees and agents.

 

(C)                             The term “Tenant Indemnitees” shall mean each Permitted Party and their respective partners, members, managers, shareholders, officers, directors, employees, trustees and agents.

 

(D)                             The parties intend that the Landlord Indemnitees (other than Landlord) shall be third-party beneficiaries of this Section 32.1.

 

32.2.                       Landlord’s Indemnification of the Tenant Indemnitees.

 

(A)                                 Subject to the terms of this Section 32.2, Landlord shall indemnify the Tenant Indemnitees, and hold the Tenant Indemnitees harmless, from and against, all losses, damages, liabilities, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) that are incurred by a Tenant Indemnitee and that derive from a claim (a “Claim Against Tenant”) made by a third party against such Tenant Indemnitee arising from or alleged to arise from:

 

(1)                                 the breach of any covenant to be performed by Landlord hereunder;

 

(2)                                 a misrepresentation made by Landlord hereunder (including, without limitation, a misrepresentation of Landlord under Section 31.1 hereof);

 

(3)                                 Landlord’s failure to pay the Broker a commission or other compensation in connection herewith; or

 

(4)                                    a wrongful act or wrongful omission of any Landlord Indemnitee (including, without limitation, a wrongful act or wrongful omission of the Person that has the right to occupy the Recapture Space by virtue of Landlord’s exercising Landlord’s rights under Section 17.3 hereof).

 

Landlord shall not be required to indemnify the Tenant Indemnitees, and hold the Tenant Indemnitees harmless, in either case as aforesaid, to the extent that it is finally determined that the negligence or wilful misconduct of a Tenant Indemnitee contributed to the loss or damage sustained by the Person making the Claim Against Tenant.

 

(B)                               The parties intend that the Tenant Indemnitees (other titan Tenant) shall constitute third-party beneficiaries of this Section 32.2.

 

32.3.                     Indemnification Procedure.

 

(A)                               If at any time a Claim Against Tenant is made or threatened against a Tenant Indemnitee, or a Claim Against Landlord is made or threatened against a Landlord

 

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Indemnitee, then the Person entitled to indemnity under this Article 32 (the “Indemnitee”) shall give to the other party (the “Indemnitor”) notice of such Claim Against Tenant or such Claim Against Landlord, as the case may be (the “Claim”); provided, however, that the Indemnitee’s failure to provide such notice shall not impair the Indemnitee’s rights to indemnity as provided in this Article 32 except to the extent that the Indemnitor is prejudiced materially thereby. Such notice shall state the basis for the Claim and the amount thereof (to the extent such amount is determinable at the time that such notice is given).

 

(B)                             The Indemnitor shall have the right to defend against the Claim using attorneys that the Indemnitor designates and that the Indemnitee approves (it being understood that (I) the Indemnitee shall not unreasonably withhold, condition or delay such approval, (II) the Indemnitee shall be deemed to have approved such attorneys if the Indemnitee fails to respond within ten (10) days to the Indemnitor’s request for approval, and (III) the attorneys designated by the Indemnitor’s insurer shall be deemed approved by the Indemnitee for purposes hereof). The Indemnitor’s failure to notify the Indemnitee of the Indemnitor’s election to defend against the Claim within thirty (30) days after the Indemnitee gives such notice to the Indemnitor shall be deemed a waiver by the Indemnitor of its aforesaid right to defend against the Claim.

 

(C)                             Subject to the terms of this Section 32.3(C), if the Indemnitor elects to defend against the Claim pursuant to Section 32.3(B) hereof, then the Indemnitee may participate, at the Indemnitee’s expense, in defending against the Claim. The Indemnitor shall have the right to control the defense against the Claim (and, accordingly, the Indemnitee shall cause its counsel to act accordingly). If there exists a conflict between the interests of the Indemnitor and the interests of the Indemnitee, then the Indemnitor shall pay the reasonable fees and disbursements of any counsel that the Indemnitee retains in so participating in the defense against the Claim. Except as otherwise provided in this Section 32.3(C), the Indemnitor shall not be required to pay the costs that Indemnitee Otherwise incurs in engaging counsel to consult with Indemnitee in connection with the Claim.

 

(D)                             If the Claim is a Claim Against Landlord, then Landlord shall cooperate reasonably with Tenant in connection therewith. If the Claim is a Claim Against Tenant, then Tenant shall cooperate reasonably with Landlord in connection therewith.

 

(E)                                The Indemnitor shall not consent to the entry of any judgment or award regarding the Claim, or enter into any settlement regarding the Claim, except in either case with the prior approval of the Indemnitee (any such entry of any judgment or award regarding a Claim to which the Indemnitor consents, or any such settlement regarding a claim to which the Indemnitor agrees, being referred to herein as a “Settlement”). The Indemnitee shall not unreasonably withhold, condition or delay the Indemnitee’s approval of a proposed Settlement, provided that (I) the Indemnitor pays, in cash, to the Person making the Claim, the entire amount of the Settlement contemporaneously with the Indemnitee’s approval thereof (so that neither the Indemnitor nor the Indemnitee have any material obligations regarding the applicable Claim that remain executory from and after the consummation of the Settlement), or (II) the Person making the Claim releases the Indemnitee from any obligations owed to such Person pursuant to such

 

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Settlement that remain executory after the consummation thereof). If (x) the terms of the Settlement do not provide for the Indemnitor’s making payment, in cash, to the Person making the Claim, the entire amount of the Settlement, contemporaneously with the Indemnitee’s approval thereof (so that either the Indemnitor or the Indemnitee have any material obligations regarding the applicable Claim that remain executory from and after the consummation of the Settlement), (y) the Person making the Claim does not release the Indemnitee from any obligations owed to such Person pursuant to such Settlement that remain executory after the consummation thereof, and (z) the Indemnitee does not approve the proposed Settlement, then the Indemnitor’s aggregate liability under this Article 32 for the Claim (including, without limitation, the costs incurred by the Indemnitor for legal costs and other costs of defense) shall not exceed an amount equal to the sum of (i) the aggregate legal costs and defense costs that the Indemnitor incurred to the date that the Indemnitor proposes such Settlement, (ii) the amount that the Indemnitor would have otherwise paid to the Person making the applicable Claim under the terms of the proposed Settlement, and (iii) the aggregate legal costs and defense costs that the Indemnitor would have reasonably expected to incur in consummating the proposed Settlement.

 

(F)                               If the Indemnitor does not elect to defend against the Claim as contemplated by this Section 32.3, then the Indemnitee may defend against, or settle, such claim, action or proceeding in any manner that the Indemnitee deems appropriate, and the Indemnitor shall be liable for the Claim to the extent provided in this Article 32.

 

Article 33

LANDLORD’S CONSENTS; ARBITRATION

 

33.1.                      Certain Limitations.

 

Subject to the terms of Section 33.2 hereof, Tenant hereby waives any claim against Landlord for Landlord’s unreasonably withholding, unreasonably conditioning or unreasonably delaying any consent or approval requested by Tenant in cases where Landlord expressly agreed herein not to unreasonably withhold, unreasonably condition or unreasonably delay such consent or approval. If there is a determination that such consent or approval has been unreasonably withheld, unreasonably conditioned or unreasonably delayed, then (1) the requested consent or approval shall be deemed to have been granted, and (2) Landlord shall have no liability to Tenant for its refusal or failure to give such consent or approval. Tenant’s sole remedy for Landlord’s unreasonably withholding, conditioning or delaying consent or approval shall be as provided in this Article 33.

 

33.2.                     Expedited Arbitration.

 

(A)                              If (i) this Lease obligates Landlord to not unreasonably withhold, condition or delay Landlord’s consent or approval for a particular matter, (ii) Landlord withholds, delays or conditions its consent or approval for such matter, and (iii) Tenant believes that Landlord did so unreasonably, then Tenant shall have the right to submit the issue of whether Landlord unreasonably withheld, delayed or conditioned such consent or approval to an

 

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Expedited Arbitration Proceeding only by giving notice thereof to Landlord on or prior to the thirtieth (30th) day after the date that Landlord denied or conditioned such consent or approval, or the thirtieth (30th) day after the date that Tenant claims that Landlord’s delaying such consent or approval first became unreasonable, as the case may be.

 

(B)                             The sole decision to be made in the Expedited Arbitration Proceeding shall be whether Landlord unreasonably withheld, delayed or conditioned its consent with respect to the particular matter being arbitrated. If the decision in the Expedited Arbitration Proceeding is that Landlord unreasonably withheld, conditioned, or delayed consent with respect to such matter, then (i) Landlord shall be deemed to have consented to such matter, and (ii) Landlord shall execute and deliver documentation that is reasonably requested by Tenant to evidence such consent.

 

(C)                             The term “Expedited Arbitration Proceeding” shall mean a binding arbitration proceeding conducted in The City of New York under the Commercial Arbitration Rules of the American Arbitration Association (or its successor) and administered pursuant to the Expedited Procedures provisions thereof; provided, however, that with respect to any such arbitration, (i) the list of arbitrators referred to in Section E-4(b) shall be returned within five (5) Business Days from the date of mailing; (ii) the parties shall notify the American Arbitration Association (or its successor) by telephone, within four (4) Business Days, of any objections to the arbitrator appointed and, subject to clause (vii) below, shall have no right to object if the arbitrator so appointed was on the list submitted by the American Arbitration Association (or its successor) and was not objected to in accordance with Section E-4(c) as modified by clause (i) above; (iii) the notification of the hearing referred to in Section E-7 shall be four (4) Business Days in advance of the hearing; (iv) the hearing shall be held within seven (7) Business Days after the appointment of the arbitrator, (v) the arbitrator shall have no right to award damages or vary, modify or waive any provision of this Lease; (vi) the decision of the arbitrator shall be final and binding on the parties; and (vii) the arbitrator shall not have been employed by either party (or their respective Affiliates) during the period of three (3) years prior to the date of the Expedited Arbitration Proceeding. The arbitrator shall determine the extent to which each party is successful in such Expedited Arbitration Proceeding in addition to rendering a decision on the dispute submitted. If the arbitrator determines that one (1) party is entirely unsuccessful, then such party shall pay all of the fees of such arbitrator. If the arbitrator determines that both parties are partially successful, then each party shall be responsible for such arbitrator’s fees only to the extent such party is unsuccessful (e.g., if Landlord is eighty percent (80%) successful and Tenant is twenty percent (20%) successful, then Landlord shall be responsible for twenty percent (20%) of such arbitrator’s fees and Tenant shall be responsible for eighty percent (80%) of such arbitrator’s fees).

 

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Article 34

ADDITIONAL PROVISIONS

 

34.1.                     Tenant’s Property Delivered to Building Employees.

 

Any Building employee to whom any property is entrusted by or on behalf of Tenant shall be deemed to be acting as Tenant’s agent with respect to such property.

 

34.2.                     Not Binding Until Execution.

 

This Lease shall not be binding upon Landlord or Tenant unless and until Landlord and Tenant have executed and unconditionally delivered a fully executed counterpart of this Lease to each other.

 

34.3.                     No Third Party Beneficiaries.

 

Landlord and Tenant hereby acknowledge that they do not intend for any other Person to constitute a third-party beneficiary hereof, except to the extent otherwise set forth herein.

 

34.4.                    Extent of Landlord’s Liability.

 

(A)                            The obligations of Landlord under this Lease shall not be binding upon the Person that constitutes Landlord initially after the sale, conveyance, assignment or transfer by such Person of its interest in the Building or the Real Property, as the case may be (or upon any other Person that constitutes Landlord alter the sale, conveyance, assignment or transfer by such Person of its interest in the Building or the Real Property, as the case may be), to the extent such obligations accrue from and after the date of such sale, conveyance, assignment or transfer.

 

(B)                             The members, managers, partners, shareholders, directors, officers and principals, direct and indirect, comprising Landlord shall not be liable for the performance of Landlord’s obligations under this Lease. Tenant shall look solely to Landlord to enforce Landlord’s obligations hereunder.

 

(C)                            The liability of Landlord for Landlord’s obligations under this Lease shall be limited to Landlord’s interest in the Real Property and the proceeds thereof (including, without limitation, proceeds of a sale or refinancing of Landlord’s interest in the Real Property, casualty insurance proceeds, and condemnation awards). Tenant shall not look to any property or assets of Landlord (other than Landlord’s interest in the Real Property and such proceeds thereof) in seeking either to enforce Landlord’s obligations under this Lease or to satisfy a judgment for Landlord’s failure to perform such obligations.

 

34.5.                   Extent of Tenant’s Liability.

 

If Tenant is a corporation, limited partnership, limited liability partnership or limited liability company, then (i) the members, managers, limited partners, shareholders, directors,

 

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officers and principals, direct and indirect, comprising Tenant shall not be liable for the performance of Tenant’s obligations under this Lease, and (ii) Landlord shall look solely to Tenant to enforce Tenant’s obligations hereunder.

 

34.6.                     Survival.

 

Subject to the terms hereof. Tenant’s liability for all amounts that are due and payable to Landlord hereunder shall survive the Expiration Date.

 

34.7.                     Recording.

 

Tenant shall not record this Lease. Tenant shall not record a memorandum of this Lease. Landlord shall have the right to record a memorandum of this Lease. If Landlord submits to Tenant a memorandum hereof that is in reasonable form, then Tenant shall execute, acknowledge and deliver such memorandum promptly alter Landlord’s submission thereof to Tenant.

 

34.8.                     Entire Agreement.

 

This Lease contains the entire agreement between the parties and supersedes all prior understandings, if any, with respect thereto. This Lease shall not be modified, changed, or supplemented, except by a written instrument executed by both parties.

 

34.9.                     Counterparts.

 

This Lease may be executed in counterparts, it being understood that all such counterparts, taken together, shall constitute one and the same agreement.

 

34.10.                Exhibits.

 

If any inconsistency exists between the terms and provisions of this Lease and the terms and provisions of the Exhibits hereto, then the terms and provisions of this Lease shall prevail.

 

34.11.              Gender; Plural.

 

Wherever appropriate in this Lease, personal pronouns shall be deemed to include the other gender and the singular to include the plural.

 

34.12.                  Divisibility.

 

If any term of this Lease, or the application thereof to any Person or circumstance, is held to be invalid or unenforceable, then the remainder of this Lease or the application of such term to any other Person or any other circumstance shall not be thereby affected, and each term shall remain valid and enforceable to the fullest extent permitted by law.

 

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34.13.              Vault Space.

 

If (i) Tenant uses or occupies any vaults, vault space or other space outside the boundaries of the Real Property that in each case is located below grade, and (ii) such space is diminished by any Governmental Authority or by any utility company, then such diminution shall not constitute an actual or constructive eviction, in whole or in part, or entitle Tenant to any abatement or diminution of Rental, or relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord.

 

34.14.              Adjacent Excavation.

 

If an excavation is made upon land adjacent to the Building, or is authorized to be made, then Tenant, upon reasonable advance notice, shall grant to the Person causing or authorized to cause such excavation a license to enter upon the Premises for the purpose of doing such work as said Person deems necessary to preserve the Building from injury or damage and to support the same by proper foundations, without any claim for damages or indemnity against Landlord, or diminution or abatement of Rental. Landlord acknowledges that Landlord’s right to access the Premises as provided in this Section 34.14 is subject to the provisions of Article 9 hereof.

 

34.15.               Captions.

 

The captions are inserted only for convenience and for reference and in no way define, limit or describe the scope of this Lease or the intent of any provision thereof.

 

34.16.              Parties Bound.

 

The covenants, conditions and agreements contained in this Lease shall bind and inure to the benefit of Landlord and Tenant and their respective legal representatives, successors, and, except as otherwise provided in this Lease, their assigns.

 

34.17.              Authority.

 

(A)                             Tenant hereby represents and warrants to Landlord that (i) Tenant is duly organized and validly existing in good standing under the laws of Delaware, and possesses all licenses and authorizations necessary to carry on its business in the Premises, (ii) Tenant has full power and authority to carry on its business in the Premises, enter into this Lease and consummate the transaction contemplated by this Lease, (iii) the individual executing and delivering this Lease on Tenant’s behalf has been duly authorized to do so, (iv) this Lease has been duly executed and delivered by Tenant, (v) this Lease constitutes a valid, legal, binding and enforceable obligation of Tenant (subject to bankruptcy, insolvency or creditor rights laws generally, and principles of equity generally), (vi) the execution, delivery and performance of this Lease by Tenant will not cause or constitute a default under, or conflict with, the organizational documents of Tenant or any agreement to which Tenant is a party, (vii) the execution, delivery and performance of this Lease by Tenant will not violate any Requirement, and (viii) all consents, approvals, authorizations, orders or filings of or with any court or

 

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governmental agency or body, if any, required on the part of Tenant for the execution, delivery and performance of this Lease have been obtained or made.

 

(B)                             Landlord hereby represents and warrants to Tenant that (i) Landlord is duly organized and validly existing in good standing under the laws of Delaware, and possesses all licenses and authorizations necessary to carry on its business, (ii) Landlord has full power and authority to carry on its business, enter into this Lease and consummate the transaction contemplated by this Lease, (iii) the individual executing and delivering this Lease on Landlord’s behalf has been duly authorized to do so, (iv) this Lease has been duly executed and delivered by Landlord, (v) this Lease constitutes a valid, legal, binding and enforceable obligation of Landlord (subject to bankruptcy, insolvency or creditor rights laws generally, and principles of equity generally), (vi) the execution, delivery and performance of this Lease by Landlord will not cause or constitute a default under, or conflict with, the organizational documents of Landlord or any agreement to which Landlord is a party, (vii) the execution, delivery and performance of this Lease by Landlord does not violate any Requirement, and (viii) all consents, approvals, authorizations, orders or filings of or with any court or governmental agency or body, if any, required on the part of Landlord for the execution, delivery and performance of this Lease have been obtained or made.

 

34.18.                  Rent Control.

 

If at the commencement of, or at any time or times during, the Term, the Rental reserved in this Lease is not fully collectible by reason of any Requirement, then Tenant shall enter into such agreements and take such other steps (without additional expense to Tenant) as Landlord may reasonably request and as may be legally permissible to allow Landlord to collect the maximum rents which may from time to time during the continuance of such legal rent restriction be legally permissible (and not in excess of the amounts reserved therefor under this Lease). Upon the termination of such legal rent restriction prior to the expiration of the Term. (a) the Rental shall become and thereafter be payable hereunder in accordance with the amounts reserved in this Lease for the periods following such termination, and (b) Tenant shall pay to Landlord, if legally permissible, an amount equal to the excess of (i) the items of Rental which would have been paid pursuant to this Lease but for such legal rent restriction, over (ii) the rents paid by Tenant to Landlord during the period or periods such legal rent restriction was in effect.

 

34.19.              Consequential Damages.

 

Tenant shall have no liability for any consequential, indirect or punitive damages that Landlord suffers (it being understood, however, that nothing contained in this Section 34.19 limits Landlord’s right to recover damages (x) as expressly provided in Section 24.3(A) hereof and in Section 27.2 hereof, or (y) for Tenant’s failure to remove Specialty Alterations to the extent provided in Section 7.8(A) hereof). Landlord shall have no liability for any consequential, indirect or punitive damages that are suffered by Tenant or any Person claiming by, through or under Tenant.

 

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34.20.              Tenant’s Advertising.

 

Tenant shall not use a picture, photograph or drawing of the Building (or a silhouette thereof) in Tenant’s letterhead or promotional materials without Landlord’s prior approval.

 

34.21.                  Specially Designated Nationals; Blocked Persons; Embargoed Persons.

 

(A)                             Tenant represents and warrants to Landlord that (a) Tenant and each person or entity directly or indirectly owning an interest in Tenant is (i) not currently identified on the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Assets Control of the Department of the Treasury (“OFAC”) and/or on any other similar list maintained by OFAC pursuant to any authorizing statute, executive order or regulation (collectively, the “List”), and (ii) not a person or entity with whom a citizen of the United States is prohibited to engage in transactions by any trade embargo, economic sanction, or other prohibition of United States law, regulation, or Executive Order of the President of the United States, (b) none of the funds or other assets of Tenant constitute property of, or are beneficially owned, directly or indirectly, by, any Embargoed Person, (c) no Embargoed Person has any interest of any nature whatsoever in Tenant (whether directly or indirectly), (d) none of the funds of Tenant have been derived from any unlawful activity with the result that the investment in Tenant is prohibited by Requirements or that this Lease is in violation of Requirements, and (e) Tenant has implemented procedures, and will consistently apply those procedures, to ensure the foregoing representations and warranties remain true and correct at all times. The term “Embargoed Person” means any person, entity or government subject to trade restrictions under U.S. law, including but not limited to, the International Emergency Economic Powers Act, 50 U.S.C. $1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. I et seq., and any Executive Orders or regulations promulgated thereunder with the result that the investment in Tenant is prohibited by Requirements or Tenant is in violation of Requirements.

 

(B)                             Tenant covenants and agrees (a) to comply with all Requirements relating to money laundering, anti-terrorism, trade embargos and economic sanctions, now or hereafter in effect, (b) to immediately notify Landlord in writing if any of the representations, warranties or covenants set forth in this paragraph or the preceding paragraph are no longer true or have been breached or if Tenant has a reasonable basis to believe that they may no longer be true or have been breached, (c) not to use funds from any “Prohibited Person” (as such term is defined in the September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit. Threaten to Commit, or Support Terrorism) to make any payment due to Landlord under this Lease and (d) at the request of Landlord, to provide such information as may be requested by Landlord to determine Tenant’s compliance with Requirements.

 

(C)                                Tenant hereby acknowledges and agrees that Tenant’s inclusion on the List at any time during the Term shall be an Event of Default. Notwithstanding anything herein to the contrary, Tenant shall not permit the Premises or any portion thereof to be used or occupied by any person or entity on the List or by any Embargoed Person (on a permanent,

 

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temporary or transient basis), and any such use or occupancy of the Premises by any such person or entity shall be an Event of Default.

 

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This page constitutes the signature page to the Lease, dated as of the    day of July, 2013, between VNO 100 WEST 33RD STREET LLC, as landlord, and ROCKET FUEL INC., as tenant, for certain space in the building known by the street address of 100 West 33rd Street, New York, New York 10001

 

IN WITNESS WHEREOF, Landlord and Tenant have duly executed and delivered this Lease as of the date first above written.

 

	
 
    	
VNO 100 WEST 33RD STREET LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
Vornado Shenandoah Holdings LLC, managing member
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Vornado Really L.P., manager
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Vornado Realty Trust, general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ David Greenbaum
    
	
 
    	
 
    	
Name: David Greenbaum
    
	
 
    	
 
    	
Title: President - New York Division
    
	
 
    	
 
    
	
 
    	
ROCKET FUEL INC., a Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BY:
    	
/s/ J. Peter Bardwick
    
	
 
    	
 
    	
Name:
    	
J. Peter Bardwick
    
	
 
    	
 
    	
Title:
    	
C.F.O
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

UNIFORM FORM CERTIFICATE OF ACKNOWLEDGMENT

(Within New York State)

 

	
STATE OF                                      
    	
)
    
	
 
    	
: ss.:
    
	
COUNTY OF                                  
    	
)
    

 

On the          day of                  , in the year 2013, before me, the undersigned personally appeared                      , personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

 

	
 
    	
 
    
	
Notary Public
    	
 
    

 

UNIFORM FORM CERTIFICATE OF ACKNOWLEDGMENT

(Outside of New York State)

 

	
STATE OF                                      
    	
)
    
	
 
    	
: ss.:
    
	
COUNTY OF                                  
    	
)
    

 

On the          day of                    , in the year 2013, before me, the undersigned, personally appeared                         , personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument, and that such individual made such appearance before the undersigned in                           . (Insert the city or other political subdivision and the state or country or other place the acknowledgment was taken.)

 

	
 
    	
 
    

(Signature and office of individual taking acknowledgment)

 

 

Exhibit “A”

 

Premises

 

100 West 33rd Street (MF1415)

3rd

 

[FLOOR PLAN]

 

 

Exhibit “3.3”

 

Rules

 

1.                                      Tenant shall not obstruct the common areas of the Building. Tenant shall not use the common areas of the Building for any purpose other than for the purpose that the applicable common area is used ordinarily.

 

2.                                      Tenant shall not use any plumbing fixtures that are connected to Building Systems for any purpose other than the ordinary purpose for which such plumbing fixtures are installed.

 

3.                                      Tenant shall not use the Premises in any manner that materially and unreasonably interferes with the use of any other portion of the Building for ordinary business purposes.

 

4.                                      Tenant shall not at any time keep in the Premises any flammable, combustible or explosive substance, except for any such substances that are incidental to the use or maintenance of the Premises for ordinary office purposes or the performance of Alterations that are performed in accordance with the terms of this Lease.

 

5.                                      Tenant shall not bring any bicycles, vehicles or animals of any kind into the Premises or the Building (except for (x) service animals, and (y) bicycles or other vehicles that Tenant has the right to bring into the Building in accordance with applicable Requirements, with the understanding, however, that Tenant shall bring such bicycles and other vehicles into the Building only in a manner that conforms with reasonable rules that Landlord establishes therefor in accordance with applicable Requirements).

 

6.                                      Subject to Section 3.3 of the Lease, Tenant shall comply with the security procedures that Landlord reasonably adopts from time to time for the Building. Tenant acknowledges that Landlord’s security procedures may include, without limitation, (i) Landlord’s denying entry to the Building by any person who does not present a Building pass or who does not comply with Landlord’s procedures regarding the registration of visitors to the Building, and (ii) procedures governing the inspection of freight that arrives at the loading facilities for the Building.

 

7.                                      Landlord shall have the right to require Tenant to (x) direct Persons who are delivering packages to the Premises to make delivery to an office in the Building that Landlord designates (in which case Landlord shall make arrangements for such packages to be delivered to Tenant using other personnel that Landlord engages), or (y) arrange for such Persons to be escorted by a representative of Tenant while such Person makes delivery to the Premises.

 

8.                                      Tenant shall subject to inspection by Landlord or Landlord’s designee all items being brought into the Building by or on behalf of Tenant (including, without limitation, packages, boxes, bags, handbags, attache cases, and suitcases). Landlord may refuse

 

 

entry into the Building to any Person who refuses to cooperate with such inspection or who is carrying any item which has a reasonable likelihood of being dangerous to persons or property.

 

9.                                      Tenant, at Tenant’s expense, shall operate its interior lights for the employees of Landlord during the period that such employees make repairs in the Premises or perform cleaning services in accordance with the terms of this Lease.

 

10.                               Tenant shall not canvass or solicit the other occupants of the Building. Tenant shall cooperate reasonably with Landlord in connection with Landlord’s efforts to prevent any Person from canvassing, soliciting or peddling in the Building.

 

11.                               Tenant shall use in the Building only hand trucks and hand carts that in either case are equipped with rubber tires and side guards.

 

12.                               Tenant shall implement a policy that precludes its personnel from smoking in the Building and shall use reasonable efforts to enforce such policy.

 

 

Exhibit “3.4”

 

Tenant’s Signs Location and Specifications

 

(Sec Attached)

 

100 West 33rd Street (MF1415) - 3rd - Floorplan

 

[FLOOR PLAN]

 

 

Exhibit “4.4”

 

Cleaning Specifications

 

NIGHTLY (ON BUSINESS DAYS)

 

·                     Sweep hard-surfaced flooring in general office space using a dust-down preparation.

 

·                     Carpet sweep carpets in general office areas without moving heavy furniture (such as desks, file cabinets, computer stands, and sofas).

 

·                     Hand dust and wipe clean all furniture, fixtures and window sills in the general office areas that are within reach of the cleaning staff without ladders.

 

·                     Empty and clean waste receptacles in the general office areas and remove wastepaper.

 

·                     Dust the interior of waste receptacles in the general office areas.

 

·                     Wash clean water fountains and coolers in the general office areas.

 

·                     Sweep private stairways within the premises.

 

·                     Sweep and wash (using disinfectant) all floors in the base building lavatories that are located in the Building core.

 

·                     Wash and polish mirrors, shelves, bright work and enameled surfaces in the base building lavatories that are located in the Building core.

 

·                     Wash and disinfect basins, bowls and urinals in the base building lavatories that are located in the Building core.

 

·                     Wash toilet seats in the base building lavatories that are located in the Building core.

 

·                     Hand dust and clean all partitions, tile walls, dispensers and receptacles in the base building lavatories that are located in the Building core.

 

·                     Empty paper receptacles and remove wastepaper in the base building lavatories that are located in the Building core.

 

·                     Fill toilet tissue holders in the base building lavatories that are located in the Building core.

 

·                     Empty and clean sanitary disposal receptacles in the base building lavatories that are located in the Building core.

 

WEEKLY

 

 

·                     Vacuum clean carpeting and rugs in the general office areas without moving heavy furniture (such as desks, file cabinets, computer stands, and sofas).

 

·                  Dust door louvres and other ventilating louvres that are within reach of the cleaning staff without ladders.

 

·                  Wipe clean bright work.

 

QUARTERLY

 

·                  High dust the Premises, including the following:

 

·                     Dust pictures, frames, charts, graphs and similar wall hangings that are not reached in nightly or weekly cleaning.

 

·                     Dust clean vertical surfaces, such as walls, partitions, doors and door bucks and other surfaces not reached in nightly or weekly cleaning.

 

·                     Dust pipes, ventilating and air-conditioning louvers, ducts, high moldings and other high areas not reached in nightly or weekly cleaning.

 

·                     Dust Venetian blinds.

 

ADDITIONAL SERVICES

 

·                  Wash the exterior of windows periodically, subject to weather conditions and Requirements.

 

 

Exhibit “6.2”

 

Landlord’s Pre-Commencement Work

 

1.              Deliver the Premises code compliant, vacant, with interior improvements demolished and in broom clean condition ready for the Initial Alterations.

 

2.              Existing sprinkler infrastructure to remain in place. Landlord acknowledges that the entire floor has a code compliant sprinkler system and loop in place per NYC DOB Code for vacant and demolished space

 

3.              Provide ample connections to the Building’s Class “E” system. No tie in fee shall be charged to Tenant.

 

4.              Fireproofing, fire stopping and enclosure of any exposed structural steel in accordance with Code.

 

5.              Provide existing electrical closets with main feeds in place and ready for distribution by Tenant.

 

6.              Demise the Premises (and other unit(s) on the floor) and demise the common corridors and common the elevator lobby of the third (3rd) floor of the Building.

 

7.              Create trimmed elevator openings for freight elevators located on the western wall of the Premises.

 

8.              Relocate the fire hoses, as necessary, within the Premises

 

9.              Relocate the ceiling mounted water heating unit, as necessary, to accommodate the demising wall.

 

10.       Fireproof the underside of the deck where two (2) staircases have been removed and the slab filled-in

 

11.       Remove any plywood flooring and replace with the raised floor system.

 

 

Exhibit “7.2”

 

Space Plan for Initial Alterations

 

[FLOOR PLAN]

 

 

Exhibit “18.1”

 

Option Space

 

100 West 33rd Street (MF1415)

3rd

 

[FLOOR PLAN]

 

 

Exhibit “19.1”

 

Additional Space

 

100 West 33rd Street (MF1415)

3rd

 

[FLOOR PLAN]

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