Tenant Improvement Allowance Commencing as of January 1, 2011, Tenant shall be entitled to use the “Tenant Improvement Allowance”, as defined in Section 2 of this Amendment, for the costs relating to the design and construction of Tenant’s improvements or which are otherwise “Tenant Improvement Allowance items,” as that term is defined in Section 2.2.1, below (collectively, the “Tenant Improvements”). In no event shall Landlord be obligated to make disbursements pursuant to this Tenant Work Letter or otherwise in connection with Tenant’s construction of the Tenant Improvements or any Tenant Improvement Allowance Items, as defined below, in a total amount which exceeds the sum of the Tenant Improvement Allowance. All Tenant Improvements for which the Tenant Improvement Allowance has been made available shall be deemed Landlord’s property under the terms of the Lease; provided, however, Landlord may, by written notice to Tenant given concurrently with Landlord’s approval of the “Final Working Drawings”, as that term is defined in Section 3.3, below, require Tenant, prior to the end of the Lease Term or promptly following any earlier termination of this Lease, at Tenant’s expense, to remove any Tenant Improvements and to repair any damage to the Premises and Building caused by such removal and return the affected portion of the Premises to a Building standard general office condition; provided, however, that Landlord shall not require Tenant to remove upon termination or expiration of this Lease, or condition its approval upon Tenant’s agreement to remove upon termination or expiration of this Lease, any Tenant Improvements constructed pursuant to this Tenant Work Letter (including, without limitation, Larc improvements) which constitute standard, non-extraordinary improvements for ordinary office, laboratory and/or Larc uses in biotech facilities. Any portion of the Tenant Improvement Allowance that is not disbursed or allocated for disbursement by December 31, 2013, shall revert to Landlord and Tenant shall have no further rights with respect thereto.
Expansion Space As used in this paragraph, the term “Expansion Space” means any space in the Building which, at any time during the Lease Term, is occupied by a Person other than Landlord under a written lease with Landlord, and the term “Tenant’s Expansion Space” means Expansion Space which Tenant has elected to lease as provided in this paragraph. Landlord agrees to notify Tenant promptly after Landlord learns that any Expansion Space is or will become available. Subject to the prior rights of other tenants to whom Landlord has granted substantially similar rights, Tenant has the option to lease any Expansion Space which Landlord notifies Tenant is or will become available. If Tenant gives Landlord notice of its exercise of this option within thirty (30) days after notification from Landlord of the availability of the Expansion Space and if no Event of Default exists when Tenant’s notice is given, this Lease will be deemed to be amended to include Tenant’s Expansion Space as part of the Premises for the remainder of the Lease Term upon all of the same terms contained in this Lease except that (i) the Rentable Area of the Premises will be amended to include Tenant’s Expansion Space; (ii) Tenant’s Share will be increased to include the rentable area of Tenant’s Expansion Space; (iii) the Term Commencement Date with respect to Tenant’s Expansion Space will be the earlier of sixty (60) days after the date on which Tenant’s Expansion Space becomes vacant and ready for occupancy (provided that date is at least sixty (60) days after Tenant exercises its option to lease the Expansion Space), or the date on which the Expansion Space is first occupied by Tenant; (iv) if Tenant’s Expansion Space contains a rentable area of 10,000 square feet or more, and if there are less than three (3) Lease Years remaining in the Lease Term, the Lease Term will be extended to include three (3) full years from the Term Commencement Date with respect to Tenant’s Expansion Space; and (v) subject to adjustment during each Fixed Rental Period as provided in Exhibit E, Basic Rent for each year of the remaining Lease Term (as it may be extended) will be the greater of (a) the Basic Rent last paid by the Person most recently occupying Tenant’s Expansion Space or (b) Market Rent determined as provided in the Rent Rider attached as Exhibit E. If Tenant exercises this option, Tenant’s Expansion Space will be leased to Tenant in its “as is” condition and Tenant will, at its expense and in compliance with the provisions of Section 7.06, design and construct all Improvements desired by Tenant for its use and occupancy. Landlord and Tenant agree to execute such amendments to this Lease and other instruments as either of them considers necessary or desirable to reflect Tenant’s exercise of this option.
Expansion Premises In addition to the Original Premises, commencing on the Expansion Premises Commencement Date (as defined below), Landlord leases to Tenant, and Tenant leases from Landlord, the Expansion Premises.
Additional Premises Landlord shall use commercially reasonable efforts to expand the Premises to include an additional fifteen thousand four hundred ten (15,410) square feet of Rentable Area located on the first (1st) floor, as shown on Exhibit A attached hereto (the “Additional Premises”) on July 1, 2012 (the “Additional Premises Delivery Date”). In the event Landlord determines the Additional Premises will be ready for delivery to Tenant in the Required Condition on the Additional Premises Delivery Date, within ten (10) business days prior to the Additional Premises Delivery Date, Landlord and Tenant shall enter into a written amendment to the Lease, which amendment shall provide, unless otherwise agreed in writing, (a) that the commencement date of the Additional Premises shall be the Additional Premises Delivery Date (the “Additional Premises Commencement Date”), (b) that, as of the Additional Premises Commencement Date, the Premises under the Lease shall be increased to include the Additional Premises for a total of sixty-one thousand four hundred forty-four (61,444) square feet of Rentable Area (together, the Premises and the Additional Premises shall be referred to hereinafter as the “Total Premises”), (c) the new Basic Annual Rent applicable to the Total Premises, which shall commence on the Additional Premises Commencement Date and shall be as further described in Section 4.2 of this Amendment, (d) Tenant’s new Pro Rata Share of Operating Expenses as of the Additional Premises Commencement Date, which Pro Rata Share shall equal one hundred percent (100%) of the Building and thirty-three and 51/100 percent (33.51%) of the Project and (e) that, in addition to the parking which Tenant is entitled to under the terms of the Lease with respect to the original Premises, Tenant, for so long as Tenant leases the Additional Premises, shall have a non-exclusive license to use the parking facilities serving the Building in common on an unreserved basis with other tenants of the Building and the Project at a ratio of 3.3 parking spaces per 1,000 rentable square feet of Additional Premises, which amounts to fifty-one (51) additional parking spaces, which number shall include three (3) additional Reserved Spaces. In the event the Additional Premises is not ready for delivery to Tenant in the Required Condition on the Additional Premises Delivery Date, then (x) this Amendment and the Lease shall not be void or voidable, (y) Landlord shall not be liable to Tenant for any loss or damage resulting therefrom and (z) the new Basic Annual Rent applicable to the Premises shall be as further described in Section 4.3 of this Amendment.
Improvement Allowance a. Landlord shall contribute the Improvement Allowance towards the Improvement Costs in accordance with the terms of this Section. All Improvement Costs incurred by Landlord shall be deducted from the Improvement Allowance, and applied by Landlord to pay the Improvement Costs, as such costs are incurred. The Improvement Allowance shall remain available to be used by Tenant through October 31, 2014 (the “Allowance Expiration Date”). Any portion of the Improvement Allowance remaining undisbursed after the Allowance Expiration Date shall be retained by Landlord and Tenant shall not be entitled to any payment, Rent reduction or offset for any unused part of the Improvement Allowance. In no event shall Landlord be obligated to expend more than the Improvement Allowance.
b. Prior to commencement of construction of any Initial Improvements, Landlord shall submit to Tenant a written estimate (the “Estimate”) of the Improvement Costs. The Estimate shall include “allowance(s),” defined as an estimate of cost for an item of work not sufficiently defined in the documents to allow a fixed price to be obtained by the general contractor for which the Improvement Costs are to be increased or decreased, respectively, by the precise amount that the actual cost of the allowance item is either in excess of or less than the amount of the allowance for that item. Tenant shall approve the Estimate in writing within five (5) business days of Tenant’s receipt thereof. If Tenant does not approve or disapprove the Estimate in writing within said period, Tenant shall be deemed to have approved the Estimate. Landlord shall be under no obligation to construct any of the Initial Improvements until Tenant has expressly approved the Estimate.
c. If based on the Estimate, the Improvement Costs will exceed the Improvement Allowance, then prior to commencement of construction of any Initial Improvements, Tenant shall pay to Landlord one hundred percent (100%) of such projected excess amount. Landlord shall keep Tenant reasonably informed with respect to construction progress of the Initial Improvements, the occupancy of the Premises by Tenant and costs thereof. Landlord shall submit to Tenant monthly progress statements illustrating the cost to date of constructing the Initial Improvements. The statements of costs submitted to Landlord by Landlord’s contractors shall be conclusive for purposes of determining the actual cost of the items described therein. The amounts payable by Tenant hereunder constitute Rent payable pursuant to the Lease, and the failure to timely pay same constitutes a Default by Tenant as if Tenant shall have failed to pay Rent. Within ten (10) days after submission by Landlord of the foregoing statement, Tenant shall pay Landlord the amount, as set forth in such notice, by which the Improvement Costs exceeds the Improvement Allowance plus any amount previously paid by Tenant to Landlord. Landlord shall not disburse the Improvement Allowance until after Landlord disburses funds paid by Tenant for excess costs and provided that the Improvement Allowance is estimated to be sufficient to pay all remaining costs. Landlord shall disburse first the funds paid by Tenant and then the Improvement Allowance directly to the general contractor and to suppliers and subcontractors as Landlord deems appropriate. As soon as reasonably practical upon completion of the Initial Improvements, Landlord shall prepare and submit to Tenant a statement showing, in reasonable detail an accounting for the Improvement Costs and the total amount payable hereunder by Landlord to Tenant or Tenant to Landlord. Within ten (10) days after submission by Landlord of the foregoing statement, Tenant shall pay Landlord the amount, as set forth in such notice, by which the Improvement Costs exceeded the Improvement Allowance and any funds previously paid by Tenant to Landlord. If the Improvement Costs are less than the Improvement Allowance and any funds previously paid by Tenant to Landlord, then the excess funds previously paid by Tenant to Landlord shall be used to offset Base Rent; and Tenant shall not be entitled to any payment, Rent reduction or offset for any unused part of the Improvement Allowance.
d. After the Improvement Allowance has been expended by Landlord, the principal amount of the Improvement Allowance, together with interest thereon calculated at the Default Rate, shall be amortized evenly over the Term, and so long as Tenant does not default in its monetary obligations under the Lease, and fail to cure such default within the applicable period of cure, if any, provided under this Lease, then the balance of the Improvement Allowance shall be reduced each month by the principal amount amortized each month, and upon Landlord’s receipt of the final payment of Rent due during the initial Term of this Lease, Tenant shall have no liability to Landlord for the repayment of any portion of the Improvement Allowance or the interest that accrued and was amortized over the initial Term of this Lease. In the event of an uncured Default by Tenant under this Lease, then in addition to all of Landlord’s other remedies available under this Lease, Tenant shalt also be liable to Landlord for the entire unreduced principal balance of the Improvement Allowance remaining as of the date of default, and interest on such balance shall accrue at the Default Rate.
Tenant Improvement Allowance Items Except as otherwise set forth in this Tenant Work Letter, the Tenant Improvement Allowance shall be disbursed by Landlord only for the following items and costs (collectively, the “Tenant Improvement Allowance Items”):
2.2.1.1 Payment of the fees of the “Architect” and the “Engineers,” as those terms are defined in Section 3.1 of this Tenant Work Letter, the costs of Tenant’s project manager (if any) and payment of the fees incurred by, and the cost of documents and materials supplied by, Landlord and Landlord’s consultants in connection with the preparation and review of the “Construction Drawings,” as that term is defined in Section 3.1 of this Tenant Work Letter;
2.2.1.2 The payment of plan check, permit and license fees relating to construction of the Tenant Improvements;
2.2.1.3 The cost of construction of the Tenant Improvements, including, without limitation, contractors’ fees and general conditions, testing and inspection costs, costs of utilities, trash removal, parking and hoists, and the costs of after-hours freight elevator usage.
2.2.1.4 The cost of any changes in the Base, Shell and Core work when such changes are required by the Construction Drawings (including if such changes are due to the fact that such work is prepared on an unoccupied basis), such cost to include all direct architectural and/or engineering fees and expenses incurred in connection therewith;
2.2.1.5 The cost of any changes to the Construction Drawings or Tenant Improvements required by applicable laws and building codes (collectively, “Code”);
2.2.1.6 Sales and use taxes;
2.2.1.7 The “Coordination Fee,” as that term is defined in Section 4.2.2.2 of this Tenant Work Letter; and
2.2.1.8 All other costs to be expended by Landlord in connection with the construction of the Tenant Improvements.
Construction Allowance (a) Landlord shall provide to Tenant a construction allowance not to exceed $135.00 per rentable square foot in the Relocation Premises (the “Construction Allowance”) to be applied toward the Total Construction Costs, as adjusted for any changes to the Tenant Work. If the Total Construction Costs are estimated to exceed the Construction Allowance by more than $5.00 per rentable square foot of the Relocation Premises, then no advance of the Construction Allowance shall be made by Landlord until Tenant has first paid to the contractor from its own funds (and provided reasonable evidence thereof to Landlord) the anticipated amount by which the projected Total Construction Costs exceed the amount of the Construction Allowance. Thereafter, Landlord shall pay to Tenant (or at Tenant’s request directly to Tenant’s general contractor) the Construction Allowance in multiple disbursements (but not more than once in any calendar month) following the receipt by Landlord of the following items: (i) a request for payment and sworn statements of Tenant and contractor, (ii) final or partial lien waivers, as the case may be, from all persons performing work or supplying or fabricating materials for the Tenant Work, fully executed, acknowledged and in recordable form, which waivers may be conditioned upon receipt of payment, (iii) the Architect’s certification that the Tenant Work for which reimbursement has been requested has been finally completed, including (with respect to the last application for payment only) any punch-list items, on the appropriate AIA form or another form approved by Landlord, and, (iv) with respect to the disbursement of the last 10% of the Construction Allowance, (1) the permanent certificate of occupancy issued for the Relocation Premises, if required by applicable law, (2) the record drawing in CAD format, PDF format and hard copy required by Section 5 above, and (3) an estoppel certificate confirming such factual matters as Landlord or Landlord’s Mortgagee may reasonably request (collectively, a “Completed Application for Payment”). Landlord shall pay the amount requested in the applicable Completed Application for Payment to Tenant within 30 days following Tenant’s submission of the Completed Application for Payment. If, however, the Completed Application for Payment is incomplete or incorrect, Landlord shall promptly notify Tenant of the same and Landlord’s payment of such request shall be deferred until 30 days following Landlord’s receipt of the corrected Completed Application for Payment. Notwithstanding anything to the contrary contained in this Exhibit, Landlord shall not be obligated to make any disbursement of the Construction Allowance during the pendency of any of the following: (1) Landlord has received written notice of any unpaid claims relating to any portion of the Tenant Work or materials in connection therewith covered by previously funded applications for payment, (2) there is an unbonded lien outstanding against the Building or the Relocation Premises or Tenant’s interest therein by reason of work done, or claimed to have been done, or materials supplied or specifically fabricated, claimed to have been supplied or specifically fabricated, to or for Tenant or the Relocation Premises, (3) the conditions to the advance of the Construction Allowance are not satisfied, or (4) Tenant is in Default under the Lease.
(b) The Construction Allowance must be used on Tenant Work performed within the Relocation Premises and the Total Construction Costs and may not be used to pay for furniture, fixtures or equipment or as rent abatement, HOWEVER, notwithstanding the foregoing, provided Tenant is not in Default, Tenant may use a portion of the Construction Allowance, not to exceed an amount equal to $35.00 per rentable square foot of the Relocation Premises, to pay for furniture, fixtures or equipment, moving costs, cabling costs, and other soft costs associated with the Relocation Premises. Should Tenant elect to use a portion of the Construction Allowance to pay for such soft costs, at Landlord’s request Tenant shall execute and deliver a letter to Landlord confirming the exact amount of the Construction Allowance used to pay for such soft costs. Should Tenant elect to use a portion of the Construction Allowance to pay for such costs, Tenant shall provide Landlord with a written request that includes copies of paid invoices or receipts for reimbursement of such costs, and Landlord shall reimburse Tenant for such amounts within 30 days of receipt of Tenant’s request. Tenant shall provide lien waivers as appropriate. No portion of the Construction Allowance may be used as a credit against Rent due under the Lease.
(c) The Construction Allowance must be used (i.e. work performed and invoices submitted to Landlord) by June 30, 2020, or the Construction Allowance shall be deemed forfeited with no further obligation by Landlord with respect thereto.
(d) If Landlord defaults in Landlord’s obligation to pay the Construction Allowance pursuant to Section 9 of this Exhibit B-1, or any portion thereof, within five (5) days after the date the same is due, then Tenant shall have the right to give Landlord a second written notice (“Offset Exercise Notice”) requesting payment of such unpaid amounts and notifying Landlord that Tenant intends to offset against rent if not paid. In the event that Landlord fails to contest in good faith or fully pay such amounts within ten (10) business days after such Offset Exercise Notice is received by Landlord, then provided no Default exists Tenant may withhold and offset such unpaid sums from and against 25% of Base Rent next due until paid.
Additional Space Commencing on May 1, 2001, Sublessor herein grants unto the Sublessee a Right of First Refusal on any space that shall be and/or becomes available in the building during the remaining Term of this Sublease. Prior to May 1, 2001 and thereafter prior to the first day of May of any calendar year during the remaining Term hereof, Sublessor shall notify Sublessee by written notice of the availability of any such space in the building. Should Sublessee desire to exercise its Right of First Refusal and sublease such available space, Sublessee must notify Sublessor in writing of its desire to sublease the available space within seven (7) calendar days of Sublessee's receipt of Landlord's notice of availability. Within thirty (30) days of the receipt of Sublessee's notice exercising the right to sublease such available space, Sublessee and Sublessor shall enter into an amendment of this agreement setting forth the terms under which the additional space is subleased to Sublessee. The Base Rental shall be at a rental mutually agreed between Sublessee and Sublessor. Failure by Sublessee to exercise its Right of First Refusal within said seven (7) calendar day period, or if exercised, failure to enter into an amendment of this agreement within thirty (30) days of Sublessor's receipt of Sublessee's notice, shall be deemed a waiver of such right and Sublessor shall thereafter be free of any obligation under this Article 2.04 for a period of 12 months. Any exercise by Sublessee of this Right of First Refusal shall be for a minimum of 5,000 rental square feet.
WORK LETTER This Lease is supplemented by that certain Work Letter of even date executed by Lessor and Lessee, attached hereto as Exhibit C, and incorporated herein by this reference.
Disbursement of Tenant Improvement Allowance During the construction of the Tenant Improvements, Landlord shall make monthly disbursements of the Tenant Improvement Allowance for Tenant Improvement Allowance Items for the benefit of Tenant and shall authorize the release of monies for the benefit of Tenant as follows.
