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Eighteenth Amendment to Lease

Lease Agreement

Eighteenth Amendment to Lease | Document Parties: CRA INTERNATIONAL, INC. | Charles River Associates Incorporated You are currently viewing:
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CRA INTERNATIONAL, INC. | Charles River Associates Incorporated

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Title: Eighteenth Amendment to Lease
Governing Law: Massachusetts     Date: 8/4/2008
Industry: Business Services     Law Firm: Dechert     Sector: Services

Eighteenth Amendment to Lease, Parties: cra international  inc. , charles river associates incorporated
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Exhibit 10.2

 

John Hancock Tower

200 Clarendon Street

Boston, Massachusetts  02117

 

Eighteenth Amendment to Lease

 

This Eighteenth Amendment to Lease (this “ Amendment ”) is made as of this 29th day of July, 2008 (the “ Effective Date ”), by and between (i)  100 & 200 Clarendon LLC , a Delaware limited liability company (“ Landlord ”), and (ii)  CRA International, Inc. , a Massachusetts corporation, formerly known as Charles River Associates Incorporated (“ Tenant ”).

 

RECITALS

 

A.             Landlord and Tenant are parties to that certain Lease dated as of March 1, 1978 (the “ Original Lease ”) as amended by that certain First Amendment of Lease dated as of December 16, 1981 (the “ First Amendment ”), as further amended by that certain Second Amendment of Lease dated as of February 24, 1984 (the “ Second Amendment ”), as further amended by that certain Third Amendment of Lease dated as of February 28, 1985 (the “ Third Amendment ”), as further amended by that certain Fourth Amendment of Lease dated as of February 7, 1986 (the “ Fourth Amendment ”), as further amended by that certain Fifth Amendment of Lease dated as of February 13, 1987 (the “ Fifth Amendment ”), as further amended by that certain Sixth Amendment of Lease dated as of August 24, 1987 (the “ Sixth Amendment ”), as further amended by that certain Seventh Amendment of Lease dated as of January 31, 1990 (the “ Seventh Amendment ”), as further amended by that certain Eighth Amendment of Lease dated as of December 31, 1991 (the “ Eighth Amendmen t”), as further amended by that certain Ninth Amendment of Lease dated as of September 2, 1992 (“ Ninth Amendment ”), as further amended by that certain Tenth Amendment of Lease dated as of August 24, 1995 (the “ Tenth Amendment ”), as further amended by that certain Eleventh Amendment of Lease dated as of November 25, 1996 (the “ Eleventh Amendment ”), as further amended by that certain Twelfth Amendment of Lease dated as of March 19, 1998 (the “ Twelfth Amendment ”), as further amended by that certain Thirteenth Amendment of Lease dated as of August 13, 1999 (the “ Thirteenth Amendment ”), as further amended by that certain Fourteenth Amendment of Lease dated as of April 20, 2000 (the “ Fourteenth Amendment ”), as further amended by that certain Fifteenth Amendment of Lease dated as of June 7, 2002 (the “ Fifteenth Amendment ”), as further amended by that certain Sixteenth Amendment of Lease dated as of April 23, 2004 (the “ Sixteenth Amendment ”), and as further amended by that certain Seventeenth Amendment of Lease dated as of February 6, 2008 (the “ Seventeenth Amendment ”) (the Original Lease, together with the First Amendment, Second Amendment Third Amendment, Fourth Amendment, Fifth Amendment, Sixth Amendment, Seventh Amendment, Eighth Amendment, Ninth Amendment, Tenth Amendment, Eleventh Amendment, Twelfth Amendment, Thirteenth Amendment, Fourteenth Amendment, Fifteenth Amendment, Sixteenth Amendment, and Seventeenth Amendment, the “ Existing Lease ”), pursuant to which Tenant leases approximately 28,129 rentable square feet of space located on Floor 26, 6,000 rentable square feet of space located Floor 31, 28,803 rentable square feet of space located on Floor 32, and 28,492 rentable square feet of space located on Floor 33 for a total area of 91,424

 

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rentable square feet (the “ Premises ”), as shown on Exhibit A attached hereto,  of that certain office building located at 200 Clarendon Street, Boston, Massachusetts 02117 (the “ Building ”).  Any capitalized terms used herein not otherwise defined shall have the respective meanings ascribed to them in the Existing Lease.

 

B.             Landlord and Tenant hereby desire to amend the Existing Lease on the terms and conditions set forth in this Amendment.  The Existing Lease, as amended by this Amendment, shall be referred to herein as the “ Lease ”.

 

AGREEMENT

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Landlord and Tenant hereby agree as follows:

 

1.              Extension of Lease Term .  The Term with respect to the Premises currently expires on August 31, 2009 (the “ Existing Expiration Date ”).  Upon the mutual execution and delivery of this Amendment, the Term with respect to the Premises is hereby extended from the Existing Expiration Date to March 31, 2015 (the “ New Expiration Date ”).  The period from the first day immediately after the Existing Expiration Date through the New Expiration Date with respect to the Premises shall be referred to herein as the “ 18th Amendment Extended Term ”.  During the 18th Amendment Extended Term, all references in the Existing Lease to the term “ Term ” with respect to the Premises shall be deemed to refer to the 18th Amendment Extended Term.  All references in this Amendment to “ Term ” shall mean any period during which this Lease is in effect.  During the 18th Amendment Extended Term, Tenant shall lease the Premises on all of the same terms and conditions set forth in the Lease, except as otherwise set forth herein.

 

Pursuant to Section 9 of the Ninth Amendment, as amended by Section 7 of the Sixteenth Amendment, Tenant has an Option to Extend the Term of the Lease.  Landlord and Tenant acknowledge that by entering into this Amendment, Tenant is hereby exercising the aforementioned Option to Extend the Term, and that except as set forth in Section 8 below, Tenant shall have no further rights to extend the Term of the Lease.  Notwithstanding the foregoing, if Tenant elects to terminate this Amendment pursuant to the terms and conditions set forth in Section 20 hereof, then, and only in that event, Tenant shall retain the Option to Extend the Term of the Lease set forth in Section 9 of the Ninth Amendment, as amended by Section 7 of the Sixteenth Amendment, except that the Exercise Date, as defined in Section 7 of the Sixteenth Amendment, shall be not later than one hundred twenty (120) days after the Effective Date set forth above.

 

2 .              Base Rent .  From and after the mutual execution of this Amendment until the Existing Expiration Date, and in addition to all other charges payable under the Lease, Tenant shall continue to pay the monthly Base Rent with respect to the Premises in accordance with the terms and provisions of the Existing Lease.  During the 18th Amendment Extended Term, Tenant shall pay the Base Rent for the Premises in the amount of $6,171,120.00 per annum ($514,260.00 per month; $67.50 per rentable square foot of the Premises) in accordance with the terms of Paragraph 1 of the Existing Lease.

 

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3 .              Waived Rent .   Notwithstanding anything herein which may be construed to the contrary, provided there is no event of monetary or material non-monetary default by Tenant existing under the Lease, beyond all applicable notice and cure periods (an “ Uncured Major Default ”), at any time during the below-listed time periods in the 18th Amendment Extended Term (the “ Waiver Periods ”), the monthly amount of Base Rent is hereby waived by Landlord (the “ Waived Rent ”) as set forth below.  The foregoing waivers shall not affect Tenant’s obligation to pay additional rent or any other charges payable by Tenant under the Lease.

 

Waiver Periods

 

Waived Rent

 

 

 

 

 

September, 2009

 

$

514,260.00

 

October, 2009

 

$

514,260.00

 

September, 2010

 

$

514,260.00

 

September, 2011

 

$

514,260.00

 

September, 2012

 

$

514,260.00

 

September, 2013

 

$

514,260.00

 

September, 2014

 

$

514,260.00

 

 

If there exists an Uncured Major Default during a Waiver Period, then Tenant shall not be entitled to the benefit of the Waived Rent for the applicable Waiver Period; provided, however, that if Tenant thereafter cures such Uncured Major Default (which cure shall be subject to Landlord’s acceptance thereof if it occurs after the applicable notice and cure period) Tenant shall thereupon have the benefit of the Waived Rent which it was denied during the period of such Uncured Major Default, as a credit against Tenant’s next due payment of Base Rent as if there had been no such Uncured Major Default.

 

4 .              Ownership Taxes, Operating Expenses.

 

(a)            Ownership Taxes.   The Base Year for purposes of calculating Tenant’s Proportionate Share of Ownership Taxes with respect to the 18th Amendment Extended Term shall be the calendar year 2010, and Tenant’s Proportionate Share shall be 5.26%.  With respect to the 18th Amendment Extended Term, and any Option Terms, as hereinafter defined, all references in subparagraph (a) of Paragraph 2 of the Lease (Rent Adjustment) to the term “fiscal year” shall be deemed to mean “calendar year”.

 

(b)            Operating Expenses .  Subparagraphs (b) and (c) of Paragraph 2 of the Lease (Rent Adjustment) is hereby deleted in its entirety, and the provisions governing Operating Expenses set forth in Exhibit B attached hereto and incorporated herein are hereby substituted therefor.  The Base Year for purposes of calculating Tenant’s Proportionate Share of Operating Expenses with respect to the 18th Amendment Extended Term shall be the calendar year 2010, and Tenant’s Proportionate Share shall be 5.26%.

 

5 .              Acceptance of Premises .  Tenant is currently occupying the Premises and acknowledges and hereby agrees that (i) except for furnishing the 18th Amendment Allowance, as hereinafter defined, and except as provided in the following paragraph, Landlord shall have no

 

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obligation to perform any work to prepare the Premises for Tenant’s use and occupancy and (ii) Tenant accepts the Premises in its current condition, “AS-IS,” “WITH ALL FAULTS.”  Additionally, Tenant acknowledges that Landlord has not made any representation or warranty as to the condition of the Premises or the Building with respect to the suitability or fitness of same for the conduct of Tenant’s permitted use, its business, or for any other purpose.

 

Landlord shall, at its sole cost and expense, install filters (and maintain and/or replace such filters throughout the 18 th Amendment Extended Term) in certain of the heat registers in the Premises.  Furthermore, Landlord shall take such other reasonable actions as may be reasonably necessary, in Landlord’s good faith judgment, throughout the Term to prevent black dust from being released from any registers in the Premises.  Promptly after execution and delivery of this Amendment by both parties, Tenant and Landlord shall jointly inspect the heat registers in the Premises to determine which of them are emitting dust.  Within thirty (30) days after such joint determination, Landlord shall install filters in all affected heat registers.

 

6 .              18th Amendment Allowance.   Landlord shall make available to Tenant a one-time tenant improvement allowance (the “ 18th Amendment Allowance ”) for the construction costs (including, without limitation, planning, architectural, and engineering expenses, construction management fees, moving expenses, and voice and data cabling) incurred by Tenant (including architectural planning costs for The Phillips Group incurred by Tenant prior to the date of this Amendment) in refurbishing the Premises (the “ Improvements ”) in an amount equal to One Million Eight Hundred Twenty-Eight Thousand Four Hundred Eighty and 00/100 Dollars ($1,828,480.00).  The planning, construction and installation of the Improvements shall be performed by parties selected by Tenant and approved by Landlord (which approval shall not be unreasonably withheld, conditioned or delayed) in accordance with the terms of Paragraph 10 of the Existing Lease.  Landlord shall, from time to time (but not more often than monthly) within forty-five (45) days following receipt of invoices marked as paid, unconditional mechanics’ lien releases, and such other information as Landlord may reasonably request with respect to the Improvements, reimburse Tenant for the cost of the Improvements; provided, however, that in no event shall Landlord be obligated to make disbursements pursuant to this Section 6 in a total amount which exceeds the 18th Amendment Allowance.  Tenant may elect to use a portion of the 18th Amendment Allowance in an amount not to exceed $457,120.00 ($5.00 per rentable square foot of the Premises) (the “ Reserved Allowance ”) (i) for the purchase and installation of future Improvements in the Premises and/or (ii) as a credit against Base Rent and any additional rent due under the Lease.

 

It is understood and agreed that subject to the prior approval of Landlord, which approval shall not be unreasonably withheld, conditioned, or delayed, Tenant may select the construction manager of its choice and shall not be required to use Landlord or an affiliate of Landlord as construction manager.  Although Tenant has not yet chosen its construction manager or architect, Landlord hereby approves the use by Tenant of CB Richard Ellis-NE Partners, LP as construction manager, and The Phillips Group as architect, in the event that Tenant elects to use either or both of these companies for such purposes.

 

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7 .              Assignment and Subletting .

 

(a)            The language added as insertion #4 to the first sentence of Paragraph 8 of the Lease is hereby deleted in its entirety and replaced with the following language:

 

“provided, however, that Tenant may, without the prior written consent of Landlord (but with prior written certification to Landlord from Tenant’s chief financial officer that the financial test set forth in subsection (i) below has been met, if applicable) assign or sublet the Premises to a Permitted Transferee as such term is hereinafter defined, but provided further that no such assignment or subletting shall affect Tenant’s continuing liability hereunder.  For purposes of this Lease, (i) an “ Assignee ” is hereby defined as a business entity into which Tenant is merged or with which Tenant is consolidated, or which acquires all or substantially all of the stock or assets of Tenant, which business entity shall have a net worth (determined in accordance with generally accepted accounting principles, consistently applied) immediately after such merger, consolidation or acquisition at least equal to the greater of (x) One Hundred Twenty Million and 00/100 Dollars ($120,000,000.00) and (y) seventy-five percent (75%) of the net worth (determined in accordance with generally accepted accounting principles, consistently applied) of Tenant immediately prior to such merger, consolidation or acquisition, and (ii) an “ Affiliated Entity ” is hereby defined as any entity which is controlled by, is under common control with, or which controls Tenant, control being defined as the direct or indirect ownership of more than fifty (50%) percent of the beneficial interest of the entity in question (individually and collectively, a “ Permitted Transferee ”).”

 

From and after the Effective Date, all references in the Lease to the language “an affiliate as that term is defined in Rule 144 promulgated under the Securities Act of 1933” shall be deleted in its entirety, and all references in the Lease to “an affiliate” shall be deemed to mean a Permitted Transferee.

 

(b)            The last sentence of Paragraph 8 of the Lease is deleted in its entirety and is replaced with the following:  “Landlord agrees that its consent to a proposed assignment or subletting shall not be unreasonably withheld provided Tenant remains primarily liable hereunder.”  In addition, Paragraph 8 of the Lease is hereby amended by adding the following language:

 

“If Landlord consents to an assignment of the Lease or a sublease of all or any portion of the Premises (the “ Subject Space ”) (each, a “ Transfer ”), as a condition thereto which the parties hereby agree is reasonable, Tenant shall pay to Landlord fifty percent (50%) of any Transfer Premium (as hereinafter defined) as and when received by Tenant from such assignee or subtenant (each, a “ Transferee ”).  “ Transfer Premium ” shall mean all Base Rent and additional rent (collectively, “ Rent ”), or other consideration payable by such Transferee in connection with the Transfer in excess of the Rent payable by Tenant under the Lease during the term of the Transfer (on a per-rentable-square-foot basis if less than all of the Premises is transferred) after deducting the reasonable expenses incurred by Tenant for (i) any free base rent, allowances or other economic concessions provided to the Transferee, (ii) any brokerage commissions, advertising costs, legal fees, architectural fees, and reasonable leasehold improvement costs in connection with the Transfer, (iii) in the case of any sublease, any actual costs incurred by Tenant in separately demising the subleased space, and (iv) any other reasonable costs incurred in connection with the Transfer.  Transfer Premium shall also include, but not be limited to, key money, bonus money or other cash consideration paid by Transferee to

 

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Tenant in connection with such Transfer, and any payment in excess of fair market value for services rendered by Tenant to Transferee or for assets, fixtures, inventory, equipment, or furniture transferred by Tenant to Transferee in connection with such Transfer.  In the calculations of the Rent (as it relates to the Transfer Premium calculated under this Paragraph 8), the Rent paid by Transferee and by Tenant during each annual period for the Subject Space shall be computed after adjusting such rent as aforesaid.  It is expressly understood and agreed that this paragraph shall not apply to any assignment or sublease for which Landlord’s consent is not required under the Lease.

 

Notwithstanding anything to the contrary contained in this Paragraph 8, if Tenant delivers to Landlord a notice of Tenant’s desire to Transfer all or substantially all of the Premises on the terms and conditions set forth in the Lease for all or substantially all of the balance of the applicable Term (the “ Transfer Notice ”), Landlord shall have the option, by giving written notice (the “ Recapture Notice ”) to Tenant within thirty (30) days (which period shall be shortened to twenty (20) days after 100 & 200 Clarendon LLC transfers all of its interests in the Building to an unrelated third party) after receipt of such Transfer Notice, to recapture the portion of the Premises which Tenant desires to transfer as identified in such Transfer Notice (the “ Transfer Space ”); provided, however, that Tenant shall have the right to nullify Landlord’s election to recapture the Transfer Space if Tenant delivers written notice (the “ Withdrawal Notice ”) to Landlord withdrawing Tenant’s Transfer Notice within ten (10) days after Tenant’s receipt of the Recapture Notice.  Unless Tenant timely delivers the Withdrawal Notice, such Recapture Notice shall cancel and terminate the Lease with respect to the Transfer Space as of the later of (i) the date stated in the Transfer Notice as the effective date of the proposed Transfer and (ii) ninety (90) days following the giving of the Recapture Notice.  In the event of a recapture by Landlord, if the Lease shall be canceled with respect to less than the entire Premises, the Rent reserved therein shall be prorated on the basis of the number of rentable square feet retained by Tenant in proportion to the number of rentable square feet contained in the Premises, and the Lease as so amended shall continue thereafter in full force and effect, and upon request of either party, the parties shall execute written confirmation of the same.  If Landlord declines, or fails to elect in a timely manner to recapture the Transfer Space under this Section 7, then, provided Landlord has consented to the proposed Transfer, Tenant shall be entitled to proceed to transfer the Transfer Space to the proposed Transferee within one hundred eighty (180) days after the date of the Transfer Notice, subject to the provisions of this Section 7 and the Existing Lease.  Tenant acknowledges and agrees that if Tenant delivers the Withdrawal Notice, Landlord may enter into a direct lease with the proposed Transferee identified in the applicable Transfer Notice on such terms and conditions as are acceptable to Landlord in its sole and absolute discretion, and Tenant shall have no right, title or interests to any of the rent, additional rent and/or any other consideration that Landlord receives from such Transferee.  It is expressly understood and agreed that Landlord shall have no recapture right for any assignment or sublease for which Landlord’s consent is not required under the Lease.

 

In no event shall Tenant be permitted to sublease the Premises or assign the Lease to a Restricted Occupant, as hereinafter defined.  For purposes hereof, a “ Restricted Occupant ” shall be defined as any tenant (or any subtenant or occupant whose sublease or occupancy agreement is dated prior to the Effective Date) of premises in the Building ( “Occupant ”) unless such Occupant’s need, as to the size of premises and length of term, cannot then (i.e., at the time that Tenant requests Landlord’s consent to a Transfer to such Occupant) be satisfied by

 

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Landlord.  Landlord shall confirm to Tenant, in writing within ten (10) business days of receipt of Tenant’s written request, as to whether or not Landlord has comparable space to offer such Occupant.”

 

8 .              Options to Extend .

 

As noted above, pursuant to Section 9 of the Ninth Amendment, as amended by Section 7 of the Sixteenth Amendment, Tenant has an Option to Extend the Term of the Lease.  Landlord and Tenant acknowledge that by entering into this Amendment, Tenant is hereby exercising the aforementioned Option to Extend the Term, and that except as set forth in Section 8 below, Tenant shall have no further rights to extend the Term of the Lease.

 

On the conditions (which conditions Landlord may waive, at its election, by written notice to Tenant at any time) that both at the time Tenant exercises the extension option(s) described below and on the commencement date of the applicable Option Term, (i) Tenant is not in default of its covenants and obligations under the Lease beyond all applicable notice and cure periods, and (ii) Tenant has not subleased more than one (1) full floor of the Premises then demised to Tenant other than to a Permitted Transferee, Tenant shall have the right and option to extend the Term for either (x) the entire Premises plus the 22,778 rentable square feet of office space on Floor 31 of the Building that Tenant is currently subleasing from John Hancock Financial Services, Inc., through March 31, 2015 (collectively, “ Extension Premises A ”) or (y) Floors 26, 32, and 33 only (collectively, “ Extension Premises B ”), in either case for two (2) additional periods of five (5) years each (each five-(5)-year period to be referred to hereinafter as an “ Option Term ”), provided that Tenant shall give written notice (“ Extension Notice ”) to Landlord on or before the date that is not less than sixteen (16) months prior to, but not more than nineteen (19) months prior to, the expiration of the then current Term (the “ Exercise Date ”), the first such Option Term commencing as of the expiration of the 18 th Amendment Extended Term and the second such Option Term commencing as of the expiration of the first (1 st ) Option Term.  Notwithstanding the foregoing, only in connection with Tenant’s lease of any RFO Premises, as more fully set forth in Section 9(a) hereof, Tenant may send Landlord an Extension Notice on or before the date twenty-four (24) months prior to the expiration of the then current Term.  If Tenant elects to extend the Term of the Lease hereunder, then at the time Tenant delivers its Extension Notice for the first Option Term, Tenant shall specify either Extension Premises A or Extension Premises B as the Premises for which the Term is being extended for the Option Term(s), and if Tenant fails to specify same, Tenant shall be deemed to have exercised its option to extend the Term for Extension Premises A defined above.

 

If an option is duly exercised as aforesaid, the then current Term shall be automatically extended for the applicable Option Term commencing on the date immediately following the expiration of the then current Term (the “ Option Term Commencement Date ”) upon all of the same terms and conditions contained in the Lease except that Base Rent shall be determined as hereinafter provided.  In the event that an option to extend is duly exercised, all references contained in the Lease to “Term” or “18th Amendment Extended Term”, whether by number of years or number of months, shall be construed to refer to the then current Term as extended by the exercise of the aforesaid option(s), whether or not specific reference thereto is made in the Lease.  In exercising any option hereunder, Tenant acknowledges that time is of the essence.

 

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Base Rent during the applicable Option Term shall be equal to the then Fair Rental Value for the Premises (as defined and determined below).

 

For purposes of this Section 8, “ Fair Rental Value ” shall mean the annual fair rental for the Premises that would be agreed upon between a landlord and a tenant executing a lease in a comparable building of comparable age for comparable square footage located in Boston for a comparable term in light of all the other business terms of the Lease, assuming the following:

 

(a)            the landlord and tenant are well informed and well advised, and each is acting in what it considers its own best interests;

 

(b)            the rental shall reflect the condition of the Premises and all residual value of any improvements to the Premises;

 

(c)            the method by which square footage is measured is similar to the method used to measure the Premises; and

 

(d)            the creditworthiness of the tenant is similar to the creditworthiness of Tenant at the time the option to extend the Lease is exercised.

 

For purposes of this Section 8, the determination of the Fair Rental Value specified above shall include consideration of all adjustments, if any, for Ownership Taxes and Operating Expenses attributable to the Premises.  Effective as of the applicable Option Term Commencement Date and for the duration of the applicable Option Term, the Base Year for determining Tenant’s Proportionate Share of Ownership Taxes and Tenant’s Proportionate Share of Operating Expenses shall be the calendar year ending immediately prior to the applicable Option Term Commencement Date (i.e., 2014 for an Option Term commencing in 2015).

 

Within thirty (30) days after receipt of Tenant’s Extension Notice, Landlord shall initially designate Fair Rental Value and Landlord shall furnish data in support of such designation.  If Tenant disagrees with Landlord’s designation of a Fair Rental Value, Tenant shall so notify Landlord within ten (10) business days after receipt of Landlord’s designation, whereupon Landlord and Tenant shall negotiate in good faith for thirty (30) days (“ Negotiation Period ”).  If the parties cannot agree in the Negotiation Period as to the amount of Fair Rental Value, then the determination of Fair Rental Value shall immediately be submitted to arbitration in accordance with the following procedure.

 

Within fifteen (15) days after the Negotiation Period, each of Landlord and Tenant shall appoint an appraiser and shall notify the other of same.  If either party fails to give notice to the other identifying an appraiser within the time provided, and such failure continues for ten (10) business days after notice from the other party (which notice shall state in a prominent position, in bold face type and all capital letters, “WARNING:  FAILURE TO RESPOND TO THIS NOTICE WITHIN TEN (10) BUSINESS DAYS WILL RESULT IN LOSING YOUR RIGHT TO NAME AN APPRAISER TO DETERMINE RENT DURING THE EXTENSION OPTION TERM”), said party shall be deemed to have waived the right to

 

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identify an appraiser, and the decision of the other party’s appraiser shall control If two appraisers are selected, they must within fifteen (15) days after the selection of the second agree to a third appraiser.  If the two appraisers fail to identify the third appraiser within such fifteen-(15)-day period, then either Landlord or Tenant may petition the American Arbitration Association (or its equivalent) having jurisdiction over the Premises for the appointment of the third appraiser.  The three appraisers must each, within thirty (30) days after the appointment of the third appraiser, simultaneously deliver to Landlord and Tenant their expert opinions of the Fair Rental Value in question.  The Fair Rental Value is the rent proposed by either the appraiser selected by Landlord or the appraiser selected by Tenant that is closest to the rent determined by the third appraiser.  Landlord and Tenant each have the right, to be exercised within fifteen (15) days after the appointment of the third appraiser, to submit written materials to the appraisers and the other party not in excess of fifteen (15) pages in length and may submit a reply of not more than five (5) pages within five (5) days after receipt of the other party’s submission.  There must be no hearings or other contact between the appraisers and the parties hereto.  Each party must pay the cost of the appraiser selected by it and one half of the cost of the third appraiser.  All appraisers must be independent, disinterested, and must have the designation MAI, SRA or equivalent and must have not less than five (5) years’ experience appraising lease rents in the business market wherein the Premises are located.  The appraisers may, but need not, present formal written appraisals supporting their opinion but must, in any event, certify that the report was conducted in accordance with professional standards.  The decision of this appraisal process is binding upon the parties and is not subject to appeal to a court or other body except for claims based upon fraud.

 

9.              Right of First Offer .   Section 8 of the Sixteenth Amendment of Lease is hereby deleted in its entirety, and the following language is substituted therefor:

 

On the conditions (which conditions Landlord may waive, at its election, by written notice to Tenant at any time) that both at the time Landlord is required to give Landlord’s Notice, as hereinafter defined, and as of the Commencement Date in respect of the RFO Premises, as hereinafter defined, (i) Tenant is not in default of its covenants and obligations under the Lease beyond all applicable notice and cure periods, and (ii)  Tenant has not subleased more than one (1) full floor of the Premises then demised to Tenant other than to a Permitted Transferee, then Tenant shall have the following right to lease the RFO Premises when the RFO Premises become available for lease to Tenant, as hereinafter defined.

 

(a)                                   Definition of RFO Premises

 

The “ RFO Premises ” shall be defined as any separately demised area on Floor 30 of the Building, when such area becomes available for lease to Tenant during the Term, as the same may be extended.  For the purposes of this Section 9, an RFO Premises shall be deemed to be “ available for lease to Tenant ” if, during the Term of the Lease, Landlord, in its sole judgment, determines that such area will become available for leasing to Tenant (i.e., when Landlord determines that the then current tenant of such RFO Premises will terminate its lease and vacate such RFO Premises, John Hancock Financial Services, Inc., or any other tenant having prior rights as set forth in Section 9(e) below, has not exercised its right to lease the RFO Premises, and when Landlord intends to offer such area for lease).  Landlord shall give Tenant

 

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written notice (“ Offer Notice ”) at the time that Landlord determines, as aforesaid, that the RFO Premises will become available for lease to Tenant.

 

In the event there are less than two (2) years remaining in the Term or in the first Option Term, if applicable, at the time Landlord gives Tenant an Offer Notice, then in order for Tenant to exercise Tenant’s Right of First Offer, Tenant must simultaneously send Landlord its Exercise Notice for the next Option Term, as set forth in Section 8 above.  In no event shall Tenant have any rights, and Landlord shall not be required to provided Tenant with an Offer Notice, under this Section 9 on or after the date sixteen (16) months prior to the expiration of the then-current Term of the Lease unless, with respect to the 18 th Amendment Extended Term or the first Option Term, Tenant has exercised either the first or second option to extend pursuant to Section 8 above, as the case may be.  Notwithstanding the foregoing, this paragraph is not intended to increase the number of extension options, which shall be limited to two (2) as set forth in Section 8 of this Amendment.

 

(b)                                  Exercise of Right to Lease RFO Premises

 

Landlord’s Offer Notice shall set forth the exact location of the RFO Premises, the Base Rent and Base Years (if applicable) applicable to the RFO Premises, and the Commencement Date and Expiration Date in respect of the RFO Premises.  Tenant shall have the right, exercisable upon written notice (“ Tenant’s Exercise Notice ”) given to Landlord within fifteen (15) business days after the receipt of Landlord’s Notice, to lease the RFO Premises.  If Tenant fails timely to give Tenant’s Exercise Notice, Tenant shall have no further right to lease such RFO Premises pursuant to this Section 9, provided, however, that this Right of First Offer shall (1) continue to apply to any portions of the RFO Premises that were not included in Landlord’s Offer Notice, (2) apply again to the RFO Premises included in Landlord’s Offer Notice if Landlord fails to enter into a lease document for such RFO Premises within twelve (12) months after Tenant waives this Right of First Offer as to such RFO Premises, (3) apply again to the RFO Premises included in Landlord’s Offer Notice if Landlord desires to offer the RFO Premises to another party where the net effective rate of the basic economic terms for such RFO Premises (taking into account free rent, allowances, tenant improvements, build-out periods without rent, and any other concessions) is ten percent (10%) or more below the net effective rate of the basic economic terms that were contained in Landlord’s Offer Notice to Tenant hereunder, (4) apply again to the RFO Premises included in Landlord’s Office Notice if the RFO Premises being offered by Landlord is less than 85% or more 115% of the rentable square footage of space in Lanldord’s Offer Notice to Tenant hereunder, and (5


 
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