LEASE

EXHIBIT 10.1

LEASE

This instrument is an indenture of lease by and between Fortune Wakefield, LLC (“Landlord”) and Metabolix, Inc., a Massachusetts corporation (“Tenant”).

The parties to this instrument hereby agree with each other as follows:

ARTICLE I

SUMMARY OF BASIC LEASE PROVISIONS

1.1                                  INTRODUCTION

As further supplemented in the balance of this instrument and its Exhibits, the following set forth the basic terms of this Lease, and, where appropriate, constitute definitions of certain terms used in this Lease.

1.2                                  BASIC DATA

Date:			March 30, 2007
Landlord:			Fortune Wakefield, LLC
Present Mailing Address of Landlord:		c/o Farley White Management Company, LLC
			660 Suffolk Street
			Lowell, MA 01854
Payment Address:			Fortune Wakefield, LLC
			c/o Farley White Management Company, LLC
			10 High Street
			Suite 900
			Boston, MA 02110
Managing Agent:		Farley White Management Company, LLC
			660 Suffolk Street
			Lowell, MA 01854
Tenant:		Metabolix, Inc.
Mailing Address of Tenant:
		650 Suffolk Street
			Lowell, MA 01854
Premises:			13,702 Rentable Square Feet
Lease Term:			Five (5) Years (plus the partial calendar month, if any, immediately following the Term Commencement Date).
Term Commencement Date:			The later of May 18, 2007 or the date that Landlord’s Work is Substantially Complete. However, if prior thereto Tenant occupies the Premises for the purpose of conducting its business, the Term Commencement Date shall be immediate upon such date of occupancy.

 

 

 

Base Rent:		Years 1-3:		$178,126.00 per annum ($14,843.83 per month)
		Year 4:		$191,828.00 per annum ($15,985.67 per month)
		Year 5:		$205,530.00 per annum ($17,127.50 per month)
Rent Commencement Date:		The Rent Commencement Date shall be the same as the Term Commencement Date.
Security Deposit:		$44,531.50.
Permitted Use:		For general office and research and development laboratory use and for no other purpose or purposes.
Tenant’s Proportionate Share:		5.37%. Tenant’s Proportionate Share shall be adjusted in the event of any increase or decrease in the total square footage of rentable floor area contained within the Premises and/or the Building, based upon the square footage of rentable floor area contained within the Premises as compared to the square footage of rentable floor area contained within the Building, as increased or decreased.
Operating Expense Base		Actual Calendar Year 2006 Expenses
Real Estate Tax Base		Actual Fiscal Year 2006 Expenses
Unreserved Parking Spaces:		The total number of parking spaces: Forty-One (41).
		Location of Parking spaces: Five (5) - West Yard, Nine (9) - Tremont yard, Twenty-Seven (27)- Ayotte Garage. Parking spaces will not be reserved and will be used in common with others entitled to use spaces in the yards and the garage.

 

1.3                               ENUMERATION OF EXHIBITS

 

ARTICLE II

DESCRIPTION OF PREMISES AND APPURTENANT

RIGHTS

2.1                               LOCATION OF PREMISES

The Landlord hereby leases to Tenant, and Tenant hereby accepts from Landlord, the premises (the “Premises”) identified on Exhibit A in Landlord’s building (the “Building”) located at 175 Cabot Street and 650 & 660 Suffolk Street in Lowell, MA.  Nothing in Exhibit A shall be treated as a representation that the Premises or the Building shall be precisely of the area, dimensions, or shapes as shown, it being the

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intention of the parties only to show diagrammatically, rather than precisely, on Exhibit A the layout of the Premises and the Building.

2.2                               APPURTENANT RIGHTS AND RESERVATIONS

Tenant shall have, as appurtenant to the Premises, rights to use in common with others entitled thereto the common facilities included in the Building or the land on which the Building is located (the “Lot”), including common walkways, driveways, lobbies, hallways, ramps, and stairways.  Such rights shall always be subject to reasonable rules and regulations from time to time established by Landlord by suitable notice, and to the right of Landlord to designate  and to change from time to time the areas and facilities so to be used, provided that such changes do not unreasonably interfere with the use of the Premises for the Permitted Use.  Tenant shall abide by the Rules and Regulations from time to time established by Landlord, it being agreed that such Rules and Regulations will be established and applied by Landlord in a non-discriminatory fashion, such that all Rules and Regulations shall be generally applicable to other tenants of the Building of similar nature to the Tenant named herein.  Landlord agrees to use reasonable efforts to insure that any such Rules and Regulations are uniformly enforced, but Landlord shall not be liable to Tenant for violation of the same by any other tenant or occupant of the Building, or persons having business with them.  In the event that there shall be a conflict between such Rules and Regulations and the provisions of this Lease, the provisions of this Lease shall control.

Not included in the Premises are the roof or ceiling, the floor and all perimeter walls of the space identified in Exhibit A , except the inner surfaces thereof and the perimeter doors and windows.  The Landlord reserves the right to install, use, maintain, repair and replace in the Premises (but in such manner as not unreasonably to interfere with Tenant’s use of the Premises) utility lines, shafts, pipes, and the like, in, over and upon the Premises, provided that the same are located above the dropped ceiling (or, if there is no dropped ceiling, then within three (3) feet of the roof deck), below the floor surfaces or tight against demising walls or columns.  Landlord agrees to repair any damage to the Premises caused by the installation of any such items.  Such utility lines, shafts, pipes and the like shall not be deemed part of the Premises under this Lease.  The Landlord also reserves the right to alter or relocate any common facility, provided that substitutions are at least equivalent in quality and functional utility to the common facilities as of the date of this Lease, and to change the lines of the Lot.

Landlord shall cause Tenant’s name to be listed on the building directory and at the entry way to the Premises of similar type to the other signage in the Building.

ARTICLE III

TERM OF LEASE;  CONDITION OF PREMISES

3.1                               TERM OF LEASE

The term of this Lease shall be the period specified in Section 1.2 hereof as the “Lease Term” commencing upon the Term Commencement Date specified in Section 1.2.

Landlord and Tenant shall execute an agreement substantially in the form of Exhibit D setting forth the Term Commencement Date.

3.2                               CONDITION OF PREMISES

Prior to the delivery of the Premises to Tenant pursuant to Exhibit B , and based upon mutually acceptable plans, Landlord shall perform at its sole expense a turn-key build-out of the Premises.  All work shall be performed in a good and workmanlike manner using Building Standard materials.  Landlord agrees to use reasonable efforts to Substantially Complete Landlord’s Work by May 1, 2007.   Substantially Complete shall mean that the Premises is available for occupancy and the work is complete with the exception of minor punch list items.  Landlord shall not be liable to Tenant or any other party, and Tenant’s obligations shall not be reduced hereunder in the event that the work is not Substantially Complete by the Term Commencement Date. In the event of a material delay caused by Tenant, the Rent Commencement Date shall be accelerated by one day for each day of delay. All other work necessary to prepare said Premises for occupancy by Tenant shall be performed by Tenant at its own expense.

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Tenant shall pay for the cost to install any wire molds or any floor mounted electric / data outlets.

3.3                               OPTION TO EXTEND

Provided that Tenant is still occupying the Premises and is not then in default beyond any applicable cure period pursuant to the Lease, Tenant may elect to extend the term of the Lease for one (1) five (5) year period  (the “Extension Term”), by giving Landlord notice of such election no later than twelve (12) months prior to the Term Expiration Date.  Any extension shall be upon the terms, covenants, and conditions contained in this Lease except that Tenant shall have no further right to extend the Lease Term and except that the Base Rent for the Extension Term shall be at fair market rent for comparable space in comparable properties in the greater Lowell area and not less than the then current Base Rent.

If Landlord and Tenant are unable to agree on the amount of such fair market rent by the date that is thirty (30) days after the date of Tenant’s election notice based on rental rates and terms for comparable space in the greater Lowell area, then Landlord shall promptly specify in writing the rent (the “Landlord’s Rental Rate”) at which Landlord is willing to lease the Premises for the Extension Term and Tenant shall promptly specify in writing the rent (the “Tenant’s Rental Rate”) which Tenant is willing to pay for the Premises for the Extension Term and the amount of the fair market rent shall be established by appraisal in the following manner.  The Landlord and Tenant shall each appoint one appraiser and the two appraisers so appointed shall determine the fair market rent within thirty (30) days of Tenant’s election notice.  If such appraisers are unable to agree on the amount of such fair market rent within such thirty- (30) day period, they shall appoint a third appraiser within ten (10) days of the expiration of such period, who shall be instructed to select, as between the rents chosen by the two appraisers, the rent that is closest to the third appraiser’s estimate of fair market rent.  The fair market rent shall be the amount so selected by the third appraiser and shall be conclusive on the Landlord and Tenant.

Each party shall bear the cost of its appraiser, and the cost of the third appraiser shall be split equally between parties; provided that if the rental rate as so determined is equal to or greater than the Landlord’s Rental Rate, then Tenant shall pay the entire cost of all appraisers and if such rate as so determined is equal to or less than Tenant’s Rental Rate, then Landlord shall pay the entire cost of all appraisers.

Until such time as the fair market rent is so determined, Tenant shall continue to pay Base Rent at the rate of $205,530.00 per annum in monthly installments of $17,127.50 with appropriate adjustments once the fair market rent is determined.  The third appraiser’s estimate shall be based on the data supplied and used by the original two appraisers and the findings made by the third appraiser shall be set forth in writing.

ARTICLE IV

RENT

4.1                               RENT PAYMENTS

The Base Rent (at the rates specified in Section 1.2 hereof) and the additional rent or other charges payable pursuant to this Lease (collectively the “Rent”) shall be payable by Tenant to Landlord at the Payment Address or such other place as Landlord may from time to time designate by notice to Tenant without any demand whatsoever except as otherwise specifically provided in this Lease and without any counterclaim, offset or deduction whatsoever.  Rent shall be made payable to the order of Managing Agent as agent for Landlord.

(a)                                   Commencing on the Rent Commencement Date, Base Rent and the monthly installments of Tenant’s Proportionate Share of the Taxes and Tenant’s Proportionate Share of Operating Expenses shall be payable in advance on the first day of each and every calendar month during the term of this Lease.  If the Rent Commencement Date falls on a day other than the first day of a calendar month, the first payment which Tenant shall make shall be made on the Rent Commencement Date and shall be equal to a proportionate part of such monthly Rent for the partial month from the Rent Commencement Date to the

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first day of the succeeding calendar month, and the monthly Rent for such succeeding calendar month.  As used in this Lease, the term “lease year” shall mean any twelve (12) month period commencing on the Rent Commencement Date.

(b)                                  Base Rent and the monthly installments of Tenant’s Proportionate Share of the Taxes and Tenant’s Proportionate Share of Operating Expenses for any partial month shall be paid by Tenant to Landlord at such rate on a pro rata basis.  Any other charges payable by Tenant on a monthly basis, as hereinafter provided, shall likewise be prorated.

(c)                                   Rent not paid within five (5) days of the date due shall be subject to an administrative charge of five (5) percent of the current monthly rent. Thereafter, any past due amount shall bear interest at a rate (the “Lease Interest Rate”) equal to 1.5% per month.

4.2                               REAL ESTATE TAX

(a)                                   The term “Taxes” shall mean all taxes and assessments (including without limitation, assessments for public improvements or benefits and water and sewer use charges), and other charges or fees in the nature of taxes for municipal services which at any time during or in respect of the Lease Term may be assessed, levied, confirmed or imposed on or in respect of, or be a lien upon, the Building and the Lot, or any part thereof, or any rent therefrom or any estate, right, or interest therein, or any occupancy, use, or possession of such property or any part thereof, and ad valorem taxes for any personal property used in connection with the Building or Lot.  Without limiting the foregoing, Taxes shall also include any payments made by Landlord in lieu of taxes.  The Landlord agrees that Tenant’s share of any special assessment shall be determined (whether or not Landlord avails itself of the privilege so to do) as if Landlord had elected to pay the same in installments over the longest period of time permitted by applicable law and Tenant shall be responsible only for those installments (including interest accruing and payable thereon) or parts of installment that are attributable to periods within the Lease Term.

Should the Commonwealth of Massachusetts, or any political subdivision thereof, or any other governmental authority having jurisdiction over the Building, (1) impose a tax, assessment, charge or fee, which Landlord shall be required to pay, by way of substitution for or as a supplement to such Taxes, or (2) impose an income or franchise tax or a tax on rents in substitution for or as a supplement to a tax levied against the Building or the Lot or any part thereof and/or the personal property used in connection with the Building or the Lot or any part thereof, all such taxes, assessments, fees or charges (“Substitute Taxes”) shall be deemed to constitute Taxes hereunder.  Taxes shall also include, in the year paid, all fees and costs incurred by Landlord in seeking to obtain a reduction of, or a limit on the increase in, any Taxes, regardless of whether any reduction or limitation is obtained.  Except as hereinabove provided with regard to Substitute Taxes, Taxes shall not include any inheritance, estate, succession, transfer, gift, franchise, net income or capital stock tax.

(b)                                  The Tenant shall pay to Landlord, as additional rent, Tenant’s Proportionate Share of any increase in the Taxes assessed against the Building and Lot during any tax year (i.e., July 1 through June 30, as the same may change from time to time) over the Real Estate Tax Base as defined in Section 1.2 during the Lease Term.  The Tenant shall pay to Landlord, together with monthly payments of Base Rent, pro rata monthly installments on account of the projected Tax increase over the Real Estate Tax Base for each lease year reasonably calculated by Landlord from time to time by Landlord with an adjustment made after the close of the tax year, to account for actual Taxes for such tax year.  After the end of each tax year, Landlord shall submit to Tenant a reasonably detailed accounting of Taxes paid, including copies of all assessments, invoices, bills and other documents evidencing Taxes paid by Landlord, for such lease year, and Landlord shall certify to the accuracy thereof.  The initial monthly payments on account of Taxes shall be none per month.  If the total of such monthly installments in any lease year is greater than Tenant’s Proportionate Share of actual Taxes for such tax year, Tenant shall be entitled to a credit against Tenant’s rental obligations hereunder in the amount of such difference or, if the Lease Term has expired and Tenant has no outstanding monetary obligations to Landlord, Landlord shall promptly pay such amount to Tenant. In no event shall the Landlord credit Tenant’s account for an amount greater than the amount of Taxes paid in by Tenant during the lease year.  If the total of such monthly installments is less than such liability for such tax year, Tenant shall pay to Landlord the amount of such difference within thirty (30) days after Tenant receives Landlord’s invoice therefor.

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(c)                                   If any increase in Taxes over the Real Estate Tax Base, with respect to which Tenant shall have paid Tenant’s Proportionate Share, shall be adjusted to take into account any abatement or refund, Tenant shall be entitled to a credit against rental obligations hereunder, in the amount of Tenant’s Proportionate Share of such abatement or refund less Landlord’s costs or expenses, including without limitation appraiser’s and attorneys’ fees, of securing such abatement or refund or, if the Lease Term has expired and Tenant has no outstanding monetary obligations to Landlord, Landlord shall promptly pay such amount to Tenant.  The Tenant shall not apply for any real estate tax abatement without the prior written consent of Landlord.  In no event shall Landlord credit Tenant’s account for an amount greater than the amount of Taxes actually paid in by Tenant during the lease year.

(d)                                  Tenant shall pay or cause to be paid, prior to delinquency, any and all taxes and assessments levied upon all trade fixtures, inventories and other personal property placed in and upon the Premises by Tenant.

4.3                               TENANT’S SHARE OF OPERATING COSTS

The Tenant shall pay to Landlord, as additional rent, Tenant’s Proportionate Share of increases in Operating Costs (defined below) over the Operating Expense Base.  The Tenant shall pay to Landlord pro rata monthly installments on account of the projected increase in Operating Costs over the Operating Expense Base (as defined in Section 1.2) for each lease year during the Lease Term in amounts reasonably calculated from time to time by Landlord with an adjustment made after the close of the lease year, to account for actual Operating Costs for such lease year.  After the end of each lease year, Landlord shall submit to Tenant a reasonably detailed accounting of Operating Costs for such lease year, and Landlord shall certify to the accuracy thereof.  The initial monthly payments on account of Operating Costs shall be none per month.  If the total of such monthly installments in any lease year is greater than Tenant’s Proportionate Share of actual Operating Costs for such lease year, Tenant shall be entitled to a credit against Tenant’s monthly installments on account of projected Operating Costs hereunder in the amount of such difference or, if the Lease Term has expired and Tenant has no outstanding monetary obligations to Landlord, Landlord shall promptly pay such amount to Tenant.  In no event shall the Landlord credit Tenant’s account for an amount greater than the amount of Operating Costs actually paid in by Tenant during the lease year.  If the total of such monthly installments is less than such liability for such lease year, Tenant shall pay to Landlord the amount of such difference, as additional rent, within thirty (30) days after Tenant receives Landlord’s invoice therefor.

As used in this Lease, the term “Operating Costs” shall mean all costs and expenses incurred by Landlord in connection with operation, insuring, repair, equipping, maintenance, management, cleaning and protection (collectively, “the Operation”) of the Building, the Building heating, ventilating, electrical, plumbing, and other systems and the Lot (collectively, “the Property”), including, without limitation, the following:

(1)                                   All expense incurred by Landlord or its agents which shall be related to employment of day and night supervisors, janitors, handymen, carpenters, engineers, firemen, mechanics, electricians, plumbers, guards, cleaners and other personnel (including amounts incurred for wages, salaries and other compensation for services, payroll, social security, unemployment and similar taxes, workmen’s compensation insurance, disability benefits, pensions, hospitalization, retirement plans and group insurance, uniforms and working clothes and the cleaning thereof, and expenses imposed on Landlord or its agents pursuant to any collective bargaining agreement), for services in connection with the Operation of the Property, and personnel engaged in supervision of any of the persons mentioned above; provided, however, that the costs of employing personnel who work less than full-time in connection with the Operation of the Property shall be equitably adjusted;

(2)                                   The cost of services, materials and supplies furnished or used in the Operation of the Property;

(3)                                   The amounts paid to managing agents and for legal and other professional fees relating to the Operation of the Property, but excluding such fees paid in connection with (x) negotiations for or the enforcement of leases; and (y) seeking abatements of Taxes; provided, however, that management fees shall not exceed prevailing market rates;

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(4)                                   Insurance premiums and the positive difference, if any, between the amounts of what the insurance premiums would be if such insurance were maintained without deductibles over the actual premiums for such policies;

(5)                                   Costs for electricity, steam and other utilities required in the Operation of the Property;

(6)                                   Water and sewer use charges;

(7)                                   The costs of snow-plowing and removal, parking fees and parking lot maintenance,  and landscaping;

(8)                                   Amounts paid to independent contractors for services, materials and supplies furnished for the Operation of the Property; and

(9)                                   All other expenses incurred in connection with the Operation of the Property.

Operating Costs may be incurred directly or by way of reimbursement, and shall include taxes applicable thereto.  The following shall be excluded from Operating Costs:

(1)                                   Salaries of officers and executives of Landlord not connected with the Operation of the Property (i.e., above the level of Building Manager) and other costs and expenses associated with the Operation of the Property, but allocable to other properties (e.g., where a service is provided at a single cost to both the Property and another property of Landlord, an equitable allocation shall be made to exclude the cost fairly attributable to such other property);

(2)                                   Depreciation of the original construction costs of the Building;

(3)                                   Expenses relating to tenants’ alterations;

(4)                                   Interest on indebtedness;

(5)                                   Expenses for which Landlord, by the terms of this Lease or any other lease, makes a separate charge;

(6)                                   Real estate taxes;

(7)                                   The cost of any electric current or other utilities furnished to the Building tenants and separately metered or billed;

(8)                                   Leasing fees or commissions;

(9)                                   Capital expenses; and

(10)                             other expenses incurred in the construction of additional leasable area on the Property.

Provided that Tenant shall have first paid all of amounts due and payable by Tenant pursuant to this Article III and upon written notice of Tenant within 60 days of the receipt of a final certificate (but not more than once with respect to any operating year), Tenant may cause Landlord’s books and records to be audited with respect to Operating Costs or Taxes applicable to the Building for such operating year. The audit shall be performed within 30 days of Landlord’s receipt of notice by a certified public accountant at Tenant’s sole cost and expense and at a mutually agreeable time and place where the books and records are customarily kept by the Landlord (or property manager) in the ordinary course.  During such time of audit Tenant shall pay its full share of Operating Costs and Taxes.  If it is determined that there are any amounts owed Tenant or Landlord as a result of said audit, such amount shall be reimbursed to the other within 30 days of said audit results.  Tenant shall keep the results of any such audit confidential and shall not disclose the results of such inspection nor the content of such books and records with any third party other than Tenant’s consultants and attorneys.  Failure of Tenant to provide Landlord with a written request to review such books and records in a timely manner pursuant to this Article 3 with respect to each operating year shall be deemed a waiver of Tenant’s rights hereunder with respect to such operating year.

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ARTICLE V

USE OF PREMISES

5.1                               PERMITTED USE

Tenant agrees that the Premises shall be used and occupied by Tenant only for the purposes specified as the Permitted Use thereof in Section 1.2 of this Lease, and for no other purpose or purposes.

The Tenant shall comply and shall cause its employees, agents, and invitees to comply with such reasonable rules and regulations as Landlord shall from time to time establish for the proper regulation of the Building and the Lot, provided that Landlord gives Tenant reasonable advance notice thereof and that such additional rules and regulations shall be of general application to all the tenants in the Building, except where different circumstances justify different treatment.

5.2                               COMPLIANCE WITH LAWS

Tenant agrees that no trade or occupation shall be conducted in the Premises or use made thereof which will be unlawful, improper, or contrary to any law, ordinance, by-law, code, rule, regulation or order applicable in the municipality in which the Premises are located or which will disturb the quiet enjoyment of the other tenants of the Building.  Tenant shall obtain any and all approvals, permits, licenses, variances and the like from governmental or quasi-governmental authorities, including without limitation any Architectural Access Board and Board of Fire Underwriters (collectively, “Approvals”) which are required for Tenant’s use of the Premises, including, without limitation, any which may be required for any construction work and installations, alterations, or additions made by Tenant to, in, on, or about the Premises; provided, however, that Tenant shall not seek or apply for any Approvals without first having given Landlord a reasonable opportunity to review any applications for Approvals and all materials and plans to be submitted in connection therewith and obtaining Landlord’s written consent, which consent shall not be unreasonably withheld.  In any event, Tenant shall be responsible for all costs, expenses, and fees in connection with obtaining all Approvals.  Without limiting the general application of the foregoing, Tenant shall be responsible for compliance of the Premises, including, without limitation, any alterations it may make to the Premises with the requirements of the Americans with Disabilities Act (42 U.S.C. Section 12101 et seq.) and the regulations and Accessibility Guidelines for Buildings and Facilities issued pursuant thereto, as the same may be amended from time to time (collectively, the “ADA”).  The Landlord shall be responsible for the compliance with the requirements of the ADA of (x) the common areas of the Building and Lot; (y) the access to the Premises from the common areas and (z) the Premises as delivered to Tenant on the Term Commencement Date.  Tenant’s inability to obtain or delay in obtaining any such Approval shall in no event reduce, delay, or terminate Tenant’s rental, payment, and performance obligations hereunder. Tenant shall, at its own cost and expense, (i) make all installations, repairs, alterations, additions, or improvements to the Premises required by any law, ordinance, by-law, code, rule, regulation or order of any governmental or quasi-governmental authority; (ii) keep the Premises equipped with all required safety equipment and appliances; and (iii) comply with all laws, ordinances, codes, rules, regulations, and orders and the requirements of Landlord’s and Tenant’s insurers applicable to the Premises, Building and Lot.  Tenant shall not place a load upon any floor in the Premises exceeding the lesser of (a) the floor load per square foot of area which such floor was designed to carry as certified by Landlord’s architect and (b) the floor load per square foot of area which is allowed by law.  Landlord reserves the right to prescribe the weight and position of all business machines and mechanical equipment, including safes, which shall be placed so as to distribute the weight.  Notwithstanding the foregoing paragraph, to the best of Landlord’s knowledge, the Building is substantially in compliance with ADA.

5.3                               INSURANCE RISKS

Tenant shall not permit any use of the Premises which will make voidable or, unless Tenant pays the extra insurance premium attributable thereto as provided below, increase the premiums for any insurance on the Building or on the contents of said property or which shall be contrary to any law or regulation from time to time established by the New England Fire Insurance Rating Association (or any

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successor organization) or which shall require any alteration or addition to the Building.  Tenant shall, within thirty (30) days after written demand therefor, reimburse Landlord and all other tenants for the costs of all extra insurance premiums caused by Tenant’s use of the Premises.  Any such amounts shall be deemed to be additional rent hereunder.

5.4                               ELECTRICAL EQUIPMENT

The Tenant shall not, without Landlord’s written consent in each instance, connect to the electrical distribution system any fixtures, appliances, or equipment which will operate individually or collectively at a wattage in excess of the capacity of the electrical system serving the Premises as the same may be reasonably determined by Landlord and Landlord may audit Tenant’s use of electric power to determine Tenant’s compliance herewith.  If Landlord, in its sole discretion, permits such excess usage, Tenant will pay for the cost of such excess power as additional rent, together with the cost of installing any additional risers, meters, or other facilities that may be required to furnish or measure such excess power to the Premises.

5.5                               TENANT’S OPERATIONAL COVENANTS

(a)                                   Affirmative Covenants

In regard to the use and occupancy of the Premises, and except as set forth in Exhibit C, Tenant will at its expense: (1) keep the inside and outside of all glass in the doors and windows of the Premises reasonably clean; (2) replace promptly any cracked or broken glass of the Premises with glass of like kind and quality; (3) maintain the Premises in a clean, orderly and sanitary condition and free of insects, rodents, vermin and other pests; (4) keep any garbage, trash, rubbish or other refuse in vermin-proof containers within the interior of the Premises until removed (and Tenant shall cause the Premises to be inspected and exterminated on a regular basis by a reputable, licensed exterminator and shall provide Landlord, on request, with a copy of Tenant’s contract for such services); (5) keep all mechanical apparatus free of vibration and loud noise which may be transmitted beyond the Premises; and (6) comply with and observe all rules and regulations reasonably established by Landlord from time to time.

(b)                                  Negative Covenants

In regard to the use and occupancy of the Premises and common areas, Tenant will not: (7) place or maintain any trash, refuse or other articles in any vestibule or entry of the Premises, on the sidewalks or corridors adjacent thereto or elsewhere on the exterior of the Premises so as to obstruct any corridor, stairway, sidewalk or common area; (8) permit undue accumulations of or burn garbage, trash, rubbish or other refuse within or without the Premises; (9) cause or permit objectionable odors to emanate or to be dispelled from the Premises except by means of an exhaust systems used in the normal course of Tenant’s business, approved by the Landlord in its reasonable discretion and maintained in accordance with any applicable laws or regulations; or (10) commit, or suffer to be committed, any waste upon the Premises or any public or private nuisance or other act or thing which may disturb the quiet enjoyment of any other tenant or occupant of the Building, or use or permit the use of any portion of the Premises for any unlawful purpose; (11) park trucks or other vehicles in a manner that will block access to the loading docks serving the Building, except when Tenant is actively using such loading docks.

5.6                               SIGNS

Except as expressly permitted in this Section 5.6, Tenant shall not place any signs, placards, or the like on the Building or in the Premises that will be visible from outside the Premises (including without limitation both interior and exterior surfaces of windows).

5.7                               HAZARDOUS MATERIALS

The Tenant shall not use, handle or store or dispose of any oil, hazardous or toxic substances, materials or wastes (collectively “Hazardous Materials”) in, under, on or about the Property or in any Tenant vehicles parked on the Property except for such storage and use consented to by Landlord in advance which consent may be withheld in Landlord’s sole and absolute discretion.  Any Hazardous

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Materials in the Premises, and all containers therefor, shall be used, kept, stored and disposed of in conformity with all applicable laws, ordinances, codes, rules, regulations and orders of governmental authorities.  If the transportation, storage, use or disposal of Hazardous Materials anywhere on the Property in connection with Tenant’s use of the Premises results in (1) contamination of the soil or surface or ground water or (2) loss or damage to person(s) or property, then Tenant agrees (i) to notify Landlord immediately of any contamination, claim of contamination, loss or damage, (ii) after consultation with and approval by Landlord, to clean up all contamination in full compliance with all applicable statutes, regulations and standards, and (iii) to indemnify, defend and hold Landlord harmless from and against any claims, suits, causes of action, costs and fees, including, without limitation, reasonable attorneys’ fees, arising from or connected with any such contamination, claim of contamination, loss or damage.  This provision shall survive the termination of this Lease.  No consent or approval of Landlord shall in any way be construed as imposing upon Landlord any liability for the means, methods, or manner of removal, containment or other compliance with applicable law for and with respect to the foregoing.  The terms of this Section 5.7 shall apply to any transportation, storage, use or disposal of Hazardous Materials irrespective of whether Tenant has obtained Landlord’s consent therefor but nothing in this Lease shall limit or otherwise modify the requirement of obtaining Landlord’s prior consent as set forth in the first sentence of this Section 5.7.

Notwithstanding anything set forth in the preceding paragraph, Landlord acknowledges that Tenant’s business requires the use of certain Hazardous Materials and Landlord hereby expressly consents to the use of such Hazardous Materials as are used or may be used in the course of Tenant’s business during the Lease Term; provided that such use complies with all applicable laws and regulations and is consistent with industry standards and practice. Upon reasonable request of Landlord, Tenant shall identify any materials being stored or otherwise in use on the Premises or Tenant’s vehicles and shall cooperate fully with Landlord in any investigation thereof.

ARTICLE VI

INSTALLATIONS, ALTERATIONS, AND ADDITIONS

6.1                               INSTALLATIONS, ALTERATIONS, AND ADDITIONS

Tenant shall not make structural installations, alterations, or additions to the Premises, but may make nonstructural installations, alterations or additions provided that Landlord consents thereto in advance and in writing, which consent shall not be unreasonably withheld, delayed or conditioned as to work in the existing office space that will not affect the utility or building service systems or equipment.  In any event, Tenant shall not demolish the existing office space in the Premises, without the prior written approval of Landlord, which approval may be withheld in Landlord’s sole and absolute discretion.  In no event shall Landlord’s approval of any proposed installations, alterations, or additions to the Premises, whether in connection with Tenant’s initial leasehold improvements or otherwise, constitute a representation by Landlord that such work complies with the requirements of any applicable law or regulation, including without limitation the requirements of the ADA.  Any installations, alterations, or additions made by Tenant shall be at Tenant’s sole cost and expense and shall be done in a good and workmanlike manner using materials of a quality at least equivalent to that of the existing improvements and in compliance with the requirements of Section 5.2; and prior to Tenant’s use of the Premises, after the performance of any such work, Tenant shall procure certificates of occupancy and any other required certificates.  Tenant shall not suffer or permit any mechanics’ or similar liens to be placed upon the Premises for labor or materials furnished to Tenant or claimed to have been furnished to Tenant in connection with work of any character performed or claimed to have been performed at the direction of Tenant, and shall cause any such lien to be released of record forthwith without cost to Landlord.  Any and all Tenant installations, alterations, and additions, in or to the Premises, that are intended to become or do become part of the real estate or fixtures therein (other than trade fixtures that are readily removable without damage to the Premises) including but not limited to equipment, appliances, and machinery, shall be fully paid for and free and clear of any and all chattel mortgages, conditional bills of sale, security interests, or any liens or encumbrances of any kind or nature.  At all times when any installation, alteration, or addition by Tenant is in progress, there shall be maintained, at Tenant’s cost and expense, insurance meeting the requirements of Section 11.3 below and certificates of insurance evidencing such coverage shall be furnished to Landlord prior to the commencement of any such work.  Any installations, alterations or additions made by Tenant to the Premises, including, without limitation, all utility systems, fixtures, machinery, equipment, and appliances installed in connection therewith, other than movable personal property, shall become the property of

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Landlord at the termination or expiration of this Lease, unless Landlord requires, at the time of Landlord’s approval of such work, Tenant to remove any of the same, in which event Tenant shall, at its own cost and expense, comply with such requirement and repair any damage caused by such removal.

ARTICLE VII

ASSIGNMENT AND SUBLETTING

7.1                               PROHIBITION

Notwithstanding any other provision of this Lease, Tenant shall not, directly or indirectly, assign, mortgage, pledge or otherwise transfer, voluntarily or involuntarily, this Lease or any interest herein or sublet  (which term without limitation, shall include granting of concessions, licenses, and the like) or allow any other person or entity to occupy the whole or any part of the Premises, without, in each instance, having first received the express consent of Landlord, which consent shall not be unreasonably withheld.  Any assignment of this Lease or subletting of the whole or any part of the Premises (other than as permitted to a subsidiary or a controlling corporation as set forth below) by Tenant without Landlord’s express consent shall be invalid, void and of no force or effect.  This prohibition includes, without limitation, any assignment, subletting, or other transfer which would occur by operation of law, merger, consolidation, reorganization, acquisition, transfer, or other change of Tenant’s corporate or proprietary structure, including a change in the partners of any partnership, and the sale, pledge, or other transfer of any of the issued or outstanding capital stock of any corporate Tenant (unless such stock is publicly traded on a recognized security exchange or over-the-counter market).  Any request for consent under this Section 7.1 shall set forth, in detail reasonably satisfactory to Landlord, the identification of the proposed assignee or sublessee, its financial condition and the terms on which the proposed assignment or subletting is to be made, including, without limitation, the rent or any other consideration to be paid in respect thereto and such request shall be treated as Tenant’s warranty in respect of the information submitted therewith.

In any case where Landlord shall consent to any assignment or subletting, Tenant originally named herein shall remain fully liable for Tenant obligations hereunder, including, without limitation, the obligation to pay the rent and other amounts provided under this Lease and such liability shall not be affected in any way by any future amendment, modification, or extension of this Lease or any further assignment, other transfer, or subleasing and Tenant hereby irrevocably consents to any and all such transactions.  Notwithstanding anything set forth in the previous sentence, in no event shall any amendment, modification, or extension of the terms of this Lease agreed to by the Landlord and any assignee or sublessee increasing the obligations of Tenant imposed under the terms of this Lease be binding on Tenant.  Tenant agrees to pay to Landlord, within fifteen (15) days of billing therefor, all reasonable legal and other out-of-pocket expenses incurred by Landlord in connection with any request to assign or sublet. It shall be a condition of the validity of any permitted assignment or subletting that the assignee or sublessee agree directly with Landlord, in form satisfactory to Landlord, to be bound by all Tenant obligations hereunder, including, without limitation, the obligation to pay all Rent and other amounts provided for under this Lease and the covenant against further assignment or other transfer or subletting.

Without limiting Landlord’s discretion to grant or withhold its consent to any proposed assignment or subletting, if Tenant requests Landlord’s consent to assign this Lease or sublet all or any portion of the Premises, Landlord shall have the option, exercisable by notice to Tenant given within thirty (30) days after Landlord’s receipt of such request, to terminate this Lease as of the date specified in such notice which shall be not less than thirty (30) nor more than sixty (60) days after the date of such notice for the entire Premises, in the case of an assignment or subletting of the whole, and for the portion of the Premises, in the case of a subletting of a portion.  In the event of termination in respect of a portion of the Premises, the portion so eliminated shall be delivered to Landlord on the date specified in good order and condition in the manner provided in Section 8.1 at the end of the Lease Term and thereafter, to the extent necessary in Landlord’s judgment, Landlord, at Landlord’s sole cost and expense, may have access to and may make modification to the Premises so as to make such portion a self-contained rental unit with access to common areas, elevators and the like. Rent and Tenant’s Proportionate Share shall be adjusted according to the extent of the Premises for which this Lease is terminated.  Without limitation of the rights of Landlord hereunder in respect thereto, if there is any assignment of this Lease by Tenant for consideration or a subletting of the whole of the Premises by Tenant at a rent which exceeds the rent payable hereunder by Tenant, or if there is a subletting of a portion of the Premises by Tenant at a rent in excess of the subleased

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portion’s pro rata share of the Rent payable hereunder by Tenant, then Tenant shall pay to Landlord, as additional rent, forthwith upon Tenant’s receipt of the consideration (or the cash equivalent thereof) therefor, in the case of an assignment, and in the case of a subletting, fifty percent (50%) of the amount of any such excess rent.  The provisions of this paragraph shall apply to each and every assignment of this Lease and each and every subletting of all or a portion of the Premises, whether to a subsidiary or controlling corporation of Tenant or any other person, firm or entity, in each case on the terms and conditions set forth herein.  For the purposes of this Section 7.1, the term “rent” shall mean all rent, additional rent or other payments and/or consideration payable by one party to another for the use and occupancy of all or a portion of the Premises.

The requirement of Landlord’s prior consent and Landlord’s recapture right shall not, however, be applicable to an assignment of this Lease by Tenant to a subsidiary (for such period of time as at least 50% of the stock of such subsidiary continues to be owned by Tenant, it being agreed that the subsequent sale or transfer of the stock of such subsidiary (either individually or in the aggregate) resulting in Tenant owning less than 50% of the stock of such subsidiary shall be treated as if such sale or transfer were, for all purposes, an assignment of this Lease governed by