Exhibit
10.1
FIRST AMENDMENT TO AMENDED AND RESTATED OFFICE
LEASE
This FIRST AMENDMENT TO AMENDED AND RESTATED
OFFICE LEASE (“ First Amendment ”) is made and
entered into as of the 22 nd day
of September, 2006, by and between KILROY REALTY, L.P., a Delaware
limited partnership (“ Landlord ”), and
FAVRILLE, INC., a Delaware corporation (“ Tenant
”).
R E C
I T A
L S :
A.
Landlord and Tenant entered into that certain Amended and Restated
Office Lease dated as of October 31, 2005 (the “ Lease
”), whereby Landlord leased to Tenant and Tenant leased from
Landlord those certain premises consisting of 79,871 rentable
square feet of space (“ Existing Premises ”) and
comprising the entire building located at 10421 Pacific Center
Court, San Diego, California 92121 (the “ 10421
Building ”). The Existing Premises is referred to
in the Lease as the “10421 Premises.”
B.
Tenant desires to expand the Existing Premises to include that
certain space consisting of approximately 48,709 rentable square
feet of space (the “ Expansion Premises ”), and
comprising the entire building located at 10445 Pacific Center
Court, San Diego, California 92121 (the “ 10445
Building ”) as delineated on Exhibit A attached hereto and made a
part hereof. The Expansion Premises is referred to in the
Lease as the “10445 Premises,” and the 10421 Building
and the 10445 Building are part of the project commonly known as
“ Pacific Corporate Center .” In
connection therewith, Landlord and Tenant desire to amend the Lease
as hereinafter provided.
A G R
E E M
E N T
:
NOW, THEREFORE, in
consideration of the foregoing recitals and the mutual covenants
contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1.
Capitalized Terms .
All capitalized terms when used herein shall have the same meaning
as is given such terms in the Lease unless expressly superseded by
the terms of this First Amendment.
2.
Premises .
2.1.
Modification of Premises
. Effective as of the date (the “ Expansion
Commencement Date ”) which is ninety-one (91) days
following the date that Landlord commences the construction of the
“Improvements” (as that term is defined in
Section 2.1 of the First Amendment Work Letter attached
hereto as Exhibit B
(the “ First Amendment Work
Letter ”)) in
the Expansion Premises after the termination or expiration of the
“Existing Lease” as provided in Section 11 ,
below, Tenant shall lease from Landlord and Landlord shall lease to
Tenant the Expansion Premises. Tenant acknowledges and agrees
that the Expansion Commencement Date may occur prior to the
“Substantial Completion of the Improvements” (as that
term is defined in Section 5.4 of the First Amendment
Work Letter). Consequently, effective upon the Expansion
Commencement Date, the Premises (as that term is defined in the
Lease) shall be increased to include the Expansion Premises.
Landlord and Tenant hereby acknowledge that such addition of the
Expansion Premises to the Existing Premises shall, effective as of
the Expansion Commencement Date, increase the size of the Premises
to approximately 128,580 rentable square feet. The Existing
Premises and the Expansion Premises may hereinafter collectively be
referred to as the “ Premises .”
2.2.
Verification of Rentable Square
Feet of Expansion Premises . For purposes of the
Lease, the “rentable square feet” of the Expansion
Premises shall be calculated pursuant to the Building Owners and
Managers Association Standard Method of Measuring Floor Area in
Industrial Building, and it accompanying guidelines
(“BOMA”). Within thirty (30) days after the
Expansion Commencement Date, Tenant’s space planner/architect
shall measure the rentable square feet of the Expansion Premises in
accordance with the provisions of this Section, and the results
thereof shall be presented to Landlord in writing.
Landlord’s space planner/architect may review Tenant’s
space planner/architect’s determination of the number of
rentable square feet of the Expansion Premises and Landlord may,
within fifteen (15) business days after Landlord’s receipt of
Tenant’s space planner/architect’s written
determination, object to such determination by written notice to
Tenant. Landlord’s failure to deliver written notice of
such objection within said fifteen (15) business day period shall
be deemed to constitute Landlord’s acceptance of
Tenant’s space planner/architect’s determination.
If Landlord objects to such determination, Landlord’s space
planner/architect and Tenant’s space planner/architect shall
promptly meet and attempt to agree upon the rentable square footage
of the Expansion Premises. If Landlord’s space
planner/architect and Tenant’s space planner/architect cannot
agree on the rentable square footage of the Expansion Premises
within thirty (30) days after Landlord’s objection thereto,
Landlord and Tenant shall mutually select an independent third
party space measurement professional to field measure the Expansion
Premises pursuant to BOMA. Such independent third party
measurement professional’s determination shall be conclusive
and binding on Landlord and Tenant. Landlord and Tenant shall
each pay one-half (½) of the fees and expenses of the
independent third party space measurement professional. To
the extent the Lease Term commences prior to such final
determination, Tenant’s determination shall be utilized until
a final determination is made, whereupon an appropriate adjustment,
if necessary, shall be made retroactively, and Landlord, or Tenant,
as applicable, shall make appropriate payment to the other.
In the event that it is determined, pursuant to the procedure
described in this Section above, that the square footage amounts
shall be different from those set forth in this Amendment, all
amounts, percentages and figures appearing or referred to in this
Amendment based upon such incorrect amount shall be modified in
accordance with such determination. Such final determination
shall be confirmed in writing between Landlord and
Tenant.
2.3.
Use of the Premises .
Tenant’s use of the Expansion Premises shall be subject to
all of the TCCs of the Lease; provided, however, with respect to
the Expansion Premises only, and provided any such use is legally
permissible, Tenant shall use the Expansion Premises solely for
general office use, research and development, warehousing,
biotechnology
2
labs, pharmaceutical manufacturing (in
accordance with cGMP), and any other uses related thereto, all
pursuant to the applicable zoning and the Pacific Corporate Center
P.I.D.
2.4.
Maintenance and Repair of the
Premises . Tenant’s maintenance and repair
obligations with respect to the Expansion Premises shall
subject to all of the TCCs of the Lease; provided, however Tenant
shall keep the Expansion Premises in first class order, repair,
condition and appearance at all times during the Expansion Term in
a manner consistent with the “Comparable Buildings,” as
that term is defined in Section 3.2.2 , below.
3.
Lease Term .
3.1.
Expansion Term . The
term of Tenant’s lease of the Expansion Premises (the “
Expansion Term ”) shall commence on the Expansion
Commencement Date and expire coterminously with Tenant’s
Lease of the Existing Premises on the Lease Expiration Date
(i.e., June 20, 2025), unless sooner terminated as provided
in the Lease, as hereby amended.
3.2.
Expansion Term Option Right
.
3.2.1.
Option Right .
Landlord hereby grants the Original Tenant, its
Affiliates and any Permitted Assignee, two (2) options to
extend the Expansion Term for the entire Expansion Premises each by
a period of five (5)
years (each, an “ Option Term
”) as set forth in this
Section 3.2 . The TCCs of Section 2.2
of the Lease shall not be applicable to the Expansion
Premises. Such options shall be exercisable only by Notice
delivered by Tenant to Landlord as provided below, provided that,
as of the date of delivery of such Notice, Tenant is not in default
under the Lease (as amended, beyond any applicable notice and cure
periods). Upon the proper exercise of an option to extend,
and provided that, as of the end of the then applicable Expansion
Term, Tenant is not in default under the Lease (as amended, beyond
any applicable notice and cure periods), the Expansion Term, as it
applies to the entire Expansion Premises, shall be extended for a
period of five (5) years.
3.2.2.
Option Rent . The
Rent payable by Tenant during the Option Term (the “
Option Rent ”) shall be equal to the Market Rent as
set forth below. For purposes of this
Section 3.2 , the term “
Market Rent
” shall mean rent (including additional
rent and considering any “base year” or “expense
stop” applicable thereto), including all escalations, at
which tenants, as of the commencement of the applicable term are,
pursuant to transactions completed within the twenty-four (24)
months prior to the date Tenant delivers to Landlord the
“Exercise Notice,” as that term is set forth below,
leasing non-sublease, non-encumbered, non-synthetic, non-equity
space (unless such space was leased pursuant to a definition of
“fair market” comparable to the definition of Market
Rent) comparable in size, location and quality to the Expansion
Premises for a “Comparable Term,” as that term is
defined in this Section 3.2.2 (the
“ Comparable
Deals ”), which comparable space
is located in the “Comparable Buildings,” as that term
is defined in this Section 3.2.2 , giving appropriate
consideration to the annual rental rates per rentable square foot
(adjusting the base rent component of such rate to reflect a net
value after accounting for whether or not utility expenses are
directly paid by the tenant such as Tenant’s direct utility
payments provided for in Section 6.1 of the Lease), the
standard of measurement by which the rentable square footage is
measured, parking ratios, general access to such Comparable
Buildings, the general visibility of such Comparable Buildings, and
taking into
3
consideration only, and
granting only, the following concessions (provided that the rent
payable in Comparable Deals in which the terms of such Comparable
Deals are determined by use of a discounted fair market rate
formula shall be equitably increased in order that such Comparable
Deals will not reflect a discounted rate) (collectively, the
“ Rent
Concessions ”): (a) rental abatement
concessions or build-out periods, if any, being granted such
tenants in connection with such comparable spaces; (b) tenant
improvements or allowances provided or to be provided for such
comparable space, taking into account the value of the existing
improvements in the Expansion Premises, such value to be based upon
the age, quality and layout of the improvements and the extent to
which the same can be utilized by this particular Tenant,
(c) Proposition 13 protection, and (d) all other monetary
concessions, if any, being granted such tenants in connection with
such comparable space; provided, however, that notwithstanding
anything to the contrary herein, no consideration shall be given to
the fact that Landlord is or is not required to pay a real estate
brokerage commission in connection with the applicable term or the
fact that the Comparable Deals do or do not involve the payment of
real estate brokerage commissions. The term
“ Comparable
Term ” shall refer to the length
of the lease term, without consideration of options to extend such
term, for the space in question. In addition, the
determination of the Market Rent shall include a determination as
to whether, and if so to what extent, Tenant must provide Landlord
with financial security, such as a letter of credit or guaranty,
for Tenant’s rent obligations during any Option Term.
Such determination shall be made by reviewing the extent of
financial security then generally being imposed in Comparable
Transactions upon tenants of comparable financial condition and
credit history to the then existing financial condition and credit
history of Tenant (with appropriate adjustments to account for
differences in the then-existing financial condition of Tenant and
such other tenants). If in determining the Market Rent,
Tenant would, pursuant to the Comparable Deals and the Rent
Concessions set forth therein, otherwise be entitled to a tenant
improvement or comparable allowance for the improvement of the
Expansion Premises (the “ Option Term TI
Allowance ”), Tenant shall not be
entitled, and shall not be compelled, to receive such Option Term
TI Allowance and Landlord shall reduce the rental rate component of
the Market Rent to be an effective rental rate which takes into
consideration that Tenant will not receive any Option Term TI
Allowance. The term “ Comparable
Buildings ” shall mean the Building
and other office and research/development buildings which are
comparable to the Building in terms of age (based upon the date of
completion of construction or major renovation as to the building
containing the portion of the Expansion Premises in question),
quality of construction, level of services and amenities, size and
appearance, and are located in the Sorrento Mesa area of San Diego,
California (the “ Comparable
Area ”).
3.2.3.
Exercise of Option .
The option contained in this Section 3.2 shall be
exercised by Tenant, if at all, only in the manner set forth in
this Section 3.2.3 . Tenant shall deliver notice
(the “ Exercise Notice ”) to Landlord not more
than fifteen (15) months nor less than nine (9) months prior to the
expiration of the then Expansion Term, stating that Tenant is
exercising its option. Concurrently with such Exercise
Notice, Tenant shall deliver to Landlord Tenant’s calculation
of the Market Rent (the “ Tenant’s Option Rent
Calculation ”). Landlord shall deliver notice (the
“ Landlord Response Notice ”) to Tenant on or
before the later to occur of (i)
the date which is thirty (30) days after Landlord’s receipt
of the Exercise Notice and Tenant’s Option Rent Calculation,
and (ii) the date which is nine (9) months
prior to the expiration of the then Expansion Term
(the “ Landlord Response Date ”), stating that
(A) Landlord is accepting Tenant’s Option Rent
Calculation as the Market Rent, or (B) rejecting
4
Tenant’s Option Rent Calculation and
setting forth Landlord’s calculation of the Market Rent (the
“ Landlord’s Option Rent Calculation
”). Within ten (10) business days of its receipt of the
Landlord Response Notice, Tenant may, at its option, accept the
Market Rent contained in the Landlord’s Option Rent
Calculation. If Tenant does not affirmatively accept or
Tenant rejects the Market Rent specified in the Landlord’s
Option Rent Calculation, the parties shall follow the procedure,
and the Market Rent shall be determined as set forth in
Section 3.2.5 .
3.2.4.
No Defaults; Required
Financial Condition of Tenant . The rights contained in this
Section 3.2 shall be personal to the Original Tenant,
its Affiliates and any Permitted Assignee and may only be exercised
by such Original Tenant, Affiliate or Permitted Assignee (and not
any other assignee, sublessee or other transferee of the Original
Tenant’s interest in the Lease, as amended) if the Original
Tenant, Affiliate and/or Permitted Assignee occupies not less than
one hundred percent (100%) of the then existing Expansion
Premises. The right to extend the Expansion Term as provided
in this Section 3.2 may not be exercised if, as of the
date of the attempted exercise of the extension option by Tenant,
or as of the commencement date of such Option Term, (A) Tenant
is in economic or material default pursuant to the terms of the
Lease (as amended, beyond any applicable notice and
cure periods) , (B) Tenant has previously
been in economic or material default under the Lease (as amended,
beyond any applicable notice and cure periods) during the previous
twenty-four (24) month period , or
(C) Tenant fails to satisfy the “Threshold
Requirements,” as that term is set forth in
Section 21.2.2 of the Lease.
3.2.5.
Determination of Market
Rent . In the event Tenant objects or is deemed to
have objected to the Market Rent, Landlord and Tenant shall attempt
to agree upon the Market Rent using reasonable good-faith
efforts. If Landlord and Tenant fail to reach agreement
within sixty (60) days following Tenant’s objection or deemed
objection to the Landlord’s Option Rent Calculation (the (the
“ Outside Agreement Date ”), then (i) in
connection with the Option Rent, Landlord’s Option Rent
Calculation and Tenant’s Option Rent Calculation, each as
previously delivered to the other party, shall be submitted to the
arbitrators pursuant to the TCCs of this Section 3.2.4
, and (ii) in connection with any other contested calculation
of market Rent, the parties shall each make a separate
determination of the Market Rent and shall submit the same to the
arbitrators pursuant to the TCCs of this Section 3.2.5
. The submittals shall be made concurrently with the
selection of the arbitrators pursuant to this
Section 3.2.5 and shall be submitted to arbitration in
accordance with Section 3.2.5.1 through 3.2.5.5 of
this First Amendment, but subject to the conditions, when
appropriate, of Section 3.2.3 .
3.2.5.1. Landlord and Tenant
shall mutually and reasonably select and appoint one arbitrator who
shall by profession be a real estate broker, appraiser or attorney
(the “ Neutral Arbitrator ”) who shall
have been active over the five (5) year period ending on the date
of such appointment in the leasing (or appraisal, as the case may
be) of first-class office/lab/manufacturing
properties in the Comparable Area. The determination of the
Neutral Arbitrator shall be limited solely to the issue of whether
Landlord’s or Tenant’s submitted Market Rent, is the
closest to the actual Market Rent as determined by the Neutral
Arbitrator, taking into account the requirements of
Section 3.2.2 of this First Amendment. Such
Neutral Arbitrator shall be appointed within thirty (30) days after
the applicable Outside Agreement Date. Neither the Landlord
nor Tenant may, directly or indirectly, consult with the
Neutral
5
Arbitrator prior to subsequent to his or her
appearance. The Neutral Arbitrator shall be retained via an
engagement letter jointly prepared by Landlord’s counsel and
Tenant’s counsel.
3.2.5.2. Within thirty (30)
days of the appointment of the Neutral Arbitrator, such Neutral
Arbitrator shall reach a decision as to Market Rent and determine
whether the Landlord’s or Tenant’s determination of
Market Rent as submitted pursuant to Section 3.2.5.1
and Section 3.2.3 of this First Amendment is closest to
Market Rent as determined by such Neutral Arbitrator and
simultaneously publish a ruling (“ Award
”) indicating whether Landlord’s or Tenant’s
submitted Market Rent is closest to the Market Rent as determined
by the Neutral Arbitrator. Following notification of the
Award, the Landlord’s or Tenant’s submitted Market Rent
determination, whichever is selected by the Neutral Arbitrator as
being closest to Market rent shall become the then applicable
Market Rent.
3.2.5.3. The Award issued by
the Neutral Arbitrator shall be binding upon Landlord and
Tenant.
3.2.5.4. If Landlord and
Tenant fail to agree upon and appoint the Neutral Arbitrator, then
either party may petition Judicial Arbitration & Mediation
Services, Inc. (“ JAMS ”) to designate an
independent third party to appoint the Neutral Arbitrator, subject
to criteria in Section 3.2.5.1 of this First
Amendment.
3.2.5.5.
The cost of arbitration shall be paid by the party (either Landlord
or Tenant) whose Market Rent is not selected by the Neutral
Arbitrator.
3.3.
Expansion Premises Termination
Right . Notwithstanding anything to the contrary in
the Lease (as hereby amended), Tenant shall have one-time option to
terminate and cancel the Lease with respect to the Expansion
Premises only effective as of June 1, 2017 (the “
Termination Date ”) upon Tenant’s delivery of
written notice to Landlord (the “ Termination Notice
”), which notice shall be delivered to Landlord on or before
December 31, 2016. Subject to Landlord’s timely receipt
of the Termination Notice, the Lease (as hereby amended) with
respect to the Expansion Premises only shall automatically
terminate and be of no further force or effect, and Landlord and
Tenant shall be relieved of their respective obligations under the
Lease (as hereby amended) with respect to the Expansion Premises,
as of the Termination Date, except with respect to those
obligations set forth in the Lease (as amended) which specifically
survive the expiration or earlier termination of the Lease,
including, without limitation, the payment by Tenant of all amounts
owed by Tenant under the Lease (as hereby amended) with respect to
the Expansion Premises arising or accruing prior to the Termination
Date. The termination rights granted to Tenant under this
Section 3.3 are personal to the Original Tenant, any
Affiliate or a Permitted Assignee and may not be assigned or
transferred to any other person or entity.
4.
Base Rent .
4.1.
Existing Premises .
Notwithstanding anything to the contrary in the Lease as hereby
amended, Tenant shall continue to pay Base Rent for the Existing
Premises in accordance with the terms of Article 3 of the
Lease.
6
4.2.
Expansion Premises .
Commencing on the Expansion Commencement Date and continuing
throughout the Expansion Term, Tenant shall pay to Landlord monthly
installments of Base Rent for the Expansion Premises as
follows:
|
Lease Years, Commencing
on the Expansion
Commencement Date,
During Expansion Term
|
|
Annualized
Base Rent
|
|
Monthly
Installment
of Base Rent
|
|
Approximate Monthly
Rental Rate
per Rentable
Square Foot
|
|
|
1
|
|
$
|
818,311.20
|
|
$
|
68,192.60
|
|
$
|
1.4000
|
|
|
2
|
|
$
|
846,952.09
|
|
$
|
70,579.34
|
|
$
|
1.4490
|
|
|
3
|
|
$
|
876,595.42
|
|
$
|
73,049.62
|
|
$
|
1.4997
|
|
|
4
|
|
$
|
907,276.25
|
|
$
|
75,606.35
|
|
$
|
1.5522
|
|
|
5
|
|
$
|
939,030.92
|
|
$
|
78,252.58
|
|
$
|
1.6065
|
|
|
6
|
|
$
|
971,897.01
|
|
$
|
80,991.42
|
|
$
|
1.6628
|
|
|
7
|
|
$
|
1,005,913.40
|
|
$
|
83,826.12
|
|
$
|
1.7210
|
|
|
8
|
|
$
|
1,041,120.37
|
|
$
|
86,760.03
|
|
$
|
1.7812
|
|
|
9
|
|
$
|
1,077,559.58
|
|
$
|
89,796.63
|
|
$
|
1.8435
|
|
|
10
|
|
$
|
1,115,274.17
|
|
$
|
92,939.51
|
|
$
|
1.9081
|
|
|
11
|
|
$
|
1,154,308.76
|
|
$
|
96,192.40
|
|
$
|
1.9748
|
|
|
12
|
|
$
|
1,194,709.57
|
|
$
|
99,559.13
|
|
$
|
2.0440
|
|
|
13
|
|
$
|
1,236,524.41
|
|
$
|
103,043.70
|
|
$
|
2.1155
|
|
|
14
|
|
$
|
1,279,802.76
|
|
$
|
106,650.23
|
|
$
|
2.1895
|
|
|
15
|
|
$
|
1,324,595.86
|
|
$
|
110,382.99
|
|
$
|
2.2662
|
|
|
16
|
|
$
|
1,370,956.71
|
|
$
|
114,246.39
|
|
$
|
2.3455
|
|
|
17
|
|
$
|
1,418,940.20
|
|
$
|
118,245.02
|
|
$
|
2.4276
|
|
|
18
|
|
$
|
1,468,603.10
|
|
$
|
122,383.59
|
|
$
|
2.5125
|
|
|
19
|
|
$
|
1,520,004.21
|
|
$
|
126,667.02
|
|
$
|
2.6005
|
|
|
20
though Lease Expiration Date
|
|
$
|
1,573,204.36
|
|
$
|
131,100.36
|
|
$
|
2.6915
|
|
7
On
or before the Expansion Commencement Date, Tenant shall pay to
Landlord the Base Rent payable for the Expansion Premises for the
first full month of the Expansion Term.
5.
Tenant’s Share of Building
Direct Expenses .
5.1.
Existing Premises .
Notwithstanding anything in the Lease, as hereby amended, to the
contrary, Tenant shall continue to pay Tenant’s Share of
Direct Expenses in connection with the Existing Premises and
attributable to the 10421 Building in accordance with the terms of
the Lease.
5.2.
Expansion Premises .
Except as specifically set forth in this Section 5.2 ,
commencing on the Expansion Commencement Date, Tenant shall pay
Tenant’s Share of Direct Expenses in connection with the
Expansion Premises in accordance with the terms of Article 4
of the Lease, provided that with respect to the calculation of
Tenant’s Share of Direct Expenses in connection with the
Expansion Premises and attributable to the 10445 Building,
Tenant’s Share shall equal 100%.
6.
Abated Rent .
In the event that Tenant is not then in economic default of the
Lease (as hereby amended, and beyond any applicable notice and cure
period) , then during the twelve month
period commencing on the Expansion Commencement Date and ending on
the day immediately prior to the first anniversary of the Expansion
Commencement Date (the “ Rent Abatement Period
”), Tenant shall only be obligated to pay one-half (½)
of (i) the Base Rent and (ii) Tenant’s Share of
Direct Expenses, which are otherwise attributable to the Expansion
Premises during such Rent Abatement Period (the “ Rent
Abatement ”). To the extent that Tenant is in such
economic default of the Lease (as hereby amended, and beyond any
applicable notice and cure period) as of the first day of any
calendar month that is part of the Rent Abatement Period, then
Tenant shall be obligated to immediately pay the full amount of the
Base Rent and Tenant’s Share of Direct Expenses otherwise
(but for the Rent Abatement) attributable to the Expansion Premises
during such calendar month (each such month, a “ Deferred
Abatement Month ”); provided, however, that following
Tenant’s full payment of any and all such amounts and
Tenant’s cure of any such economic default, the Rent
Abatement Period shall be extended one (1) month for each Deferred
Abatement Month; provided further, however, in no event shall the
total dollar amount of such Rent Abatement exceed the dollar amount
of the Rent Abatement otherwise attributable to the first twelve
months immediately following the Expansion Commencement
Date.
7.
Expansion Improvements
. Except as specifically set forth herein, Landlord shall not
be obligated to provide or pay for any improvement work or services
related to the improvement of the Expansion Premises, and Tenant
shall accept the Expansion Premises in its presently existing,
“as-is” condition. The improvements in the
Expansion Premises shall be constructed pursuant to the terms of
the First Amendment Work Letter. The terms and conditions of
the First Amendment Work Letter shall not be applicable to the
construction of the Existing Premises.
8.
Parking . Effective
as of the Expansion Commencement Date and continuing throughout the
Expansion Term, Tenant shall be entitled to utilize, without
charge, up to one hundred ninety-four (194) unreserved parking
passes in connection with Tenant’s lease of the
8
Expansion Premises (the “ Expansion
Parking Passes ”) (i.e., four (4) unreserved parking
spaces for every 1,000 rentable square feet of the Expansion
Premises). Except as set forth in this Section 8
, Tenant’s use of the Expansion Parking Passes shall be in
accordance with the provisions of Article 28 of the
Lease.
9.
Security Deposit .
Landlord and Tenant acknowledge that, in accordance with Section
21.1 of the Lease, Tenant has previously delivered the sum of
Three Hundred Fifty-Five Thousand Seven Hundred Twenty-Seven and
60/100 Dollars ($355,727.60) (the “ Existing Security
Deposit ”) to Landlord as security for the faithful
performance by Tenant of the terms, covenants and conditions of the
Lease with respect to the Existing Premises. Landlord shall
continue to retain the Existing Security Deposit as security for
the faithful performance by Tenant of the terms, covenants and
conditions of the Lease, as hereby amended, with respect to the
Expansion Premises. Notwithstanding the foregoing, to the
extent that Tenant timely elects to exercise its termination right
with respect to the Expansion Premises as set forth in
Section 3.3 , above, then subject to the terms and
conditions of Section 21.1 of the Lease, the amount of
the Security Deposit shall be reduced to Two Hundred Eight-Seven
Thousand Five Hundred Thirty-Five and No/100 Dollars ($287,535.00)
and Landlord shall, within forty-five days following the
Termination Date, return an amount equal to Sixty-Eight Thousand
One Hundred Ninety-Two and 60/100 Dollars ($
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