OFFICE LEASE AGREEMENT

Exhibit 10.1

OFFICE LEASE AGREEMENT

between

SOUTHEAST STB PORTFOLIO, LLC

as Landlord

and

INTELLON CORPORATION,

as Tenant

SunTrust Bank Building

203 East Silver Springs Blvd.

Ocala, FL

TABLE OF CONTENTS

 

 

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OFFICE LEASE AGREEMENT

203 EAST SILVER SPRINGS BLVD

OCALA, FL

THIS OFFICE LEASE AGREEMENT (“Lease”) is entered into as of the Date, and by and between the Landlord and Tenant, as identified in Section 1.1 below.

1. DEFINITIONS .

1.1 Basic Lease Definitions . In this Lease, the following defined terms have the meanings indicated:

(a) “Date” means September 4, 2009.

(b) “Landlord” means SOUTHEAST STB PORTFOLIO, LLC, a Georgia limited liability company.

(c) “Tenant” means INTELLON CORPORATION, a Delaware corporation

(d) “Premises” means those premises known as Suite              located on the first and second floors of the Building and identified on Exhibit A , which contain approximately 24,502 rentable square feet. The Premises do not include any areas above the finished ceiling or below the finished floor covering installed in the Premises or any other areas not shown on Exhibit A as being part of the Premises. Landlord reserves, for Landlord’s exclusive use, any of the following (other than those installed for Tenant’s exclusive use) that may be located in the Premises: janitor closets, stairways and stairwells; fan, mechanical, electrical, telephone and similar rooms; and elevator, pipe and other vertical shafts, flues and ducts.

(e) “Building” means the office building located at the following address, and the parking facilities and other improvements associated therewith as the same may hereafter to expanded or modified, and having the following name and address: 203 East Silver Springs Blvd., Ocala FL.

(f) “Term” means the duration of this Lease, which will be approximately seven (7) years. The Term shall commence on the date (the “Commencement Date”) that Landlord delivers to Tenant possession of the Premises upon Substantial Completion (as defined in Exhibit B, Section 7) of (i) the Tenant Improvements (as defined in Exhibit B, Section 1) and (ii) those items on Exhibit B-2 that are described on said Exhibit as work which must be completed as a condition to Substantial Completion (the foregoing being referred to as the “Delivery Condition”). Landlord shall use commercially diligent efforts to complete the Landlord’s Base Building Work by the date that Landlord achieves Substantial Completion of the Tenant Improvements, however if the Landlord’s Base Building Work is not Substantially Complete as of said date, the Commencement Date still shall be the date that Landlord delivers to Tenant possession of the Premises upon Substantial Completion of the Tenant Improvements. If the Commencement Date is the first day of a calendar month, then the Term shall end on the day (the “Expiration Date”)

that is the seventh (7 ^th ) anniversary of the Commencement Date, unless terminated earlier or extended further as provided in this Lease. If the Commencement Date is not the first day of a calendar month, then the Term shall end on the day (the “Expiration Date”) that is the seventh (7 ^th ) anniversary of the first day of the calendar month following the month in which the Commencement Date occurs, unless terminated earlier or extended further as provided in this Lease. The Commencement Date is estimated to be December 1, 2009 and the Expiration Date is estimated to be November 30, 2016. Following Substantial Completion of the Tenant Improvements, Tenant shall execute and deliver to Landlord a Tenant Acceptance Agreement (Exhibit C), accurately stating the Commencement Date and Expiration Date within five (5) business days after Landlord delivers same to Tenant. (See section 2.3), provided that if Tenant believes that the Tenant Acceptance Agreement contains incorrect information, Tenant shall execute and return the Tenant Acceptance Agreement within said time frame after making the factual corrections thereto it thinks are appropriate. In the Tenant Acceptance Agreement, Tenant shall confirm that it has accepted possession of the Premises.

If the Commencement Date has not occurred by December 6, 2009 (which date shall be extended by one (1) day for each day of Tenant Delay and Force Majeure Delay), Tenant may elect to delay the start of its occupancy of the Premises for the regular conduct of its business until February 1, 2010 (the “Occupancy Deferral Right”), provided that such election shall be effective only if (i) Tenant delivers to Landlord written notice of such election on or before December 9, 2009, time being of the essence, and (ii) Tenant delivers with said notice an executed Tenant Acceptance Agreement pursuant to which Tenant unconditionally acknowledges that Tenant has accepted possession of the Premises. If Tenant fails to timely deliver said election notice, then Tenant’s right to exercise the Occupancy Deferral Right automatically shall be null and void and Tenant shall be deemed to have elected to commence occupancy of the Premises.

(g) “Base Rent” means the Rent payable according to Section 3.1, which will be in an amount per month applicable during each Lease Year as follows:

 

In addition to the amounts stated on the table above, Tenant shall pay as Base Rent all rental tax charged to and payable by Landlord pursuant to the laws of the State of Florida. Should the Commencement Date be a date other than the first day of a calendar month,

 

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then Base Rent for the fractional month in which the Commencement Date occurs shall be proportionately adjusted based upon the number of months occurring in that month following the Commencement Date. The first month’s Base Rent is due upon execution of this Lease.

(h) “Tenant’s Share” is deemed to mean, with respect to the calculation of certain Additional Rent according to Section 3.2, 38.01%.

(i) “Base Year” means the calendar year ending December 31, 2010.

(j) “Security Deposit”: none.

(k) “Landlord’s Rent Address” means:

SOUTHEAST STB PORTFOLIO, LLC

c/o The Simpson Organization

112 S. Tryon Street, Suite 1700

Charlotte, North Carolina 28284

(l) “Landlord’s Notice Address” means all of the following:

SOUTHEAST STB PORTFOLIO, LLC

c/o The Simpson Organization

112 S. Tryon Street, Suite 1700

Charlotte, North Carolina 28284

With a copy to:

SOUTHEAST STB PORTFOLIO, LLC

c/o The Simpson Organization

1401 Peachtree Street, Suite 400

Atlanta, Georgia 30309

With a copy to:

Arnall Golden Gregory LLP

171 17 ^th Street NW, Suite 2100

Atlanta, Georgia 30363

Attention: Michael D. Golden, Esq.

(m) “Tenant’s Address” means:

Prior to the Commencement Date :

Intellon Corporation

5955 T. G. Lee Blvd., Suite 600

Orlando, FL 32822-4411

Attention: Charles E. Harris, CEO

 

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After the Commencement Date :

At the Premises, Attention: Charles E. Harris, CEO

With a copy to:

Intellon Corporation

5955 T. G. Lee Blvd., Suite 600

Orlando, FL 32822-4411

Attention: General Counsel

(n) “Brokers” means the following brokers who will be paid by Landlord pursuant to a separate agreement: The Simpson Organization, Inc. representing Landlord.

(q) “Use” means general office and engineering laboratory use only, and for no other purpose. As used in the preceding sentence, the phrase “engineering laboratory” shall be limited to the design, development, assembly, creation and testing only of integrated circuits and circuit boards, but not for the general manufacturing of circuit board.

1.2 Additional Definitions . In addition to those terms defined in Section 1.1 and other sections of this Lease, the following defined terms when used in this Lease have the meanings indicated:

(a) “Additional Rent” means the Rent payable according to Section 3.2.

(b) “Affiliates” means, with respect to any party, any persons or entities that own or control, are owned or controlled by, or are under common ownership or control with, such party and such party’s and each of such other person’s or entity’s respective officers, directors, shareholders, partners, venturers, members, managers, agents and employees. For purposes of this definition, a party is “owned” by anyone that owns more than 50% of the equity interests in such party and a party is “controlled” by anyone that owns sufficient voting interests to control the management decisions of such party.

(c) “Building Standard” means the scope and quality of leasehold improvements, Building systems and Building services, as the context may require, which are reasonably determined by Landlord from time to time for the Building generally.

(d) “Business Hours” means the hours from 8:00 a.m. to 6:00 p.m. on Monday through Friday and from 8:00 a.m. to 12:00 noon on Saturday, excluding statutory or legal holidays.

(e) “Common Areas” means certain interior and exterior common and public areas located in or around the Building as may be designated by Landlord for the nonexclusive use in common by Tenant, Landlord and other tenants, and their employees, agents and invitees.

 

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(f) “Encumbrance” means any ground lease, first mortgage or first deed of trust now or later encumbering the Building or Land, and all their renewals, modifications, supplements, consolidations and replacements.

(g) “Expenses” means the aggregate of any and all costs (other than those expressly excluded below) incurred or accrued during each calendar year according to generally accepted accounting principles for operating, managing, administering, equipping, securing, protecting, heating, cooling, ventilating, lighting, repairing, replacing, renewing, cleaning, maintaining, decorating, inspecting, the Land, Building and Common Areas; wages and salaries of all persons engaged in the operation, maintenance, security or access control of the Building, including all taxes, insurance and benefits relating thereto; the cost of all maintenance and service agreements for the Building and the equipment therein, including, but not limited to, alarm service, security service, access control, landscaping, window cleaning, pest control, elevator maintenance and Common Area janitorial service; fees and expenses (including reasonable attorneys’ fees) incurred in contesting the validity of any Laws that would cause an increase in Expenses; depreciation on personal property and moveable equipment which is or should be capitalized on Landlord’s books; and costs (whether capital or not) that are incurred in order to conform to changes subsequent to the Date in any Laws, or that are intended to reduce Expenses or the rate of increase in Expenses, or to promote safety, or to maintain the quality of the Building (such costs will not be included in Expenses for the Base Year and will otherwise be charged to Expenses in annual installments over the useful economic life of the items for which such costs are incurred together with interest at the average prime rate as announced by Chase Manhattan Bank or its successor thereto in effect during each such calendar year). Expenses will not include (1) mortgage principal or interest; (2) ground lease payments; (3) leasing commissions; (4) costs of advertising space for lease in the Building; (5) costs for which Landlord is reimbursed by insurance proceeds or from tenants of the Building (other than such tenants’ regular contributions to Expenses); (6) any depreciation or capital expenditures (except as expressly provided above); (7) legal fees incurred for negotiating leases or collecting rents; (8) costs directly and solely related to the maintenance and operation of the entity that constitutes the Landlord, such as accounting fees incurred solely for the purpose of reporting Landlord’s financial condition; (9) third party tenant signage; and (10) Net Expenses. For each calendar year during the Term, the amount by which those Expenses that vary with occupancy (such as cleaning costs and utilities) would have increased had the Building been 100% occupied and operational and had all Building services been provided to all tenants will be reasonably determined and the amount of such increase will be included in Expenses for such calendar year.

(h) “Land” means that certain tract of land located in Ocala, Florida which contains the Building, parking facilities and other associated improvements.

(i) “Laws” means any and all present or future federal, state or local laws, statutes, ordinances, rules, regulations or orders of any and all governmental or quasi-governmental authorities having jurisdiction.

 

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(j) “Lease Year” means each successive period of 12 calendar months during the Term, ending on the same day and month (but not year, except in the case of the last Lease Year) as the day and month on which the Expiration Date will occur. If the Commencement Date is not the first day of a month, the first Lease Year will be greater than 12 months by the number of days from the Commencement Date to the last day of the month in which the Commencement Date occurs.

(k) “Lender” means the ground lessor of any ground lease, the mortgagee of any mortgage, the grantee under any deed to secure debt or the beneficiary of any deed of trust that constitutes an Encumbrance.

(l) “Net Expenses” means the aggregate of any and all of the following costs incurred or accrued during each calendar year according to generally accepted accounting principles in connection with the Land and Building: (1) the cost of all insurance relating to the Building, including, but not limited to, the cost of property insurance, casualty, rental loss and liability insurance applicable to the Building and Landlord’s personal property used in connection therewith and the cost of deductibles paid or claims made by Landlord; (2) charges for water, sewer, natural gas and other energy and utilities provided to the Land and Building (excluding charges for such service provided to the Building that are separately sub-metered and billed to Building occupants); (3) charges for removing trash from the Building; (4) the cost of pest control services; (5) and any and all costs associated with life safety systems, including without limitation the costs of testing, maintaining, repairing and replacing same and (6) Taxes.

(m) “Rent” means the Base Rent, Additional Rent and all other amounts required to be paid by Tenant under this Lease.

(n) “Taxes” means the amount incurred or accrued during each calendar year according to generally accepted accounting principles for that portion of the following items that is allocable to the Building: all ad valorem real and personal property taxes and assessments, special or otherwise, levied upon or with respect to the Building, the personal property used in operating the Building, and the rents and additional charges payable by tenants of the Building, and imposed by any taxing authority having jurisdiction; all taxes, levies and charges which may be assessed, levied or imposed in replacement of, or in addition to, all or any part of ad valorem real or personal property taxes or assessments as revenue sources, and which in whole or in part are measured or calculated by or based upon the Building, the leasehold estate of Landlord or the tenants of the Building, or the rents and other charges payable by such tenants; capital and place-of-business taxes, and other similar taxes assessed relating to the Common Areas; and any reasonable expenses incurred by Landlord in attempting to contest, reduce or avoid an increase in Taxes, including, without limitation, reasonable legal fees and costs. Taxes will not include any net income taxes of Landlord. Tenant acknowledges that Taxes may increase during the Term and that if the Building or Land, or both, are currently subject to a tax abatement program and such program ceases to benefit the Building or Land, or both, during the Term, Taxes will increase.

 

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2. GRANT OF LEASE .

2.1 Demise . Subject to the terms, covenants, conditions and provisions of this Lease, Landlord leases to Tenant and Tenant leases from Landlord the Premises, together with the nonexclusive right to use the Common Areas, for the Term. Notwithstanding anything to the contrary contained or implied in the Lease, Tenant agrees that Tenant will accept possession of the Premises in an “as is, where-is” condition for the term of the Lease in its present condition as of the date hereof, except that (i) Landlord shall construct and install, in a good and workmanlike manner, the Leasehold Improvements as set forth on Exhibit B ; and (ii) Landlord shall, at Landlord’s cost, remediate, cure, remove or take other appropriate action to eliminate any violation of, or non-compliance with, any law, statute, ordinance, or governmental rule or regulation covering the Premises if such violation or non-compliance existed prior to the Commencement Date, but only if such violation or non-compliance must be accomplished by order or demand of a governmental office or agency, or if such violation or non-compliance (i) prohibits the issuance of or invalidates a certificate of occupancy for the Premises, (ii) unreasonably and materially affects the safety of Tenant’s employees or personal property or creates a significant health hazard for Tenant’s employees, or (iii) materially impairs Tenant’s use and occupancy of the Premises for the Uses; and that no representations, warranties, or inducements with respect to any condition of such space have been made by Landlord or its designated representatives, to Tenant or its designated representatives. In furtherance of the foregoing, Tenant hereby acknowledges that no promises to decorate, alter, repair or improve the Premises or any portion thereof, either before or after the execution of this Lease, have been made to Tenant, or its designated representatives, by Landlord, or its designated representatives except as set forth on Exhibit B .

Tenant has expressed an interest in also leasing certain storage space located within the basement of the Building (the “Storage Space”). Landlord and Tenant shall negotiate in good faith to agree upon the precise location, configuration and area of the Storage Space and the terms and conditions of Tenant’s lease thereof within sixty (60) days following the Date of this Lease.

2.2 Quiet Enjoyment . Landlord covenants that provided Tenant is not in Default, during the Term Tenant will have quiet and peaceable possession of the Premises, subject to the terms, covenants, conditions and provisions of this Lease, and Landlord will not disturb such possession except as expressly provided in this Lease.

2.3 Statement of Lease Term. Landlord and Tenant shall execute and deliver a Tenant Acceptance Agreement (Exhibit C) correctly specifying the Commencement Date and Expiration Date of the Lease Term within five (5) business days after Landlord delivers same to Tenant; provided that if Tenant believes that the Tenant Acceptance Agreement contains incorrect information, Tenant shall execute and return the Tenant Acceptance Agreement within said time frame after making the factual corrections thereto it thinks are appropriate. In the Tenant Acceptance Agreement, Tenant shall confirm that it has accepted possession of the Premises. In the event Tenant fails to contest or deliver such Acceptance Agreement statement to Landlord within ten (10) business days after Landlord’s request, then Landlord’s determination of the Commencement Date and Expiration Date shall be conclusive and binding upon Tenant.

 

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3. RENT.

3.1 Base Rent . Commencing on the Commencement Date and then throughout the Term, Tenant agrees to pay Landlord Base Rent according to the following provisions. Base Rent during each Lease Year (or portion of a Lease Year) described in Section 1.1(f) will be payable in monthly installments in the amount specified for such Lease Year (or portion) in Section 1.1(f), in advance, on or before the first day of each and every month during the Term. However, if the Term commences on other than the first day of a month or ends on other than the last day of a month, Base Rent for such month will be appropriately prorated.

Notwithstanding the foregoing, if Tenant timely and properly exercises the Occupancy Deferral Right, then fifty percent (50%) of Base Rent for the months of December, 2009 and January 2010 shall conditionally abate (such abated Base Rent being referred to herein as the “Excused Rent”), except as follows: if Tenant should default in the performance of any its obligations under the Lease, and if such default remains uncured beyond the expiration of any notice and cure period expressly stated in the Lease, then all Excused Rent shall be immediately due and payable by Tenant to Landlord without notice or demand from Landlord.

3.2 Additional Rent . Tenant agrees to pay Landlord, as Additional Rent, in the manner provided below for each calendar year subsequent to the Base Year that contains any part of the Term, all of the following sums: (i) Tenant’s Share of the amount by which Expenses for such calendar year exceed Expenses for the Base Year (“Escalation Expense Charge”); and (ii) Tenant’s Share of all Net Expenses, without regard or reduction for the portion of Net Expenses included in the Base Year (the “Net Expense Charge”). A chart depicting Tenant’s obligations with respect to Expenses, Net Expenses and certain other charges is attached hereto as Schedule 1.

(a) Estimated Payments . Prior to or as soon as practicable after the beginning of each calendar year subsequent to the Base Year, Landlord will notify Tenant of Landlord’s estimate of Additional Rent for the ensuing calendar year. On or before the first day of each month during the ensuing calendar year, Tenant will pay to Landlord, in advance,  ¹ / 12 of such estimated amounts, provided that until such notice is given with respect to the ensuing calendar year, Tenant will continue to pay on the basis of the prior calendar year’s estimate until the month after the month in which such notice is given. In the month Tenant first pays based on Landlord’s new estimate, Tenant will pay to Landlord  ¹ / 12 of the difference between the new estimate and the prior year’s estimate for each month which has elapsed since the beginning of the current calendar year. If at any time or times it appears to Landlord that the Escalation Expense Charge or Net Expense Charge for the then-current calendar year will vary from Landlord’s estimate by more than 3%, Landlord may, by notice to Tenant, revise its estimate for such year and subsequent payments by Tenant for such year will be based upon the revised estimate.

(b) Annual Settlement . As soon as practicable after the close of each calendar year subsequent to the Base Year (including the calendar year in which the Termination Date occurs) but no later than April 30 of each calendar year, Landlord will deliver to Tenant its statement of Escalation Expense Charges and Net Expense Charges for such calendar year. If on the basis of such statement Tenant owes an amount that is less than

 

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the estimated payments previously made by Tenant for such calendar year, Landlord will, at Tenant’s option, either refund such excess amount to Tenant or credit such excess amount against the next payment(s), if any, due from Tenant to Landlord. If on the basis of such statement Tenant owes an amount that is more than the estimated payments previously made by Tenant for such calendar year, Tenant will pay the deficiency to Landlord within 30 days after the delivery by Landlord of such statement. If this Lease commences on a day other than the first day of a calendar year or terminates on a day other than the last day of a calendar year, the Escalation Expense Charge and Net Expense Charge applicable to the calendar year in which such commencement or termination occurs will be prorated on the basis of the number of days within such calendar year that are within the Term. Delay by Landlord in providing to Tenant any statement as contemplated herein shall not relieve Tenant from the obligation to pay any Escalation Expense Charge or Net Expense Charge upon the rendering of such statement. The obligations of the party hereunder shall survive the expiration of the Term or the earlier termination thereof.

(c) Final Payment . Tenant’s obligation to pay the Additional Rent provided for in this Section 3.2 which is accrued but not paid for periods prior to the expiration or early termination of the Term will survive such expiration or early termination. Prior to or as soon as practicable after the expiration or early termination of the Term, Landlord may submit an invoice to Tenant stating Landlord’s estimate of the amount by which Tenant’s payment of Escalation Expense Charges or Net Expense Charges through the date of such expiration or early termination will exceed Tenant’s estimated payments of Additional Rent for the calendar year in which such expiration or termination has occurred or will occur. Tenant will pay the amount of any such excess to Landlord within 30 days after the date of Landlord’s invoice.

(d) Cap On Increase of Expenses . The foregoing provisions notwithstanding, Tenant’s Share of Escalation Expense Charges for each calendar year during the Term following the Base Year shall not increase by more than five percent (5%) above Tenant’s Share of Expenses for the prior calendar year on a compounded and cumulative basis; provided, however, that the foregoing shall neither apply to nor limit increases in insurance, utilities, or Taxes. As used in the prior sentence, the term “compounded” shall mean that the 5% increase for a calendar year shall be calculated by multiplying the prior calendar year sum by 105%. As used in the prior sentence, the term “cumulative” shall mean that, where an increase in actual controllable Expenses in a given calendar year is less than 5%, the difference between said increase and 5% may be captured in a subsequent calendar year where the actual increase exceeds 5%; provided that Tenant’s Share of Expenses shall never be more than ten percent (10%) above Tenant’s Share of Expenses for the prior calendar year on a non-cumulative basis.

3.3 Other Taxes . Tenant will reimburse Landlord upon demand for any and all taxes payable by Landlord (other than net income taxes and taxes included in Taxes) whether or not now customary or within the contemplation of Landlord and Tenant: (a) upon, measured by or reasonably attributable to the cost or value of Tenant’s equipment, furniture, fixtures and other personal property located in the Premises; (b) upon or measured by Rent; (c) upon or with respect to the possession, leasing, operation, management, maintenance, alteration, repair, use or

 

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occupancy by Tenant of the Premises or any portion of the Premises; and (d) upon this transaction or any document to which Tenant is a party creating or transferring an interest or an estate in the Premises. If it is not lawful for Tenant to reimburse Landlord, the Base Rent payable to Landlord under this Lease will be revised to yield to Landlord the same net rental after the imposition of any such tax upon Landlord as would have been payable to Landlord prior to the imposition of any such tax.

3.4 Terms of Payment . All Base Rent, Additional Rent and other Rent will be paid to Landlord in lawful money of the United States of America, at Landlord’s Rent Address or to such other person or at such other place as Landlord may from time to time designate in writing, without notice or demand. Tenant agrees that its covenant to pay Rent is an independent covenant, not subject to abatement, offset or deduction, except as otherwise expressly provided in this Lease.

3.5 Late Payments . To compensate Landlord for its additional cost of processing late payments, for any payment of Rent which is not received within 5 days after it is due, Tenant will pay a late charge of 7% of the late payment, but not less than $100 or more than $1,500. In addition, all amounts payable under this Lease by Tenant to Landlord, if not paid when due, will bear interest from the due date until paid at the rate of 4% per annum plus the Wall Street Journal prime rate in effect on the date of demand, plus any attorneys’ fees and costs incurred by Landlord by reason of Tenant’s failure to pay Rent and other charges when due hereunder. Any returned checks will be considered as unpaid rent and subject to a percent (5%) late charge.

3.6 Right to Accept Payments . No receipt by Landlord of an amount less than Tenant’s full amount due will be deemed to be other than payment “on account,” nor will any endorsement or statement on any check or any accompanying letter effect or evidence an accord and satisfaction. Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance or pursue any right of Landlord. No payments by Tenant to Landlord after the expiration or other termination of the Term, or after the giving of any notice (other than a demand for payment of money) by Landlord to Tenant, will reinstate, continue or extend the Term or make ineffective any notice given to Tenant prior to such payment. After notice or commencement of a suit, or after final judgment granting Landlord possession of the Premises, Landlord may receive and collect any sums of Rent due under this Lease, and such receipt will not void any notice or in any manner affect any pending suit or any judgment obtained.

4. USE AND OCCUPANCY .

4.1 Use . Tenant agrees to use and occupy the Premises only for the Use described in Section 1.1, or for such other purpose as Landlord expressly authorizes in writing.

4.2 Compliance.

(a) Tenant agrees to use the Premises in a safe, careful and proper manner, and to comply, at Tenant’s expense, with all Laws applicable to Tenant’s use, occupancy or alteration of the Premises and with any Laws that require any alterations to the Premises due to Tenant’s status under such Laws. If, due to the nature or manner of any use or occupancy of the Premises by Tenant that is other than normal office or

 

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engineering laboratory use and occupancy, any improvements or alterations to the Premises or Building or changes in the services provided by Landlord according to Section 5 are required to comply with any Laws, or with requirements of Landlord’s insurers, then Tenant will pay all costs of the required improvements, alterations or changes in services.

(b) Landlord and Tenant agree that, during the Term, each will comply with all Laws governing, and all procedures established by Landlord for, the use, abatement, removal, storage, release, discharge, disposal or transport of any substances, chemicals or materials declared to be, or regulated as, hazardous or toxic under any applicable Laws (“Hazardous Substances”) and any required or permitted alteration, repair, maintenance, restoration, removal or other work in or about the Premises or Building that involves or affects any Hazardous Substances. No Hazardous Substances will be stored, used, released, discharged, produced, processed or disposed in, on or about, or transported to or from, the Premises or Building by Tenant or its subtenants, or any of their respective agents, employees, contractors or invitees, without first obtaining Landlord’s express written consent (any Hazardous Substances which are stored, used, released, discharged, produced, processed or disposed in, on or about, or transported to or from, the Premises or Building by any of such persons or entities are called “Tenant’s Hazardous Substances”). However, normal quantities of Tenant’s Hazardous Substances customarily used in general office activities (such as copier and cleaning chemicals) or used in connection with the engineering laboratory portion of the Use (such as flux cleaner, isopropyl alcohol and solder for circuit board repair) may be stored and used at the Premises without Landlord’s prior written consent. If the presence of Tenant’s Hazardous Materials on the Premises results in contamination of the Land, Building or Premises, Tenant, at its expense, will take all action necessary to restore the Land, Building and Premises to the condition existing prior to the introduction of Tenant’s Hazardous Substances, whether such action is required by any governmental authority in order to comply with applicable Laws or by Landlord in order for Landlord to make the same economic use of the Land, Building and Premises as Landlord could have made prior to the introduction of Tenant’s Hazardous Substances. Such action may include, without limitation, the investigation of the environmental condition of the Land, Building or Premises, the preparation of remediation plans or feasibility studies and the performance of cleanup, remedial, removal or restoration work. Tenant will obtain Landlord’s written approval before undertaking any action required by this Section 4.2(b), which approval will not be unreasonably withheld so long as the proposed actions will not have an avoidable material and adverse effect. Each party will indemnify and hold the other and the other’s Affiliates harmless from and against any and all claims, costs and liabilities (including reasonable attorneys’ fees) arising out of or in connection with any breach by such party of its covenants under this Section 4.2(b). The parties’ obligations under this Section 4.2(b) will survive the expiration or early termination of the Term.

4.3 Occupancy. Tenant will not do or permit anything which obstructs or interferes with other tenants’ rights or with Landlord’s providing Building services, or which injures or annoys other tenants. Tenant will not cause, maintain or permit any nuisance or waste in or about the Premises and will keep the Premises free of debris, and anything of a dangerous,

 

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noxious, toxic or offensive nature or which could create a fire hazard or undue vibration, heat, noise, fumes, vapors or odors. Tenant will not increase on an ongoing basis the number of persons occupying the Premises or the pedestrian traffic in and out of the Premises or the Building above an ordinary level for the Use in comparable buildings. Tenant will not do or permit anything which interferes with the transmission or reception of microwave, television, radio, telephone or other communication signals from antennae or other facilities on the Building or Land. Tenant shall be permitted to install DSL, cable services and fiber optics for the Use. If any item of equipment, building material or other property brought into the Building by Tenant or on Tenant’s request causes a dangerous, noxious, toxic or offensive effect (including an environmental effect) and in Landlord’s reasonable opinion such effect will not be permanent but will only be temporary and is able to be eliminated, then Tenant will not be required to remove such item, provided that Tenant promptly and diligently causes such effect to be eliminated, pays for all costs of elimination and indemnifies and holds harmless Landlord against all liabilities arising from such effect. Tenant will not make or permit any use of the Premises which may jeopardize any insurance coverage, increase the cost or rate of insurance or require additional insurance coverage. If by reason of Tenant’s failure to comply with the provisions of this Section 4.3, insurance premiums or rates are increased, then Landlord may require Tenant to immediately pay Landlord as Rent the amount of the increase in insurance premiums.

4.4 Substituted Premises . Intentionally deleted.

5. SERVICES AND UTILITIES .

5.1 Landlord’s Standard Services . During the Term, Landlord will operate and maintain the Building and Common Areas in compliance with all applicable Laws and according to those standards from time to time prevailing for similar office buildings in the area in which the Building is located. Landlord will provide the following services according to such standards, the costs of which will be included in Expenses or Net Expenses to the extent provided in Section 1.2(g) or Section 1.2(l), except for those expenses specifically identified in this Lease as expenses which will be billed directly to and paid by Tenant:

(a) repair, maintenance and replacement of all structural elements of the Building (including Building windows, roof and exterior), all Common Areas (including the parking lot) and all mechanical, plumbing, water and sewer, natural gas and electrical systems installed in the Building, but excluding any mechanical, plumbing or electrical equipment that exclusively serves a tenant’s premises (including the Premises) or is installed or operated to accommodate such tenant’s (including Tenant’s) special requirements (such as a supplementary air conditioning unit installed to cool a computer room);

(b) heating, ventilating and air conditioning of the Premises and Common Areas at temperatures and in amounts consistent with those the mechanical system serving the Premises is designed to provide and otherwise as may be reasonably required for comfortable use and occupancy under normal business operations with “Customary Office Equipment” (as used in this Lease, “Customary Office Equipment” will include desk top and laptop personal computers and printers, small reproduction machines, engineering laboratory equipment, and similar devices and equipment; but will not

 

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include any machines, devices or equipment that adversely affect the temperature otherwise maintained in the Premises such as, e.g., heavy-duty computer or reproduction equipment); provided that the electricity used to deliver such service to the Premises shall be tied to the electrical sub-meter for the Premises and Tenant shall be responsible for all charges for such electrical energy consumed to provide such service;

(c) electricity for lighting the Premises and operating Customary Office Equipment in amounts not exceeding the demand the electrical system serving the Premises is designed to provide; except that the cost for such service shall be paid directly by Tenant (and shall not be included in Expenses) as provided in this Lease;

(d) maintenance and repair of plumbing for the Building, Common Areas and Premises, including water for small kitchens, washrooms and drinking fountains;

(e) janitorial services to the Common Areas;

(f) passenger elevators for access to and from any floor(s) on which the Premises are located above the Building’s first floor;

(g) Common Area toilet facilities, including necessary washroom supplies sufficient for normal use;

(h) electric lighting for all Common Areas that require electric light during the day or are open at night, including replacement of tubes and ballasts in lighting fixtures;

(i) pest control and life safety for the Building, Common Areas and, at Tenant’s cost as a Net Expense, the Premises;

(j) landscaping services and security services and, at Tenant’s costs as a Net Expense, water sewer, utilities other than electric, trash removal, for the Building and Common Areas; and

(k) signage for the Building.

5.2 Additional Services .

(a) If Tenant requests any maintenance or repair of Building systems serving the Premises (including without limitation the electrical and the heating, ventilating or air conditioning systems) that Landlord is required to perform under this Lease, Landlord will furnish the same at a time and in a manner reasonably designated by Landlord, and where the same is performed outside of Business Hours at Tenant’s request, Tenant will pay Landlord the excess costs as reasonably determined by Landlord from time to time as a result of such work being performed after Business Hours.

(b) If Tenant requires electric current, water or any other energy in excess of the amounts provided by Landlord according to Section 5.1, such excess electric, water or other energy requirements will be supplied only with Landlord’s prior consent, which consent will not be unreasonably withheld. If Landlord grants such consent, Tenant will

 

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pay all costs of meter service and installation of facilities or professional services necessary to measure and/or furnish the required excess capacity. Tenant will also pay the entire cost of such additional electricity, water or other energy so required.

(c) If Tenant installs any machines, equipment or devices in the Premises that do not constitute Customary Office Equipment and such machines, equipment or devices cause the temperature in any part of the Premises to exceed the temperature the Building’s mechanical system would be able to maintain in the Premises were it not for such machines, equipment or devices, then Landlord reserves the right to install (or to require Tenant to install) supplementary air conditioning units in the Premises, and Tenant will pay all costs of installing, operating and maintaining such supplementary units.

(d) Landlord shall have no obligation to provide replacement of bulbs, tubes or ballasts within the Premises. Tenant shall provide, at Tenant’s sole cost and expense, all replacement of bulbs, tubes or ballasts for lighting fixtures within the Premises.

(e) Tenant will pay as Rent, within 30 days after the date of Landlord’s invoice, all costs which may become payable by Tenant to Landlord under this Section 5.2.

5.3 Interruption of Services . If any of the services provided for in this Section 5 are interrupted or stopped, Landlord will use due diligence to promptly resume the service; provided, however, that, except in connection with the negligence or willful misconduct of Landlord or its agents, employees or invitees, no irregularity or stoppage of any of these services will create any liability for Landlord (including, without limitation, any liability for damages to Tenant’s personal property caused by any such irregularity or stoppage), constitute an actual or constructive eviction or, except as expressly provided below, cause any abatement of the Rent payable under this Lease or in any manner or for any purpose relieve Tenant from any of its obligations under this Lease. If, due to reasons within Landlord’s reasonable control, any of the services required to be provided by Landlord under this Section 5 should become unavailable and should remain unavailable for a continuous period in excess of 3 business days after notice of such unavailability from Tenant to Landlord, and if such unavailability should render all or any portion of the Premises untenantable (and Tenant in fact ceases using the Premises for normal business operations), then commencing upon the expiration of such continuous 3 business day period, Tenant’s Rent will equitably abate in proportion to the portion of the Premises so rendered untenantable (and in fact not used by Tenant for normal business operations) for so long as such services remain unavailable for such reasons. Without limiting those reasons for an irregularity or stoppage of services that may be beyond Landlord’s control, any such irregularity or stoppage that is required in order to comply with any Laws will be deemed caused by a reason beyond Landlord’s control.

5.4 Janitorial Service . Tenant shall be responsible for obtaining from a janitorial contractor reasonably approved by Landlord janitorial services for the Premises and Tenant shall pay all costs associated therewith directly to said contractor.

 

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5.5 Billing for Electricity . Tenant shall pay for electric service provided to the Premises. Landlord reserves the right in its sole and absolute discretion to select the providers of electric, gas, water and sewer services that supply such services to the Property and the Premises, except that Landlord shall not select an electric service provided other than Ocala Electric or its successors without the prior consent of Tenant. Landlord also reserves the right to change any of said utility service providers as often as reasonably necessary, subject to the limitation in the preceding sentence. Tenant shall connect to and use the utilities, facilities and/or services supplied to or the Premises by Landlord any company or service provider that the Landlord selects (as the same may change from time to time in Landlord’s discretion). As a part of the Landlord’s Work, Landlord shall install in the Premises or elsewhere a sub-meter to measure the electricity used by Tenant; and Tenant shall pay to Landlord for such use within ten (10) days after submission of each bill by Landlord therefor, in accordance with such rates as Landlord is charged by the local electric utility company.

6. REPAIRS .

6.1 Repairs Within the Premises . Subject to the terms of Sections 2.1, 5.1(a), 7.2, 10 and 12, and except to the extent Landlord is required to perform or pay for certain maintenance or repairs according to this Agreement, Tenant will, at Tenant’s own expense and at all times during the Term, maintain and repair the Premises and Tenant’s equipment, personal property and trade fixtures in the Premises, and any mechanical, plumbing or electrical equipment that is installed or operated to accommodate Tenant’s special requirements (such as a supplementary air conditioning unit installed to cool a computer room in the Premises), in good order and repair and in a condition that complies with all applicable Laws. Tenant will also be responsible for the cost of repairing all damage to the Premises, Building or Common Areas (or any equipment or fixtures in or serving the same) caused by Tenant or its subtenants, or any of their respective agents, employees, contractors or invitees. Any such damage may be repaired by Landlord, in which case Tenant will pay as Rent to Landlord the reasonable cost of such repairs, including an amount sufficient to reimburse Landlord for reasonable overhead and supervision, within 20 days after the date of Landlord’s invoice. Alternatively, at Landlord’s option, Tenant will promptly and adequately repair all such damage under the supervision and subject to the prior reasonable approval of Landlord. All work done by Tenant or its contractors (which contractors will be subject to Landlord’s prior reasonable approval) will be done in a first-class workmanlike manner using only grades of materials at least equal in quality to Building Standard materials and will comply with all insurance requirements and all applicable Laws.

6.2 Failure to Maintain Premises . If Tenant fails to perform any of its obligations under Section 6.1 and such failure continues for a period of five (5) business days after written notice from Landlord, then Landlord may perform such obligations and Tenant will pay as Rent to Landlord the cost of such performance, including an amount sufficient to reimburse Landlord for reasonable overhead and supervision, within 30 days after the date of Landlord’s invoice. For purposes of performing such obligations, or to inspect the Premises, Landlord may enter the Premises upon reasonable prior notice to Tenant during normal business hours and subject to Tenant’s reasonable security measures (except in cases of actual or suspected emergency, in which case no prior notice will be required) without liability to Tenant for any loss or damage incurred as a result of such entry except for loss or damage caused by Landlord’s gross

 

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negligence or willful misconduct. Landlord will take reasonable steps in connection with such entry to minimize any disruption to Tenant’s business or its use of the Premises.

6.3 Notice of Damage . Tenant will notify Landlord promptly after Tenant learns of (a) any fire or other casualty in the Premises; (b) any damage to or defect in the Premises, Building or Common Areas, including any fixtures or equipment in or serving the same, which was caused by Tenant or its subtenants, or their respective agents, employees, contractors or invitees, and/or for the repair of which Landlord might be responsible; and (c) any damage to or defect in any parts or appurtenances of the Building’s sanitary, electrical, heating, ventilating, air conditioning, elevator or other systems located in or passing through the Premises.

7. ALTERATIONS .

7.1 Alterations by Tenant . Tenant may from time to time at its own expense make changes, additions and improvements to the Premises to better adapt the same to its business, provided that any such change, addition or improvement will (a) comply with all applicable Laws; (b) be made only with the prior written consent of Landlord, which consent will not be unreasonably withheld; (c) equal or exceed Building Standard; (d) be made and constructed in accordance with all plans and specifications approved in writing by Landlord prior to the commencement of any such work; and (e) be carried out only by persons selected by Tenant and approved in writing by Landlord, who will if required by Landlord deliver to Landlord, before commencement of the work, performance and payment bonds. Tenant will maintain, or will cause the persons performing any such work to maintain, worker’s compensation insurance and public liability and property damage insurance (with Landlord named as an additional insured), in amounts, with companies and in a form reasonably satisfactory to Landlord, which insurance will remain in effect during the entire period in which the work will be carried out. If requested by Landlord, Tenant will deliver to Landlord proof of all such insurance. Tenant will promptly pay, when due, the cost of all such work and, upon completion, Tenant will deliver to Landlord, to the extent not previously received by Landlord, evidence of payment, contractors’ affidavits and full and final waivers of all liens for labor, services or materials. Tenant will also pay any increase in property taxes on, or fire or casualty insurance premiums for, the Building attributable to such change, addition or improvement and the cost of any modifications to the Building outside the Premises that are required to be made in order to make the change, addition or improvement to the Premises. Tenant, at its expense, will have promptly prepared and submitted to Landlord reproducible as-built plans of any such change, addition or improvement upon its completion. All changes, additions and improvements to the Premises, whether temporary or permanent in character, made or paid for by Landlord or Tenant will, without compensation to Tenant, become Landlord’s property upon installation. If at the time Landlord consents to their installation, Landlord requests or approves in writing the removal by Tenant of any such changes, additions or improvements upon termination of this Lease, Tenant will remove the same upon termination of this Lease as provided in Section 15.1. All other changes, additions and improvements will remain Landlord’s property upon termination of this Lease and will be relinquished to Landlord as provided in Section 15.1. Notwithstanding anything in this Agreement to the contrary, the Leasehold Improvements and Tenant’s personal property, such as trade fixtures, furniture and equipment, shall be exempt from the terms and conditions of this Section 7.1

 

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7.2 Alterations by Landlord . Landlord may from time to time make repairs, changes, additions and improvements to the Building, Common Areas and those Building systems necessary to provide the services described in Section 5, and for such purposes Landlord may enter the Premises at any time upon not less than 10 days’ prior notice to Tenant subject to Tenant’s reasonable security measures (except in cases of actual or suspected emergency, in which case no prior notice will be required) without liability to Tenant for any loss or damage incurred as a result of such entry, except for loss or damage caused by Landlord’s negligence or willful misconduct. In doing so, Landlord will not disturb or interfere with Tenant’s use of the Premises and operation of its business any more than is reasonably necessary in the circumstances and will repair any damage to the Premises caused by such entry. No permanent change, addition or improvement made by Landlord will materially impair access to the Premises.

8. LIENS . Except as provided below in this Section, Tenant agrees to pay before delinquency all costs for work, services or materials furnished to Tenant for the Premises, the nonpayment of which could result in any lien against the Building. Tenant will keep title to the Building free and clear of any such lien. Tenant will immediately notify Landlord of the filing of any such lien or any pending claims or proceedings relating to any such lien and will indemnify and hold Landlord harmless from and against all loss, damages and expenses (including reasonable attorneys’ fees) suffered or incurred by Landlord as a result of such lien, claims and proceedings. In case any such lien attaches, Tenant agrees to cause it to be immediately released and removed of record (failing which Landlord may do so at Tenant’s sole expense), unless Tenant has a good faith dispute as to such lien in which case Tenant may contest such lien by appropriate proceedings so long as Tenant deposits with Landlord a bond or other security in an amount reasonably acceptable to Landlord and any Lender which may be used by Landlord to release such lien if Tenant’s contest is abandoned or is unsuccessful. Upon final determination of any permitted contest, Tenant will immediately pay any judgment rendered and cause the lien to be released.

9. INSURANCE .

9.1 Landlord’s Insurance . During the Term, Landlord will provide and keep in force the following insurance:

(a) commercial general liability insurance relating to the Building;

(b) all risk or fire insurance (including standard extended coverage endorsement perils, leakage from fire protective devices and other water damage) relating to the Building (but excluding Tenant’s fixtures, furnishings, equipment, personal property, documents, files and work products) in an amount not less than the full replacement cost; and

(c) such other insurance (including boiler and machinery, earthquake and flood insurance) as Landlord reasonably elects to obtain or any Lender requires.

(d) Insurance effected by Landlord under this Section 9.1 will be in amounts which Landlord from time to time reasonably determines sufficient or any Lender

 

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requires; will be subject to such deductibles and exclusions as Landlord reasonably determines; and will otherwise be on such terms and conditions as Landlord from time to time reasonably determines sufficient; and may be obtained by Landlord through blanket or master policies insuring other entities or properties owned or controlled by Landlord. In addition, Landlord may elect to maintain rental income insurance. If the annual cost to Landlord for such property or rental income insurance exceeds the standard rates because of the nature of Tenant’s operations, Tenant shall, upon receipt of an invoice therefor, reimburse Landlord for such increased cost.

9.2 Tenant’s Insurance . During the Term, Tenant will provide and keep in force the following insurance:

(a) commercial general liability insurance relating to Tenant’s business (carried on, in or from the Premises) and Tenant’s use and occupancy, for personal and bodily injury and death, and damage to others’ property, with combined single limits of not less than $1,000,000 for any one accident or occurrence and $2,000,000.00 in the aggregate and issued on an occurrence basis insuring against all claims for third-party property damage and third-party bodily injury or death.;

(b) all risk or fire insurance (including standard extended endorsement perils, leakage from fire protective devices and other water damage) relating to Tenant’s fixtures, furnishings, equipment, personal property, inventory and stock-in-trade on a full replacement cost basis in amounts sufficient to prevent Tenant from becoming a coinsurer and subject only to such deductibles and exclusions as Landlord may reasonably approve;

(c) if any boiler or machinery is operated in the Premises, boiler and machinery insurance;

(d) if Tenant operates owned, hired or non-owned vehicles on the Land, automobile liability insurance with limits of not less than $1,000,000 combined bodily injury and property damage;

(e) worker’s compensation and employer’s liability insurance in any amounts required to comply with applicable Laws;

(f) umbrella liability insurance with limits not less than $3,000,000.00 per occurrence and in the aggregate attaching without gaps in coverage or limits, above the underlying general liability and auto liability policies outlined in this Section 9.2; and

(g) business income and extra expense insurance with limits not less than one hundred percent (100%) of all charges payable by Tenant under this Lease for a period of twelve (12) months.

Landlord, Landlord’s Building manager, Landlord’s asset manager and any Lender will be named as additional insureds in the policy described in Section 9.2(a), which will include cross liability and severability of interests clauses and will be on an “occurrence” (and not a “claims made”) form. Tenant’s insurance policies will be written by insurers that are rated A / IX or better by Best’s Rating Guide and licensed in the state in which the Building is located, will be written as

 

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primary policies, not contributing with and not supplemental to the coverage that Landlord may carry, and will otherwise be upon such terms and conditions as Landlord from time to time reasonably requires. Tenant will file with Landlord, on or before the Commencement Date and at least 10 days before the expiration date of expiring policies, such copies of either current policies or certificates, or other proofs, as may be reasonably required to establish Tenant’s insurance coverage in effect from time to time and payment of premiums. Tenant’s insurers will agree to give Landlord and all other additional insureds at least 30 days’ prior notice of any non-renewal, and at least 10 days’ prior notice of any cancellation, of any insurance coverage required by this Section 9.2. If Tenant fails to insure or pay premiums, or to file satisfactory proof as required, Landlord may, upon a minimum of 24-hours’ notice, effect such insurance and recover from Tenant on demand any premiums paid as additional Rent hereunder.

9.3 Waiver of Subrogation . Notwithstanding anything to the contrary contained in the Lease, each party hereto waives all rights of recovery, claims, actions or causes of actions arising in any manner in its (the “Injured Party’s”) favor and against the other party for loss or damage to the Injured Party’s property located within or constituting a part or all of the Building, to the extent the loss or damage: (a) is covered by the Injured Party’s insurance or falls within a policy deductible; or (b) would have been covered by the insurance the Injured Party is required to carry under this Lease, whichever is greater, regardless of the cause or origin, including the sole, contributory, partial, joint, comparative or concurrent negligence of the other party. This waiver also applies to each party’s directors, officers, employees, shareholders, partners, representatives and agents. All insurance carried by either Landlord or Tenant covering the losses and damages described in this Section 9.3 shall provide for such waiver of rights of subrogation by the Injured Party’s insurance carrier to the maximum extent that the same is permitted under the laws and regulations governing the writing of insurance within the state in which the Building is located. Both parties hereto are obligated to obtain such a waiver and provide evidence to the other party of such waiver. The waiver set forth in this Section 9.3 shall be in addition to, and not in substitution for, any other waivers, indemnities or exclusions of liability set forth in this Lease.

10. DAMAGE OR DESTRUCTION

10.1 Termination Options . If the Premises or the Building are damaged by fire or other casualty Landlord will (i) promptly after learning of such damage, notify Tenant in writing of the time necessary to repair or restore such damage, as reasonably estimated by Landlord’s architect, engineer or contractor, and (ii) if Landlord learns that the insurance proceeds expected to be available to Landlord will not be sufficient for such repair and restoration, promptly notify Tenant of such in writing. If such estimate states that repair or restoration of all of such damage that was caused to the Premises or to any other portion of the Building necessary for Tenant’s occupancy cannot be completed within 180 days from the date of such damage (or within 30 days from the date of such damage if such damage occurred within the last 12 months of the Term) or if Landlord notifies Tenant that the proceeds expected to be available to Landlord will not be sufficient for such repair and restoration, then Tenant will have the option to terminate this Lease. If such estimate states that repair or restoration of all of such damage that was caused to the Building cannot be completed within 180 days from the date of such damage, or if such damage occurred within the last 12 months of the Term and such estimate states that repair or restoration of all such damage that was caused to the Premises or to any other portion of the

 

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Building necessary for Tenant’s occupancy cannot be completed within 30 days from the date of such damage, or if such damage is not insured against by the insurance policies required to be maintained by Landlord according to Section 9.1, then Landlord will have the option to terminate this Lease. Any option to terminate granted above must be exercised by written notice to the other party given within 15 business days after Landlord delivers to Tenant the notice of estimated repair time. If either party exercises its option to terminate this Lease, the Term will expire and this Lease will terminate 10 business days after notice of termination is delivered; provided, however, that Rent for the period commencing on the date of such damage until the date this Lease terminates will be reduced to the reasonable value of any use or occupation of the Premises by Tenant during such period.

10.2 Repair Obligations . If the Premises or the Building are damaged by fire or other casualty and neither party terminates this Lease according to Section 10.1, then Landlord will repair and restore such damage with due diligence, reasonable promptness and in a good and workmanlike manner, subject to force majeure, delays for insurance adjustments and delays caused by matters beyond Landlord’s control. Unless (i) Landlord was in breach of its obligations under Section 9.1 of this Agreement at the time of the damage; or (ii) the damage was caused in part by the negligence or willful misconduct of the Landlord and if as a result thereof Landlord does not receive all of the full replacement insurance proceeds, Landlord will not be required to spend more for such repair and restoration than the insurance proceeds available to Landlord as a result of the fire or other casualty other than the deductible under said policy; provided, however, that Landlord notifies Tenant promptly after Landlord learns that the insurance proceeds expected to be available to Landlord will not be sufficient for such repair and restoration, but no later than 170 days from the date of such damage. Landlord will have no liability to Tenant and Tenant will not be entitled to terminate this Lease if such repairs and restoration are not in fact completed within the estimated time period, provided that Landlord promptly commences and diligently pursues such repairs and restoration to completion. In no event will Landlord be obligated to repair, restore or replace any of the property required to be insured by Tenant according to Section 9.2.

10.3 Rent Abatement . Subject to the provisions of Section 10.4 below, if any fire or casualty damage renders the Premises untenantable and if this Lease is not terminated according to Section 10.1, then Rent will abate beginning on the date of such damage. Such abatement will end on the date Landlord has substantially completed the repairs and restoration Landlord is required to perform according to Section 10.2. Such abatement will be in an amount bearing the same ratio to the total amount of Rent for such period as the untenantable portion of the Premises bears to the entire Premises. In no event will Landlord be liable for any inconvenience or annoyance to Tenant or injury to the business of Tenant resulting in any way from damage caused by fire or other casualty or the repair of such damage, provided however that, to the extent Tenant remains in possession of a portion of the Premises, Landlord will take all reasonable steps to minimize the disruption to Tenant’s business and use of such portion of the Premises during the period of repair.

11. INDEMNIFICATION .

Tenant shall defend, indemnify and hold harmless Landlord, its agents, employees, officers, directors, partners and shareholders (“Landlord’s Related Parties”) from and against any

 

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and all liabilities, judgments, demands, causes of action, claims, losses, damages, costs and expenses, including reasonable attorneys’ fees and costs actually incurred, arising out of the use, occupancy, conduct, operation, or management of the Premises by, or the gross negligence or willful misconduct of, Tenant, its officers, contractors, licensees, agents, servants, employees, guests, invitees, or visitors in or about the Building or Premises or arising from any breach or default under this Lease by Tenant, or arising from any accident, injury, or damage, howsoever and by whomsoever caused, to any person or property, occurring in or about the Premises. This indemnification shall survive termination or expiration of this Lease with respect to acts, omissions or other occurrence prior to such termination or expiration. This provision shall not be construed to make Tenant responsible for loss, damage, liability or expense resulting from injuries to third parties or damages to property caused by the sole negligence or willful misconduct of Landlord, or its officers, contractors, licensees, agents, employees, or invitees, or caused solely by an event of default by Landlord under this Lease.

Landlord shall defend, indemnify and hold harmless Tenant, its agents, employees, officers, directors, partners and shareholders from and against any and all liabilities, judgments, demands, causes of action, claims, losses, damages, costs and expenses, including, without limitation, reasonable attorneys’ fees and costs actually incurred, arising out of the use, occupancy, conduct, operation, or management of the Building by, or the gross negligence or willful misconduct of, Landlord, its officers, contractors, licensees, agents, servants, employees in or about the Building or arising from any breach or default under this Lease by Landlord. This indemnification shall survive termination or expiration of this Lease with respect to acts, omissions or other occurrence prior to such termination or expiration. This provision shall not be construed to make Landlord responsible for loss, damage, liability or expense resulting from injuries to third parties or damages to property caused by the sole negligence or willful misconduct of Tenant, or its officers, contractors, licensees, agents, employees, or invitees, or caused solely by an event of default by Tenant under this Lease.

The respective rights and obligation of Landlord and Tenant under this Article 11 shall be subject in all respects to the terms and provisions of Article 9 above, including, without limitation, Section 9.3 thereof entitled “Waiver of Subrogation.”

12. CONDEMNATION .

12.1 Full Taking . If all or substantially all of the Building or Premises are taken for any public or quasi-public use under any applicable Laws or by right of eminent domain, or are sold to the condemning authority in lieu of condemnation and the taking would prevent or materially interfere with reasonable access to the Building entrances or use of the Premises for the purpose for which it is then being used, then this Lease will terminate as of the date when the condemning authority takes physical possession of the Building or Premises.

12.2 Partial Taking .

(a) Landlord’s Termination of Lease . If only part of the Building or Premises is thus taken or sold, and if after such partial taking, in Landlord’s reasonable judgment, alteration or reconstruction is not economically justified, then Landlord (whether or not

 

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the Premises are affected) may terminate this Lease by giving written notice to Tenant within 60 days after the taking.

(b) Tenant’s Termination of Lease . If any of the Premises is thus taken or sold and Landlord is unable to provide Tenant with comparable replacement premises in the Building, Tenant may terminate this Lease if, in Tenant’s reasonable judgment, the Premises cannot be operated by Tenant in an economically viable fashion because of such partial taking. Such termination by Tenant must be exercised by written notice to Landlord given not later than 60 days after Tenant is notified of the taking of the Premises.

(c) Effective Date of Termination . Termination by Landlord or Tenant will be effective as of the date when physical possession of the applicable portion of the Building or Premises is taken by the condemning authority.

(d) Election to Continue Lease . If neither Landlord nor Tenant elects to terminate this Lease upon a partial taking of a portion of the Premises, the Rent payable under this Lease will be diminished by an amount allocable to the portion of the Premises which was so taken or sold. If this Lease is not terminated upon a partial taking of the Building or Premises, Landlord will, at Landlord’s sole expense, promptly restore and reconstruct the Building and Premises to substantially their former condition to the extent the same is feasible. However, Landlord will not be required to spend for such restoration or reconstruction an amount in excess of the net amount received by Landlord as compensation or damages for the part of the Building or Premises so taken.

12.3 Awards . As between the parties to this Lease, Landlord will be entitled to receive, and Tenant assigns to Landlord, all of the compensation awarded upon taking of any part or all of the Building or Premises, including any award for the value of the unexpired Term. However, Tenant may assert a claim in a separate proceeding against the condemning authority for any damages resulting from the taking of Tenant’s trade fixtures or personal property, or for moving expenses, business relocation expenses or damages to Tenant’s business incurred as a result of such condemnation.

13. ASSIGNMENT AND SUBLETTING .

13.1 Limitation . Except in the case of any transfer permitted under Section 13.67, Tenant will not assign all or any of its interest under this Lease, sublet all or any part of the Premises or permit the Premises to be used by any parties other than Tenant and its employees, contractors, guests and invitees without Landlord’s prior written consent.

13.2 Notice of Proposed Transfer; Landlord’s Options . If Tenant desires to enter into any assignment of this Lease or a sublease of all or any part of the Premises, Tenant will first give Landlord written notice of the proposed assignment or sublease, which notice will contain the name and address of the proposed transferee, the proposed use of the Premises, statements reflecting the proposed transferee’s current financial condition and income and expenses for the past 2 years, and the principal terms of the proposed assignment or sublease. Except in the case of any transfer permitted under Section 13.7, if Tenant seeks to assign the Lease or sublet a

 

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portion of the Premises for the entire remainder of the Term, Landlord shall have the additional right to terminate this Lease as to that portion of the Premises which Tenant seeks to assign or sublet. Landlord may exercise such right to terminate by giving written notice to Tenant at any time prior to Landlord’s written consent to such assignment or sublease. If Landlord exercises such right to terminate, Landlord shall be entitled to recover possession of such portion of the Premises on the proposed date for possession by such assignee or subtenant, except that Tenant may revoke its request for Landlord&r