Early Termination Option Lessee shall have the right to terminate this Lease on March 31, 2005, September 30, 2005, March 31, 2006, or September 30, 2006 (each an “Early Termination Date”). Lessee shall give written notice of Lessee’s election to terminate, and such written notice shall be delivered to Lessor at least six (6) months prior to the applicable Early Termination Date. Should Lessee elect to terminate this Lease, Lessee shall pay a termination fee “Early Termination Fee”, and the Early Termination Fee shall be delivered to Lessor at least ninety (90) days prior to the applicable Early Termination Date. If the Early Termination Fee is delinquent, then the Lease shall not be terminated until the next following Early Termination Date which is at least 90 days after the Early Termination Fee is paid. The Early Termination Fee shall consist of the sum of:
(1) The unamortized portion of Lessor’s out-of-pocket costs (“Lessor’s Work Costs”) incurred in connection with making the Premises available to Lessee pursuant to this Lease (including any expansion and/or increase of the Premises), such costs including but not limited to: costs of completing the tenant improvements, space planning and design fees, contractor’s fees and profits, sales taxes, insurance premiums for builder’s risk insurance in connection with such work, clean-up, computer or other telecommunications cabling work, permit fees, the cost of demolishing existing improvements, if any, leasing fees and commissions, and legal fees. The unamortized portion shall be determined by taking the total of such costs over the term of this Lease, and amortizing them from the date incurred (but not earlier than the Commencement Date) over the remaining initial term of this Lease using an assumed interest rate of eight percent (8%). No later than ninety (90) days after the completion of Lessor’s Work, Lessor shall deliver to Lessee a full and complete accounting of Lessor’s Work Costs, including full detail and background documentation reasonably requested by Lessee, for Lessee’s review and approval, together with an amortization schedule based on the final amount of Lessor’s Work Costs. So long as Lessee finds no reasonable basis on which to challenge such accounting or amortization schedule by providing written objection to Lessor within 30 days, this accounting shall be used by Lessee in determining the amount of any Early Termination Fee due hereunder. Plus
(2) Seventy-five percent (75%) of the value of the rental abatement associated with the Space Pocket, which value shall be amortized over the final twenty-four (24) months of this Lease. By way of example, if the value of the rental abatement for the Space Pocket is $100,000 and the Early Termination Date is September 30, 2006, the Early Termination Fee shall include an additional $18,750 ($100,000 divided by 24 months, times 6 months then remaining, times 75%) for the value of the rent abatement for the Space Pocket.
Early Termination Right (a) Tenant shall have a right to terminate this Lease effective anytime on or after the last day of the thirty-sixth (36th) full calendar month of the Term (as applicable, the “Early Termination Date”) by providing Landlord with written notice (a “Termination Notice”) of its intent to terminate given at least nine (9) months prior to the applicable Early Termination Date.
(b) If Tenant elects to exercise the right to terminate this Lease in accordance with this Section 3.03, Tenant shall pay Landlord a cancellation payment (the “Termination Fee”) equal to One Hundred Twenty-Five Thousand and No/100 Dollars ($125,000.00). Twenty-five percent (25%) of such Termination Fee shall be paid by Tenant to Landlord concurrently with the giving of the Termination Notice, twenty-five percent (25%) of such Termination Fee shall be paid by Tenant to Landlord four (4) months prior to the Early Termination Date, and the remaining fifty percent (50%) of such Termination Fee shall be paid by Tenant to Landlord on the Early Termination Date.
(c) Provided that Tenant pays the Termination Fee, the Lease shall terminate as of the Early Termination Date with the same force and effect as if scheduled to expire according to its terms as of such date, and all terms and provisions of this Lease (including, without limitation, the condition of the Premises upon expiration of the Term and survival of indemnity obligations) shall be applicable thereto. If Tenant fails to timely pay the Termination Fee, Tenant’s exercise of its right to terminate shall be null and void and of no force and effect whatsoever, this Lease shall continue in full force and effect and Tenant shall have no further right to terminate this Lease. Notwithstanding the foregoing, Tenant’s exercise of its rights under this Section 3.03 shall, if Landlord so elects in its absolute discretion, be ineffective in the event that Tenant is in default of this Lease at the time of delivery of a Termination Notice or upon the applicable Early Termination Date.
