Extended Term Tenant shall have the option to extend the Term for two (2) consecutive five (5) year periods (the "FIRST EXTENDED TERM" and "SECOND EXTENDED TERM", respectively) on all the terms and conditions contained in this Lease including, without limitation, continuation of the adjustment of the Base Rent on an annual basis as provided in Section 3.3 below (provided only that upon commencement of the First Extended Term the only remaining option to extend the Term shall be the Second Extended Term and upon exercise of the option with respect to the Second Extended Term, no further right to extend the Term shall exist). Tenant shall deliver, if at all, written notice of its exercise of the option ("OPTION NOTICE") to Landlord at least six (6) months but not more than one (1) year before the expiration of the Term or First Extended Term, as the case may be. In the event Tenant fails to deliver the applicable Option Notice within the time allowed, Landlord shall deliver written notice to Tenant of Tenant's failure to deliver the Option Notice, and Tenant shall then have thirty (30) days from receipt of such notice within which to deliver the Option Notice, if at all, to Landlord. In the event (and only in the event) that, Tenant fails to deliver an Option Notice to Landlord within such thirty (30) days, Tenant shall be considered to have elected not to extend the Term of this Lease and thereafter, Tenant shall have no further right to extend the Term of this Lease. References in this Lease to the "Term" shall include the initial Term of fifteen (15) years and shall, in addition, include the First Extended Term and the Second Extended Term, if applicable.
Extension Term The Term of this Lease of all of the Premises may be extended for the Extension Term by unconditional written notice from Tenant to Landlord at least twelve (12) (but not more than fifteen (15)) months before the end of the Initial Term, time being of the essence. If Tenant does not timely exercise this option, or if on the date of such notice or at the beginning of the Extension Term (i) an Event of Default by Tenant exists, or (ii) Tenant is not leasing sixty percent (60%) or more of the Premises, or (iii) Tenant has made any Transfer under Article 13 (other than a Related Party Transfer), at Landlord’s option upon written notice to Tenant, Tenant’s right to extend the Term of this Lease shall irrevocably lapse and be void and of no further force and effect, Tenant shall have no further right to extend, and this Lease shall expire at the end of the Initial Term. If Tenant fails to timely exercise its rights hereunder, then within seven (7) days of Landlord’s request therefor, Tenant shall execute and deliver to Landlord a certification, in recordable form, confirming the Tenant’s failure to exercise (or waiver of) such right, and Tenant’s failure to so execute and deliver such certification shall (without limiting Landlord’s remedies on account thereof) entitle Landlord to execute and deliver to any third party, and record, an affidavit confirming the failure or waiver, which affidavit shall be binding on Tenant and may be conclusively relied on by third parties. All references to the Term shall mean the Initial Term as it may be extended by the Extension Term. The Extension Term shall be on all the same terms and conditions except that the Base Rent for the Extension Term shall be as set forth below.
Option to Extend Lease Term Landlord hereby grants to Tenant an option to extend the Lease Term for either a) a one (1) year period; b) a two (2) year period; or c) a three (3) year period (“Option Period”), on the following terms and conditions:
A. Tenant must give Landlord notice in writing of its exercise of the option in question, and the length of the Option Period, no earlier than 270 days before the date the Lease Term would end, but for the exercise of the said option, and no later than 180 days before the date the Lease Term would end, but for the exercise of the said option.
B. Tenant may not extend the Lease Term pursuant to any option granted by this paragraph if Tenant is in Default beyond any applicable notice and cure period as of the date of exercise of the option, or as of the date this Lease would have been terminated but for said exercise.
C. All terms, covenants and conditions of this Lease shall apply during the option period, except that the Base Monthly Rent for the Option Period shall be determined as provided in section D below.
D. The Base Monthly Rent for the Option Period shall be the greater of: (i) the Base Monthly Rent payable for the last month of the Premises Lease Term, or (ii) ninety-five (95%) percent of the then fair market monthly rent determined as of the commencement of the Option Period, based upon a lease for premises of like size, quality and location in the Menlo Park area. If the parties are unable to agree upon the fair market monthly rent for the Premises for the Option Period within 30 days from Tenant’s delivery of notice of exercise of the option, then the fair market monthly rent shall be determined by appraisal conducted pursuant to subsection E of this paragraph.
E. In the event it becomes necessary to determine by appraisal the fair market rent of the Premises for the purpose of establishing the Base Monthly Rent during the Option Period, then such fair market monthly rent shall be determined by three real estate appraisers, all of whom shall be members of the American Institute of Real Estate Appraisers, with not less than five years’ experience appraising real property (other than residential or agricultural property) located in San Mateo County, California, in accordance with the following procedures:
(i) The party demanding an appraisal (the “Notifying Party”) shall notify the other party (the “Non-Notifying Party”) thereof by delivering a written demand for appraisal, which demand, to be effective, must give the name, address, and qualifications of an appraiser selected by the Notifying Party. Within 10 days of receipt of said demand, the Non-Notifying Party shall select its appraiser and notify the Notifying Party, in writing, of the name, address, and qualifications of an appraiser selected by it. Failure by the Non-Notifying Party to select a qualified appraiser within said 10 business day period shall be deemed a waiver of its right to select a second appraiser on its own behalf; and the Notifying Party shall select a second appraiser on behalf of the Non-Notifying Party within five days after the expiration of said 10 business day period. Within 10 business days from the date the second appraiser shall have been appointed, the two appraisers so selected shall appoint a third appraiser. If the two appraisers fail to select a third qualified appraiser, the third appraiser shall be selected by the American Arbitration Association or if it shall refuse to perform this function, then at the request of either Landlord or Tenant, such third appraiser shall be promptly appointed by the American Arbitration Association or, if it shall refuse to perform this function then, at the request of either Landlord or Tenant, such third appraiser shall be promptly appointed by the then Presiding Judge of the Superior Court of the State of California, County of San Mateo.
(ii) The three appraisers so selected shall meet in Menlo Park, California, not later than 20 days following the selection of the third appraiser. At said meeting the appraisers so selected shall attempt to determine the fair market monthly rent of the Premises for the Option Period.
(iii) If the appraisers so selected are unable to complete their determinations in one meeting, they may continue to consult at such times as they deem necessary for a 15 day period from the date of the first meeting, in an attempt to have at least two of them agree. If, at the initial meeting or at any time during said 15 day period, two or more of the appraisers so selected agree on the fair market rent of the Leased Premises, such agreement shall be determinative and binding on the parties hereto, and the agreeing appraisers shall, in simple letter form executed by the agreeing appraisers, forthwith notify both Landlord and Tenant of the amount set by such agreement.
(iv) If two or more appraisers do not so agree within said 15 day period, then each appraiser shall, within five days after the expiration of said 15 day period, submit his independent appraisal in simple letter form to Landlord and Tenant stating his determination of the fair market rent of the Premises for the Option Period. The parties shall then determine the fair market rent for the Premises by determining the average of the fair market rent set by each of the appraisers. However, if the lowest appraisal is less than eighty-five percent (85%) of the middle appraisal then such lowest appraisal shall be disregarded and/or if the highest appraisal is greater than one hundred fifteen percent (115%) of the middle appraisal then such highest appraisal shall be disregarded. If the fair market rent set by any appraisal is so disregarded, then the average shall be determined by computing the average set by the other appraisals that have not been disregarded.
(v) Nothing contained herein shall prevent Landlord and Tenant from jointly selecting a single appraiser to determine the fair market rent of the Premises, in which event the determination of such appraisal shall be conclusively deemed the fair market rent of the Premises.
(vi) Each party shall bear the fees and expenses of the appraiser selected by or for it, and the fees and expenses of the third appraiser (or the joint appraiser if one joint appraiser if one joint appraiser is used) shall be borne fifty percent (50%) by Landlord and fifty percent (50%) by Tenant.
F. The option rights of Tenant under the within article 20 of this Lease, and the extended term thereunder, are granted solely and exclusively for Tenants’ personal benefit and may not be assigned or transferred by Tenant other than as part of a Voluntary Permitted Transfer.
G. The Base Monthly Rent for the remainder of the Option Period, if any, shall be adjusted by annual CPI increases.