The Rockefeller Group response to time inc 12 23 13

Rockefeller Group Development Corporation 1221 Avenue of the Americas, New York, NY 10020-1095 Tel: 212-282-2100

December 23, 2013 Mr. Mitchell Steir, Chairman & CEO Mr. Howard Nottingham, Executive Managing Director Mr. Matthew Barlow, Executive Vice President, Director Studley 399 Park Avenue – 11th Floor New York, NY 10022 Re: Time Inc. Dear Mitch, Howard, and Matt: Enclosed are proposals for the leasing of office space by Time Inc. at 1271 Avenue of the Americas and Hudson West Hoboken. We are pleased that Time Inc. is considering both of these locations, and we appreciate the opportunity to submit the proposals to you. As you are aware, Time Inc. and The Rockefeller Group have enjoyed a long and successful business relationship. Approximately 60 years ago, our two organizations partnered in the development of 1271 Avenue of the Americas and named it the Time & Life Building. While much has changed in the world since the building opened, the Time & Life Building remains an icon and one of the most desirable office buildings in Manhattan, with outstanding accessibility via multiple modes of public transportation, superior technological infrastructure, and world-class amenities (i.e., Rockefeller Center, restaurants, shops, culture, parks, etc.). I am confident that the stature of the building as a premier business address will be preserved and enhanced by the comprehensive improvements planned for the building. While my colleagues and I would be pleased if Time Inc. remains in 1271, we most importantly want to keep Time Inc. as a tenant and business partner. We believe that Hudson West Hoboken is an outstanding alternative. This architecturally-striking office building will offer a modern, efficient, and sustainable office environment in a dynamic community. Furthermore, the economic incentives available from the State of New Jersey are unparalleled, adding significant value to the many physical attributes of the project, making Hudson West Hoboken an extremely cost-effective option. In addition, there are numerous public transportation options (i.e., PATH trains, ferries, and buses) connecting Hoboken to Manhattan and the entire tri-state region. Given the success of our first development project with Time Inc., we would be thrilled to replicate our efforts and successes with Time Inc. in Hoboken. As President and Chief Executive Officer of The Rockefeller Group, I want to express my personal commitment to this transaction and to furthering our long-standing and highly valued business partnership.


At your convenience, my colleagues and I would like to meet with representatives of Time Inc. and you to present the unique and flexible options The Rockefeller Group can deliver to your client. This meeting would provide an opportunity to discuss any questions you may have regarding the proposals, and to determine what we can do to reach agreement with Time Inc. regarding a long-term real estate solution for them. Thank you again for the opportunity to submit the proposals. If you have any questions or if I can be of any assistance, please do not hesitate to contact me. Very Truly Yours,

Atsushi Nakajima President and Chief Executive Officer Cc: Mr. Edward J. Guiltinan Mr. Leslie E. Smith

1271 Avenue of the AmericAs hudson West | hoboken

Office Lease PrOPOsaLsDecember 23, 2013


December 23, 2013 Mr. Mitchell Steir, Chairman & CEO Mr. Howard Nottingham, Executive Managing Director Mr. Matthew Barlow, Executive Vice President, Director Studley 399 Park Avenue – 11th Floor New York, NY 10022 Re: Time Inc. Lease Proposal for 1271 Avenue of the Americas Gentlemen: Thank you for your proposal for Time Inc. to continue its occupancy at 1271 Avenue of the Americas, New York, NY (“Building”). The Rockefeller Group values its long-term relationship with Time, Inc. and hopes to continue this relationship. Accordingly, the Rockefeller Group is pleased to present the following counterproposal: Tenant: Time Inc. or the newly formed publicly traded entity

which is to be spun off by Time Warner (“Tenant”).

Landlord: Rockefeller Center North, Inc. (“Landlord”).

Extension Premises Commencement Date:

The lease will commence on the date upon which Landlord delivers vacant possession of the Extension Premises, as defined hereinafter, to Tenant with the Additional Landlord Work, as defined hereinafter, substantially completed (“Extension Premises Commencement Date”). The Additional Landlord Work is targeted to be completed in approximately ten months (i.e., on or about October 31, 2016, assuming Landlord gets possession on January 1, 2016). Accordingly, the targeted Extension Premises Commencement Date is November 1, 2016. Upon the Extension Premises Commencement Date, Landlord will deliver the Extension Premises to

Mr. Mitchell Steir Mr. Howard Nottingham Mr. Matthew Barlow December 23, 2013 Page 2

Tenant for Tenant to commence its alterations to the Extension Premises. Upon Tenant’s completion of its alterations to the Extension Premises, Tenant will relocate to the Extension Premises.

Extension Premises: Tenant will initially lease 610,777 rentable square feet of above-grade office space in the Building (“Extension Premises”), which will be composed of the following: In addition, Tenant will have the right to lease below-grade space. The amount, location, and use of such space are to be discussed by Tenant and Landlord.

Floor Rentable Square Feet 12 39,308 11 39,326 9 39,121 8 45,375 7 75,941 6 75,825 5 75,721 4 75,655 3 77,841 2 66,664 Total 610,777

Pre-Commencement Expansion of the Extension Premises:

Tenant will have the right by providing notice no later than January 1, 2015 to lease up to four additional floors of above-grade office space that is contiguous with the Extension Premises on a full-floor, contiguous basis at the same terms and conditions as those set forth herein.

Term: The term (“Term”) of the lease will commence on the Extension Premises Commencement Date and expire on the day before the fifteenth anniversary of the Rent Commencement Date (i.e., December 31, 2032). The Rent Commencement Date is defined in the Free Rent section.


Existing Lease: On or before December 31, 2015, Tenant will surrender the Extension Premises and relocate to other floors in the Building leased by Tenant to allow Landlord to perform the Additional Landlord Work in the Extension Premises as set forth hereinafter. Tenant’s existing lease with respect to the Extension Premises will terminate as of December 31, 2015. From January 1, 2016 to December 31, 2017, Tenant will not pay base rent or additional rent for the Extension Premises pursuant to Tenant’s existing lease. Landlord estimates the value of this rent abatement at approximately $70,000,000. Tenant and Landlord will discuss the arrangements whereby Tenant will deliver additional floors leased pursuant to Tenant’s existing lease to Landlord as Tenant relocates to the Extension Premises pursuant to the new lease.

Base Rent: From and after the Extension Premises Commencement Date, Tenant will pay the following annual base rental rates for the Extension Premises:

Tenant will also pay base rent for the below-grade space it leases, and the rental rates will be determined based upon the location of such space.

Year(s) Annual Base Rental Rate 1-5 $73.00 per rentable square foot per year

6-10 $78.00 per rentable square foot per year 11-15 $83.00 per rentable square foot per year

Free Rent: Provided Tenant is not in default of the lease or in bankruptcy, Tenant will not be required to pay base rent for the Extension Premises pursuant to the new lease from the Extension Premises Commencement Date to December 31, 2017. Tenant will commence paying base rent for the Extension Premises pursuant to the new lease as of January 1, 2018 (“Rent Commencement Date”). As set forth above in the Existing Lease section, Tenant’s obligation to pay base rent and additional


rent for the Extension Premises pursuant to Tenant’s existing lease ceases as of December 31, 2015.

Tenant Improvement Allowance: Landlord will provide Tenant with an allowance of $50 per rentable square foot of the Extension Premises (“Tenant Improvement Allowance”) for the design and construction of the initial alterations in the Extension Premises. The Tenant Improvement Allowance will be paid on a “progress-pay” basis. Tenant will provide appropriate supporting documentation when seeking payment of the Tenant Improvement Allowance. Softs costs incurred by Tenant that can be applied against the Tenant Improvement Allowance will not exceed 20% of the Tenant Improvement Allowance. Any costs of design and construction of the initial alterations in excess of the Tenant Improvement Allowance will be the responsibility of Tenant. Tenant will have the right to credit any unused portion of the Tenant Improvement Allowance against future payments of base rent.

Escalations: Operating Expenses: Tenant will pay its proportionate share of increases in operating expenses in excess of a base year amount. The base year for operating expenses will be the calendar year commencing January 1, 2018. In addition to operating expense escalations for above-grade space, Tenant will pay operating expense escalations for any below-grade space it leases. Operating expense escalations payable with respect to the below-grade space will be based on the services provided to the below-grade space (i.e., certain services, such as cleaning, are not performed in tenants’ below-grade space, so such expenses are not included in the expenses for below-grade space). Operating expenses will be adjusted to reflect 100%


occupancy in the base year and each subsequent year. The management fee included in operating expenses will be reasonably consistent with those management fees charged at other first-class office buildings in midtown Manhattan. There will not be a cap on escalations. Provided Tenant is not in default under the lease beyond applicable notice and cure periods or in bankruptcy, Tenant, or a certified public accounting firm engaged by Tenant (provided such firm is not engaged on a contingency or success-fee basis), will have the right to audit Landlord’s books and records with respect to operating expenses within six months of receipt of an escalation statement, provided that such audit right will be limited to the operating expenses for the year for which the escalation statement was received. Tenant and/or any such certified public accounting firm will be required to enter into a non-disclosure agreement before performing an audit. Real Estate Taxes: Tenant will pay its proportionate share of increases in real estate taxes in excess of a base year amount. The base year for real estate taxes will be calendar year commencing January 1, 2018.

Renewal Rights: Tenant will be provided one ten-year renewal option, subject to the following:

i. Tenant will have the right to renew the lease on a full-floor basis with respect to no less than 85% of the Extension Premises;

ii. If Tenant elects to renew the lease with respect to less than the entire Extension Premises, the space renewed must be renewed on a “bottom up” or “top down” contiguous basis as determined by Landlord;

iii. Tenant must provide written notice of its intention to renew the lease at least 36 months prior to the expiration of the Term;


iv. Landlord will have the right to nullify Tenant’s exercise of the renewal option if, at any time on or before the commencement of the renewal term, Tenant is in default under the lease beyond applicable notice and cure periods or is in bankruptcy;

v. Tenant must be in occupancy of at least 85% of the Extension Premises at the time it exercises the renewal option for the Extension Premises;

vi. The renewal rent will be the then current Fair Market Value rent for comparable office space taking into account all relevant factors (“FMV”);

vii. The FMV determination will be made between the 15th month and the 12th month prior to the expiration of the Term. If the parties cannot agree upon the FMV determination in that period, baseball arbitration will be used to determine the FMV; and

viii. The renewal option will be personal to Tenant or a Permitted Transferee (defined in the Assignment and Subletting section below).

Electricity: Tenant will pay Landlord 103% of the cost of electricity, as measured by submeter. No base Building systems (including, but not limited to, HVAC) will be included on Tenant’s electric meter. Landlord acknowledges that Tenant has requested electric service for the Extension Premises of eight watts per rentable square foot. As a point of reference, Tenant is currently using approximately one-and-one-half to two watts per usable square foot. Landlord is confident that it can accommodate Tenant’s demonstrated electric requirement, and Landlord would appreciate the opportunity to discuss this issue with Tenant.


Vertical Transportation: Prior to the Extension Space Commencement Date,

Landlord will modernize the Building’s passenger elevators, including installation of a destination dispatch control system, and Landlord will renovate the elevator cabs. Landlord requires additional information from Tenant to address Tenant’s request to have the right to install additional escalators between the lobby and the 2nd floor.

Additional Landlord Work: Landlord is planning a comprehensive renovation of the Building. The renovations will include replacing the existing convector units with smaller convectors. In addition, Landlord will replace the existing perimeter windows with larger, more energy-efficient windows that will extend lower and higher than the existing windows and which will greatly enhance the light in the space. The new convectors and windows are collectively referred to herein as the “Additional Landlord Work”. In addition to the Additional Landlord Work, Landlord is planning other renovations, including the Building’s street-level lobby and HVAC fans, as well as the elevator modernization and renovation project mentioned in the Vertical Transportation section above. The base rent set forth in this proposal reflects the Additional Landlord Work and other renovations being performed.

HVAC: Landlord will provide building-standard HVAC service from 8:00 AM to 8:00 PM on weekdays and from 9:00 AM through 1:00 PM on Saturdays, excluding Building holidays (“HVAC Hours”). If so requested by Tenant, Landlord will provide HVAC service at times other than HVAC Hours, for which Tenant will pay Landlord an overtime HVAC usage fee equal to 90% of 1271’s then current overtime HVAC rate. Increases in the Building’s overtime HVAC charge shall be based on the percentage


increase in the cost per kilowatt hour of electricity. Tenant will have the right to install a supplemental cooling system in the Extension Premises, subject to all applicable laws, ordinances, codes, rules, regulations, specifications, and guidelines and Landlord’s approval. Landlord will provide chilled water for Tenant’s supplemental cooling system. Tenant will pay 90% of the Building’s then current rate for chilled water and tap fees. Increases in the Building’s chilled water rate shall be based on the percentage increases in labor and utility costs.

Cleaning: Landlord, at its expense, will provide cleaning pursuant to a cleaning specification to be attached to the lease.

Use: The Extension Premises may be used for general, administrative and executive offices and all other appropriate and typical uses ancillary to Tenant’s business, including studios, in compliance with all applicable laws, ordinances, codes, rules, regulations, specifications, and guidelines. If a change of use is required for any of Tenant’s legal uses, Landlord, at Tenant’s sole cost and expense, will fully cooperate with Tenant in obtaining all required municipal approvals.

Alterations: Tenant will be responsible for the design, permitting, and construction of the initial alterations to prepare the Extension Premises for Tenant’s occupancy in accordance with the initial plans and specifications drawn by Tenant’s architect and submitted by Tenant to Landlord. The initial plans and the initial alterations, as well as any future alterations performed by Tenant, must comply with all applicable laws, ordinances, rules, regulations, specifications and guidelines and, except as provided in the following paragraph, are subject to Landlord’s approval. Should Landlord refuse consent, Landlord will do so in writing, stating the reasons for such non-consent, within 15 business days of


receiving a written request from Tenant with all required completed supporting documentation. If Landlord does not respond within such 15 business-day period, Tenant may issue Landlord a notice indicating that if Landlord does not respond within three business days of receipt of such notice, Landlord’s consent will be deemed provided. If Landlord does not respond within such subsequent three business-day period, then Landlord’s consent will be deemed to have been provided. Resubmissions of plans thereafter will be approved or disapproved (in writing with specific reasons for disapproval) by Landlord within ten business days from submission. If Landlord does not respond within such subsequent ten business-day period, Tenant may issue Landlord a notice indicating that if Landlord does not respond within two business days of receipt of such notice, Landlord’s consent will be deemed provided. If Landlord does not respond within such subsequent two business-day period, then Landlord’s consent will be deemed to have been provided. Landlord’s consent will not be required for alterations that (i) do not (x) affect the Building’s structure or systems, (y) require construction permits, or (z) cost more than $10 per rentable square foot of the area upon which alterations are being performed or (ii) are purely aesthetic (provided they are not visible outside of the Extension Premises). However, Tenant will be required to notify Landlord of any such alterations that do not require Landlord’s consent and all other conditions of this section will apply whether or not consent is required. Landlord agrees to cooperate in the execution of required permit forms to expedite the overall permitting and construction timeframe. There will be no charge by Landlord for the review of plans by Landlord or any inspections by Landlord with regard to the initial alterations and future alterations. However, Tenant will pay all actual, reasonable third-party review fees incurred by Landlord related to


alterations. There will not be a cap on such third-party review fees. Subject to Landlord’s reasonable approval, Tenant will have the right to select the contractors, subcontractors, engineers, and architects of its choice to perform its alterations. Tenant’s restoration obligations pursuant to its existing lease with respect to its existing alterations will continue to apply. However, Tenant will not be obligated to restore the Extension Premises pursuant to its new lease, except for non-traditional office improvements installed by Tenant, including convenience stairs, auditoriums, studios, data centers, contents of conduit, generators, UPS systems, fuel tanks, fuel lines, cooling towers, private bathrooms, kitchens and related equipment, dining areas, cafeterias, satellite dishes, and antennas.

Fire Stairs: Tenant will have the right to use the fire stairs connecting the contiguous floors of the Extension Premises as convenience stairs, subject to all applicable laws, ordinances, codes, rules, regulations, specifications, and guidelines and appropriate indemnifications. Tenant, at its cost and expense, will install an internal security system as part of this right, and will tie such system into 1271’s security and Class E systems. Tenant will have the right to make cosmetic alterations to the fire stairs, subject to Landlord’s review and approval and all applicable laws, ordinances, rules, regulations, specifications and guidelines.

Hoist/Freight Elevators: To be discussed.

Expansion Options and Rights: To be discussed.

Contraction Options: To be discussed.

Roof Space: Tenant will be provided a reasonable amount of roof space at no extra cost for the installation of satellite


dishes, antennas, and other equipment/infrastructure supporting Tenant’s operation, subject to all applicable laws, ordinances, codes, rules, regulations, specifications, and guidelines and Landlord’s approval.

Assignment and Subletting: Tenant will have the right to assign and sublet to (i) Tenant’s affiliates, (ii) purchasers of 51% or more of the stock of Tenant or all or substantially all of the assets of Tenant (including Tenant’s leasehold), or (iii) a successor by merger or consolidation without Landlord’s consent, provided that the successor has a net worth equal to or greater than the greater of (x) Tenant’s net worth as of the date of the lease, and (y) Tenant’s net worth as of the date of the requested assignment. For purposes of this proposal, any assignee or subtenant pursuant to (i), (ii), or (iii) above will be deemed a “Permitted Transferee.” All rights provided in this proposal that are personal to the named Tenant will inure to the benefit of a Permitted Transferee. Tenant will have the right to sublease all of the Extension Premises to third parties, subject to Landlord’s reasonable approval. Tenant will not have the right to sublease the Extension Premises to an occupant of the Building or to a tenant to whom Landlord has shown comparable space in the Building for a comparable term in the 6 months prior to the sublease request, if Landlord has a comparable amount of space available for lease for a comparable term. Landlord will receive 50% percent of any net assignment or sublease profits. Landlord will have the right of recapture for sublease space for the same sublease term being offered to a subtenant or for an assignment. Tenant will not have the right to assign or sublease to


(i) a governmental entity, (ii) an entity with diplomatic immunity, (iii) an entity in bankruptcy, (iv) an entity that in the reasonable judgment of Landlord would negatively affect the reputation, character, and/or value of the Building, and (v) an entity that in the reasonable judgment of Landlord would interfere with the quiet enjoyment of the Building by other tenants of the Building. In no event will any assignment or subletting, release or relieve Tenant from its obligations fully to observe or perform all of the terms, covenants and conditions of the lease, and the fact that Landlord may consent to any assignment or subletting will not be construed as constituting such a release of Tenant.

Subordination; Memorandum of Lease:

As a condition to the effectiveness of the new lease, Landlord will provide Tenant with the standard subordination and non-disturbance agreement (“SNDA”) from the existing mortgagee for the Building. Landlord will deliver to Tenant the standard SNDA of any future mortgagee for the Building. Landlord will not provide a SNDA to a subtenant. Upon request by Tenant, Landlord and Tenant, at no cost to Landlord, will enter into a Memorandum of Lease for recording in a form to be attached to the Lease.

Lobby: To be discussed.

Naming, Signage and Exclusivity Rights with regard to the Building:

To be discussed.

Holdover: In the absence of any written agreement to the contrary, if Tenant remains in occupancy of the Extension Premises, or any portion thereof, after the expiration (or other termination) of the Term, Tenant will pay base rent as follows:


i. For the first 60-day period following such expiration (or other termination) at a rate equal to 150% of the greater of (a) the base rent and additional rent due immediately prior to the expiration or other termination of the Term for the entire Extension Premises and (b) FMV.

ii. At all times thereafter at a rate equal to 200% of (a) the base rent and additional rent due immediately prior to the expiration or other termination of the Term for the entire Extension Premises and (b) FMV.

Notwithstanding anything to the contrary, if Tenant does not vacate the Extension Premises within 90 days of the expiration (or other termination) of the Term, Tenant will indemnify Landlord for all damages, including without limitation, consequential damages, as a result of Tenant’s failure to surrender the Extension Premises in accordance with the terms of the lease.

Security Deposit: To be discussed.

Brokerage: Landlord will pay a full commission to Studley in accordance with a separate brokerage agreement to be forwarded by Landlord to Studley.

This document constitutes a proposal for terms and conditions of a proposed transaction and is solely intended to be used as an outline for negotiation of a formal written agreement. This is not an offer, is not binding on the undersigned and may be withdrawn or modified at any time without notice. Nothing herein will require any party to negotiate, in good faith or otherwise, and the undersigned may discontinue negotiations at any time for any reason whatsoever, without any liability or obligation whatsoever. Each party will proceed with negotiations at its sole cost and expense (which may involve substantial transaction costs). No definitive agreement will exist until mutual execution and unconditional delivery of a formal written agreement.



If you have any questions or if I can be of any assistance to you, please do not hesitate to contact me. Very truly yours,

Rockefeller Center North, Inc. by its agent Rockefeller Group Development Corporation

Edward J. Guiltinan, Sr. Vice President & Regional Director

December 23, 2013 Mr. Mitchell Steir, Chairman & CEO Mr. Howard Nottingham, Executive Managing Director Mr. Matthew Barlow, Executive Vice President, Director Studley 399 Park Avenue – 11th Floor New York, NY 10022

Re: Time Inc. Lease Proposal for Build to Suit office space Hudson West Hoboken, NJ

Gentlemen: The Rockefeller Group is pleased to submit the following response to Time Inc.’s request to lease space at our Hudson West Hoboken project. Tenant Time Inc. or the newly formed publicly traded entity that is

to be spun off by Time Warner (“Tenant”).

Landlord Rockefeller Group Development Corporation (“RGDC”) or an affiliate (“Landlord”).

Premises Landlord shall construct a 20-story LEED Gold office building of approximately 706,507 gross square foot (“gsf”), which would include approximately 542,285 rentable square feet (“rsf”) of office (BOMA measurement*), ground floor space, and below grade space (“Office Premises”), 8,701 square feet of retail space at the base of the Building (“Retail Premises”), and a structured parking facility that accommodates up to 283 cars (collectively the “Building”). The Building is identified as Building 3 in the Hoboken Project Description section of this submission. The structured parking is located on floors two through four of the Building with additional executive valet spaces located in one below-grade level. Detailed Building Specifications, along with floor plates, design elements, and other aspects of the Building are included in this submission.


Rockefeller Group Development Corporation 500 International Drive, Suite 345, Mt. Olive, NJ 07828 Tel: 973-347-9100

* The rentable square footages presented above are based on the BOMA/ANSI 1996 standard of measurement. The chart below details the rentable square feet of the Office Premises calculated on different measurement standards commonly used in New York and New Jersey. A detailed square footage analysis for each measurement standard is included in the Site and Building Information section.

BOMA 1996 REBNY 19%

loss factor

REBNY 27% loss

factor Rentable Square Feet of Office Premises

542,285 626,198 694,822

Tenant Space Requirement

Landlord maintains flexibility to increase the size of the Building to accommodate a larger initial requirement or to provide additional expansion. Specifically, Landlord can add three additional floors to accommodate a 600,000 rentable square foot (BOMA measurement) initial space requirement as well as one additional floor of expansion space. Landlord proposes to collaborate closely with Tenant to modify the building size, design, and related economics to the extent Tenant so desires.

Lease Commencement Date

The lease shall commence upon the substantial completion of the Building (“Lease Commencement Date”), projected to be January 1, 2018. To provide the most efficient and economical solution for the Tenant, this proposal assumes that Landlord shall be responsible for constructing the tenant improvements. A detailed project schedule showing how this delivery date will be achieved is included at the end of this section. The schedule and projected delivery date are dependent upon obtaining all necessary approvals within the time frames provided, which Landlord is highly confident can be accomplished. The Annual Net Rent, Parking Rent and Operating Expenses & Real Estate Taxes shall commence on the Lease Commencement Date.



Pre-Commencement Expansion of the Initial Premises

This proposal contemplates Tenant being the only office tenant in the Building. No contraction or expansion option is proposed.

Possession and Commencement

Landlord shall deliver the entire Office Premises (inclusive of Tenant Improvement work) on or before January 1, 2018.

Lease Term The initial term of the lease shall be 15 years from the Lease Commencement Date.

Renewal Rights Provided that Tenant maintains a minimum occupancy threshold (to be discussed), Tenant shall have the right to renew the lease subject to the following:

i. Tenant will have the right to renew the lease on a full-floor basis with respect to no less than 80% of the Office Premises;

ii. If Tenant elects to renew the lease with respect to less than the entire Office Premises, the space renewed must be renewed on a “bottom up” or “top down” contiguous basis as determined by Landlord;

iii. Tenant must provide written notice of its intention to renew the lease at least 36 months prior to the expiration of the Term;

iv. Tenant must be in occupancy of at least 80% of the Office Premises at the time it exercises the renewal option for the Office Premises;

v. The renewal rent will be the then current Fair Market Value rent for comparable office space taking into account all relevant factors (“FMV”);

vi. The FMV determination will be made between the 15th month and the 12th month prior to the expiration of the Term. During that designated three-month period, Landlord shall provide its determination of FMV. Within 60 days of the receipt of the Landlord’s determination, Tenant shall i) accept Landlord’s determination, ii) rescind its exercise option, or iii) provide its own determination of FMV. If Tenant provides its own determination of FMV, Landlord's consultant and Tenant's consultant will select a mutually acceptable third-party arbitrator, who will select



either Landlord’s or Tenant’s final determination, which shall be binding on both Landlord and Tenant (i.e., baseball arbitration)

After the Annual Net Rent for the renewal period has been determined, the rent escalation of two percent (2%) every year will continue.

Annual Net Rent The lease contemplated herein assumes that Tenant will be the only office tenant in the Building and that the lease will be a triple-net lease. The first year’s Annual Net Rent for the Office Premises shall be $25,487,395. The Annual Net Rent for the Office Premises will increase by two percent (2%) every year. The first year’s Annual Net Rent per rentable square foot is presented below based on the various standards of building measurement.

BOMA 1996 REBNY 19% loss factor

REBNY 27% loss factor

First year’s Annual Net Rent (per sq ft)

$47.00 $40.70 $36.68

Based upon the New Jersey State incentives (detailed in the Incentive Analysis Section of this submission) and the anticipated employment that will be created by Tenant, it is anticipated that the net effective occupancy cost to Tenant will be reduced significantly. In addition to the Annual Net Rent, Tenant will be responsible for expenses detailed in the Operating Expenses & Real Estate Taxes section of this Lease Proposal below.

Operating Expenses & Real Estate Taxes

Tenant shall be responsible for the cost of all building operating expenses, real estate taxes, tenant electricity costs, and parking costs, as estimated below (net of operating expenses and real estate taxes collected from retail tenants, if any). Tenant Electricity Tenant shall pay all Tenant electricity costs for the Office Premises as measured by a direct meter. Tenant electricity



shall be the electricity used by Tenant in excess of base building utility expenses, which are included in Operating Expenses. Any retail tenant located in the Retail Premises will be responsible for its own utility costs. Real Estate Taxes Tenant shall pay all real estate taxes or PILOT (i.e., payment in lieu of taxes) payments that are required. Landlord estimates annual real estate taxes or PILOT payments to be approximately $4.50 per rsf (BOMA/ANSI 1996) for the Office Premises. It is anticipated that a five-year PILOT will be negotiated with the City of Hoboken as part of the entitlement process. If this is successfully accomplished, it provides for a five-year phase-in until typical real estate taxes become applicable. It is reasonable to assume that typical real estate taxes will increase by approximately 3% per annum. The estimated first year (2018) operating expenses and real estate taxes for the Building is provided below (calculated on the BOMA/ANSI 1996 standard of measurement): $/rsf Real Estate Tax Expense $4.50 Payroll & Employee Related Expense $2.00 Repairs & Maintenance $2.50 Repairs & Maintenance (Exterior) $0.40 Base Building Cleaning $0.50 Building Utilities Expense $2.50 Insurance Expense $0.30 General and Admin. Expense $0.25 Professional Fees $0.30 Property Management Fees $1.00 Contingency $0.25 - $1.00 Estimated Building Operating Expense

$14.50 - $15.25

1271 Existing Lease As the transaction progresses, Landlord is willing to discuss the selective termination of certain floors of Tenant’s current lease at 1271 Avenue of the Americas.



Electricity

Electricity shall be measured via direct meter and Tenant shall have the option to use its own electricity provider. Landlord shall cooperate with Tenant to maximize energy cost savings and Landlord shall pass through to Tenant all such savings, as well as all rebates and incentives, if any, relative to Tenant’s electrical usage and/or equipment or installations during the initial construction of the Building.

Landlord shall deliver the Building to Tenant with sufficient infrastructure to accommodate a demand of six (6) watts per rentable square foot net of the power requirement for the building HVAC system.

HVAC As Tenant will be the only office tenant in the Building, it will have the ability to control and meet its own heating, ventilation and air conditioning use requirements. All fan powered boxes located within the Tenant Premises shall be connected to Tenant’s direct meter while all DX units will be metered to the core and shell. Tenant will have the right to install a supplemental cooling system in the Building, subject to all applicable laws, ordinances, codes, rules, regulations, specifications, and guidelines and Landlord’s reasonable approval.

Building within a Building

As contemplated herein, Tenant will be the only office tenant in the Building. Therefore, the lobby entrances and check-in will display only Tenant’s brand and serve only Tenant’s population.

All HVAC and electrical systems are designed to serve the Building as a whole. As the only tenant in the Office Premises, Tenant shall have the right to separately contract for facilities management services.

Tenant Work Allowance A tenant work allowance of $21,691,400 ($40 per BOMA/ANSI 1996 rentable square foot) will be provided to Tenant, which may be used (without holdback) toward hard costs, soft costs, moving expenses, and FF&E. The allowance will be made available to Tenant as costs are incurred and Landlord will reimburse Tenant as invoices are received.



Tenant will have the right to apply unused tenant work allowance, if any, against rental obligations.

Landlord’s Work Landlord’s work will be delivered in accordance with the Basis of Design included with this submission.

Cleaning Landlord shall provide base building cleaning pursuant to a cleaning specification to be attached to the lease. Tenant shall have the right to elect to contract for supplemental cleaning with a contractor of its own choice, subject to Landlord's reasonable approval.

Use The Tenant Premises shall be used for any legal purposes consistent with uses typical and appropriate for a first-class office building. Tenant shall have the right and ability to hold events in the Building lobby and/or in plaza areas subject to Landlord’s reasonable approval and local laws.

Alterations Landlord shall have the right to review and approve plans and specifications for Tenant’s improvements (such approval not to be unreasonably withheld), and Landlord shall provide expedited turn-around times on such plans and specifications.

Landlord will inform Tenant of any obligation at the end of it lease term to remove its alterations or improvements (including conduits, risers, cabling, wiring and special alterations such as internal staircases, auditoriums, executive bathrooms and server rooms), if any, when Tenant submits its plans for alterations. Tenant shall be permitted to select its own architects, engineers, and other design consultants.

Fire Stairs Tenant shall have the right to use the fire stairs for commuting between floors, and to make or install improvements or equipment in connection with such use, subject to applicable legal requirements.

Hoist/Freight Elevators This proposal contemplates Landlord managing the tenant improvement work in addition to the base building construction. Therefore, hoist and freight elevators will be efficiently used to complete both base-building and tenant-improvement work as part of Landlord’s overall logistics plan.



Expansion Option and Rights

Not applicable, as Tenant will be the only tenant in the Office Premises.

Contraction Option

No contraction option is provided. Landlord proposes to work with Tenant to adjust the size of the Building as the transaction progresses and Tenant refines its initial space requirements.

Roof Space Landlord shall provide Tenant with roof space for Tenant’s telecommunication equipment at reasonable usage fees to be negotiated, subject to local zoning/building code and Landlord’s review and approval of Tenant’s requirements. Tenant must maintain any equipment it installs on the roof and must also prevent any unsightly conditions at its own cost.

Assignment and Subletting

Tenant will have the right to assign and sublet to (i) Tenant’s affiliates, (ii) purchasers of 51% or more of the stock of Tenant or all or substantially all of the assets of Tenant (including Tenant’s leasehold), or (iii) a successor by merger or consolidation without Landlord’s consent, provided that the successor has a net worth equal to or greater than the greater of (x) Tenant’s net worth as of the date of the lease, and (y) Tenant’s net worth as of the date of the requested assignment. For purposes of this proposal, any assignee or subtenant pursuant to (i), (ii), or (iii) above will be deemed a “Permitted Transferee.” All rights provided in this proposal that are personal to the Tenant will inure to the benefit of a Permitted Transferee. Tenant will have the right to sublease all of the Office Premises to third parties, subject to Landlord’s reasonable approval. Landlord will receive 50% percent of any net assignment or sublease profits received from third parties. Landlord will have the right of recapture space for the same sublease term being offered to a third-party subtenant. Tenant will not have the right to assign or sublease to (i) a



governmental entity (foreign or domestic), (ii) an entity with diplomatic immunity, (iii) an entity in bankruptcy, and (iv) an entity that in the reasonable judgment of Landlord would negatively affect the reputation, character, and/or value of the Building and/or Landlord's adjacent buildings. In no event will any assignment or sublease release or relieve Tenant from its obligations fully to observe or perform all of the terms, covenants and conditions of the lease, and the fact that Landlord may consent to any assignment or subletting will not be construed as constituting such a release of Tenant.

Emergency Power The Building generator is designed to provide support for life safety needs and critical building needs only. Structurally reinforced space shall be provided for two future tenant generators on the roof of the Building. For additional information please refer to the Building Specifications section of this proposal.

Subordination; Memorandum of Lease

Landlord’s properties are not subject to any easements or any other agreements or restrictions. The lease will be subordinate to any future mortgage, but Landlord will provide SNDA’s reasonably satisfactory to all parties. Landlord and Tenant shall enter into a Memorandum of Lease for recording.

Parking/Vehicle Access The Building shall have 229 self-parking spaces located on floors two through four of the Building. There will also be one below-grade level of valet parking that can accommodate approximately 54 additional parking spaces. The self-parking spaces shall be exclusive to Tenant from 8 am to 6 pm, Monday through Friday. Tenant shall pay $300 per month for each of the 283 parking spaces (“Parking Rent”). The Parking Rent shall increase by 2% annually.

Lobby/Elevators As long as Tenant remains the only office tenant in the building, Tenant shall have the right to place its personnel at the lobby desk for the purpose of screening Tenant invitees. Landlord will provide the necessary telecommunications wiring to the lobby desk.



Tenant to have approval rights over any other uses of the Building lobby and over lobby security procedures so long as it remains the only Tenant in the Building.

Naming, Signage and Exclusivity Right with regard to the Building

Subject to local approvals, and at Tenant’s sole cost and expense:

- Tenant may have prominent signage mutually agreeable to Tenant and Landlord. Signage may include signage on the exterior of the Building and monument signage outside the Building

- Tenant shall be given the opportunity to have custom signage in the ground floor elevator lobby

- Tenant shall have the right to install and maintain custom signage on the elevator lobby of all floors.

Restrictions on Leasing to Competitors and to Government Agencies

No premises in Building shall be leased to or occupied by (i) any competitor of Tenant (subject to Tenant providing a list of competitors for Landlord to review) or (ii) any government agency (foreign or domestic) as long as Tenant maintains occupancy of more than 75% of the Building.

Telecommunications Infrastructure

Landlord will provide secure space for dedicated points of entry ("POEs") for Tenant’s telecommunications providers, and secure pathways from such POEs to the Premises.

Landlord shall allow up to three telecommunications providers (for each service provided) of Tenant’s choice to bring service into the Building without charge.

Holdover In the absence of any written agreement to the contrary, if Tenant remains in occupancy of the Office Premises, or any portion thereof, after the expiration (or other termination) of the Term, Tenant will pay base rent as follows:

i. For the first 60-day period following such expiration (or other termination) at a rate equal to 150% of the greater of (a) the net rent and additional rent due immediately prior to the expiration or other termination of the Term for the entire Office Premises and (b) FMV.

ii. At all times thereafter at a rate equal to 200% of (a) the net rent and additional rent due immediately prior



to the expiration or other termination of the Term for the entire Office Premises and (b) FMV.

Notwithstanding anything to the contrary, if Tenant does not vacate the Office Premises within 90 days of the expiration (or other termination) of the Term, Tenant will indemnify Landlord for all damages, including without limitation, consequential damages, as a result of Tenant’s failure to surrender the Office Premises in accordance with the terms of the lease.

Confidentiality This proposal and all discussions related thereto shall be held in confidence by Landlord and Tenant and will not be discussed with third parties except on an “as needed” basis (e.g., leasing brokers, attorneys, design consultants).

This document constitutes a proposal for terms and conditions of a proposed transaction and is solely intended to be used as an outline for negotiation of a formal written agreement. This is not an offer, is not binding on the undersigned and may be withdrawn or modified at any time without notice. Nothing herein will require any party to negotiate, in good faith or otherwise, and the undersigned may discontinue negotiations at any time for any reason whatsoever, without any liability or obligation whatsoever. Each party will proceed with negotiations at its sole cost and expense (which may involve substantial transaction costs). No definitive agreement will exist until mutual execution and unconditional delivery of a formal written agreement. After your review of the information contained in our proposal, we would welcome the opportunity to discuss it with you in more detail. Please do not hesitate to contact me at 973-448-3590. We look forward very much to the potential opportunity to work closely on this exciting transaction with your client and you. Sincerely,

Leslie E. Smith Jr. Executive Vice President cc: Daniel MacEachron, The Rockefeller Group

Clark Machemer, The Rockefeller Group

Documents

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