Construction of the Tenant Improvements (a) Tenant shall construct and install the Tenant Improvements in a good and workmanlike manner, in compliance with all Laws and in accordance with this Exhibit B. Tenant’s proposed architect/engineer, general contractor, and fire protection, plumbing, HVAC and electrical subcontractors are subject to Landlord’s prior approval. Promptly following the selection and approval of the architect/engineer, Tenant shall forward to said architect/engineer (and copy Landlord on the transmittal) Landlord’s building standards heretofore delivered to Tenant, and Tenant shall cause said architect/engineer to comply with said building standards. Promptly following the selection and approval of the general contractor, Tenant shall forward to said general contractor (and copy Landlord on the transmittal) Landlord’s fire protection, plumbing, HVAC and electrical specifications and Landlord’s rules of conduct, all of which have been delivered to Tenant prior to the date of this Lease, and Tenant shall cause said general contractor to comply with said specifications and rules of conduct. At Landlord’s request, Tenant shall coordinate a meeting among Landlord (who will reasonably make its representative available for such meeting), Tenant and Tenant’s general contractor to discuss the Building systems and other matters related to the construction of the Tenant Improvements. (b) Promptly following the date hereof, Tenant shall prepare and submit to Landlord a set of permittable construction drawings (the “CDs”), based on the preliminary plans attached hereto as Exhibit B-2 and made a part hereof (the “Preliminary Plans”), covering all work to be performed by Tenant in constructing the Tenant Improvements. Tenant shall have no right to make any Tenant Improvements that would materially alter the exterior appearance of the Building or the Building systems without Landlord’s prior approval. Landlord shall have fifteen (15) days after receipt of the CDs in which to review the CDs and in which to give Tenant written notice of its approval of the CDs or its requested changes to the CDs in reasonably sufficient detail so as to allow Tenant to make the requested changes (provided that Landlord shall not be permitted to request a change that is inconsistent with the Preliminary Plans). If Landlord requests any changes to the CDs, Tenant shall make such changes and shall, within fifteen (15) days of its receipt of Landlord’s requested changes (if any), submit the revised portion of the CDs to Landlord. Landlord shall have five (5) business days after receipt of the revised CDs in which to review said revised CDs and in which to give to Tenant written notice of its approval of the revised CDs or its requested changes thereto. This process shall continue until such time, if at all, that Landlord approves the CDs in accordance with this Section 2. Tenant shall at all times in its preparation of the CDs, and of any revisions thereto, act reasonably and in good faith. Landlord shall at all times in its review of the CDs, and any revisions thereto, act reasonably and in good faith.
Tenant Improvements The tenant improvement work (“Tenant Improvements”) shall consist of any work required to complete the Premises pursuant to approved plans and specifications. Tenant shall employ its own architect and general contractor in constructing the Tenant Improvements, subject to Landlord’s reasonable prior approval. Notwithstanding the foregoing, if the Tenant Improvement work requires a permit from the City of San Diego, then the general contractor shall be selected and engaged by Tenant on the basis of a competitive bid involving 3 pre-selected general contractors reasonably approved by Landlord and Tenant. The Tenant Improvement work shall be completed by the general contractor with the lowest bid. The work shall be undertaken and prosecuted in accordance with the following requirements (provided that, to the extent Tenant elects to perform Tenant Improvements without applying the Landlord Contribution (defined below) to the payment of such Tenant Improvements, then (except with respect to Tenant’s right to apply the Landlord Contribution towards the Basic Rent Credit as set forth below) this Work Letter shall not apply, and Section 7.3 of the Lease shall be solely applicable to such Tenant Improvements, which shall constitute Alterations for all purposes thereunder): A. Concurrently with approval being granted by Tenant, the space plans, construction drawings and specifications for all improvements and finishes, together with any changes thereto for the Tenant Improvements, shall be submitted to Landlord (with samples as required) for review and approval by Landlord and its architect for the Project (as described in Article I of the Lease). In lieu of disapproving an item, Landlord may approve same on the condition that Tenant pay to Landlord, prior to the start of construction and in addition to all sums otherwise due hereunder, an amount equal to the cost, as reasonably estimated by Landlord, of removing and replacing the item upon the expiration or termination of the Lease. Should Landlord approve work that would necessitate any ancillary Building modification or other expenditure by Landlord, then except to the extent of any remaining balance of the “Landlord Contribution”, Tenant shall, in addition to its other obligations herein, promptly fund the cost thereof to Landlord. B. All construction drawings prepared by Tenant’s architect shall follow Landlord’s CAD standards, which standards shall be provided to Tenant or its architect upon request. C. Landlord shall, subject to the foregoing, approve or disapprove any submittal of plans or specifications by Tenant within 5 business days following receipt thereof by Landlord. D. Tenant shall use the electrical, mechanical, plumbing and fire/life safety engineers and subcontractors designated by Landlord. All other subcontractors shall be subject to Landlord’s reasonable approval. E. Tenant shall deliver to Landlord a copy of the final application for permit and issued permit for the construction work, if any. F. Tenant’s general contractor and each of its subcontractors shall comply with Landlord’s requirements as generally imposed on third party contractors, including without limitation all insurance coverage requirements and the obligation to furnish appropriate certificates of insurance to Landlord prior to commencement of construction. G. A construction schedule shall be provided to Landlord prior to commencement of the construction work, and weekly updates shall be supplied during the progress of the work. H. Tenant shall give Landlord 10 days prior written notice of the commencement of construction so that Landlord may cause an appropriate notice of non-responsibility to be posted. I. Tenant and its general contractor shall attend weekly job meetings with Landlord’s construction manager for the Project.
Tenant’s Work (a) Tenant shall prepare, at its sole cost and expense (against which the Landlord’s Contribution may be applied), a set of design/development plans in substantial conformity with the concept plan approved by Landlord (subject to Landlord’s review of further details regarding access and maintenance of the tel/data room and access, maintenance and ventilation issues in connection with components located on the third floor along the window line) and attached hereto as Exhibit G, Tenant Design and Construction Guidelines attached hereto as Exhibit H (“Tenant Design and Construction Guidelines”) and the allocation of responsibilities set forth in the Landlord/Tenant Matrix sufficient for Landlord to approve Tenant’s proposed design of the Premises (“Design/Development Plans”), and a full set of final permit-ready construction drawings (“Final Construction Drawings”) for the interior finish and layout of the initial improvements (“Tenant’s Work”) which Tenant desires to have performed in the Premises. The Design/ Development Plans and the Final Construction Drawings are collectively referred to herein as the “Plans.” Provided that no Default has occurred and remains outstanding, Landlord shall reimburse Tenant up to $4,358.60 ($.10 per RSF) for out of pocket costs incurred in preparing the initial test fit of the Premises. (b) The Plans shall be submitted to Landlord, together with a construction budget setting forth the anticipated costs for the Tenant’s Work, and Landlord shall approve or disapprove of the Plans, which approval shall not be unreasonably withheld, conditioned or delayed, and Landlord shall respond in any event within fifteen (15) days of receiving them. No work shall be conducted by or on behalf of Tenant until the Final Construction Drawings have been approved for such work in writing by Landlord. At Tenant’s sole cost and expense (against which the Landlord’s Contribution may be applied), Tenant shall cause the Plans to be revised in a manner sufficient to remedy the Landlord’s objections and/or respond to the Landlord’s concerns and for such revised Plans to be redelivered to Landlord, and Landlord shall approve or disapprove such portions of the Plans to which Landlord previously commented within seven (7) Business Days following the date of resubmission. Landlord’s failure to timely respond to Tenant’s submitted Plans or revised Plans shall be deemed to be approval thereof provided that upon submitting such plans, Tenant provides written notice to Landlord stating “IF LANDLORD FAILS TO RESPOND TO THE ENCLOSED PLANS WITHIN 15 DAYS (OR 7 BUSINESS DAYS AS APPLICABLE), LANDLORD’S APPROVAL SHALL BE DEEMED GIVEN PURSUANT TO SECTION 5.2(b) OF THE LEASE” in upper case boldface type in the top margin of such notice. Landlord’s approval is solely given for the benefit of Landlord and Tenant under this Section and neither Tenant nor any third party shall have the right to rely upon Landlord’s approval of the Plans for any other purpose whatsoever. (c) Landlord shall not charge Tenant any coordination, overhead or contractor supervision fees in connection with Tenant’s Work; provided, however that Landlord shall be reimbursed from the Landlord’s Contribution for any third-party, out of pocket expenses incurred by Landlord in connection with the review and approval of Tenant’s Work. (d) The Plans shall be stamped by a Massachusetts registered architect and engineer, such architect and engineer and Tenant’s general contractor and subcontractors, being subject to Landlord’s prior approval, which shall not be unreasonably withheld, conditioned or delayed, and shall comply with the Legal Requirements and the requirements of the Tenant Design and Construction Guidelines. The final approved Plans shall be in a form satisfactory to appropriate governmental authorities responsible for issuing permits, approvals and licenses required for Tenant’s Work. (e) Tenant’s Work shall be completed in accordance with the Plans and no material changes to Tenant’s Work shall occur without Landlord’s approval as set forth herein. All of the Tenant’s Work shall be performed in accordance with the requirements set forth in the Tenant Design and Construction Guidelines and completed in a first class workmanlike manner. Tenant shall be solely responsible for the effect of the Tenant’s Work on the Building’s structure and systems, whether or not Landlord has consented to the Alterations, and shall reimburse Landlord on demand for any costs incurred by Landlord by reason of any faulty work done by Tenant or its contractors. All of Tenant’s Work shall be performed in such manner as to maintain harmonious labor relations and to minimize any material interference with Building operations or other construction work being performed within the Building. (f) Tenant shall use diligent efforts to keep the Project and Tenant’s leasehold interest therein free of any liens or claims of liens arising from acts or omissions of Tenant, or its subtenants, contractors or others claiming by, through or under Tenant, and shall discharge or bond any such liens within ten (10) Business Days following notice to Tenant of their filing. Before commencement of any work, upon Landlord’s request, Tenant’s contractor shall provide a payment, performance and lien indemnity bond required by Landlord. Tenant shall provide evidence of such insurance as Landlord may reasonably require, naming Landlord as an additional insured. Tenant shall indemnify Landlord and hold it harmless from and against any cost, claim, or liability arising from any work done by or at the direction of Tenant. (g) All alterations affixed to the Premises shall become part thereof and remain therein at the end of the Term unless otherwise agreed to by Landlord and Tenant. However, if Landlord gives Tenant a notice, at the time Landlord approves the Plans, to remove any alterations, Tenant shall do so and shall pay the cost of removal and any repair required by such removal. (h) All of Tenant’s personal property, trade fixtures, equipment, furniture, movable partitions, and any alterations not affixed to the Premises shall remain Tenant’s property, removable at any time. If Tenant fails to remove any such materials at the end of the Term, Landlord may do so and store them at Tenant’s expense, without liability to Tenant, and may sell them at public or private sale and apply the proceeds to any amounts due hereunder, including costs of removal, storage and sale.