Exhibit 10.16
THIRD AMENDMENT TO LEASE AGREEMENT
----------------------------------
THIS THIRD AMENDMENT TO LEASE AGREEMENT ("Third Amendment") is made and
entered into as of the 26th day of May, 2000, by and between THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("Landlord"), and CELLIT,
INC., a Florida corporation ("Tenant").
WITNESSETH:
WHEREAS, Tenant and Landlord's predecessor in interest, Codina West Dade
Development Corp., No. 4, a Florida corporation, entered into that certain Lease
Agreement dated as of February 23, 1999, as amended by that certain First
Amendment to Lease Agreement dated as of March 30, 2000 and by that certain
Second Amendment to Lease Agreement dated on or about the date hereof but deemed
to be retroactively effective as of March 30, 2000 (the "Second Amendment") (as
so amended, the "Lease") with respect to therein described space comprising
27,969 (as amended) rentable square feet (the "Original Premises") located in
the building known as Westside Plaza II, 0000 Xxxxxxxxx 00xx Xxxxxx, Xxxxx,
Xxxxxxx 00000 (the "Building"); and
WHEREAS, Landlord and Tenant desire to amend the Lease pursuant to the
terms and conditions hereinafter set forth in this Third Amendment.
NOW, THEREFORE, In consideration of the foregoing and the mutual promises
and covenants contained herein and in the Lease, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Landlord and Tenant hereby agree as follows:
1. Expansion
---------
a. Effective as of the Expansion Effective Date (as defined in the Work
Letter attached hereto as Exhibit B), the Original Premises shall be increased
for all purposes under the Lease (other than the construction provisions
thereof) by 15,747 rentable square feet located on the third (3rd) floor of the
----------------------
Building as shown on Exhibit A attached hereto and made a part hereof (the
"Second Expansion Space"). Effective as of the Expansion Effective Date, Item 2
of the Basic Lease Provisions attached to the Lease and Section 1 of the Lease
Agreement shall be amended to reflect the addition of the Second Expansion
Space, the Original Premises shall thereafter contain for all purposes under the
Lease (other than the construction provisions thereof), 43,716 rentable square
feet; and Tenant's Share (Item 5 of the Basic Lease Provisions to the Lease)
shall thereafter be 41.71%.
b. The term for the Second Expansion Space shall commence on the Expansion
Effective Date and shall expire on December 31, 2004, coterminous with the Term
for the Original Premises.
c. Base Rent for the Second Expansion Space shall be paid in accordance
with the Lease, except that it shall be calculated not in accordance with the
schedules contained in the Lease, but in accordance with the following schedule:
Rate Per Rentable
Period Square Foot per Annum
-------------------------------------------- ---------------------
Expansion Effective Date - December 31, 2000 $15.25
January 1, 2001 - December 31, 2001 $15.78
January 1, 2002 - December 31, 2002 $16.33
January 1, 2003 - December 31, 2003 $16.90
January 1, 2004 - December 31, 2004 $17.49
d. All other charges and expenses under the Lease which are or will be
applicable to the Original Premises [excluding the Second Expansion Space and
the first Expansion Space (as described in
the Second Amendment) (the "First Expansion Space")] shall be applicable to the
Second Expansion Space from and after the Expansion Effective Date.
e. On or before the Expansion Effective Date, Tenant shall deposit with
Landlord a replacement LOC or supplemental LOC complying with the terms of
Section 44 such that after such date the LOC or LOCs held by Landlord pursuant
to the terms of Section 44 of the Lease shall be in the aggregate face amount of
$300,000.00 instead of $250,000.00 as set forth in the Lease .
f. The parking ratio of "five (5) spaces per 1,000 rentable square feet of
space in the Premises (136 spaces total)" set forth in Section 34 of the Lease,
as same has been amended previously, shall no longer be applicable. Subject to
the remaining provisions of Section 34 of the Lease, the total number of parking
spaces available to Tenant pursuant to Section 34 shall be 211. In the event
Tenant uses or encumbers parking spaces for Tenant's emergency generator,
uninterruptable power source or other equipment, fixtures or personally, such
spaces so used or encumbered shall be deemed to be included within the 211
available spaces and not in addition thereto.
2. The provisions of the Work Letter attached to this Third Amendment as Exhibit
B are hereby incorporated by this reference.
3. The parties hereto agree that Tenant's rights arising pursuant to Section 58
of the Lease have been waived and that this provision is of no further force and
effect .
4. Right of First Offer.
--------------------
(a) Following the Expansion Effective Date, so long as the Lease is in full
force and effect and no default exists beyond applicable notice and cure
periods. Landlord hereby grants to Tenant an ongoing right of first offer
(the "Right of First Offer") to expand the Premises to include any space
which "becomes available" (as defined herein) on the third (3rd) floor of
the Building (the "Offer Space") subject to the terms and conditions set
forth herein and subject and subordinate to prior rights of other tenants.
(b) After any part of the Offer Space has or will "become available" for
leasing by Landlord, Landlord shall not lease to another tenant the Offer
Space without first offering in writing (the "Offer") Tenant the right to
lease such Offer Space as set forth herein.
(i) The Offer Space shall be deemed to "become available" when
Landlord desires to lease all or a portion of the Offer Space.
(ii) Notwithstanding subsection (i) above, the Offer Space shall not
be deemed to "become available" if the space is assigned or subleased by
the current tenant of the space or re-let by the current tenant of the
space by renewal, extension, or renegotiation.
(c) The Offer shall contain (i) a description of the Offer Space and an
attached floor plan that shows the Offer Space; (ii) the date on which
Landlord expects the Offer Space to become available; and (iii) the
increase in Tenant's operating expense percentage. Upon receipt of the
Offer, Tenant shall have the right, for a period of six (6) business days
after receipt of the Offer, to exercise the Right of First Offer by giving
Landlord written notice that Tenant desires to lease the Offer Space upon
the same terms and conditions contained in this Lease (but excluding those
provisions specifically applicable to the First Expansion Space and
excluding the construction provisions contained therein; a tenant
improvement allowance shall be available as set forth below), including,
but not limited to, the calculation of rent (based on the rates for the
Second Expansion Space), which shall be adjusted based upon the Rentable
Square Feet contained in the Offer Space and the term for which Tenant will
lease the Offer Space. The term of the Lease with respect to the Offer
Space shall be coterminous with the Term of the Lease. Any Offer Space
added to the Premises shall be delivered by Landlord to Tenant "as is"
except that Landlord shall provide Tenant a tenant improvement
-2-
allowance (the "TI Allowance") as follows: (i) if the applicable Offer
Space has not been previously improved, the TI Allowance shall be equal to
the TI Allowance applicable to the Second Expansion Space (to wit, $25.75
per rentable square foot) (which amount shall be subject to increase as set
forth below), on a per rentable square foot basis, decreased by multiplying
such amount by a fraction, the numerator of which is the number of months
remaining in the initial Term of this Lease as of the commencement date
with respect to the applicable Offer Space and the denominator of which is
fifty (50) months or (ii) if the applicable Offer Space has been previously
improved the TI Allowance shall be an amount equal to $1.00 per rentable
square foot (which amount shall be subject to increase as set forth below)
multiplied by the number of years remaining in the initial Term (plus any
Option Term if properly exercised by Tenant in accordance with the
provisions of the Lease on or before the date of the Offer) of this Lease
as of the "commencement date" with respect to the applicable Offer Space.
The TI Allowance applicable under items (i) and (ii) above (the applicable
allowance being referred to as the "Base TI Allowance") shall be increased
(but not decreased) on an annual basis by multiplying the Base TI Allowance
by a fraction, the numerator of which is the figure at which the CPI (as
defined below) stands for the month most recently published prior to the
commencement date with respect to the applicable Offer Space and the
denominator of which is the figure at which the CPI stood one year (or the
date of the immediately prior publication, if more than one year) earlier
(with like adjustments being made for each earlier year through the
Expansion Effective Date). For example, if the Expansion Effective Date
occurs on November 1, 2000 and the commencement date with respect to the
Offer Space occurs on November 1, 2002, the Base TI Allowance shall be
subject to CPI increases as set forth above for the period November 1, 2001
through November 1, 2002 and the period November 1, 2000 through November
1, 2001. The term CPI shall mean the Miami Consumer Price Index. All Items,
All Urban Consumers (1982-1984 = 100), prepared by the Bureau of Labor
Statistics of the United States Department of Labor or such other
governmental agency then publishing such Index.
(d) If, within such six (6) business day period, Tenant exercises the Right
of First Offer, than Landlord and Tenant shall amend the Lease to include
the Offer Space subject to the same terms and conditions as the Lease, as
modified by the terms and conditions of the Offer. If this Lease is
guaranteed now or at anytime in the future, Tenant simultaneously shall
deliver to Landlord an original, signed, and notarized reaffirmation of
each Guarantor's personal guaranty, in form and substance acceptable to
Landlord.
(e) If, within such six (6) business day period, Tenant declines or fails
to exercise the Right of First Offer, Landlord shall then have the right to
lease the Offer Space in portions or in its entirety to a third party
without regard to the restrictions in this Right of First Offer and on
whatever terms and conditions Landlord may decide in its sole discretion,
and thereafter, this Right of First Offer shall terminate, and Tenant shall
have no further Right of First Offer on the Offer Space until such time as
"Offer Space" again "becomes available" triggering the applicability of
this Section and this Right of First Offer.
(f) This Right of First Offer is personal to Cellit Inc. and shall become
null and void upon the occurrence of an assignment of the Lease on a sublet
of all or a part of the Premises, which assignment or sublet requires
Landlord's consent pursuant to the terms of Section 25 of the of the Lease.
5. Tenant and Landlord each represent to the other that they have dealt with no
broker, finder, real estate agent or other person entitled to a commission, fee
or other compensation in connection with or as a result of this Third Amendment
or the transactions contemplated hereby or hereunder other than Codina Realty
Services, Inc. - Oncor International and Xxxxxxx & Xxxxxxxxx of Florida, Inc.,
the fees for which shall be paid by Landlord pursuant to a separate agreement.
Each party hereby indemnifies the other and holds the other harmless from any
and all claims, losses, costs and damages (including reasonable attorney's fees)
arising in connection with a breach of the aforesaid representation.
-3-
6. Landlord and Tenant affirm and covenant that each has the authority to enter
into this Third Amendment, to abide by the terms hereof, and that the
signatories hereto are authorized representatives of their respective entities
empowered by their respective entities to execute this Third Amendment.
7. To the extent the provisions of this Third Amendment are inconsistent with
the Lease, the terms of this Third Amendment shall control.
8. Except as expressly amended or modified herein, all other terms, covenants
and conditions of the Lease shall remain in full force and effect.
9. The conditions, covenants, and agreements contained herein shall be binding
upon the parties hereto and their respective successors and assigns.
10. Any terms used in this Third Amendment as defined terms, but which are not
defined herein, shall have the meanings attributed to those terms in the Lease.
IN WITNESS WHEREOF, the parties herein have hereunto set their hands and
seals, the day and year first above written.
WITNESSES TO LANDLORD: LANDLORD:
/s/ Xxxx Xxxxxxx THE PRUDENTIAL INSURANCE COMPANY
--------------------------------- OF AMERICA, a New Jersey corporation
Print Name: Xxxx Xxxxxxx
----------------------
By: Codina Real Estate Management, Inc.,
its Agent
/s/ Xxxxx Roses
---------------------------------
Print Name: Xxxxx Roses By: /s/ Xxxxxxx X. Xxxxxx
---------------------- ------------------------------------
Print Name: Xxxxxxx X. Xxxxxx
Title: President
WITNESS TO TENANT: TENANT:
CELLIT, INC., a Florida corporation
/s/ Xxxxxx Xxxxxxx
---------------------------------
Print Name: Xxxxxx Xxxxxxx By: /s/ Xxxxxxxxx Xxxxxx
---------------------- ------------------------------------
Print Name: Xxxxxxxxx Xxxxxx
----------------------------
/s/ Xxxxxxxx Beibswingert Title: President & CEO
--------------------------------- -----------------------------
Print Name: Xxxxxxxx Beibswingert
----------------------
-4-
EXHIBIT A
---------
[GRAPHIC]
EXHIBIT B
Work Letter for Second Expansion Space
In addition to the mutual covenants and agreements contained in the Third
Amendment, Landlord and Tenant further agree as follows:
Section A:
1. From and after the date of this Third Amendment ("the Expansion Early
Entry Date"), Tenant and Tenant's agents may enter the Second Expansion
Space in order perform the Expansion Tenant Improvements (as hereinafter
defined). Tenants agrees that any such entry into and occupation of the
Second Expansion Space shall be deemed to be under all of the terms,
covenants, conditions and provisions of the Lease, as modified, except as
to the covenant to pay Base Rent and Operating Expenses, and further agrees
Landlord shall not be liable in any way for any injury, loss or damage
which may occur to any of Tenant's work and installations made in the
Second Expansion Space or to properties placed therein, the same being at
Tenant's sole risk.
2. Tenant hereby agrees to accept the Second Expansion Space "AS IS, WHERE
IS AND WITH ALL FAULTS" and Landlord is not obligated to construct any
tenant improvements therein. Tenant has inspected the Second Expansion
Space and is fully aware of its condition (such condition being referred to
as the ("Base Condition"). Notwithstanding the foregoing to the contrary,
Landlord shall diligently pursue correction of any latent defect (as
opposed to ordinary repair and maintenance) in the Base Condition (but
specifically excluding the Expansion Tenant Improvements) discovered by
Tenant and of which Landlord has been notified, in writing within one (1)
year of the Expansion Effective Date. Landlord's liability to correct
latent defects shall not extend beyond one (1) year from the Expansion
Effective Date except for latent defects of which Landlord has been
notified during such one (1) year period as set forth in the preceding
sentence.
3. Provided the Lease is in full force and effect and no default exists
beyond applicable notice or cure periods, Landlord shall provide to Tenant
a tenant improvement allowance (the "Expansion Tenant Improvement
Allowance") up to $ 360,216,75 the product of 13,989 usable square feet
------------ -------------
contained in the Second Expansion Space multiplied by $ 25.75.
--------
Section B:
1. Working Drawings for Second Expansion Space.
-------------------------------------------
A. Tenant's architect/engineer (such architect or engineer is subject to
Landlord's prior approval, which approval shall not be unreasonably
withheld or delayed) shall, at Tenant's sole cost, and expense, prepare and
deliver to Landlord detailed working drawings for the renovation,
alteration and improvement of the Second Expansion Space (the "Working
Drawings"). The Working Drawings shall be in such detail as Landlord may
reasonably require and shall be in compliance with all applicable statutes,
ordinances and regulations, provided however, that Landlord's approval of
the Working Drawings shall not be deemed to be a warrant or representation
that the Working Drawings comply with all applicable statutes, ordinances
or regulations. Landlord shall approve or disapprove in writing the Working
Drawings within five (5) business days following receipt of same from
Tenant. Landlord shall not unreasonably withhold its approval of the
Working Drawings. In the event Landlord disapproves the Working Drawings,
then Landlord and Tenant shall, in good faith, mutually attempt to resolve
any disputes. In the event Landlord fails to approve or disapprove the
Working Drawings within five (5) business days following receipt thereof,
then Landlord shall be deemed to have approved the same. As used herein,
and in the Third Amendment, the term "Expansion Tenant Improvements" shall
mean the improvements to be made to the Second Expansion Space by Tenant
pursuant to the approved Working Drawings.
-6-
B. After approval of the Working Drawings by Landlord any changes or
upgrades to the Working Drawings shall be mutually agreed upon in writing
by both Landlord and Tenant. Upon approval thereof by both parties, Tenant
shall make those changes to which Landlord and Tenant mutually agreed and
submit the revised portion of the Working Drawings to Landlord. Tenant
shall have no right to request any changes to the Working Drawings which
would materially alter either the Second Expansion Space or the exterior
appearance or basic nature of the Building as the same are contemplated by
the Working Drawings.
2. Construction of Expansion Tenant Improvements.
---------------------------------------------
At Tenant's sole cost and expense, Tenant shall cause to be constructed and
installed, in or upon the Second Expansion Space, the Expansion Tenant
Improvements in accordance with the Working Drawings. The construction and
installation of the Expansion Tenant Improvements shall be supervised and
coordinated by a general contractor selected by Tenant from a list of
approved general contractors provided by Landlord to Tenant (the "Approved
Contractor"). Once selected, Tenant shall deliver to Landlord a copy of the
contract or other written agreement between the approved Contractor and
Tenant. All permits, licenses and authorizations required or permitted by
all applicable governmental authorities relating to the Expansion Tenant
Improvements shall be procured and paid for by Tenant. Tenant shall cause
the Expansion Tenant Improvements to be completed by the Approved
Contractor: (i) in accordance with the Working Drawings and in a good and
workmanlike manner, (ii) in compliance with all applicable laws,
ordinances, regulations and covenants, (iii) without voiding any Building
warranties (in the event any such warranties are so voided, Tenant shall
indemnify Landlord for all costs, expenses, losses and liabilities incurred
by Landlord as a result thereof); and (iv) in such a manner so as not to
unreasonably interfere with the use of the Building by other tenants
thereof, with Tenant being required to schedule and coordinate all work by
Tenant, the Approved Contractor, sub-contractors, vendors and suppliers
through Codina Real Estate Management, Inc, in order to minimize any noise,
disturbance, nuisance or interruption to the other tenants of the Building.
Landlord shall have the right to reasonably (i) approve the work schedule
of Tenant and Tenant's contractors (including the Approved Contractor) in
the construction of the Expansion Tenant Improvements, (ii) approve
Tenant's move-in schedule for occupancy of the Second Expansion Space upon
completion of the Expansion Tenant Improvements, and (iii) inspect the
Second Expansion Space throughout the construction of the Expansion Tenant
Improvements. Tenant shall carry, or cause its contractors (including the
Approved Contractor) to carry, insurance reasonably satisfactory to
Landlord throughout the construction of the Expansion Tenant Improvements.
Upon issuance of a certificate of occupancy by the appropriate governmental
authority ("Substantial Completion") a representative of Tenant and a
representative of Landlord shall inspect the Second Expansion Space and
generate a list of "punch-list" items, if any, which punch list items
Tenant agrees to complete within a reasonable time thereafter. The date of
Substantial Completion is currently targeted to be December 1 2000. The
term "Expansion Effective Date" as used in this Third Amendment shall mean
the earlier to occur of (i) the date of Substantial Completion or (ii)
December 1, 2000 (subject to extension on a day-for-day basis for "force
majcure events" as defined in Section 55 of the Lease, and events of"
Landlord Delay" as hereinafter defined), regardless of whether the
Expansion Tenant Improvements are then Substantially Complete. The term"
Landlord Delay" shall mean those negligent acts of Landlord which directly,
solely and independently cause the actual date of Substantial Completion to
be delayed beyond the date Substantial Completion would have occurred but
for the Landlord Delay.
3. Not Used.
4. Indemnification.
----------------
Except as a result of Landlord's negligence or willful misconduct, Tenant
does hereby indemnify, agree to defend and save Landlord harmless from and
against any and all claims, liabilities, damages and expenses (including
reasonable attorney's fees) suffered, paid or incurred by Landlord arising
out of the construction and installation of the Expansion Tenant
Improvements,
-7-
including, specifically, the cost of any labor performed and materials
furnished to Second Expansion Space.
5. Expansion Tenant Improvement Allowance:
--------------------------------------
Tenant shall be responsible for all costs and expenses associated with the
Expansion Tenant Improvements. Provided that Tenant is not in default under
the Lease, this Third Amendment of this Work Letter beyond applicable grace
or cure periods. Landlord shall pay to Tenant the Expansion Tenant
Improvement Allowance toward the cost of the Expansion Tenant Improvements
(which shall be deemed to include costs of preparation of the Working
Drawings, preparation of any other plans, specifications or construction
drawings, permitting telecommunications cabling expenses, architectural and
engineering services and any special consultants hired by Tenant). Any
costs and expenses for the Expansion Tenant Improvements in excess of the
Expansion Tenant Improvement Allowance shall be paid solely by Tenant in
the event the costs and expenses for the Expansion Tenant Improvements are
less than the Expansion Tenant Improvement Allowance (such difference being
referred to as the "Excess Allowance". Tenant shall receive a credit
against the first installment of Base Rent following the Commencement Date
and continuing for each immediately subsequent month thereafter until
exhausted equal to a maximum of fifty percent (50%) of the Excess
Allowance, with Landlord retaining the remaining fifty percent (50%) and
Tenant forfeiting all rights thereto. The Expansion Tenant Improvement
Allowance shall be paid from time to time (but no more frequently than once
a month) within ten (10) business days following the date Landlord receives
from Tenant the following:
(i) Tenant's invoice for payment (the "Invoice"):
(ii) lien releases from all contractors (including the Approved
Contractor) performing any portion of the work comprising the
Expansion Tenant Improvements or any portion of the work
comprising the portion of the Expansion Tenant Improvements which
is the subject of the Invoice, as applicable;
(iii)a certificate from Tenant's architect or engineer, as applicable,
certifying in writing to Landlord that the Expansion Tenant
Improvements (or any portion of the work comprising the Expansion
Tenant Improvements which is the subject of the Invoice, as
applicable) has been substantially completed in accordance with
the Working Drawings and invoices, receipts and other evidence
reasonably required by Landlord to evidence the cost of the
Expansion Tenant Improvements (or portion of the work
comprising the Expansion Tenant Improvements which is the subject
of the Invoice, as applicable) made as of the date of Tenant's
request for payment; and
(iv) evidence that Tenant has procured and paid for all permits,
licenses and authorizations required by all applicable
governmental authorities relating to the Expansion Tenant
Improvements (or portion of the work comprising the Expansion
Tenant Improvements which is the subject of the Invoice, as
applicable);
(v) a certified written statement from the Tenant certifying to
Landlord that upon Tenant's receipt of the Expansion Tenant
Improvement Allowance, all costs relating to the Expansion
Tenant Improvements (or portion of the work comprising the
Expansion Tenant Improvements which is the subject of the
Invoice, as applicable) shall have been paid in full.
In the event Tenant complies with the foregoing but Landlord's fails to
pay the Expansion Tenant Improvement Allowance (or portion thereof) within
the aforesaid ten (10) business day period and provided the amounts and
information provided to Landlord with respect to such payment are not
reasonably in dispute. Tenant shall be entitled to offset until exhausted
the immediately payable Base Rent for the Original Premises to the extent
of Landlord's failure.
-8-
6. Florida Construction Lien Law.
-----------------------------
In accordance with the applicable provisions of the Florida Construction
Lien Law and specifically Florida Statutes Section 713.10 , no work
performed by Tenant pursuant to this Third Amendment, whether in the nature
of erection, construction, alteration or repair, shall be deemed to be for
the immediate use and benefit of Landlord so that no mechanic's or other
lien shall be allowed against the Building or the estate of Landlord
created hereunder by reason of any consent given by Landlord to Tenant to
improve the Second Expansion Space. Tenant agrees to advise any contractor
(including the Approved Contractor), materialman or subcontractor
performing work on behalf of Tenant of this provision exculpating Landlord
from liability for such liens. In the event any mechanic's or other lien
shall at any time be filed against the Property by reason of work, labor,
services, or materials performed or furnished, or alleged to have been
performed or furnished to Tenant or to anyone holding the Original Premises
and/or the Second Expansion Space through or under Tenant, Tenant shall
forthwith cause the same to be discharged of record or bonded to the
satisfaction of Landlord. If Tenant shall fail to cause such lien forthwith
to be so discharged or bonded within thirty (30) days after written notice
from Landlord of the filing thereof, then, in addition to any other right
or remedy of Landlord, Landlord may bond or discharge the same by paying
the amount claimed to be due, and the amount to be paid by Landlord
including reasonable attorneys' facts incurred by Landlord either defending
against such lien or in the procuring the discharge of such lien, together
with interest thereon at the Default Rate, shall be due and payable by
Tenant to Landlord as Additional Rent.
-9-
EXHIBIT B
Work Letter for Expansion Space
In addition to the mutual covenants and agreements contained in the Second
Amendment, Landlord and Tenant further agree as follows:
Section A:
1. From and after the date of this Second Amendment (the "Expansion Early
Entry Date"), Tenant and Tenant's agents may enter the Expansion Space in
order perform the Work (as hereinafter defined). Tenant agrees that any
such entry into and occupation of the Expansion Space shall be deemed to be
under all of the terms, covenants, conditions and provisions of the Lease,
except as to the covenant to pay Base Rent and Operating Expenses, and
further agrees Landlord shall not be liable in any way for any injury, loss
or damage which may occur to any of Tenant's work and installations made in
the Expansion Space or to properties placed therein, the same being at
Tenant's sole risk.
2. Tenant hereby agrees to accept the Expansion Space "AS IS, WHERE IS AND
WITH ALL FAULTS", and Landlord is not obligated to construct any tenant
improvements therein. Tenant has inspected the Expansion Space and is fully
aware of its condition.
3. Landlord shall provide to Tenant a tenant improvement allowance (the
"Expansion Tenant Improvement Allowance") equal to $7,650.00, the product
of 765 rentable square feet contained in the Expansion Space multiplied by
$10.00.
Section B:
1. Working Drawings for Expansion Space.
-------------------------------------
A. Tenant, or Tenant's architect/engineer (such architect or engineer is
subject to Landlord's prior approval, which approval shall not be
unreasonably withheld or delayed) shall, at Tenant's sole cost and expense,
prepare and deliver to Landlord detailed working drawings for the
renovation, alteration and improvement of the Expansion Space to allow for
increased amperage to separately meter electric service thereto, to
prevent sound attenuation and noise levels emanating from the Expansion
Space from exceeding "NC-30" and such other items as may be mutually
acceptable to both Landlord and Tenant (the "Working Drawings"). The
Working Drawings shall be in such detail as Landlord may reasonably require
and shall be in compliance with all applicable statutes, ordinances and
regulations; provided, however, that Landlord's approval of the Working
Drawings shall not be deemed to be a warranty or representation that the
Working Drawings comply with all applicable statutes, ordinances or
regulations. Landlord shall approve or disapprove in writing the Working
Drawings within five (5) business days following receipt of same from
Tenant. Landlord shall not unreasonably withhold its approval of the
Working Drawings. In the event Landlord disapproves the Working Drawings,
then Landlord and Tenant shall, in good faith, mutually attempt to resolve
any disputes. In the event Landlord fails to approve or disapprove the
Working Drawings within five (5) business days following receipt thereof,
then Landlord shall be deemed to have approved the same. As used herein,
and in the Second Amendment, the term "Expansion Tenant Improvements" shall
mean the improvements to be made to the Expansion Space by Tenant pursuant
to the approved Working Drawings.
B. After approval of the Working Drawings by Landlord, any changes or
upgrades to the Working Drawings shall be mutually agreed upon in writing
by both Landlord and Tenant. Upon approval thereof by both parties, Tenant
shall make these changes to which Landlord and Tenant mutually agreed and
submit the revised portion of the Working Drawings to Landlord. Tenant
shall have no right to request any changes to the Working Drawings which
would materially alter
-7-
either the Expansion Space or the exterior appearance or basic nature of
the Building, as the same are contemplated by the Working Drawings.
2. Construction of Expansion Tenant Improvements.
---------------------------------------------
Tenant shall, at Tenant's sole cost and expense, construct or install, or
cause to be constructed and installed, in or upon the Expansion Space, the
Expansion Tenant Improvements in accordance with the Working Drawings. All
permits, licenses and authorizations required or permitted by all
applicable governmental authorities relating to the Expansion Tenant
Improvements shall be procured and paid for by Tenant. The Expansion Tenant
Improvements shall be completed by Tenant: (i) in accordance with the
Working Drawings in a good and workmanlike manner; (ii) in compliance with
all applicable laws, ordinances, regulations and covenants, (iii) without
voiding any Building warranties (in the event any such warranties are so
voided, Tenant shall indemnify Landlord for all costs, expenses, losses and
liabilities incurred by Landlord as a result thereof): and (iv) in such a
manner so as not to unreasonably interfere with the use of the Building by
other tenants thereof, with Tenant being required to schedule and
coordinate all work by Tenant and Tenant's contractors, sub-contractors,
vendors and suppliers through Codina Real Estate Management, Inc, in order
to minimize any noise, disturbance, nuisance or interruption to the other
tenants of the Building. Landlord shall have the right to reasonably (i)
approve the work schedule of Tenant and Tenant's contractors in the
construction of the Expansion Tenant Improvements, (ii) approve Tenant's
move-in schedule for occupancy of the Expansion Space upon completion of
the Expansion Tenant Improvements, (iii) inspect the Expansion Space
throughout construction of the Expansion Tenant Improvements, and (iv)
approve Tenant's construction contractor. Tenant shall carry, or cause its
contractor to carry, insurance reasonably satisfactory to Landlord
throughout the construction of the Expansion Tenant Improvements. Upon
substantial completion, as determined by Landlord in its reasonable
discretion, of the Expansion Tenant Improvements, a representative of
Tenant and a representative of Landlord shall inspect the Expansion Space
and generate a list of "punch list" items, if any, which punch list items
Tenant agrees to complete within a reasonable time thereafter. If Tenant
fails to complete the Expansion Tenant Improvements by April 1, 2000, all
obligations under the Lease attributable to the Expansion Space, including,
but not limited to, Tenant's obligations to pay Rent, shall nevertheless
begin on the Commencement Date.
3. Release of Liens.
-----------------
The consent by Landlord to the construction of the Expansion Tenant
Improvements by Tenant shall not be construed as any assumption by
Landlord, either express or implied, of any liability of any nature against
Landlord, the Expansion Space, the Original Premises, the Building or the
Property for the payment of any labor performed or any materials furnished
in connection with the construction or installation of the Expansion Tenant
Improvements. In the event any such claim for payment or any materialmen's
or mechanics' liens are filed against Landlord, the Expansion Space or the
Original Premises (including Tenant's leasehold interest in either), the
Building or the Property, then Tenant agrees to forthwith pay the same or
cause such security therefore to be deposited for the payment and discharge
of the same as may be reasonably required by Landlord. Tenant further
agrees that, upon completion of the Expansion Tenant Improvements, Tenant
shall provide Landlord written lien releases from any and all contractors
who have performed work in the Expansion Space.
4. Indemnification.
---------------
Tenant does hereby indemnify, agree to defend and save Landlord and Agent
harmless from and against any and all claims, liabilities, damages and
expenses (including reasonable attorney's fees) suffered, paid or incurred
by Landlord or Agent arising out of the construction and installation of
the Expansion Tenant Improvements, including specifically, the cost of any
labor performed and materials furnished to Expansion Space.
-8-
5. Expansion Tenant Improvement Allowance.
--------------------------------------
Tenant shall be responsible for all costs and expenses associated with the
Work. Provided that Tenant is not in default under the Lease beyond
applicable grace or cure periods, this Second Amendment or this Work
Letter, Landlord shall pay to Tenant the Expansion Tenant Improvement
Allowance toward the cost of the Expansion Tenant Improvements and the
preparation of the Working Drawings (and all incidental costs related
thereto) (collectively, the "Work"). Any costs and expenses for the Work in
excess of the Expansion Tenant Improvement Allowance shall be paid solely
by Tenant. In the event the costs and expenses for the Work are less than
the Expansion Tenant Improvement Allowance, Landlord shall retain any such
excess, and Tenant hereby forfeits all rights thereto. The Expansion Tenant
Improvement Allowance shall be paid at such time as Tenant delivers to
Landlord:
(i) Tenant's invoice for payment
(ii) lien releases from all contractors performing any portion of the
work comprising the Work
(iii)a certificate from Tenant's architect or engineer, as applicable,
certifying in writing to Landlord that the Work has been
substantially completed in accordance with the Working Drawings
and invoices, receipts and other evidence reasonably required by
Landlord to evidence the cost of the Work made as of the date of
Tenant's request for payment; and
(iv) evidence that Tenant has procured and paid for all permits,
licenses and authorizations required by all applicable
governmental authorities relating to the Expansion Tenant
Improvements;
(v) a certified written statement from the Tenant certifying to
Landlord that upon Tenant's receipt of the Expansion Tenant
Improvement Allowance, all costs relating to the Work shall have
been paid in full.
-9-
