Exhibit 10.13
SECOND AMENDMENT TO LEASE
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THIS SECOND AMENDMENT TO LEASE ("Amendment") is made and entered into as of
the 20th day of September, 2000, by and between WXI/SAN REALTY, L.L.C., a
Delaware limited liability company ("Landlord"), and PLUMTREE SOFTWARE, INC., a
California corporation ("Tenant").
RECITALS:
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A. BPG Sansome, L.L.C., a Delaware limited liability company, as
predecessor-in-interest to Landlord, and Tenant entered into that certain Office
Lease dated as of April 7, 1999 (the "Lease"), whereby Tenant leased certain
office space in the building located at 000 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx. The Original Lease was subsequently amended by that certain First
Amendment to Lease dated as of May 31, 2000 by and between Landlord and Tenant.
The Original Lease, as amended by the First Amendment, is referred to herein as
the "Lease."
B. By this Amendment, Landlord and Tenant desire to expand the Existing
Premises (as defined below) and to otherwise modify the Lease as provided
herein.
C. Unless otherwise defined herein, capitalized terms as used herein shall
have the same meanings as given thereto in the Lease.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
AGREEMENT:
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1. The Existing Premises. Landlord currently leases to Tenant that certain
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office space in the Building containing 19,202 rentable square feet consisting
of Suites M-4, 100 and 101. Pursuant to the First Amendment, the Premises leased
by Tenant shall be increased by an additional 13,189 rentable square feet on the
dates listed in Section 2 below, which additional space is comprised of Suites
102, M-100 and 310 (the "Existing Premises").
2. Confirmation/Amendment of Expansion Commencement Dates. The anticipated
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"Expansion Commencement Date" as that term is defined in Section 2 of the First
Amendment is hereby amended to be October 1, 2000 as to Suite M-100 and 102;
provided, however, that the "Outside Date" (as defined in Section 2 of the First
Amendment) with respect to Suites M-100 and 102 shall remain February 1, 2001.
The anticipated Expansion Commencement Date as to Suite 310 shall remain
November 1, 2000, as set forth in the First Amendment.
3. Expansion of the Existing Premises. That certain space known as Suite
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200 and located on the second (2/nd/) floor of the Building outlined on the
floor plan attached hereto as Exhibit "A" and made a part hereof, is referred to
herein as the "Second Expansion Space." Landlord and Tenant stipulate that the
Second Expansion Space contains 8,639 rentable square feet. The rentable square
footage of the Second Expansion Space was calculated by Landlord's space planner
pursuant to the Standard Method for Measuring Floor Area in Office Buildings,
ANSITBOMA Z65.1 - 1996. Effective as of the date Landlord delivers the Second
Expansion Space to Tenant ("Second Expansion Commencement Date"), Tenant shall
lease the Second Expansion Space. Landlord shall deliver the Second Expansion
Space to Tenant in broom clean condition. Effective upon the Second Expansion
Commencement Date, the Existing Premises shall be increased to include the
Second Expansion Space. Landlord will deliver the Second Expansion Space to
Tenant the day after the date of full execution of this Second Amendment. Such
addition of the Second Expansion Space to the Existing Premises shall, effective
as of the Second Expansion Commencement Date, increase the number of rentable
square feet leased by Tenant in the Building to a total of 27,841 rentable
square feet (subject to increase to add 13,189 rentable square feet consisting
of Suites M-100, 102 and 310, as further set forth in the First Amendment).
After the last Expansion Commencement Date, Tenant will lease a total of 41,030
rentable square feet in the Building. Effective as of the Second Expansion
Commencement Date, all references to the "Premises" shall mean and refer to the
Existing Premises as expanded by the Second Expansion Space. Section 10 of the
First Amendment is hereby deleted in its entirety.
4. Term and Monthly Base Rent for the Expansion Space. The Term for
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Tenant's lease of the Second Expansion Space ("Expansion Space Term") shall
commence on the Second Expansion Commencement Date and shall expire
co-terminously with Tenant's lease of the Existing Premises on October 31, 2006.
The option to extend granted to Tenant pursuant to Section 9 of the First
Amendment shall apply to the Second Expansion Space, provided Tenant must
exercise its option to extend as to all space leased by Tenant and cannot
exercise such option only as to a portion of such space. During the Expansion
Space Term, Tenant shall pay monthly Base Rent for the Second Expansion Space as
follows:
Period of Annual Base Rent Per
Expansion Space Term Monthly Base Rent Rentable Square Foot
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Second Expansion $47,514.50 $66.00
Commencement Date--10/31/01
11/1/01--10/31/02 $48,954.33 $68.00
11/1/02--10/31/03 $50,394.17 $70.00
11/1/03--10/31/04 $51,834.00 $72.00
11/1/04--10/31/05 $53,273.83 $74.00
11/1/05--10/31/06 $54,713.67 $76.00
5. Rental Abatement. Notwithstanding anything to the contrary contained in
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Section 4 above, and provided that Tenant faithfully performs all of the terms
and conditions of the Lease, as amended by this Amendment, Landlord hereby
agrees to xxxxx Tenant's obligation to pay Monthly Base Rent for the Second
Expansion Space for the first thirty (30) days of the Expansion Space Term. The
purpose of the abatement period is to compensate Tenant for the expected time
required for the Contractor to perform the Improvements in the Second Expansion
Space. During such abatement period, Tenant shall still be responsible for the
payment of all of its other monetary obligations under the Lease. In the event
of a default by Tenant under the terms of the Lease that results in early
termination pursuant to the provisions of Section 17.2 of the Original Lease,
then as a part of the recovery set forth in Section 17.2 of the Original Lease,
Landlord shall be entitled to the recovery of the Monthly Base Rent that was
abated under the provisions of this Section 5.
6. Lessee's Percentage Share. During the Expansion Space Term, Lessee's
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Percentage Share of any increase in Basic Costs for the Second Expansion Space
only shall be 5.86%. Effective as of the last Expansion Commencement Date,
Lessee's Percentage Share of any increase in Basic Costs for the entire Premises
shall be 27.82%.
7. Tenant Improvements. The Tenant Work Letter attached to the First
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Amendment is hereby deleted and replaced with the Tenant Work Letter attached
hereto as Exhibit "B" and made a part hereof, which Tenant Work Letter shall
govern the construction of the Expansion Space added by the First Amendment, as
well as the Second Expansion Space added by this Amendment.
8. Letter of Credit. Concurrently with Tenant's execution and delivery of
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this Amendment, Tenant shall elect to either (i) increase the Stated Amount of
its existing Letter of Credit or (ii) cause a new Letter of Credit to be issued,
which new Letter of Credit shall be subject to all the terms and conditions
applicable to Tenant's existing Letter of Credit, as set forth in Section 7 of
the First Amendment. The increased amount of the Letter of Credit (or Stated
Amount in the case of a new Letter of Credit) shall be Five Hundred Thirty-Three
Thousand Four Hundred Fifty-Eight and 25/100 Dollars ($533,458.25) ("Increased
Amount"). The Increased Amount shall burn off on the same dates, at the same
rate, and subject to the same restrictions, as the Stated Amount of the existing
Letter of Credit. In the event Tenant satisfies the conditions set forth in the
last paragraph of Section 7 of the First Amendment, the Increased
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Amount may be decreased to Fifty-Four Thousand Seven Hundred Thirteen and 67/100
Dollars ($54,713.67).
9. Notice of Lease Term Dates. Landlord may deliver to Tenant a
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commencement letter confirming the Second Expansion Commencement Date. Tenant
agrees to execute and return to Landlord said commencement letter within five
(5) days after Tenant's receipt thereof.
10. Brokers. Each party represents and warrants to the other that no
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broker, agent or finder negotiated or was instrumental in negotiating or
consummating this Amendment, other than Xxxxxxx & Wakefield and The CAC Group
(collectively, the "Brokers"). Each party further agrees to defend, indemnify
and hold harmless the other party from and against any claim for commission or
finder's fee by any person or entity (other than the Brokers) who claims or
alleges that they were retained or engaged by the indemnifying party or at the
request of such party in connection with this Amendment. The Brokers shall be
compensated by Landlord pursuant to a separate agreement.
11. Defaults. Tenant hereby represents and warrants to Landlord that, as of
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the date of this Amendment, Tenant is in full compliance with all terms,
covenants and conditions of the Lease and that there are no breaches or defaults
under the Lease by Landlord or Tenant, and that Tenant knows of no events or
circumstances which, given the passage of time, would constitute a default under
the Lease by either Landlord or Tenant.
12. Signing Authority. Each person executing this Amendment on behalf of
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Landlord and Tenant represents that such individual is authorized to do so.
13. No Further Modification. Except as set forth in this Amendment, all of
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the terms and provisions of the Lease shall apply with respect to the Second
Expansion Space and shall remain unmodified and in full force and effect.
Effective as of the date hereof, all references to the "Lease" shall refer to
the Lease as amended by this Amendment.
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IN WITNESS WHEREOF, this Amendment has been executed as of the day and year
first above written.
"Landlord":
WXI/SAN REALTY, L.L.C.,
a Delaware limited liability company
By: MRC Properties VI, L.L.C.,
a Delaware limited liability company
By: /s/ Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
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Title: VICE PRESIDENT
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"Tenant":
PLUMTREE SOFTWARE, INC.
a California corporation
*By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
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Title: CEO
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*By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
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Title: CFO
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* NOTE:
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If Tenant is a California corporation, then one of the following alternative
requirements must be satisfied:
(A) This Amendment must be signed by two (2) officers of such corporation: one
being the chairman of the board, the president or a vice president, and the
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other being the secretary, an assistant secretary, the chief financial
officer or an assistant treasurer. If one (1) individual is signing in two
(2) of the foregoing capacities, that individual must sign twice; once as
one officer and again as the other officer.
(B) If there is only one (1) individual signing in two (2) capacities, or if
the two (2) signatories do not satisfy the requirements of (A) above, then
Tenant shall deliver to Landlord a certified copy of a corporate resolution
in the form reasonably acceptable to Landlord authorizing the
signatory(ies) to execute this Amendment.
If Tenant is a corporation incorporated in a state other than California, then
Tenant shall deliver to Landlord a certified copy of a corporate
resolution in the form reasonably acceptable to Landlord authorizing the
signatory(ies) to execute this Amendment.
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EXHIBIT "A"
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OUTLINE OF SECOND EXPANSION SPACE
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[GRAPHICAL INFORMATION OMITTED]
EXHIBIT "A"
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EXHIBIT "B"
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TENANT WORK LETTER
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This Tenant Work Letter shall set forth the terms and conditions relating
to the construction of the Expansion Space added by the First Amendment and the
Second Expansion Space added by this Amendment (collectively referred to herein
as the "Total Expansion Space"). This Tenant Work Letter is essentially
organized chronologically and addresses the issues of the construction of the
Total Expansion Space, in sequence, as such issues will arise during the actual
construction of the Total Expansion Space. All references in this Tenant Work
Letter to Articles or Sections of "the Lease" shall mean the relevant portions
of the Lease, as amended by the Amendment to which this Tenant Work Letter is
attached, and all references in this Tenant Work Letter to Sections of "this
Tenant Work Letter" shall mean the relevant portions of this Tenant Work Letter.
SECTION 1
LANDLORD'S INITIAL CONSTRUCTION IN THE TOTAL EXPANSION SPACE
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Landlord has constructed, at its sole cost and expense, the base, shell and
core (i) of the Total Expansion Space and (ii) of the floors of the Building on
which the Total Expansion Space is located (collectively, the "Base, Shell and
Core"). In addition, leasehold improvements to the Total Expansion Space may
have been constructed for a previous tenant. Except as set forth in this Section
1 below, Tenant acknowledges that the Base, Shell and Core and any such
leasehold improvements shall be provided in their existing "as is" condition.
Any renovations to the existing leasehold improvements shall be designed and
constructed pursuant to this Tenant Work Letter, and the cost of designing and
constructing such renovations shall be Construction Costs. Notwithstanding the
foregoing, as to the Second Expansion Space only, Landlord shall, at Landlord's
sole cost and expense, be responsible for making any improvements, repairs or
upgrades to the common areas of the second floor of the Building, the common
areas of the Building itself and/or the Base, Shell and Core applicable thereto
to the extent the appropriate governmental entities require that changes be made
in such areas of the Building to comply with applicable legal requirements
(including, but not limited to, the ADA), which requirements are triggered by
the Improvements to be constructed in the Second Expansion Space (collectively,
the "Landlord's Compliance Work"). Tenant will be responsible for any
improvements, repairs or upgrades required to comply with the applicable legal
requirements within the Second Expansion Space itself (including the Base, Shell
and Core applicable thereto), which requirements are triggered by the
Improvements. Landlord shall use commercially reasonable efforts to perform
Landlord's Compliance Work in a timely manner and so as to minimize interference
with the construction of the Improvements and with Tenant's use of the Second
Expansion Space, and Tenant shall not be entitled to any abatement of rent in
connection with the completion of Landlord's Compliance Work. Regardless of
anything to the contrary contained in this Tenant Work Letter, Landlord may
disapprove the Final Space Plan or Final Working Drawings on the basis that due
to the Improvements contemplated by such plans, the total cost of Landlord's
Compliance Work would be in excess of One Hundred Thousand Dollars
($100,000.00). In the event Landlord disapproves of the Final Space Plan or the
Final Working Drawings based upon the cost of Landlord's Compliance Work, Tenant
may elect to do any one of the following: (i) pay the cost of Landlord's
Compliance Work in excess of the cap set forth above, in which case Landlord
shall approve the Final Space Plan or Final Working Drawings, as applicable,
(ii) revise the Final Space Plan and/or Final Working Drawings as required to
reduce the cost of Landlord's Compliance Work below the cap set forth above, in
which case Tenant shall be entitled to an abatement of rent as to the Second
Expansion Space only, during the time period reasonably required to so revise
the Final Space Plan and/or Final Working Drawings, or (iii) provide Landlord
with a notice of Tenant's election to terminate the Lease as to the Second
Expansion Space only, which notice shall be in writing and delivered to Landlord
within five (5) business days after Landlord's disapproval of the Final Space
Plan or Final Working Drawings, as applicable, and which termination shall be
effective as of the date which is thirty (30) days after the date of delivery of
such notice. Nothing contained in this Section 1 shall obligate Landlord to
perform any improvements, upgrades or repairs to the common areas of the
Building or to any other portion of the Building (including the Base, Shell and
Core) which are triggered by Improvements to be constructed in any portion of
the Premises leased by Tenant other than the Second Expansion Space, and Tenant
shall remain responsible for any improvements,
EXHIBIT "B"
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upgrades or repairs required in such areas if required by the appropriate
governmental authorities to comply with applicable legal requirements
(including, but not limited to, the ADA).
SECTION 2
IMPROVEMENTS
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2.1 Improvement Allowance. Tenant shall be entitled to a one-time tenant
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improvement allowance (the "Improvement Allowance") in the amount of $194,895.00
(based upon $5.00 per rentable square foot of the Second Expansion Space, $15.00
per rentable square foot of Suites M-100, 101 and 102, and $5.00 per rentable
square foot of Suite 310) for the costs relating to the initial design and
construction of Tenant's improvements, which are permanently affixed to the
Total Expansion Space and/or the cost of items which Tenant is required to
perform in order to comply with legal requirements triggered by Tenant's
improvements, other than costs associated with Landlord's Compliance Work (the
"Improvements"). Tenant may use the Improvement Allowance in any space leased by
Tenant in the Building, and shall not be limited solely to constructing
Improvements within the Total Expansion Space. In no event shall Landlord be
obligated to make disbursements pursuant to this Tenant Work Letter in a total
amount which exceeds the Improvement Allowance. The Improvement Allowance may be
used by Tenant at any time prior to the date which is six (6) months after the
last Expansion Commencement Date. All Improvements for which the Improvement
Allowance has been made available shall be deemed Landlord's property under the
terms of the Lease. Tenant shall not be entitled to any credit for any unused
portion of the Improvement Allowance.
Notwithstanding anything to the contrary in the Lease or this Work Letter,
the Improvements for Suites 101, 102 and M-100 shall provide for an open
mezzanine to the first floor that is substantially similar to and consistent
with the mezzanine in the original Premises, and the Construction Costs shall
include the cost of any changes to the Base, Shell and Core that are necessary
in order to accommodate such mezzanine ("Necessary Mezzanine Changes"); however,
the foregoing shall not require Tenant to construct any particular number of
offices on the mezzanine.
2.2 Disbursement of the Improvement Allowance. Except as otherwise set
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forth in this Tenant Work Letter, the Improvement Allowance shall be disbursed
by Landlord (each of which disbursements shall be made pursuant to Landlord's
disbursement process), only for the following items and costs (collectively, the
"Construction Costs"):
2.2.1 Payment of the fees of the "Architect" and the "Engineers," as
those terms are defined in Section 3.1 of this Tenant Work Letter, and payment
of the fees incurred by, and the cost of documents and materials supplied by,
Landlord and Landlord's consultants in connection with the preparation and
review of the "Construction Drawings," as that term is defined in Section 3.1 of
this Tenant Work Letter;
2.2.2 The payment of plan check, permit and license fees relating to
construction of the Improvements;
2.2.3 The cost of construction of the Improvements;
2.2.4 The cost of any changes in the Base, Shell and Core when such
changes are required by the Construction Drawings (including if such changes are
due to the fact that such work is prepared on an unoccupied basis) and are due
to Tenant's particular use (i.e., to the extent Tenant's use of the Premises is
different from usual and customary office use) or are otherwise required by law
as a result of the construction of the Improvements (other than costs associated
with Landlord's Compliance Work), such cost to include all direct architectural
and/or engineering fees and expenses incurred in connection therewith;
2.2.5 The cost of any changes to the Construction Drawings or
Improvements required by applicable building code or any other governmental law
or regulation (collectively, "Code");
2.2.6 Sales and use taxes;
2.2.7 "Landlord's Supervision Fee," as that term is defined in Section
4.3.2 of this Tenant Work Letter; and
EXHIBIT "B"
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2.2.8 All other reasonable costs to be expended by Landlord or Tenant
in connection with the construction of the Improvements.
2.3 Standard Improvement Package. The Improvements to be constructed in
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accordance with this Tenant Work Letter will be constructed using materials and
finishes which are comparable to the materials and finishes customarily used in
first-class office buildings in the San Francisco area. Tenant shall utilize
materials and finishes which are not of lesser quality than the materials and
finished found in comparable buildings in the vicinity of the Building.
SECTION 3
CONSTRUCTION DRAWINGS
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3.1 Selection of Architect/Construction Drawings. Landlord shall retain
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Huntsman Architecture Group (the "Architect") to prepare the "Construction
Drawings," as that term is defined in this Section 3.1. Landlord shall also
retain Landlord's designated engineering consultants (the "Engineers") to
prepare all plans and engineering working drawings relating to the structural,
mechanical, electrical, plumbing, HVAC, lifesafety, and sprinkler work with
respect to the Improvements. Landlord shall ensure that the Engineers charge
rates which are comparable to the rates charged by similarly qualified engineers
performing similar work in comparable buildings in the vicinity of the Building.
The plans and drawings to be prepared by the Architect and the Engineers
hereunder with respect to the Improvements shall be known collectively as the
"Construction Drawings." Notwithstanding that Landlord has retained the
Architect and Engineers to prepare the Construction Drawings, Landlord shall
have no liability whatsoever in connection therewith and shall not be
responsible for any omissions or errors contained in the Construction Drawings.
3.2 Final Space Plan. Tenant and the Architect shall prepare the final
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space plan for Improvements in the Total Expansion Space (collectively, the
"Final Space Plan"), which Final Space Plan shall include a layout and
designation of all offices, rooms and other partitioning, their intended use,
and equipment to be contained therein, and Tenant shall "sign-off" on such Final
Space Plan to evidence its approval of the Final Space Plan. The Final Space
Plan will be prepared and signed by Tenant on or before November 1, 2000, and
any delay in completing the Final Space Plan beyond such date shall be a Tenant
Delay pursuant to Section 5 below. After Tenant approves the Final Space Plan,
Tenant shall deliver the Final Space Plan to Landlord for Landlord's approval or
reasonable disapproval, which approval or reasonable disapproval shall be
delivered by Landlord to Tenant no later than five (5) days after Landlord's
receipt of such Final Space Plan. If Landlord reasonably disapproves of any
portion of the Final Space Plan, the parties shall meet, within five (5) days
after Landlord's disapproval, to agree upon revisions to be made to the Final
Space Plan to meet the reasonable satisfaction of Landlord. The Architect shall
then revise the Final Space Plan to the form agreed upon in such meeting and
Landlord shall then approve or reasonably disapprove the revised Final Space
Plan no later than twO (2) days after Landlord's receipt of such revised Final
Space Plan. If Landlord shall again reasonably disapprove the revised Final
Space Plan, the parties will revise and review the Final Space Plan again in
accordance with the procedure set forth above until Landlord's reasonable
approval is obtained.
3.3 Final Working Drawings. Landlord, the Architect and the Engineers shall
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complete the architectural and engineering drawings for the Improvements, and
the Architect shall compile a fully coordinated set of architectural,
structural, mechanical, electrical and plumbing working drawings in a form which
is complete to allow subcontractors to bid on the work and to obtain all
applicable permits (collectively, the "Final Working Drawings") and shall submit
the same to Tenant for Tenant's approval or reasonable disapproval, which
approval or reasonable disapproval shall be delivered by Tenant to Landlord no
later than five (5) days after Tenant's receipt of such Final Working Drawings.
If Tenant reasonably disapproves of any portion of the Final Working Drawings,
the parties shall meet, within five (5) days after Tenant's disapproval, to
agree upon revisions to be made to the Final Working Drawings to meet the
reasonable satisfaction of Tenant. The Architect shall then revise the Final
Working Drawings to the form agreed upon in such meeting. Tenant shall then
approve the revised Final Working Drawings no later than two (2) days after
Tenant's receipt of such revised Final Working Drawings. If Tenant shall again
reasonably disapprove the revised Final Working Drawings, the parties will
revise and review the Final Working Drawings again in accordance with the
procedure set forth above until Tenant's reasonable approval is obtained. The
Final Working
EXHIBIT "B"
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Drawings, as approved by Tenant, may be referred to herein as the "Approved
Working Drawings."
3.4 Approved Working Drawings. Landlord shall submit the Approved Working
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Drawings to the appropriate governmental entities for all applicable building
permits necessary to allow "Contractor," as that term is defined in Section 4.1
of this Tenant Work Letter, to commence and fully complete the construction of
the Improvements (the "Permits"). If Tenant desires any change, modification or
alteration in the Approved Working Drawings, Tenant must first obtain the
reasonable prior written consent of Landlord, provided that Landlord may not
refuse to consent to such change order solely on the basis that such change
order will increase the cost of the Improvements (but Landlord may refuse to
consent if such change order would result in the aggregate cost of Landlord's
Compliance Work exceeding $75,000.00). Prior to commencing any change requested
by Tenant to the Approved Working Drawings, Landlord shall prepare and deliver
to Tenant, for Tenant's approval, a change order ("Change Order") setting forth
the additional time required to perform the change and the total cost of such
change, which shall include associated architectural, engineering and
Contractor's fees. If Tenant fails to approve such Change Order in writing
within two (2) business days after such delivery by Landlord, Tenant shall be
deemed to have withdrawn the Change Order and Landlord shall not proceed to
perform the change.
3.5 Time Deadlines. Landlord and Tenant shall cooperate with (i) the
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Architect, the Engineers, and one another to complete all phases of the
Construction Drawings and the permitting process, and (ii) the Contractor, for
approval of the "Cost Proposal," as that term is defined in Section 4.2, below,
in accordance with the dates set forth herein. Landlord and Tenant shall meet on
a weekly basis to discuss their progress in connection with the same. The
applicable dates for approval of items, plans and drawings and selection of a
contractor as described in this Tenant Work Letter are referred to herein as the
"Time Deadlines." Landlord and Tenant agree to comply with the Time Deadlines.
SECTION 4
CONSTRUCTION OF THE TENANT IMPROVEMENTS
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4.1 Contractor. The contractor which shall construct the Improvements shall
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be a contractor selected pursuant to the following procedure. The Final Working
Drawings shall be submitted by Landlord to two (2) general contractors selected
by Landlord, provided that Landlord will endeavor to bid to three (3)
contractors, depending upon availability of qualified and acceptable contractors
capable of performing the work in accordance with Landlord's time schedule.
Landlord will give Tenant written notice of the names of the contractors
selected by Landlord and Tenant shall have the right to reasonably disapprove
any of the contractors by giving Landlord written notice thereof within two (2)
days following Tenant's receipt of the names of such contractors, which notice
shall specify the reasons for Tenant's disapproval (Tenant's failure to give
such disapproval notice to Landlord with such two (2) day period shall
constitute Tenant's approval of the contractors). Each such contractor shall be
invited to submit a sealed, fixed price contract bid (on such bid form as
Landlord shall designate) to construct the Improvements. Each contractor shall
be notified in the bid package of the time schedule for construction of the
Improvements. The contractors will be required to competitively bid all
subtrades. Tenant shall be entitled to review the bids received by Landlord. The
bids shall be submitted promptly to Landlord and a reconciliation shall be
performed by Landlord to adjust inconsistent or incorrect assumptions so that a
like-kind comparison can be made and a low bidder determined. Landlord shall
select the contractor who shall be the lowest bidder and who states that it will
be able to meet Landlord's construction schedule. The contractor selected may be
referred to herein as the "Contractor". Landlord shall cause the Improvements to
be constructed in accordance with the Approved Working Drawings and no changes
shall be made without Tenant's consent (unless such changes are required by a
building inspector or another governmental authority or legal requirement).
4.2 Cost Proposal. After the Approved Working Drawings are approved by
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Landlord and Tenant, Landlord shall provide Tenant with a cost proposal in
accordance with the Approved Working Drawings, which cost proposal shall
include, as nearly as possible, the cost of all items necessary to construct the
Improvements including both hard and soft costs and the Landlord Supervision
Fee, including any amounts already disbursed by Landlord or in the process of
being disbursed by Landlord (the "Cost Proposal"). Landlord does not guaranty
the accuracy of the
EXHIBIT "B"
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Cost Proposal. Tenant shall either (i) approve and deliver the Cost Proposal to
Landlord within five (5) business days of the receipt of the same, or (ii)
notify Landlord within five (5) business days after Tenant's receipt of the Cost
Proposal that Tenant desires to revise the Approved Working Drawings to reduce
the amount of the Cost Proposal, in which case such changes shall be made to the
Approved Working Drawings only in accordance with Section 3.4 above and the
revised Working Drawings shall be provided to the Contractor for repricing
whereupon Landlord shall revise the Cost Proposal for Tenant's approval. This
procedure shall be repeated until the Cost Proposal is approved by Tenant. The
date by which Tenant has approved the Cost Proposal shall be known hereafter as
the "Cost Proposal Delivery Date." All costs expended in connection with the
construction of the Improvements shall be submitted to Tenant for approval in
accordance with this Section 4.2.
4.3 Construction of Improvements by Landlord's Contractor under the
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Supervision of Landlord.
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4.3.1 Over-Allowance Amount. On the Cost Proposal Delivery Date, Tenant
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shall deliver to Landlord cash in an amount (the "Over-Allowance Amount") equal
to the difference between (i) the amount of the Cost Proposal and (ii) the
amount of the Improvement Allowance. The Over-Allowance Amount shall be
disbursed by Landlord after disbursement of the Improvement Allowance. In the
event that after the Cost Proposal Delivery Date, any revisions, changes, or
substitutions shall be made to the Construction Drawings or the Improvements,
any additional costs which arise in connection with such revisions, changes or
substitutions shall be paid by Tenant to Landlord immediately upon Landlord's
request as an addition to the Over-Allowance Amount. In addition, upon
Landlord's determination of the actual costs incurred by or on behalf of
Landlord for the Construction Costs, Tenant shall pay Landlord the amount, if
any, by which such actual costs exceed the sum of the Improvement Allowance and
the Over-Allowance Amount within fifteen (15) days after being billed therefor,
or Landlord may, at its election, require that Tenant deposit with Landlord the
full amount of such excess prior to Landlord's delivery of the applicable
portion of the Expansion Space or the Second Expansion Space to Tenant. No
portion of the Improvement Allowance shall be used to pay Tenant or Tenant's
agents, contractors or employees, unless and until Landlord's contractors and
any other persons and entities employed by or under contract with Landlord have
been paid in full. Any unused portion of the Over-Allowance Amount will be
returned to Tenant promptly after completion of the Improvements and the receipt
of all invoices.
4.3.2 Landlord Supervision. Landlord shall independently retain
--------------------
Contractor to construct the Improvements in accordance with the Approved Working
Drawings and the Cost Proposal and Landlord shall supervise the construction by
Contractor, and Tenant shall pay a construction supervision and management fee
(the "Landlord Supervision Fee") to Landlord (or its agent) in an amount equal
to the product of (i) five percent (5%) and (ii) the Construction Costs up to
$250,000; plus the product of (a) four percent (4%) and (b) any Construction
Costs from $250,001 to $500,000; plus the product of (1) three percent (3%) and
(2) any Construction Costs above $500,000.
4.3.3 Contractor's Warranties and Guaranties. Landlord hereby assigns
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to Tenant all warranties and guaranties by Contractor relating to the
Improvements, and Tenant hereby waives all claims against Landlord relating to,
or arising out of the construction of, the Improvements (excluding any gross
negligence or willful misconduct of Landlord, which Landlord will be liable for
so long as such amounts are not covered by insurance maintained by Tenant or
required to be maintained by Tenant pursuant to the Lease). Such warranties and
guaranties of Contractor shall guarantee that the Improvements shall be free
from any defects in workmanship and materials for a period of not less than one
(1) year from the date of completion thereof.
4.4 Phased Construction/Abatement Period. Tenant shall be entitled to
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elect either (a) to have Landlord construct the Improvements in Suites 101, 102
and M-100 after all such Suites are received by Tenant (collectively, the "First
Floor Suites"), or (b) to wait until all portions of the Total Expansion Space
are received and to have Landlord construct the Improvements (i) in the entire
Total Expansion Space simultaneously or (ii) in three (3) phases, one (1) phase
being the First Floor Suites, one (1) phase being Suite 310, and the other phase
being Suite 200, in order to permit Tenant to conduct business in the portion(s)
not under construction (for example, construction may proceed in the First Floor
Suites while Tenant conducts business in Xxxxx 000 xxx/xx Xxxxx 000, and once
construction in the First Floor Suites is complete, construction in
EXHIBIT "B"
-5-
Suite 200 or Suite 310 would commence and Tenant would conduct business in the
First Floor Suites). Tenant shall provide written notice to Landlord stating
which of the foregoing options Tenant elects, and the proposed dates for
commencement of construction of the Improvements in the applicable portions of
the Total Expansion Space, which notice may be delivered at any time after
Landlord's delivery of the First Floor Suites through the date which is ten (10)
days after Landlord's delivery of the last portion of the Total Expansion Space
being added pursuant to the First and Second Amendments. After Tenant's delivery
of such notice to Landlord, Landlord shall exercise all due diligence to
commence and complete construction of the Improvements and Landlord's Compliance
Work as soon as practicable. During the construction of Improvements in the
First Floor Suites and/or Suite 310, as applicable, Tenant's obligation to pay
Base Rent for the applicable portion of the Expansion Space (i.e., First Floor
Suites and/or Suite 310, as applicable) shall be abated. The abatement period
will commence as of the date physical construction of Improvements (as opposed
to space planning and design) begins in any portion of the First Floor Space
and/or Suite 310, as applicable, and shall end on the date the First Floor
Suites and/or Suite 310, as applicable, are "Substantially Completed" (subject
to the provisions of Section 5.2 below) as defined in Section 5.1 below
("Abatement Period"). Notwithstanding the abatement granted to Tenant for the
First Floor Suites and Suite 310, and in consideration for the abatement granted
to Tenant in Paragraph 4 of this Amendment, there shall be no abatement of rent
for Suite 200 during the construction of Improvements in the Second Expansion
Space. Depending upon the scope of work to be performed, Landlord may require
that Tenant vacate the applicable portion(s) of the Total Expansion Space during
the construction of the Improvements in order to facilitate the construction
process; provided that Landlord and Tenant will cooperate to minimize
interference with Tenant's business operations so long as any compromises or
other concessions do not delay the Substantial Completion of the Improvements.
SECTION 5
COMPLETION OF THE IMPROVEMENTS;
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EXPANSION COMMENCEMENT DATE
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5.1 Ready for Occupancy. For purposes of this Amendment, "Substantial
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Completion" of the First Floor Suites and/or Suite 310, as applicable, shall
occur upon completion of construction of the Improvements in the First Floor
Suites and/or Suite 310, as applicable, pursuant to the Approved Working
Drawings, with the exception of any punch list items and any Tenant fixtures,
work-stations, built-in furniture, or equipment to be installed by Tenant or
under the supervision of Contractor, together with a sign off by the building
inspector or the issuance of a temporary certificate of occupancy (to the extent
such items are required given the scope of the Improvements constructed in the
First Floor Suites and/or Suite 310, as applicable).
5.2 Delay of Substantial Completion of the Expansion Space. Except as
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provided in this Section 5, the applicable Abatement Period shall expire as set
forth in Section 4.4 above. If there shall be a delay or there are delays in the
Substantial Completion of the First Floor Suites and/or Suite 310, as reasonably
determined by the Architect or in the occurrence of any of the other conditions
precedent to the Substantial Completion of the Improvements therein, as a
direct, indirect, partial, or total result of any of the following
(collectively, "Tenant Delays"):
5.2.1 Tenant's failure to comply with the Time Deadlines;
5.2.2 Tenant's failure to timely approve any matter requiring Tenant's
approval;
5.2.3 A breach by Tenant of the terms of this Tenant Work Letter or the
Lease;
5.2.4 Tenant's request for changes in the Approved Working Drawings;
5.2.5 Tenant's requirement for materials, components, finishes or
improvements which are not available in a reasonable time which are different
from, or not included in, the Standard Improvement Package;
5.2.6 Changes to the Base, Shell and Core (excluding changes which are
part of Landlord's Compliance Work) required by the Approved Working Drawings to
the extent such changes are due to Tenant's particular use of the Total
Expansion Space and would not typically
EXHIBIT "B"
-6-
be found in general office space, but excluding delays caused by Necessary
Mezzanine Changes; or
5.2.7 Any other acts or omissions of Tenant, or its agents, or
employees (provided that as to a Tenant Delay pursuant to this section 5.2.7,
Landlord shall provide written notice to Tenant specifying the action or
inaction that Landlord contends constitutes a Tenant Delay pursuant to this
Section 5.2.7, and if such action or inaction is not cured within one (1) day
after receipt of such notice, then a Tenant Delay, as set forth in such notice,
shall be deemed to have occurred commencing as of the date such notice is
received and continuing for the number of days the construction of the
Improvements was in fact delayed as a result of such action or inaction);
then, notwithstanding anything to the contrary set forth in this Amendment and
regardless of the actual date of the Substantial Completion of the First Floor
Suites and/or Suite 310, as applicable, the date of expiration of the Abatement
Period shall be deemed to be the date Substantial Completion of the First Floor
Suites and/or Suite 310, as applicable, would have occurred if no Tenant Delays,
as set forth above, had occurred.
SECTION 6
MISCELLANEOUS
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6.1 Tenant's Entry Into the Total Expansion Space Prior to Substantial
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Completion. Provided that Tenant and its agents do not interfere with, or delay,
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Contractor's work in the Building and the Expansion Space, Landlord shall allow
Tenant access to the portion of the Total Expansion Space under construction
during the construction of the Improvements therein and prior to the Substantial
Completion of such portion of the Expansion Space for the purpose of Tenant
installing overstandard equipment or fixtures (including Tenant's data and
telephone equipment) in such portion of the Total Expansion Space. Prior to
Tenant's entry into such portion of the Total Expansion Space as permitted by
the terms of this Section 6.1, Tenant shall submit a schedule to Landlord and
Contractor, for their approval, which schedule shall detail the timing and
purpose of Tenant's entry. Tenant shall hold Landlord harmless from and
indemnify, protect and defend Landlord against any loss or damage to the
Building or Total Expansion Space and against injury to any persons caused by
Tenant's actions pursuant to this Section 6.1.
6.2 Tenant's Representative. Tenant has designated Xxxxxxx Xxxxxxxxxx as
-----------------------
its sole representative with respect to the matters set forth in this Tenant
Work Letter, who shall have full authority and responsibility to act on behalf
of the Tenant as required in this Tenant Work Letter.
6.3 Landlord's Representative. Landlord has designated Xxxx Xxxxx of PM
-------------------------
Realty Group as its sole representative with respect to the matters set forth in
this Tenant Work Letter, who, until further notice to Tenant, shall have full
authority and responsibility to act on behalf of the Landlord as required in
this Tenant Work Letter.
6.4 Time of the Essence in This Tenant Work Letter. Unless otherwise
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indicated, all references herein to a "number of days" shall mean and refer to
calendar days. In all instances where Tenant is required to approve or deliver
an item, if no written notice of approval is given or the item is not delivered
within the stated time period, at Landlord's sole option, at the end of said
period the item shall automatically be deemed approved or delivered by Tenant
and the next succeeding time period shall commence.
6.5 Tenant's Lease Default. Notwithstanding any provision to the contrary
----------------------
contained in the Lease, if an event of default as described in Section 17.1 of
the Lease or this Tenant Work Letter has occurred at any time on or before the
substantial completion of the Total Expansion Space, then (i) in addition to all
other rights and remedies granted to Landlord pursuant to the Lease, Landlord
shall have the right to withhold payment of all or any portion of the
Improvement Allowance and/or Landlord may cause Contractor to cease the
construction of the Total Expansion Space, and (ii) all other obligations of
Landlord under the terms of this Tenant Work Letter shall be forgiven until such
time as such default is cured pursuant to the terms of this Lease.
EXHIBIT "B"
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6.6 Tenant's Agents. All of Tenant's agents, contractors, and
---------------
subcontractors performing work in, or in connection with, the Expansion Space
(collectively as "Tenant's Agents"), shall be subject to Landlord's reasonable
approval and, if deemed necessary by Landlord to maintain harmony among other
labor at the Building or if required by law or any agreement to which Landlord
is bound, shall be union labor.
6.7 Insurance Requirements. All of Tenant's Agents shall carry liability
----------------------
and Products and Completed Operation Coverage insurance, each in amounts not
less than One Million Dollars ($1,000,000.00) per incident, One Million Dollars
($1,000,000.00) in aggregate, and in form and with companies as are required to
be carried by Tenant as set forth in Article 9.3 of the Lease, and the policies
therefor shall insure Landlord and Tenant, as their interests may appear, as
well as Landlord's contractor, and shall name as additional insureds all
mortgagees of the Building or any other party designated by Landlord. All
insurance maintained by Tenant's Agents shall preclude subrogation claims by the
insurer against anyone insured thereunder. Such insurance shall provide that it
is primary insurance as respects the Landlord and that any other insurance
maintained by Landlord is excess and noncontributing with the insurance required
hereunder.
EXHIBIT "B"
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