EXHIBIT 10.24.2
FIRST AMENDMENT TO OFFICE LEASE
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This FIRST AMENDMENT TO OFFICE LEASE ("FIRST AMENDMENT") is made and
entered into effective as of March 31, 1999, by and between WHLNF REAL ESTATE
LIMITED PARTNERSHIP, a Delaware limited partnership ("LANDLORD"), and
REALSELECT, INC., a Delaware corporation ("TENANT").
R E C I T A L S:
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A. Landlord and Tenant entered into that certain Office Lease dated
as of September 18, 1998 (the "Lease"), pursuant to which Landlord leased to
Tenant, and Tenant leased from Landlord, 34,324 rentable and 32,338 usable
square feet of space within the building located at 000 Xxxx Xxxxxxxxx, Xxxxxxxx
Xxxx, Xxxxxxxxxx (the "BUILDING"), consisting of (i) 18,681 rentable and 17,600
usable square feet of space located on the east wing of the ground floor of the
Building and (ii) 15,643 rentable and 14,738 usable square feet of space located
on the east wing of the second (2nd) floor of the Building, as further described
in the Lease (the "ORIGINAL PREMISES").
B. Landlord and Tenant now desire to amend the Lease in certain
respects, including to (i) expand the Original Premises to include those certain
premises consisting of approximately 8,000 rentable and 7,175 usable square feet
of space located on the first floor of the tower of the Building, as depicted on
Exhibit A attached hereto (the "EXPANSION SPACE"), (ii) expand the Premises to
include approximately 8,274 rentable and 7,421 usable square feet of space
located on the first floor of the tower of the Building as depicted on Exhibit A
attached hereto (the "MUST-TAKE SPACE"), and (iii) otherwise modify the Lease,
all upon the terms and conditions set forth in this First Amendment. The
Expansion Space and the Must-Take Space are sometimes referred to herein
collectively as the "NEW SPACE."
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:
1. Capitalized Terms. Except as otherwise expressly provided herein
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to the contrary, all capitalized terms used in this First Amendment shall have
the same meanings given such terms in the Lease.
2. Addition of New Space. Commencing on the date (the "NEW SPACE
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COMMENCEMENT DATE") which is thirty (30) days after the first to occur of (i)
the date upon which Tenant commences business operations in the Expansion Space
or Must-Take Space or (ii) the date of Substantial Completion (as such term is
defined in Section 3 of the Tenant Work Letter attached hereto as Exhibit B) of
the New Space, the Original Premises shall be expanded to include the New Space
for a term coterminous with the Lease Term for the Original Premises, and leased
on the same terms and conditions set forth in the Lease, subject to the
modifications set forth in this First Amendment, and the "PREMISES" shall mean
the Original Premises and the New Space, unless otherwise specified herein. The
New Space Commencement Date is anticipated to be June 1, 1999. Tenant shall have
the right to occupy all or portion of the New Space prior to the New Space
Commencement Date, but in no event prior to May 1, 1999 (the "BENEFICIAL
OCCUPANCY PERIOD"), provided that (i) a temporary certificate of occupancy (or
its equivalent) shall have been issued by the appropriate governmental
authorities for each such portion of the New Space to be occupied, and (ii) all
of the terms and conditions of the Lease, as amended hereby, shall apply during
the Beneficial Occupancy Period as though the New Space Commencement Date had
occurred (although the New Space Commencement Date shall not actually occur
until the date set forth in this Section 2 above) upon such occupancy of all or
a portion of the New Space by Tenant; provided that, during the Beneficial
Occupancy Period, Tenant shall not be obligated to pay any Base Rent or Direct
Expenses for the New Space so occupied by Tenant.
3. Tenant Improvements. Except as expressly set forth in this First
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Amendment and in the Tenant Work Letter, (i) Tenant shall occupy the New Space
in its current "AS IS"
condition without any obligation on Landlord's part to construct or to pay for
any tenant improvements or refurbishment work in the New Space subject only to
(A) any latent defects in the New Space which could not have been discovered by
Tenant with the exercise of reasonable diligence, and (B) the completion of any
work which is to be performed by Landlord in the New Space or the Building
pursuant to the Tenant Work Letter, and (ii) Tenant shall be solely responsible,
at its sole cost and expense, for constructing any and all alterations and
refurbishment work for the New Space pursuant to and in accordance with the
provisions of Article 8 of the Lease, it being agreed to by the parties that all
provisions of the Original Lease (including the Tenant Work Letter attached
thereto as Exhibit B) which require Landlord to construct, pay for or provide an
allowance for any tenant improvements or refurbishment work shall not apply to
the New Space.
4. Base Rent. From and after the New Space Commencement Date and
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continuing through the initial Lease Term, the Base Rent payable by Tenant for
the New Space shall be as set forth in the following schedule. From the New
Space Commencement Date through October 31, 1999 (the "MUST-TAKE ABATEMENT
PERIOD"), the monthly installment of Base Rent is calculated based upon the
rentable square footage of the Expansion Space only because Tenant is not
obligated to pay Base Rent for the Must-Take Space during such period. From
November 1, 1999 through the expiration of the Lease Term, the monthly
installments of Base Rent are calculated based upon the rentable square footage
of the Expansion Space and of the Must-Take Space.
Rentable Square
Monthly Monthly Rental Footage
Months of Lease Term Installment Rate per Rentable on Which Base
for the New Space of Base Rent Square Foot Rent is Based
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1 - 10/31/99 $15,360.00 $1.92 8,000
11/1/99 - Month 19 $31,246.08 $1.92 16,274
Months 20 - 31 $32,873.48 $2.02 16,274
Month 32 - Expiration $34,500.88 $2.12 16,274
of Lease Term
5. Advance Month's Tenant Share of Rent. Concurrently with Tenant's
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execution of this First Amendment, Tenant shall pay to Landlord the amount of
$31,246.08 which shall represent the first (1st) month's installment of Base
Rent for the Expansion Space and the November, 1999 installment of Base Rent for
the Must-Take Space.
6. Security Deposit. Concurrently with Tenant's execution of this
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First Amendment, Tenant shall deposit with Landlord the amount of $34,500.88 as
an increase to and as part of the Security Deposit which shall be held by
Landlord pursuant to the terms and conditions of Article 20 of the Lease.
7. Tenant's Share of Direct Expenses. On the New Space Commencement
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Date and continuing through the expiration of the Lease Term, Tenant's Share of
Direct Expenses shall be increased by 10.34% (i.e., 5.08% for the Expansion
Space and 5.26% for the Must-Take Space) to 32.14% to reflect the addition of
the New Space to the Original Premises; provided, however, for the first twelve
(12) months of the initial Lease Term for the New Space, Tenant shall have no
obligation to pay Tenant's Share of Direct Expenses for the New Space. The Base
Year for the New Space shall be same as the Base Year for the Original Premises
(i.e., calendar year 1999).
8. Parking. From and after the New Space Commencement Date and
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continuing through the expiration of the Lease Term, Tenant shall have the right
to use an additional four (4) parking spaces for every 1,000 usable square feet
of space in the Expansion Space, subject to the terms and conditions of Article
23 of the Lease; provided, however, that up to five percent (5%) of such spaces
shall be reserved and the remainder shall be unreserved. From and after November
1, 1999 and continuing through the expiration of the Lease Term, Tenant shall
have
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the right to use an additional four (4) parking spaces for every 1,000 usable
square feet of space in the Must-Take Space (the "MUST-TAKE SPACES"), subject to
the terms and conditions of Article 23 of the Lease; provided, however, that up
to five percent (5%) of such spaces shall be reserved and the remainder shall be
unreserved. Tenant may use the Must-Take Spaces upon Tenant's commencement of
business operations in the Must-Take Space; provided, however, prior to November
1, 1999, Tenant's use of the Must-Take Spaces shall be subject to availability.
9. Right of First Offer. Section 1.4 of the Lease is hereby deleted
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in its entirety and replaced with the following:
"1.4 Right of First Offer. During the initial Lease Term, Tenant
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shall have the one-time right of first offer to lease one (1) full floor of
either floors 3, 4 or 5 of the Building (the "FIRST OFFER SPACE ") when such
full floor becomes available for lease as provided hereinbelow; if more than one
of such full floors becomes available at the same time, the First Offer Space
shall consist of one (1) such full floors as shall be designated by Landlord, in
its sole discretion, in Landlord's First Offer Notice (as defined below).
Notwithstanding the foregoing, if less than two (2) years remain in the initial
Lease Term at the time of Landlord's delivery of the First Offer Notice, Tenant
shall not have such right of first offer to lease the First Offer Space
identified in such First Offer Notice unless Tenant has either previously
exercised its extension option pursuant to the Extension Option Rider or
exercises such option concurrently with Tenant's delivery of Tenant's Election
Notice (as defined below). Tenant's right of first offer shall be upon the terms
and conditions set forth in this Section 1.4. Notwithstanding anything to the
contrary contained in this Section 1.4, Tenant's right of first offer contained
in this Section 1.4 shall be subject and subordinate to (A) any leases of the
First Offer Space which, as of the date of execution of this Lease, have been
fully executed by Landlord and the tenants therein (the "INITIAL LEASES"), (B)
all expansion, first offer and similar rights currently provided to the tenants
in the Initial Leases and (C) renewals of the Initial Leases, whether or not
such renewals are pursuant to an express written provision in such leases and
regardless of whether any such renewals are consummated pursuant to new leases
or lease amendments (collectively, the "SUPERIOR RIGHTS"). In addition, Tenant
shall have no right of first offer, and Landlord shall not be obligated to
deliver to Tenant a First Offer Notice, with respect to less than an entire full
floor of space, if less than a full floor becomes available for lease at any
time.
1.4.1 Procedure for Offer. Landlord shall give Tenant written notice
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(the "FIRST OFFER NOTICE") that the First Offer Space shall or has become
available for lease by Tenant pursuant to the terms of Tenant's right of first
offer, as set forth in this Section 1.4, provided that no holder of the Superior
Rights desires to lease all or any portion of such space. Pursuant to such First
Offer Notice, Landlord shall offer to lease to Tenant such available First Offer
Space for a term coterminous with the Lease Term. The First Offer Notice shall
describe the space so offered to Tenant, including, without limitation,
Landlord's determination of the rentable square footage thereof as calculated
pursuant to Landlord's standard rentable area measurements for the Building
which shall be consistent with the measurement standards used for the initial
Premises, and shall also set forth Landlord's determination of the "FIRST OFFER
RENT," as that term is defined in Section 1.4.3 below, and the other terms upon
which Landlord is willing to lease such space to Tenant.
1.4.2 Procedure for Acceptance. If Tenant wishes to exercise
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Tenant's right of first offer with respect to the applicable full floor First
Offer Space described in the First Offer Notice, then within ten (10) business
days of Tenant's receipt of the applicable First Offer Notice, Tenant shall
deliver written notice to Landlord ("TENANT'S ELECTION NOTICE") pursuant to
which Tenant shall elect either to: (i) lease the entire First Offer Space
described in the First Offer Notice at the First Offer Rent and upon the terms
contained in such notice; or (ii) refuse to lease the First Offer Space,
specifying that Tenant is not interested in exercising its right of first offer
for such First Offer Space, in which event Tenant's right of first offer
contained in this Section 1.4 shall terminate and be of no further force or
effect and Landlord shall be free to lease the First Offer Space or any portion
thereof to anyone to whom Landlord desires on any terms Landlord desires. If
Tenant does not notify Landlord of its election of any of the options in clauses
(i) or (ii) hereinabove, Tenant shall be deemed to have elected the option in
clause (ii).
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1.4.3 First Offer Space Rent. The Rent payable by Tenant for the
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First Offer Space (the "FIRST OFFER RENT") shall be equal to the Fair Market
Rental Rate for the First Offer Space, as defined in the Extension Option Rider
attached hereto. Concurrent with Tenant's delivery of Tenant's Election Notice
exercising such right of first offer, Tenant may object in writing to Landlord's
determination of the Fair Market Rental Rate set forth in Landlord First Offer
Notice, in which case the Fair Market Rental Rate shall be determined in
accordance with the appraisal procedures set forth in Section 4 of the Extension
Option Rider. If Tenant does not timely object in writing to Landlord's
determination of the Fair Market Rental Rate, then Tenant shall be deemed to
have rejected such determination and the appraisal procedures in Section 4 of
the Extension Option Rider shall apply.
1.4.4 Construction In First Offer Space. If Tenant leases the First
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Offer Space pursuant to the terms of this Section 1.4, Tenant shall take the
First Offer Space in its "as is" condition as of the date of delivery of such
space by Landlord to Tenant, subject to Landlord's construction of any initial
improvements in such First Offer Space and providing a tenant improvement
allowance to construct such improvements to the extent, if any, included in the
definition of "FIRST OFFER RENT", as set forth in Section 1.4.3.
1.4.5 Amendment to Lease. If Tenant timely exercises Tenant's right
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to lease the First Offer Space as set forth herein, Landlord and Tenant shall
within fifteen (15) business days thereafter execute an amendment to the Lease
memorializing Tenant's lease for such First Offer Space upon the terms and
conditions set forth in this Section 1.4. Tenant shall commence payment of Rent
for the First Offer Space, and the term of the First Offer Space shall commence
upon the date of delivery of such First Offer Space to Tenant with the initial
tenant improvements therefor to be constructed by Landlord, if any,
substantially completed and a certificate or temporary certificate of occupancy
(or its equivalent) has been issued permitting occupancy of such First Offer
Space (the "FIRST OFFER COMMENCEMENT DATE") and terminate coterminous with the
termination of the Lease Term, as such may be extended pursuant to this Lease.
1.4.6 Suspension of Right of First Offer. At Landlord's option, in
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addition to its other remedies under this Lease, Tenant shall not have the right
to lease the First Offer Space, as provided in this Section 1.4, if, as of the
date of the attempted exercise of such right of first offer by Tenant, or as of
the scheduled date of delivery of such First Offer Space to Tenant, Tenant is in
default under this Lease beyond any applicable notice and cure periods. In
addition, and notwithstanding anything to the contrary contained in this Section
1.4, the right to lease the First Offer Space contained in this Section 1.4
shall be personal to the original Tenant executing this Lease and any Affiliate
to which Tenant's entire interest in this Lease has been assigned pursuant to
Section 14.7 below, and may only be exercised by the original Tenant or such
Affiliate assignee, as the case may be (but not by any other assignee, sublessee
or other transferee of Tenant's interest in this Lease or the Premises, or any
part thereof) if, at the time of the attempted exercise of such right of first
offer, the original Tenant or such Affiliate assignee, as the case may be, is in
physical occupancy and possession of at least eighty percent (80%) of the
Premises then leased by Tenant under this Lease."
10. Emergency Generator. Landlord and Tenant hereby memorialize that
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the monthly installment of the amount payable by Tenant in connection with the
acquisition and installation of the Emergency Generator pursuant to Section 6.7
of the Original Lease is $1,799.30.
11. Affiliated Transfers. Landlord understands that Tenant may elect to
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merge the corporate entities of RealSelect and NetSelect as one corporation.
Provided such merger does not significantly diminish the assets held by the two
corporations separately, and such merger and assignment of the Lease in
connection therewith satisfies all of the conditions set forth in Sections
14.7.1 through 14.7.5 of the Lease, Landlord agrees that any such merger shall
not constitute a Transfer as defined in Article 14 of the Lease, and will not,
among other things, require the consent of Landlord.
12. Monument Sign. Landlord agrees and understands that while the Lease
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specifically states in Section 24.8.2 that only the name "RealSelect" can be
displayed on the Monument Sign, Tenant will have the right to substitute a
different name in lieu thereof to reflect a change in Tenant's company name or a
d/b/a. However, any such name change shall be
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subject to Landlord's reasonable prior approval, although Landlord hereby
approves the name change on the Monument Sign to "Xxxxxxx.xxx". In addition, to
the extent that the original Tenant executing this First Amendment, and/or any
Affiliate to which Tenant's interest in the Lease, as amended hereby, or
interest in the Premises has been assigned or sublet, continues to lease and
occupy pursuant to the Lease, as amended hereby, in the aggregate at least
45,000 rentable square feet of space in the Building, Tenant shall have the non-
exclusive right to have its name displayed in a "preferred" manner on the
Monument Sign, the exact location and specifications of which shall be mutually
and reasonably agreed upon by Landlord and Tenant.
13. New Letter of Credit. Tenant shall deliver to Landlord a replacement
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letter of credit (the "NEW LETTER OF CREDIT"), which shall replace the Letter of
Credit (as defined in the XX Xxxxx attached to the Lease). Once Tenant delivers
the New Letter of Credit to Landlord, the New Letter of Credit shall be subject
to all of the terms and conditions set forth in the XX Xxxxx, except as amended
by this Section 13, provided that all references to the Letter of Credit in the
XX Xxxxx shall be deemed to refer to the New Letter of Credit. Subject to the
terms of this Section 13 below, the amount of the New Letter of Credit (the "NEW
LC AMOUNT") shall be $370,000.00, and the New Letter of Credit shall be
delivered to Landlord no later than (i) the date which is sixty (60) days after
Tenant's execution of this First Amendment if, as of such date, Tenant has not
delivered to Landlord evidence satisfactory to Landlord that Tenant has received
at least $7,000,000.00 of private funding for Tenant (the "PRIVATE FUNDING"), or
(ii) September 30, 1999 if, as of the date which is sixty (60) days after
Tenant's execution of this First Amendment, Tenant has delivered to Landlord
evidence satisfactory to Landlord that Tenant has received the Private Funding.
In the event that Tenant successfully completes an initial public offering of
stock in Tenant through the New York Stock Exchange or other nationally
recognized stock exchange, then (A) notwithstanding the foregoing provisions of
this Section 13, if Tenant has not yet delivered the New Letter of Credit to
Landlord pursuant to the terms of this Section 13, provided Tenant has delivered
evidence to Landlord of such initial public offering, the New Letter of Credit
to be delivered by Tenant to Landlord in accordance with the terms of this
Section 13 shall have a New LC Amount of $160,000.00, and (B) if Tenant has
already delivered the New Letter of Credit to Landlord pursuant to the terms of
this Section 13, then the New Letter of Credit delivered by Tenant to Landlord
shall be reduced by $210,000.00 (such that the remaining New LC Amount shall be
$160,000.00) upon the date which is fifteen (15) days after Tenant requests such
reduction and delivers to Landlord evidence of such initial public offering. Any
such reduction in the New LC Amount shall be accomplished through amendment or
replacement of the New Letter of Credit to be provided by Tenant to Landlord at
Tenant's sole cost and expense. Once Tenant delivers the New Letter of Credit to
Landlord in accordance with the terms of this Section 13, the provisions of
Paragraph 5(a) of the XX Xxxxx and the phrase "whether or not the LC Amount has
been reduced pursuant to the provisions of Paragraph 5(a) above" contained in
Paragraph 5(b) of the XX Xxxxx shall be deleted in their entirety and shall be
of no further force or effect. All references in the XX Xxxxx to the LC Amount
shall, for purposes of the New Letter of Credit, be deemed to refer to the New
LC Amount.
14. Brokers. Landlord and Tenant hereby represent and warrant to each
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other that they have not dealt with any real estate broker or agent in
connection with the negotiation of this First Amendment other than Xxxxx & Xxxxx
(the "BROKER"), which Broker shall be paid a brokerage commission in connection
with this First Amendment pursuant to a separate agreement between and/or among
Landlord and the Broker. Each party shall indemnify, defend and hold the other
harmless from any and all claims, demands, losses, liabilities, lawsuits,
judgments, and costs and expenses (including, without limitation, reasonable
attorney's fees) with respect to any leasing commission, compensation or fees
claimed by any other broker or agent in connection with this First Amendment or
its negotiation by reason of any act of the indemnifying party.
15. No Further Modification. Except as set forth in this First Amendment,
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all of the terms and provisions of the Lease shall remain unmodified and in full
force and effect.
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IN WITNESS WHEREOF, this First Amendment has been entered into as of the
day and year first above written.
"Landlord" "Tenant"
WHLNF REAL ESTATE LIMITED PARTNERSHIP, REALSELECT, INC.,
a Delaware limited partnership a Delaware corporation
By: Legacy Partners Commercial, Inc., a Texas By: /s/ Xxxx Xxxxxxxx
corporation, as manager and agent for Landlord ----------------------------------------------
Name: Xxxx Xxxxxxxx
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Its: Chief Financial Officer & Corp. Secretary
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By: /s/ D. Xxxxx Xxxxxx By: /s/ Xxxxxxx Xxxxxxx
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Name: D. Xxxxx Xxxxxx Name: Xxxxxxx Xxxxxxx
Its: Senior Vice President -----------------------------------------
Its: President
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EXHIBIT A
FLOOR PLAN FOR NEW SPACE
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EXHIBIT A - Page 1
EXHIBIT B
TENANT WORK LETTER
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Tenant acknowledges and agrees that the New Space has previously been
constructed including interior tenant improvements therein, and is satisfactory
and shall be accepted by Tenant in its "AS IS" condition as of the date of
execution of this First Amendment and on the New Space Commencement Date;
provided, however, that Landlord shall construct certain modifications to the
interior of the New Space pursuant to the Approved Working Drawings in
accordance with the following provisions of this Tenant Work Letter. The
defined terms used in this Tenant Work Letter shall apply to the design and
construction of the initial Tenant Improvements for the New Space, only, and the
defined terms used in Exhibit B to the Original Lease shall have no application
to the New Space or the design or construction of the initial Tenant
Improvements for the New Space.
SECTION 1
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CONSTRUCTION DRAWINGS FOR THE NEW SPACE
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Prior to the execution of this First Amendment, Landlord and Tenant have
approved a detailed space plan for the construction of certain improvements in
the New Space, which space plan has been prepared by Xxxx & Xxxxxxx Architects,
dated March 31, 1999 (the "FINAL SPACE PLAN"). Based upon and in conformity with
the Final Space Plan, Landlord shall cause an architect and engineers selected
by Landlord to prepare and deliver to Tenant, for Tenant's approval, detailed
specifications and engineered working drawings for the tenant improvements for
the New Space shown on the Final Space Plan (the "WORKING DRAWINGS"). The
Working Drawings shall incorporate modifications to the Final Space Plan as
necessary to comply with the floor load and other structural and system
requirements of the Building. To the extent that the finishes and specifications
are not completely set forth in the Final Space Plan for any portion of the
tenant improvements depicted thereon, the actual specifications and finish work
shall be in accordance with the specifications for the Building's standard
improvement package items, as determined by Landlord. Within five (5) business
days after Tenant's receipt of the Working Drawings, Tenant shall approve or
disapprove the same, which approval shall not be unreasonably withheld;
provided, however, that Tenant may only disapprove the Working Drawings to the
extent such Working Drawings are inconsistent with the Final Space Plan and only
if Tenant delivers to Landlord, within such five (5) business day period,
specific changes proposed by Tenant which are consistent with the Final Space
Plan and do not constitute changes which would result in any of the
circumstances described in items (i) through (iv) below. If any such revisions
are timely and properly proposed by Tenant, Landlord shall cause its architect
and engineers to revise the Working Drawings to incorporate such revisions and
submit the same for Tenant's approval in accordance with the foregoing
provisions, and the parties shall follow the foregoing procedures for approving
the Working Drawings until the same are finally approved by Landlord and Tenant.
Upon Landlord's and Tenant's approval of the Working Drawings, the same shall be
known as the "APPROVED WORKING DRAWINGS". Once the Approved Working Drawings
have been approved by Landlord and Tenant, Tenant shall make no changes, change
orders or modifications thereto without the prior written consent of Landlord,
which consent may be withheld in Landlord's sole discretion if such change or
modification would: (i) directly or indirectly delay the Substantial Completion
of the New Space; (ii) increase the cost of designing or constructing the Tenant
Improvements above the cost of the tenant improvements depicted in the Final
Space Plan, unless Tenant agrees in writing to pay for such increased cost;
(iii) be of a quality lower than the quality of the standard improvement package
items for the Building; and/or (iv) require any changes to the base, shell and
core work or structural improvements or systems of the Building. The Final Space
Plan, Working Drawings and Approved Working Drawings shall be collectively
referred to herein as, the "CONSTRUCTION DRAWINGS". The tenant improvements for
the New Space shown on the Approved Working Drawings shall be referred to herein
as the "TENANT IMPROVEMENTS".
EXHIBIT B - Page 1
SECTION 2
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CONSTRUCTION OF AND PAYMENT FOR THE TENANT IMPROVEMENTS
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Landlord and Tenant hereby agree that Landlord shall, at Landlord's expense
(except as provided in this Section 2), cause a contractor designated by
Landlord (the "CONTRACTOR") to (i) obtain all applicable building permits for
construction of the Tenant Improvements, and (ii) construct the Tenant
Improvements as depicted on the Approved Working Drawings, in compliance with
such building permits and all applicable laws in effect at the time of
construction, including, without limitation, the Americans with Disabilities Act
and Title 24, and in good workmanlike manner. Landlord shall pay for the cost of
the design and construction of the Tenant Improvements in an amount up to, but
not exceeding, the product of (i) the total usable square feet of space in the
New Space (i.e., 14,596) and (ii) eighty-five percent (85%) of Landlord's
original contract cost (excluding Tenant's Data Center Work and Landlord's Work,
as those terms are defined in Exhibit B to the Original Lease) to construct the
Tenant Improvements for the Original Premises divided by the number of usable
square feet in the Original Premises (i.e., 32,338) (the "ALLOWANCE"). Tenant
shall pay for all costs in excess of the Allowance (which shall include a
Landlord supervision fee of our percent (4%) of such costs), which payment shall
be made to Landlord in cash within ten (10) days after Tenant's receipt of
invoice therefor from Landlord. In addition, to the extent any materials for the
Tenant Improvements are other than Building standard (unless specifically
designated in the Final Space Plan), Tenant shall pay for the cost of such non-
Building standard materials (including a four percent (4%) Landlord supervision
fee for such costs). In no event shall Landlord be obligated to pay for any of
Tenant's furniture, computer systems, telephone systems, equipment or other
personal property which may be depicted on the Construction Drawings; such items
shall be paid for by Tenant. Tenant shall not be entitled to receive in cash or
as a credit against any rental or otherwise, any portion of the Allowance not
used to pay for the cost of the design and construction of the Tenant
Improvements.
SECTION 3
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SUBSTANTIAL COMPLETION
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OF THE TENANT IMPROVEMENTS
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3.1 Substantial Completion. For purposes of this First Amendment,
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"SUBSTANTIAL COMPLETION" of the New Space shall occur upon (i) the completion of
construction of the Tenant Improvements in the New Space pursuant to the
Approved Working Drawings, with the exception of any (A) punch list items (which
shall be promptly completed) and (B) any tenant fixtures, work-stations, built-
in furniture, systems or equipment to be installed by Tenant or under the
supervision of Contractor; and (ii) the issuance of a certificate or temporary
certificate of occupancy (or its equivalent) permitting occupancy of the New
Space.
3.2 Delay of the Substantial Completion of the New Space. If there shall
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be a delay or there are delays in the Substantial Completion of the New Space as
a direct, indirect, partial, or total result of any of the following
(collectively, "TENANT DELAYS"):
3.2.1 Tenant's failure to timely approve the Working Drawings or any
other matter requiring Tenant's approval;
3.2.2 A breach by Tenant of the terms of this Tenant Work Letter or
the Lease (as amended by this First Amendment);
3.2.3 Tenant's request for changes in any of the Construction
Drawings (other than changes to cause the Working Drawings to be consistent with
the Final Space Plan);
3.2.4 Tenant's requirement for materials, components, finishes or
improvements which are not available in a commercially reasonable time given the
estimated date of Substantial Completion of the New Space (but only if Landlord
notifies Tenant at the time of Tenant's selection of such items or within a
reasonable period of time thereafter, of such unavailability),
EXHIBIT B - Page 2
as set forth in the First Amendment, or which are different from, or not
included in, Landlord's standard improvement package items for the Building;
3.2.5 Changes to the base, shell and core work, structural components
or structural components or systems of the Building required by the Approved
Working Drawings; or
3.2.6 Any other acts or omissions of Tenant, or its agents, or
employees;
then, notwithstanding anything to the contrary set forth in the Lease or First
Amendment and regardless of the actual date of Substantial Completion of the New
Space, the New Space Commencement Date (as set forth in Section 2 of the First
Amendment) shall be deemed to be the date the New Space Commencement Date would
have occurred if no Tenant Delay or Delays, as set forth above, had occurred.
Notwithstanding the foregoing, for purposes of determining whether the New Space
Commencement Date should be so accelerated, no Tenant Delay shall be deemed to
have occurred unless and until Landlord has provided notice to Tenant (the
"Delay Notice"), specifying the action or inaction by Tenant which Landlord
contends constitutes the Tenant Delay. If such action or inaction is not cured
by Tenant within one (1) business day of receipt of such Delay Notice (the
"Grace Period"), then a Tenant Delay, as set forth in such Delay Notice, shall
be deemed to have occurred commencing as of the expiration of the Grace Period;
provided that Tenant shall only be permitted an aggregate of three (3) days of
Grace Period and, thereafter, a Tenant Delay shall commence upon the delivery of
the Delay Notice to Tenant.
SECTION 4
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MISCELLANEOUS
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Provided that Tenant and its agents do not interfere with Contractor's
work in the Building and the New Space, Contractor shall allow Tenant access to
the New Space at least thirty (30) days prior to Substantial Completion thereof
for the purpose of Tenant installing overstandard equipment or fixtures
(including Tenant's data and telephone equipment) in the New Space. Prior to
Tenant's entry into the New Space as permitted by the terms of this Section 4,
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 Premises, New Space and Real Property and
against injury to any persons caused by Tenant's actions pursuant to this
Section 4.
