Exhibit 10.5.2
SECOND AMENDMENT TO LEASE
THIS SECOND AMENDMENT TO LEASE ("Second Amendment") is made and entered
into as of the 5th day of December, 1996, by and between ARDEN REALTY LIMITED
PARTNERSHIP, a Maryland limited partnership ("Landlord") and INVESTMENT
TECHNOLOGY GROUP, INC., a Delaware corporation ("Tenant").
R E C I T A L S :
A. 400 Corporate Pointe, Ltd., a California general partnership ("400
CORPORATE") and Integrated Analytics Corporation, a California corporation
("IAC") entered into that certain Standard Form Office Lease dated as of July
11, 1990 ("ORIGINAL LEASE"), whereby 400 Corporate leased to IAC and IAC
leased from 400 Corporate certain office space located in that certain
building located and addressed at 400 Corporate Pointe, Culver City,
California 90230 (the "BUILDING"). The Original Lease was subsequently
amended by that certain First Amendment to Lease dated June 1, 1995, by and
between AEW/LBA Acquisition Co. LLC, a California limited liability company
("AEW") as successor-in-interest to 400 Corporate, and Tenant, as
successor-in-interest to IAC (the "FIRST AMENDMENT"). Landlord is
successor-in-interest to AEW. The Original Lease, as amended by the First
Amendment, is referred to herein as the "Lease". Pursuant to the Lease,
Tenant currently occupies 13,696 rentable square feet located on the eighth
(8th) floor of the Building and known as Suite 855 (the "EXISTING PREMISES").
B. By this Second Amendment, Landlord and Tenant desire to add certain
additional space on the seventh (7th) floor of the Building to the Existing
Premises, and to otherwise modify the Lease as provided herein.
C. Unless otherwise defined herein, capitalized terms as used herein
shall have the same meaning 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 hereby agree as follows:
A G R E E M E N T :
1. EXPANSION OF EXISTING PREMISES. Effective as of the Additional
Space Effective Date (as defined below) and continuing until the expiration
of the Lease Term, the Existing Premises shall be modified to add that
certain space consisting of approximately 5,295 rentable square feet located
on the seventh (7th) floor of the Building known as Suite 750 and outlined on
the floor plan attached to this Second Amendment as Exhibit "A" and
incorporated herein by this reference ("ADDITIONAL SPACE"). Accordingly,
effective as of the Additional Space Effective Date, Tenant shall lease an
aggregate of approximately 18,991 rentable square feet of space in the
Building consisting of the Existing Premises and the Additional Space, which
shall be referred to collectively as the "PREMISES." The term "ADDITIONAL
SPACE EFFECTIVE DATE" shall mean the earlier to occur of (a) the first Monday
following the date the Additional Space is Ready for Occupancy (as defined in
Section 5 of the Tenant Work Letter attached to this Second Amendment as
Exhibit "B"), or (b) March 1, 1997. Tenant's lease of the Additional Space
shall expire co-terminously with Tenant's lease of the Existing Premises on
December 31, 2005. Landlord and Tenant hereby acknowledge that when the Must
Take Space is added to the Premises pursuant to Section 8 of this Second
Amendment, Tenant shall lease an aggregate of approximately 20,254 rentable
square feet in the Building consisting of the Existing Premises, the
Additional Space and the Must Take Space. Following the Must Take Space
Effective Date, as defined in Section 8 of this Second Amendment, the term
"Premises" as used in the Lease as amended by this Second Amendment shall
refer to the Existing Premises, the Additional Space and the Must Take Space.
2. BASE RENT FOR THE ADDITIONAL SPACE. Effective as of the Additional
Space Effective Date and continuing until the expiration of the Lease Term,
Tenant shall pay, in accordance with the provisions of this Section 2, Base
Rent for the Additional Space as follows:
Monthly Installment of Basic Monthly Basic Rent Per
Month Rent Rentable Square Foot
----- ---- --------------------
Additional Space $6,512.85 $1.23
Effective Date -
December 31, 2000
January 1, 2001 - $7,942.50 $1.50
December 31, 2005
Concurrently with Tenant's execution of this Second Amendment, Tenant
shall pay to Landlord an amount equal to Basic Rent for the first full month
of Tenant's lease of the Additional Space.
3. TENANT'S PERCENTAGE OF TOTAL RENTABLE AREA. Commencing as of the
Additional Space Effective Date, Tenant's Percentage of Total Rentable Area
with regard to the Additional Space shall be 3.30%, and the Base Year (as
defined in Section 1.7 of the First Amendment) with regard to the Additional
Space shall be calendar year 1997.
4. IMPROVEMENTS TO ADDITIONAL SPACE. Tenant shall construct the
tenant improvements to the Additional Space pursuant to the terms and
conditions of the Tenant Work Letter attached hereto as Exhibit "B," and the
initial construction of such tenant improvements shall be governed by the
Tenant Work Letter rather than by the provisions of Article 14 of the
Original Lease. Except as specifically set forth in the Tenant Work Letter,
Tenant hereby acknowledges that Landlord shall not be obligated to provide or
pay for any improvement work or services related to the improvement of the
Additional Space. Tenant also acknowledges that Landlord has made no
representation or warranty regarding the condition of the Additional Space.
5. PARKING. Landlord and Tenant hereby acknowledge and agree that
pursuant to Section 1(w) of the Original Lease, Tenant is entitled to lease
parking spaces at a ratio of four (4) parking spaces per one thousand (1000)
rentable square feet contained within the Premises from time to time.
Therefore, in addition to the parking spaces currently rented by Tenant
pursuant to Section 1.10 of the First Amendment, commencing as of the
Additional Space Effective Date, Tenant shall be entitled to the use and
rental of an allocation of up to twenty-one (21) additional parking spaces
(some of which may, at Tenant's election, be reserved spaces, subject to the
percentage limitation set forth in Paragraph 56 of the Original Lease)
(collectively, the "ADDITIONAL SPACES") located in the Building's on-site
parking facilities. Tenant shall pay to Landlord for such Additional Spaces
an amount determined in accordance with Sections 1.10(b)(i) and (ii) of the
First Amendment. In addition, Tenant may lease additional unreserved parking
spaces on a month-to-month basis, subject to availability, at the prevailing
market rate charged for such spaces from time to time.
6. SECURITY DEPOSIT. Concurrently with Tenant's execution of this
Second Amendment, Tenant shall deliver to Landlord an additional Security
Deposit in the amount of $6,512.85 which shall increase the total Security
Deposit held by Landlord with regard to the Lease, as amended by this Second
Amendment. The Security Deposit, as increased hereby, shall be held by
Landlord in accordance with the terms and conditions of Article 7 of the
Original Lease.
7. BROKERS. Each party represents and warrants to the other that no
broker, agent or finder negotiated or was instrumental in negotiating or
consummating this Second Amendment other than CB Commercial Real Estate
Group, Inc., who shall be compensated by Landlord pursuant to a separate
agreement. 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 entity who claims or alleges that they were retained or engaged by the
first party or at the request of such party.
8. MUST TAKE SPACE. Tenant hereby agrees to add to the Premises
approximately 1,263 additional rentable square feet of space located on the
seventh (7th) floor of the Building known as Suite 725 ("MUST TAKE SPACE"),
as delineated on Exhibit "A". The Must Take Space shall be delivered to
Tenant on a date selected by Landlord which date is scheduled to be either
May 1, 1997, or January 1, 1998, depending upon whether the current tenant in
the Must Take Space elects to extend its lease term. Notwithstanding the
foregoing, in the event Landlord does not deliver the Must Take Space to
Tenant on or before June 30, 1998, this Section 8 shall be void and of no
further force or effect and Landlord shall have no further obligation to
deliver the Must Take Space to Tenant and Tenant shall have no further
obligation to lease the Must Take Space from Landlord. The "MUST TAKE SPACE
EFFECTIVE DATE" shall be the earlier to occur of (a) the first Monday
following the date the Must Take Space is Ready for Occupancy (as defined in
Section 5 of the Tenant Work Letter attached to this Second Amendment as
Exhibit "B"), or (b) ninety (90) days following delivery of the Must Take
Space to Tenant. Tenant's lease of the Must Take Space shall be on the same
terms and conditions as affect the Premises throughout the Lease Term,
including, without limitation, the payment of Basic Rent as follows:
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Monthly Installment of Basic Monthly Basic Rent Per
Month Rent Rentable Square Foot
----- ---- --------------------
Must Take Space $1,553.49 $1.23
Effective Date -
December 31, 2000
January 1, 2001 - $1,894.50 $1.50
December 31, 2005
Upon the Must Take Space Effective Date, (i) Tenant's Percentage Share
shall be increased to take into account the additional number of rentable
square feet of the Must Take Space, (ii) the Base Year (as defined in Section
1.7 of the First Amendment) with regard to the Must Take Space shall be
either (A) the calendar year in which Landlord delivers the Must Take Space
to Tenant, if Landlord delivers the Must Take Space on or before July 1 of
such calendar year, or (B) the calendar year following the calendar year of
delivery of the Must Take Space to Tenant, if Landlord delivers the Must Take
Space after July 1 of such calendar year, and (iii) the Must Take Space shall
be leased to Tenant in its then "as is" condition (I.E., Landlord shall not
be required to construct any improvements in, or contribute any improvement
allowance for, the Must Take Space), provided Tenant shall construct the
tenant improvements in the Must Take Space pursuant to the terms and
conditions of the Tenant Work Letter attached hereto as Exhibit "B."
Landlord shall provide written notice ("MUST TAKE NOTICE") to Tenant setting
forth the anticipated delivery date of the Must Take Space at least three (3)
months prior to the date of delivery of the Must Take Space. The Lease Term
for the Must Take Space and Tenant's obligation to pay Rent with respect to
the Must Take Space shall commence upon the Must Take Space Effective Date
and shall expire co-terminously with the Renewal Term (as defined in Section
1.5(a) of the First Amendment) for the Premises. Landlord shall not be
liable to Tenant or otherwise be in default hereunder in the event that
Landlord is unable to deliver the Must Take Space to Tenant on the projected
delivery date thereof due to the failure of any other tenant to timely vacate
and surrender to Landlord such Must Take Space, or any portion thereof;
provided, however, Landlord agrees to use its commercially reasonable efforts
to enforce its right to possession of such Must Take Space against such other
tenant. Promptly after the Must Take Space Effective Date, Landlord and
Tenant shall execute a confirmation of Lease Term Dates in a form similar to
Exhibit "C" attached hereto.
9. OPTION TO CANCEL. Section 1.11 of the First Amendment is hereby
amended as follows:
(a) the reference to "June 1, 2000," contained in the eighth line
of Section 1.11 is hereby deleted and a reference to "March 1, 2002" is
substituted in lieu thereof;
(b) the reference to "June 1, 2001," contained in the ninth line
of Section 1.11 is hereby deleted and a reference to "March 1, 2003" is
substituted in lieu thereof;
(c) the following shall be added at the end of Section 1.11:
Notwithstanding the foregoing, Tenant shall be entitled to
exercise its Cancellation Option with regard to either the
entire Premises, or as to only all of the space leased by
Tenant on one floor of the Premises. If Tenant elects to
exercise its Cancellation Option with regard to the eighth
(8th) floor only, Tenant shall be obligated to pay a
cancellation fee calculated pursuant to this Section 1.11,
above (the "EIGHTH FLOOR CANCELLATION FEE"). In the event
Tenant elects to exercise its Cancellation Option with regard
to that portion of the Premises located on the seventh (7th)
floor of the Building (comprised of the Additional Space and
the Must-Take Space), Tenant shall be obligated to pay a
cancellation fee equal to the unamortized balance of leasing
commissions paid by Landlord in connection with the Additional
Space and the Must Take Space, which amortization shall be
calculated on a straight line basis over a period from the
Additional Space Effective Date through the end of the Renewal
Term, with regard to the Additional Space, and over a period
from the Must Take Space Effective Date through the end of the
Renewal Term, with regard to the Must-Take Space (collectively
the "SEVENTH FLOOR CANCELLATION FEE"). Within thirty (30) days
following the Must Take Space Effective Date, Landlord shall
deliver to Tenant a statement setting forth the cost incurred
by Landlord for leasing commissions in connection with the
Additional Space and the Must Take Space. In the event Tenant
elects to exercise its Cancellation Option with regard to the
entire Premises, Tenant shall be obligated to pay the Eighth
Floor Cancellation Fee and the
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Seventh Floor Cancellation Fee in connection with such
cancellation. Notwithstanding the foregoing provisions of this
Section 1.11, in the event that Tenant elects to exercise its
Second Offer Right to expand into the entire eighth (8th)
floor, in lieu of the Cancellation Option, Tenant shall have
the right to terminate its lease of that portion of the
Premises located on the seventh (7th) floor, upon notice to
Landlord delivered concurrently with Tenant's notice of its
intent to expand into the entire eighth (8th) floor. Such
termination shall be effective concurrently with the effective
date of Tenant's expansion onto the entire eighth (8th) floor.
In the case of such termination, Tenant shall not be
obligated to pay the Seventh Floor Cancellation Fee.
10. RIGHT OF SECOND OFFER. Section 1.21 of the First Amendment is
hereby modified as follows:
(a) the reference to "the eighth (8th) floor of the Building (the
"SECOND RIGHT AREA")" contained in the ninth and tenth lines of Section
1.21(a) is hereby deleted in its entirety and a reference to "the fifth
(5th), seventh (7th) and eighth (8th) floors of the Building (provided with
regard to the fifth (5th) and seventh (7th) floors, such Second Offer Right
shall only apply to the remaining space not subject to Tenant's First Right
of First Offer contained in Paragraph 14 of Rider #1 to the Original Lease)
(collectively, the "SECOND RIGHT AREA")" is hereby substituted in lieu
thereof;
(b) the last sentence of Section 1.21(c) is hereby deleted in its
entirety and the following is hereby substituted in lieu thereof:
Notwithstanding any provision of this Section 1.21 to the
contrary, Tenant's Second Offer Right with respect to the
Second Right Space shall be subject to whatever the rights are
of other tenants in the Building, including, without
limitation, all rights of Sacks, Rivera & Zolonz
(collectively, the "PRIOR TENANTS") that exist, and are in
effect, (i) with regard to that portion of the Second Right
Space located on the eighth (8th) floor, as of the date of the
First Amendment, and (ii) with regard to that portion of the
Second Right Space located on the fifth (5th) and seventh
(7th) floors, as of the date of the Second Amendment.
11. OPTION TO RENEW. The phrase "for the Premises or any portion
thereof" contained in the second and third lines of Section 1.12(a) of the
First Amendment is hereby deleted in its entirety and the phrase "for a
minimum of 5,000 rentable square feet of the Premises (subject to Landlord's
prior reasonable approval, which approval right shall be limited to the issue
of whether the remaining space in the Premises is in a configuration which is
leasable to a third party)" is hereby substituted in lieu thereof.
12. STAIRWELL ACCESS. Landlord agrees to allow Tenant access to the
stairwells between the seventh (7th) and eighth (8th) floors of the Building
during normal business hours. In connection therewith, Tenant hereby
acknowledges that Tenant shall be required to install and maintain a time
clock and associated locking device at each of the two (2) stairwell doors on
the seventh (7th) floor, and at each of the two (2) stairwell doors on the
eighth (8th) floor of the Building. Such time clocks and associated locking
devices shall be installed by the Building-designated locksmith as a
component of the Tenant Improvements to be constructed by Tenant pursuant to
the Tenant Work Letter.
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13. MARBLE REPLACEMENT. Landlord agrees, at Landlord's sole cost and
expense, to repair the marble in the entry of the Existing Premises within
thirty (30) days after full execution and delivery of this Second Amendment.
14. NO FURTHER MODIFICATION. Except as set forth in this Second
Amendment, all of the terms and provisions of the Lease shall apply to the
Additional Space and shall remain unmodified and in full force and effect.
From and after the date of this Second Amendment, all references in the Lease
to the "Premises" shall refer to the Existing Premises and the Additional
Space.
IN WITNESS WHEREOF, this Second Amendment has been executed as of the
day and year first above written.
"Landlord":
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: ARDEN REALTY, INC.,
a Maryland corporation
Its sole general partner
By: Victor J. Coleman
VICTOR J. COLEMAN
Its: President and COO
By:
---------------------------------------
Its:
---------------------------------
"Tenant":
INVESTMENT TECHNOLOGY GROUP, INC., a Delaware
corporation
By: John R. MacDonald
Its: Chief Financial Officer
By: Raymond L. Killian, Jr.
Its: President
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EXHIBIT "A"
FLOOR PLAN OF ADDITIONAL SPACE AND MUST-TAKE SPACE
[To Be Provided]
EXHIBIT "A"
EXHIBIT "B"
TENANT WORK LETTER
This Tenant Work Letter shall set forth the terms and conditions
relating to the construction of the Additional Space and the Must Take Space.
This Tenant Work Letter is essentially organized chronologically and
addresses the issues of the construction of the Additional Space and the Must
Take Space, in sequence, as such issues will arise during the actual
construction of the Additional Space and the Must Take Space. The Additional
Space and the Must Take Space may be collectively referred to as the
"IMPROVED SPACE." All references in this Tenant Work Letter to Articles or
Sections of "this Second Amendment" shall mean the relevant portions of
Articles 1 through 13 of this Second Amendment to Lease to which this Tenant
Work Letter is attached as Exhibit B, and all references in this Tenant Work
Letter to Sections of "this Tenant Work Letter" shall mean the relevant
portions of Sections 1 through 5 of this Tenant Work Letter.
SECTION 1
DELIVERY OF THE IMPROVED SPACE
1.1 "AS IS" CONDITION. Upon the full execution and delivery of this
Second Amendment by Landlord and Tenant, Landlord shall deliver the
Additional Space to Tenant, and Tenant shall accept the Additional Space from
Landlord in its presently existing, "as-is" condition. Landlord shall
deliver the Must Take Space to Tenant in its "as is" condition in accordance
with the provisions of Section 8 of this Second Amendment.
1.2 LANDLORD WORK. Landlord shall, at Landlord's sole cost and
expense, ensure that the Building systems, including the HVAC and electrical
systems are in good working order and condition prior to the Additional Space
Effective Date and the Must Take Space Effective Date, respectively
(collectively, the "LANDLORD WORK").
SECTION 2
TENANT IMPROVEMENTS
Landlord has established specifications (the "SPECIFICATIONS") for the
Building standard components to be used in the construction of the Tenant
Improvements in the Improved Space (collectively, the "STANDARD IMPROVEMENT
PACKAGE"). The quality of Tenant Improvements shall be equal to or of
greater quality than the quality of the Specifications, provided that the
Tenant Improvements shall comply with certain Specifications as designated by
Landlord. Landlord may make changes to the Specifications for the Standard
Improvement Package from time to time.
SECTION 3
CONSTRUCTION DRAWINGS
3.1 SELECTION OF ARCHITECT/CONSTRUCTION DRAWINGS. Tenant shall retain
an architect/space planner reasonably approved by Landlord (the "ARCHITECT")
to prepare the "Construction Drawings," as that term is defined in this
Section 3.1. Tenant shall retain the engineering consultants designated by
Landlord (the "ENGINEERS") to prepare all plans and engineering working
drawings relating to the structural, mechanical, electrical, plumbing, HVAC
and lifesafety work in the Improved Space, which work is not part of the
Landlord Work. The plans and drawings to be prepared by Architect and the
Engineers hereunder shall be known collectively as the "CONSTRUCTION
DRAWINGS." All Construction Drawings shall comply with the drawing format
and specifications determined by Landlord, and shall be subject to Landlord's
approval. Tenant and Architect shall verify, in the field, the dimensions
and conditions as shown on the relevant portions of the base building plans,
and Tenant and Architect shall be solely responsible for the same, and
Landlord shall have no responsibility in connection therewith. Landlord's
review of the Construction Drawings as set forth in this Section 3, shall be
for its sole purpose and shall not imply Landlord's review of the same, or
obligate Landlord to review the same, for quality, design, Code compliance or
other like matters. Accordingly, notwithstanding that any Construction
Drawings are reviewed by Landlord or its space planner, architect, engineers
and consultants, and notwithstanding any advice or assistance which may be
rendered to Tenant by Landlord or Landlord's space planner, architect,
engineers, and consultants, Landlord shall have no liability whatsoever in
connection therewith and shall not be responsible for any omissions or errors
contained in the Construction Drawings, and Tenant's waiver and indemnity set
forth in Section 10.1 of this Lease shall specifically apply to the
Construction Drawings.
3.2 FINAL SPACE PLAN. Tenant shall supply Landlord with two (2) copies
signed by Tenant of its final space plan for the Improved Space before any
architectural working drawings or engineering drawings have been commenced.
The final space plan (the "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. Landlord may request clarification or
more specific drawings for special use items not included in the Final Space
Plan. Landlord shall advise Tenant within five (5) business days after
Landlord's receipt of the Final Space Plan for the Improved Space
EXHIBIT "B" - Page 1
if the same is unsatisfactory or incomplete in any respect. If Tenant is so
advised, Tenant shall promptly cause the Final Space Plan to be revised to
correct any deficiencies or other matters Landlord may reasonably require.
3.3 FINAL WORKING DRAWINGS. After the Final Space Plan has been
approved by Landlord, Tenant shall supply the Engineers with a complete
listing of standard and non-standard equipment and specifications, including,
without limitation, B.T.U. calculations, electrical requirements and special
electrical receptacle requirements for the Improved Space, to enable the
Engineers and the Architect to complete the "Final Working Drawings" (as that
term is defined below) in the manner as set forth below. Upon the approval
of the Final Space Plan by Landlord and Tenant, Tenant shall promptly cause
the Architect and the Engineers to complete the architectural and engineering
drawings for the Improved Space, and 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 Landlord for
Landlord's approval. Tenant shall supply Landlord with two (2) copies signed
by Tenant of such Final Working Drawings. Landlord shall advise Tenant
within five (5) business days after Landlord's receipt of the Final Working
Drawings for the Improved Space if the same is unsatisfactory or incomplete
in any respect. If Tenant is so advised, Tenant shall immediately revise the
Final Working Drawings in accordance with such review and any disapproval of
Landlord in connection therewith.
3.4 APPROVED WORKING DRAWINGS. The Final Working Drawings shall be
approved by Landlord (the "APPROVED WORKING DRAWINGS") prior to the
commencement of construction of the Improved Space by Tenant. After approval
by Landlord of the Final Working Drawings, Tenant may submit the same to the
appropriate municipality for all applicable building permits. Tenant hereby
agrees that neither Landlord nor Landlord's consultants shall be responsible
for obtaining any building permit or certificate of occupancy for the
Improved Space and that obtaining the same shall be Tenant's responsibility;
provided, however, that Landlord shall cooperate with Tenant in executing
permit applications and performing other ministerial acts reasonably
necessary to enable Tenant to obtain any such permit or certificate of
occupancy. No changes, modifications or alterations in the Approved Working
Drawings may be made without the prior written consent of Landlord, which
consent may not be unreasonably withheld.
SECTION 4
CONSTRUCTION OF THE TENANT IMPROVEMENTS
4.1 TENANT'S SELECTION OF CONTRACTORS.
4.1.1 THE CONTRACTOR. A general contractor shall be retained
by Tenant to construct the Tenant Improvements. Such general contractor
("CONTRACTOR") shall be selected by Tenant from a list of general contractors
supplied by Landlord, and Tenant shall deliver to Landlord notice of its
selection of the Contractor upon such selection.
4.1.2 TENANT'S AGENTS. All subcontractors, laborers,
materialmen, and suppliers used by Tenant (such subcontractors, laborers,
materialmen, and suppliers, and the Contractor to be known collectively as
"TENANT'S AGENTS") must be approved in writing by Landlord, which approval
shall not be unreasonably withheld or delayed. If Landlord does not approve
any of Tenant's proposed subcontractors, laborers, materialmen or suppliers,
Tenant shall submit other proposed subcontractors, laborers, materialmen or
suppliers for Landlord's written approval.
4.2 CONSTRUCTION OF TENANT IMPROVEMENTS BY TENANT'S AGENTS.
4.2.1 CONSTRUCTION CONTRACT; COST BUDGET. Prior to Tenant's
execution of the construction contract and general conditions with Contractor
(the "CONTRACT"), Tenant shall submit the Contract to Landlord for its
approval, which approval shall not be unreasonably withheld or delayed.
Prior to the commencement of the construction of the Tenant Improvements, and
after Tenant has accepted all bids for the Tenant Improvements, Tenant shall
provide Landlord with a detailed breakdown, by trade, of the final costs to
be incurred or which have been incurred in connection with the design and
construction of the Tenant Improvements to be performed by or at the
direction of Tenant or the Contractor, which costs form a basis for the
amount of the Contract (the "FINAL COSTS").
4.2.2 TENANT'S AGENTS.
4.2.2.1 LANDLORD'S GENERAL CONDITIONS FOR TENANT'S
AGENTS AND TENANT IMPROVEMENT WORK. Tenant's and Tenant's Agent's
construction of the Tenant Improvements shall comply with the following: (i)
the Tenant Improvements shall be constructed in strict accordance with the
Approved Working Drawings; (ii) Tenant's Agents shall submit schedules of all
work relating to the Tenant's Improvements to Contractor and Contractor
shall, within five (5) business days of receipt thereof, inform Tenant's
Agents of any changes which are necessary thereto, and Tenant's Agents shall
adhere to such corrected schedule; and (iii) Tenant shall abide by all rules
made by Landlord's Building manager (including specifically the "Contractor's
Rules and Regulations" for Pepperdine University Plaza) with respect to the
use of freight, loading dock and service elevators, storage of
EXHIBIT "B" - Page 2
materials, coordination of work with the contractors of other tenants, and
any other matter in connection with this Tenant Work Letter, including,
without limitation, the construction of the Tenant Improvements.
4.2.2.2 INDEMNITY. Tenant's indemnity of Landlord as set
forth in Section 10.1 of this Lease shall also apply with respect to any and
all costs, losses, damages, injuries and liabilities related in any way to
any act or omission of Tenant or Tenant's Agents, or anyone directly or
indirectly employed by any of them, or in connection with Tenant's
non-payment of any amount arising out of the Tenant Improvements and/or
Tenant's disapproval of all or any portion of any request for payment. Such
indemnity by Tenant, as set forth in Section 10.1 of this Lease, shall also
apply with respect to any and all costs, losses, damages, injuries and
liabilities related in any way to Landlord's performance of any ministerial
acts reasonably necessary (i) to permit Tenant to complete the Tenant
Improvements, and (ii) to enable Tenant to obtain any building permit or
certificate of occupancy for the Improved Space.
4.2.2.3 REQUIREMENTS OF TENANT'S AGENTS. Each of Tenant's
Agents shall guarantee to Tenant and for the benefit of Landlord that the
portion of the Tenant Improvements for which it is responsible 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. Each of Tenant's Agents
shall be responsible for the replacement or repair, without additional
charge, of all work done or furnished in accordance with its contract that
shall become defective within one (1) year after the later to occur of (i)
completion of the work performed by such contractor or subcontractors and
(ii) the Lease Commencement Date. The correction of such work shall include,
without additional charge, all additional expenses and damages incurred in
connection with such removal or replacement of all or any part of the Tenant
Improvements, and/or the Building and/or common areas that may be damaged or
disturbed thereby. All such warranties or guarantees as to materials or
workmanship of or with respect to the Tenant Improvements shall be contained
in the Contract or subcontract and shall be written such that such guarantees
or warranties shall inure to the benefit of both Landlord and Tenant, as
their respective interests may appear, and can be directly enforced by
either. Tenant covenants to give to Landlord any assignment or other
assurances which may be necessary to effect such right of direct enforcement.
4.2.2.4 INSURANCE REQUIREMENTS.
4.2.2.4.1 GENERAL COVERAGES. All of Tenant's Agents
shall carry worker's compensation insurance covering all of their respective
employees, and shall also carry public liability insurance, including
property damage, all with limits, in form and with companies as are required
to be carried by Tenant as set forth in Article 10 of this Lease.
4.2.2.4.2 SPECIAL COVERAGES. Tenant shall carry
"Builder's All Risk" insurance in an amount approved by Landlord covering the
construction of the Tenant Improvements, and such other insurance as Landlord
may require, it being understood and agreed that the Tenant Improvements
shall be insured by Tenant pursuant to Article 10 of this Lease immediately
upon completion thereof. Such insurance shall be in amounts and shall
include such extended coverage endorsements as may be reasonably required by
Landlord including, but not limited to, the requirement that all of Tenant's
Agents shall carry excess liability and Products and Completed Operation
Coverage insurance, each in amounts not less than $500,000 per incident,
$1,000,000 in aggregate, and in form and with companies as are required to be
carried by Tenant as set forth in Article 10 of this Lease.
4.2.2.4.3 GENERAL TERMS. Certificates for all insurance
carried pursuant to this Section 4.2.2.4 shall be delivered to Landlord
before the commencement of construction of the Tenant Improvements and before
the Contractor's equipment is moved onto the site. All such policies of
insurance must contain a provision that the company writing said policy will
give Landlord thirty (30) days prior written notice of any cancellation or
lapse of the effective date or any reduction in the amounts of such
insurance. In the event that the Tenant Improvements are damaged by any
cause during the course of the construction thereof, Tenant shall immediately
repair the same at Tenant's sole cost and expense. Tenant's Agents shall
maintain all of the foregoing insurance coverage in force until the Tenant
Improvements are fully completed and accepted by Landlord, except for any
Products and Completed Operation Coverage insurance required by Landlord,
which is to be maintained for ten (10) years following completion of the work
and acceptance by Landlord and Tenant. All policies carried under this
Section 4.2.2.4 shall insure Landlord and Tenant, as their interests may
appear, as well as Contractor and Tenant's Agents. All insurance, except
Workers' Compensation, maintained by Tenant's Agents shall preclude
subrogation claims by the insurer against anyone insured thereunder and shall
name Landlord and its sole general partner, Arden Realty, Inc., as additional
insureds. Such insurance shall provide that it is primary insurance as
respects the owner and that any other insurance maintained by owner is excess
and noncontributing with the insurance required hereunder. The requirements
for the foregoing insurance shall not derogate from the provisions for
indemnification of Landlord by Tenant under Section 4.2.2.2 of this Tenant
Work Letter. Landlord may, in its discretion, require Tenant to obtain a
lien and completion bond or some alternate form of security satisfactory to
Landlord in an amount sufficient to ensure the lien-free completion of the
Tenant Improvements and naming Landlord as a co-obligee.
4.2.3 GOVERNMENTAL COMPLIANCE. The Tenant Improvements shall
comply in all respects with the following: (i) all applicable codes and other
state, federal, city or quasi-governmental laws, codes, ordinances and
regulations, as each may apply according to the rulings of the controlling
public official, agent or other person;
EXHIBIT "B" - Page 3
(ii) applicable standards of the American Insurance Association (formerly,
the National Board of Fire Underwriters) and the National Electrical Code;
and (iii) building material manufacturer's specifications.
4.2.4 INSPECTION BY LANDLORD. Landlord shall have the right to
inspect the Tenant Improvements at all times, provided however, that
Landlord's failure to inspect the Tenant Improvements shall in no event
constitute a waiver of any of Landlord's rights hereunder nor shall
Landlord's inspection of the Tenant Improvements constitute Landlord's
approval of the same. Should Landlord disapprove any portion of the Tenant
Improvements, Landlord shall notify Tenant in writing of such disapproval and
shall specify the items disapproved. Any defects or deviations in, and/or
disapproval by Landlord of, the Tenant Improvements shall be rectified by
Tenant at no expense to Landlord, provided however, that in the event
Landlord determines that a defect or deviation exists or disapproves of any
matter in connection with any portion of the Tenant Improvements and such
defect, deviation or matter might adversely affect the mechanical,
electrical, plumbing, heating, ventilating and air conditioning or
life-safety systems of the Building, the structure or exterior appearance of
the Building or any other tenant's use of such other tenant's leased
premises, Landlord may take such action as Landlord deems necessary, at
Tenant's expense and without incurring any liability on Landlord's part, to
correct any such defect, deviation and/or matter, including, without
limitation, causing the cessation of performance of the construction of the
Tenant Improvements until such time as the defect, deviation and/or matter is
corrected to Landlord's satisfaction.
4.2.5 MEETINGS. Commencing upon the execution of this Lease,
Tenant shall hold weekly meetings at a reasonable time, with the Architect
and the Contractor regarding the progress of the preparation of Construction
Drawings and the construction of the Tenant Improvements, which meetings
shall be held at a location designated by Landlord, and Landlord and/or its
agents shall receive prior notice of, and shall have the right to attend, all
such meetings, and, upon Landlord's request, certain of Tenant's Agents shall
attend such meetings. In addition, minutes shall be taken at all such
meetings, a copy of which minutes shall be promptly delivered to Landlord.
One such meeting each month shall include the review of Contractor's current
request for payment.
4.3 NOTICE OF COMPLETION; COPY OF RECORD SET OF PLANS. Within ten (10)
days after completion of construction of the Tenant Improvements, Tenant
shall cause a Notice of Completion to be recorded in the office of the
Recorder of the appropriate County in accordance with Section 3093 of the
Civil Code of the State of California or any successor statute, and shall
furnish a copy thereof to Landlord upon such recordation. If Tenant fails to
do so, Landlord may execute and file the same on behalf of Tenant as Tenant's
agent for such purpose, at Tenant's sole cost and expense. At the conclusion
of construction, (i) Tenant shall cause the Architect and Contractor (A) to
update the Approved Working Drawings as necessary to reflect all changes made
to the Approved Working Drawings during the course of construction, (B) to
certify to the best of their knowledge that the "record-set" of as-built
drawings are true and correct, which certification shall survive the
expiration or termination of this Lease, and (C) to deliver to Landlord two
(2) sets of copies of such record set of drawings within ninety (90) days
following issuance of a certificate of occupancy for the Improved Space, and
(ii) Tenant shall deliver to Landlord a copy of all warranties, guaranties,
and operating manuals and information relating to the improvements,
equipment, and systems in the Improved Space.
SECTION 5
MISCELLANEOUS
5.1 READY FOR OCCUPANCY. For purposes of this Second Amendment, the
Improved Space shall be deemed "READY FOR OCCUPANCY" on the Substantial
Completion of the Improved Space. For purposes of this Second Amendment,
"SUBSTANTIAL COMPLETION" of the Improved Space shall occur upon the
completion of construction of the Tenant Improvements in the Improved Space
pursuant to the Approved Working Drawings, with the exception of any punch
list items.
5.2 TENANT'S REPRESENTATIVE. Tenant has designated Mark Wright 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.
5.3 LANDLORD'S REPRESENTATIVE. Landlord has designated Herbert Porter
and Kimberly Harris as its sole representatives 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.
5.4 TIME OF THE ESSENCE IN THIS TENANT WORK LETTER. Unless otherwise
indicated, all references herein to a "number of days" shall mean and refer
to calendar days. If any item requiring approval is timely disapproved by
Landlord, the procedure for preparation of the document and approval thereof
shall be repeated until the document is approved by Landlord.
5.5 TENANT'S LEASE DEFAULT. Notwithstanding any provision to the
contrary contained in this Lease, if an event of default as described in
Section 25(a) of the Lease or this Tenant Work Letter has occurred at any
time on or before the Substantial Completion of the Improved Space, then (i)
in addition to all other rights and remedies granted to Landlord pursuant to
this Lease, Landlord may cause Contractor to cease the construction of the
Improved Space (in which case, Tenant shall be responsible for any delay in
the substantial completion of the
EXHIBIT "B" - Page 4
Improved Space caused by such work stoppage), 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 the Lease,
as amended by this Second Amendment (in which case, Tenant shall be
responsible for any delay in the substantial completion of the Improved Space
caused by such inaction by Landlord).
EXHIBIT "B" - Page 5
EXHIBIT "C"
NOTICE OF LEASE TERM DATES
AND TENANT'S PROPORTIONATE SHARE
TO:
---------------------------------- DATE:
---------------------------------- ----------------------------
----------------------------------
RE: Second Amendment to Lease dated November _____, 1996, between ARDEN REALTY
LIMITED PARTNERSHIP, a Maryland limited partnership ("LANDLORD"), and
INVESTMENT TECHNOLOGY GROUP, INC., a Delaware corporation ("TENANT"),
concerning Suite 725 (the "Must Take Space"), located at 400 Corporate
Pointe, Culver City, California.
Ladies and Gentlemen:
In accordance with the Second Amendment, Landlord wishes to advise
and/or confirm the following:
1. That the Must Take Space has been accepted herewith by the
Tenant as being substantially complete in accordance with the Lease and that
there is no deficiency in construction.
2. That the Tenant has taken possession of the Must Take Space
and acknowledges that under the provisions of the Lease the Term of said
Lease shall commence as of ____________ for a term of ________________________
ending on ________________________.
3. That in accordance with the Second Amendment, Basic Rental
commenced to accrue on ________________________.
4. If the Must Take Space Effective Date is other than the first
day of the month, the first billing will contain a prorata adjustment. Each
billing thereafter shall be for the full amount of the monthly installment as
provided for in said Lease.
5. Rent is due and payable in advance on the first day of each
and every month during the Term of said Lease. Your rent checks should be
made payable to ________________________ at ___________________________________.
6. The exact number of rentable square feet within the Must Take
Space is __________ square feet.
7. Tenant's Proportionate Share, as adjusted based upon the exact
number of rentable square feet within the Must Take Space is _______%.
AGREED AND ACCEPTED:
TENANT:
,
- ---------------------------------------
a
-------------------------------------
By:
-----------------------------------
Its:
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EXHIBIT "C" - Page 1