exv10w1



 








Exhibit 10.1




SECOND AMENDMENT TO OFFICE LEASE AGREEMENT





     This Second Amendment to Office Lease Agreement (this “Second Amendment”) is made and entered
into as of September 24, 2007, by and between PLAZA CENTER PROPERTY LLC, a Delaware limited
liability company (“Landlord”), and AUTHORIZE.NET HOLDINGS, INC., a Delaware corporation
(“Tenant”).



RECITALS:




     A.      Landlord, as successor-in-interest to EOP Operating Limited Partnership, a Delaware limited
partnership, and Tenant (formerly known as Lightbridge, Inc.) entered into that certain Office
Lease Agreement, dated August 10, 2004 (the “Office Lease”), as amended by that certain First
Amendment, dated May 3, 2005 (collectively, the “Lease”), pursuant to which Landlord leases to
Tenant and Tenant leases from Landlord certain space (the “Existing Premises”) commonly known as
Suites 310, 320 and 600 in the building located at 10800 NE 8th Street, Bellevue, Washington (the
"Building”).



     B.      Landlord and Tenant desire to amend the Lease on the terms and conditions set forth in this
Second Amendment.



     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:




     1.      Defined Terms. Except as explicitly set forth in this Second Amendment, each
initially capitalized term when used herein shall have the same respective meaning as is set forth
in the Lease.



     2.      Premises.



               2.1      Seventh Floor Premises. Effective as of the date (the “Expansion Premises
Commencement Date”) that is the earlier to occur of (i) the date the “Seventh Floor Premises”, as
that term is defined, below, are “Ready for Occupancy,” as that term is defined in Section
5.1 of the Tenant Work Letter attached hereto as Exhibit B (the “Tenant Work Letter”)
(which is anticipated to occur as of January 15, 2008 (the “Anticipated Completion Date”)), or (ii)
the date Tenant first commences the conduct of business from the Seventh Floor Premises, or any
portion thereof, subject to the terms of this Second Amendment, the “Premises” under the Lease
shall consist of (a) 14,281 rentable square feet of space located on the seventh (7th)
floor of the Building, as more particularly set forth on Exhibit A, attached hereto (the
"Seventh Floor Premises”), and (b) 14,148 rentable square feet of space located on the sixth
(6th) floor of the Building (the “Sixth Floor Premises”), which Sixth Floor Premises is
presently part of the Existing Premises. Except as otherwise may be specifically set forth in this
Second Amendment, the rentable square footages of the Sixth Floor Premises and the Seventh Floor
Premises shall not be subject to re-measurement or modification. Tenant hereby acknowledges that
Tenant currently occupies the Sixth Floor Premises, that Tenant shall continue to accept the Sixth
Floor Premises in their existing, “as is” condition, and that Landlord shall have no obligation to
provide or pay for any improvements with respect to the Sixth Floor Premises. Except as
specifically set forth in the Tenant Work Letter, Tenant shall accept the Seventh Floor Premises in
their existing, “as is” condition and Landlord shall not be obligated to provide or pay for any
improvement work or services related to the improvement of the Expansion Premises. Tenant also
acknowledges that neither Landlord nor any agent of Landlord has made any representation or
warranty regarding the condition of the Seventh Floor Premises or with respect to the suitability
of the Seventh Floor Premises for the conduct of Tenant’s business. For purposes of this Second
Amendment, the Seventh Floor Premises shall consist, collectively, of the following two components:
(x) 9,298 rentable square feet of space (to be referred to herein as the “Relocated Third Floor
Premises”) (which is to be leased by Tenant, as more particularly set forth in Section 2.2,
below, in lieu of the 9,298 rentable square feet of space on the third floor of the Building that
is included in the Existing Premises as of the date



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hereof), and (y) 4,983 rentable square feet of space (which is being leased by Tenant in order
to expand the premises leased by Tenant) (the “Expansion Premises”).



               2.2      Surrender of Third Floor Premises.



                           2.2.1    In General. Upon the date (the “Third Floor Surrender Date”) that is five (5)
business days following the Expansion Premises Commencement Date, Tenant’s lease of the “Third
Floor Premises”, as that term is defined, below, shall automatically terminate and be of no further
force and effect, and Landlord and Tenant shall be relieved of their respective obligations under
the Lease, as amended hereby, in connection with the Third Floor Premises, except those obligations
of Tenant set forth in the Lease, as amended hereby, which relate to the term of Tenant’s lease of
the Third Floor Premises and/or which specifically survive the expiration or earlier termination of
the Lease, including, without limitation, the payment by Tenant of all amounts owed by Tenant under
the Lease, as amended hereby, through and including the Third Floor Surrender Date. Tenant shall
vacate the Third Floor Premises, and surrender and deliver possession of the Third Floor Premises
to Landlord free of anyone claiming possession of the Third Floor Premises by, through or under
Tenant on or before the Third Floor Surrender Date in accordance with the provisions of the Lease,
as amended hereby. In the event that Tenant retains possession of the Third Floor Premises or any
part thereof after the Third Floor Surrender Date, then the provisions of Article 22 of the
Office Lease shall apply with respect to the Third Floor Premises and any amounts payable by Tenant
thereunder shall be computed using the rent payable for the last month that the Lease is in effect
with respect to the Third Floor Premises. For purposes of this Second Amendment, the “Third Floor
Premises” shall mean the 9,298 rentable square feet of space leased by Tenant on third floor of the
Building as of the date hereof and known as Suites 310 and 320, which space is part of the Existing
Premises.



                           2.2.2    Representations of Tenant. Tenant represents and warrants to Landlord that,
with respect to the Third Floor Premises, (a) Tenant has not heretofore sublet the Third Floor
Premises nor assigned all or any portion of its interest in the Lease; (b) no other person, firm or
entity has any right, title or interest in the Lease with respect to the Third Floor Premises; and
(c) Tenant has the full right, legal power and actual authority to enter into this Second Amendment
and to terminate the Lease with respect to the Third Floor Premises without the consent of any
person, firm or entity. Tenant further represents and warrants to Landlord that as of the date
hereof there are no, and as of the Third Floor Surrender Date there shall not be any, mechanic’s
liens or other liens encumbering all or any portion of the Third Floor Premises, by virtue of any
act or omission on the part of Tenant, its predecessors, contractors, agents, employees,
successors, assigns or subtenants. The representations and warranties set forth in this
Section 2.2.2 shall survive the termination of the Lease with respect to the Third Floor
Premises and Tenant shall be liable to Landlord for any inaccuracy or any breach thereof.



     3.      Lease Term. The term of the Lease is hereby extended from September 30, 2009 to
the date (the “Extended Expiration Date”) immediately preceding the sixty (60) month anniversary of
the Expansion Premises Commencement Date, and shall expire on the Extended Expiration Date, unless
the Lease, as amended by this Second Amendment, is sooner terminated as provided in the Lease. The
term of the Lease commencing as of October 1, 2009 (the “Extended Term Commencement Date”) and
continuing through and including the Extended Expiration Date is referred to herein as the
"Extended Term”.



     4.      Rent.



               4.1      Base Rent.



                           4.1.1    Modified Existing Premises.



                                       4.1.1.1    Prior to Extended Term Commencement Date. Prior to the Extended Term
Commencement Date, Tenant shall continue to pay monthly Base Rent for the Relocated Third Floor
Premises and the Sixth Floor Premises (i.e., 23,446 rsf of the Premises) (collectively, the
"Modified Existing Premises”) in accordance with the terms of the Lease (i.e., prior to the
Extended Term Commencement Date, the Base Rent payable by Tenant with respect to the Sixth Floor
Premises shall remain as set forth in the Lease and the Base Rent payable by Tenant with respect to
the Relocated Third Floor Premises shall be the Base Rent that would
have been payable by Tenant under the Lease for the Third Floor Premises had this Second
Amendment not been entered into).



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                                       4.1.1.2    As of Extended Term Commencement Date. Effective as of the Extended Term
Commencement Date, Tenant shall pay monthly Base Rent for the Modified Existing Premises in the
amounts set forth below; provided, however, that Landlord and Tenant hereby acknowledge and agree
that, effective as of the Extended Term Commencement Date, (i) the Sixth Floor Premises shall be
deemed to consist of 14,289 rentable square feet, and (ii) the Modified Existing Premises shall be
deemed to consist of 23,587 rentable square feet of space, which rentable square footages shall not
be subject to re-measurement or modification.



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Annual Rental	 
	 	Month of	 	 	Annual	 	 	Monthly Installment	 	 	Rate per	 
	 	Extended Term	 	 	Base Rent	 	 	of Base Rent	 	 	Rentable Square Foot	 
	 	10/1/09 — 1/31/10

	 	 	$	850,311.35	 	 	 	$	70,859.28	 	 	 	$	36.05	 	 
	 	2/1/10 — 1/31/11

	 	 	$	875,785.31	 	 	 	$	72,982.11	 	 	 	$	37.13	 	 
	 	2/1/11 — 1/31/12

	 	 	$	902,202.75	 	 	 	$	75,183.56	 	 	 	$	38.25	 	 
	 	2/1/12 — Extended Expiration Date*

	 	 	$	929,091.93	 	 	 	$	77,424.33	 	 	 	$	39.39	 	 
	 




*Notwithstanding anything contained herein to the contrary, in the event that the Extended
Expiration Date shall occur after 1/31/13, then to the extent the same is due to the Seventh Floor
Premises being Ready for Occupancy following the Anticipated Completion Date as a result of one or
more “Tenant Delays,” as that term is defined in Section 5.2 of the Tenant Work Letter, the monthly
Base Rent for the Modified Existing Premises shall thereafter increase by three percent (3%)
annually, with the first such adjustment to occur as of 2/1/13. In the event that the Extended
Expiration Date shall occur after 1/31/13 due to the Seventh Floor Premises being Ready for
Occupancy following the Anticipated Completion Date for reasons other than one or more Tenant
Delays, then Tenant shall continue to pay monthly Base Rent for the Modified Existing Premises
following 1/31/13 and continuing until the Extended Expiration Date in an amount equal to
$77,424.33 per month.




                           4.1.2    Expansion Premises. Commencing on the Expansion Premises Commencement Date and
continuing through and including the Extended Expiration Date, Tenant shall pay monthly Base Rent
for the Expansion Premises in the amounts set forth below. The term of Tenant’s lease of the
Expansion Premises (which commences as of the Expansion Premises Commencement Date and expires
coterminously with the Modified Existing Premises on the Extended Expiration Date) is referred to
herein as the “Expansion Term.”



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Annual Rental	 
	 	Month of	 	 	Annual	 	 	Monthly Installment	 	 	Rate per	 
	 	Expansion Term	 	 	Base Rent	 	 	of Base Rent	 	 	Rentable Square Foot	 
	 	1-12

	 	 	$	174,405.00	 	 	 	$	14,533.75	 	 	 	$	35.00	 	 
	 	13-24

	 	 	$	179,637.15	 	 	 	$	14,969.76	 	 	 	$	36.05	 	 
	 	25-36

	 	 	$	185,018.79	 	 	 	$	15,418.23	 	 	 	$	37.13	 	 
	 	37-48

	 	 	$	190,599.75	 	 	 	$	15,883.31	 	 	 	$	38.25	 	 
	 	49-60

	 	 	$	196,280.37	 	 	 	$	16,356.70	 	 	 	$	39.39	 	 
	 





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Notwithstanding anything in this Section 4.1.2, above, to the contrary, provided that
Tenant is not in default of the Lease, as amended hereby, beyond any applicable notice and cure
period, Tenant shall not be obligated to pay an amount equal to $14,533.75 of the monthly Base Rent
attributable to the Expansion Premises for the first (1st) month of Tenant’s lease of
the Expansion Premises. Upon Tenant’s execution of this Second Amendment, Tenant shall deliver to
Landlord a check payable to Landlord in the amount of $14,533.75, which amount represents the Base
Rent due for the Expansion Premises or the first month of the Expansion Term following the
expiration of the foregoing free Base Rent period.




               4.2      Expenses and Taxes.



                           4.2.1    Modified Existing Premises.



                                       4.2.1.1    Prior to Extended Term Commencement Date. Prior to the Extended Term
Commencement Date, Tenant shall continue to pay Tenant’s Pro Rata Share of Expenses and Taxes for
the Modified Existing Premises in accordance with the terms of the Lease (i.e., the Expenses and
Taxes payable by Tenant with respect to the Sixth Floor Premises shall remain as set forth in the
Lease and the Expenses and Taxes payable by Tenant with respect to the Relocated Third Floor
Premises shall be calculated and paid by Tenant in the same manner as the Expenses and Taxes
payable by Tenant under the Lease for the Third Floor Premises would have been paid had this Second
Amendment not been entered into).



                                       4.2.1.2    As of Extended Term Commencement Date. Effective as of the Extended Term
Commencement Date, Tenant shall pay Tenant’s Pro Rata Share of Expenses and Taxes for the Modified
Existing Premises in accordance with the terms of the Lease; provided, however, that as of the
Extended Term Commencement Date, with respect to the Modified Existing Premises (which, as set
forth in Section 4.1.1.2, above, shall then be deemed to consist of 23,587 rentable square
feet of space) (i) Tenant’s Pro Rata Share shall equal 17.17%, (ii) Tenant shall only be obligated
to pay Tenant’s Pro Rata Share of Expenses (including estimates thereof) in excess of the Expenses
incurred during the “2010 Base Year,” as that term is defined, below, and (iii) Tenant shall only
be obligated to pay Tenant’s Pro Rata Share of Taxes (including estimates thereof) in excess of the
Taxes incurred during the 2010 Base Year. For purposes of this Second Amendment, the “2010 Base
Year” shall mean the calendar year 2010. In connection with the calculation of Expenses for the
2010 Base Year, Expenses shall not include market-wide cost increases due to extraordinary
circumstances, including, but not limited to, force majeure, boycotts, strikes, conservation
surcharges, embargoes or shortages, or amortized costs relating to capital improvements. Further,
as of and following the Extended Term Commencement Date, for purposes of calculating Expenses due
with respect to the Modified Existing Premises (a) in no event shall the components of Expenses for
any year related to insurance, security or utility costs be less than the components of Expenses
related to insurance, security or utility costs, respectively, in the 2010 Base Year, and (b) in no
event shall Taxes in any year be less than Taxes in the 2010 Base Year.



                           4.2.2    Expansion Premises. Commencing on the Expansion Premises Commencement Date and
continuing through and including the Extended Expiration Date, Tenant shall pay Tenant’s Pro Rata
Share of Expenses and Taxes in accordance with the terms of the Lease; provided, however, that,
with respect to the Expansion Premises, (i) Tenant’s Pro Rata Share shall equal 3.6274%, (ii)
Tenant shall only be obligated to pay Tenant’s Pro Rata Share of Expenses (including estimates
thereof) in excess of the Expenses incurred during the “2008 Base Year,” as that term is defined,
below, and (iii) Tenant shall only be obligated to pay Tenant’s Pro Rata Share of Taxes (including
estimates thereof) in excess of the Taxes incurred during the 2008 Base Year. For purposes of this
Second Amendment, the “2008 Base Year” shall mean the calendar year 2008. In connection with the
calculation of Expenses for the 2008 Base Year, Expenses shall not include market-wide cost
increases due to extraordinary circumstances, including, but not limited to, force majeure,
boycotts, strikes,



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conservation surcharges, embargoes or shortages, or amortized costs relating to capital
improvements. Further, for purposes of calculating Expenses due with respect to the Expansion
Premises (a) in no event shall the components of Expenses for any year related to insurance,
security or utility costs be less than the components of Expenses related to insurance, security or
utility costs, respectively, in the 2008 Base Year, and (b) in no event shall Taxes in any year be
less than Taxes in the 2008 Base Year.



                           4.2.3    Other Terms. Landlord and Tenant hereby acknowledge and agree that (i) all
references to “generally accepted accounting principles” in Section 2 of Exhibit B
to the Lease are hereby deleted and are replaced with “sound real estate accounting principles”,
and (ii) the word “gross” is hereby inserted before the word negligence in Section 2.02(b)
of Exhibit B.



     5.      Security Deposit. Within three (3) business days following the date of the full
execution and delivery of this Second Amendment, Tenant shall deposit with Landlord a security
deposit in the amount of $44,455.69 (the “Additional Security Deposit”). Upon such deposit,
Landlord shall hold an aggregate security deposit under the Lease, as amended by this Second
Amendment, in the amount of $93,781.03. In the event that Tenant shall fail to timely delivery the
Additional Security Deposit, notwithstanding anything in the Lease to the contrary, Tenant shall
immediately be deemed to be in default of the Lease, as amended hereby, without the requirement of
any notice from Landlord or the expiration of any cure period.



     6.      Parking.



               6.1      Modified Existing Premises. Prior to the Extended Term Commencement Date, Tenant
shall continue to retain the parking rights applicable to the Modified Existing Premises (i.e., the
61 Spaces) in accordance with the terms of the Lease (including the parking charges set forth in
Section II.A of Exhibit F of the Office Lease). Commencing as of the Extended Term
Commencement Date and continuing throughout the Extended Term, Tenant shall continue to retain the
parking rights applicable to the Modified Existing Premises (i.e., the 61 Spaces) in accordance
with the terms of the Lease; provided, however, that the parking rate payable by Tenant for Spaces
rented by Tenant in connection with the Modified Existing Premises shall equal the prevailing rate
charged by Landlord from time to time, plus applicable parking taxes.



               6.2      Expansion Premises. During the term of Tenant’s lease of the Expansion Premises,
Tenant shall be entitled to an additional fifteen (15) unreserved parking spaces in the Garage,
which shall be subject to all of the terms set forth in the Lease with respect to the Spaces to
which Tenant is entitled in connection with the Modified Existing Premises; provided, however, that
all times during the term of Tenant’s lease of the Expansion Premises, the parking rate payable by
Tenant for Spaces rented by Tenant in connection with the Expansion Premises shall equal the
prevailing rate charged by Landlord from time to time, plus applicable parking taxes.



     7.      Normal Business Hours. The last sentence of Section 1.13 of the Office
Lease is hereby deleted in its entirety and is replaced with the following:




“Building Service Hours” for the Building are 6:00 A.M. to 6:00 P.M.

on Business Days and 7:00 A.M. to 12:00 P.M. on Saturdays.”



     8.      Notices. Effective as of the date of this Second Amendment, notwithstanding
anything in the Lease to the contrary, all notices to be sent to Landlord shall be delivered to the
following addresses:



	 	 	 
	 

	 	c/o Beacon Capital Partners, LLC
	 

	 	11755 Wilshire Boulevard
	 

	 	Suite 1770
	 

	 	Los Angeles, California 90025
	 

	 	Attention: Mr. Jeremy B. Fletcher
	 
	 	 
	 

	 	and






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	 	c/o Beacon Capital Partners, LLC
	 

	 	200 State Street, 5th Floor
	 

	 	Boston, Massachusetts 02109
	 

	 	Attention: General Counsel
	 
	 	 
	 

	 	and
	 
	 	 
	 

	 	Allen Matkins Leck Gamble Mallory & Natsis LLP
	 

	 	1901 Avenue of the Stars
	 

	 	Suite 1800
	 

	 	Los Angeles, California 90067
	 

	 	Attention: Anton N. Natsis, Esq.






     9.      Deletions. Section III of Exhibit F of the Office Lease is hereby
deleted in its entirety and is of no further force or effect.



     10.     Brokers. Landlord and Tenant hereby warrant to each other that they have had no
dealings with any real estate broker or agent in connection with the negotiation of this Second
Amendment other than The CAC Group, Inc. and Colliers International (the “Brokers”) and that they
know of no other real estate broker or agent who is entitled to a commission in connection with
this Second Amendment. Each party agrees to indemnify and defend the other party against and hold
the other party harmless from any and all claims, demands, losses, liabilities, lawsuits,
judgments, and costs and expenses (including, without limitation, reasonable attorneys’ fees) with
respect to any leasing commission or equivalent compensation alleged to be owing on account of the
indemnifying party’s dealings with any real estate broker or agent other than the Brokers. The
terms of this Section 10 shall survive the expiration or earlier termination of the Lease,
as hereby amended.



     11.     No Other Modifications. Except as otherwise provided herein, all other terms and
provisions of the Lease shall remain in full force and effect, unmodified by this Second Amendment.



     12.     Counterparts. This Second Amendment may be executed in any number of original
counterparts. Any such counterpart, when executed, shall constitute an original of this Second
Amendment, and all such counterparts together shall constitute one and the same Second Amendment.



     13.     Conflict. In the event of any conflict between the Lease and this Second
Amendment, this Second Amendment shall prevail.



     IN WITNESS WHEREOF, the parties have entered into this Second Amendment as of the date first
set forth above.



	 	 	 	 	 
	 	"LANDLORD”:





PLAZA CENTER PROPERTY LLC,

a Delaware limited liability company

 	 
	 	By:  	/S/ Jeremy B. Fletcher
 	 
	 	 	Jeremy B. Fletcher, 	 
	 	 	Senior Managing Director 	 
	 




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	 	"TENANT”:





AUTHORIZE.NET HOLDINGS, INC.,

a Delaware corporation

 	 
	 	By:  	/S/ Timothy C. O’Brien
 	 



	 	 	 	 	 
	 	 	 
	 	Its:  	                       Chief Financial Officer
 	 



	 	 	 	 	 
	 	 	 
	 	By:  	                       /S/ Robert E. Donahue
 	 



	 	 	 	 	 
	 	Its:  	                       Chief Executive Office
 	 
	 	 	 	 
	 	 	 	 
	 




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NOTARY PAGE



STATE OF _______________ )





) ss.


COUNTY OF _____________ )




     I certify that I know or have satisfactory evidence that
__________ is the person who
appeared before me, and said person acknowledged that (he/she) signed this instrument, on oath
stated that (he/she) was authorized to execute the instrument and acknowledged it as the
_______________ of Authorize.net Holdings, Inc., a Delaware corporation, to be the free and
voluntary act of such party for the uses and purposes mentioned in the instrument.




Dated: _______________




_____________________________________________

(Signature)




(Seal or stamp)




Title: ________________________________________




Notary Public in and for the State of _______________




My appointment expires: _______________


STATE OF _______________ )





) ss.


COUNTY OF ______________ )




     I certify that I know or have satisfactory evidence that ___is the person who
appeared before me, and said person acknowledged that (he/she) signed this instrument, on oath
stated that (he/she) was authorized to execute the instrument and acknowledged it as the
___of Authorize.net Holdings, Inc., a Delaware corporation, to be the free and
voluntary act of such party for the uses and purposes mentioned in the instrument.




Dated: _______________




_____________________________________________

(Signature)




(Seal or stamp)




Title: ________________________________________




Notary Public in and for the State of _______________




My appointment expires: _______________



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STATE OF CALIFORNIA                    )





) ss.


COUNTY OF LOS ANGELES               )




     On ____________________, before me, ____________________,
a Notary Public, personally
appeared Jeremy B. Fletcher, personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me
that he executed the same in his authorized capacity, and that by his signature on the instrument,
the person, or the entity upon behalf of which the person acted, executed the instrument.



     WITNESS my hand and official seal.



Signature ______________________            (Seal)





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EXHIBIT A




OUTLINE OF SEVENTH FLOOR PREMISES







 









 








EXHIBIT B




TENANT WORK LETTER




     This Tenant Work Letter shall set forth the terms and conditions relating to the construction
of the tenant improvements in the Seventh Floor Premises. This Tenant Work Letter is essentially
organized chronologically and addresses the issues of the construction of the Seventh Floor
Premises, in sequence, as such issues will arise during the actual construction of the Seventh
Floor Premises.



SECTION 1




LANDLORD’S INITIAL CONSTRUCTION IN THE SEVENTH FLOOR PREMISES




     1.1      Base, Shell and Core of the Seventh Floor Premises. Landlord has constructed, at
its sole cost and expense, the base, shell, and core (i) of the Seventh Floor Premises and (ii) of
the floor of the Building on which the Seventh Floor Premises is located (collectively, the “Base,
Shell, and Core”). The Base, Shell and Core shall consist of those portions of the Seventh Floor
Premises which were in existence prior to the construction of the tenant improvements in the
Seventh Floor Premises.



     1.2      Landlord Work. Landlord shall, at Landlord’s sole cost and expense, prior to the
Expansion Premises Commencement Date, install a new Building standard ceiling system in the Seventh
Floor Premises; provided, however, that, in connection therewith, all presently existing ceiling
mounted light fixtures, HVAC diffusers and returns, life safety devices and sprinklers
(collectively, the “Existing Ceiling Equipment”) shall be reinstalled by Landlord in their
presently existing locations. Notwithstanding the foregoing, subject to the terms of this Tenant
Work Letter, Tenant shall have the right to designate the relocation of one or more components of
the Existing Ceiling Equipment (as shall, if applicable, be set forth in the “Approved Working
Drawings,” as that term is defined in Section 3.4 of this Tenant Work Letter), in which event
Tenant shall be responsible for any costs incurred by Landlord resulting from any such relocation
of the Existing Ceiling Equipment or components thereof (provided, further, than any unused Tenant
Improvement Allowance may be utilized by Tenant for such costs).



SECTION 2




TENANT IMPROVEMENTS




     2.1      Tenant Improvement Allowance. Tenant shall be entitled to a one-time tenant
improvement allowance (the “Tenant Improvement Allowance”) in the amount of $228,060.50 (which
amount equals the sum of (i) the $74,745.00 tenant improvement allowance applicable to the
Expansion Premises, and (ii) the $153,315.50 tenant improvement allowance applicable to the
Modified Existing Premises (based upon 23,587 rsf)) for the costs relating to the initial design
and construction of Tenant’s improvements which are permanently affixed to the Seventh Floor
Premises (the “Tenant Improvements”). In no event shall Landlord be obligated to make
disbursements pursuant to this Tenant Work Letter in a total amount which exceeds the Tenant
Improvement Allowance. All Tenant Improvements for which the Tenant Improvement Allowance has been
made available shall be deemed Landlord’s property under the terms of the Lease, as amended hereby.
In the event that Tenant fails to use the entire Tenant Improvement Allowance on or before the
date (the “Outside Date”) which is one hundred eighty days following the Expansion Premises
Commencement Date, then any remaining balance shall revert to Landlord and Tenant shall have no
further rights with respect thereto (whether as a Rent credit, cash payment, or otherwise). The
Outside Date shall be extended to the extent Tenant’s use of the Tenant Improvement Allowance is
delayed as a result of a “Force Majeure”, as that term is defined in Section 26.03 of the Office
Lease.



     2.2      Disbursement of the Tenant Improvement Allowance. Except as otherwise set forth
in this Tenant Work Letter, the Tenant Improvement Allowance shall be disbursed by Landlord (each
of which disbursements shall be made pursuant to Landlord’s disbursement process) for costs related
to the construction of the Tenant



EXHIBIT B

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Improvements and for the following items and costs (collectively,
the “Tenant Improvement Allowance Items”): (i) 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; (ii) the cost of any
changes in the Base, Shell and Core when such changes are required by the Construction Drawings;
(iii) the cost of any changes to the Construction Drawings or Tenant Improvements required by all
applicable building codes (the “Code”); and (iv) the “Landlord Supervision Fee”, as that term is
defined in Section 4.3.2 of this Tenant Work Letter.



     2.3      Standard Tenant Improvement Package. Landlord has established specifications (the
“Specifications”) for the Building standard components to be used in the construction of the Tenant
Improvements in the Seventh Floor Premises (collectively, the “Standard Improvement Package”),
which Specifications shall be supplied to Tenant by Landlord. The quality of Tenant Improvements
shall be equal to or of greater quality than the quality of the Specifications, provided that
Landlord may, at Landlord’s option, require the Tenant Improvements to comply with certain
Specifications.



SECTION 3




CONSTRUCTION DRAWINGS




     3.1      Selection of Architect/Construction Drawings. Tenant shall retain the
architect/space planner selected by Tenant and approved by Landlord (which approval shall not be
unreasonably withheld, conditioned or delayed) (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,
lifesafety, and sprinkler work of the Tenant Improvements. 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 as
reasonably determined by Landlord, and shall be subject to Landlord’s approval, which approval
shall not be unreasonably withheld, conditioned or delayed. 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 the Lease shall specifically apply to the Construction
Drawings.



     3.2      Final Space Plan. On or before the date set forth in Schedule 1, attached
hereto, Tenant and the Architect shall prepare the final space plan for Tenant Improvements in the
Seventh Floor Premises (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 shall deliver the Final Space Plan to Landlord for
Landlord’s approval, which approval shall not be unreasonably withheld, conditioned or delayed.



     3.3      Final Working Drawings. On or before the date set forth in Schedule 1,
Tenant, the Architect and the Engineers shall complete the architectural and engineering drawings
for the Seventh Floor Premises, and the final architectural 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, which approval shall not be unreasonably withheld, conditioned or delayed.



EXHIBIT B

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     3.4      Permits. The Final Working Drawings shall be approved by Landlord (the “Approved
Working Drawings”) prior to the commencement of the construction of the Tenant Improvements, which
approval by Landlord shall not be unreasonably withheld, conditioned or delayed. Tenant shall
immediately submit the Approved Working Drawings to the appropriate municipal authorities for all
applicable building permits necessary to allow “Contractor,” as that term is defined in Section
4.1, below, to commence and fully complete the construction of the Tenant Improvements (the
“Permits”), and, in connection therewith, Tenant shall coordinate with Landlord in order to allow
Landlord, at its option, to take part in all phases of the permitting process and shall supply
Landlord, as soon as possible, with all plan check numbers and dates of submittal and obtain the
Permits on or before the date set forth in Schedule 1. Notwithstanding anything to the contrary set
forth in this Section 3.4, Tenant hereby agrees that neither Landlord nor Landlord’s
consultants shall be responsible for obtaining any building permit or certificate of occupancy for
the Seventh Floor Premises and that the obtaining of the same shall be Tenant’s responsibility;
provided however that Landlord shall, in any event, 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, provided that
Landlord may withhold its consent, in its sole discretion, to any change in the Approved Working
Drawings if such change would directly or indirectly delay the “Substantial Completion” of the
Seventh Floor Premises as that term is defined in Section 5.1 of this Tenant Work Letter.



     3.5      Time Deadlines. Tenant shall use its best, good faith, efforts and all due
diligence to cooperate with the Architect, the Engineers, and Landlord to complete all phases of
the Construction Drawings and the permitting process and to receive the permits, and with
Contractor for approval of the “Cost Proposal,” as that term is defined in Section 4.2 of
this Tenant Work Letter, as soon as possible after the execution of this Second Amendment, and, in
that regard, shall meet with Landlord on a scheduled basis to be reasonably determined by Landlord,
to discuss Tenant’s progress in connection with the same. The applicable dates for approval of
items, plans and drawings as described in this Section 3, Section 4, below, and in
this Tenant Work Letter are set forth and further elaborated upon in Schedule 1 (the “Time
Deadlines”), attached hereto. Tenant agrees to comply with the Time Deadlines.



SECTION 4




CONSTRUCTION OF THE TENANT IMPROVEMENTS




     4.1      Contractor. A contractor designated by Landlord (“Contractor”) shall construct
the Tenant Improvements.



     4.2      Cost Proposal. After the Approved Working Drawings are signed by 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 Tenant
Improvement Allowance Items to be incurred by Tenant in connection with the design and construction
of the Tenant Improvements (the “Cost Proposal”). Tenant shall approve (or disapprove) and deliver
the Cost Proposal to Landlord within five (5) business days of the receipt of the same, and upon
receipt of the approved Cost Proposal by Landlord, Landlord shall be released by Tenant to purchase
the items set forth in the Cost Proposal and to commence the construction relating to such items.
In the event that Tenant shall disapprove of the Cost Proposal (i) such disapproval shall be deemed
a “Tenant Delay,” as that term is defined in Section 5.2 of this Tenant Work Letter commencing as
of the expiration of such 5-business day approval/disapproval period and continuing until the date
Tenant approves of a Cost Proposal in accordance with the terms hereof, and (ii) Tenant shall
thereafter promptly cause the Approved Working Drawings to be modified in such a fashion that the
resulting Cost Proposal is likely to be approved by Tenant (with any modifications to such drawings
to be subject to Landlord’s approval, which shall not be unreasonably withheld), and Landlord shall
thereafter provide Tenant with a new Cost Proposal for Tenant’s approval in accordance with the
terms hereof. Such process shall be repeated until Tenant approves the Cost Proposal. The date
Tenant approves and delivers the Cost Proposal to Landlord shall be known hereafter as the “Cost
Proposal Delivery Date”.



EXHIBIT B

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     4.3      Construction of Tenant Improvements by Contractor under the Supervision of
Landlord.



               4.3.1    Over-Allowance Amount. For purposes of this Section 4.3.1, the “Over-Allowance
Amount” shall be the difference between (i) the amount of the Cost Proposal, and (ii) the amount of
the Tenant Improvement Allowance (after deducting from the Tenant Improvement Allowance any amounts
expended in connection with the preparation of the Construction Drawings, and the cost of all other
items incurred prior to the commencement of construction of the Tenant Improvements). Tenant shall
pay, immediately upon written notice from Landlord, a percentage of each amount disbursed by
Landlord to the Contractor or otherwise disbursed under this Tenant Work Letter, which percentage
shall be equal to the amount of the Over-Allowance Amount divided by the amount of the Cost
Proposal, and such payment by Tenant shall be a condition to Landlord’s obligation to pay any
amounts of the Tenant 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 Tenant
Improvements, any additional costs which arise in connection with such revisions, changes or
substitutions or any other additional costs shall be paid by Tenant to Landlord on a prorata basis
with Landlord (as reasonably determined by Landlord) consistent with the manner in which the
initial Over-Allowance Amount is paid.



               4.3.2    Landlord’s Retention of Contractor. Landlord shall independently retain
Contractor, on behalf of Tenant, to construct the Tenant 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 in an amount equal to the product of (i) three percent (3%), and (ii)
an amount equal to all costs incurred in connection with the design and construction of the Tenant
Improvements.



               4.3.3    Contractor’s Warranties and Guaranties. Landlord hereby assigns to Tenant all
warranties and guaranties by Contractor relating to the Tenant Improvements, and Tenant hereby
waives all claims against Landlord relating to, or arising out of the construction of, the Tenant
Improvements.



     4.4      Tenant’s Covenants. Tenant hereby indemnifies Landlord for any loss, claims,
damages or delays arising from the actions of Architect on the Seventh Floor Premises or in the
Building. Immediately after the Substantial Completion of the Seventh Floor Premises, Tenant shall
have prepared and delivered to the Building a copy of the “as built” plans and specifications
(including all working drawings) for the Tenant Improvements.



SECTION 5




COMPLETION OF THE TENANT IMPROVEMENTS;

EXPANSION PREMISES COMMENCEMENT DATE




     5.1      Ready for Occupancy. The Seventh Floor Premises shall be deemed “Ready for
Occupancy” upon the Substantial Completion of the Seventh Floor Premises. For purposes of this
Second Amendment, “Substantial Completion” of the Seventh Floor Premises shall mean that (i)
construction of the Tenant Improvements in the Seventh Floor Premises pursuant to the Approved
Working Drawings is complete, with the exception of (a) any punch list items (i.e., minor items of
construction that will not materially adversely affect Tenant’s use of the Seventh Floor Premises
for the uses permitted under the Lease and that can be completed without materially adversely
affecting Tenant’s use of the Seventh Floor Premises for the uses permitted under the Lease) and
(b) any tenant fixtures, work-stations, built-in furniture, or equipment to be installed by Tenant
or under the supervision of Contractor, and (ii) the Seventh Floor Premises are free from
construction materials and debris, except for such construction materials as may be required to
complete the work to be performed by the Contractor.



     5.2      Delay of the Substantial Completion of the Seventh Floor Premises. Except as
provided in this Section 5.2, the Expansion Premises Commencement Date shall occur as set
forth in this Second Amendment and Section 5.1, above. If there shall be a delay or there
are delays in the Substantial Completion of the Seventh Floor



EXHIBIT B

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Premises or in the occurrence of any
of the other conditions precedent to the Expansion Premises Commencement Date, as set forth in this
Second Amendment, as a direct, indirect, partial, or total result of:



               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, as amended
hereby, beyond any applicable notice and cure period;



               5.2.4    Changes in any of the Construction Drawings after disapproval of the same by Landlord or
because the same do not comply with Code or other applicable laws;



               5.2.5    Tenant’s request for changes in the Approved Working Drawings;



               5.2.6    Tenant’s requirement for materials, components, finishes or improvements which are not
included in the Standard Improvement Package and are not available in a commercially reasonable
time given the anticipated date of Substantial Completion of the Seventh Floor Premises, as set
forth in this Second Amendment, or which are different from, or not included in, the Standard
Improvement Package;



               5.2.7    Changes to the Base, Shell and Core required by the Approved Working Drawings; or



               5.2.8    Any other acts or omissions of Tenant, or its agents, or employees;


(each, a “Tenant Delay”) then, notwithstanding anything to the contrary set forth in this Second
Amendment or this Tenant Work Letter and regardless of the actual date of the Substantial
Completion of the Seventh Floor Premises, the date of Substantial Completion of the Seventh Floor
Premises shall be deemed to be the date the Substantial Completion of the Seventh Floor Premises
would have occurred if no Tenant delay or delays, as set forth above, had occurred.




SECTION 6




MISCELLANEOUS




     6.1      Tenant’s Entry Into the Seventh Floor Premises Prior to Substantial Completion.
Provided that Tenant and its agents do not unreasonably interfere with Contractor’s work in the
Building and the Seventh Floor Premises, Landlord and Contractor shall allow Tenant access to the
Seventh Floor Premises prior to the Substantial Completion of the Seventh Floor Premises for the
purpose of Tenant installing overstandard equipment or fixtures (including Tenant’s data and
telephone equipment) in the Seventh Floor Premises. Prior to Tenant’s entry into the Seventh Floor
Premises 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 Seventh Floor Premises and against injury to
any persons caused by Tenant’s actions pursuant to this Section 6.1.



     6.2      Freight Elevators. Landlord shall, consistent with its obligations to other
tenants of the Building, make the freight elevator reasonably available to Tenant in connection
with initial decorating, furnishing and moving into the Seventh Floor Premises.



EXHIBIT B

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     6.3      Tenant’s Representative. Tenant has designated Mr. Jennifer Jordan as its sole
representative with respect to the matters set forth in this Tenant Work Letter, who, until further
notice to Landlord, shall have full authority and responsibility to act on behalf of the Tenant as
required in this Tenant Work Letter.



     6.4      Landlord’s Representative. Landlord has designated Mr. Brad Middleton 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.



     6.5      Tenant’s Agents. All subcontractors, laborers, materialmen, and suppliers
retained directly by Tenant shall all be union labor in compliance with the then existing master
labor agreements.



     6.6      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. 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 such period the item shall automatically be deemed approved or delivered by Tenant and the next
succeeding time period shall commence.



     6.7      Tenant’s Lease Default. Notwithstanding any provision to the contrary contained
in the Lease, as amended hereby, if an event of default as described in the Lease, as amended
hereby, beyond any applicable notice and cure period, or a default by Tenant under this Tenant Work
Letter, has occurred at any time on or before the Substantial Completion of the Seventh Floor
Premises, then (i) in addition to all other rights and remedies granted to Landlord pursuant to the Lease, as amended hereby, Landlord shall have the right to withhold
payment of all or any portion of the Tenant Improvement Allowance and/or Landlord may cause
Contractor to cease the construction of the Seventh Floor Premises (in which case, Tenant shall be
responsible for any delay in the Substantial Completion of the Seventh Floor Premises caused by
such work stoppage as set forth in Section 5 of this Tenant Work Letter), 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 hereby.




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SCHEDULE 1 TO EXHIBIT B




TIME DEADLINES




	 	 	 	 	 
	 

	 	Dates
	 	Actions to be Performed
	 
	 	 	 	 
	A.

	 	September 25, 2007
	 	Final Space Plan to be completed by Tenant and delivered to Landlord.
	 
	 	 	 	 
	B.

	 	October 16, 2007
	 	Tenant to deliver Final Working Drawings to Landlord.
	 
	 	 	 	 
	C.

	 	November 13, 2007
	 	Tenant to deliver Permits to Contractor.
	 
	 	 	 	 
	D.

	 	Five (5) business days after
the receipt of the
Cost Proposal by Tenant
	 	Tenant to approve Cost Proposal and deliver Cost Proposal to Landlord.