Document:

exv10w8

 

EXHIBIT 10.8

EMPLOYMENT AGREEMENT

          THIS AGREEMENT is entered into as of the 1st day of March, 2005 (the “Effective Date”), by and
between Pegasus Solutions, Inc., a Delaware corporation (the “Company”) and Michael Kistner (the
“Executive”).

          WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it is
essential and in the best interest of the Company and its stockholders to enter into this Agreement
to retain the services of the Executive and to ensure his continued dedication and efforts; and

          WHEREAS, in order to induce the Executive to enter into and continue employment by the
Company, the Company desires to provide the Executive with certain benefits during the term of his
employment and, in the event his employment is terminated, to provide the Executive with the
benefits and payments described herein.

          NOW, THEREFORE, in consideration of the respective agreements of the parties contained herein,
it is agreed as follows:

	1.	 	Employment Term.

          The initial term of employment shall commence on the Effective Date and shall expire on the
third anniversary of the Effective Date (the “Initial Term”) provided that in the event neither
party provides Notice of Termination (as hereinafter defined) at least 30 days prior to the
expiration of the Initial Term, such term will be automatically renewed and extended for successive
30 day periods thereafter until terminated as provided herein.

	2.	 	Employment.

          (a) While employed by the Company, Executive shall perform the duties, undertake the
responsibilities as assigned by the Company and exercise the authority customarily performed,
undertaken and exercised by persons situated in a similar executive capacity and, excluding periods
of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during usual business hours to the business and affairs of the
Company to the extent necessary to discharge the responsibilities assigned to the Executive.

	3.	 	Compensation.

          (a) Base Salary. The Company agrees to pay or cause to be paid to the Executive an annual
base salary as mutually agreed, and as may be increased from time to time by mutual agreement
(hereinafter referred to as the “Base Salary”). Such Base Salary shall be payable in accordance
with the Company’s customary practices applicable to its executives.

          (b) Annual Bonus. In addition to Base Salary, the Executive may be awarded, for each fiscal
year ending during the Employment Term, an annual discretionary bonus (the “Annual Bonus”) in
accordance with the terms and conditions of the bonus plan approved by the Company. Any actual
payment or award under such Annual Bonus plan, and the size of any payment or award, will be in
accordance with the terms of the plan. Each such Annual Bonus

 

 

shall be paid no later than the end of the third (3rd) month of the fiscal year
next following the fiscal year for which the Annual Bonus is awarded.

	4.	 	Employee Benefits.

          The Executive shall be entitled to participate in all employee benefit plans, practices and
programs maintained by the Company and made available to all employees generally, including,
without limitation, all pension, retirement, profit sharing, savings, medical, hospitalization,
disability, dental, life or travel accident insurance benefit plans. The Company may reduce
benefit levels if such changes are part of broad-based changes in the Company’s benefit programs
offered generally to all employees. Notwithstanding the foregoing, except as otherwise set forth
herein, nothing herein shall obligate the Company to adopt such plans, practices or programs.

	5.	 	Other Benefits.

          (a) Fringe Benefits and Perquisites. The Executive shall be entitled to participate in the
Executive Perquisite Plan of the Company as described in Attachment A hereto (the “Perquisite
Plan”).

          (b) Expenses. The Executive shall be entitled to receive reimbursement of all expenses
reasonably incurred by him in connection with the performance of his duties hereunder including
promoting, pursuing or otherwise furthering the business or interests of the Company in accordance
with the accounting procedures and expense reimbursement policies of the Company as it shall adopt
from time to time.

	6.	 	Vacation and Sick Leave.

          During the Employment Term, at such reasonable times as the Chief Executive Officer shall in
his discretion permit, the Executive shall be entitled without loss of pay, to absent himself
voluntarily from the performance of his employment under this Agreement, provided that:

          (a) The Executive shall be entitled to twenty-two (22) days of annual vacation in accordance
with Company policies as in effect from time to time.

          (b) The Executive shall be entitled to sick leave (without loss of pay) in accordance with the
Company’s policies as in effect from time to time.

	7.	 	Termination.

          In the event of a Change In Control (as hereinafter defined) resulting in Executive giving
Notice of Termination occurring while this Agreement is in effect or in the event Executive is
terminated by the Company for reasons other than “cause” (as hereinafter defined) prior to the
expiration of the Initial Term of this Agreement, the Company shall pay and provide the following
benefits to Executive:

(1) the Company shall continue to pay Executive as severance pay and in lieu of any
further compensation a monthly payment for a period of twelve (12) months following
the Termination Date, but for no longer period than the expiration of the Initial
Term, an amount equal to Executive’s monthly Base

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Salary and Perquisite Plan in effect for the month immediately preceding the
Termination Date,.

(2) for the twelve (12) month period immediately following the Termination Date, but
for no longer period than the Initial Term, the Company shall reimburse Executive
for COBRA payments for the insurance coverage in effect immediately prior to the
Termination Date. The Company’s obligation hereunder with respect to the foregoing
benefits shall terminate in the event the Executive obtains any such benefits
(regardless of level and scope of coverage) pursuant to a subsequent employer’s
benefit plans.

The Executive hereby acknowledges that full payment and/or performance by the Company of its
obligations as set forth in Section 7 hereof shall be in lieu of any other remedy or cause of
action the Executive may have, either at law or in equity, as a result of the termination of the
Executive’s employment pursuant to such Section.

	8.	 	Definitions.

          (a) Notice of Termination. A Notice of Termination is a written notice given by the Company
to the Executive or by the Executive to the Company terminating this Agreement and the Executives’
employment. The Notice of Termination must be given at least 30 in advance of the Termination Date
(as hereinafter defined).

          (b) Termination Date. For purposes of this Agreement, “Termination Date” shall mean the date
specified in the Notice of Termination provided that if the Executive’s employment is terminated
because of a Change In Control, the date specified in the Notice of Termination shall be not more
than thirty (30) days from the date the Notice of Termination is given to the Company.

          (c) Cause. A termination of employment is for “cause” if the Executive:

	 	(1)	 	has been convicted of or pleads guilty or no contest to a felony; or
	 
	 	(2)	 	intentionally engaged in conduct which is demonstrably and
materially injurious to the Company, monetarily or otherwise or from which
Executive derives an improper material personal benefit; provided, however,
that no termination of the Executive’s employment shall be for Cause as set
forth in this clause (2) until;

	 	(i)	 	there shall have been delivered to the
Executive a copy of a written not notice setting forth that the
Executive was guilty of the conduct set forth in this clause (2) and
specifying the particulars thereof in reasonable detail; and
	 
	 	(ii)	 	the Executive shall have been provided an
opportunity to be heard by the Board (with the assistance of the
Executive’s counsel if the Executive so desires). No act, nor failure
to act, on the Executive’s part shall be considered “intentional”
unless Executive has acted, or failed to act, with an absence of good
faith and

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	 	 	 	without a reasonable belief that Executive’s action or failure to act
was in the best interest of the Company.

	 	(3)	 	commits gross malfeasance or intentionally fails to perform the
duties of the Executive’s position; provided, however, the Company shall first
notify the Executive in writing stating with reasonable specificity the action
or inaction of the Executive which forms the basis for such notice and the
Executive fails to cure such malfeasance or failure within ten (10) days of the
date of such notice; or
	 
	 	(4)	 	violates any valid non-competition or non-disclosure agreement
or the Company’s insider trading policy, if any.

          (d) Change In Control. For purposes of this Agreement, a “Change in Control” shall mean any
of the following events:

(1) An acquisition of any voting securities of the Company (the “Voting Securities”) by any
“Person” (as the term person is used for purposes of Section 12(d) or 13(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) other than any parent,
subsidiary or affiliate of the Company immediately after which such Person has “Beneficial
Ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more
than fifty percent (50%) of the combined voting power of the Company’s then outstanding
Voting Securities; provided, however, in determining whether a Change in Control has
occurred, Voting Securities which are acquired in a “Non-Control Acquisition” (as
hereinafter defined) shall not constitute an acquisition which would cause a Change in
Control. A “Non-Control Acquisition” shall mean an acquisition by (i) an employee benefit
plan (or a trust forming a part thereof) maintained by (A) the Company or (B) any
corporation or other Person of which a majority of its voting power or its voting equity
securities or equity interest is owned, directly or indirectly, by the Company (for purposes
of this definition, a “Subsidiary”) or (ii) the Company or its Subsidiaries,

(2) The individuals who, as of the date of this Agreement is approved by the Board, are
members of the Board (the “Incumbent Board”) cease for any reason to constitute at least one
half (1/2) of the members of the Board; provided, however, that if the election, or
nomination for election of any new director was approved by a vote of the members of the
Board as provided by the Company’s Bylaws, such new director shall, for purposes of this
Agreement, be considered as a member of the Incumbent Board; provided, however, that no
individual shall be considered a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened “Election Contest” (as
described in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the Board (a
“Proxy Contest”) including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest, or

(3) Approval by the stockholders of the Company of:

	 	(i)	 	A complete liquidation or dissolution of the Company, or

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	 	(ii)	 	An agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any Person (other than a
transfer to a Subsidiary or a parent in a Non-Control Acquisition).

	9.	 	Successors and Assigns.

          (a) This Agreement shall be binding upon and shall inure to the benefit of the Company, its
successors and assigns and the Company shall require any successor or assign to expressly assume
and agree to perform this Agreement in the same manner and to the same extent that the Company
would be required to perform if no such succession or assignment had taken place. The term
“Company” as used herein shall include such successors and assigns. The term “successors and
assigns” as used herein shall mean a corporation or other entity acquiring all or substantially all
the assets and business of the Company (including this Agreement) whether by operation of law or
otherwise.

          (b) Neither this Agreement nor any right or interest hereunder shall be assignable or
transferable by the Executive, his beneficiaries or legal representatives, except by will or by the
laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive’s legal personal representative.

	10.	 	Fees and Expenses.

          The Company shall pay all legal fees and related expenses (including the costs of experts,
evidence and counsel) incurred by the Executive as a result of the breach or default by the Company
of the terms hereof.

	11.	 	Notice.

          For purposes of this Agreement, notice and all other communications provided for in the
Agreement (including the Notice of Termination) shall be in writing and shall be deemed to have
been duly given when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party to the other,
provided that all notices to the Company shall be directed to the attention of the Board with a
copy to the Secretary of the Company. All notices and communications shall be deemed to have been
received on the date of delivery thereof or on the third (3rd) business day after the
mailing thereof, except that notice of change of address shall be effective only upon receipt.

	12.	 	Miscellaneous.

          No provision of this Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by the Executive and the Company. No
waiver by either party hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are not expressly set
forth in this Agreement.

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	13.	 	Governing Law.

          This Agreement shall be governed by and construed and enforced in accordance with the laws of
the State of Texas without giving effect to the conflict of law principles thereof. Subject to
Section 16 of this Agreement, any action brought by any party to this Agreement shall be brought
and maintained in a court of competent jurisdiction in Dallas County, Texas.

	14.	 	Severability.

          The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provisions hereof shall not affect the validity or enforceability of the
other provisions hereof.

	15.	 	Entire Agreement.

          This Agreement constitutes the entire agreement between the parties hereto and supersedes all
prior agreements, if any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.

	16.	 	Arbitration.

          Any dispute or controversy arising out of or relating to this Agreement, except the right to
injunctive relief, shall be determined and settled by arbitration in the City of Dallas, Texas, in
accordance with the Employment Dispute Resolution Rules of the American Arbitration Association
then in effect, and judgment upon the award rendered by the arbitrator may be entered in any court
of competent jurisdiction, hereby expressly waiving the right to jury trial. Such arbitrator shall
have no power to modify any of the provisions of this Agreement, and his or her jurisdiction is
limited accordingly. A party requesting arbitration hereunder shall give ten (10) days’ written
notice to the other party to request such arbitration. Unless the arbitrator decides otherwise,
the successful party in any such arbitration shall be entitled to reasonable attorneys’ fees and
costs associated with such arbitration. If the parties hereto cannot agree upon an arbitrator,
then one shall be appointed by the governing office of the American Arbitration Association. Any
arbitrator so appointed shall have extensive experience in a profession connected with the subject
matter of the dispute. Whenever any action is required to be taken under this Agreement within a
specified period of time and the taking of such action is materially affected by a matter submitted
to arbitration, such period shall automatically be extended by the number of days plus ten (10)
that are taken for the determination of that matter by the arbitrator.

          IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its Chairman of
the Board or Chairman of the Compensation Committee and the Executive has executed this Agreement
as of the date and year first above written.

	 	 	 	 	 	 	 
	PEGASUS SOLUTIONS, INC.	 	EXECUTIVE:
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	Michael Kistner
	Print:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

-6-exv10w25

 

Exhibit 10.25

FIRST AMENDMENT OF LEASE

     THIS
FIRST AMENDMENT OF LEASE (this “Amendment”) is entered into on this 7th day
of August, 2003, by and between DALLAS RPFIV CAMPBELL CENTRE ASSOCIATES LIMITED PARTNERSHIP
(“Landlord”) and PEGASUS SOLUTIONS INC. (“Tenant”).

WITNESSETH:

     WHEREAS, Landlord and Tenant entered into that certain Lease Agreement (the
“Lease”) dated September 17, 2001 covering approximately 81,252 square feet of
rentable area in the building (the “Building”) commonly known as Campbell Centre I in
Dallas, Texas; and

     WHEREAS, Landlord and Tenant desire (i) to expand the Premises to include an additional
16,374 square feet of rentable area (the “Expansion Space”) on the fifteenth
(15th) floor of the Building, as outlined and hatched on the floor plan attached
hereto as Exhibit A and incorporated herein for all purposes, and (ii) to further
modify the terms of the Lease as provided herein.

     NOW, THEREFORE, for and in consideration of the sum of Ten Dollars ($10.00) and other
good and valuable consideration paid by each party hereto to the other, the receipt and
sufficiency of which are hereby mutually acknowledged, Landlord and Tenant hereby agree as
follows:

     1. Premises. Effective as of October 31, 2003 (the “Expansion Commencement
Date”), the Premises shall be expanded to include the Expansion Space so that the
Premises shall consist of approximately 97,626 square feet of rentable area located on the
fifteenth (15th), sixteenth (16th), seventeenth (17th), eighteenth
(18th), nineteenth (19th) and twentieth (20th) floors of
the Building.

     2. Basic
Rental. Tenant’s Basic Rental with respect to the Expansion Space for
the period commencing on the Expansion Commencement Date shall be as set forth in the
following schedule:

	 	 	 	 	 	 	 	 	 
	 	 	Annual Basic Rental	 	 
	 	 	Rate Per Rentable	 	Monthly
	               Month	 	Square Foot	 	Basic Rental
	10/31/03–04/30/04
	 	$	0.00	 	 	$	0.00	 
	05/01/04–09/30/06
	 	$	18.50	 	 	$	25,243.25	 
	10/01/06–02/28/10
	 	$	19.25	 	 	$	26,266.63	 
	03/01/10–02/29/12
	 	$	20.00	 	 	$	27,290.00	 

     3. Expense
Stop. The Expense Stop for the Expansion Space shall be equal to the
Basic Cost per rentable square foot in the Building for the calendar year 2003, adjusted
pursuant
to Paragraph (d) of Exhibit C to the Lease. Paragraph (e) of Exhibit C to the Lease
shall also
apply to the Expansion Space.

     4. Parking. Effective as of the Expansion Commencement Date the Lease shall be
amended to reflect that (i) Tenant shall be entitled to fifty-seven (57) additional
unreserved
parking spaces (one (1) of which Tenant may elect to convert to a reserved parking
space), and
(ii) Tenant’s rental obligations with respect to such fifty-seven (57) additional parking spaces
shall be $0.00.

     5. Tenant
Finish. Landlord shall construct and install leasehold improvements in
the Expansion Space pursuant to the Work Letter attached hereto as Exhibit B and
made a part
hereof for all purposes.

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     6. Eyebrow Signage. Subject to approval by the City of Dallas, Texas, if prior
to January 31, 2004 (i) the Premises are expanded to include an additional full floor in the
lower bank of the Building (in addition to the 97,626 square feet of rentable area leased pursuant
to this Amendment), or (ii) a Tenant Affiliate (as hereinafter defined) leases a full floor in the
lower bank of the Building (the “Affiliate
Lease”), Tenant shall have the non-exclusive
right, at its cost, to install and maintain an eyebrow sign (the
“Eyebrow Signage”) reflecting
Tenant’s name in one (1) location on the exterior of the Building. The size, color, lettering, quality,
design, construction and exact location of the Eyebrow Signage shall comply in all respects with all
governmental laws, codes, rules and regulations, and shall be subject to Landlord’s reasonable
approval. Tenant shall, at its risk and expense and at Landlord’s election, remove the Eyebrow
Signage within thirty (30) days after Landlord’s request therefor following the occurrence of any
of the following events: (i)the termination of Tenant’s right to possess the Premises in
accordance with the terms of this Lease; or (ii) the termination of Tenant’s Affiliate’s right
to possess its premises in accordance with the terms of the Affiliate Lease; or (iii) the final
termination of this Lease or expiration of the Term as extended or renewed; or (iv) the final
termination of the Affiliate Lease or expiration of the term of the Affiliate Lease as
extended or
renewed; or (v) Tenant ceases to lease at least seven (7) full floors in the Building if
Tenant’s
right to the Eyebrow Signage arose from the expansion of the Premises, or Tenant ceases to
lease
at least six (6) full floors in the Building if Tenant’s right to the Eyebrow Signage arose
from the
Affiliate Lease; or (vi) Tenant’s Affiliate ceases to lease at least one (1) full floor in the
Building
if Tenant’s right to the Eyebrow Signage arose from the Affiliate Lease. Tenant shall repair
all
damage caused by the installation, maintenance, or removal of the Eyebrow Signage and restore
the Building and the Project to its condition before the installation of the Eyebrow Signage,
ordinary wear and tear excepted. If Tenant fails to take any of the foregoing actions,
Landlord
may, after giving Tenant ten (10) days prior written notice, without compensation to Tenant,
and
at Tenant’s expense, remove the Eyebrow Signage and perform the related restoration or repair
work and dispose of the Eyebrow Signage in a manner Landlord deems appropriate. The rights
set forth in this Paragraph 6 are personal to Tenant and may not be assigned to any party
(other
than to a Permitted Transferee, as defined in Section 10.b of the Lease). As used herein the
term
“Affiliate” shall mean an entity that is controlled by, or is under common control
with Tenant.
For purposes hereof, the term “control” shall mean the ownership of more than 25% of
the
beneficial interest or the voting power of the controlled entity.

     7. Extension
Options. Tenant’s exercise of its rights to extend the Term set forth in
Exhibit G to the Lease shall include the Expansion Space.

     8. Tenant
Estoppel. Tenant hereby confirms and ratifies the Lease, as amended
hereby, acknowledges that Landlord is not in default under the Lease as of the date this
Amendment is executed by Tenant and accepts the Premises “AS IS”, without benefit of further
improvements except as expressly provided in this Amendment, and without warranty of
suitability or fitness for a particular purpose.

     9. Commissions. Tenant represents that it has dealt with no broker, agent or other
person in connection with this Amendment other than GLV Realty
Advisors (“Broker”) and that
no broker, agent or other person brought about this Amendment (other than Broker), and Tenant
shall indemnify and hold Landlord harmless from and against any and all claims, losses, costs or
expenses (including attorneys’ fees and expenses) by any broker, agent or other person (except
those of Broker) claiming a commission or other form of compensation by virtue of having dealt
with Tenant with regard to this transaction contemplated by this Amendment. The provisions of
this paragraph shall survive the expiration of the Lease Term or any renewal or extension
thereof.

     10. Confidentiality Tenant agrees that Tenant shall not disclose, directly or
indirectly, any of the terms, covenants, conditions or agreements set forth in the Lease, this
Amendment or any subsequent amendments hereto, nor shall Tenant provide the Lease, this
Amendment or any subsequent amendments hereto or any copies of same to any person,
including, but not limited to, any other tenants in the Building or any agents or employees of
such tenants, except that Tenant may disclose such information for valid business, legal and
accounting purposes.

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11. Miscellaneous.

          (a) Any capitalized term or phrase used in this Amendment shall have the
same meaning as the meaning ascribed to such term or phrase in the Lease unless expressly
otherwise defined in this Amendment.

          (b) In the event that the terms of the Lease conflict or are inconsistent with
those of this Amendment, the terms of this Amendment shall govern.

          (c) Except as amended by this Amendment, the terms of the Lease remain in
full force and effect.

          (d) Submission of this Amendment for examination does not constitute an
offer, right of first refusal, reservation of, or option for, the Expansion Space or any other
premises in the Building. This Amendment shall become effective only upon execution and
delivery by both Landlord and Tenant.

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed on the day
and year first written above.

	 	 	 	 	 	 	 
	 	 	LANDLORD:	 	 
	 
	 	 	 	 	 	 
	 	 	DALLAS RPFIV CAMPBELL CENTRE	 	 
	 	 	ASSOCIATES LIMITED PARTNERSHIP,	 	 
	 	 	a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	By:	 	GEIRPIV Holding Corporation,	 	 
	 

	 	 	 	a Delaware corporation,	 	 
	 

	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 
	 	 	PEGASUS SOLUTIONS, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

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EXHIBIT A

[Floor Plan of Expansion Space]

Exhibit A — Page 1 of 1

 

 

EXHIBIT B

TENANT FINISH-WORK: ALLOWANCE

     1. Except as set forth in this Exhibit, Tenant accepts the Expansion Space in its “as
is” condition on the date that this Amendment is entered into. Landlord shall, at Landlord’s
sole cost, provide the following leasehold improvements in the Premises on or before the Expansion
Commencement Date:

	 	•	 	Nineteenth (19th) and twentieth (20th) floor restrooms — Replace
restroom partitions where required in order to install partitions with
recessed toilet paper dispensers.
	 
	 	•	 	Twentieth (20th) floor men’s restroom — Replace wall covering, repair
water leak above the ceiling and replace ceiling tiles as required due to
water leaks. Paint ceiling and install slanted color-matching exposure
panels in front of vanity to cover exposed plumbing.
	 
	 	•	 	Nineteenth (19th) and twentieth (20th) floors — Apply a layer of elastic
clear urethane sealer to the reception area floors.

     2. Tenant shall provide to Landlord for its approval final working drawings (the
“Preliminary Working Drawings”), prepared by an architect that has been approved by
Landlord (which approval shall not be unreasonably withheld), of all improvements that Tenant
proposes to install in the Expansion Space. Landlord shall respond to Tenant’s written request for
Landlord’s approval of its architect within five (5) business days after receipt of such request.
Landlord’s failure to respond within such five (5) business days shall be deemed to be Landlord’s
approval thereof. The Preliminary Working Drawings shall include the partition layout, ceiling
plan, electrical outlets and switches, telephone outlets, drawings for any modifications to the
mechanical and plumbing systems of the Building, and detailed plans and specifications for the
construction of the improvements called for under this Exhibit in accordance with all
applicable
governmental laws, codes, rules, and regulations. Further, if any of Tenant’s proposed
construction work will affect the Building’s HVAC, electrical, mechanical, or plumbing
systems,
then the working drawings pertaining thereto shall be prepared by the Building’s engineer of
record, whom Tenant shall at its cost engage for such purpose. Tenant shall furnish the
initial
draft of the Preliminary Working Drawings to Landlord for Landlord’s review and approval.
Within five (5) business days after receipt Landlord shall either provide comments to such
Preliminary Working Drawings or approve the same. Landlord’s failure to respond within such
five (5) business day period shall be deemed to be Landlord’s approval thereof. I f Landlord
provides Tenant with comments to the Preliminary Working Drawings, Tenant shall provide
revised Preliminary Working Drawings to Landlord incorporating Landlord’s comments within
one week after receipt of Landlord’s comments. Within five (5) business days after receipt
Landlord shall then either provide comments to such revised Preliminary Working Drawings or
approve such Preliminary Working Drawings. Landlord’s failure to respond within such five (5)
business day period shall be deemed to be Landlord’s approval thereof. The process described
above shall be repeated, if necessary, until the Preliminary Working Drawings have been
approved by Landlord. Tenant shall furnish detailed architectural, mechanical and electrical
drawings and specifications (collectively, the
“Final Construction Documents”) to
Landlord for Landlord’s review and approval. Within five (5) business days after receipt Landlord
shall either provide comments to such Final Construction Documents or approve the same. If
Landlord
provides Tenant with comments to the Final Construction Documents, Tenant shall provide
revised Final Construction Documents to Landlord incorporating Landlord’s comments within
one week after receipt of Landlord’s comments. Within five (5) business days after receipt
Landlord shall then either provide comments to such revised Final Construction Documents or
approve such Final Construction Documents. Landlord’s failure to respond within such five (5)
business day period shall be deemed to be Landlord’s approval thereof. The process described
above shall be repeated, if necessary, until the Final Construction Documents have been
approved by Landlord. Landlord’s approval of the Preliminary Working Drawings and Final

Exhibit B — Page 1 of 2

 

 

Construction Documents shall not be unreasonably withheld, provided that (a) they comply with all
applicable governmental laws, codes, rules, and regulations, (b) such working drawings are
sufficiently detailed to allow construction of the improvements in a good and workmanlike manner,
and (c) the improvements depicted thereon conform to the rules and regulations promulgated from
time to time by the Landlord for the construction of tenant improvements. As used herein,
“Working Drawings” shall mean collectively, the Preliminary Working Drawings and Final
Construction Documents approved by Landlord, as amended from time to time by any approved changes
thereto, and “Work” shall mean all improvements to be constructed in accordance with and as
indicated on the Working Drawings. Approval by Landlord of the Working Drawings shall not be a
representation or warranty of Landlord that such drawings are adequate for any use, purpose, or
condition, or that such drawings comply with any applicable law or code, but shall merely be the
consent of Landlord to the performance of the Work. Tenant and Landlord shall sign the Working
Drawings to evidence their respective review and approval thereof. All changes in the Work must
receive the prior written approval of Landlord.

     3. Landlord shall solicit bids for the Work from contractors selected by Landlord and
approved by Tenant, which approval shall not be unreasonably withheld. Landlord’s failure to
respond within five (5) business days after receipt of Tenant’s request for approval shall be
deemed to be Landlord’s approval thereof. Landlord and Tenant shall cooperate in good faith to
coordinate the construction schedule. All contractors and subcontractors shall be required to
procure and maintain insurance against such risks, in such amounts, and with such companies as
Landlord may reasonably require. Certificates of such insurance, with paid receipts
therefor, must be received by Landlord before the Work is commenced.

     4. Landlord shall construct the Work or have the Work constructed in a first class
and workmanlike manner.

     5. Tenant shall bear the entire cost of performing the Work (including, without
limitation, design of the Work and preparation of the Working Drawings, costs of construction
labor and materials, electrical usage during construction, additional janitorial services,
general tenant signage, related taxes and insurance costs, all of which costs are herein collectively
called the “Total Construction
Costs”) in excess of the Construction Allowance (hereinafter
defined).

     6. Landlord shall furnish a construction allowance (the “Construction Allowance”)
equal to $32.00 per rentable square foot in the Expansion Space. Tenant shall be entitled to
use any unused portion of the Construction Allowance to pay for the out-of-pocket costs actually
incurred by Tenant in relocating to the Expansion Space, including, without limitation, the cost of
professional movers and the installation of Tenant’s telephone and data cabling systems. Any
remaining unused portion of the Construction Allowance shall be the property of Landlord.

     7. Landlord or its agent shall supervise the Work, make disbursements required to be
made to the contractor, and act as a liaison between the contractor and Tenant and coordinate
the relationship between the Work, the Building, and the Building’s systems. In consideration for
Landlord’s construction supervision services, Tenant shall pay to Landlord a construction
supervision fee equal to one and one-half percent (1.5%) of the Total Construction Costs.

     8. To the extent not inconsistent with this Exhibit, Section 8a. of the Lease shall
govern the performance of the Work and the Landlord’s and Tenant’s respective rights and
obligations regarding the improvements installed pursuant thereto.

Exhibit B — Page 2 of 2

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