Document:

EX-10.42 First Amendment to Lease

 

FIRST AMENDMENT TO LEASE

THIS AGREEMENT, made and entered into this  18th  day of  August, 2006
by and between GALLERIA 600, LLC (hereinafter “Landlord”) and The Ultimate Software Group, Inc., a
Delaware corporation (hereinafter “Tenant”);

WHEREAS, Landlord and Tenant entered into a certain Lease Agreement dated April 27, 2006
(hereinafter “Lease”) for Suite 1000 containing 14,309 square feet (hereinafter “Premises”) in the
600 Galleria Parkway Office Building, Atlanta, Georgia 30339;

WHEREAS, Landlord and Tenant desire to amend the Lease as hereinafter set forth;

NOW THEREFORE, in consideration of the mutual agreements of the undersigned and other good and
valuable considerations, the Lease is hereby amended effective January 15, 2007 as follows:

1. By deleting from the Premises Paragraph of the Lease, “14,309” square feet and substituting in
lieu thereof “24,609” square feet (“Entire Premises”), consisting of 14,309 square feet (“Original
Premises”) and 10,300 square feet on the 10th floor directly adjacent to Tenant’s
Premises (“Expansion Premises”). The term Entire Premises is hereby deemed to be one and the same
as the “Premises” or the “Leased Premises” under the Lease, including, without limitation, any
renewal options thereunder.

2. The term for the Expansion Premises shall begin on January 15, 2007 (“Commencement Date of the
Expansion Premises”) and shall be coterminous with the Original Premises with a new expiration date
of July 31, 2013. As a point of clarification, this extends the Original Premises Lease Term by
six (6) months. Tenant shall have the right to occupy the Expansion Premises two (2) weeks prior
to the Commencement Date for the installation of furniture, fixtures and equipment.
Notwithstanding any of the foregoing language to the contrary, in the event that Landlord fails to
deliver to Tenant the turnkey of the Expansion Premises pursuant to the terms and conditions hereof
at least two (2) weeks prior to January 15, 2007, then the Commencement Date of the Expansion
Premises shall be adjusted to that date which is two (2) weeks after the date on which Landlord
delivers the turnkey of the Expansion Premises to Tenant for the purposes of Tenant’s installation
as described herein.

3. Tenant shall not be responsible for the payment of rent on the Expansion Premises for the first
six and one-half (6.5) months of occupancy which period shall commence as of the Commencement Date
of the Expansion Premises.

4. Effective as of the Commencement Date of the Expansion Premises, Tenant’s rental rate for the
Expansion Premises shall be Twenty-two and 50/100 Dollars ($22.50) per rentable square foot or
Nineteen Thousand Three Hundred Twelve and 50/100 dollars ($19,312.50) per month and otherwise
payable pursuant to all other terms and conditions of Paragraphs 2(a) and (b) under the Lease.
Consistent with the original Lease Agreement, the monthly rental payable hereunder for the
Expansion Premises shall be subject to annual increases of three percent (3%) per year commencing
as of the first anniversary of the Commencement Date of the Expansion Premises and otherwise
pursuant to all other terms and conditions of Paragraph 2(c). Should the Commencement Date be a day
other than the first day of a calendar month, then said annual increases shall commence on the
first day of that month immediately following the anniversary of the Commencement Date.

5. Tenant’s “Base Year” for calculation of operating expenses on the Expansion Premises shall be
2007 with the first adjustment occurring January 1, 2008; otherwise such payment of operating
expenses shall be made by Tenant pursuant to the terms and conditions of Paragraph 2(c).

6. Landlord shall “turnkey” the design and construction of the Expansion Premises using finishes
that are consistent with the finishes of the Original Premises pursuant to the terms and conditions
of the Work Letter Agreement attached hereto as Exhibit “B-1” and incorporated herein by reference.

7. The floor plan of the Expansion Premises is depicted on Exhibit “D-1” attached hereto and
made a part hereof.

Landlord and Tenant agree that except as herein amended, the Lease dated April 27, 2006 shall
remain in full force and effect. Landlord and Tenant acknowledge that time is of the essence of
each and every provision of this amendment.

IN WITNESS WHEREOF, the First Amendment to Lease has been executed as of the date and year first
above written.

	 	 	 	 	 
	 	LANDLORD: GALLERIA 600, LLC

 	 
	 	By:  	/s/ Kevin E. Stahlman
 	 
	 	 	Name:  	Kevin E. Stahlman 	 
	 	 	Title:  	Director, Southern Region — Real Estate 	 
	 
	 	TENANT: The Ultimate Software Group, Inc., a Delaware corporation

 	 
	 	By:  	/s/ Robert Manne
 	 
	 	 	Name:  	Robert Manne 	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 	Attest:  	/s/ Mitchell Dauerman
 	 
	 	 	Name:  	Mitchell Dauerman 	 
	 	 	Title:  	EVP — CFO 	 

 

 

EXHIBIT
“B-1”

WORK LETTER AGREEMENT

1. MATERIALS FURNISHED BY LANDLORD

     Landlord, at its sole cost and expense except as otherwise provided herein, shall build out
the Expansion Premises (as defined in the First Amendment) pursuant to the Plans and Specifications
to be agreed to by Tenant and Landlord pursuant to the terms and conditions of this Work Letter
Agreement (“Plans and Specifications”) and deliver the “turn key” build out of the Expansion
Premises pursuant to the terms of the Lease and this Work Letter Agreement, which shall include,
without limitation, the furnishing and installation within the Expansion Premises substantially in
accordance with the Plans and Specifications including the following: partitions, doors, lighting
fixtures, acoustical ceiling, floor covering, electrical switches and outlets, telephone outlets,
air conditioning, and other improvements required by Tenant which are normally performed by the
construction trades. Landlord warrants to Tenant that all of the build out of the Expansion
Premises pursuant to the Plans and Specifications shall be performed in accordance with industry
standards, free from defects, including, without limitation, all labor, materials, equipment and
workmanship.

2. IMPROVEMENT COSTS TO BE PAID BY LANDLORD

     Landlord shall “turn key” all of the improvements which Tenant desires to have made to the
Expansion Premises based upon the Plans and Specifications subject to the terms and conditions
herein if approved in advance by Landlord and Tenant pursuant to the terms and conditions of
Paragraph 4 hereof. In addition, Landlord shall provide an allowance for any cabling (including
audio-visual) within the Expansion Premises equal to Three and No/100 dollars ($3.00) per rentable
square foot. In addition, Landlord shall pay the full amount of the aforedescribed cabling
allowance to Tenant within fourteen (14) days of Tenant’s delivery of the invoice thereof to
Landlord. The total Tenant Allowance for cabling shall not exceed Thirty Thousand Nine Hundred and
No/100 Dollars ($30,900.00).

3. IMPROVEMENT COSTS TO BE PAID BY TENANT

     The cost of any improvements not shown on the Plans and Specifications or otherwise specified
for payment by Tenant on the Plans and Specifications (as approved by Landlord and Tenant pursuant
to the terms and conditions of Paragraph 4 hereof) that are in addition to those provided by
Landlord under Paragraphs 1 and 2 above shall be paid by Tenant, one half (1/2) upon commencement
of the construction and one half (1/2) upon completion of the construction. Should Tenant request
any modifications to work which has already been completed under this Work Letter Agreement, Tenant
shall pay the costs of all such modifications, one half (1/2) upon commencement of the
modifications and one half (1/2) upon competition of the modifications.

4. APPROVAL OF PLANS AND COST

     (a) Landlord and Tenant shall diligently pursue the preparation of all Plans and
Specifications for the improvements as described in this Work Letter Agreement, the costs of which
shall be borne by Landlord. All such Plans and Specifications including finishes shall have the
approval of both Landlord and Tenant, which approval shall not be unreasonably withheld by either
party; in

 

 

addition, all Plans and Specifications shall have the approval of all governmental
agencies and authorities, including but not limited to, the state and county fire marshal.
Plans and Specifications and a cost estimate for the portion of
the work covered thereby to be borne by Tenant, if any, shall be approved by Landlord and Tenant no
later than September 1, 2006, in accordance with the procedure set forth in the following Paragraph
4(b).

     (b) As soon as practicable after execution of this Lease, Tenant shall provide Landlord with
instructions sufficient to enable Landlord to prepare Plans and Specifications for the improvements
Tenant desires to have provided. Thereafter, if per the provisions of Paragraph 3 above, Tenant
shall bear any of the costs of the improvements, a cost estimate for the improvements to be paid
for by Tenant shall be prepared by Landlord and submitted to Tenant for preliminary approval. When
the Plans and Specifications are approved by Landlord and Tenant, Landlord shall obtain a
quotation, and shall submit the same to Tenant for approval as the price to be paid by Tenant to
Landlord for said improvements which relate solely to the costs to be borne by Tenant pursuant to
paragraph 2 hereof. Upon written approval of such price by Tenant, Landlord and Tenant shall be
deemed to have given final approval to the Plans and Specifications on the basis of which the
quotation was made and Landlord shall be authorized to proceed with the improvements of the
Premises in accordance with such Plans and Specifications. If Tenant disapproves such price which
is solely for Tenant’s work as described in Paragraph 2 hereof, or fails to approve or disapprove
such price within seven (7) days after submission thereof by Landlord, Landlord shall not be
obligated to proceed with any improvement of the Expansion Premises until such time as Landlord and
Tenant approve a price for Tenant’s work.

     (c) Tenant shall bear the cost of any changes in the work requested by Tenant after final
approval of Plans and Specifications under Paragraph 4(b) above.

 

 

EXHIBIT
“D-1”

FLOOR PLAN OF EXPANSION PREMISESEXHIBIT 10.38

 

Exhibit 10.38

Executive Officer Compensation

On January 25, 2007, the Compensation Committee of the Board of Directors (the “Board”) of Winston
Hotels, Inc. (the “Company”) approved, and on January 25, 2007, the Board ratified, 2006
performance bonuses, new annual salaries for 2007, bonus ranges for 2007 and awards of restricted
common stock to each of the Company’s executive officers. These grants and awards are summarized in
the following table (amounts not in thousands for purpose of this Exhibit 10.38):

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2006	 	2007	 	 	 	 
	 	 	Cash	 	Annual	 	2007	 	2007 Restricted
	 	 	Bonus	 	Salary	 	Bonus Range	 	Shares Award (#) (1)
	Robert W. Winston, III
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Chief Executive Officer
	 	$	600,000	 	 	$	446,500	 	 	$	0–446,500	 	 	 	75,055	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Joseph V. Green
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	President and Chief Financial Officer
	 	$	367,500	 	 	$	386,000	 	 	$	0–386,000	 	 	 	53,807	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Kenneth R. Crockett
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Executive
Vice President and Chief Development Officer
	 	$	325,500	 	 	$	341,750	 	 	$	0–341,750	 	 	 	47,657	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Brent V. West
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Vice
President and Chief Accounting Officer
	 	$	100,000	 	 	$	210,000	 	 	$	0–210,000	 	 	 	16,471	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	James P. Frey
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Vice President
	 	$	85,000	 	 	$	170,100	 	 	$	0–170,100	 	 	 	11,753	 

 

			
	(1)	 	Assuming continued employment by the executives, these
restricted stock awards vest 20% immediately and 20% on
each of January 1, 2008, 2009, 2010 and 2011. If we
complete the Merger, the unvested shares will vest in full
on the effective date of the Merger.

Bonus amounts will be determined by the Compensation Committee of the Board at the beginning of the
2008 fiscal year. The Compensation Committee set goals upon which 2007 bonuses for Robert W.
Winston, III, Joseph V. Green and Kenneth R. Crockett will be based. Any 2007 bonuses paid to these
executive officers will be based primarily on the attainment of certain individual and Company
goals. Approximately 75% of the 2007 bonus awards will be based upon the attainment of certain
Company goals, which generally will be based on the following performance criteria: the ranking of
the Company’s total return to shareholders, as compared to a peer group of hotel REITs, the
Company’s actual funds from operations (FFO) for the year ending December 31, 2007 as a percentage
of the Company’s FFO guidance targets for the year ending December 31, 2007, and certain
acquisition, disposition, lending and general corporate goals. Approximately 25% of the potential
bonus awards will be based upon attainment of individual goals, as determined by the Compensation
Committee.

Director Compensation

The Board also set compensation for the Company’s outside directors. Directors who are not
employees of the Company receive a fee of $1,500 for each Board meeting and $500 for each committee
meeting attended in person. For telephonic meetings of the Board or its committees that are more
than 30 minutes in length, directors will typically receive a fee of approximately $500 for their
participation. The Company also reimburses all directors for their out-of-pocket expenses in
connection with their service on the Board. Each director received a grant of 8,500 shares of
restricted stock in August 2004. These restricted stock awards vested 20% immediately, 20% on the
day of the Company’s annual meeting of shareholders in each of 2005 and 2006 and will vest 20% on
the date of the Company’s annual meeting in each of 2007 and 2008 assuming the director remains a
director of the Company on those dates. If we complete the Merger, the unvested shares will vest
in full on the effective date of the Merger.

102

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