LEASE AGREEMENT BETWEEN ARI INTERNATIONAL BUSINESS PARK, LLC, ARI- IBP 1, LLC, ARI - IBP 2, LLC, ARI - IBP 3, LLC, ARI - IBP 4, LLC, ARI - IBP 5, LLC, ARI - IBP 6, LLC, ARI - IBP 7, LLC, ARI - IBP 8, LLC, ARI - IBP 9, LLC, ARI - IBP 11, LLC, and ARI - IBP 12, LLC, ACTING BY AND THROUGH BILLINGSLEY PROPERTY SERVICES, INC. AND REACHLOCAL, INCORPORATED TABLE OF CONTENTS

 

Basic Lease Information

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	Basic Rental:		Dates	Annual Rate per Rentable Square Foot	Basic Monthly Rental
			Commencement Date – 12/31/11	$17.50	$10,637.08
			1/1/12 – 12/31/12	$18.00	$10,941.00
			1/1/13 – 12/31/13	$18.50	$11.244.92
			1/1/14 – 1/31/14	$19.00	$11,548.83

The foregoing Basic Lease Information is incorporated into and made a part of the related lease (the “Lease”).  If any conflict exists between any Basic Lease Information and the Lease, then the Lease shall control.

 

 

 

 

CERTAIN RIGHTS RESERVED BY LANDLORD		21.         Provided that the exercise of such rights does not unreasonably interfere with Tenant's occupancy of the Premises, and upon reasonable advance notice provided by Landlord to Tenant (except in case of emergency), Landlord shall have the following rights:
		(a)           to decorate and to make inspections, repairs, alterations, additions, changes, or improvements, whether structural or otherwise, in and about the Building, or any part thereof; for such purposes, to enter upon the Premises and, during the continuance of any such work, to temporarily close doors, entryways, public space, and corridors in the Building; to interrupt or temporarily suspend Building services and facilities (Landlord shall use reasonable efforts to complete any work requiring the suspension of Building services and facilities during off-business hours when reasonably and commercially practicable to do so); and to change the arrangement and location of entrances or passageways, doors, and doorways, corridors, elevators, stairs, restrooms, or other public parts of the Building;
		(b)           to take such reasonable measures as Landlord deems advisable for the security of the Building and its occupants, including without limitation searching all items entering or leaving the Building; evacuating the Building for cause, suspected cause, or for  drill purposes; temporarily denying access to the Building; and closing the Building after normal business hours and on Saturdays, Sundays, and holidays, subject, however, to Tenant's right to enter when the Building is closed after normal business hours under such reasonable regulations as Landlord may prescribe from time to time which may include by way of example, but not of limitation, that persons entering or leaving the Building, whether or not  during normal business hours, identify themselves to a security officer by registration or otherwise and that such persons establish their right to enter or leave the Building;
		(c)           to change the name by which the Building is designated; and
		(d)           upon reasonable advance notice, to enter the Premises during Tenant’s regular business hours (or at any time when accompanied by a representative of Tenant) to show the Premises to prospective purchasers, lenders, or  prospective tenants.
SUBSTITUTION SPACE		22.       (a)           From time to time during  the  Term,  Landlord may  substitute  for the Premises other comparable space that has an area at least equal but not greater than 105% of  that of the Premises and is located in the Building or in any Comparable Buildings owned or managed by Landlord or an affiliate of Landlord (the "Substitution Space");

 

		(p)           Past Due Rent. Tenant shall pay interest on all past-due rent from the date due until paid at the maximum lawful rate.  In no event, however, shall the charges permitted under this Section 23.(p) or elsewhere in this Lease, to the extent they are considered to be interest under applicable Law, exceed the maximum lawful rate of interest.
		(q)           Representations and Warranties.  Landlord and Tenant each represent and warrant that the person executing this Lease on its behalf is acting in his or her capacity as an officer or partner, as applicable, with due authorization and authority to bind Landlord or Tenant, as applicable, to this Lease.  Landlord represents and warrants that it has good title to the Project so to fully and properly lease the Premises to Tenant as provided herein.   Landlord represents and warrants that the Project conforms in all material respects to all applicable laws, ordinances, rules and regulations generally applicable to commercial office buildings in Plano, Texas, as of the date hereof.  Further, Landlord represents and warrants that, to Landlord’s knowledge, the Project contains no hazardous substances as currently defined under applicable law, except those used in the operation of the Building and which are being used in compliance with applicable law.  Other than any express warranties contained herein, neither Landlord nor Tenant make any implied warranties of any kind or nature, and the parties hereby waive any claims upon any such implied warranties.

 

 

EXHIBIT A

 

 

 

EXHIBIT B

 

 

 

 

 

EXHIBIT C

 

 

Any Basic Cost incurred in connection with any work performed, or services provided, to or for the benefit of one or more of the buildings located in the office park of which the Project is a part and commonly referred to as the International Business Park shall be allocated between all such buildings, including the Building, on a per square foot of rentable area basis.

There are specifically excluded from the definition of the term "Basic Cost" costs (1) for capital improvements made to the Project, other than capital improvements described in Section 2.(c) above and except for items which, though capital for accounting purposes, are properly considered maintenance and repair items, such as painting of common areas, replacement of carpet in elevator lobbies, and the like;  (2) for repair, replacements and general maintenance paid by proceeds of insurance or by Tenant or other third parties, and alterations attributable solely to tenants of the Building other than Tenant;  (3) for interest, amortization or other payments on loans to Landlord;  (4) for depreciation of the Building;  (5) for leasing commissions;  (6) for legal expenses, other than those incurred for the general benefit of the Building's tenants (e.g., tax disputes);  (7)  for renovating or otherwise improving space for occupants of the Building or vacant space in the Building;  (8) for correcting defects in the construction of the Building;  (9) for overtime or other expenses of Landlord in curing defaults or performing work expressly provided in this Lease to be borne at Landlord's expense;  (10) for federal income taxes imposed on or measured by the income of Landlord from the operation of the Project;  (11) repairs or replacements necessitated by Landlord’s gross negligence or willful misconduct; (12) amounts reimbursed to Landlord pursuant to any warranty or by any other tenant or third party; (13) reserves for future expenses;   (14) late charges or penalties incurred as a result of Landlord’s failure to pay any bills or charges when due; (15) general overhead of Landlord (not including any goods or services used or provided directly for the benefit of the Project); (16) amounts incurred to remediate any hazardous substances as defined by applicable environmental law unless caused in whole or in part by Tenant, its officers, employees, agents, contractors or customers; and (17) for rent or other payment due under any ground lease for any or all the Land.

3.           The Annual Operating Expense Statement shall include a statement of Landlord's actual Basic Cost for the previous year adjusted as provided in Section 4 of this Exhibit.  If Tenant has paid estimated Excess and the Annual Operating Expense Statement reveals that Tenant paid more for Basic Cost than the actual Excess in the year for which such statement was prepared, then Landlord shall credit or reimburse Tenant for such excess within thirty (30) days after delivery of the Annual Operating Expense Statement; conversely, if Tenant paid less than the actual Excess, then Tenant shall pay Landlord such deficiency within thirty (30) days after delivery of the Annual Operating Expense Statement.

4.

With respect to any calendar year or partial calendar year in which the Building is not occupied to the extent of 95% of the rentable area thereof, the Variable Basic Costs (defined below) for such period shall, for the purposes hereof, be increased to the amount which would have been incurred had the Building been occupied to the extent of 95% of the rentable area thereof.  As used herein, “Variable Basic Costs” means any Basic Cost that is variable in correlation with the level of occupancy of the Building.

5.      Landlord shall maintain books and records reflecting the Basic Costs in accordance with sound accounting and management practices.  Within 120 days after the end of each calendar year, Landlord shall deliver to Tenant a statement of the Operating Costs, which shall include a computation of the Additional Rent.  Upon receipt of the statement of Operating Costs, Tenant, at its expense, shall have the right, upon one hundred thirty 30) days written notice to Landlord, to audit or cause to be audited the financial records for the Project (including, without limitation, Landlord’s paid tax receipts) for the period reflected in such statement.  Such audit must be completed during normal business hours in the property manager’s office or other location designated by Landlord and within one hundred eighty (180) days of Tenant’s receipt of such statement.  Landlord shall credit any overpayment determined by the final approved audit report against the next Basic Rent due and owing by Tenant or, if no further Rent is due, refund such overpayment directly to Tenant within thirty (30) days of determination.  Likewise, Tenant shall pay Landlord any underpayment determined by the final approved audit report within thirty (30) days of determination.  The foregoing obligations shall survive the Expiration Date.

EXHIBIT D

1.              Landlord shall finish out the Premises according to the Space Plan attached to this Exhibit D-2 (the “Space Plan”) and the Scope of Work attached as Exhibit D-3 (the “Scope of Work”), meaning that Landlord shall construct, at Landlord’s sole cost and expense, all of the improvements to the Premises shown or described on Exhibit D-2 and/or Exhibit D-3 (the “Initial Improvements”).  Notwithstanding anything herein to the contrary, all leasehold improvements in the Premises including existing leasehold improvements made prior to the execution of this Lease and Initial Improvements shall be constructed in good and workman like condition as of the Commencement Date of the Lease. The Initial Improvements shall include all items necessary to make the Premises be in compliance with all federal, state, county and municipals laws, ordinances, including but not limited to, the Americans with Disabilities Act, in effect as of the Commencement Date.  Landlord shall deliver the Premises to Tenant in good, vacant, broom clean condition, with all Building Systems in good working order.  Notwithstanding the foregoing to the contrary, the costs associated with the sidelights depicted on the Space Plan (including the installation thereof) shall be borne by Tenant.  Once the final costs of such sidelights has been determined, Landlord and Tenant shall enter into an amendment to this Lease whereby the amount of abated rent to which Tenant is entitled as set forth in the Basic Lease Information shall be reduced by an amount equal to the costs of such sidelights.

 

2.              Landlord shall diligently construct the Initial Improvements to the Premises in accordance with the Scope of Work and the Space Plan, and deliver possession of the Premises to Tenant upon completion of the Initial Improvements.  As used herein, the term “Tenant Delay” shall mean any actual delay in the Substantial Completion of the Initial Improvements specified in a written notice to Tenant delivered by Landlord within one (1) business day after the occurrence of such delay (a “Tenant Delay Notice”) due to (a) any change by Tenant to the Scope of Work, (b) any material specification by Tenant of materials or installations which were not included in the Scope of Work or the Space Plan and which, because of long lead-time requirements or shortage of supply/availability, will actually delay Substantial Completion of the Initial Improvements, (c) any other delay otherwise caused by Tenant or any Tenant Party being in possession of the Premises or not performing any express requirement of Tenant under the terms of this Lease after Landlord’s written request therefor or any interference by Tenant or any Tenant Party with Landlord’s or its contractor’s, subcontractor’s, employee’s or agent’s construction activities in connection with the Project.  For purposes of determining the Commencement Date, the Substantial Completion date shall be accelerated by one (1) day for each day of Tenant Delay specified in a Tenant Delay Notice.  As soon as the Initial Improvements have been substantially completed, subject to any remaining items which do not materially interfere with or prevent Tenant from occupying and using the Premises for the permitted uses (i.e., punch-list items), and a certificate of occupancy or its equivalent for the Premises has been obtained (“Substantial Completion”), Landlord shall notify Tenant in writing that the Premises are ready for occupancy.  Within ten (10) days thereafter, Tenant shall submit to Landlord in writing a punch list of items needing completion or correction.  Landlord shall use commercially reasonable efforts to complete such items within thirty (30) days after it receives such notice. Landlord shall allow changes to the Scope of Work and the Space Plan.  If Tenant requests any change to the Scope of Work or the Space Plan, Tenant shall submit a written change order to Landlord and Landlord shall promptly thereafter deliver to Tenant a written notice specifying all additional costs in designing and constructing the Initial Improvements as a result of such change order (taking into account any cost savings attributable to such change order or prior change orders) and Tenant shall either pay to Landlord such specified additional costs or revoke such change order.

 

 

3.             Subject to the terms and conditions of this Paragraph 3, Tenant shall have the non-exclusive right to enter the Premises and the Property during the two (2) weeks preceding the anticipated Commencement Date, for the sole purpose of installing computer systems and telephone equipment.  All such work will comply with all governmental rules and regulations, and will be coordinated with Landlord and Landlord’s contractor.  Prior to any such entry Tenant shall deliver to Landlord evidence that the insurance required under Section 10 of the Lease has been obtained.  Any such early entry by Tenant shall be on the terms of the Lease, but no Rent shall accrue until the Commencement Date occurs.  All such activities conducted by Tenant or any other Tenant Party and any such system, improvements or equipment so installed by Tenant or any Tenant Party, shall be at Tenant’s sole risk and expense and Landlord shall have no liability therefor. Tenant shall conduct its activities in the Premises so as not to interfere with Landlord's construction activities, and in the event Tenant or any Tenant Party, interferes with Landlord's construction activities any delay resulting therefrom shall constitute a "Tenant Delay".

 

4.             Tenant shall have the benefit of all warranties (full assigned as necessary) with respect to the Premises and the Initial Improvements.

5.             Landlord shall provide an “open book” accounting policy with respect to the cost of the Initial Improvements and in connection with any requested changes to the Space Plan or the Scope of Work so that Tenant may review the costs of such Initial Improvements and substantiate the application of the Change Order Allowance and Landlord’s determination of the aggregate cost of any change order requested by Tenant.

6.             As part of the construction services provided by Landlord hereunder, the Landlord will, at no cost to Tenant, (i) contract with the selected general contractor, (ii) manage the construction of the Initial Improvements, (iii) act as liaison between Tenant, the general contractor and the designer, and (iv) coordinate the relationship between the construction of the Initial Improvements, the Building, and the Building Systems.

EXHIBIT D-1

 

 

Unless a particular specification is stated herein or in the Lease, all construction and finish items shall be of a type determined by Landlord as standard for the Building.

EXHIBIT D-2

EXHIBIT D-3

EXHIBIT F

1.             JANITORIAL SERVICE SPECIFICATIONS FOR TENANT SUITES, COMMON AREAS ON TENANT-OCCUPIED FLOORS AND TENANT COMPUTER ROOMS.

Services listed below shall be provided in a manner that is consistent with the operation of Comparable Buildings.

A.

Nightly Services

i.

All surface areas, desks, file cabinets, counter tops, book shelves, credenzas, computer screens and other equipment will be dusted.  Desk tops will be wiped down but no papers will be moved.

ii.

All glass top desks, glass doors, partitions, light switches and walls will be spot cleaned to remove smudges and fingerprints.

iii.

All carpeted areas will be vacuumed.  All hard surface floors will be swept with a dust mop then damp mopped.

iv.

All trash receptacles and ash urns (exterior) will be emptied and cleaned.  Liners will be changed whenever necessary.  Trash/recycle will be taken to the designated areas for trash removal.

v.

All stairwells will be vacuumed and swept as well as dusted.

vi.

The elevator will be vacuumed and fingerprints removed from wall surfaces.

vii.

All kitchen countertops, tables and cupboard doors in break rooms will be cleaned and disinfected.  Hand prints and smudges will be removed from the exterior of the refrigerator as well as any other appliances. Sinks and other chrome areas will be cleaned and polished.

viii.

All fixtures and appliances in the restrooms will be cleaned and sanitized.  All chrome and mirrors will be cleaned and polished.

ix.

All commodes and urinals will be cleaned with a germicidal disinfectant.  The use of an emulsion bowl cleaner will be used whenever necessary.

x.

Restroom floors will be cleaned using a germicidal disinfectant.

 

B.

Weekly Services

i.

All pictures and door frames will be dusted.

ii.

Partitions and walls in the restrooms will be completely wiped down with a germicidal disinfectant, unless needed more frequently (in which event, any costs associated with such additional service shall be at Tenant's sole cost and expense).

iii.

All VCT floors will be buffed and carpets will be spot cleaned where needed.

 

General: The purpose of these sign criteria is to create a graphic environment that expresses a distinctive identity for the Tenant in a way that is compatible with other signs on this and future buildings.  Graphics should project quality, professionalism and a positive business image.  Lettering shall be well proportioned and its proper spacing and legibility are important considerations.  The names, logos or decals of manufacturers or installers shall not be visible except for information (if any) required by governing authorities.

Rights to Signage and Location: Each tenant may have identification on the building directory, corridor mounted sign provided by the Landlord indicating the tenant’s name and suite number and other tenant signage including tenant logos and trade marks installed on the tenant’s glass door or sidelight, subject to the prior approval of the Landlord and installed at tenant’s expense.  Requests for additional tenant identification or non-standard signage will be reviewed by the Landlord.  The Landlord reserves the right to reject requests for additional or non-standard tenant signage without qualification.

Exterior building-mounted and site monument-mounted space is reserved for the three largest tenants as identified in each lease agreement.  Location rights for signage on the building and ground-mounted monuments will be determined by the Landlord based on lease size.  Sign locations facing International Parkway and placement of graphics on monument signs will be reserved for tenants leasing larger spaces.

Signage Requirements: The following requirements apply to the design of your sign; however, in all cases, written approval must be obtained from the Landlord prior to the manufacture or installation of any signage.  The Landlord reserves the sole right to make all determinations concerning interpretation of this sign policy.

Written approval by the Landlord and conformance with these criteria does not imply conformance with any applicable sign ordinances.  The signage subcontractor is responsible for verifying with local authorities to ensure compliance with all applicable codes and ordinances.  All permits and approvals are to be forwarded to the Landlord prior to sign fabrication.

Prior to awarding a contract for fabrication and installation, the Tenant is required to submit three (3) sets of drawings for final review and approval to:

Billingsley Development Corporation

4100 International Parkway

Suite 1100

Carrollton, Texas 75007

Specific submittal requirements appear under each signage type.

1           Secondary entry signs.

2           Roof signs or box signs.

3           Cloth signs.

4           Exposed seam tubing.

5           Animated or moving components.

6           Intermittent or flashing illumination.

7           Iridescent painted signs.

8           Letters mounted or painted on illuminated panels.

10         Temporary Signage.

Site Monument Signs: Subject to the terms and conditions of the Lease and as stipulated in this section, monument signs shall conform to Exhibit M and the following criteria:

Submittal to Landlord: Tenant submittals shall include an elevation of the monument sign, drawn to a minimum scale of 1/4" = 1'-0".  Drawing shall indicate the type, color and thickness of materials, finish and mounting.  Tenant’s sign contractor shall first visit the site to verify existing conditions prior to preparation of submittal.

Signage Design: At single-tenant buildings, signs shall be ten inch (10") high metal letters with black baked-on gloss finish, in Universe 67 font.  At multi-tenant buildings, signs shall be 6" high metal letters with black baked-on gloss finish, in Universe 67 font.  All letters shall be upper case.  Logos in addition to signage must be approved in advance by the Landlord.

Exterior Building Mounted Signage: Subject to the terms and conditions of the Lease and as stipulated in this section, building mounted signage shall conform to Exhibit N and the following criteria:

Submittal to Landlord: Tenant submittals shall include an elevation of the affected building facade and proposed sign, drawn to a minimum scale of 1/4" = 1'-0".  Drawings must include a cross-section showing electrical connections and proposed methods of attachment to building.  Drawing shall indicate the type, color, thickness and type of materials, finish used on return and type of illumination.  Tenant’s sign contractor shall visit the site to verify existing conditions prior to preparation of shop drawings and to obtain information needed to prepare these submittals.

Signage Design: Any letter style (block or script) may be used, subject to approval of the Landlord.  Upper and lower case letters are permitted.  Landlord will have final review over height increases for script letters.  Proposed logos in addition to signage must be approved by the Landlord.  Logos must be in proportion to the height of parapet and lettering and in same color as signage.  Box type signs are not permitted.

 

 

Sign Construction: Exterior building mounted signs shall be internally illuminated acrylic faced individual letters mechanically attached to the non-glass portion of the building face.  Letters shall appear black when not illuminated, white when illuminated.  Letters shall be constructed of 1/8” thick Rohm & Haas Plexiglass (color #3063) faces with minimum .063 gauge aluminum returns and minimum .080 gauge aluminum backs.  Aluminum joints are to be fully welded.  Mechanical joining is not allowed.  No armor plate or wood may be used in the manufactured returns.  Returns are to be painted flat black.  The trim cap is to be one inch (1") flat black “Jewel Lite.”

Signage Size/Length/Area: Height of letters shall not exceed thirty inches (30").  Multiple rows of lettering are not to exceed thirty inches (30") in height including spaces between rows.  The minimum letter size is twelve inches (12").  The individual letter depth is six inches (6") minimum, or as required to diffuse neon stroke for uniform appearance.  The maximum allowable signage length and area will be determined by the Landlord.

Illumination and Wiring: All signs must be UL labeled and be installed according to all applicable codes and the National Electrical Code.  Lamps shall be 15mm and 30mm, 6500 degree white neon tubing.  Quantity and placement of neon shall be adequate to provide uniform lighting across the entire width and length of each letter.  Transformers and secondary wiring are to be concealed behind parapets or within the ceiling plenum.  Electrical power shall be brought to the required location at Tenant’s sole expense.  Conduit, wiring and similar components shall not be visible from the ground.  Final electrical connection of sign to transformer box must be performed by a licensed electrician approved by Landlord.  Timer controls for all signs are to be set per Landlord requirements.

Signage Installation: Letters are to be located on the building as determined by the Landlord.  Attachment of the sign is to be made using non-corrosive mechanical fasteners into nominal 8” thick reinforced concrete tilt-wall panels.  Tenant will be responsible for all damage to the building incurred during sign installation or removal.  Upon removal of the sign, the Tenant will be responsible for repair and refinishing of all affected building surfaces.

Interior Signs: Interior signs identifying fixed building elements, suite numbers and a building directory identifying tenant names and suite numbers will be provided by the Landlord. Tenant Identification signs (Tenant name, logo) for suite entries are to be provided by each tenant.  Sign size and location shall comply with all local codes and ordinances, as well as ADA/TAS.  Shell Building Interior signage comprises:

1

Building directory (lobby)

Tenant signs within the lease space are allowed, and will be provided by tenant.  Size, color and configuration shall be compatible with the building standard graphics.  Content of the signs shall be at the tenant’s option subject to approval by the Landlord.

Interior Signage Design and Construction:

Building Directory comprises a 24” X 30” thermoplastic plate with raised Universe 65 text.  Tenant name and suite numbers are silk-screened onto thermoplastic plate.

Tenant Suite Identification signs are 6” x 6” thermoplastic plate, with a coated background, and black faced raised text.  Text is Universe 65.  Braille characters are raised and coated to match the sign color.

Stair, Restroom, Mechanical and Emergency Egress Identification signs are 4” x 6” thick thermoplastic plate, and black faced raised text.  Text is Universe 65.  Braille characters are raised magnesium.  Raised black pictograms are provided for Men’s Room, Women’s Room, and Stairs.

Tenant Identification Signage: Tenant Identification signs may be of any letter style or design, provided they are sized and located according to the following requirements.

Submittal to Landlord: Submittals for Tenant Identification shall include a dimensioned elevation of the sign and the affected surrounding architectural elements (doors, glass etc.) drawn to a minimum 1/4" = 1'-0" scale.  Drawing shall indicate the type, color and thickness of sign materials and the proposed mounting method.  Tenant shall submit a sample of all sign materials in the finishes and colors specified on the drawings.  All such signs shall be mounted on glass doors or glass sidelights.  Sign submittals shall include samples of the glass if other than clear glass.  Tenant’s sign contractor shall visit the site to verify existing conditions prior to preparation of shop drawings.

Signage Design and Construction: Signs may be text or graphic designs or a combination of both, subject to the size and placement requirements outlined below.  Signs may be of any building standard sign material and color or other materials and colors subject to written approval from the Landlord.  Signs may not be constructed of wood or any combustible material.  Signs located on glass, is restricted to painted, vinyl or screened lettering or graphics placed on the tenant side of the glass, and not projecting more than 1/32” from the glass surface.  Illuminated Tenant Identification signage is prohibited.

Signage Size: No Tenant Identification sign may exceed twenty-four inches (24”) high maximum, forty-eight inches (48”) wide maximum and four (4) square feet in area, as defined by a rectangle surrounding a regularly shaped sign, or as defined in the case of an irregularly shaped sign by a rectilinear perimeter of not more than eight (8) straight lines enclosing the extreme limits of any figure or character.

Signage Placement: Tenant Identification signage is restricted to the following two locations:

1	Glass on tenant door (all tenant doors are to be glass)

2	Glass on tenant entry sidelight (all tenant entries are to include glass sidelight – space permitting.

 

 

THIS FIRST AMENDMENT TO LEASE (this “First Amendment”) is made and entered into as of June 7, 2010 (the “Effective Date”), by and between ARI-INTERNATIONAL BUSINESS PARK, LLC, ARI-IBP 1, LLC, ARI-IBP 2, LLC, ARI-IBP 3, LLC, ARI-IBP 4, LLC, ARI-IBP 5, LLC, ARI-IBP 6, LLC, ARI-IBP 7, LLC, ARI-IBP 8, LLC, ARI-IBP 9, LLC, ARI-IBP 11, LLC and ARI-IBP 12, LLC, each a Delaware limited liability company (“Landlord”) acting by and through Billingsley Property Services, Inc., as agent for Landlord, and REACHLOCAL, INCORPORATED, a Delaware corporation (“Tenant”).

 

WHEREAS, Landlord and Tenant entered into that certain Lease Agreement dated February 2, 2010 (the “Original Lease”), with respect to certain office space more particularly described therein (the “Original Premises”) known as Suite 1200 of the office building (the “Building”) whose street address is 6504 International Parkway, Plano, Texas 75093; and

WHEREAS, Landlord and Tenant now desire to amend the Lease to, among other things, expand the Premises under the terms and conditions set forth herein.

 

NOW THEREFORE, for and in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confessed, Landlord and Tenant hereby agree as follows:

1.

Defined Terms.  The capitalized terms used herein and not otherwise defined herein shall have the same meaning as ascribed thereto in the Lease.

2.

Expansion Premises.  Commencing on September 1, 2010 (the “Expansion Date”), the Premises shall be automatically expanded to include approximately ten thousand eight hundred twenty (10,820) square feet of rentable area known as Suite 1000 of the Building, as shown on Exhibit A attached hereto and made a part hereof (the “Expansion Premises”).  As of the Expansion Date, the total square feet of rentable area in the Premises shall be approximately eighteen thousand one hundred fourteen (18,114) square feet.

The Expansion Premises shall be added to and become part of the Premises on the Expansion Date for all purposes of the Lease without any further action on behalf of Landlord or Tenant and shall be subject to all of the terms and conditions of the Lease applicable to the Premises, including, without limitation, Tenant’s obligation to pay Basic Rental, Tenant’s share of Electrical Costs, Excess (if any), and all other sums that Tenant may owe to Landlord in accordance with the Lease, subject to the modifications contained in this First Amendment.

 

 

 

3.

Lease Term for the Expansion Premises.  The lease term for the Expansion Premises shall commence upon the Expansion Date and shall expire as to the Expansion Premises on the date upon which the Lease expires as to the Original Premises (January 31, 2014).

4.

Condition of the Expansion Premises.  Tenant has made a complete examination and inspection of the Expansion Premises and accepts the same in its current condition, as-is, without recourse to Landlord, and Landlord shall have no obligation to complete any improvements to the Expansion Premises, or pay any allowances or costs applicable thereto, except for those items specifically listed on Exhibit B attached hereto and made a part hereof.  ADDITIONALLY, LANDLORD MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASEHOLD IMPROVEMENTS IN THE EXPANSION PREMISES.  ALL IMPLIED WARRANTIES WITH RESPECT THERETO, INCLUDING BUT NOT LIMITED TO THOSE OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE EXPRESSLY NEGATED AND WAIVED.

5.

Basic Rent.  Commencing on the Expansion Date, the Basic Rental for the entire Premises shall be the following amounts for the following periods of time:

 

Dates	Annual Rate per Rentable Square Feet	Basic Monthly Rental
Commencement Date - 12/31/11	$17.50	$26,416.25
1/1/12 - 12/31/12	$18.00	$27,171.00
1/1/13 - 12/31/13	$18.50	$27,925.75
1/1/14 - 1/31/14	$19.00	$28,680.50

 

As provided in the Basic Rental provision in the Basic Lease Information of the Lease, Basic Rental shall be conditionally abated for the entire Premises until December 31, 2010.

 

6.

Tenant’s Proportionate Share.  As of the Expansion Date, the definition of “Tenant’s Proportionate Share” in the Basic Lease Information of the Lease shall be amended to replace the reference to “6.8595%” with “17.0350%”.

 

7.

Furniture.  Landlord hereby conveys to Tenant, and Tenant hereby accepts from Landlord, the furniture in the Premises belonging to Landlord and more particularly described on Exhibit C attached hereto and made a part hereof (the "Furniture") for a purchase price of One and No/100 Dollar ($1.00).

TENANT UNDERSTANDS AND AGREES THAT THE FURNITURE IS BEING SOLD AND CONVEYED "AS IS", "WHERE IS", "WITH ALL FAULTS" THAT MAY EXIST AS OF THE EFFECTIVE DATE, AND WITH ANY AND ALL LATENT AND PATENT DEFECTS.  LANDLORD SPECIFICALLY DISCLAIMS ANY AND ALL WARRANTIES, WHETHER WRITTEN OR ORAL, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE WITH RESPECT TO THE FURNITURE AND TENANT HEREBY EXPRESSLY WAIVES ANY IMPLIED COVENANTS, WARRANTIES OF ANY KIND OR CHARACTER WHATSOEVER WITH RESPECT TO THE FURNITURE, ITS CONDITION IN COMPLIANCE WITH LAWS, INCOME TO BE DERIVED THERE FROM, OR EXPENSES TO BE INCURRED WITH RESPECT THERETO, THE OBLIGATIONS, RESPONSIBILITIES OR LIABILITIES RELATING TO THE FURNITURE, OR ANY OTHER MATTER OR THING RELATING TO OR AFFECTING THE FURNITURE.

8.

Brokerage Commissions.  Except for the commission payable to Peloton Real Estate Partners and Studley, Inc. (collectively, the "Brokers"), which commission is governed by separate agreement by and between Landlord and each Broker, Tenant hereby warrants and represents that it has not dealt with any other brokers or intermediaries entitled to any compensation in connection with this First Amendment.  Except for Brokers, Landlord hereby warrants and represents to Tenant that it has not dealt with any brokers or intermediaries entitled to any compensation in connection with this First Amendment.  Each party hereby indemnifies the other party against any and all liabilities, costs and expenses resulting from a breach by the indemnifying party of the foregoing representation.  The obligations set forth in this Paragraph 8 shall survive any termination of the Lease.

 

9.

Conflict.  In the event any of the terms of the Lease conflict with the terms of this First Amendment, the terms of this First Amendment shall control.  Except as amended hereby, all terms and conditions of the Lease shall remain in full force and effect, and Landlord and Tenant hereby ratify and confirm the Lease as amended hereby.  The Lease, as amended herein, constitutes the entire agreement between the parties hereto and no further modification of the Lease shall be binding unless evidenced by an agreement in writing signed by Landlord and Tenant.

 

10.

Counterparts.  This First Amendment may be executed in any number of identical counterparts each of which shall be deemed to be an original and all, when taken together, shall constitute one and the same instrument.

 

EXECUTED on the Effective Date set forth above.

 

 

 

	TENANT:
	REACHLOCAL, INCORPORATED,
	a Delaware corporation

 

 

 

 

 

Page of 4

 

 

q	10,820 rsf of renovated office interior construction

q	Modify existing HVAC system.

q	Existing tenants in adjacent spaces (beside and below). Normal working hours 7 AM to 7 PM (M-F) except for noisy work which must be performed after hours. Overtime weekday and weekends as required to meet schedule, but are not anticipated.

q	All permits by GC

q	Asbestos survey and Energy compliance for permit by Tenant

q	Substantial completion September 1,2010.

q	Keying by A-1 Locksmiths under GC contract

q	HVAC Test and Balance and Testing under GC Contract

 

 

q

Demo and modify all existing interior walls and millwork and remove to accommodate new construction room F. See attached as built for demo walls.

q

Remove built in reception desk at room A.

q

Demo telephone carrels room D.

q

Demo 2 front conference rooms and movable panel wall room C.

q

Demo west wall millwork in room B

q

Remove 2 doors into kitchen from room E.

q

Demo east wall covering at window wall.

 

 

q	New Drywall Interior Partition – 10’-0” height, 2 1/2“x22 ga stl studs @ 24” o.c. w/ 5/8” gypsum board each side as shown on plan.

q	Add wall patch at existing window between room A & B.

q	Patch and Repair existing ceiling due to demolition and new construction room F and C.

q	New construction at Room F to include new IT room with 4x8 backboard.

 

 

q	New Herculite door and sidelight with Transom at front entry.

 

 

q	By Tenant.

 

 

q	All new walls are light texture and standard eggshell finish paint. Color TBD.

 

 

q	Install new carpet to match existing at affected areas. Room F to receive carpet to match existing in room C. Allowance not to exceed $20.00 sy installed. Color and style to be determined.

 

 

q

Relocate electric screen and switch from east wall to west wall.

 

 

q	Existing to remain, ensure doors and drawers are all operational  in current condition.

 

Blinds                      

 

q	Modify/Replace/Repair as needed due to new construction.

 

 

q	Modify and add building fire sprinkler drops to accommodate the lease plan.

q	Remove any unnecessary smoke detectors in suite

Reach Local

 

 

q	All Appliances by Tenant.

 

 

q

Modify existing HVAC system. Relocate T stats as needed due to new construction.

q

HVAC requirements TBD for IT room.

 

 

q	Provide and install new fluorescent light fixtures as needed due to new office construction at Room F.

q	Place all light fixture control for lights within new demised space on switches within the space.

q	New Server/Data: electrical needs TBD.

q	Approx 80 cubicle carrels, Approx 12 connections  wall connections for systems furniture. Whips and cubicles provided by Tenant, connection to floor/column/wall connections and furniture by GC.

q	Approx 12 each column/wall connections for data runs to server room from systems furniture

 

 

q	Smoke detectors furnished and installed per building code requirements. Access control devices connected to building fire alarm system per building code requirements.

 

1)	Data and communications wiring, terminating devices, equipment, labor and installation is by others.

2)	Architectural and Engineered plans, associated plan reviews, ADA reviews, asbestos reviews are not included in this scope.

3)	Appliances in addition to Owner provided in As-is condition to be provided by Tenant.

4)	Specifications for doors and hardware:

Door Frames:                           RACO “Classic Prestige”, or Alumax “Falcon”, or Wilson Partitions “Projected Profile”. Clear aluminum.

 

Doors:                                3-0 x 9-0 x 1 ¾” Five-Ply solid core, flush slab

 

Stained veneer, slip matched, stained finish to match existing.

 

Mortise Sets:                      Sargent 8100 Series, LNH Lever Trim

 

US26, Polished Chrome

 

Key:                      Yale GC keyway

 

Hinges:                      Hager, McKinney, or Stanley

 

4 ½” x 4 ½”, 5-Knuckle, non-removable pin at corridors

 

4 ½” x 4 ½”, 5-Knuckle, non-rising pin at corridors

 

US26, Polished Chrome

 

Closer:                      Yale to match existing

 

Stops:           Floor mounted stops in polished or satin stainless steel.

THIS SECOND AMENDMENT TO LEASE (this “Second Amendment”) is made and entered into as of March 23, 2011 (the “Effective Date”), by and between ARI-INTERNATIONAL BUSINESS PARK, LLC, ARI-IBP 1, LLC, ARI-IBP 2, LLC, ARI-IBP 3, LLC, ARI-IBP 4, LLC, ARI-IBP 5, LLC, ARI-IBP 6, LLC, ARI-IBP 7, LLC, ARI-IBP 8, LLC, ARI-IBP 9, LLC, ARI-IBP 11, LLC and ARI-IBP 12, LLC, each a Delaware limited liability company (“Landlord”) acting by and through Billingsley Property Services, Inc., as agent for Landlord, and REACHLOCAL, INC., a Delaware corporation (“Tenant”).

 

WHEREAS, Landlord and Tenant entered into that certain Lease Agreement dated February 2, 2010 (the “Original Lease”), with respect to certain office space more particularly described therein (the “Original Premises”) known as Suite 1200 of the office building (the “Building”) whose street address is 6504 International Parkway, Plano, Texas 75093; and

WHEREAS, Landlord and Tenant entered into that certain First Amendment to Lease dated June 7, 2010 (the “First Amendment”; the Original Lease, as amended by the First Amendment is referred to herein as the “Lease”) wherein the Tenant expanded its leased premises to include Suite 1000 of the Building, consisting of approximately 10,820 square feet of rentable area (the “First Expansion Premises”), thereby bringing the Total Rentable Square Feet in the Premises to 18,114;

WHEREAS, Landlord and Tenant now desire to amend the Lease to, among other things, again expand the Premises under the terms and conditions set forth herein.

 

NOW THEREFORE, for and in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confessed, Landlord and Tenant hereby agree as follows:

1.           Defined Terms.  The capitalized terms used herein and not otherwise defined herein shall have the same meaning as ascribed thereto in the Lease.

2.           Expansion Premises.  Commencing on the Second Expansion Date (defined below), the Premises shall be automatically expanded to include approximately 16,284 square feet of rentable area known as Suite 2100 of the Building, as shown on Exhibit A attached hereto and made a part hereof (the “Second Expansion Premises”).  As of the Second Expansion Date, the Total Rentable Square Feet in the Premises shall be approximately 34,398 square feet.  The Second Expansion Premises shall be added to and become part of the Premises on the Second Expansion Date for all purposes of the Lease without any further action on behalf of Landlord or Tenant and shall be subject to all of the terms and conditions of the Lease applicable to the Premises, including, without limitation, Tenant’s obligation to pay Basic Rental, Tenant’s share of Electrical Costs, Excess (if any), and all other sums that Tenant may owe to Landlord in accordance with the Lease, subject to the modifications contained in this Second Amendment.

 

 

3.           Second Expansion Date.  As used herein, the term “Second Expansion Date” means the earliest of (a) the date on which Tenant occupies any portion of the Second Expansion Premises and begins conducting business therein, (b) the date on which the Work (as defined in Exhibit B hereto) in the Premises is Substantially Completed (as defined in Exhibit B hereto), or (c) the date on which the Work in the Premises would have been Substantially Completed but for the occurrence of any Tenant Delay Days (as defined in Exhibit B hereto).  Landlord and Tenant presently anticipate that possession of the Second Expansion Premises will be tendered to Tenant on or about June 1, 2011 (the “Estimated Delivery Date”).  If Landlord is unable to tender possession of the Second Expansion Premises to Tenant by the Estimated Delivery Date, then (a) the validity of this Second Amendment shall not be affected or impaired thereby, (b) Landlord shall not be in default hereunder or be liable for damages therefor, and (c) Tenant shall accept possession of the Second Expansion Premises when Landlord tenders possession thereof to Tenant.

4.           Lease Term for the Second Expansion Premises.  The lease term for the Second Expansion Premises shall commence upon the Second Expansion Date and shall expire as to the Second Expansion Premises on the date upon which the Lease expires as to the Original Premises (January 31, 2014).

5.           Condition of the Second Expansion Premises.  Tenant has made a complete examination and inspection of the Second Expansion Premises and accepts the same in its current condition, as-is, without recourse to Landlord; provided, however, Landlord shall construct the Work in the Second Expansion Premises as provided in Exhibit B hereto.

6.           Basic Rent.  Commencing on the Second Expansion Date, the Basic Rental for the entire Premises shall be the following amounts for the following periods of time:

 

Dates	Rentable Square Feet in the Premises	Annual Rate per Rentable Square Foot	Basic Monthly Rental
Second Expansion Date through December 31, 2011	34,398	$17.50	$50,163.75
January 1, 2012 through December 31, 2012	34,398	$18.00	$51,597.00
January 1, 2013 through December 31, 2013	34,398	$18.50	$53,030.25
January 1, 2014 through January 31, 2014	34,398	$19.00	$54,463.50

 

 

 

The schedule of Basic Rent provided in this Section 6 is independent of Tenant’s obligations pursuant to that Temporary License Agreement dated February 1, 2011 between Landlord and Tenant (the “License Agreement”).  The License Term (as defined in the License Agreement) shall expire upon the Second Expansion Date; provided, however, that Tenant may remain in the Designated Premises (as defined in the License Agreement) following the expiration of the License Term for a period not to exceed 10 days; provided, further, that Tenant shall pay to Landlord for each such day Tenant remains in the Designated Premises beyond the expiration of the License Term an amount equal to $457.72, plus Licensee’s Proportionate Share of electrical costs for the Building (as set forth in the License Agreement) for such period.

7.           Population Density.  Landlord and Tenant agree that the population density within the Second Expansion Premises shall at no time exceed seven persons for each 1,000 square feet of rentable area located therein.  If the population density within the Second Expansion Premises exceeds four persons for each 1,000 square feet of rentable area located therein (“Building-Standard Density”) during any calendar quarter during the lease term (other than on a temporary basis for meetings and conferences), then Basic Rental with respect to the Second Expansion Premises shall be increased, prospectively, as follows:

If the population density in the Second Expansion Premises is (each a “Density Band”):	then the then-applicable Annual Rate per Rentable Square Foot in the Second Expansion Premises shall be increased by:	which is an increase to the then-current Basic Monthly Rental due of:
greater than Building-Standard Density but less than five persons for each 1,000 square feet of rentable area	$0.30	$407.10
equal to or greater than five persons for each 1,000 square feet of rentable area, but less than six persons for each 1,000 square feet of rentable area	$0.60	$814.20
equal to or greater than six persons for each 1,000 square feet of rentable area, but less than or equal to seven persons for each 1,000 square feet of rentable area	$1.90	$2,578.30

On the first day of each calendar quarter during the lease term, an officer of Tenant shall certify in a written letter to Landlord the current population density in the Second Expansion Premises, and, should such certification indicate a population density therein greater than the Building-Standard Density, then Tenant shall pay the applicable increased Basic Rental during such calendar quarter as set forth above.  Further, Tenant shall immediately notify Landlord if, after the first day of such calendar quarter, the population density of the Second Expansion Premises increases such that it falls within a higher Density Band, and, effective with such increase in the population density, Tenant shall pay increased Basic Rental as set forth above for the remainder of such calendar quarter.  For example, if, upon January 1, 2012, the population density within the Second Expansion Premises is 4.5 persons per 1,000 square feet of rentable area therein, then commencing on such date, the monthly Basic Rental due with respect to the Second Expansion Premises shall be $24,833.10 (or, on an annualized basis, $18.30 per Rentable Square Foot therein).  By way of further example, if, on March 1, 2012, the population density in the Second Expansion Premises increases to 5.2 persons per 1,000 square feet of rentable area therein, then, commencing upon such date, the monthly Basic Rental due with respect to the Second Expansion Premises shall be $25,240.20 (or, on an annualized basis, $18.60 per Rentable Square Foot therein).  Under no circumstances shall Tenant be entitled to a downward adjustment of Basic Rental during the course of any calendar quarter; provided, however, that Basic Rental may be adjusted downward based upon the population density within the Second Expansion Premises as it exists on the first day of a calendar quarter.  Landlord may request reasonable documentation from Tenant substantiating Tenant’s calculation of the population density within the Second Expansion Premises and may, in its discretion, verify such calculation using any reasonable method.  At no time shall the population density within the Second Expansion Premises exceed 7 persons per 1,000 square feet of rentable area therein.  Nothing in this Paragraph 7 shall increase Landlord’s obligations under the Lease with respect to parking.

 

 

 

8.           Tenant’s Proportionate Share.  As of the Second Expansion Date, the Tenant’s Proportionate Share shall be 32.3490%.

9.           Operating Expenses.

 

a.           The first sentence of Section 1 of Exhibit C to the Original Lease is hereby deleted in its entirety and replaced with the following:  “Tenant shall pay from time to time an amount (the “Excess”) calculated by multiplying (a) the amount by which the Basic Cost (defined below), divided by the Total Rentable Square Feet, exceeds the 2010 actual Basic Costs per Rentable Square Foot in the Building (the “Expense Stop”), by (b) the Rentable Square Feet in the Premises.”

b.           The Expense Stop shall be separately calculated for the Second Expansion Premises, based upon 2011 actual Basic Costs per Rentable Square Foot in the Building.

10.           Brokerage Commissions.  Except for the commission payable to Peloton Real Estate Partners, Studley, Inc., and Billingsley Property Services, Inc. (collectively, the "Brokers"), which commission is governed by separate agreement by and between Landlord and each Broker, Tenant hereby warrants and represents that it has not dealt with any other brokers or intermediaries entitled to any compensation in connection with this Second Amendment.  Except for Brokers, Landlord hereby warrants and represents to Tenant that it has not dealt with any brokers or intermediaries entitled to any compensation in connection with this Second Amendment.  Each party hereby indemnifies the other party against any and all liabilities, costs and expenses resulting from a breach by the indemnifying party of the foregoing representation.  The obligations set forth in this Paragraph 10 shall survive any termination of the Lease.

11.           Conflict; Ratification.  In the event any of the terms of the Lease conflict with the terms of this Second Amendment, the terms of this Second Amendment shall control.  Except as amended hereby, all terms and conditions of the Lease shall remain in full force and effect.  Tenant hereby ratifies and confirms its obligations under the Lease, and represents and warrants to Landlord that it has no defenses thereto. Additionally, Tenant further confirms and ratifies that, as of the date hereof, (a) the Lease is and remains in good standing and in full force and effect, (b) Tenant has no claims, counterclaims, set-offs or defenses against Landlord arising out of the Lease or in any way relating thereto or arising out of any other transaction between Landlord and Tenant, and (c) except as expressly provided for in this Second Amendment, all tenant finish-work allowances provided to Tenant under the Lease or otherwise, if any, have been paid in full by Landlord to Tenant, and Landlord has no further obligations with respect thereto.  The Lease, as amended herein, constitutes the entire agreement between the parties hereto and no further modification of the Lease shall be binding unless evidenced by an agreement in writing signed by Landlord and Tenant.

 

12.           Counterparts.  This Second Amendment may be executed in any number of identical counterparts each of which shall be deemed to be an original and all, when taken together, shall constitute one and the same instrument.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

EXECUTED on the Effective Date set forth above.

 

 

 

 

(Landlord Performs the Work)

 

1.           Acceptance of Premises.  Except as set forth in this Exhibit, Tenant accepts the Second Expansion Premises in their “AS-IS” condition on the date that this Second Amendment is entered into; provided, however, that, following the surrender of the Second Expansion Premises by the tenant currently in possession thereof, Landlord shall cause the Second Expansion Premises to be returned to broom-clean condition.

 

2.           Space Plans.

 

(a)           Preparation and Delivery.  On or before the tenth day following the date of this Second Amendment (such earlier date is referred to herein as the “Space Plans Delivery Deadline”), Tenant shall deliver to Landlord a space plan prepared by a design consultant reasonably acceptable to Landlord (the “Architect”) depicting improvements to be installed in the Original Premises, the First Expansion Premises, or the Second Expansion Premises (the “Space Plans”).

 

(b)           Approval Process.  Landlord shall notify Tenant whether it approves of the submitted Space Plans within five business days after Tenant’s submission thereof.  If Landlord disapproves of such Space Plans, then Landlord shall notify Tenant thereof specifying in reasonable detail the reasons for such disapproval, in which case Tenant shall, within three business days after such notice, revise such Space Plans in accordance with Landlord’s objections and submit to Landlord for its review and approval.  Landlord shall notify Tenant in writing whether it approves of the resubmitted Space Plans within three business days after its receipt thereof.  This process shall be repeated until the Space Plans have been finally approved by Landlord and Tenant.  If Landlord fails to notify Tenant that it disapproves of the initial Space Plans within five business days (or, in the case of resubmitted Space Plans, within three business days), then such submission shall be deemed approved by Landlord if, within five (5) business days after Tenant delivers to Landlord a second request for Landlord’s approval of the same, Landlord fails to either approve of or disapprove of such Space Plans.  If Tenant fails to timely deliver such Space Plans, then each day after the Space Plans Delivery Deadline that such Space Plans are not delivered to Landlord shall be a Tenant Delay Day (defined below).

 

 (c)           Landlord’s Approval; Performance of Work.  If any of Tenant’s proposed construction work will affect the Building’s structure or the Building Systems, then the Space Plans pertaining thereto must be approved by the Building’s engineer of record.  Landlord’s approval of such Space Plans shall not be unreasonably withheld, provided that (1) they comply with all laws, (2) the improvements depicted thereon do not adversely affect (in the reasonable discretion of Landlord) the Building’s structure or the Building Systems (including the Building’s restrooms or mechanical rooms), the exterior appearance of the Building, or the appearance of the Building’s common areas or elevator lobby areas, (3) such Space Plans are sufficiently detailed to allow construction of the improvements in a good and workmanlike manner, and (4) the improvements depicted thereon conform to the rules and regulations promulgated from time to time by Landlord for the construction of tenant improvements (a copy of which has been delivered to Tenant).  As used herein, “Work” means all improvements to be constructed in accordance with and as indicated on the Space Plans, together with any work required by governmental authorities to be made to other areas of the Building as a result of the improvements indicated by the Space Plans.  Landlord’s approval of the Space Plans shall not be a representation or warranty of Landlord that such drawings are adequate for any use or comply with any Law, but shall merely be the consent of Landlord thereto.  Tenant shall, at Landlord’s request, sign the Space Plans to evidence its review and approval thereof.  After the Space Plans have been approved, Landlord shall cause the Work to be performed in substantial accordance with the Space Plans.

 

 

4.           Bidding of Work.  Prior to commencing the Work, Landlord shall competitively bid the Work to three contractors approved by Landlord (one of which contractors shall be MCL Construction LLC).  Tenant shall be allowed to review the submitted bids from such contractors to value engineer any of Tenant’s requested alterations.  In such case, Tenant shall notify Landlord of any items in the Space Plans that Tenant desires to change within three business days after Landlord’s submission thereof to Tenant.  If Tenant fails to notify Landlord of its election within such three business day period, Tenant shall be deemed to have approved the bids.  Within five business days following Landlord’s submission of the initial construction bids to Tenant under the foregoing provisions (if applicable), Tenant shall have completed all of the following items: (a) finalized with Landlord’s representative and the proposed contractor, the pricing of any requested revisions to the bids for the Work, and (b) approved in writing any overage in the Total Construction Costs in excess of the Construction Allowance and any value engineering, failing which each day after such five business day period shall constitute a Tenant Delay Day.

 

5.           Change Orders.  Tenant may initiate changes in the Work.  Each such change must receive the prior written approval of Landlord, such approval not to be unreasonably withheld or delayed; however, (a) if such requested change would adversely affect (in the reasonable discretion of Landlord) (1) the Building’s structure or the Building systems (including the Building’s restrooms or mechanical rooms), (2) the exterior appearance of the Building, or (3) the appearance of the Building’s common areas or elevator lobby areas, or (b) if any such requested change might delay the Second Expansion Date, Landlord may withhold its consent in its sole and absolute discretion.  Landlord shall, upon completion of the Work, cause to be prepared an accurate architectural “as-built” plan of the Work as constructed, which plan shall be incorporated into this Exhibit B by this reference for all purposes.  If Tenant requests any changes to the Work described in the Space Plans, then such increased costs and any additional design costs incurred in connection therewith as the result of any such change shall be added to the Total Construction Costs.

 

6.           Definitions.  As used herein, a “Tenant Delay Day” means each day of delay in the performance of the Work that occurs (a) because Tenant fails to timely furnish any information or deliver or approve any required documents such as the Space Plans (whether preliminary, interim revisions or final), pricing estimates, construction bids, and the like, (b) because of any change by Tenant to the Space Plans, (c) because Tenant fails to attend any meeting with Landlord, the Architect, any design professional, or any contractor, or their respective employees or representatives, as may be required or scheduled hereunder or otherwise necessary in connection with the preparation or completion of any construction documents, such as the Space Plans, or in connection with the performance of the Work, (d) because of any specification by Tenant of materials or installations in addition to or other than Landlord’s standard finish-out materials, or (e) because a Tenant Party otherwise delays completion of the Work.  As used herein “Substantial Completion,” “Substantially Completed,” and any derivations thereof mean the Work in the Premises is substantially completed (as reasonably determined by Landlord) in substantial accordance with the Space Plans.  Substantial Completion shall have occurred even though minor details of construction, decoration, landscaping and mechanical adjustments remain to be completed by Landlord.

 

 

7.           Walk-Through; Punchlist.  When Landlord considers the Work in the Second Expansion Premises to be Substantially Completed, Landlord will notify Tenant and, within three business days thereafter, Landlord’s representative and Tenant’s representative shall conduct a walk-through of the Premises and identify any necessary touch-up work, repairs and minor completion items that are necessary for final completion of the Work.  Neither Landlord’s representative nor Tenant’s representative shall unreasonably withhold his or her agreement on punchlist items.  Landlord shall use reasonable efforts to cause the contractor performing the Work to complete all punchlist items within 30 days after agreement thereon; however, Landlord shall not be obligated to engage overtime labor in order to complete such items.

 

8.           Excess Costs.  The entire cost of performing the Work (including design of and space planning for the Work and preparation of the Space Plans and the final “as-built” plan of the Work, costs of construction labor and materials, electrical usage during construction, additional janitorial services, general tenant signage, related taxes and insurance costs, licenses, permits, certifications, surveys and other approvals required by law, and the construction supervision fee referenced in Section 10 of this Exhibit, all of which costs are herein collectively called the “Total Construction Costs”) in excess of the Construction Allowance (hereinafter defined) shall be paid by Tenant.  Upon approval of the Space Plans and selection of a contractor, Tenant shall promptly (a) execute a work order agreement prepared by Landlord which identifies such drawings and itemizes the Total Construction Costs and sets forth the Construction Allowance, and (b) pay to Landlord 50% of the amount by which Total Construction Costs exceeds the Construction Allowance.  Upon Substantial Completion of the Work and before Tenant occupies the Second Expansion Premises to conduct business therein, Tenant shall pay to Landlord an amount equal to the Total Construction Costs (as adjusted for any approved changes to the Work), less (1) the amount of the advance payment already made by Tenant, and (2) the amount of the Construction Allowance.  In the event of default of payment of such excess costs, Landlord (in addition to all other remedies) shall have the same rights as for an Event of Default under the Lease.

 

9.           Construction Allowance.  Landlord shall provide to Tenant a construction allowance not to exceed $13.50 per rentable square foot in the Second Expansion Premises (which aggregate sum is $219,834, and is referred to as the “Construction Allowance”) to be applied toward the Total Construction Costs, as adjusted for any changes to the Work.  Tenant may use up to $97,704 of the Construction Allowance towards (a) improvements within Tenant’s premises at 6400 International Parkway in Plano, Texas (the “6400 International Premises”) and/or (b) Tenant’s costs incurred for cabling and furniture, fixtures and equipment in the Premises or the 6400 International Premises.  Notwithstanding anything herein to the contrary, Tenant may not use any excess portion of the Construction Allowance for improvements to or for the acquisition of furniture, fixtures and equipment to be located within the 6400 International Premises if the building in which the 6400 International Premises ceases to be owned by Landlord or its affiliates prior to the disbursement of such excess allowance to Tenant.  All improvements or alternations to the 6400 International Premises shall be undertaken and completed in accordance with the terms of the lease agreement for such premises.  The Construction Allowance shall not be disbursed to Tenant in cash, but shall be applied by Landlord to the payment of the Total Construction Costs, if, as, and when the cost of the Work is actually incurred and paid by Landlord.  The Construction Allowance must be used (that is, the Work must be fully complete and the Construction Allowance disbursed) by December 31, 2011 or shall be deemed forfeited with no further obligation by Landlord with respect thereto, time being of the essence with respect thereto.

 

 

10.           Construction Management.  Landlord or its Affiliate or 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 five percent of the hard costs portion of Total Construction Costs.

 

11.           Miscellaneous.  To the extent not inconsistent with this Exhibit, Sections 7 and 19 of the Original Lease shall govern the performance of the Work and Landlord’s and Tenant’s respective rights and obligations regarding the improvements installed pursuant thereto.

 

 

EXHIBIT B

Page B-4

 

THIS THIRD AMENDMENT TO LEASE (this "Third Amendment") is made and entered into as of August 31, 2011 (the "Effective Date"), by and between ARI-INTERNATIONAL BUSINESS PARK, LLC, ARI-IBP 1, LLC, ARI-IBP 2, LLC, ARI-IBP 3, LLC, ARI-IBP 4, LLC, ARI-IBP 5, LLC, ARI-IBP 6, LLC, ARI-IBP 7, LLC, ARI-IBP 8, LLC, ARI-IBP 9, LLC, ARI-IBP 11, LLC and ARI-IBP 12, LLC, each a Delaware limited liability company ("Landlord") acting by and through Billingsley Property Services, Inc., as agent for Landlord, and REACHLOCAL, INC., a Delaware corporation ("Tenant").

 

WHEREAS, Landlord and Tenant entered into that certain Lease Agreement dated February 2, 2010 (the "Original Lease"), with respect to certain office space more particularly described therein (the "Original Premises") known as Suite 1200 of the office building (the "Building") whose street address is 6504 International Parkway, Plano, Texas 75093;

WHEREAS, Landlord and Tenant entered into that certain First Amendment to Lease dated June 7, 2010 (the "First Amendment") wherein the Tenant expanded its leased premises to include Suite 1000 of the Building, consisting of approximately 10,820 square feet of rentable area (the "First Expansion Premises"), thereby bringing the Total Rentable Square Feet in the Premises to 18,114;

WHEREAS, Landlord and Tenant entered into that certain Second Amendment to Lease dated March 23, 2011 (the "Second Amendment"; the Original Lease, as amended by the First Amendment and as amended by the Second Amendment is referred to herein as the "Lease") wherein the Tenant expanded its leased premises to include Suite 2100 of the Building, consisting of approximately 16,284 square feet of rentable area (the "Second Expansion Premises"; the Original Premises, the First Expansion Premises and the Second Expansion Premises are collectively referred to herein as the "Premises"), thereby bringing the Total Rentable Square Feet in the Premises to 34,398; and

WHEREAS, Landlord and Tenant now desire to amend the Lease to, among other things, again expand the Premises under the terms and conditions set forth herein.

 

NOW THEREFORE, for and in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confessed, Landlord and Tenant hereby agree as follows:

1.           Defined Terms.  All capitalized terms used herein and not otherwise defined herein shall have the same meaning as ascribed thereto in the Lease. All references in the Lease to "this Lease" shall be deemed to mean the Lease as amended by this Third Amendment.

 

 

THIRD AMENDMENT TO LEASE AGREEMENT

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2.           Expansion Premises.  Commencing on the Third Expansion Date (defined below), the Premises shall be automatically expanded to include approximately 8,907 square feet of rentable area known as Suite 1300 of the Building, as shown on Exhibit A attached hereto and made a part hereof (the "Third Expansion Premises").  As of the Third Expansion Date, the Total Rentable Square Feet in the Premises shall be approximately 43,305 square feet.  The Third Expansion Premises shall be added to and become part of the Premises on the Third Expansion Date for all purposes of the Lease without any further action on behalf of Landlord or Tenant and shall be subject to all of the terms and conditions of the Lease applicable to the Premises, including, without limitation, Tenant's obligation to pay Basic Rental, Tenant's share of Electrical Costs, Excess (if any), and all other sums that Tenant may owe to Landlord in accordance with the Lease, subject to the modifications contained in this Third Amendment.

 

3.           Third Expansion Date.  As used herein, the term "Third Expansion Date" means the earlier of (a) the date on which Tenant occupies any portion of the Third Expansion Premises and begins conducting business therein or (b) November 1, 2011.

4.           Lease Term for the Third Expansion Premises.  The lease term for the Third Expansion Premises shall commence upon the Third Expansion Date and shall expire as to the Third Expansion Premises on the date upon which the Lease expires as to the Original Premises (January 31, 2014).

 

5.           Condition of the Third Expansion Premises.  Tenant has made a complete examination and inspection of the Third Expansion Premises and accepts the same in its current condition, "AS-IS", without recourse to Landlord and Landlord shall have no obligation to complete any improvements to the Third Expansion Premises.  ADDITIONALLY, LANDLORD SHALL MAKE NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASEHOLD IMPROVEMENTS IN THE LEASED PREMISES.  ALL IMPLIED WARRANTIES WITH RESPECT THERETO, INCLUDING BUT NOT LIMITED TO THOSE OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE EXPRESSLY NEGATED AND WAIVED.

6.           Basic Rent.  Commencing on the Third Expansion Date, the Basic Rental for the entire Premises shall be the following amounts for the following periods of time:

 

 

THIRD AMENDMENT TO LEASE AGREEMENT

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Dates	Rentable Square Feet in the Premises	Annual Rate per Rentable Square Foot	Basic Monthly Rental
Third Expansion Date through December 31, 2011	43,305	$18.11	$65,366.13
January 1, 2012 through December 31, 2012	43,305	$18.51	$66,799.38
January 1, 2013 through December 31, 2013	43,305	$19.01	$68,603.75
January 1, 2014 through January 31, 2014	43,305	$19.51	$70,408.13

 

7.           Population Density.  Landlord and Tenant agree that the population density within either the Second Expansion Premises or Third Expansion Premises shall at no time exceed seven (7) persons for each 1,000 square feet of rentable area located therein (each independently calculated).  If the population density within the Second Expansion Premises or Third Expansion Premises exceeds four (4) persons for each 1,000 square feet of rentable area located therein ("Building-Standard Density") during any calendar quarter during the lease term (other than on a temporary basis for meetings and conferences), then Basic Rental with respect to the Second Expansion Premises or Third Expansion Premises shall be increased, prospectively, as follows:

If the population density in the Second Expansion Premises or Third Expansion Premises is (each a "Density Band"):	then the then-applicable Annual Rate per Rentable Square Foot shall be increased by for the:		which is an increase to the then-current Basic Monthly Rental due of for the:
	Second Expansion Premises	Third Expansion Premises	Second Expansion Premises	Third Expansion Premises
greater than Building-Standard Density but less than five persons for each 1,000 square feet of rentable area	$0.30	$0.30	$407.10	$222.68
equal to or greater than five persons for each 1,000 square feet of rentable area, but less than six persons for each 1,000 square feet of rentable area	$0.60	$0.60	$814.20	$445.35
equal to or greater than six persons for each 1,000 square feet of rentable area, but less than or equal to seven persons for each 1,000 square feet of rentable area	$1.90	$1.90	$2,578.30	$1,410.28

 

 

On the first day of each calendar quarter during the lease term, an officer of Tenant shall certify in a written letter to Landlord the current population density in the Second Expansion Premises and Third Expansion Premises independently, and, should such certification indicate a population density therein greater than the Building-Standard Density, then Tenant shall pay the applicable increased Basic Rental during such calendar quarter as set forth above.  Further, Tenant shall immediately notify Landlord if, after the first day of such calendar quarter, the population density of the Second Expansion Premises or Third Expansion Premises increases such that it falls within a higher Density Band, and, effective with such increase in the population density, Tenant shall pay increased Basic Rental as set forth above for the remainder of such calendar quarter.  For example, if, upon April 1, 2012, the population density within the Third Expansion Premises is 4.5 persons per 1,000 square feet of rentable area therein, then commencing on such date, the monthly Basic Rental due with respect to the Third Expansion Premises shall be $15,425.06 (or, on an annualized basis, $20.78 per Rentable Square Foot therein).  By way of further example, if, on June 1, 2012, the population density in the Third Expansion Premises increases to 5.2 persons per 1,000 square feet of rentable area therein, then, commencing upon such date, the monthly Basic Rental due with respect to the Third Expansion Premises shall be $15,647.73 (or, on an annualized basis, $21.08 per Rentable Square Foot therein).  Under no circumstances shall Tenant be entitled to a downward adjustment of Basic Rental during the course of any calendar quarter; provided, however, that Basic Rental may be adjusted downward based upon the population density within the Third Expansion Premises (or Second Expansion Premises if applicable) as it exists on the first day of a calendar quarter.  Landlord may request reasonable documentation from Tenant substantiating Tenant’s calculation of the population density within the Second Expansion Premises and Third Expansion Premises and may, in its discretion, verify such calculation using any reasonable method.  At no time shall the population density within the Second Expansion Premises or Third Expansion Premises (each calculated independently) exceed seven (7) persons per 1,000 square feet of rentable area therein.  Nothing in this Paragraph 7 shall increase Landlord’s obligations under the Lease with respect to parking.

8.           Tenant's Proportionate Share.  As of the Third Expansion Date, the Tenant's Proportionate Share shall be 40.7255%.

9.           Operating Expenses.  The Expense Stop shall be separately calculated for the Third Expansion Premises, based upon 2012 actual Basic Costs per Rentable Square Foot in the Building.

10.         Brokerage Commissions.  Except for the commission payable to Peloton Real Estate Partners and Studley, Inc. (collectively, the "Brokers"), which commission is governed by separate agreements by and between Landlord and each Broker, Tenant hereby warrants and represents that it has not dealt with any other brokers or intermediaries entitled to any compensation in connection with this Third Amendment.  Except for Brokers, Landlord hereby warrants and represents to Tenant that it has not dealt with any brokers or intermediaries entitled to any compensation in connection with this Third Amendment.  Each party hereby indemnifies the other party against any and all liabilities, costs and expenses resulting from a breach by the indemnifying party of the foregoing representation.  The obligations set forth in this Paragraph 10 shall survive any termination of the Lease.

 

 

11.         Conflict; Ratification.  In the event any of the terms of the Lease conflict with the terms of this Third Amendment, the terms of this Third Amendment shall control.  Except as amended hereby, all terms and conditions of the Lease shall remain in full force and effect.  Tenant hereby ratifies and confirms its obligations under the Lease, and represents and warrants to Landlord that it has no defenses thereto. Additionally, Tenant further confirms and ratifies that, as of the date hereof, (a) the Lease is and remains in good standing and in full force and effect, (b) Tenant has no claims, counterclaims, set-offs or defenses against Landlord arising out of the Lease or in any way relating thereto or arising out of any other transaction between Landlord and Tenant, and (c) except as expressly provided for in this Third Amendment, all tenant finish-work allowances provided to Tenant under the Lease or otherwise, if any, have been paid in full by Landlord to Tenant, and Landlord has no further obligations with respect thereto.  The Lease, as amended herein, constitutes the entire agreement between the parties hereto and no further modification of the Lease shall be binding unless evidenced by an agreement in writing signed by Landlord and Tenant.

 

12.         Counterparts.  This Third Amendment may be executed in any number of identical counterparts each of which shall be deemed to be an original and all, when taken together, shall constitute one and the same instrument.

 

 

EXECUTED on the Effective Date set forth above.

 

	LANDLORD: ARI-INTERNATIONAL BUSINESS PARK, LLC, ARI-IBP 1, LLC, ARI-IBP 2, LLC, ARI-IBP 3, LLC, ARI-IBP 4, LLC, ARI-IBP 5, LLC, ARI-IBP 6, LLC, ARI-IBP-7, LLC, ARI-IBP 8, LLC, ARI-IBP 9, LLC, ARI-IBP 11, LLC, ARI-IBP 12, LLC, each a Delaware limited liability company
	By:	Billingsley Property Services, Inc., a Texas corporation, as Agent
		By:	/s/ Kenneth D. Mabry
		Name:	Kenneth D. Mabry
		Title:	Sr. Vice President

 

 

 

 

 

 

 

 

EXHIBIT A, THE THIRD EXPANSION PREMISES

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