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SECOND AMENDMENT TO LEASE

Lease Agreement

SECOND AMENDMENT TO LEASE | Document Parties: ASP WT, LLC | ELECTRONIC ARTS, INC | LIBERTY PROPERTY LIMITED PARTNERSHIP | Tiburon Entertainment, Inc You are currently viewing:
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ASP WT, LLC | ELECTRONIC ARTS, INC | LIBERTY PROPERTY LIMITED PARTNERSHIP | Tiburon Entertainment, Inc

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Title: SECOND AMENDMENT TO LEASE
Date: 8/10/2009
Industry: Software and Programming     Sector: Technology

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EXHIBIT 10.2

SECOND AMENDMENT TO LEASE

THIS SECOND AMENDMENT TO LEASE (this “Second Amendment”), is made effective as of the 8 th day of May, 2009 (the “Second Amendment Effective Date”), by and between LIBERTY PROPERTY LIMITED PARTNERSHIP , a Pennsylvania limited partnership (“Landlord”), and ELECTRONIC ARTS-TIBURON , A FLORIDA CORPORATION f/k/a Tiburon Entertainment, Inc. (“Tenant”).

BACKGROUND:

A. Landlord’s predecessor in interest, ASP WT, L.L.C., a Delaware limited liability company, and Tenant entered into that certain Lease for Space at Summit Park I, dated June 15, 2004 (the “Original Premises Lease”), with a Lease Commencement Date of January 1, 2005, and an expiration date of June 30, 2010, for 117,201 square feet in the building known as Maitland Summit Park I, located at 1950 Summit Park Drive, Maitland, Florida (the “Original Premises”).

B. Landlord and Tenant entered into that certain First Amendment to Lease, dated December 13, 2005 (the “First Amendment”) (with the Original Premises Lease and the First Amendment being together referred to as the “Original Lease”, and with the Original Lease, as modified by the terms and conditions of this Second Amendment, being hereafter collectively referred to as the “Lease”) for Building I and 23,163 square feet on the 6th Floor in the building known as Maitland Summit Park II, located at 1958 Summit Park Drive, Maitland, Florida (the “Expansion Premises”) (the Original Premises and the Expansion Premises are hereafter collectively the “Leased Premises”).

C. Landlord and Tenant desire to extend the Lease Term for an additional period of five (5) years and four (4) months with respect to the Original Premises and for an additional period of five (5) years with respect to the Expansion Premises, and provide for two (2) additional options to renew, each for a period of five (5) years

D. Tenant desires to have and Landlord has agreed to provide Tenant with the option to lease the 11,039 square foot suite currently occupied by ZOM, Inc., a Florida corporation, located in Building I (the “Second Expansion Premises”), to be effective no earlier than December 1, 2010 and no later than November 30, 2013, on the terms and conditions set forth below in this Second Amendment.

E. Landlord and Tenant desire to amend the Original Lease to extend the Lease Term, address the option for the Second Expansion Premises and to provide for certain other matters, all as set forth in this Second Amendment.

NOW, THEREFORE , the parties hereto, in consideration of the mutual promises and covenants contained herein and in the Lease, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, agree as follows:

1. Recitals; Capitalized Terms . The recitals set forth above are true and correct and are incorporated herein by this reference. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Original Lease.


2. Definitions . Section 1.1 of the Original Lease is hereby deleted in its entirety and the following new Section 1.1 is inserted in place and in lieu thereof:

1.1 DEFINITIONS .

 

 

a.

Leased Premises shall mean those suites/floors within both the Original Premises and the Expansion Premises, and shall include the Second Expansion Premises if and when the option for the Second Expansion Premises is exercised by Tenant, subject to such other adjustments as are specifically contemplated and provided in the Lease.

 

 

b.

Original Premises shall mean those suites/floors within Building I as described in Schedule 1.

 

 

c.

Expansion Premises shall mean those suites/floors within Building II as described in Schedule 1.

 

 

d.

Second Expansion Premises shall mean those suites/floors within Building I as described in Section 5 of this Second Amendment.

 

 

e.

Building shall mean both Building I and Building II.

 

 

f.

Building I shall mean Maitland Summit Park I located at 1950 Summit Park Drive, Orlando, Florida 32801.

 

 

g.

Building II shall mean Maitland Summit Park II located at 1958 Summit Park Drive, Orlando, Florida 32801.

 

 

h.

Project shall mean both Building I and Building II, and the parking facilities and the property owned by Landlord on which the said buildings are located.

 

 

i.

Tenant’s Building I Square Footage shall mean 117,201 rentable square feet (which shall increase to 128,240 rentable square feet if and when the option for the Second Expansion Premises is exercised by Tenant); Total Building I Square Footage of Building I shall mean 128,240 rentable square feet.

 

 

j.

Tenant’s Building II Square Footage shall mean 23,163 rentable square feet; Total Building II Square Footage of Building II shall mean 128,934 rentable square feet.

 

 

k.

Lease Commencement Date shall mean January 1, 2005; Lease Expiration Date shall mean October 31, 2015, subject to extension for Renewal Term(s) as provided in Section 12.4 of this Lease; Lease Term shall mean the time period between and including the Lease Commencement Date and Lease Expiration Date.

 

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l.

Extension Term shall mean: (i) the time period between (and including) July 1, 2010 and October 31, 2015 with respect to Building I, and (ii) the time period between (and including) November 1, 2010 and October 31, 2015 with respect to Building II.

 

 

m.

Building I Base Rent shall mean those amounts as set forth in Section 13.17 of this Lease, plus applicable sales tax, if any; but subject to adjustment as provided in this Lease.

 

 

n.

Building II Base Rent shall mean those amounts as set forth in Section 13.17 of this Lease, plus applicable sales tax, if any; but subject to adjustment as provided in this Lease.

 

 

o.

Base Rent shall mean Building I Base Rent and Building II Base Rent combined, together with base rent payable, if any, for the Second Expansion Premises by Tenant pursuant to this Lease, plus applicable sales tax.

 

 

p.

Tenant’s Building I Pro Rata Share shall mean 91.4%, but subject to adjustment should either or both of the options under Section 12.3 and/or Section 12.4 of this Lease be exercised.

 

 

q.

Tenant’s Building II Pro Rata Share shall mean 17.97%, but subject to adjustment should either or both of the options under Section 12.3 and/or Section 12.4 of this Lease be exercised.

 

 

r.

Tenant’s Pro Rata Share shall mean Tenant’s Building I Pro Rata Share and Tenant’s Building II Pro Rata Share combined.

 

 

s.

Deposit Not used; there is no deposit; Prepaid Rent Not used; there is no Prepaid Rent.

 

 

t.

Permitted Purpose shall mean general office use and such other ancillary uses as are specifically and expressly contemplated or permitted pursuant to this Lease.

 

 

u.

Authorized Number of Parking Spaces shall mean: (i) with respect to Building I and the Original Premises, a minimum of 484 unreserved spaces at a rate of $-0- per space per month, and (ii) with respect to Building II and the Expansion Premises, 4.5 parking spaces per 1,000 rentable square feet unreserved parking spaces in the Building II parking structure (i.e., 103 spaces), at a rate of $-0- per space per month; provided, however, of the 103 Building II parking spaces, Landlord shall provide 4 reserved parking spaces, at no charge, at locations to be determined by Landlord in the Building II parking structure. In addition, Tenant may use additional parking spaces in the Building II parking structure in excess of the foregoing ratio without any additional consideration, provided that

 

3


 

    

Tenant’s use of the same does not interfere with the use of such parking by other tenants of Building II. Once Landlord substantially completes construction of its next phase of development at Maitland Summit Park, the foregoing right of the Tenant to use additional parking within the Building II parking structure beyond the 4.5 parking spaces per 1,000 rentable square feet shall terminate and expire (provided, however, that during the construction period, Landlord may reduce such additional parking, if necessary, to accommodate the construction).

 

 

v.

Managing Agent shall mean Landlord.

 

 

w.

Landlord’s Mailing Address : 2400 Lake Orange Drive, Suite 110, Orlando, Florida 32837, telephone: 407-447-1776, and fax: 407-888-3242. Copy to: Attn: General Counsel, 500 Chesterfield Parkway, Malvern, Pennsylvania 19355.

 

 

x.

Tenant’s Mailing Address : 1950 Summit Park Drive, Orlando, Florida 32810, telephone: 407-386-4000, and fax: 407-386-4555, with copy to 209 Redwood Shores Parkway, Redwood City, California 94065, attn: Vice President, Global Real Estate.

 

 

y.

Market Base Rent shall mean market rents, tenant improvements, rent concessions and other typical and material financial lease terms for renewing tenants in similar Class A office space in Maitland, Florida.

 

 

z.

Business Day shall mean each weekday that the majority of Banks located in Orange County, Florida are open for business.

3. Lease Term . The Lease Term shall be extended for both the Original Premises and the Expansion Premises, for an additional sixty-four (64) months with respect to the Original Premises and for an additional sixty (60) months with respect to the Expansion Premises, with each terminating concurrently on the Lease Expiration Date of October 31, 2015, but subject to extension for Renewal Term(s) as provided in Section 12.4 of this Lease.

4. Landlord Improvements . During the Lease Term, Landlord will implement the following capital improvement projects for the Building: (A) by no later than June 1, 2009, Landlord will replace the roofing materials (and not structural components) for Building I, (B) by no later than June 1, 2009, Landlord will use diligent and commercially reasonable efforts to make any other repairs as may be reasonably necessary to correct and/or diminish to the extent practicable, any water leaks for Building II, (C) by no later than January 1, 2010, Landlord will (i) connect all unconnected and currently installed VAV’s and HVAC units in the Leased Premises to the existing Energy Management System (EMS), (ii) connect all common area lighting to the EMS, (iii) allow Tenant to monitor and control the HVAC and lighting systems of the Leased Premises by means of the EMS, (iv) by no later than October 1, 2009, install a new fire panel for Building I, and until replaced, maintain the existing fire panel in working condition, (D) perform such repairs and maintenance to the cooling towers for Building I and install any requisite upgrades as commercially reasonable in order to keep such cooling towers in

 

4


working condition, and (E) such other capital improvements for the Building as may be deemed warranted by Landlord during the Lease Term in the exercise of commercially reasonable discretion, and consistent with Landlord’s approved capital improvement budget, as may be modified from time to time, for the Leased Premises. These possible other capital improvements include, but are not limited to, the replacement of the cooling towers for Building I and Building II, and renovation and refurbishment of all Building restrooms on floors that are fully or partially occupied by Tenant. Such restroom renovations would include replacement of damaged tiles and replacement of existing faucets with automatic sensor faucets by October 1, 2009. Other such restroom renovations (to include replacement of sinks, mirrors, countertops, and fixtures of the type and quality selected by Landlord subject to reasonable approval by the Tenant) would be performed by Landlord within one and a half (1.5) years after the Second Amendment Effective Date. Any and all capital improvements made by Landlord as described in this Paragraph 4 shall be deemed the “Landlord’s Additional Capital Improvements.” Notwithstanding the foregoing, nothing in this Section 4 shall alleviate or diminish Landlord’s maintenance obligations set forth in this Lease, and such maintenance activities shall include, without limitation, the repair of any non-working bathroom fixtures and other equipment in the Building restrooms on floors that are fully or partially occupied by Tenant.

5. Second Expansion Option . During the Lease Term, Tenant shall have the one (1) time right and option to lease (“Option to Lease”) the 11,039 square feet suite in Building I currently occupied by ZOM, Inc. (the “Second Expansion Premises”) commencing no earlier than December 1, 2010, which Second Expansion Premises are more particularly described and depicted on Exhibit “A” attached hereto and incorporated herein by this reference. If Tenant desires to exercise its Option to Lease, Tenant shall give Landlord written notice thereof (“Second Expansion Option Notice”), which Second Expansion Option Notice shall specify the date (being the date that is no later than ten (10) months and no earlier than six (6) months after the date of the Second Expansion Option Notice) on which Tenant desires its lease and occupancy of the Second Expansion Premises to commence. Notwithstanding the foregoing, Tenant shall not be entitled to exercise the Option to Lease effective after November 30, 2013. Within fifteen (15) Business Days after delivery of Tenant’s Second Expansion Notice to Landlord, Landlord shall deliver to Tenant a proposed amendment to this Lease establishing the lease terms for the Second Expansion Premises (which proposed amendment shall be consistent with the terms and conditions of this Section 5, shall contain mutually satisfactory terms and shall be negotiated and executed by Landlord and Tenant in good faith). The foregoing Option to Lease: (i) is subject to there being no Tenant event of default under this Lease that is not cured within the applicable cure period and provided that Landlord has not given Tenant notice of default more than two (2) times during the immediately preceding twelve (12) months, (ii) is personal to Tenant and may not be assigned (except in the case of a permitted assignment or sublease of this Lease as provided in Section 6.4 of this Lease), and (iii) shall be available to and exercisable by the Tenant only when the Tenant is in actual possession and physical occupancy of the Leased Premises.

If Tenant exercises the Option to Lease, Landlord shall provide the Tenant Improvement Allowance (defined below) in the amount and for such purposes as provided in Section 9B of this Second Amendment. Upon exercise of Option to Lease, the lease term for the Second Expansion Premises shall commence on the date specified in the Second Expansion Option

 

5


Notice (being the date that is no later than ten (10) months and no earlier than six (6) months after the date of the Second Expansion Option Notice (the “Second Expansion Commencement Date”), and shall expire on the Lease Expiration Date. Base Rent, Operating Costs and other amounts due with respect to the Second Expansion Premises shall first become due on the Second Expansion Commencement Date. If the Second Expansion Commencement Date is not the first day of a calendar month, then Base Rent, Operating Costs and other amounts due under the Lease with respect to the Second Expansion Premises shall be apportioned on a per diem basis and shall be paid on or before the Second Expansion Commencement Date. The initial base rent for the Second Expansion Premises shall be an amount equal to the Building II Base Rent applicable as of the Second Expansion Commencement Date, and such Second Expansion space base rent shall be adjusted thereafter in amounts equal to the Building II Base Rent adjustments for the remaining time period of the Lease Term. Notwithstanding the foregoing, Tenant’s right to lease the Second Expansion Premises is subject to the existing rights of Charles Schwab & Co., Inc. (“Schwab”).

6. Parking for Second Expansion Premises . If Tenant exercises its Option to Lease as provided in Section 5 of this Second Amendment, then the parking deck for Building I will be designated for Tenant’s exclusive use, on the same terms and conditions as provided in Schedule 5 attached to the Original Premises Lease.

7. Base Rent Adjustment . Section 13.17 of the Lease is hereby revised to include the following new paragraphs:

 

    

Subject to adjustment based on the determination of Operating Expenses pursuant to Section 3.3 of this Lease, Building I Base Rent shall be adjusted on the following dates and in the following manner (with Month 67 being July, 2010):

 

Period

  

Total Base Rent per Square Foot

  

Total Base Rent per Month

  

Total Base Rent for
Period

  

Rent

  

Operating Costs

  

Total

  

Rent

  

Operating Costs

  

Total

  

Months 67-70

  

$

17.07

  

$

7.21

  

$

24.28

  

$

166,718.43

  

$

70,418.27

  

$

237,136.69

  

$

948,546.77

Months 71-82

  

$

15.50

  

$

7.76

  

$

23.26

  

$

151,384.63

  

$

75,789.98

  

$

227,174.61

  

$

2,726,095.26

Months 83-94

  

$

15.89

  

$

7.95

  

$

23.84

  

$

155,193.66

  

$

77,645.66

  

$

232,839.32

  

$

2,794,071.84

Months 95-106

  

$

16.28

  

$

8.16

  

$

24.44

  

$

159,002.69

  

$

79,696.68

  

$

238,699.37

  

$

2,864,392.44

Months 107-118

  

$

16.69

  

$

8.36

  

$

25.05

  

$

163,007.06

  

$

81,650.03

  

$

244,657.09

  

$

2,935,885.05

Months 119-130

  

$

17.11

  

$

8.57

  

$

25.68

  

$

167,109.09

  

$

83,701.05

  

$

250,810.14

  

$

3,009,721.68

 

Subject to adjustment based on the determination of Operating Expenses pursuant to Section 3.3 of this Lease, Building II Base Rent shall be adjusted on the following dates and in the following manner (with Month 55 being November, 2010):

 

Period

  

Total Base Rent per Square Foot

  

Total Base Rent per Month

  

Total Base Rent for
Period

  

Rent

  

Operating Costs

  

Total

  

Rent

  

Operating Costs

  

Total

  

Months 55-66

  

$

15.50

  

$

6.57

  

$

22.07

  

$

29,918.88

  

$

12,681.74

  

$

42,600.62

  

$

511,207.41

Months 67-78

  

$

15.89

  

$

6.73

  

$

22.62

  

$

30,671.67

  

$

12,990.58

  

$

43,662.26

  

$

523,947.06

Months 79-90

  

$

16.28

  

$

6.91

  

$

23.19

  

$

31,424.47

  

$

13,338.03

  

$

44,762.50

  

$

537,149.97

Months 91-102

  

$

16.69

  

$

7.08

  

$

23.77

  

$

32,215.87

  

$

13,666.17

  

$

45,882.04

  

$

550,584.51

Months 103-114

  

$

17.11

  

$

7.25

  

$

24.36

  

$

33,026.58

  

$

13,994.31

  

$

47,020.89

  

$

564,250.68

 

6


8. Operating Costs . Section 3.3 of the Original Premises Lease and Section 4 of the First Amendment are hereby deleted in their entirety and the following new Section 3.3 is hereby inserted in place and in lieu thereof:

 

 

3.3

OPERATING COSTS . Tenant shall pay its share of Operating Costs in accordance with the terms and conditions of this Section 3.3, as follows:

 

 

(A)

For the purposes of this Section 3.3 and this Lease, the following terms shall have the following meanings and definitions:

 

 

(i)

“Operating Costs” shall mean all reasonable and actual expenses relating to the Leased Premises, the Building or the Project, including but not limited to: real estate taxes and assessments; gross rents, sales, use, business, corporation, franchise or other taxes (except income taxes); utilities not separately chargeable to other tenants; insurance premiums and (to the extent used) deductibles; maintenance, repairs and replacements; refurbishing and repainting; equipment, tools, materials and supplies; air conditioning, heating and elevator service; property management including typical market management fees; security; employees and contractors; resurfacing and restriping of walks, drives and parking areas; signs, directories and markers; landscaping; and snow and rubbish removal. Operating Costs shall not include expenses for legal services, real estate brokerage and leasing commissions, Landlord’s income taxes, income tax accounting, interest, depreciation, general corporate overhead, or capital improvements to the Building or Project except for capital improvements installed for the purpose of reducing or controlling expenses, or required by any governmental or other authority having or asserting jurisdiction over the Building or Project. If any expense, though paid in one year, relates to more than one calendar year, at option of Landlord, such expense may be proportionately allocated among such related calendar years. In the event that the Building is not fully leased during any calendar year, Landlord may make appropriate adjustments to the Operating Costs, using reasonable projections, to adjust such costs to an amount that would normally be expected to be incurred if the Building were 95% leased, and such adjusted costs shall be used for purposes of this Section 3.3. Landlord and Tenant hereby acknowledge and agree that the term “Operating Costs” as used in this Lease shall mean those defined Operating Costs for Building I and Building II, respectively. For purposes of calculating Tenant’s Pro Rata Share of any Operating Costs for each of Building I and Building II, the defined Operating Costs for Building I and the defined Operating Costs for Building II shall be calculated, treated, allocated and assessed separately, such that Tenant is obligated to pay, in accordance with the terms and conditions of this Section 3.3,

 

7


 

    

Tenant’s Building I Pro Rata Share of any Operating Costs for Building I and Tenant’s Building II Pro Rata Share of any Operating Costs for Building II. For the purposes of the calculation, assessment and payment of any Operating Costs pursuant to this Section 3.3, the term “Building” as used therein shall mean either Building I or Building II, as the case may be.

 

 

(ii)

“Base Year” shall mean: (i) the calendar year 2005 with respect to Building I; and (ii) the calendar year 2006 for Building II.

 

 

(iii)

“Excess Operating Costs” shall mean, during that portion of the Lease Term ending on (and including) October 31, 2010 (the “Remaining Original Lease Term”), any excess of (x) Operating Costs for any calendar year following the Base Year over (y) the actual Operating Costs of the Base Year.

 

 

(iv)

“Controllable Operating Costs” shall mean, during the Extension Term and any Renewal Term(s), common area maintenance, landscaping, HVAC maintenance and supplies, elevator maintenance, personnel for the Project, fire protection, pest extermination, management fee as long as management services are being provided by Landlord or an affiliate of Landlord, and other miscellaneous maintenance.

 

 

(v)

“Non-Controllable Operating Costs” shall mean, during the Remaining Original Lease Term, any Operating Costs, including without limitation, taxes, insurance and utilities, as well as other expenses, that increase by more than four percent (4%) per annum by reason of one or more Force Majeure event. During the Extension Term and any Renewal Term(s), “Non-Controllable Operating Costs” shall mean all Operating Costs that are not Controllable Operating Costs.

 

 

(vi)

“Operating Costs Cap” shall mean a maximum annual increase in the amount of Controllable Operating Costs equal to four percent (4%) per annum.

 

 

(vii)

“Force Majeure” shall mean any act of God, fire, natural disaster, accident, act of government, shortages of material or supplies or any other cause reasonably beyond the control of such party.

 

 

(B)

During the Remaining Original Lease Term, Tenant shall pay its share of Excess Operating Costs in accordance with the following terms of this Section 3.3(B):

Tenant shall pay, in equal monthly installments, Tenant’s Pro Rata Share of any estimated Excess Operating Costs for each calendar

 

8


 

    

year, prorated for any partial calendar year, during the Remaining Original Lease Term. Annually, or from time to time, based on actual and projected Operating Cost data, Landlord may adjust its estimate of Operating Costs upward or downward. Within fifteen (15) days after notice to Tenant of a revised estimate of Operating Costs, Tenant shall remit to Landlord a sum equal to any shortage of the amount which should have been paid to date for the then current calendar year based on the revised estimate, and all subsequent monthly estimated payments shall be based on the revised estimate. Landlord shall cap controllable operating cost increases, constituting the Excess Operating Costs, to four percent (4%) per year, provided that such Operating Cost Cap shall not apply to Non-Controllable Operating Costs. Should the Force Majeure event subside and cease to affect Non-Controllable Operating Costs, such expenses shall be adjusted downward as appropriate and shall again be subject to the Operating Costs Cap in increases described above.

 

 

(C)

During that portion of the Lease Term subsequent to (and including) November 1, 2010 (the “Remainder Lease Term”), but not during the Remaining Original Lease Term, the Base Rent and Tenant’s share of Operating Costs shall be governed by the following terms and conditions of this Section 3.3(C):

The Base Rent applicable during the Remainder Lease Term, as set forth in Section 13.17 of this Lease, has been calculated using an estimate of the Operating Costs. The Base Rent for the first year of the Remainder Lease Term shall be


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