Sample Business Contracts


California-Irvine-4 Park Plaza Lease [Amendment No. 1] - Irvine Co. and Exult Inc.

Lease Forms

  • Start a state-specific lease for the rental of commercial property. Specify the term and rent due, as well as whether the landlord or tenant is responsible for property taxes, insurance, and maintenance and repairs.
  • When a tenant vacates commercial property before the lease term has expired, it may be able to rent the premises to a third party. The tenant would be the sublessor and the third party would be the sublessee. Besides preparing a sublease, both parties will want to review the provisions for assignment or subletting in the original lease agreement between the landlord and the sublessor.
  • Tenants of residential property should prepare a sublease agreement if they are seeking to sublease a room or the entire apartment or house to a third party. All parties should review the original lease agreement to see if there are any restrictions on subletting or assigning the premises.
  • Triple net leases are a type of commercial leases where the tenant has to pay for property taxes, insurance, utilities, and maintenance, in addition to the monthly rent.
  • When renting an office space, tenants should understand the amount of the rent and duration of the lease. Other important terms include whether the space can be subleased, which parties are responsible for maintenance, and whether any furniture and furnishings will be provided.

                                                               February 29, 2000
                                                                           05/98

                            FIRST AMENDMENT TO LEASE



I. PARTIES AND DATE.

        This First Amendment to Lease (the "First Amendment") dated 2/29, 2000,
is by and between THE IRVINE COMPANY ("Landlord"), and EXULT, INC., a Delaware
corporation, formerly known as BPO-US, INC., a Delaware corporation ("Tenant").

II. RECITALS.

        On June 28, 1999, Landlord and Tenant entered into an office space lease
("Lease") for space in a building located at 4 Park Plaza, Suite 350, Irvine,
California ("Premises").

        Landlord and Tenant each desire to modify the Lease to change the
location of the Premises to Suite 1000 comprising approximately 22,529 rentable
square feet of space on the tenth (10th) floor of the Building, extend the Lease
Term, adjust the Basic Rent, and make such other modifications as are set forth
in "Ill. MODIFICATIONS" next below.

III. MODIFICATIONS.

        A. Basic Lease Provisions. The Basic Lease Provisions are hereby amended
as follows:

                1. Effective as of the Commencement Date for Suite 1000, Item 2
shall be amended by deleting "Suite 350" therefrom and substituting "Suite 1000"
in lieu thereof.

                2. Item 4 is hereby amended by adding the following.

                        "Estimated Commencement Date for Suite 1000: June 1,
2000"

                3. Item 5 is hereby deleted in its entirety and the following
shall be substituted in lieu thereof:

                        "5. Lease Term: The Term of this Lease shall expire
                        thirty-six (36) months following the Commencement Date
                        for Suite 1000, plus such additional days as may be
                        required to cause this Lease to terminate on the final
                        day of the calendar month."

                4. Effective as of the Commencement Date for Suite 1000, Item 6
shall be deleted in its entirety and the following shall be substituted in lieu
thereof:

                        "6. Basic Rent: Fifty-Eight Thousand Five Hundred
                        Seventy-Five Dollars ($58,575.00) per month.

                        Rental Adjustments: Commencing twelve (12) months
                        following the Commencement Date for Suite 1060, the
                        Basic Rent shall be Sixty Thousand Eight Hundred
                        Twenty-Eight Dollars ($60,828.00) per month.


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                        Commencing twenty-four (24) months following the
                        Commencement Date for Suite 1000, the Basic Rent shall
                        be Sixty-Three Thousand Eighty-One Dollars ($63,081.00)
                        per month."

                5. Effective as of the Commencement Date for Suite 1000, Item 8
shall be deleted in its entirety and the following shall be substituted in lieu
thereof:

                        "8. Floor Area of Premises: approximately 22,529
                        rentable square feet."

                6. Effective as of the Commencement Date for Suite 1000, Item 12
shall be deleted in its entirety and the following shall be substituted in lieu
thereof:

                        "12. Parking: Forty (40) unreserved vehicle parking
                        spaces."

                7. Effective as of the Commencement Date for Suite 1000, Item 13
shall be amended by deleting "Suite 350" therefrom and substituting "Suite 1000"
in lieu thereof.

        B. Operating Expenses. Notwithstanding any contrary provision in the
Lease, Landlord hereby agrees that Tenant shall not be obligated to reimburse
Landlord for Operating Expenses accruing during the twelve (12) month period
following the Commencement Date for Suite 1000.

        C. Floor Plan of Premises. Effective as of the Commencement Date for
Suite 1000, Exhibit A attached to the Lease is deleted and is substituted by the
Revised Exhibit A attached to this First Amendment.

        D. Parking.

                (a) Effective as of the Commencement Date for Suite 1000,
                    Section 6.4 of the Lease shall be deleted in its entirety
                    and the following shall be substituted in lieu thereof:

                "SECTION 6.4. PARKING. Landlord hereby leases to Tenant, and
                Tenant hereby agrees to lease from Landlord for the Term of this
                Lease, the number of vehicle parking spaces set forth in Item 12
                of the Basic Lease Provisions (the "Committed Stalls"). The
                parking spaces shall be provided in accordance with the
                provisions set forth in Exhibit C to this Lease."

                (b) Landlord agrees that up to seven (7) of Tenant's Committed
                    Stalls may be converted by Tenant to reserved stalls (the
                    "Converted Reserved Stalls") by providing written notice of
                    such election to Landlord at any time during the initial six
                    (6) months following the Commencement Date for Suite 1000
                    (the "Parking Election Period"). Tenant acknowledges that,
                    if such written notice of election is not delivered to
                    Landlord within the Parking Election Period, then the
                    conversion of those seven (7) Committed Stalls to reserved
                    stalls shall be subject to the month to month availability
                    of such reserved stalls as determined by Landlord. In
                    addition to the Committed Stalls, Tenant shall have the
                    right to lease up to thirty-seven


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<PAGE>   3

                (37) additional unreserved parking spaces (the "Additional
                Unreserved Stalls") by providing written notice to Landlord at
                any time during the Parking Election Period. Notwithstanding the
                provisions of Exhibit C to the Lease, Landlord agrees that the
                stall charges payable by Tenant during the initial thirty-six
                (36) months following the Commencement Date for Suite 1000 shall
                be: (i) Fifty Dollars ($50.00) per month per for each of the
                Committed Stalls; (ii) One Hundred Twenty-Five Dollars ($125.00)
                per month for each Converted Reserved Stall leased by Tenant
                during the Parking Election Period; and (iii) Fifty Dollars
                ($50.00) per month for each Additional Unreserved Stall leased
                by Tenant during the Parking Election Period. Tenant understands
                and agrees that any Converted Reserved Stalls and any Additional
                Unreserved Stalls leased by Tenant after the Parking Election
                Period shall be subject to the month to month availability of
                such stalls as determined by Landlord and shall be at Landlord's
                scheduled parking rates from time to time.

        E. Tenant Improvements. Landlord hereby agrees to complete the Tenant
Improvements for Suite 1000 in accordance with the provisions of Exhibit X, Work
Letter, attached hereto.

        F. Right to Extend this Lease. Provided that Tenant is not in default
under any provision of this Lease at the time of exercise of the extension right
granted herein, and provided further that Tenant is occupying the entire
Premises and has not assigned or sublet any of its interest in this Lease,
Tenant may extend the Term of this Lease for one (1) period of thirty-six (36)
months. Tenant shall exercise its right to extend the Term by and only by
delivering to Landlord. not less than ten (10) months or more than twelve (12)
months prior to the expiration date of the Term, Tenant's written notice of its
irrevocable commitment to extend (the "Commitment Notice"). Should Tenant fail
timely to deliver the Commitment Notice, then this extension right shall
thereupon lapse and be of no further force or effect. The Basic Rent payable
under the Lease during the extension of the Term shall be at the prevailing
market rental rate (including periodic adjustments) for comparable and similarly
improved space within the Building as of the commencement of the extension
period, as determined by Landlord based on a reasonable extrapolation of its
then-current leasing rates. Promptly following receipt of the Commitment Notice,
Landlord shall prepare an appropriate amendment to the Lease memorializing the
extension of the Term in accordance with the foregoing, and Tenant shall duly
execute and return same to Landlord within fifteen (15) days. Should Tenant fail
timely to execute and deliver the amendment, then Landlord may, at its sole
written election, either specifically enforce the Commitment Notice or
extinguish Tenant's right to extend the Term. Should Landlord elect the latter,
then this Lease shall terminate upon the scheduled date of expiration and
Tenant's rights under this paragraph shall be of no further force or effect. Any
attempt to assign or transfer any right or interest created by this paragraph
shall be void from its inception. Tenant shall have no other right to extend the
Term beyond the single thirty-six (36) month extension created by this
paragraph. Unless agreed to in a writing signed by Landlord and Tenant, any
extension of the Term, whether created by an amendment to this Lease or by a
holdover of the Premises by Tenant, or otherwise, shall be deemed a part of, and
not in addition to, any duly exercised extension period permitted by this
paragraph. Time is specifically made of the essence of this paragraph.


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<PAGE>   4

        G. Commencement Date for Suite 1000. Subject to the provisions of
Paragraph H, the Lease Term for Suite 1000 shall commence ("Commencement Date
for Suite 1000") fourteen (14) days following the date Suite 1000 is ready for
occupancy as described in Paragraph H, or, if earlier, upon the date that Tenant
commences its business operations in Suite 1000. It is understood that Tenant
shall be afforded full access to Suite 1000 during that fourteen (14) day period
for the purpose of installing its furniture, fixtures and equipment therein, all
without any rental obligation but subject to the other provisions of this Lease.
Promptly following request by Landlord, the parties shall memorialize on a form
provided by Landlord the actual Commencement Date for Suite 1000 and the
expiration date ("Expiration Date") of the Lease.

        H. Delay in Possession. If Landlord, for any reason whatsoever, cannot
deliver possession of Suite 1000 to Tenant on or before the Estimated
Commencement Date for Suite 1000 as set forth hereinabove, this First Amendment
shall not be void or voidable nor shall Landlord be liable to Tenant for any
resulting loss or damage. However, Tenant shall not be liable for any rent and
the Commencement Date for Suite 1000 shall not occur until fourteen (14) days
after Suite 1000 is in fact tendered to Tenant ready for occupancy as defined
below, except that if Landlord's failure to so deliver possession is delayed as
the result of any action or inaction by Tenant (including without limitation any
Tenant Delay ("Tenant Delay") as described in the Work Letter attached to this
First Amendment), then the Commencement Date for Suite 1000 shall be deemed to
have occurred, and Landlord shall be entitled to full performance by Tenant
(including the payment of rent), fourteen (14) days following the date Landlord
would have been able to deliver Suite 1000 to Tenant but for Tenant's delay(s).
Suite 1000 shall be deemed ready for occupancy only if and when Landlord, to the
extent applicable, (a) has put into operation all building services essential
for the use of Suite 1000 by Tenant, (b) has provided reasonable access to Suite
1000 for Tenant so that they may be used without unnecessary interference, (c)
has substantially completed all the work required to be done by Landlord in this
First Amendment, and (d) has obtained requisite government approvals to Tenant's
occupancy. Notwithstanding anything to the contrary contained in this Paragraph
H, but subject to the terms and conditions hereinafter provided, if for any
reason other than Tenant Delays or other matters beyond Landlord's reasonable
control, the actual Commencement Date for Suite 1000 has not occurred by the
date that is one hundred eighty (180) days following Tenant's approval of final
construction drawings and pricing for the tenant improvement work, then Tenant
may, by written notice to Landlord given at any time thereafter but prior to the
actual occurrence of the Commencement Date for Suite 1000, elect to terminate
this First Amendment. Notwithstanding the foregoing, if at any time during the
construction period, Landlord reasonably believes that the Commencement Date for
Suite 1000 will not occur on or before one hundred eighty (180) days following
Tenant's approval of final construction drawings and pricing for the tenant
improvement work, Landlord may notify Tenant in writing of such fact and of a
new outside date on or before which the Commencement Date for Suite 1000 will
occur, and Tenant must elect within ten (10) days of receipt of such notice to
either terminate this First Amendment or waive its right to terminate this First
Amendment provided the Commencement Date for Suite 1000 occurs on or prior to
the new outside date established by Landlord in such notice to Tenant. Tenant's
failure to elect to terminate this First Amendment within such ten (10) day
period shall be deemed Tenant's waiver of its right to terminate this First
Amendment as provided in this


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paragraph as to the previous outside date, but not as to the new outside date
established by said notice.

        I. Termination of Suite 350. Landlord and Tenant agree that the rights
and obligations of the parties under the Lease with respect to Suite 350 shall
terminate in their entirety, effective as of midnight on the day preceding the
Commencement Date for Suite 1000, provided that such termination shall not
relieve Tenant of (a) any accrued obligation or liability under the Lease with
respect to Suite 350 as of said termination date, or (b) any obligation under
the Lease with respect to Suite 350 which was reasonably intended to survive the
expiration or earlier termination thereof. Tenant understands and agrees that it
shall completely vacate Suite 350 by midnight on the day preceding the
Commencement Date for Suite 1000 and shall remove all property therefrom in
accordance with the provisions of Section 15.3 of the Lease.

        J. Monument Signage. It is understood that Landlord is presently seeking
approval from the City of Irvine for the installation of an additional monument
sign at the Building. If and when Landlord installs such monument sign, Tenant
shall have the right to install nonexclusive signage, which signage shall
consist only of the name "Exult" or "Exult, Inc." The type, location and design
of such signage shall be subject to the prior written approval of Landlord and
the City of Irvine. Fabrication, installation, insurance, and maintenance of
such signage shall be at Tenant's sole cost and expense. Tenant understands and
agrees that it shall use Landlord's designated contractor for installing the
monument signage. Should Tenant fail to have the monument signage installed
within nine (9) months of receipt of approval of the construction thereof by the
City of Irvine, then Tenant's right to install same thereafter shall be deemed
null and void. Except for the foregoing, no sign, advertisement or notice
visible from the exterior of the Premises shall be inscribed, painted or affixed
by Tenant on any part of the Premises without the prior consent of Landlord.
Tenant's signage right shall belong solely to Exult, Inc., a Delaware
corporation and may not be transferred or assigned without Landlord's prior
written consent, which may be withheld by Landlord in Landlord's sole
discretion. In the event Tenant, exclusive of any subtenant(s), fails to occupy
the entire tenth (10th) floor of the Building, then Tenant shall, within thirty
(30) days following notice from Landlord, remove the monument signage at
Tenant's expense. Tenant shall also remove such signage promptly following the
expiration or earlier termination of the Lease. Any such removal shall be at
Tenant's sole expense, and Tenant shall bear the cost of any resulting repairs
to the monument that are reasonably necessary due to the removal.

        K. Right of First Offer. Provided Tenant is not then in default
hereunder, Landlord hereby grants Tenant a one-time right ("First Right") to
lease any space which may become available for lease on the ninth (9th) floor of
the Building ("First Right Space") in accordance with and subject to the
provisions of this Paragraph; provided, however, that this First Right shall
cease to be effective during the final twelve (12) months of the Term, as the
Term may have been extended by Tenant pursuant to Paragraph G above. At any time
after the date of this First Amendment, but prior to leasing the first Right
Space, or any portion thereof, to any other party, Landlord shall give Tenant
written notice of the basic economic terms including but not limited to the
Basic Rent, term, operating expense base, security deposit, and tenant
improvement allowance (collectively, the "Economic Terms"), upon which Landlord
is willing to lease such particular First Right Space to Tenant or to a third
party; provided that the Economic Terms shall


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exclude brokerage commissions and other Landlord payments that do not directly
inure to the tenant's benefit. It is understood that should Landlord intend to
lease other space in addition to the First Right Space as part of a single
transaction, then Landlord's notice shall so provide and all such space shall
collectively be subject to the following provisions. Within five (5) business
days after receipt of Landlord's notice, Tenant must give Landlord written
notice pursuant to which Tenant shall elect to (i) lease all, but not less than
all, of the space specified in Landlord's notice (the "Designated Space") upon
such Economic Terms and the same non-Economic Terms as set forth in this Lease;
(ii) refuse to lease the Designated Space, specifying that such refusal is not
based upon the Economic Terms, but upon Tenant's lack of need for the Designated
Space, in which event Landlord may lease the Designated Space upon any terms it
deems appropriate; or (iii) refuse to lease the Designated Space, specifying
that such refusal is based upon said Economic Terms, in which event Tenant shall
also specify revised Economic Terms upon which Tenant shall be willing to lease
the Designated Space. In the event that Tenant does not so respond in writing to
Landlord's notice within said period, Tenant shall be deemed to have elected
clause (ii) above. In the event Tenant gives Landlord notice pursuant to clause
(iii) above, Landlord may elect to either (x) lease the Designated Space to
Tenant upon such revised Economic Terms and the same other non-Economic Terms as
set forth in this Lease, or (y) lease the Designated Space to any third party
upon Economic Terms which are not materially more favorable to such party than
those Economic Terms proposed by Tenant. Should Landlord so elect to lease the
Designated Space to Tenant, then Landlord shall promptly prepare and deliver to
Tenant an amendment to this Lease consistent with the foregoing, and Tenant
shall execute and return same to Landlord within ten (10) days. Tenant's failure
to timely return the amendment shall entitle Landlord to specifically enforce
Tenant's commitment to lease the Designated Space, to lease such space to a
third party, and/or to pursue any other available legal remedy. Notwithstanding
the foregoing, it is understood that Tenant's First Right shall be subject to
any extension or expansion rights granted by Landlord to any existing third
party tenant in the Building, and to any extension or expansion rights granted
by Landlord to any third party tenant occupying the First Right Space or any
portion thereof, and in no event shall any such First Right Space be deemed
available for leasing until the existing tenant thereof shall have vacated the
First Right Space. Tenant's rights under this Paragraph shall belong solely to
Exult, Inc., a Delaware corporation and may not be assigned or transferred by
it. Any attempted assignment or transfer shall be void and of no force or
effect.

        L. Space Planning and Substitution. Notwithstanding any contrary
provision in Section 7.6 of the Lease, Landlord agrees that provided Tenant is
occupying the entire tenth (10th) floor of the Building, it shall not enforce
the provisions of said Section 7.6 during the initial thirty-six (36) month
period following the Commencement Date for Suite 1000.

        M. Additional Security Deposit/Rent Credit. Section 4.4 of the Lease
entitled "Additional Security Deposit/Rent Credit" is hereby amended by deleting
the second sentence therefrom and substituting the following in lieu thereof:

                "In the event that Tenant is not then in default under the Lease
                at any time, and provided further that Tenant has not at any
                time been more than ten (10) days late with respect to any
                payments of rent due under the Lease, Landlord shall return the
                Additional Security Deposit to Tenant in the form of credits in
                the amount of


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                Twenty-Five Thousand Dollars ($25,000.00) against the Basic Rent
                payable for July, 2000, Twenty-Five Thousand Dollars
                ($25,000.00) against the Basic Rent payable for July, 2001, and
                One Thousand One Hundred Fifty-Six Dollars ($1,156.00) against
                the Basic Rent payable for July, 2002."

IV. GENERAL.

        A. Effect of Amendments. The Lease shall remain in full force and effect
except to the extent that it is modified by this Amendment.

        B. Entire Agreement. This Amendment embodies the entire understanding
between Landlord and Tenant with respect to the modifications set forth in "III.
MODIFICATIONS" above and can be changed only by a writing signed by Landlord and
Tenant.

        C. Counterparts. If this Amendment is executed in counterparts, each is
hereby declared to be an original; all, however, shall constitute but one and
the same amendment. In any action or proceeding, any photographic, photostatic,
or other copy of this Amendment may be introduced into evidence without
foundation.

        D. Defined Terms. All words commencing with initial capital letters in
this Amendment and defined in the Lease shall have the same meaning in this
Amendment as in the Lease, unless they are otherwise defined in this Amendment.

        E. Corporate and Partnership Authority. If Tenant is a corporation or
partnership, or is comprised of either or both of them, each individual
executing this Amendment for the corporation or partnership represents that he
or she is duly authorized to execute and deliver this Amendment on behalf of the
corporation or partnership and that this Amendment is binding upon the
corporation or partnership in accordance with its terms.

        F. Attorneys' Fees. The provisions of the Lease respecting payment of
attorneys' fees shall also apply to this Amendment.


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<PAGE>   8

V. EXECUTION.

        Landlord and Tenant executed this Amendment on the date as set forth in
"I. PARTIES AND DATE." above.

LANDLORD:                                   TENANT:

THE IRVINE COMPANY                          EXULT, INC.

By:                                         By:
   --------------------------------            ---------------------------------
   William R. Halford, President,              Title:
   Irvine Office Company                             ---------------------------
   a division of The Irvine Company


By:                                         By:
   --------------------------------            ---------------------------------
   Vincent P. Hayes                            Title:
   Assistant Secretary                               ---------------------------


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                                    EXHIBIT A

                           DIAGRAM OF JAMBOREE CENTER

                                  4 PARK PLAZA

                                   TENTH FLOOR


<PAGE>   10


                                    EXHIBIT X

                                   WORK LETTER

                                DOLLAR ALLOWANCE

                            [SECOND GENERATION SPACE]

The Tenant Improvement work (herein "Tenant Improvements") shall consist of any
work required to complete Suite 1000 pursuant to plans and specifications
approved by both Landlord and Tenant. All of the Tenant Improvement work shall
be performed in accordance with the procedures below by a contractor selected on
the basis of a competitive bidding process involving three (3) general
contractors designated by Landlord.

I. ARCHITECTURAL AND CONSTRUCTION PROCEDURES

        A. Tenant and Landlord have approved, or shall approve within the time
           period set forth below, a detailed space plan for Suite 1000,
           prepared by Landlord's architect, which includes interior partitions,
           ceilings, interior finishes, interior office doors, suite entrance,
           floor coverings, window coverings, lighting, electrical and telephone
           outlets, plumbing connections, heavy floor loads and other special
           requirements ("Preliminary Plan"). Landlord agrees that the
           Preliminary Plan may include plans for a computer room, provided that
           such room shall be subject to specifications approved by Landlord and
           provided further that Landlord may elect to require Tenant to return
           any such portion of the Premises to building standard condition at
           Tenant's sole expense upon the expiration or earlier termination of
           the Lease. Tenant shall approve or disapprove the Preliminary Plan by
           signing copies of the appropriate instrument and delivering same to
           Landlord within three (3) business days of its receipt by Tenant. If
           Tenant disapproves any matter, Tenant shall specify in detail the
           reasons for disapproval and Landlord shall attempt to modify the
           Preliminary Plan to incorporate Tenant's suggested revisions in a
           mutually satisfactory manner. Notwithstanding the foregoing, however,
           Tenant shall approve in all respects a Preliminary Plan not later
           than March 13, 2000 ("Plan Approval Date").

        B. On or before the Plan Approval Date, Tenant shall provide in writing
           to Landlord or Landlord's Architect all specifications and
           information requested by Landlord for the preparation of final
           construction documents and costing, including without limitation
           Tenant's final selection of wall and floor finishes, complete
           specifications and locations (including load and HVAC requirements)
           of Tenant's equipment, and details of all improvements to be
           installed in Suite 1000 (collectively, "Programming Information").
           Tenant's failure to provide the Programming Information by the Plan
           Approval Date shall constitute a Tenant Delay for purposes of this
           First Amendment. Tenant understands that final construction documents
           for the Tenant Improvements shall be predicated on the


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           Programming Information, and accordingly that such information must
           be accurate and complete.

        C. Upon Tenant's approval of the Preliminary Plan and delivery of the
           complete Programming Information, Landlord's architect and engineers
           shall prepare and deliver to Tenant working drawings and
           specifications ("Working Drawings and Specifications") for the Tenant
           Improvements. Tenant shall have five (5) working days from the
           receipt thereof to approve or disapprove the Working Drawings and
           Specifications. Tenant shall not unreasonably withhold or delay its
           approval, and any disapproval or requested modification shall be
           limited to items not contained in the approved Preliminary Plan.
           Should Tenant disapprove the Working Drawings and Specifications,
           such disapproval shall be accompanied by a detailed list of
           revisions, Any revision requested by Tenant and accepted by Landlord
           shall be incorporated into a revised set of Working Drawings and
           Specifications, and Tenant shall approve same in writing within five
           (5) business days of receipt without further revision. Upon Tenant's
           approval of the Working Drawings and Specifications, Landlord shall
           cause the same to be competitively bid as provided above. The lowest
           responsible bid shall, unless otherwise agreed by the parties, be
           deemed the "Final Cost Estimate" for the construction of the Tenant
           Improvements. In no event shall Tenant disapprove the Final Cost
           Estimate if it does not exceed the approved Preliminary Cost
           Estimate. Should Tenant disapprove the Final Cost Estimate, such
           disapproval shall be accompanied by a detailed list of revisions. Any
           revision requested by Tenant and accepted by Landlord shall be
           incorporated by Landlord's architect into a revised Final Cost
           Estimate, and Tenant shall approve same in writing within three (3)
           business days of receipt without further revision. Tenant's failure
           to comply in a timely manner with any of the requirements of this
           paragraph shall constitute a Tenant Delay. Without limiting the
           rights of Landlord for Tenant Delays as set forth herein, in the
           event Tenant has not approved both the Working Drawings and
           Specifications and the Final Cost Estimate within ninety (90) days
           following the date of this First Amendment, then Landlord may, at its
           option, elect to terminate this First Amendment by written notice to
           Tenant. In the event Landlord elects to effect such a termination,
           Tenant shall, within ten (10) days following demand by Landlord, pay
           to Landlord any costs incurred by Landlord in connection with the
           preparation or review of plans, construction estimates, price
           quotations, drawings or specifications under this Work Letter and for
           all costs incurred in the preparation and execution of this First
           Amendment, including any leasing commissions.

        D. In the event that Tenant requests in writing a revision in the
           approved Working Drawings and Specifications ("Change"), then
           provided such Change is acceptable to Landlord, Landlord shall advise
           Tenant by written change order as soon as is practical of any
           increase in the Completion Cost and/or any Tenant Delay such Change
           would cause. Tenant shall approve or disapprove such change order in
           writing within two (2) business days following its receipt from
           Landlord. Tenant's approval of a Change shall be accompanied by
           Tenant's payment of any


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           resulting increase in the Completion Cost. It is understood that
           Landlord shall have no obligation to interrupt or modify the Tenant
           Improvement work pending Tenant's approval of a change order.

        E. It is understood that the Preliminary Plan and the Working Drawings
           and Specifications, together with any Changes thereto, shall be
           subject to the prior approval of Landlord. Landlord shall identify
           any disapproved items within three (3) business days (or two (2)
           business days in the case of Changes) after receipt of the applicable
           document. In lieu of disapproving an item, Landlord may approve same
           on the condition that Tenant pay to Landlord, prior to the start of
           construction and in addition to all sums otherwise due hereunder, an
           amount equal to the cost, as reasonably estimated by Landlord, of
           removing and replacing the item upon the expiration or termination of
           the Lease. Should Landlord approve work that would necessitate any
           ancillary Building modification or other expenditure by Landlord,
           then except to the extent of any remaining balance of the "Landlord's
           Contribution" as described below, Tenant shall, in addition to its
           other obligations herein, promptly fund the cost thereof to Landlord.

        F. Notwithstanding any provision in the First Amendment or this Work
           Letter to the contrary, if Tenant fails to comply with any of the
           time periods specified in this Work Letter, fails otherwise to
           approve or reasonably disapprove any submittal within three (3)
           business days, fails to approve in writing the Preliminary Plan for
           the Tenant Improvements by the Plan Approval Date, fails to provide
           all of the Programming Information requested by Landlord by the Plan
           Approval Date, fails to approve in writing the Working Drawings and
           Specifications and the Final Cost Estimate within the time provided
           herein, requests any Changes, furnishes inaccurate or erroneous
           specifications or other information, or otherwise delays in any
           manner the completion of the Tenant Improvements (including without
           limitation by specifying materials that are not readily available) or
           the issuance of an occupancy certificate (any of the foregoing being
           referred to in this Work Letter as a "Tenant Delay"), then Tenant
           shall bear any resulting additional construction cost or other
           expenses, and the Commencement Date for Suite 1000 shall be deemed to
           have occurred for all purposes, including Tenant's obligation to pay
           rent, as of the date Landlord reasonably determines that it would
           have been able to deliver Suite 1000 to Tenant but for the collective
           Tenant Delays. In no event, however, shall such date be earlier than
           the Estimated Commencement Date for Suite 1000 as set forth in the
           First Amendment. Should Landlord determine that the Commencement Date
           for Suite 1000 should be advanced in accordance with the foregoing,
           it shall so notify Tenant in writing. Landlord's determination shall
           be conclusive unless Tenant notifies Landlord in writing, within five
           (5) business days thereafter, of Tenant's election to contest same by
           arbitration with JAMS/ENDISPUTE pursuant to Section 14.7(b) of the
           Lease. Pending the outcome of such arbitration proceedings, Tenant
           shall make timely payment of all rent due under this First Amendment
           based upon the Commencement Date for Suite 1000 as set forth in the
           aforesaid notice from Landlord.


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        G. Tenant hereby designates Patty Furuya, Telephone No. (949) 809-8732,
           as its representative, agent and attorney-in-fact for the purpose of
           receiving notices, approving submittals and issuing requests for
           Changes, and Landlord shall be entitled to rely upon authorizations
           and directives of such person(s) as if given directly by Tenant.
           Tenant may amend the designation of its construction
           representative(s) at any time upon delivery of written notice to
           Landlord.

II. COST OF TENANT IMPROVEMENTS

        A. Landlord shall complete, or cause to be completed, the Tenant
           Improvements, at the construction cost shown in the approved Final
           Cost Estimate (subject to the provisions of this Work Letter), in
           accordance with final Working Drawings and Specifications approved by
           both Landlord and Tenant. Landlord shall pay towards the final
           constructions costs ("Completion Cost") as incurred a maximum of Two
           Hundred Thirty-One Thousand Eight Hundred Four Dollars ($231,804.00)
           ("Landlord's Contribution"), based on $12.00 per usable square foot
           of Suite 1000, and Tenant shall be fully responsible for the
           remainder ("Tenant's Contribution"). Landlord agrees that if the
           actual cost of completion of the Tenant Improvements is less than the
           maximum amount provided for the Landlord's Contribution, than at any
           time following the Commencement Date for Suite 1000 but prior to
           December 31, 2000, Tenant shall be permitted to utilize such savings
           towards other improvement work in the Premises, provided that such
           work is subject to the prior written approval of Landlord
           ("Additional Improvements"). Tenant acknowledges that any such excess
           funds shall be utilized by no later than December 31, 2000;
           thereafter, any remaining funds of the Landlord's Contribution shall
           inure to the benefit of Landlord and shall be considered forfeited by
           Tenant. It is understood that the Additional Improvements shall be
           done during Tenant's occupancy of Suite 1000. In this regard, Tenant
           agrees to assume any risk of injury, loss or damage which may result.
           Tenant further agrees that no rental abatement shall result while the
           Additional Improvements are completed in Suite 1000.

        B. The Completion Cost shall include all direct costs of Landlord in
           completing the Tenant Improvements, including but not limited to the
           following: (i) payments made to architects, engineers, contractors,
           subcontractors and other third party consultants in the performance
           of the work, (ii) permit fees and other sums paid to governmental
           agencies, (iii) costs of all materials incorporated into the work or
           used in connection with the work, and (iv) keying and signage costs.
           The Completion Cost shall also include an administrative/ supervision
           fee to be paid to Landlord in the amount of five percent (5%) of all
           such direct costs.

        C. Prior to start of construction of the Tenant Improvements, Tenant
           shall pay to Landlord the amount of the Tenant's Contribution set
           forth in the approved Final Cost Estimate. In addition, if the actual
           Completion Cost of the Tenant Improvements is greater than the Final
           Cost Estimate because of modifications or extras not reflected on the
           approved working drawings, or because of Tenant


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           Delays,then Tenant shall pay to Landlord, within ten (10) days
           following submission of an invoice therefor, all such additional
           costs, including any additional architectural fee. If Tenant defaults
           in the payment of any sums due under this Work Letter, Landlord shall
           (in addition to all other remedies) have the same rights as in the
           case of Tenant's failure to pay rent under the Lease.

        D. After the Tenant Improvements to Suite 1000 are substantially
           completed (excepting punch list items) and prior to the Commencement
           Date for Suite 1000, Landlord shall cause Landlord's contractor to
           inspect Suite 1000 with the Tenant's representative and complete a
           punch list of unfinished or incorrect items of the Tenant
           Improvements. Authorized representatives for the Landlord and Tenant
           shall execute said punch list to indicate their approval thereof. The
           items listed on such punch list shall be completed by Landlord within
           thirty (30) days after the approval of such punch list or as soon
           thereafter as reasonably practicable.

        E. The following costs shall be borne solely by Landlord (and Landlord's
           Contribution shall not be used to pay for the same): (1) attorneys'
           fees and costs incurred in connection with the negotiation of
           construction contracts and architectural agreements or the resolution
           of any disputes concerning construction, (2) premiums for any bonds
           obtained in connection with the construction, (3) costs associated
           with financing the construction costs, (4) costs incurred due to
           Landlord's or Landlord's employees', agents' or contractors' delay,
           negligence or willful misconduct, (5) penalties and late charges
           attributable to the failure of Landlord or Landlord's employees,
           agents or contractors to pay construction costs.


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