Minnesota-Minneapolis-Retek Plaza Lease [Amendment No. 1] - Ryan 900 LLC and Retek Inc.
FIRST AMENDMENT TO LEASE
This First Amendment to Lease, dated as of August 9, 2000 (Amendment),
between RYAN 900, LLC, a Minnesota limited liability company (Landlord), and
RETEK INC., a Delaware corporation (Tenant);
WITNESSETH, that:
WHEREAS, Landlord and Tenant have entered into a Lease dated November 8, 1999
(Lease) for approximately 217,775 rentable square feet on the 8th, 9th, 10th,
11th and 12th floors of the building being developed by Landlord on the block
bounded by Nicollet Mall, LaSalle Avenue, South 9th Street and South 10th Street
in the City of Minneapolis, County of Hennepin, State of Minnesota; and
WHEREAS, Landlord and Tenant desire and intend hereby to amend the Lease as
specifically hereinafter set forth and provided.
NOW, THEREFORE, in consideration of the mutual terms hereof, Landlord and Tenant
agree that the Lease shall be and hereby is amended as follows:
1. The description of the Premises contained in the Basic Lease
Information is hereby deleted and replaced in its entirety by the
following:
"The Premises will be delivered to Tenant in three phases.
As of the Commencement Date, the Premises will consist of floors 10 and
11 and portions of floor 4 and floor 5 of the Building. Each of floors
10 and 11 consists of approximately 43,505 square feet of Rentable
Area. The portion of floor 5 included in the Premises consists of
approximately 26,520 square feet of Rentable Area and is shown
crosshatched on the 5th floor plan attached hereto as part of Exhibit
A. The portion of floor 4 included in the Premises consists of
approximately 42,058 square feet of Rentable Area, and is shown
crosshatched on the 4th floor plan attached hereto as part of Exhibit
A. As of the Commencement Date, the Premises will consist of
approximately 155,588 square feet of Rentable Area.
As of the later of a) the first day of the third (3rd) full month of
the Term or b) December 1, 2001 ("Phase 2 Commencement"), the Premises
will consist of floors 9, 10, 11 and said portions of floor 4 and floor
5 of the Building. The 9th floor consists of approximately 43,505
square feet of Rentable Area. As of the Phase 2 Commencement, the
Premises will consist of approximately 199,093 square feet of Rentable
Area.
As of the later of a) the first day of the fifth (5th) full month of
the Term or b) March 1, 2002 ("Phase 3 Commencement"), the Premises
will consist of floors 8, 9, 10, 11 and said portions of floor 4 and
floor 5 of the Building. The 8th floor consists of approximately 43,505
square feet of Rentable Area. As of the Phase 3 Commencement, the
Premises will consist of approximately 242,598 square feet of Rentable
Area."
-1-
<PAGE> 2
2. The floor plans which are attached hereto as Exhibit A are substituted
for the floor plans which are attached as Exhibit A to the Lease.
3. The words "floors 10, 11 and 12" in the second sentence of Section 2.1
are deleted, and the words "floors 10 and 11 and portions of floor 4
and floor 5" are substituted in place thereof.
4. Section 1.2 - Expansion Options - is hereby deleted and replaced in its
entirety by the following:
"1.2 Expansion Options. Subject to the terms and conditions set forth
in this Section 1.2, Landlord grants to Tenant options to add space
("EXPANSION SPACE") to the Premises as follows:
(a) The maximum Expansion Space shall be approximately 98,510
square feet of Rentable Area, to be leased at Tenant's option in two
options (collectively, the "EXPANSION OPTIONS"). The first option
("FIRST EXPANSION OPTION") shall be at Tenant's election with respect
to either seventh floor of approximately 43,505 square feet of Rentable
Area or sixth and seventh floors each containing approximately 43,505
square feet of Rentable Area in the Building ("FIRST EXPANSION SPACE").
The second option ("SECOND EXPANSION OPTION") shall be for a portion of
floor 4, as shown on the floor plan attached as Exhibit B, consisting
of no less than 8,500 and no more than 11,500 square feet of Rentable
Area ("SECOND EXPANSION SPACE").
(b) Tenant shall have the right to exercise its Expansion
Options as follows: Tenant shall have the right to exercise the First
Expansion Option no later than December 31, 2001. Tenant shall have the
right to exercise the Second Expansion Option no later than the last
day of the thirty sixth (36th) full month of the Term which, based upon
the Scheduled Commencement Date, would be September 30, 2004. If Tenant
shall fail to exercise any Expansion Option by the dates provided, it
shall be deemed to have waived the right to exercise the Expansion
Option in question. Each Expansion Option shall be exercised by Tenant
giving written notice to Landlord of its election, and as to the First
Expansion Option, Tenant's determination as to taking one or two
floors.
(c) Unless accelerated as provided herein, Landlord shall
deliver the First Expansion Space to Tenant, and such space shall
become a part of the Premises, on the later of January 1, 2003, and the
date Landlord delivers the First Expansion Space to Tenant with
Landlord's Work Substantially Complete. The First Expansion Space shall
be delivered to Tenant in a manner consistent with Section 2.1 as to
Landlord's construction obligations set forth in the Construction Rider
defined in Section 2.1 ("LANDLORD'S WORK"), Substantial Completion and
conditions precedent to delivery to Tenant, and with the same Tenant
Improvement Allowance provided to Tenant. Tenant shall provide Final
Tenant Improvement Plans to Landlord for the First Expansion Space no
later than August 1, 2002. Landlord shall deliver the Second Expansion
Space to Tenant between the first day of the 39th full month of the
Term and the first day of the 54th full month of the Term which, based
upon the Scheduled Commencement Date, would be between December 1, 2004
and March 1, 2006. The Second Expansion Space shall be delivered to
Tenant in its "As-Is" condition, but constructed to at least the Base
Building condition as specified in Exhibits D & E. If the
-2-
<PAGE> 3
Second Expansion Space has not been constructed beyond the Base
Building condition set forth in Exhibits D & E, the determination of
Market Rate will reflect the unimproved condition of the space. The
space leased pursuant to the Second Expansion Option shall be added to
the Premises on the date of delivery thereof by Landlord, but Tenant's
obligation to pay Rent with respect thereto shall not commence until
the earlier of (i) the date which is four (4) months after such
delivery date, or (ii) the date on which Tenant commences using such
space for business purposes.
(d) Within thirty (30) days of receiving Tenant's notice
exercising the Second Expansion Option, Landlord shall give notice of
Landlord's good faith estimate of the Market Rate for the Second
Expansion Space. The Market Rate set forth in such notice by Landlord
shall be controlling unless within thirty (30) days after such notice
Tenant shall notify Landlord that it objects to Landlord's estimate of
Market Rate, in which case the Market Rate shall be determined in
accordance with Section 3.5 of this Lease. If the Market Rate has not
been determined prior to the date when monthly Rent on the Second
Expansion Space commences, then Tenant shall pay monthly Rent based
upon Landlord's estimate until the monthly Rent has been determined, at
which time Landlord shall pay to Tenant or Tenant shall pay to
Landlord, as appropriate, the amount equal to the overpayment or
underpayment of Rent for such Second Expansion Space.
(e) If at the time of exercise or at any time thereafter until
the commencement of the Term as to any Expansion Space, an Event of
Default exists under this Lease, Tenant will have no right to exercise
its option as to the relevant Expansion Space and/or to lease such
Expansion Space.
(f) Within ten (10) days after request by Landlord or Tenant,
the parties will execute an amendment to this Lease, in the form
prepared by Landlord, adding to the Premises any Expansion Space which
Tenant has elected to lease, as of the date of commencement of the Term
with respect to such Expansion Space, and otherwise upon the terms and
conditions of this Lease.
Tenant may elect to accelerate the Scheduled Commencement Date for the
First Expansion Space. Upon written notice of Tenant's intent to
accelerate the Scheduled Commencement Date and the space to which such
acceleration applies, Landlord shall make a commercially reasonable
effort to deliver such space in the condition provided for in this
Lease as of the date specified by Tenant, but Landlord, acting
diligently, shall have no liability for failing to so deliver.
If Tenant exercises its occupancy acceleration right and Landlord
delivers the First Expansion Space to Tenant prior to its scheduled
delivery/commencement dates under the Lease and in the condition
required under this Lease, Tenant shall receive a credit ("Rent
Credit") against Rent due under this Lease for each month the
respective delivery dates are accelerated. The Rent Credit will be
applied against the first installments of Rent coming due after the
respective accelerated delivery/commencement dates. If the respective
scheduled delivery/commencement dates are accelerated for any partial
month, the Rent Credit will be prorated for such partial month on the
basis of the total number of days in that particular month. The Rent
Credit will be an amount equal to $1.67 multiplied by the number of
rentable square feet of space delivery of which is accelerated,
multiplied by the number of months (or partial months) the respective
scheduled delivery/commencement dates are accelerated.
-3-
<PAGE> 4
For example, if Tenant exercises its acceleration right with respect to
the First Expansion Space (currently scheduled for delivery on January
1, 2003) and Landlord delivers the First Expansion Space to Tenant on
October 15, 2002 (with all of the delivery conditions of Section 2.1
satisfied such that the commencement date for the First Expansion Space
is October 15, 2002), Tenant will receive a Rent Credit equal to $1.67
multiplied by the Rentable Area of the First Expansion Space multiplied
by 2.484 (the partial month happens to be a month with 31 days, and 15
divided by 31 equals 0.484 when rounded to 3 decimal points)."
5. The description of Base Rent contained in the Basic Lease Information
is hereby deleted and replaced in its entirety by the following:
"Base Rent:
Months 1-6: The sum of a) $18.12 per rentable square foot per year
multiplied by 24,823 rentable square feet, plus b) $16.50 per rentable
square foot per year multiplied by the square foot rentable area of the
Premises in excess of 24,823 rentable square feet.
Months 7-60: The sum of a) $18.12 per rentable square foot per year
multiplied by 24,823 rentable square feet, plus b) $17.93 per rentable
square foot per year multiplied by the square foot rentable area of the
Premises in excess of 24,823 rentable square feet.
Months 61-120: The sum of a) $18.12 per rentable square foot per year
multiplied by 24,823 rentable square feet, plus b) $18.93 per rentable
square foot per year multiplied by the square foot rentable area of the
Premises in excess of 24,823 rentable square feet.
Months 121-150: The sum of a) $19.62 per rentable square foot per year
multiplied by 24,823 rentable square feet, plus b) $19.91 per rentable
square foot per year multiplied by the square foot rentable area of the
Premises in excess of 24,823 rentable square feet."
6. The second paragraph of Section 3.1 is hereby deleted and replaced in
its entirety by the following:
"Tenant shall receive a credit in the amount of Two Hundred Eighty
Thousand Nine Hundred Forty Seven and 00/100 Dollars ($280,947.00)
against Base Rent first due under the terms of this Lease."
7. Section 4 - SECURITY DEPOSIT - is hereby deleted and replaced in its
entirety by the following:
"4. Security Deposit. On or before January 31, 2000, Tenant shall
deposit with Landlord the amount specified in the Basic Lease
Information as the Security Deposit (the "SECURITY DEPOSIT") as
security for the performance of Tenant's obligations under this Lease.
Landlord may (but shall have no obligation to) use the Security Deposit
or any portion thereof to cure any Event of Default under this Lease or
to compensate Landlord for any damage Landlord incurs as a result of
Tenant's failure to perform any of Tenant's obligations hereunder and
for which Landlord is entitled to recover under the terms of this
Lease. In such event Tenant shall pay to Landlord on demand an amount
sufficient to replenish the Security Deposit. If Tenant is not in
default at the expiration or termination of this Lease, Landlord shall,
within thirty (30) days of such expiration or termination, return
-4-
<PAGE> 5
to Tenant the Security Deposit or the balance thereof then held by
Landlord and not applied as provided above. Landlord may commingle the
Security Deposit with Landlord's general and other funds. Landlord
shall not be required to pay interest on the Security Deposit to
Tenant.
The initial amount of the Security Deposit shall be Eleven Million Nine
Hundred Thousand and 00/100 Dollars ($11,900,000.00). If Tenant's Net
Worth, consisting of Total Equity and Deferred Revenue, as determined
in accordance with Generally Accepted Accounting Principles ("NET
WORTH"), for a period of three (3) consecutive calendar years during
the Term, as determined at the end of each quarter is greater than
Seventy Five Million and 00/100 Dollars ($75,000,000.00), the amount of
the Security Deposit shall, effective immediately on the first day of
the fourth (4th) consecutive calendar year, be reduced by Three Million
Seven Hundred Fifty Thousand and 00/100 Dollars ($3,750,000.00).
Following the twelfth consecutive month after the Security Deposit has
been reduced by Three Million Seven Hundred Fifty Thousand and 00/100
Dollars ($3,750,000.00), in which Tenant's Net Worth is, as determined
at the end of each quarter, greater than Seventy Five Million and
00/100 Dollars ($75,000,000.00), the amount of the Security Deposit
shall be reduced by an additional Three Million Seven Hundred Fifty
Thousand and 00/100 Dollars ($3,750,000.00), effective on the first day
of the thirteenth (13th) consecutive month.
The amount of the Security Deposit shall, from time to time upon
request by Tenant, be further reduced by an amount equal to any
reduction in Landlord's obligation for Total Remaining Rent, as defined
in Section 34 of the Lease, provided, however, that the amount of the
Security Deposit shall not be reduced by reason of Landlord's payment
of rent. In no event shall the amount of the Security Deposit be
reduced pursuant to the terms of this paragraph by an amount greater
than Four Million Four Hundred Thousand and 00/100 Dollars
($4,400,000.00).
During such time as Tenant's Net Worth is greater than Seventy Five
Million and 00/100 Dollars ($75,000,000.00), no Security Deposit shall
be required. If as of the end of any fiscal quarter Tenant's Net Worth
is less than Seventy Five Million and 00/100 Dollars ($75,000,000.00),
Tenant shall promptly, but in any event within thirty (30) days,
deposit with Landlord the amount provided for in this Section 4. The
Security Deposit may be in the form of an unconditional and irrevocable
letter of credit issued by a national bank reasonably acceptable to
Landlord. Landlord may draw upon the letter of credit if it is not
extended or replaced at least thirty (30) days prior to its expiration
date. Landlord will accept Tenant's unaudited financial statement on
January 31, 2000, to establish Tenant's Net Worth as of that date."
8. The amount of the Security Deposit set forth in the Basic Lease
Information is increased from $7,500,000.00 to $11,900,000.00.
9. The Rentable Area of the Building set forth in the Basic Lease
Information is changed from approximately 487,607 square feet to
approximately 450,976 square feet. The estimated Tenant's Share as of
the Commencement Date set forth in the Basic Lease Information is
changed from 26.8% to 34.5%.
-5-
<PAGE> 6
10. The amount of the Landlord contribution toward the Tenant Improvements
Allowance with respect to the Premises pursuant to paragraph 2.5(a) of
Exhibit B to the Lease is hereby reduced by Thirty Five Thousand Two
Hundred Sixty Three and no/100 Dollars.
11. Section 36 - Project/Building Name is hereby deleted and replaced in
its entirety by the following: "36. Project/Building Name. The name
"Retek on the Mall" shall be affixed as primary building signage above
the Nicollet Mall entrance to the Building. The Nicollet Mall lobby
entrance shall be a shared entry for the benefit of Tenant and any
other tenant occupying all or substantially all of the third floor of
the Building." The name "Retek" shall be affixed as primary building
signage at the Tenth Street entrance to the Building.
12. Exhibit F to the Lease is deleted in its entirety.
13. Storage Space: Landlord does hereby lease and Tenant does hereby take a
storage area of approximately 8,000 square feet located on the
Penthouse level of the Building, for the Term of the Lease, at an
initial rental rate of $12.00 per square foot. The rental rate for the
storage space shall be subject to adjustment at three year intervals to
that charged for similar space in similar buildings in downtown
Minneapolis, MN. Tenant may, at its sole discretion terminate this
Lease as to the Storage Space demised by this section, as of the last
day of each third year, upon ninety (90) days written notice to
Landlord.
EXCEPT as expressly amended or supplemented herein, the Lease is and shall
remain and continue in full force and effect in accordance with its terms.
IN WITNESS WHEREOF, this Amendment is hereby executed and delivered as of the
date and year first above written.
LANDLORD: RYAN 900, LLC
BY: /s/ Tim Gray
--------------------------------------
ITS: CFO
-------------------------------------
TENANT: RETEK INC.
BY: /s/ Gregory A. Effertz
--------------------------------------
ITS: CFO
-------------------------------------
-6-