EXHIBIT 10.13
CONSENT TO SUBLEASE
This Consent is entered into as of this ____ day of June, 2000, by and
among Davis Associates, a California limited partnership ("Landlord"), Oracle
Corporation, a Delaware Corporation ("Sublandlord"), Extricity, Inc., a
California corporation ("Subtenant"). The parties hereby certify, represent,
warrant and acknowledge as follows:
1. Pursuant to that certain Lease dated as of December ___, 1995 and
executed December 21, 1995, as the same has been amended by that certain letter
dated May 18, 2000 from Landlord to Sublandlord (as amended, the "Lease"),
Landlord, as landlord, leased to ("Sublandlord"), as tenant, 69,925 square feet
of rentable space (the "Premises") consisting of the entire Building located at
0 Xxxxx Xxxxx in the City of Belmont, California (the "Building").
2. The Lease constitutes the entire agreement between Landlord and
Sublandlord with respect to the Premises, and is presently in full force and
effect. The Lease has not been further modified, changed, altered or amended in
writing, orally or otherwise. As of the date of this Consent to Sublease (this
"Consent"), Landlord has not assigned, encumbered or hypothecated its interest
in the Lease. All capitalized terms used herein shall have the meaning given
those terms in the Lease.
3. As of the date of this Consent and to the best of Landlord's knowledge,
neither Landlord nor Sublandlord is in default under the Lease nor has either of
them committed any breach of the Lease; no event has occurred which, but for the
passing of time or the giving or receipt of notice, or both, would constitute a
default under the Lease; and no notice of default has been given under the
Lease. There are no disputes between Landlord and Sublandlord concerning the
Lease, the Premises or the improvements thereon.
4. As of the date hereof, Sublandlord has made no alterations to the
Premises that pursuant to the provisions of the Lease, Landlord would require
Sublandlord to remove.
5. Landlord has executed this Consent in contemplation of that certain
sublease (the "Sublease") by and between Sublandlord and Subtenant, which
sublease is attached hereto as Exhibit "A", and Landlord hereby consents to
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Sublandlord's subleasing of the Premises to Subtenant pursuant to the terms of
the Sublease.
6. Sublandlord hereby represents and warrants that Sublandlord (i) has not
transferred or conveyed its interest in the Lease to any person or entity
collaterally or otherwise, and (ii) has full power and authority to enter into
the Sublease and this Consent. Subtenant hereby represents and warrants that
Subtenant has full power and authority to enter into the Sublease and this
Consent.
7. Subtenant hereby assumes, with respect to Landlord, all of the
indemnity and insurance obligations of the Sublandlord under the Lease.
8. Nothing contained in the Sublease or this Consent shall be construed as
relieving or releasing Sublandlord from any of its obligations under the Lease,
it being expressly understood and agreed that Sublandlord shall remain liable
for such obligations notwithstanding anything contained in the Sublease or any
subsequent assignment(s), sublease(s) or transfer(s) of the interest of the
tenant under the Lease. Sublandlord shall be responsible for the collection of
all rent due it from Subtenant, and for the performance of all the other terms
and conditions of the Sublease, it being understood that Landlord is not a party
to the Sublease.
9. In no event shall the Sublease or this Consent be construed as granting
or conferring upon the Sublandlord or the Subtenant any greater rights than
those contained in the Lease nor shall there be any diminution of the rights and
privileges of the Landlord under the Lease.
1. IN WITNESS WHEREOF, the undersigned has executed this Consent as of the
date first written above.
"LANDLORD"
DAVIS ASSOCIATES,
a California limited partnership
By: /s/ Xxxxxxx Xxxxxx
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Print Name: XXXXXXX XXXXXX
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Title: Agent for the JHR Trust
--------------------------
General Partner
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EXHIBIT "A"
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Sublease
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THE RAISER ORGANIZATION
Xxxxxx X. Xxxxxxxx 000 XXXXX XXXXXXXXX XXXXXX
May 18,2000 XXX XXXXX. XXXXXXXXXX 00000
Page 1 650 342 - 9026 FAX 344 - 4158
E-MAIL xxxxxxxx@xx.xxxxxx.xxx
MXX-54640
May 18, 2000
Oracle Corporation
c/o Xxxxxx X. Xxxxxxxx
Colliers International
000 Xxxxxxxx Xxxxxx - Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Re: Oracle Corporation Lease of One Xxxxx Drive, Belmont
----------------------------------------------------
Dear Phil:
In response to your letter of May 9, 2000, we would prefer that Oracle
sublease One Xxxxx Drive for the entire remaining term rather than offer a
three-year sublease. Therefore, by this letter, Davis Associates, a California
limited partnership, as Landlord under the above-referenced Lease, agrees to
waive its rights under Section 14.2 of the Lease to recapture or sublease the
premises due to any sublease of One Xxxxx Drive by Oracle with a sublease term
expiring on September 30, 2006. All other provisions of Section 14 shall remain
in effect, including, without limitation, Landlord's right to consent to any
subletting or assignment and Landlord's right to share in any sublease or
assignment profits.
This waiver of Section 14.2 does not apply to any Option Period (as
defined in the Lease). Should Oracle exercise either or both of its extension
options, then Section 14.2 will remain in full force and effect during each
Option Period.
Very truly yours,
Davis Associates,
a California limited partnership
By: /s/Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx,
for the General Partner
RAISER CONSTRUCTION COMPANY
RAISER DEVELOPMENT COMPANY
RAISER PROPERTY MANAGEMENT
RAISER REAL ESTATE SERVICES
RAISER SENIOR SERVICES. LLC
RAISER RESOURCES, LLC
SUBLEASE
BETWEEN
ORACLE CORPORATION,
a Delaware corporation
AND
EXTRICITY, INC.,
a California corporation
June 22, 0000
XXX XXXXX XXXXX
XXXXXXX, XXXXXXXXXX
SUBLEASE
THIS SUBLEASE ("Sublease") is entered into as of June 22, 2000, is made
by and between ORACLE CORPORATION, a Delaware corporation (herein called
"Sublandlord") and EXTRICITY, INC., a(n) California Corporation (herein called
"Subtenant"), with reference to the following facts:
A. Pursuant to that certain Lease dated as of December ___, 1995 and
executed December 21, 1995, as the same has been amended by that certain letter
dated May 18, 2000 from Landlord (defined below) to Sublandlord (as amended, the
"Master Lease"), Xxxxx Associates ("Landlord"), as Landlord, leased to
Sublandlord, as tenant, certain space (the "Master Lease Premises") consisting
of 69,925 rentable square feet consisting of the entire Building located at 0
Xxxxx Xxxxx in the City of Belmont, California (the "Building").
B. Subtenant wishes to sublease from Sublandlord, and Sublandlord wishes
to sublease to Subtenant, the entire Master Lease Premises (hereinafter called
the "Subleased Premises").
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged by the parties, Sublandlord and Subtenant hereby agree as follows:
1. Sublease. Sublandlord hereby subleases to Subtenant and Subtenant
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hereby subleases from Sublandlord for the term, at the rental, and upon all of
the conditions set forth herein, the Subleased Premises.
2. Term. The term of this Sublease ("Term") shall commence on the
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later to occur of (i) the date Sublandlord procures Landlord's consent to the
Sublease (the "Consent") or (ii) the date Sublandlord tenders possession of the
Subleased Premises to Subtenant (the "Commencement Date") and shall end on
September 30, 2006 (the "Expiration Date"), unless sooner terminated pursuant to
any provision hereof. Upon the determination of the Commencement Date, the
parties will enter into a letter agreement memorializing the Commencement Date
and the Schedule of Base Rent payable hereunder.
3. Rent.
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3.1 Rent Payments.
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(a) From and after the Commencement Date Subtenant shall pay
to Sublandlord as Base Rent for the Subleased Premises during the Term the
following:
Monthly Rate Per Rentable
Months Square Foot Monthly Payment
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1- 12 $6.75 $471,993.75
13- 24 $7.02 $490,873.50
25- 36 $7.30 $510,452.50
37- 48 $7.59 $530,730.75
49- 60 $7.89 $551,708.25
60- 72 $8.21 $574,084.25
72-Expiration Date $8.54 $597,159.50
Provided, that Tenant will not be obligated to pay Base Rent with respect to the
final seven (7) days of the Term so long as Tenant has vacated the Subleased
Premises in accordance with the terms of this Sublease as of the date that is
seven (7) days prior to the Expiration Date.
(b) If the Term does not end on the last day of a month, the
Base Rent and Additional Rent for that partial month shall be prorated by
multiplying the monthly Base Rent and Additional Rent by a fraction, the
numerator of which is the number of days of the partial month included in the
Term and the denominator of which is the total number of days in the full
calendar month. All Rent (hereinafter defined) shall be payable in lawful money
of the United States, by regular bank check of Subtenant, to Sublandlord at the
address stated herein or to such other persons or at such other places as
Sublandlord may designate in writing.
3.2 Operating Expenses.
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(a) Definitions. For purposes of this Sublease and in
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addition to the terms defined elsewhere in this Sublease, the following terms
shall have the meanings set forth below:
(1) "Additional Rent" shall mean the sums payable
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pursuant to subparagraph 3.2(b) of this Sublease.
(2) "Operating Costs" shall mean "Operating Expenses" (as
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defined in the Master Lease) charged by Landlord to Sublandlord pursuant to the
Master Lease.
(3) "Rent" shall mean, collectively, Base Rent,
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Additional Rent, and all other sums payable by Subtenant to Sublandlord under
this Sublease, whether or not expressly designated as "rent", all of which are
deemed and designated as rent pursuant to the terms of this Sublease.
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(4) "Subtenant's Percentage Share" shall mean one hundred
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percent (100%).
(b) In addition to the Base Rent payable pursuant to Section
3.1 above, from and after the Commencement Date, for each calendar year of the
Term, Subtenant, as Additional Rent, shall pay Subtenant's Percentage Share of
Operating Costs payable by Sublandlord for the then current calendar year. It is
expressly acknowledged by the parties hereto that this Subleased is intended to
be "triple net" Sublease, pursuant to which Subtenant shall pay all "pass-
throughs" payable by Sublandlord under the Master Lease and attributable to the
Term. Sublandlord shall give Subtenant written notice of Sublandlord's estimate
of the amount of Additional Rent per month payable pursuant to this Subsection
(b) for each calendar year following the Sublandlord's receipt of Landlord's
estimate of the Operating Costs payable under the Master Lease. Thereafter, the
Additional Rent payable pursuant to this Subsection (b) shall be determined and
adjusted in accordance with the provisions of Subsection 3.2(c) below.
(c) For partial calendar years during the term of this
Sublease, the amount of Additional Rent payable pursuant to Subsection 3.2(d)
that is applicable to that partial calendar year shall be prorated based on the
ratio of the number of days of such partial calendar year falling during the
term of this Sublease to 365. The expiration or earlier termination of this
Sublease shall not affect the obligations of Sublandlord and Subtenant pursuant
to Subsection 3.2(d), and such obligations shall survive, remain to be performed
after, any expiration or earlier termination of this Sublease.
4. Security Deposit.
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(a) Concurrently with Subtenant's execution of this Sublease,
Subtenant shall deposit with Sublandlord an irrevocable letter of credit (the
"Letter of Credit"), which Letter of Credit shall: (a) be in the amount of
$8,609,166.00; (b) be issued on the form attached hereto as Exhibit B, with no
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modifications; (c) name Landlord as its beneficiary; (d) be drawn on an FDIC
insured financial institution satisfactory to the Landlord; and (e) expire no
earlier than sixty (60) days after the Termination Date of this Lease. If any
amendment to the Letter of Credit or issuance of a substitute Letter of Credit
results in fees or charges, then such fees or charges shall be payable solely by
Subtenant.
(b) If a default by Subtenant occurs in the payment or
performance of any of the terms, covenants or conditions of this Sublease,
including the payment of Rent (beyond any applicable notice and/or cure
periods), Sublandlord may, to the extent necessary to cure such default, apply
or retain the whole or any part of the Letter of Credit by drawing down upon the
Letter of Credit (the Letter of Credit shall be deemed the "Security Deposit"
for the purposes of this Sublease) and use, apply or retain the whole or any
part of such proceeds, as the case may be, to the extent required for the
payment of any Rent or any other sum as to which Subtenant is in default (beyond
any applicable notice and/or cure periods) including (i) any sum which
Sublandlord may expend or may be required to expend by reason of Subtenant's
default and/or (ii) any damages to which Sublandlord is entitled pursuant to
this Sublease, whether such damages accrue before or after summary proceedings
or other reentry by Sublandlord. If Sublandlord applies or retains any part of
the Security Deposit, Subtenant, upon demand, shall deposit with Sublandlord
the amount so applied or retained so that Sublandlord
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shall have the full Security Deposit (i.e., a Letter of Credit in the initial
face amount described above) on hand at all times during the Term. If Subtenant
shall fully and faithfully comply with all the terms, covenants and conditions
of this Sublease, the Security Deposit shall be returned to Subtenant after the
later to occur of (i) the Expiration Date, (ii) delivery of possession of the
Subleased Premises to Sublandlord in the manner required by this Sublease, (iii)
the final reconciliation of any payments of Additional Rent by Subtenant and
(iv) completion by Subtenant to the satisfaction of Landlord and Sublandlord of
any restoration work required in the Subleased Premises or with respect to the
monument signage described in Section 12 below.
5. Warrant Agreements. Concurrently with Subtenant's execution and
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delivery of this Sublease, Subtenant shall execute Warrant Agreements in the
form of Exhibit C-1 and Exhibit C-2 attached hereto, pursuant to which Subtenant
shall grant to Sublandlord warrants to purchase 20,000 shares of Subtenant's
"Series F" convertible preferred stock at a purchase price of $6.45 per share
and will grant to Landlord warrants to purchase 20,000 shares of Subtenant's
"Series F" convertible preferred stock at a purchase price of $6.45 per share.
6. Use and Occupancy.
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6.1 Use. The Subleased Premises shall be used and occupied only
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for the purposes described in Section 1.9 of the Master Lease.
6.2 Compliance with Master Lease.
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(a) Generally. Subtenant agrees that it will occupy the
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Subleased Premises in accordance with the terms of the Master Lease and will not
suffer to be done or omit to do any act which may result in a violation of or a
default under any of the terms and conditions of the Master Lease, or render
Sublandlord liable for any damage, charge or expense thereunder. Subtenant
further covenants and agrees to indemnify Sublandlord against and hold
Sublandlord harmless from any claim, demand, action, proceeding, suit,
liability, loss, judgment, expense (including attorneys fees) and damages of any
kind or nature whatsoever arising out of, by reason of, or resulting from,
Subtenant's failure to perform or observe any of the terms and conditions of the
Master Lease or this Sublease. Any other provision in this Sublease to the
contrary notwithstanding, Subtenant shall pay to Sublandlord as Rent hereunder
any and all sums which Sublandlord may be required to pay the Landlord arising
out of the use by Subtenant of additional Building services (e.g. charges
associated with after-hour or excess HVAC usage and overstandard electrical
charges).
(b) Sublandlord Not Required to Perform Landlord's
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Obligations. Subtenant agrees that Sublandlord shall not be required to perform
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any of the covenants, agreements and/or obligations of Landlord under the Master
Lease and, insofar as any of the covenants, agreements and obligations of
Sublandlord hereunder are required to be performed under the Master Lease by
Landlord thereunder, Subtenant acknowledges and agrees that Sublandlord shall be
entitled to look to Landlord for such performance. Sublandlord shall not be
responsible for any failure or interruption, for any reason whatsoever, of the
services or facilities that may be appurtenant to or supplied at the Building by
Landlord or otherwise, including, without limitation, heat, air conditioning,
ventilation, life-safety, water, electricity, elevator service and cleaning
service, if any; and no failure to furnish, or interruption of, any such
services or facilities shall give rise to any (i) abatement, diminution or
reduction of
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Subtenant's obligations under this Sublease, or (ii) liability on the part of
Sublandlord. Notwithstanding the foregoing, Sublandlord shall promptly take such
action as may reasonably be indicated, under the circumstances, to secure such
performance upon Subtenant's request to Sublandlord to do so.
(c) Sublandlord's Responsibility. Sublandlord represents to
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Subtenant that the Master Lease is in full force and effect and that no notices
of default have been sent or received by Sublandlord with respect to the Master
Lease.
(d) Landlord's On-Site Employee. Subtenant expressly
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acknowledges that an employee of Landlord who performs maintenance
responsibilities for the Subleased Premises (as well as the property located at
00 Xxxxx Xxxxx) maintains an office in the basement of the Building, without any
deduction in Rent payable hereunder. Such employee shall have access to the
Subleased Premises (other than computer rooms) and the basement of the Building
at all times, as well as use of an office in the Building, in order to allow
Landlord to provide the maintenance and service responsibilities required of
Landlord under the Master Lease, without any deduction in Rent. Subtenant shall
not impair such employee from performing his or her work tasks within the
Subleased Premises.
7. Master Lease and Sublease Terms.
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7.1 Subject to Master Lease. This Sublease is and shall be at all
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times subject and subordinate to the Master Lease. Additionally, Subtenant's
rights under this Sublease shall be subject to the terms of the Consent.
Subtenant acknowledges that Subtenant has reviewed and is familiar with all of
the terms, agreements, covenants and conditions of the Master Lease. During the
Term and for all periods subsequent thereto with respect to obligations which
have arisen prior to the termination of this Sublease, Subtenant agrees to
perform and comply with, for the benefit of Sublandlord and Landlord, the
obligations of Sublandlord under the Master Lease which pertains to the
Subleased Premises and/or this Sublease.
7.2 Incorporation of Master Lease. The terms, conditions and
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respective obligations of Sublandlord and Subtenant to each other under this
Sublease shall be the terms and conditions of the Master Lease except for those
provisions of the Master Lease which are directly contradicted by this Sublease
in which event the terms of the Sublease document shall control over the Master
Lease. Therefore, for the purposes of this Sublease, wherever in the Master
Lease the word "Landlord" is used it shall be deemed to mean the Sublandlord
herein and wherever in the Master Lease the word "Tenant" is used it shall be
deemed to mean the Subtenant herein. The time limits contained in the Master
Lease for the giving of notices, making of demands or performing of any act,
condition or covenant on the part of the tenant thereunder, or for the exercise
by the tenant thereunder of any right, remedy or option, are changed for the
purposes of incorporation herein by reference by shortening the same in each
instance by three days, so that in each instance Subtenant shall have three days
less time to observe or perform hereunder than Sublandlord has as the tenant
under the Master Lease. The time limits contained in the Master Lease for the
giving of notices, making of demands or performing of any act, condition or
covenant on the part of Landlord, or for the exercise by Landlord of any right,
remedy or option, are changed for the purposes of incorporation herein by
reference by doubling the same in each instance, so that in each instance
Sublandlord shall have twice as much time to observe or perform hereunder than
Landlord has under the Master Lease.
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Any non-liability, release, indemnity or hold harmless provision in the Master
Lease for the benefit of Landlord that is incorporated herein by reference,
shall be deemed to inure to the benefit of Sublandlord, Landlord, and any other
person intended to be benefited by said provision, for the purpose of
incorporation by reference in this Sublease. Any right of Landlord under the
Master Lease of access or inspection and any right of Landlord under the Master
Lease to do work in the Master Lease premises or in the Building and any right
of Landlord under the Master Lease in respect of rules and regulations, which is
incorporated herein by reference, shall be deemed to inure to the benefit of
Sublandlord, Landlord, and any other person intended to be benefited by said
provision, for the purpose of incorporation by reference in this Sublease.
7.3 Clarification on Incorporation of Master Lease. For the
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purposes of incorporation herein, the terms of the Master Lease are subject to
the following additional modifications:
(a) In all provisions of the Master Lease (under the terms
thereof and without regard to modifications thereof for purposes of
incorporation into this Sublease) requiring the approval or consent of Landlord,
Subtenant shall be required to obtain the approval or consent of both
Sublandlord and Landlord.
(b) In all provisions of the Master Lease requiring Tenant to
submit, exhibit to, supply or provide Landlord with evidence, certificates, or
any other matter or thing, Subtenant shall be required to submit, exhibit to,
supply or provide, as the case may be, the same to both Landlord and
Sublandlord. In any such instance, Sublandlord shall determine if such evidence,
certificate or other matter or thing shall be satisfactory.
(c) Sublandlord shall have no obligation to restore or
rebuild any portion of the Sublease Premises after any destruction or taking by
eminent domain.
(d) In all provisions of the Master Lease requiring Tenant to
designate Landlord as an additional or named insured on its insurance policy,
Subtenant shall be required to so designate Landlord and Sublandlord on its
insurance policy.
7.4 Exclusions. Notwithstanding the terms of Section 7.3 above,
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Subtenant shall have no rights nor obligations under the following parts,
Sections and Exhibits of the Master Lease: Articles 1, 2, 3, Section 4.3(c)
(second sentence only), Section 5.1, Section 6.1.1 (3/rd/through
8/th/sentences), Section 6.3.1, Section 16.3, Article 21, Article 22, Article
26, Article 27, Article 28, Article 30, Section 31.2, Exhibit C.
7.5 Sublandlord's Agreement. Sublandlord agrees to maintain the
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Master Lease, as it pertains to the Subleased Premises, during the Term of this
Sublease.
8. Indemnity. Subtenant shall indemnify, defend and hold harmless
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Sublandlord from and against all losses, costs, damages, expenses and
liabilities, including, without limitation, reasonable attorneys' fees and
disbursements, which Sublandlord may incur or pay out (including, without
limitation, to the landlord under the Master Lease) by reason of (i) any
accidents, damages or injuries to persons or property occurring in or on the
Subleased Premises or the parcel on which the Subleased Premises are located
(including the parking lot) (unless the same shall have been caused by
Sublandlord's gross negligence or willful
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misconduct), (ii) any breach or default hereunder on Subtenant's part, (iii) the
successful enforcement of Sublandlord's rights under this Section 8 or any other
Section of this Sublease, (iv) any work done after the date hereof in or to the
Subleased Premises, or (v) any act, omission or negligence on the part of
Subtenant and/or its officers, partners, employees, agents, customers and/or
invitees, or any person claiming through or under Subtenant.
9. Limitation on Liability. Sublandlord shall not be liable for
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personal injury or property damage to Subtenant, its officers, agents,
employees, invitees, guests, licensees or any other person in the Sublease
Premises, regardless of how such injury or damage may be caused (unless the same
shall have been caused by Sublandlord's gross negligence or willful misconduct
and, in any event, subject to the application of proceeds of Subtenant's
insurance coverage required hereunder). Any property of Subtenant kept or stored
in the Sublease Premises shall be kept or stored at the sole risk of Subtenant.
Subtenant shall hold Sublandlord harmless from any claims arising out of any
personal injury or property damage occurring in the Sublease Premises, including
subrogation claims by Subtenant's insurance carrier(s).
10. Consents and Approvals. In any instance when Sublandlord's
----------------------
consent or approval is required under this Sublease, Sublandlord's refusal to
consent to or approve any matter or thing shall be deemed reasonable if, among
other matters, such consent or approval is required under the provisions of the
Master Lease incorporated herein by reference but has not been obtained from
Landlord. If Subtenant shall seek the approval by or consent of Sublandlord and
Sublandlord shall fail or refuse to give such consent or approval, Subtenant
shall not be entitled to any damages for any withholding or delay of such
approval or consent by Sublandlord, it being agreed that Subtenant's sole remedy
in connection with an alleged wrongful refusal or failure to approve or consent
shall be an action for injunction or specific performance and that said remedy
of an action for injunction or specific performance shall be available only in
those cases where Sublandlord shall have expressly agreed in this Sublease not
to unreasonably withhold or delay its consent.
11. Furniture. Concurrently with Subtenant's execution and delivery
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of this Sublease to Sublandlord, Subtenant shall execute and deliver a furniture
lease in the form of Exhibit D attached hereto, pursuant to which Subtenant will
lease from Sublandlord all existing furniture (including cubicles, office
furniture, chairs and conference tables) except that furniture previously
removed by Sublandlord (as more particularly described in Furniture Lease, the
"Furniture"), as well as existing wiring to office and work stations within the
Premises.
12. Signage. Provided Landlord consents to Subtenant having monument
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signage rights, Subtenant shall have the right, at Subtenant's sole cost and
expense during the Term to install monument signage identifying Subtenant (but
not any other entity other than assignee of Subtenant's interest hereunder
pursuant to the provisions of a Permitted Transfer). The method of installation
of any such signage and the materials used, shall be subject to the approval of
Sublandlord and Landlord. Subtenant shall have the obligation, at the expiration
or sooner termination of this Sublease, to remove any and all such signage at
Subtenant's sole cost and expense and repair any damage caused by such removal
to the reasonable satisfaction of Sublandlord and Landlord.
13. Attorney's Fees. If Sublandlord, Subtenant or Landlord brings an
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action to enforce the terms hereof or to declare rights hereunder, the
prevailing party who recovers
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substantially all of the damages, equitable relief or other remedy sought in any
such action on trial and appeal shall be entitled to his reasonable attorney's
fees to be paid by the losing party as fixed by the court.
14. Subtenant's Acceptance.
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14.1 Generally. Sublandlord shall deliver, and Subtenant shall
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accept, possession of the Subleased Premises in their "AS IS" condition as the
Subleased Premises exists on the Commencement Date hereof; Subtenant expressly
acknowledges that Sublandlord will, prior to the Commencement Date, remove
Sublandlord's security system, all computer servers, and all overhead
projectors, and will deliver the Subleased Premises to Subtenant in "broom
clean" condition. Sublandlord shall have no obligation to furnish, render or
supply any work, labor, services, materials, furniture, fixtures, equipment,
decorations or other items to make the Subleased Premises ready or suitable for
Subtenant's occupancy. In making and executing this Sublease, Subtenant has
relied solely on such investigations, examinations and inspections as Subtenant
has chosen to make or has made and has not relied on any representation or
warranty concerning the Subleased Premises or the Building, except as expressly
set forth in this Sublease. Subtenant acknowledges that Sublandlord has afforded
Subtenant the opportunity for full and complete investigations, examinations and
inspections of the Subleased Premises and the common areas of the Building.
Subtenant acknowledges that it is not authorized to make or do any alterations
or improvements in or to the Subleased Premises except as permitted by the
provisions of this Sublease and the Master Lease and that upon termination of
this Sublease, Subtenant shall deliver the Subleased Premises to Sublandlord in
the same condition as the Subleased Premises were at the commencement of the
Term hereof, reasonable wear and tear excepted; Subtenant expressly acknowledges
that if Subtenant performs alterations within the Subleased Premises and
Landlord or Sublandlord requires their removal, Subtenant will be solely
responsible for the cost of such removal (and any repairs necessitated by such
removal), and that Sublandlord shall have no responsibility to return the
Security Deposit to Subtenant until all such restoration work has been completed
to the satisfaction of Landlord and Sublandlord.
14.2 Code Issues. If the performance of any work in or about the
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Subleased Premises by Subtenant "triggers" a requirement for code-related
upgrades to or improvements of the Master Leased Premises or any common areas,
Subtenant shall be solely responsible for the cost of such code-required upgrade
or improvements.
15. Notices: Any notice by either party to the other required,
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permitted or provided for herein shall be valid only if in writing and shall be
deemed to be duly given only if (a) delivered personally, or (b) sent by means
of Federal Express, UPS Next Day Air or another reputable express mail delivery
service guaranteeing next day delivery, or (c) sent by United States Certified
or registered mail, return receipt requested, addressed (i) if to Sublandlord,
at the following addresses:
Oracle Corporation
000 Xxxxxx Xxxxxxx
Xxx XXX0
Xxxxxxx Xxxxxx, XX 00000
Attn: Lease Administrator
8
With a copy to:
Oracle Corporation
000 Xxxxxx Xxxxxxx
Xxx 0XX0
Xxxxxxx Xxxxxx, XX 00000
Attn: Legal Department
and (ii) if the Subtenant, at the Subleased Premises, attn: General Counsel.
Or at such other address for either party as that party may designate by notice
to the other. A notice shall be deemed given and effective, if delivered
personally, upon hand delivery thereof (unless such delivery takes place after
hours or on a holiday or weekend, in which event the notice shall be deemed
given on the next succeeding business day), if sent via overnight courier, on
the business day next succeeding delivery to the courier, and if mailed by
United States certified or registered mail, three (3) business days following
such mailing in accordance with this Section.
16. Assignment and Subletting.
-------------------------
(a) Generally; Sublandlord's Right to Recapture.
-------------------------------------------
Supplementing Article 14 of the Master Lease as incorporated herein, Subtenant
shall have the right to assign or sublease all or a portion of the Subleased
Premises with the consent of Landlord (to be withheld or granted pursuant to the
provisions of the Master Lease) and Sublandlord's consent to any such
transaction to which Landlord has consented shall not be unreasonably withheld,
conditioned or delayed. Notwithstanding the foregoing, in the event that
Subtenant proposes to sublease all or a portion of the Subleased Premises or to
assign its interest in the Sublease (other than pursuant to Permitted Transfer
[defined below]), Sublandlord shall have the right, to be exercised within
twenty (20) days following receipt of Subtenant's notice of request for consent
to such transaction, to terminate this Sublease with respect to the portion of
the Subleased Premises that is the subject of the proposed transaction,
effective as of the date upon which Subtenant's proposed sublease or assignment
is to take effect. If such termination applies to a portion, but not all, of the
Subleased Premises, Subtenant will be responsible for one-half (1/2) of the cost
of design and construction of any demising walls and corridors required in order
to separate the Subleased Premises from the area that is the subject of such
termination and Sublandlord shall be responsible for the remaining one-half
(1/2).
(b) Permitted Transfers. Notwithstanding anything to the
-------------------
contrary contained herein, Tenant may assign its entire interest under this
Sublease or sublet the Subleased Premises to a wholly owned corporation,
partnership or other legal entity or affiliate, subsidiary or parent of Tenant
or to any successor to Tenant by purchase, merger, consolidation or
reorganization (hereinafter, collectively, referred to as "Permitted Transfer")
without the consent of Sublandlord, provided: (i) Tenant is not in default under
this Sublease; (ii) if such proposed transferee is a successor to Tenant by
purchase, merger, consolidation or reorganization, the continuing or surviving
entity shall own all or substantially all of the assets of Tenant and shall have
a net worth which is at least equal to the greater of Tenant's net worth at the
date of this Sublease or Tenant's net worth at the date of the Permitted
Transfer; (iii) in no event shall any Permitted Transfer release or relieve
Tenant from any of its obligations under this
9
Sublease and (iv) Subtenant must still procure any consents or approvals
required by Landlord. Tenant shall give Sublandlord written notice at least
thirty (30) days prior to the effective date of such Permitted Transfer. As used
herein: (a) "parent" shall mean a company which owns a majority of Tenant's
voting equity; (b) "subsidiary" shall mean an entity wholly owned by Tenant or
at least fifty-one percent (51%) of whose voting equity is owned by Tenant; and
(c) "affiliate" shall mean an entity controlled, controlling or under common
control with Tenant. Notwithstanding the foregoing, sale of the shares of equity
of any affiliate or subsidiary to which this Sublease. has been assigned or
transferred other than to another parent, subsidiary or affiliate of the
original Tenant named hereunder shall be deemed to be an assignment requiring
the consent of Sublandlord hereunder.
17. Brokers. Subtenant represents that it has dealt directly with and
-------
only with CPS ("CPS"), as a broker in connection with this Sublease. Sublandlord
represents that it has dealt directly with and only with Colliers International
("Colliers"), as a broker in connection with this Sublease. Sublandlord and
Subtenant shall indemnify and hold each other harmless from all claims of any
brokers other than CPS and Colliers claiming to have represented Sublandlord or
Subtenant in connection with this Sublease. Subtenant and Sublandlord agree that
CPS and Colliers shall be paid commissions in connection with this Sublease
pursuant to a separate agreement.
18. Complete Agreement. There are no representations, warranties,
------------------
agreements, arrangements or understandings, oral or written, between the parties
or their representatives relating to the subject matter of this Sublease which
are not fully expressed in this Sublease. This Sublease cannot be changed or
terminated nor may any of its provisions be waived orally or in any manner other
than by a written agreement executed by both parties.
19. Interpretation. Irrespective of the place of execution or
--------------
performance, this Sublease shall be governed by and construed in accordance with
the laws of the State of California. If any provision of this Sublease or the
application thereof to any person or circumstance shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of this Sublease and the
application of that provision to other persons or circumstances shall not be
affected but rather shall be enforced to the extent permitted by law. The table
of contents, captions, headings and titles, if any, in this Sublease are solely
for convenience of reference and shall not affect its interpretation. This
Sublease shall be construed without regard to any presumption or other rule
requiring construction against the party causing this Sublease or any part
thereof to be drafted. If any words or phrases in this Sublease shall have been
stricken out or otherwise eliminated, whether or not any other words or phrases
have been added, this Sublease shall be construed as if the words or phrases so
stricken out or otherwise eliminated were never included in this Sublease and no
implication or inference shall be drawn from the fact that said words or phrases
were so stricken out or otherwise eliminated. Each covenant, agreement,
obligation or other provision of this Sublease shall be deemed and construed as
a separate and independent covenant of the party bound by, undertaking or making
same, not dependent on any other provision of this Sublease unless otherwise
expressly provided. All terms and words used in this Sublease, regardless of the
number or gender in which they are used, shall be deemed to include any other
number and any other gender as the context may require. The word "person" as
used in this Sublease shall mean a natural person or persons, a partnership, a
corporation or any other form of business or legal association or entity.
10
20. Counterparts. This Sublease may be executed in separate
------------
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument. This Sublease shall be
fully executed when each party whose signature is required has signed and
delivered to each of the parties at least one counterpart, even though no single
counterpart contains the signatures of all parties hereto.
IN WITNESS WHEREOF, the parties hereto hereby execute this Sublease as
of the day and year first above written.
SUBLANDLORD:
-----------
ORACLE CORPORATION,
a Delaware corporation
By: /s/ Xxxxx Xxxxx
---------------------------------
Print Name: Xxxxx Xxxxx
-------------------------
Title: VP and Corporate Treasurer
-----------------------------
SUBTENANT:
----------
EXTRICITY, INC.
a California corporation
By: /s/ Xxxxxxx Xxxxxxxxxx
---------------------------------
Print Name: Xxxxxxx Xxxxxxxxxx
-------------------------
Title: CFO
------------------------------
11
Subleased Premises
------------------
First Floor
-----------
[Graphic]
Subleased Premises
------------------
Second Floor
------------
[Graphic]
Subleased Premises
------------------
Lower Level
-----------
[Graphic]
EXHIBIT B
---------
DATE: _____________
FROM: IMPERIAL BANK
INTERNATIONAL DIVISION
0000 XXXXXXXXX XXXXX XXXX.
XXXXXXX XXXXX, XX 00000
U.S.A.
TELEX: 3730628 (IMPERIAL INW)
SWIFT: IMPBUS66
APPLICANT: EXTRICITY, INC.
000 XXXX XXXXXXX XXXXX
XXXXX 000
XXXXXXX XXXXXX, XX 00000
IN FAVOR OF: ORACLE CORPORATION
000 XXXXXX XXXXXXX
XXXXXXX XXXX, XXXXXXXXXX 00000
WE HEREBY ESTABLISH OUR IRREVOCABLE TRANSFERABLE STANDBY LETTER OF CREDIT
NO. _____ EXPIRING 11/22/01 AT OUR COUNTERS FOR AMOUNT: USD 8,609,166.00
(EIGHT MILLION SIX HUNDRED NINE THOUSAND ONE HUNDRED SIXTY SIX EXACTLY).
CREDIT IS AVAILABLE WITH IMPERIAL BANK
INTERNATIONAL DIVISION
000 XXXXXXX XXXXXX
XXXXX 0000
XXX XXXXXXXXX, XXXXXXXXXX
00000-0000
BY PAYMENT OF DRAFTS AT SIGHT
DRAFTS DRAWN ON: IMPERIAL BANK
INTERNATIONAL DIVISION
000 XXXXXXX XXXXXX
XXXXX 0000
XXX XXXXXXXXX, XXXXXXXXXX
00000-0000
REQUIRED DOCUMENTS:
1. THE ORIGINAL OF THIS STANDBY LETTER OF CREDIT AND AMENDMENT(S) IF ANY.
1
2. BENEFICIARY'S STATEMENT DATED AND PURPORTEDLY SIGNED BY ONE OF ITS OFFICERS
WORDED AS FOLLOWS: WE HEREBY CERTIFY THAT THIS DRAW IN THE AMOUNT OF
USD______ (U.S. DOLLARS ____) UNDER YOUR IREVOCABLE STANDBY LETTER OF
CREDIT NO. ____ REPRESENTS FUNDS DUE AND OWING TO US AS A RESULT OF THE
APPLICANT'S FAILURE TO COMPLY WITH ONE OR MORE OF THE TERMS OF THAT CERTAIN
SUBLEASE BY AND BETWEEN ORACLE CORPORATION, AS SUBLANDLORD, AND EXTRICITY,
INC., AS SUBTENANT.
ADDITIONAL CONDITIONS:
ALL INFORMATION REQUIRED WHETHER INDICATED BY BLANKS, BRACKETS OR
OTHERWISE, MUST BE COMPLETED AT THE TIME OF DRAWING.
ALL SIGNATURES MUST BE MANUALLY EXECUTED IN ORIGINALS.
PARTIAL DRAWINGS MAY BE MADE UNDER THIS LETTER OF CREDIT, PROVIDED,
HOWEVER, THAT EACH SUCH DEMAND THAT IS PAID BY US SHALL REDUCE THE AMOUNT
AVAILABLE UNDER THIS LETTER OF CREDIT.
IT IS A CONDITION OF THIS STANDBY LETTER OF CREDIT THAT IT SHALL BE DEEMED
AUTOMATICALLY EXTENDED WITHOUT AMENDMENT FOR ONE YEAR PERIODS FROM THE
PRESENT EXPIRATION DATE HEREOF, AND EACH APPLICABLE ANNIVERSARY THEREOF
UNLESS SIXTY (60) DAYS PRIOR TO ANY SUCH DATE, WE SHALL NOTIFY YOU IN
WRITING BY CERTIFIED MAIL OR COURIER SERVICE AT THE ABOVE LISTED ADDRESS
THAT WE ELECT NOT TO CONSIDER THIS IRREVOCABLE LETTER OR CREDIT RENEWED FOR
ANY SUCH ADDITIONAL PERIOD. UPON RECEIPT BY YOU OF SUCH NOTICE, YOU MAY
DRAW HEREUNDER BY MEANS OF YOUR DRAFT (S) ON US AT SIGHT ACCOMPANIED BY
YOUR ORIGINAL SIGNED STATEMENT WORDED AS FOLLOWS: ORACLE CORPORATION HAS
RECEIVED NOTICE FROM IMPERIAL BANK THAT THE EXPIRATION DATE OF LETTER OF
CREDIT NO. ________ WILL NOT BE EXTENDED FOR AN ADDITIONAL PERIOD AS OF THE
DATE OF THIS DRAWING, ORACLE CORPORATION HAS NOT RECEIVED A SUBSTITUTE
LETTER OF CREDIT OR OTHER INSTRUMENT ACCEPTABLE TO ORACLE CORPORATION AS
SUBSTITUTE FOR IMPERIAL BANK LETTER OF CREDIT NO. ________.
ISSUING BANK WILL SEND CONCURRENTLY WITH ANY NOTICE SENT TO BENEFICIARY, BY
A NATIONALLY RECOGNIZED COURIER SERVICE OR CERTIFIED MAIL, AN ADDITIONAL
NOTICE TO:
2
SHARTSIS, XXXXXX & XXXXXXXX LLP, XXX XXXXXXXX XXXXX, 00XX XXXXX, XXX
XXXXXXXXX, XXXXXXXXXX, 00000 ATTENTION: XXXXXXXX X. XXXXXXX.
NOTWITHSTANDING THE ABOVE, THE FINAL EXPIRATION DATE SHALL BE 11/22/06.
THIS LETTER OF CREDIT IS TRANSFERABLE IN WHOLE ONLY. YOU MAY TRANSFER THIS
LETTER OF CREDIT TO YOUR TRANSFEREE OR SUCCESSOR UPON SATISFACTORY DELIVERY
AND PRESENTATION TO THE ISSUING BANK OF (1) THE ORIGINAL STANDBY L/C AND
AMENDMENTS, IF ANY, FOR PROPER ENDORSEMENT (2) A REQUEST FOR TRANSFER ON
THE ISSUER'S USUAL TRANSFER FORM (3) VERIFICATION OF SIGNATURE AND
AUTHORITY ON SUCH TRANSFER FORM SIGNING FOR THE BENEFICIARY (4) PAYMENT OF
A TRANSFER FEE (NOT TO EXCEED 1/4 OF 1 PERCENT) AND (5) ANY OTHER
REQUIREMENTS RELATIVE TO THE UCP 500 AND U.S. GOVERNMENT REGULATIONS.
IMPERIAL BANK, UPON RECEIPT OF BENEFICIARY'S REQUEST, IN A MANNER AS STATED
HEREIN, TO TRANSFER THIS LETTER OF CREDIT, WILL REQUIRE THAT THE ORIGINAL
OF THIS LETTER OF CREDIT AND ALL AMENDMENTS THERETO, IF ANY, BE RETURNED TO
US FOR CANCELLATION. UPON OUR RECEIPT OF SAME, A NEW LETTER OF CREDIT SHALL
BE ISSUED TO THE TRANSFEREE, AS BENEFICIARY.
ALL DRAFTS AND DOCUMENTS REQUIRED UNDER THIS LETTER OF CREDIT MUST BE
MARKED: "DRAWN UNDER IMPERIAL BANK LETTER OF CREDIT NO. ________-.
ALL DOCUMENTS ARE TO BE DISPATCHED IN ONE LOT BY COURIER SERVICE TO
IMPERIAL BANK INTERNATIONAL DIVISION, 000 XXXXXXX XXXXXX, XXXXX 0000, XXX
XXXXXXXXX, XXXXXXXXXX 00000-0000.
THIS LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR UNDERTAKING.
WE HEREBY ENGAGE WITH YOU THAT ALL DRAFTS DRAWN UNDER AN IN COMPLIANCE WITH
THE TERMS OF THIS CREDIT WILL BE DULY HONORED IF DRAWN AND PRESENTED FOR
PAYMENT AT THIS OFFICE ON OR BEFORE THE EXPIRATION DATE OF THIS CREDIT. WE
FURTHER ACKNOWLEDGE AN AGREE THAT UPON RECEIPT OF THE COMPLYING
DOCUMENTATION REQUIRED HEREIN, WE WILL HONOR YOUR DRAW (S) AGAINST THIS
IRREVOCABLE STANDBY LETTER OF CREDIT WITHOUT INQUIRY INTO THE ACCURACY OF
BENEFICIARY'S SIGNED STATEMENT.
3
EXCEPT SO FAR AS OTHERWISE EXPRESSLY STATED HEREIN, THIS CREDIT IS SUBJECT
TO THE "UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS" (1993
REVISION) INTERNATIONAL CHAMBER OF COMMERCE (PUBLICATION NO. 500).
4
EXHIBIT C-1
-----------
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED ("THE ACT"), OR THE SECURITIES LAWS OF CERTAIN STATES.
THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY
NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION THEREUNDER OR
EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS. INVESTORS SHOULD BE AWARE THAT
THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION
OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT
ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
WARRANT TO PURCHASE SERIES F PREFERRED STOCK
OF
EXTRICITY, INC.
Void after July __, 2004
This certifies that, for value received, Oracle Corporation or its
permitted registered assigns ("Registered Holder"), is entitled, subject to the
terms and conditions of this Warrant, at any time before 5:00 p.m. Pacific Time
on July , 2004 (the "Expiration Date"), to purchase from Extricity, Inc., a
California corporation (the "Company"), Twenty Thousand (20,000) shares of the
Company's Series F Preferred Stock, no par value per share (the "Warrant
Stock"), as constituted on May 3, 2000 (the "Issue Date"), at the price of Six
Dollars Forty-five Cents ($6.45) per share, or any amount less than $6.45 per
share to which the conversion price of the Series F Preferred Stock may be
reduced as a result of the issuance or deemed issuance of additional shares of
common stock at less than the conversion price of the Series F Preferred Stock
(the "Purchase Price") upon surrender of this Warrant at the principal office of
the Company, together with a duly executed subscription in the form attached
hereto as Exhibit 1 and simultaneous payment of the full Purchase Price therefor
in lawful money of the United States as provided herein. The Purchase Price and
the number and character of shares of Warrant Stock purchasable hereunder are
subject to adjustment as provided herein. Unless the context otherwise requires,
the term "Warrant Stock" shall mean and include the stock and other securities
and property at any time receivable or issuable upon exercise of this Warrant.
The term "Warrant" as used herein, shall include this Warrant and any warrants
delivered in substitution or exchange therefor as provided herein.
1. Exercise.
--------
(a) Exercise Period. Subject to compliance with all applicable
---------------
securities laws, this Warrant may be exercised at any time, in whole or in part,
on any business day prior to the Expiration Date, by surrendering this Warrant
at the principal executive office of the Company,
1
together with the subscription form attached hereto duly executed by the
Registered Holder and payment in full of the Purchase Price or adjusted Purchase
Price therefor, if applicable (as determined in accordance with the terms
hereof) for the number of shares of Warrant Stock to be purchased upon such
exercise of this Warrant. Upon a partial exercise of this Warrant, this Warrant
shall be surrendered, and a new Warrant of the same tenor for purchase of the
number of remaining shares of Warrant Stock not previously purchased shall be
issued by the Company to the Registered Holder. This Warrant shall be deemed to
have been exercised immediately prior to the close of business on the date of
its surrender for exercise and payment in full to the Company of the Purchase
Price as provided above, and the person entitled to receive the shares of
Warrant Stock issuable upon such exercise shall be treated for all purposes as
the holder of record of such shares as of the close of business on such date. As
soon as practicable on or after such date, the Company shall issue and deliver
to the person or persons entitled to receive the same a certificate or
certificates for the number of whole shares of Warrant Stock issuable upon such
exercise, together with cash in lieu of any fraction of a share equal to such
fraction of the current fair market value of one whole share of Warrant Stock as
of the date of exercise, as determined in good faith by the Company's Board of
Directors. No fractional shares may be issued upon any exercise of this Warrant.
Notwithstanding the above, this Warrant must be exercised on the earliest to
occur off (i) the Expiration Date; (ii) six (6) months after the date of closing
of the issuance and sale of shares of Common Stock of the Company in the
Company's first underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended; (iii) the
sale of all or substantially all the assets of the Company; or (iv) the merger
of the Company into or consolidation with any other entity (the "Expiration
Date"). In the event of a proposed transaction of the kind described in (ii),
(iii) or (iv) above, the Company shall notify the Registered Holder at least
thirty (30) days prior to the consummation of such event or transaction.
(b) Conversion. In lieu of exercising this Warrant or any portion
----------
hereof, at any time after the effective date of a Form S-1 registration
statement relating to Common Stock of the Company filed by the Company pursuant
to the Securities Act of 1933, as amended, the Registered Holder shall have the
right to convert this Warrant or any portion hereof into Common Stock by
executing and delivering to the Company at its principal office the written
Subscription Notice in the form attached hereto, specifying the portion of the
Warrant to be converted, and accompanied by this Warrant. The number of shares
of Common Stock to be issued to Registered Holder upon such conversion shall be
computed using the following formula:
X = (P)(Y)(A-B)/A
Where
X=
the number of shares of Common Stock to be issued to the
Registered Holder for the portion of the Warrant being converted.
2
P=
the portion of the Warrant being converted expressed as a decimal
fraction.
Y=
the total number of shares of Common Stock issuable upon exercise
of the Warrant in full.
A=
the fair market value of one share of Common Stock, which shall
mean (i) the closing price of the Company's stock issuable upon
conversion of such share as reported on the Nasdaq National
Market or other national exchange on which such stock is traded
on the last business day immediately prior to the date the notice
of conversion is received by the Company, or (ii) if this Warrant
is being converted in conjunction with a public offering of stock
the per share price to the public pursuant to the offering.
B=
the Exercise Price on the date of conversion.
Any portion of this Warrant that is converted shall be immediately
canceled. This Warrant or any portion hereof shall be deemed to have been
converted immediately prior to the close of business on the date of its
surrender for conversion as provided above, and the person entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as Registered Holder of such shares of record as of the close of
business on such date. As promptly as practicable after such date, the Company
shall issue and deliver to the person or persons entitled to receive the same a
certificate or certificates' for the number of full shares of Common Stock
issuable upon such conversion. If the Warrant shall be converted for less than
the total number of shares of Common Stock then issuable upon conversion,
promptly after surrender of the Warrant upon such conversion, the Company will
execute and deliver a new Warrant, dated the date hereof, evidencing the right
of the Registered Holder to the balance of the Shares purchasable hereunder upon
the same terms and conditions set forth herein.
2. Valid Issuance. All shares of Warrant Stock issued upon the exercise of this
Warrant shall be validly issued, fully paid and non-assessable. The Company
shall not be required to pay any tax or other charge imposed in connection with
any transfer involved in the issue of any certificate for shares of Warrant
Stock, or any Common Stock or other securities issuable upon conversion of such
Warrant Stock ("Conversion Stock"), in any name other than that of the
Registered Holder of this Warrant, and in such case the Company shall not be
required to issue or deliver any stock certificate or security until such tax or
other charge has been paid, or it has been established to the Company's
satisfaction that no tax or other charge is due.
3. Transfer and Exchange. This Warrant and the rights hereunder may not be
transferred unless such transfer complies with all applicable securities laws
and the provisions of Section 4.
3
If a transfer of all or part of this Warrant is permitted in accordance with the
preceding sentence, then this Warrant and all rights hereunder may be
transferred, in whole or in part, on the books of the Company maintained for
such purpose at the principal office of the Company referred to above, by the
Registered Holder hereof in person, or by duly authorized attorney, upon
surrender of this Warrant properly endorsed and upon payment of any necessary
transfer tax or other governmental charge imposed upon such transfer. Upon any
permitted partial transfer, the Company will issue and deliver to the Registered
Holder a new Warrant or Warrants with respect to the shares of Warrant Stock not
so transferred. Each taker and holder of this Warrant, by taking or holding the
same, consents and agrees that when this Warrant shall have been so endorsed,
the person in possession of this Warrant may be treated by the Company, and all
other persons dealing with this Warrant, as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby,
any notice to the contrary notwithstanding; provided, however that until a
transfer of this Warrant is duly registered on the books of the Company, the
Company may treat the Registered Holder hereof as the owner of this Warrant for
all purposes.
4. Representations and Covenants of the Registered Holder. This Warrant has
been entered into by the Company in reliance upon the following representations
and covenants of the Registered Holder:
(a) Investment Purpose. The right to acquire Warrant Stock or the Warrant
------------------
Stock issuable upon exercise of the Registered Holder's rights contained herein
will be acquired for investment purposes only for the Registered Holder's own
account and not with a view to the sale or distribution of any part thereof, and
the Registered Holder has no present intention of selling, granting any
participation in or otherwise distributing the same.
(b) Private Issue. The Registered Holder understands (i) that the Warrant
-------------
Stock issuable upon exercise of this Warrant is not registered under the Act or
qualified under applicable state securities laws on the ground that the issuance
contemplated by this Warrant will be exempt from the registration and
qualifications requirements thereof, and (ii) that the Company's reliance on
such exemption is predicated on the representations set forth in this Section.
(c) Securities Law Restrictions on Transfer. The Registered Holder agrees
---------------------------------------
that, absent an effective registration statement filed with the U.S. Securities
and Exchange Commission under the Act covering the disposition or sale of this
Warrant or the Warrant Stock issued or issuable upon exercise hereof, such
Registered Holder may not sell or transfer this Warrant or any or all of such
Warrant Stock, as the case may be, without first complying with Section 3 and
without first providing the Company with an opinion of counsel, satisfactory to
the Company, to the effect that such sale or transfer will be exempt from the
registration and prospectus delivery requirements of the Act, and such
Registered Holder consents to the Company making a notation on its records, or
giving instructions to any transfer agent of this Warrant, or such Warrant
Stock, in order to implement such restriction on transfer. The shares issued
upon exercise of this Warrant shall bear legends referring to the restrictions
on transfer set forth herein. As a further condition to any transfer of this
Warrant, any permitted transferee must execute and deliver to the Company
representations and warranties similar to those set forth herein and agree in
writing to accept and be bound by all of the terms and conditions of this
Warrant.
4
(d) Financial Risk. The Registered Holder has such knowledge and experience
--------------
in financial and business matters as to be capable of evaluating the merits and
risks of its investment, and has the ability to bear the economic risks of its
investment. The Registered Holder has not been organized for the specific
purpose of acquiring this Warrant. The Registered Holder has had access to all
information regarding the Company, its present and prospective business, assets,
liabilities and financial condition that the Registered Holder considers
important to making the decision regarding its investment and has had ample
opportunity to ask questions of and receive answers from the Company's
representatives concerning its investment and to obtain any and all documents
requested in order to supplement or verify any of the information supplied.
(e) Accredited Investor. Registered Holder is an "accredited investor"
-------------------
within the meaning of the Securities and Exchange Rule 501 of Regulation D, as
presently in effect.
(f) "Market Stand-Off" Agreement. The Registered Holder hereby agrees that
----------------------------
it shall not, to the extent requested by the Company or an underwriter of
securities of the Company, sell or otherwise transfer or dispose of this Warrant
or any shares of Warrant Stock or other shares of stock of the Company then
owned by the Registered Holder (other than to donees or partners of the
Registered Holder who agree to be similarly bound) for up to one hundred eighty
(180) days following the effective date of a registration statement of the
Company filed under the Act; provided, however, that:
(i) such agreement shall be applicable only to the first such
registration statement of the Company which covers securities to be sold on its
behalf to the public in an underwritten offering but not to securities sold
pursuant to such registration statement; and
(ii) all executive officers and directors of the Company and holders
of more than one (1%) of the Company's outstanding capital stock then holding
Common Stock of the Company enter into similar agreements.
In order to enforce the foregoing covenant, the Company shall have the right to
place restrictive legends on the certificates representing the shares subject to
this Section and to impose stop transfer instructions with respect to the shares
of Warrant Stock and any other shares of stock of the Registered Holder (and the
shares or securities of every other person subject to the foregoing restriction)
until the end of such period.
5. Adjustment of Purchase Price and Number of Shares. The number and character
of shares of Warrant Stock issuable upon exercise of this Warrant (or any shares
of stock or other securities or property at the time receivable or issuable upon
exercise of this Warrant) and the Purchase Price therefor, are subject to
adjustment upon occurrence of the following events:
(a) Adjustment for Stock Splits, Stock Dividends, Recapitalizations, etc.
--------------------------------------------------------------------
The Purchase Price of this Warrant and the number of shares of Warrant Stock
issuable upon exercise of this Warrant shall each be proportionally adjusted to
reflect any stock dividend, stock split, reverse stock split, combination of
shares, reclassification, recapitalization or other similar event altering the
number of outstanding shares of Warrant Stock.
5
(b) Adjustment for Other Dividends and Distributions. In case the
------------------------------------------------
Company shall make or issue, or shall fix a record date for the determination of
eligible holders entitled to receive, a dividend or other distribution with
respect to the Warrant Stock payable in securities of the Company then, and in
each such case, the Registered Holder of this Warrant, on exercise of this
Warrant at any time after the consummation, effective date or record date of
such event, shall receive, in addition to the shares of Warrant Stock (or such
other stock or securities) issuable on such exercise prior to such date, the
securities of the Company to which such Registered Holder would have been
entitled upon such date if such Registered Holder had exercised this Warrant
immediately prior thereto (all subject to further adjustment as provided in this
Warrant).
(c) Adjustment for Capital Reorganization, Consolidation, Merger. Subject
------------------------------------------------------------
to Section 5(d), if any capital reorganization of the capital stock of the
Company, or any consolidation or merger of the Company with or into another
corporation, or the sale of all or substantially all of the Company's assets to
another corporation shall be effected in such a way that holders of Warrant
Stock will be entitled to receive stock, securities or assets with respect to or
in exchange for their Warrant Stock, and in each such case, the Registered
Holder of this Warrant, upon the exercise this Warrant (as provided in Section
1), at any time after the consummation of such capital reorganization,
consolidation, merger, or sale, shall be entitled to receive, in lieu of the
stock or other securities and property receivable upon the exercise of this
Warrant prior to such consummation, the stock or other securities or property to
which such Registered Holder would have been entitled upon such consummation if
such Registered Holder had exercised this Warrant immediately prior thereto, all
subject to further adjustment as provided in this Section 5; and in each such
case, the terms of this Warrant shall be applicable to the shares of stock or
other securities or property receivable upon the exercise of this Warrant after
such consummation.
(d) Conversion of Warrant Stock. If all the outstanding shares of the
---------------------------
Series F Preferred Stock of the Company are converted into Common Stock pursuant
to the Company's Articles of Incorporation or otherwise, or such Series F
Preferred Stock otherwise ceases to exist, then, from and after the date on
which such Series F Preferred Stock is so converted or ceases to exist then this
Warrant will be exercisable for 20,000 shares of Common Stock of the Company and
the term "Warrant Stock" (wherever used in this Warrant) will thereafter mean
the Company's Common Stock and the Purchase Price will remain Six Dollars Forty-
five Cents ($6.45) per share (subject to subsequent adjustment as provided
herein).
6. No Impairment. Subject to the provisions of Section 5, the Company will
not, by amendment of its Articles of Incorporation or bylaws, or through
reorganization, consolidation, merger, dissolution, issue or sale of securities,
sale of assets or any other voluntary action, willfully avoid or seek to avoid
the observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Registered Holder of this Warrant against impairment. Without
limiting the generality of the foregoing, subject to the provisions of Section
5, the Company (a) will not increase the par value of any shares of stock
issuable upon the exercise of this Warrant above the amount payable therefor
upon such exercise, and (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable shares of Warrant Stock upon the exercise of this Warrant.
6
7. Certificate as to Adjustments. In each case of any adjustment in other
stock, securities or property receivable on the exercise of this Warrant, the
Chief Financial Officer of the Company shall compute such adjustment in
accordance with the terms of this Warrant and prepare a certificate setting
forth such adjustment and showing in detail the facts upon which such adjustment
is based. The Company will forthwith mail a copy of each such certificate to the
Registered Holder of this Warrant.
8. Notices of Record Date. In case:
(a) the Company shall take a record of the holders of its Warrant Stock (or
other stock or securities at the time receivable upon the exercise of this
Warrant) for the purpose of entitling them to receive any stock dividend; or
(b) of any consolidation or merger of the Company with or into another
corporation, or any conveyance of all or substantially all of the assets of the
Company to another corporation in which holders of the Company's stock are to
receive stock, securities or property of another corporation; or
(c) of any voluntary dissolution, liquidation or winding-up of the Company;
or
(d) of any redemption or conversion into Common Stock of all outstanding
Warrant Stock;
then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the case may be, (i)
the date on which a record is to be taken for the purpose of such dividend, and
stating the amount and character of such dividend, or (ii) the date on which
such consolidation, merger, conveyance, dissolution, liquidation, winding-up,
redemption or conversion is to take place, and the time, if any is to be fixed,
as of which the holders of record of Warrant Stock or Common Stock (or such
stock or securities as at the time are receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Warrant Stock or Common
Stock (or such other stock or securities) for securities or other property
deliverable upon such consolidation, merger, conveyance, dissolution,
liquidation or winding-up. Such notice shall be mailed at least ten (10) days
prior to the date therein specified.
9. Loss or Mutilation. Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant, and of a written indemnity agreement reasonably
satisfactory to the Company, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver in lieu
thereof a new Warrant of like tenor.
10. Reservation of Warrant Stock. Subject to the provisions of Section 5(d),
the Company shall at all times reserve and keep available for issue upon the
exercise of this Warrant such number of its authorized but unissued shares of
Warrant Stock (and Common Stock if the Warrant Stock is not Common Stock) as
will be sufficient to permit the exercise in full of this Warrant and the
conversion of all shares of Warrant Stock issuable hereunder into Common Stock
(if the Warrant Stock is then convertible into Common Stock).
7
11. No Rights or Liabilities as Shareholder. This Warrant does not by itself
entitle the Registered Holder to any voting rights or other rights as a
shareholder of the Company. In the absence of affirmative action by Registered
Holder to purchase Warrant Stock by exercise of this Warrant, no provisions of
this Warrant, and no enumeration herein of the rights or privileges of the
Registered Holder shall cause such Registered Holder to be a shareholder of the
Company for any purpose.
12. Notices. All notices and other communications from the Company to the
Registered Holder shall be mailed by first-class registered or certified mail,
postage prepaid, to the address furnished to the Company in writing by the last
Registered Holder who shall have furnished an address to the Company in writing.
13. Change; Waiver. Neither this Warrant nor any term hereof may be changed,
waived, discharged or terminated orally but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.
14. Headings. The headings in this Warrant are for purposes of convenience in
reference only, and shall not be deemed to constitute a part hereof.
15. Law Governing. This Warrant shall be construed and enforced in accordance
with, and governed by, the internal laws of the State of Delaware, excluding
that body of law applicable to conflicts of law.
Dated: July __,2000
EXTRICITY, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxxxxx
CFO
Acknowledged and Agreed:
Oracle Corporation
By: /s/ XXXXX XXXXX
-------------------------------
Name: Xxxxx Xxxxx
-----------------------------
Title: V.P. and Corporate Treasurer
----------------------------
8
EXHIBIT C-2
-----------
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED ("THE ACT"), OR THE SECURITIES LAWS OF CERTAIN STATES.
THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY
NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION THEREUNDER OR
EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS. INVESTORS SHOULD BE AWARE THAT
THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION
OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT
ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
WARRANT TO PURCHASE SERIES F PREFERRED STOCK
OF
EXTRICITY, INC.
Void after July __, 2004
This certifies that, for value received, Xxxxx Associates or its permitted
registered assigns ("Registered Holder"), is entitled, subject to the terms and
conditions of this Warrant, at any time before 5:00 p.m. Pacific Time on
July, __, 2004 (the "Expiration Date"), to purchase from Extricity, Inc., a
California corporation (the "Company"), Twenty Thousand (20,000) shares of the
Company's Series F Preferred Stock, no par value per share (the "Warrant
Stock"), as constituted on May 3, 2000 (the "Issue Date"), at the price of Six
Dollars Forty-five Cents ($6.45) per share, or any amount less than $6.45 per
share to which the conversion price of the Series F Preferred Stock may be
reduced as a result of the issuance or deemed issuance of additional shares of
common stock at less than the conversion price of the Series F Preferred Stock
(the "Purchase Price") upon surrender of this Warrant at the principal office of
the Company, together with a duly executed subscription in the form attached
hereto as Exhibit 1 and simultaneous payment of the full Purchase Price therefor
in lawful money of the United States as provided herein. The Purchase Price and
the number and character of shares of Warrant Stock purchasable hereunder are
subject to adjustment as provided herein. Unless the context otherwise requires,
the term "Warrant Stock" shall mean and include the stock and other securities
and property at any time receivable or issuable upon exercise of this Warrant.
The term "Warrant" as used herein, shall include this Warrant and any warrants
delivered in substitution or exchange therefor as provided herein.
1. Exercise.
--------
(a) Exercise Period. Subject to compliance with all applicable
---------------
securities laws, this Warrant may be exercised at any time, in whole or in part,
on any business day prior to the Expiration Date, by surrendering this Warrant
at the principal executive office of the Company,
1
together with the subscription form attached hereto duly executed by the
Registered Holder and payment in full of the Purchase Price or adjusted Purchase
Price therefor, if applicable (as determined in accordance with the terms
hereof) for the number of shares of Warrant Stock to be purchased upon such
exercise of this Warrant. Upon a partial exercise of this Warrant, this Warrant
shall be surrendered, and a new Warrant of the same tenor for purchase of the
number of remaining shares of Warrant Stock not previously purchased shall be
issued by the Company to the Registered Holder. This Warrant shall be deemed to
have been exercised immediately prior to the close of business on the date of
its surrender for exercise and payment in full to the Company of the Purchase
Price as provided above, and the person entitled to receive the shares of
Warrant Stock issuable upon such exercise shall be treated for all purposes as
the holder of record of such shares as of the close of business on such date. As
soon as practicable on or after such date, the Company shall issue and deliver
to the person or persons entitled to receive the same a certificate or
certificates for the number of whole shares of Warrant Stock issuable upon such
exercise, together with cash in lieu of any fraction of a share equal to such
fraction of the current fair market value of one whole share of Warrant Stock as
of the date of exercise, as determined in good faith by the Company's Board of
Directors. No fractional shares may be issued upon any exercise of this Warrant.
Notwithstanding the above, this Warrant must be exercised on the earliest to
occur off (i) the Expiration Date; (ii) six. (6) months after the date of
closing of the issuance and sale of shares of Common Stock of the Company in the
Company's first underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended; (iii) the
sale of all or substantially all the assets of the Company; or (iv) the merger
of the Company into or consolidation with any other entity (the "Expiration
Date"). In the event of a proposed transaction of the kind described in (ii),
(iii) or (iv) above, the Company shall notify the Registered Holder at least
thirty (30) days prior to the consummation of such event or transaction.
(b) Conversion. In lieu of exercising this Warrant or any portion
----------
hereof, at any time after the effective date of a Form S-1 registration
statement relating to Common Stock of the Company filed by the Company pursuant
to the Securities Act of 1933, as amended, the Registered Holder shall have the
right to convert this Warrant or any portion hereof into Common Stock by
executing and delivering to the Company at its principal office the written
Subscription Notice in the form attached hereto, specifying the portion of the
Warrant to be converted, and accompanied by this Warrant. The number of shares
of Common Stock to be issued to Registered Holder upon such conversion shall be
computed using the following formula:
X = (P)(Y)(A-B)/A
Where
X=
the number of shares of Common Stock to be issued to the Registered
Holder for the portion of the Warrant being converted.
2
P=
the portion of the Warrant being converted expressed as a decimal
fraction.
Y=
the total number of shares of Common Stock issuable upon exercise
of the Warrant in full.
A=
the fair market value of one share of Common Stock, which shall
mean (i) the closing price of the Company's stock issuable upon
conversion of such share as reported on the Nasdaq National
Market or other national exchange on which such stock is traded
on the last business day immediately prior to the date the notice
of conversion is received by the Company, or (ii) if this Warrant
is being converted in conjunction with a public offering of stock
the per share price to the public pursuant to the offering.
B=
the Exercise Price on the date of conversion.
Any portion of this Warrant that is converted shall be immediately
canceled. This Warrant or any portion hereof shall be deemed to have been
converted immediately prior to the close of business on the date of its
surrender for conversion as provided above, and the person entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as Registered Holder of such shares of record as of the close of
business on such date. As promptly as practicable after such date, the Company
shall issue and deliver to the person or persons entitled to receive the same a
certificate or certificates for the number of full shares of Common Stock
issuable upon such conversion. If the Warrant shall be converted for less than
the total number of shares of Common Stock then issuable upon conversion,
promptly after surrender of the Warrant upon such conversion, the Company will
execute and deliver a new Warrant, dated the date hereof, evidencing the right
of the Registered Holder to the balance of the Shares purchasable hereunder upon
the same terms and conditions set forth herein.
2. Valid Issuance. All shares of Warrant Stock issued upon the exercise of
this Warrant shall be validly issued, fully paid and non-assessable. The Company
shall not be required to pay any tax or other charge imposed in connection with
any transfer involved in the issue of any certificate for shares of Warrant
Stock, or any Common Stock or other securities issuable upon conversion of such
Warrant Stock ("Conversion Stock"), in any name other than that of the
Registered Holder of this Warrant, and in such case the Company shall not be
required to issue or deliver any stock certificate or security until such tax or
other charge has been paid, or it has been established to the Company's
satisfaction that no tax or other charge is due.
3. Transfer and Exchange. This Warrant and the rights hereunder may not be
transferred unless such transfer complies with all applicable securities laws
and the provisions of Section 4.
3
If a transfer of all or part of this Warrant is permitted in accordance with the
preceding sentence, then this Warrant and all rights hereunder may be
transferred, in whole or in part, on the books of the Company maintained for
such purpose at the principal office of the Company referred to above, by the
Registered Holder hereof in person, or by duly authorized attorney, upon
surrender of this Warrant properly endorsed and upon payment of any necessary
transfer tax or other governmental charge imposed upon such transfer. Upon any
permitted partial transfer, the Company will issue and deliver to the Registered
Holder a new Warrant or Warrants with respect to the shares of Warrant Stock not
so transferred. Each taker and holder of this Warrant, by taking or holding the
same, consents and agrees that when this Warrant shall have been so endorsed,
the person in possession of this Warrant may be treated by the Company, and all
other persons dealing with this Warrant, as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby,
any notice to the contrary notwithstanding; provided, however that until a
transfer of this Warrant is duly registered on the books of the Company, the
Company may treat the Registered Holder hereof as the owner of this Warrant for
all purposes.
4. Representations and Covenants of the Registered Holder. This Warrant has
been entered into by the Company in reliance upon the following representations
and covenants of the Registered Holder:
(a) Investment Purpose. The right to acquire Warrant Stock or the Warrant
------------------
Stock issuable upon exercise of the Registered Holder's rights contained herein
will be acquired for investment purposes only for the Registered Holder's own
account and not with a view to the sale or distribution of any part thereof, and
the Registered Holder has no present intention of selling, granting any
participation in or otherwise distributing the same.
(b) Private Issue. The Registered Holder understands (i) that the Warrant
-------------
Stock issuable upon exercise of this Warrant is not registered under the Act or
qualified under applicable state securities laws on the ground that the issuance
contemplated by this Warrant will be exempt from the registration and
qualifications requirements thereof, and (ii) that the Company's reliance on
such exemption is predicated on the representations set forth in this Section.
(c) Securities Law Restrictions on Transfer. The Registered Holder agrees
---------------------------------------
that, absent an effective registration statement filed with the U.S. Securities
and Exchange Commission under the Act covering the disposition or sale of this
Warrant or the Warrant Stock issued or issuable upon exercise hereof, such
Registered Holder may not sell or transfer this Warrant or any or all of such
Warrant Stock, as the case may be, without first complying with Section 3 and
without first providing the Company with an opinion of counsel, satisfactory to
the Company, to the effect that such sale or transfer will be exempt from the
registration and prospectus delivery requirements of the Act, and such
Registered Holder consents to the Company making a notation on its records, or
giving instructions to any transfer agent of this Warrant, or such Warrant
Stock, in order to implement such restriction on transfer. The shares issued
upon exercise of this Warrant shall bear legends referring to the restrictions
on transfer set forth herein. As a further condition to any transfer of this
Warrant, any permitted transferee must execute and deliver to the Company
representations and warranties similar to those set forth herein and agree in
writing to accept and be bound by all of the terms and conditions of this
Warrant.
4
(d) Financial Risk. The Registered Holder has such knowledge and experience
--------------
in financial and business matters as to be capable of evaluating the merits and
risks of its investment, and has the ability to bear the economic risks of its
investment. The Registered Holder has not been organized for the specific
purpose of acquiring this Warrant. The Registered Holder has had access to all
information regarding the Company, its present and prospective business, assets,
liabilities and financial condition that the Registered Holder considers
important to making the decision regarding its investment and has had ample
opportunity to ask questions of and receive answers from the Company's
representatives concerning its investment and to obtain any and all documents
requested in order to supplement or verify any of the information supplied.
(e) Accredited Investor. Registered Holder is an "accredited investor"
-------------------
within the meaning of the Securities and Exchange Rule 501 of Regulation D, as
presently in effect.
(f) "Market Stand-Off" Agreement. The Registered Holder hereby agrees that
----------------------------
it shall not, to the extent requested by the Company or an underwriter of
securities of the Company, sell or otherwise transfer or dispose of this
Warrant. or any shares of Warrant Stock (other than to donees or partners of the
Registered Holder who agree to be similarly bound) for up to one hundred eighty
(180) days following the effective date of a registration statement of the
Company filed under the Act; provided, however, that:
(i) such agreement shall be applicable only to the first such
registration statement of the Company which covers securities to be sold on its
behalf to the public in an underwritten offering but not to securities sold
pursuant to such registration statement; and
(ii) all executive officers and directors of the Company and holders
of more than one (1%) of the Company's outstanding capital stock then holding
Common Stock of the Company enter into similar agreements.
In order to enforce the foregoing covenant, the Company shall have the right to
place restrictive legends on the certificates representing the shares subject to
this Section and to impose stop transfer instructions with respect to the shares
of Warrant Stock (and the shares or securities of every other person subject to
the foregoing restriction) until the end of such period.
5. Adjustment of Purchase Price and Number of Shares. The number and character
of shares of Warrant Stock issuable upon exercise of this Warrant (or any shares
of stock or other securities or property at the time receivable or issuable upon
exercise of this Warrant) and the Purchase Price therefor, are subject to
adjustment upon occurrence of the following events:
(a) Adjustment for Stock Splits, Stock Dividends, Recapitalizations, etc.
--------------------------------------------------------------------
The Purchase Price of this Warrant and the number of shares of Warrant Stock
issuable upon exercise of this Warrant shall each be proportionally adjusted to
reflect any stock dividend, stock split, reverse stock split, combination of
shares, reclassification, recapitalization or other similar event altering the
number of outstanding shares of Warrant Stock.
(b) Adjustment for Other Dividends and Distributions. In case the Company
------------------------------------------------
shall make or issue, or shall fix a record date for the determination of
eligible holders entitled to receive, a dividend or other distribution with
respect to the Warrant Stock payable in securities of
5
the Company then, and in each such case, the Registered Holder of this Warrant,
on exercise of this Warrant at any time after the consummation, effective date
or record date of such event, shall receive, in addition to the shares of
Warrant Stock (or such other stock or securities) issuable on such exercise
prior to such date, the securities of the Company to which such Registered
Holder would have been entitled upon such date if such Registered Holder had
exercised this Warrant immediately prior thereto (all subject to further
adjustment as provided in this Warrant).
(c) Adjustment for Capital Reorganization, Consolidation, Merger. Subject
------------------------------------------------------------
to Section 5(d), if any capital reorganization of the capital stock of the
Company, or any consolidation or merger of the Company with or into another
corporation, or the sale of all or substantially all of the Company's assets to
another corporation shall be effected in such a way that holders of Warrant
Stock will be entitled to receive stock, securities or assets with respect to or
in exchange for their Warrant Stock, and in each such case, the Registered
Holder of this Warrant, upon the exercise this Warrant (as provided in Section
1), at any time after the consummation of such capital reorganization,
consolidation, merger, or sale, shall be entitled to receive, in lieu of the
stock or other securities and property receivable upon the exercise of this
Warrant prior to such consummation, the stock or other securities or property to
which such Registered Holder would have been entitled upon such consummation if
such Registered Holder had exercised this Warrant immediately prior thereto, all
subject to further adjustment as provided in this Section 5; and in each such
case, the terms of this Warrant shall be applicable to the shares of stock or
other securities or property receivable upon the exercise of this Warrant after
such consummation.
(d) Conversion of Warrant Stock. If all the outstanding shares of the
---------------------------
Series F Preferred Stock of the Company are converted into Common Stock pursuant
to the Company's Articles of Incorporation or otherwise, or such Series F
Preferred Stock otherwise ceases to exist, then, from and after the date on
which such Series F Preferred Stock is so converted or ceases to exist then this
Warrant will be exercisable for 20,000 shares of Common Stock of the Company and
the term "Warrant Stock" (wherever used in this Warrant) will thereafter mean
the Company's Common Stock and the Purchase Price will remain Six Dollars Forty-
five Cents ($6.45) per share (subject to subsequent adjustment as provided
herein).
6. No Impairment. Subject to the provisions of Section 5, the Company will
not, by amendment of its Articles of Incorporation or bylaws, or through
reorganization, consolidation, merger, dissolution, issue or sale of securities,
sale of assets or any other voluntary action, willfully avoid or seek to avoid
the observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Registered Holder of this Warrant against impairment. Without
limiting the generality of the foregoing, subject to the provisions of Section
5, the Company (a) will not increase the par value of any shares of stock
issuable upon the exercise of this Warrant above the amount payable therefor
upon such exercise, and (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable shares of Warrant Stock upon the exercise of this Warrant.
7. Certificate as to Adjustments. In each case of any adjustment in other
stock, securities or property receivable on the exercise of this Warrant, the
Chief Financial Officer of the
6
Company shall compute such adjustment in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment and showing in
detail the facts upon which such adjustment is based. The Company will forthwith
mail a copy of each such certificate to the Registered Holder of this Warrant.
8. Notices of Record Date. In case:
(a) the Company shall take a record of the holders of its Warrant Stock (or
other stock or securities at the time receivable upon the exercise of this
Warrant) for the purpose of entitling them to receive any stock dividend; or
(b) of any consolidation or merger of the Company with or into another
corporation, or any conveyance of all or substantially all of the assets of the
Company to another corporation in which holders of the Company's stock are to
receive stock, securities or property of another corporation; or
(c) of any voluntary dissolution, liquidation or winding-up of the Company;
or
(d) of any redemption or conversion into Common Stock of all outstanding
Warrant
Stock;
then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the case may be, (i)
the date on which a record is to be taken for the purpose of such dividend, and
stating the amount and character of such dividend, or (ii) the date on which
such consolidation, merger, conveyance, dissolution, liquidation, winding-up,
redemption or conversion is to take place, and the time, if any is to be fixed,
as of which the holders of record of Warrant Stock or Common Stock (or such
stock or securities as at the time are receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Warrant Stock or Common
Stock (or such other stock or securities) for securities or other property
deliverable upon such consolidation, merger, conveyance, dissolution,
liquidation or winding-up. Such notice shall be mailed at least ten (10) days
prior to the date therein specified.
9. Loss or Mutilation. Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant, and of a written indemnity agreement reasonably
satisfactory to the Company, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver in lieu
thereof a new Warrant of like tenor.
10. Reservation of Warrant Stock. Subject to the provisions of Section 5(d),
the Company shall at all times reserve and keep available for issue upon the
exercise of this Warrant such number of its authorized but unissued shares of
Warrant Stock (and Common Stock if the Warrant Stock is not Common Stock) as
will be sufficient to permit the exercise in full of this Warrant and the
conversion of all shares of Warrant Stock issuable hereunder into Common Stock
(if the Warrant Stock is then convertible into Common Stock).
11. No Rights or Liabilities as Shareholder. This Warrant does not by itself
entitle the Registered Holder to any voting rights or other rights as a
shareholder of the Company. In the
7
absence of affirmative action by Registered Holder to purchase Warrant Stock by
exercise of this Warrant, no provisions of this Warrant, and no enumeration
herein of the rights Or privileges of the Registered Holder shall cause such
Registered Holder to be a shareholder of the Company for any purpose.
12. Notices. All notices and other communications from the Company to the
Registered Holder shall be mailed by first-class registered or certified mail,
postage prepaid, to the address furnished to the Company in writing by the last
Registered Holder who shall have furnished an address to the Company in writing.
13. Change; Waiver. Neither this Warrant nor any term hereof may be changed,
waived, discharged or terminated orally but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.
14. Headings. The headings in this Warrant are for purposes of convenience in
reference only, and shall not be deemed to constitute a part hereof.
15. Law Governing. This Warrant shall be construed and enforced in accordance
with, and governed by, the internal laws of the State of Delaware, excluding
that body of law applicable to conflicts of law.
Dated: July __,2000
EXTRICITY, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxxxxx
CFO
Acknowledged and Agreed:
Oracle Corporation
By: /s/ Xxxxxxx Xxxxxx
--------------------------
Name: Xxxxxxx Xxxxxx
------------------------
Title: Agent for the JHR Trust
-----------------------
General Partner
8
EXHIBIT 1
---------
SUBSCRIPTION FORM
-----------------
(To be executed only upon exercise of Warrant)
(1) The undersigned Registered Holder hereby elects to purchase _____ shares of
the Series F Preferred Stock of the Company, pursuant to the terms of the
Warrant dated July __, 2000 (the "Warrant") between the Company and the
Registered Holder, and tenders herewith
( ) payment of the purchase price for such shares in full, together with
all applicable transfer taxes, if any.
(2) In exercising its rights to purchase the Series F Preferred Stock of the
Company, the undersigned hereby confirms and acknowledges the investment
representations and warranties made in Section 4 of the Warrant.
(3) Please issue a certificate or certificates representing said shares of
Series F Preferred Stock in the name of the undersigned or in such other
name as is specified below.
_______________________________
(Name)
_______________________________
(Address)
Registered Holder:
By:____________________________
Title:_________________________
Date:__________________________
1
EXHIBIT D
---------
Furniture Lease
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This Furniture and Equipment Lease ("Lease") is entered into as of June 22,
2000, by and between Oracle Corporation, a Delaware corporation ("Lessor"), and
Extricity, Inc., a California corporation ("Lessee"), with reference to the
following facts:
A. Lessor currently leases space (the "Master Lease Premises") in that
certain office building known as Belmont Shores located at 0 Xxxxx Xxxxx,
Xxxxxxx, Xxxxxxxxxx (the "Building") pursuant to the terms of a lease (as
amended) with Xxxxx Associates ("Master Lease").
X. Xxxxxx and Lessee are entering into that certain Sublease of even date
herewith (the "Sublease") pursuant to which Lessor will sublet the entire Master
Lease Premises (referred to herein as the "Subleased Premises") to Lessee. In
addition to subletting the Subleased Premises from Lessor, Lessee desires to
lease from Lessor certain furniture, equipment and furnishings owned or leased
by Lessor and presently located in the Subleased Premises, and Lessor is willing
to lease the same to Lessee on the terms, covenants and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the covenants herein contained, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto do hereby agree as follows (capitalized
terms used and not defined herein will have the meaning given them in the
Sublease):
1. LEASE. Lessor agrees to lease to Lessee and Lessee agrees to lease
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from Lessor, subject to the terms, covenants and conditions herein, the items of
furniture, equipment, furnishings and other personal property described in
Schedule I attached hereto and incorporated herein by this reference (the
"Furniture"). Lessor being the owner or primary lessee of the Furniture for all
purposes, this Lease is intended to constitute a true lease of the Furniture and
not an agreement for the sale of or the grant of a security interest in any
Furniture. Lessee's interest in the Furniture is limited to a leasehold.
2. TERM. The term of this Lease shall commence upon the Commencement
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Date of the Term of the Sublease and, unless earlier terminated as provided
herein, shall continue for so long as the Sublease shall remain in effect. Prior
to the commencement of the term of this Lease, Lessor and Lessee shall conduct
an inspection of the Furniture in order to identify and inventory the Furniture
and verify its then current condition.
3. RENT. Lessee shall pay to Lessor rent for the Furniture (the
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"Furniture Rent") in the amount of $20,208.50 per month. Such Furniture Rent
shall be payable in advance on the first day of each calendar month during the
term hereof, in lawful money of the United States, to Lessor at its offices at
000 Xxxxxx Xxxxxxx, Mail Stop LGN2, Xxxxxxx Xxxx, Xxxxxxxxxx 00000, Attention:
Lease Administrator, or to such other person or at such other place as Lessor
may from time to time designate in writing, provided that the first month's
payment of Furniture Rent will be deemed payable concurrently with Lessee's
execution and delivery of this Lease to Lessor. All Furniture Rent and other
amounts payable hereunder shall be due and payable without any offset,
deduction, prior notice or demand and without any abatement, reduction,
counterclaim or other right Lessee may claim against Lessor.
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4. CONDITION OF FURNITURE. Upon the commencement of the term of this
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Lease, Lessor shall deliver the Furniture to Lessee in good order and repair,
subject to normal wear and tear. Lessee acknowledges that Lessor is not a seller
under the California Uniform Commercial Code and that Lessor makes no warranties
of any nature, including, but not limited to, warranties as to the
merchantability of the Furniture, its fitness for any particular purpose, its
installation, its size, design, capacity or condition, its quality, its
compliance with any law, rule, specification or contract or latent defects.
5. LOCATION; LESSOR'S INSPECTIONS; LABELS. All of the Furniture shall
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remain in the Subleased Premises (other than the Generator, defined below, which
is located outside of the Subleased Premises) and shall not be removed therefrom
for any reason whatsoever without Lessor's prior written consent. Lessor shall
have the right to enter the Subleased Premises and inspect the Furniture at any
time during normal business hours and upon reasonable advance notice given to
Lessee. If Lessor supplies Lessee with labels stating that the Furniture or any
item thereof is owned by Lessor, Lessee shall affix and keep the same on each
item of Furniture, Lessee shall not alter, deface or remove any of the same and
Lessee shall promptly replace any such labels that may be removed, defaced or
destroyed., Lessee shall not permit the name of any person other than Lessor (or
any primary lessor identified to Lessee) to be placed on any item of Furniture
in a manner that might be interpreted as a claim of any right, title or interest
in or to such item. Notwithstanding the foregoing, Lessee, with Lessor's prior
written consent as to the location and manner of storage and the items to be so
stored, shall have the right to remove specific items of Furniture from the
Subleased Premises and store such items, from time to time.
6. TITLE. Title to each item of Furniture (whether full legal title
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or Lessor's interest as primary lessee) shall be and remain with Lessor at all
times, and Lessee shall at no time make any assertion to the contrary. Lessee
shall have no right, title or interest in or to any of the Furniture except its
leasehold interest solely as lessee as provided herein. Each item of Furniture
is and shall at all times remain personal property, notwithstanding the manner
in which it may now or hereafter be affixed or attached to the Subleased
Premises.
7. REPAIRS AND MAINTENANCE: USE; ALTERATIONS. Lessee, at its sole
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expense, shall keep the Furniture in good working order, condition and repair
throughout the term of this Lease, ordinary wear and tear excepted. Lessee
represents, warrants and agrees that all Furniture will be used solely for
business purposes and not for personal, family or household purposes. Lessee
shall use the Furniture in a careful, proper manner and shall comply with all
laws, regulations and ordinances relating to its possession, use or maintenance.
Lessee shall use the Furniture in conformity with all insurance policies
relating to the Furniture or its use, and shall use the Furniture only for the
purposes for which it is intended to be used. Any alterations of Furniture shall
be subject to Lessor's prior written approval, which approval, in the case of
any alterations of cubicles located in the Subleased Premises may be conditioned
upon Lessee's use of Lessor's specified vendor perform any such work. Lessee
shall be solely responsible for all labor and materials cost associated with any
such alterations, and Lessor shall have the right, at Lessor's sole option, to
require that Lessee restore any such alterations prior to the expiration of the
term and Lessee's surrender of the Furniture to Lessor.
8. SURRENDER. Lessee acknowledges and agrees that each item of the
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Furniture will have significant value to Lessor at the expiration or earlier
termination of the term of this Lease, and that Lessor intends to retake
possession of the Furniture at that time. In order to effect Lessor's right to
retake possession of the Furniture, Lessor shall have the right to
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remove the Furniture and particular items thereof from the Subleased Premises at
any time during the seven (7) day period prior to the expiration of the term of
this Lease. Lessor shall notify Lessee of Lessor's schedule for removal of the
Furniture, and Lessee shall cooperate with Lessor in effecting the removal of
the Furniture from the Subleased Premises in accordance with Lessor's schedule.
The parties shall agree upon an equitable proration of the rent for the final
month of the term hereof based upon Lessor's schedule for removal of the
Furniture.
9. RISK OF LOSS. Lessee shall at all times bear the entire risk of
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loss, theft, destruction or damage, whether partial or complete and whether or
not insured, of each item of the Furniture, and of any condemnation,
confiscation, requisition, seizure, forfeiture or other taking of title to or
use of each item of Furniture, whether partial or complete, from any cause
whatsoever (herein "Loss or Damage"), except to the extent that any such Loss or
Damage may result from the negligence or willful misconduct of Lessor, or its
agents, contractors or employees; and Lessee shall indemnify and defend Lessor
and hold Lessor harmless from and against any and all Loss or Damage, except to
the extent that any such Loss or Damage may result from the negligence or
willful misconduct of Lessor, or its agents, contractors or employees, until
such time as such item of Furniture shall have been returned to Lessor and
received by Lessor in accordance with all terms and conditions of this Lease. No
Loss or Damage shall release, impair or otherwise affect Lessee's obligation to
pay rent or any other obligation of Lessee under this Lease. In the event of any
Loss or Damage to any item of Furniture, Lessee shall notify Lessor thereof in
writing within five (5) days after the occurrence of such Loss or Damage, and
Lessee shall immediately, at Lessee's option and at Lessee's sole expense, with
respect to such item of Furniture, (a) place the same in good working order,
condition and repair, (b) replace the same with like Furniture in good working
order, condition and repair, having equivalent value and utility and with clear
title therein in Lessor (which shall thereupon be deemed substituted for such
item of Furniture for all purposes), or (c) pay to Lessor an amount equal to the
replacement cost of such item of Furniture.
10. INSURANCE. Lessee shall, at its own expense, at all times during
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the term of this Lease, insure the Furniture against risks customarily insured
against (as reasonably approved by Lessor) on similar items of furniture in an
amount not less than the full cost of replacement of the Furniture. The
insurance shall provide thirty (30) days prior written notice to Lessor in the
event of material change to or cancellation or expiration of the insurance.
Lessee shall deliver to Lessor certificates of such insurance and evidence
satisfactory to Lessor of Lessee's payment when due of all premiums on such
insurance. Without relieving Lessee of its obligations under section 9 above, in
the event of any Loss or Damage, if Lessor receives any insurance proceeds as a
consequence of being the loss payee under any insurance policy maintained by
Lessee, Lessor shall make such proceeds available to Lessee for replacement of
any items of Furniture damaged or destroyed.
11. LIENS: TAXES. During the term of this Lease, Lessee shall pay all
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licenses or required fees pertaining to the Furniture and keep the same free of
all claims, liens, charges, security interests and other encumbrances and pay
all taxes, assessments, levies, fees and penalties which may be levied or
assessed on or with respect to this Lease, the Furniture or its use or
possession or any interest herein or therein, or any payments hereunder,
including, but not limited to, all sales and use taxes and all other federal,
state and local taxes however designated, levied or assessed, either on Lessee
or Lessor (except for taxes measured solely by Lessor's net income), or On the
ownership, use or operation of the Furniture. During the term of this Lease,
Lessee shall comply with all federal, state and local laws requiring the filing
of ad valorem and other tax returns relating to the Furniture. If such returns
are required to be filed by
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Lessor, Lessee shall so notify Lessor in writing, whereupon Lessee shall provide
Lessor promptly on request such information as Lessor shall require to complete
such returns, and Lessor shall file such returns. If Lessee does not pay any of
the same when due, Lessor shall have the right, but shall not be obligated, to
pay the same, in which event Lessee shall pay to Lessor on demand, as additional
rent, an amount equal to all amounts paid or expenses incurred by Lessor,
together with interest thereon at the annual rate of twelve percent or, if
lower, the maximum rate that Lessor may lawfully charge.
12. INDEMNITY. Lessee shall indemnify and defend (by counsel engaged
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by Lessee, but satisfactory to Lessor) Lessor and its agents, employees,
officers and directors and hold them harmless from and against any and all
claims, liabilities, losses, damages and expenses, including, without
limitation, all court costs and attorneys' and expert witnesses' fees and costs,
arising from or in connection with or based on (a) any of the Furniture or the
possession, condition, operation or use (by whomever operated or used) of any of
the Furniture, or (b) the performance or enforcement of any of the terms, or any
noncompliance or nonperformance of any condition, of this Lease, except to the
extent that any of the foregoing result from the negligence or willful
misconduct of Lessor, or its agents, contractors or employees, or from any
breach on the part of Lessor under any contract made by Lessor affecting any of
the Furniture. Lessee shall satisfy, pay and discharge any and all settlements,
judgments and fines that may be recovered against Lessor in connection
therewith. Lessor shall give Lessee written notice of any such claim.
13. ASSIGNMENT.
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(a) Lessee expressly covenants and agrees that it shall not
assign, mortgage or encumber this Lease or sublet or lend any of the Furniture
or permit any of the Furniture to be used by anyone other than Lessee.
Notwithstanding the foregoing, Lessee, in connection with a sublease or
assignment consented to by Lessor pursuant to the provisions of the Sublease,
shall have the right to sublease some or all of the Furniture, or assign its
interest in the Furniture to the permitted subtenant or assignee under a such
sublease, provided that (i) no such transaction shall serve to relieve Lessee
from its liability hereunder; (ii) all terms and conditions of this Lease shall
apply to any such sublease or assignment, which shall be expressly made subject
to this Lease, (iii) any amounts received by Lessee in excess of the Furniture
Rent as consideration for any such sublease or assignment of all or any portion
of the Furniture shall be payable to Lessor as additional Furniture Rent. No
assignment or sublease by Lessee shall in any event relieve or release Lessee of
or from any debt, duty, obligation or liability hereunder, and Lessee shall
remain primarily liable hereunder.
(b) Lessor, in its sole and absolute discretion, may sell, assign,
transfer, pledge, hypothecate, grant security interests in or otherwise encumber
or dispose of this Lease or any of the Furniture or any interest herein or
therein, as a whole or in part, without notice to Lessee. Notwithstanding any
assignment by Lessor, Lessor warrants that so long as Lessee is not in default
hereunder, Lessee shall quietly enjoy use of the Furniture subject to the terms
and conditions of this Lease and, as part of any such assignment, the assignee
thereunder shall agree that Lessee's rights hereunder in and to the Furniture
shall not be disturbed so long as Lessee is not in default hereunder. Lessor
shall notify Lessee in writing of any transfer of this Lease by Lessor; and
Lessee agrees to acknowledge receipt of and comply with any notice thereof given
by Lessor in writing and to provide Lessor or its assignee with such agreements,
consents, conveyances, documents and certificates as may be reasonably requested
by Lessor or its assignee to effect, facilitate or perfect any assignment by
Lessor.
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(c) Subject to the foregoing, this Lease shall inure to the
benefit of and bind Lessor, Lessee and their respective heirs, legatees,
personal representatives, successors and assigns.
14. DELINQUENCY CHARGE. Should Lessee fail to pay any Furniture Rent
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hereunder or any other sum required to be paid to Lessor by Lessee on the date
due, Lessee agrees to pay to Lessor (a) an amount equal to five percent (5%) of
such rent or other sum, and (b) all of Lessor's costs and expenses incurred or
paid in collecting the delinquent payment, with interest thereon from the date
paid by Lessor until paid by Lessee at the annual rate of twelve percent or, if
lower, the maximum rate Lessor may lawfully charge.
15. DEFAULT. Any of the following shall constitute a "default"
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hereunder: (a) Lessee fails to pay when due any rent or any other sum required
to be paid hereunder and such failure continues for ten days from written notice
thereof from Lessor;
(a) Lessee fails to observe, keep or perform any other term,
covenant or condition of this Lease and such failure continues for thirty days
from written notice thereof from Lessor;
(b) Lessee becomes insolvent or admits in writing its inability
to pay or fails to pay its debts as they become due, or makes an assignment for
the benefit of its creditors, or applies for or acquiesces in the appointment of
a receiver, trustee or other custodian for any of its properties or assets;
(c) any proceeding shall be commenced by or against Lessee for
any relief which includes, or might result in, any modification of the
obligations of Lessee under this Lease or relief under any bankruptcy or
insolvency laws or other laws relating to the relief of debtors, adjustment of
indebtedness, reorganization, composition or extension, unless, in the case of
an involuntary proceeding not consented to or acquiesced in by Lessee, such
proceeding shall have been dismissed within 90 days after the same shall have
been commenced (,provided that this Lease shall terminate automatically if
Lessee fails to pay any rent when due hereunder after a proceeding has been
commenced by or against Lessee under the United States Bankruptcy Code);
(d) Lessee voluntarily or involuntarily, by operation of law or
otherwise, removes, sells, transfers, assigns, grants any security interest in,
pledges, hypothecates, encumbers, parts with possession of or sublets this Lease
or any Furniture, or attempts to do so, except only as and to the extent
expressly permitted hereby; or
(e) Lessee commits an event of default under the Sublease.
16. REMEDIES. On any default hereunder by Lessee, Lessor shall have
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the right, but shall not be obligated, to exercise at any time or from time to
time thereafter any one or more of the following rights and remedies, any of
which rights and remedies may be exercised by Lessor without notice to or demand
on Lessee:
(a) Advance Rent. If Lessee shall have paid any rent hereunder in
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advance of the due date therefor, Lessor may apply any or all thereof to any
obligation of Lessee hereunder.
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(b) Acceleration. Lessor may declare all rent and other amounts
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then due or to become due hereunder immediately due and payable and thereupon
may forthwith recover all of such rent or other amounts, with such accelerated
future rents discounted to their present value at the date of default (provided,
however, that this remedy shall only be available to Lessor if Lessee is at any
time in default with respect to the payment of two (2) or more months' rent
hereunder).
(c) Recovery of Sums Due and to Become Due. In lieu of such
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acceleration, Lessor may recover all rent and other amounts due as of the date
of such default and recover all rent and other sums as they accrue thereafter.
(d) Proceeding in Court. Lessor may proceed by appropriate court
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action, either at law or in equity, to enforce performance by Lessee of the
terms and conditions of this Lease or to recover damages for the breach hereof
or to regain possession of the Furniture.
(e) Termination. Any of the foregoing actions by Lessor under
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this section 16 shall not constitute a termination of this Lease or any of
Lessee's obligations under this Lease. Lessor may, in its exclusive discretion,
terminate this Lease by express written notice thereof to Lessee.
(f) Other Remedies. Lessor may pursue any other remedy available
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to Lessor at law or in equity. Under all circumstances, Lessee shall also pay to
Lessor, on demand, an amount equal to any and all incidental damages sustained
by Lessor, including, without limitation, all costs of collection, repossession,
transportation, storage, repair, reconditioning, resale or other disposition of
the Furniture, all attorneys', expert witnesses' and accountants' fees and costs
(whether or not suit is commenced), court costs and other costs and expenses
incurred in exercising any rights or remedies hereunder or in enforcing any of
the terms or conditions hereof.
The discount rate for purposes of determining present value shall be a rate
equal to one percent in excess of the discount rate of the Federal Reserve Bank
of San Francisco as of the date of entry of judgment in favor of Lessor.
The provisions of this section 16 shall not prejudice Lessor's right to
recover or prove damages for unpaid rent accrued prior to default. No remedy
referred to in this section 16 is intended to be exclusive, but each shall be
cumulative and in addition to any other remedy referred to above or otherwise
available to Lessor at law or in equity and may be exercised concurrently or
consecutively. The exercise or beginning of exercise by Lessor of any one or
more of such remedies shall not preclude the simultaneous or later exercise by
Lessor of any or all of such other remedies. Lessor's remedies shall be
available to Lessor's successors and assigns.
17. FURTHER ASSURANCES. Lessee will promptly and duly execute and
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deliver to Lessor such further documents and assurances and take such further
action as Lessor may from time to time reasonably request in order more
effectively to carry out the intent and purposes of this Lease and to establish
and protect the rights, interests and remedies intended to be created in favor
of Lessor hereunder, including, without limitation, the execution and filing of
financing statements and continuation statements with respect to the Furniture
and this Lease.
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18. PERFORMANCE BY LESSOR OF LESSEE'S OBLIGATIONS. If Lessee fails
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promptly to perform any of its obligations under this Lease, Lessor, on written
notice to Lessee, may (but shall not be obligated to and shall not incur any
liability or obligation to Lessee or any third party for failure to) perform the
same for the account of Lessee without waiving Lessee's failure as a default.
All sums paid or expense or liability incurred by Lessor in such performance
(including reasonable legal fees) shall be promptly reimbursed by Lessee on
demand of Lessor, together with interest thereon from the date paid by Lessor to
the date reimbursed by Lessee at the annual rate of twelve percent or, if lower,
the maximum rate that Lessor may lawfully charge.
19. GENERATOR. The parties acknowledge that Furniture includes that
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certain generator and fuel tank which serve the Premises under the Master Lease
(collectively, "Generator"). Lessee shall operate and maintain the Generator in
accordance with the schedule of periodic maintenance approved in advance by
Lessor, using a vendor either specified by, or approved in writing by, Lessor.
The parties acknowledge that the Generator may be located on the property
located at 00 Xxxxx Xxxxx, which is currently leased by Lessor under a lease
other than the Master Lease, and that such additional lease may, during the term
of this Lease, expire or be terminated, in which event Lessor may no longer have
a right to lease the Generator to Lessee. In such event, Lessor shall reasonably
cooperate with Lessee in attempting to locate an alternative site for the
Generator or a replacement Generator (such replacement to be provided at
Lessee's sole cost and expense). If a replacement Generator cannot ultimately be
made available, the Furniture Rent shall be reduced, effective as of the date on
which the Generator is no longer available to Lessee, to $18,110.75 per month.
20. Security System. The parties acknowledge that the Furniture also
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includes the existing security system in the Subleased Premises. Lessee shall
perform regularly scheduled maintenance with respect to such security system in
accordance with the schedule approved in writing in advance by Lessor, and using
either Lessor's specified vendor (as of the date of this Lease, such vendor is
Mosler) or an alternative vendor proposed by Lessee and approved in writing in
advance by Lessor in Lessor's sole and absolute discretion.
21. NOTICES. All notices, consents and other communications required
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or permitted under this Lease shall be given in accordance with the provisions
of the Sublease.
22. ENFORCEMENT. This Lease shall be deemed to have been entered into
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in the County of San Mateo, State of California, where this Lease is being
signed on behalf of Lessor and Lessee, and all performance on the part of
Lessee, including the payment of all rent and other sums due hereunder, shall be
deemed to have been required to be performed by Lessee in said County. This
Lease shall be governed by and construed, interpreted and enforced in accordance
with the laws of the State of California, without giving effect to principles of
conflicts of law or choice of law. Jurisdiction and venue in any action or
proceeding in connection with this Lease shall be in the proper state or Federal
court located in the City and County of San Francisco or the County of San
Mateo, State of California.
23. MISCELLANEOUS. The singular includes the plural and vice versa,
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as applicable. The term "Lessee" as used herein, if this Lease is signed by more
than one Lessee, means each Lessee, and their obligations and representations
hereunder shall be joint and several. The headings or captions at the beginning
of sections hereof are solely for convenience of reference and are not part of
this Lease.
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24. TIME. Time is of the essence of this Lease.
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25. ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Lease constitutes the
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entire agreement between Lessor and Lessee and supersedes all prior or
contemporaneous agreements, promises, representations, correspondence and
negotiations, regarding the subject matter hereof. This Lease may not be
amended, altered or changed except by written agreement signed by Lessor and
Lessee and supported by new consideration. No provision hereof for the benefit
of Lessor and no default of Lessee hereunder may be waived except in writing
signed by Lessor. No failure on the part of Lessor to exercise, and no delay in
exercising, any right or remedy hereunder shall operate as a waiver thereof.
Waiver by Lessor of any provision hereof or default hereunder in any instance
shall not constitute a waiver as to any other provision, default or instance.
26. SEVERABILITY. If any provision of this Lease is held invalid,
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such invalidity shall not affect the other provisions, which shall be given
effect without the invalid provision.
IN WITNESS WHEREOF, the parties hereto have executed this Furniture Lease
as of the date first above written.
LESSOR: LESSEE:
ORACLE CORPORATION, EXTRICITY, INC.,
a Delaware corporation a California corporation
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxx Name: Xxxxxxx Xxxxxxxxxx
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Title: V.P. and Corporate Treasurer Title: CFO
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SCHEDULE 1 TO EXHIBIT D
Furniture Inventory for 0 Xxxxx Xxxxx
Furniture
Total Cubes: 310
Cube Furniture: Xxxxxx Xxxxxx Ethospace in 6'x8' configuration.
Each cube comes with the following equipment: 2 pedestal file cabinets, 1 rail
tile, 1 whiteboard tile, 1 Xxxxxx Xxxxxx Ergon chair, 3 pieces of paper
management trays: 1 vertical, 1 horizontal and 1 slotted, recycle bin and trash
bin.
Total Offices: 72
Office Furniture: Xxxxxxxx Lundstead Furniture. Each office has one desk and
one return. Office 2020 has two sets of furniture.
Each office comes with the following equipment: two 48" overhead bookshelves,
two 48" tacktiles, whiteboard, recycle bin, trash bin, and 3 Xxxxxx Xxxxxx Ergon
chairs. 4 offices have four 48" tacktiles and four 48" overhead bookshelves, 3
offices have three 48" tacktiles and three 48" overhead bookshelves.
Conference Rooms: 4
Furniture in Conference Rooms: one 72" credenza, one 12' conference table, 12
Xxxxxx Xxxxxx Ergon chairs.
Additional Furniture:
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Room Furniture
0112 Xxxxxx Xxxxxx Ethospace, 8'x 16' section
0116 Xxxxxx Xxxxxx Ethospace, 6'x22' section
1002 Reception Area desk, 7'6"x l1'
1100/1104/2100/2106 One Refrigerator each
2106 19" equipment rack with two 96 port patch panels
0102/0108/0110 24x7 supplemental HVAC units - 5 tons
1106/2106/2002 24x7 supplemental HVAC units - 5 tons
Note: See Exhibit A - Sublease Premises for cubicle and office locations.
Generator
Xxxxxxxx Engine / Onan Generator #500 (500KW or 1000 xxxxx) - Model XXXX-00000-
X; Serial # H960615510
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Security Equipment Inventory:
Card access Equipment
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ApC control panels 3
APS(pwr supply) 3
Star couplers 3
MRM's(door controllers) 21
Card readers 21
Lock pwr supplies 3
Relays 21
CCTV Equipment
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Cameras 12
Lenses 12
Time lapse VCR 1
Multiplexers 1
Misc.
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Rack 1
UPS 1
Panic buttons 1
Exit buttons 2
Locksets 21
Transfer hinges 21
Contacts 23
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NET OFFICE LEASE
Xxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx
1.0 SUMMARY OF TERMS
1.1 Date: This Lease is dated for reference purposes only: December ____, 1995.
1.2 Parties and Notice Addresses:
Tenant: Oracle Corporation, a Delaware corporation,
000 Xxxxxx Xxxxxxx, Xxx 000000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Lease Administration
with a copy to: Oracle Corporation
500 Oracle Parkway, Box 659507
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Legal Department.
Landlord: Davis Associates, a California limited partnership
c/o The Raiser Organization
000 X. Xxxxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
1.3 Premises (Section 2.1): Approximately 69,925 Rentable Square Feet
consisting of the office building located at Xxx
Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxx, together with
the right to use in common with the tenant of the
warehouse building at Eleven Xxxxx Drive the
"common areas" of the land on which the buildings
are situated (collectively, the "Property"). The
Property is more particularly described in
Exhibit "A" attached hereto, and the Premises is
outlined on Exhibit "B" attached hereto.
1.4 Scheduled Commencement Date (Section 3.2): October l, 1996.
1.5 Expiration Date (Section 3.1): September 30, 2006.
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1.6 Base Rent (Section 5.1):
(a) Period Base Monthly Rent
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Months 1-30 $79,140.00
Months 31-60 85,115.25
Months 61-90 91,683.75
Months 91-120 98,252.25
(b) Advance Rent (Section 5.1): $79,140, payable by Tenant and credited
against the first Base Monthly Rent due under the Lease in accordance
with Section 22.1.
1.7 Initial Monthly Estimated Operating Expense Payment (Section 6.1):
$36,900.00.
1.8 Tenant's Pro Rata Share of Shared Operating Expenses (Section 6.1):
94'.96%.
1.9 Use (Section 4.1): Premises used solely for: general office purposes,
which shall include conference, classroom, demonstration p.c. and data
labs and software sales and development purposes.
1.10 Option to Renew (Section 26): Two five-year options to renew at the then
existing Fair Market Rental Rate.
1.11 Right of First Offer (Section 27): Right of first offer to purchase the
Premises.
1.12 Right of First Refusal (Section 28): Right of first refusal to lease the
warehouse building at 00 Xxxxx Xxxxx, Xxxxxxx.
1.13 Brokers:
Landlord's Broker: Cornish & Xxxxx Commercial.
Cooperating Broker: Colliers Advisory Group, a division of Colliers
Xxxxxxx International, Inc.
1.14 Contents: This Lease consists of Sections 1 through 31, and Exhibits A
through D.
1.15 Conflicts: In the event of any conflict between the foregoing summary of
terms and the following, more detailed, provisions of this Lease, the more
detailed provisions shall control.
2.0 PREMISES
2.1 Description. Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, the "Premises", as outlined in the site plan attached
hereto as Exhibit "B", together with the right, in
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common with the occupants of the warehouse building at Eleven Xxxxx Drive,
to use the "Common Areas" (as defined in Section 6.4.3).
2.2 Initial Tenant Improvements.
(a) Landlord shall be responsible, at Landlord's cost, for ensuring that
as of the Commencement. Date the Premises is in compliance with all
requirements of the Americans With Disabilities Act and that the deferred
maintenance items with respect to the HVAC system described in the
December 5, 1995 memorandum from Xxxxxxxxxxx Mechanical, Incorporated to
Xxxxx Xxxxx has been completed.
(b) Tenant shall be responsible for completing all refurbishments to the
interior of the Premises, including, without limitation, repainting,
recarpeting, erecting exterior signage complying with the provisions of
this Lease, installing telecommunications and security systems, and making
such minor modifications to the configuration of the existing offices as
Landlord may reasonably approve (the "Initial Tenant Improvements").
Landlord may require, as a condition to its consent to any change in the
existing floor plan or any other modification to the Premises which is
structural in nature, that Tenant remove all such improvements at the end
of the Lease Term and return the Premises to the its original condition,
reasonable wear and tear excepted, if so requested by Landlord.
Notwithstanding the foregoing, Tenant may make minor changes in office
sizes and configurations (provided the total number of offices is not
reduced by more than 5% and the reconfigured offices are of a standard and
reusable size and incorporate the same finishes as the remainder of the
Premises), eliminate the main corridor on the second floor of the Premises
and eliminate the basement lunch room (provided that Tenant leaves in
place all existing kitchen appliances and fixtures), without any
obligation to restore the Premises at the end of the Lease Term. Landlord
shall advise Tenant at the time it approves any request for modifications
to the Premises whether Landlord reserves the right, as a condition of its
consent, to require restoration with respect to the modification approved.
(c) Tenant shall cause its architects and engineers to prepare all
drawings and specifications necessary to describe in reasonable detail the
scope and nature of the proposed Initial Tenant Improvements, including
all documentation necessary to describe all structural, mechanical,
electrical, lighting, life safety, fire sprinkler and other components of
the proposed improvements (the "Contract Documents"). Tenant shall deliver
the Contract Documents to Landlord's property manager for Landlord's
approval. Within five (5) business days following delivery of the Contract
Documents to Landlord's property manager, Landlord shall notify Tenant of
its approval or disapproval of the Contract Documents and, if Landlord
disapproves the Contract Documents, the revisions Landlord will require.
As promptly as reasonably possible thereafter, Tenant shall submit revised
Contract Documents to Landlord's property manager, incorporating the
revisions required by Landlord. All revised Contract Documents shall be
subject to Landlord's approval in the manner described above. If Landlord
fails to approve or disapprove any Contract Documents within five (5)
business days following delivery to Landlord's property manager, Landlord
shall be deemed to have approved the Contract Documents so submitted,
Tenant shall also be responsible for obtaining all government permits and
approvals required to complete the Initial Tenant Improvements.
3
(d) Tenant shall enter into a guaranteed maximum price construction
contract with Raiser Construction Company substantially in the form
attached hereto as Exhibit "C" to complete all of the Initial Tenant
Improvements other than the installation of telecommunications and security
systems, for which Tenant shall contract with specialty contractors
reasonably acceptable to Landlord. Landlord agrees to have a Landlord
representative in attendance at weekly project meetings with Tenant and its
primary contractors during both the planning and construction phases of the
Initial Tenant Improvements. Tenant shall not be required to pay Landlord a
separate fee for construction administration or supervision in connection
with the Initial Tenant Improvements.
(e) Landlord shall provide to Tenant a tenant improvement allowance in the
amount of Two Hundred Thirty-Seven Thousand Three Hundred and No/100
Dollars ($237,300) (the "Tenant Improvement Allowance") to cover costs
actually incurred by Tenant in completing the Initial Tenant Improvements,
including without limitation the cost of Tenant's architects and engineers,
permit fees and related "soft costs." Tenant shall be responsible for
paying all costs of the Initial Tenant Improvements in excess of the Tenant
Improvement Allowance. In the event the full Tenant Improvement Allowance
is not expended to pay for the Initial Tenant Improvements, the excess
shall be applied by Landlord as a credit against the Base Monthly Rent next
due and payable. All disbursements from the Tenant Improvement Allowance
shall be made pro rata with payments made directly by Tenant, based on a
budget for the Initial Tenant Improvements approved by Landlord and Tenant,
as it may be amended from time to time. Landlord shall disburse funds from
the Tenant Improvement Allowance either directly to Raiser Construction
Company, its subcontractors and suppliers or Tenant's specialty contractors
pursuant to draw requests submitted on AIA G702 or G703 forms and approved
by Tenant or to Tenant upon presentation to Landlord of invoices evidencing
amounts advanced by Tenant. All disbursements shall be made within five (5)
business days following a request therefor, accompanied by appropriate
supporting documentation, including without limitation evidence of
corresponding direct payments by Tenant.
3.0 TERM
3.1 Period. The "Term" of this Lease shall be approximately ten years,
commencing on the Commencement Date, as defined in Section 3.2 below and
terminating on the Expiration Date set forth in Section 1.5 above. For
purposes of this Lease, "Lease Month" shall mean a period of one (1) month,
the first such period commencing on the first day of the first full
calendar month of the Term, and consecutive periods beginning in one-month
intervals thereafter.
3.2 Commencement. The Term shall commence on the earlier to occur of (a) the
date Tenant opens for business in the Premises and (b) October 1, 1996,
provided that the October 1, 1996 outside date for commencement of the
Lease Term shall be extended by one day for each day (if any) beyond June
30, 1996 during which Visa International remains in possession of the
Premises, thereby impeding commencement of the Initial Tenant Improvements.
If the actual date of commencement of the Term of this Lease (the
"Commencement Date") shall be any date other than the date set forth in
Section 1.4, Landlord and Tenant shall confirm the same in writing promptly
upon the occurrence of the same; provided, however, that failure of
Landlord or Tenant to confirm the same in writing shall not affect
4
any obligation or Tenant hereunder or Landlord's determination of such date
pursuant to this Section 3.2. Except as otherwise expressly provided in
Section 3.3, if Landlord, for any reason whatsoever, cannot deliver
possession of the Premises to Tenant on the date specified in Section 1.4,
this Lease shall not be void or voidable, nor shall Landlord be liable to
Tenant for any loss or damage resulting therefrom.
3.3 Early Entry. Landlord shall deliver access to the Premises (which shall be
in broom clean condition) to Tenant on or before July 1, 1996 solely for
the purpose of completing the Initial Tenant Improvements. Such early entry
shall be subject to all of the terms and conditions of this Lease, provided
that Tenant shall not be obligated to pay any Base Rent or Additional Rent
for the period prior to the Commencement Date. Tenant shall also have the
right during such period to install furniture and equipment and otherwise
prepare the Premises for the conduct of Tenant's business, provided that
Tenant conducts such activities in a manner so as not to interfere with or
delay completion of the initial Tenant Improvements. In the event that
Landlord is unable to deliver access to the Premises on or before July 1,
1996 because of a holding over by the existing tenant, Visa International,
Landlord shall not be deemed to be in breach of the Lease, but the October
1, 1996 outside Commencement Date shall be postponed by one day for each
day of holding over beyond June 30, 1996, as provided in Section 3.2. In
the event Visa International remains in possession of the Premises for a
period of three full calendar months from and after June 30, 1996, Tenant
shall have the right, at its sole discretion, to terminate this Lease.
4.0 USE
4.1 Authorized. The Premises may be used and occupied only for the purposes
specified in Section 1.8 hereof, and for no other purpose or purposes.
4.2 Compliance. Tenant accepts the Premises by its occupancy and subject to all
applicable laws, ordinances, rules, regulations, orders, permits,
restrictions of record, and requirements in effect during the Term
(collectively, "Laws"), with which Tenant shall comply at its sole cost as
they relate to Tenant's use of the Premises or (o the operation of Tenant's
business or to improvements or alterations made to the Premises by Tenant,
Tenant shall not place a load upon the floor of the Premises exceeding the
load per square foot such floor was designed to carry, as determined by
Landlord or its structural engineer. Partitions shall be considered as part
of the load. Landlord may prescribe the weight and position of all safes,
files and heavy equipment that Tenant desires to place in the Premises, so
as properly to distribute their weight.
4.3 Restricted Activities.
(a) Tenant shall not do or permit to be done in or about the Premises
anything that is prohibited by any Law that is now in force or may
hereafter be enacted. Tenant shall not use or store on the Premises
any hazardous or toxic or radioactive materials, substances, or wastes
(collectively, "Hazardous Materials"), except for such substances as
are required in the ordinary conduct of Tenant's business conducted in
the Premises and are used and stored in compliance with all
5
applicable Laws and all precautions and guidelines now or hereafter
promulgated pursuant thereto. Tenant, at its sole cost, shall comply
with all Laws and all precautions and guidelines now or hereafter
promulgated pursuant thereto relating to the treatment, production,
storage, handling, transfer, processing, transporting) use and
disposal of any Hazardous Materials (collectively, "Restricted
Activities"). If Tenant does engage in any Restricted Activities,
Tenant shall deliver to Landlord advance written notice of its
activities and Tenant shall be solely responsible for and shall
defend, indemnify, reimburse, protect, and hold Landlord and each of
Landlord's partners, employees, agents, successors or assigns harmless
from and against all claims, losses, damages, expenses, costs and
liabilities, including reasonable attorneys' fees, arising out of or
in connection with (a) Restricted Activities by Tenant, its employees,
agents, contractors, licensees, or invitees ("Agents") and (b) the
removal, clean-up and restoration work and materials necessary to
return the Premises and any other property to their condition existing
prior to the Restricted Activities. If at any time during the term of
this Lease, as it may be extended, Tenant becomes aware of any (i)
actual or threatened material release of any Hazardous Materials on,
under, or about the Premises or any adjacent property (except any
release that is in compliance with applicable Laws and, if required, a
permit issued by the appropriate governmental agency), or (ii)
inquiry, investigation, proceeding or claim by any governmental agency
or private party regarding Restricted Activities or Hazardous
Materials on, under, or about the Premises, then Tenant shall within
five (5) days after first learning of such inquiry, investigation,
proceeding or claim give Landlord written notice of same.
(b) Notwithstanding anything contained in this Lease to the contrary,
Tenant shall have no obligation to clean up or to indemnify, defend or
hold Landlord harmless with respect to any Hazardous Materials which
were not used, generated, manufactured, stored, released, disposed of
or transported to, from or within the Premises by Tenant or its
subtenants or any of their respective agents, employees or contractors
during the Term of this Lease. Landlord waives any right of
contribution against Tenant with respect to any cleanup or remediation
costs incurred by Landlord with respect to any Hazardous Materials and
any such costs shall not be included as a part of any Operating
Expenses payable by Tenant hereunder. Further, Landlord shall
indemnify, defend, protect and hold Tenant, and each of Tenant's
directors, officers, employees, agents, successors and assigns,
harmless from and against any and all environmental remediation or
cleanup costs, tort damages, fees (including, without limitation,
reasonable attorney's fees and costs) and penalties arising from or
caused by Landlord's (or Landlord's agents, employees or contractors)
use, generation, manufacture, storage, release, disposal or
transportation of Hazardous Materials to, in or under, about or from
the Premises.
(c) Landlord hereby represents to Tenant that Landlord has no knowledge of
the presence or discharge on, in or under the Premises of any
Hazardous Materials in violation of applicable Laws. For the purposes
of this Section 4.3(c), "Landlord's knowledge" shall mean the actual
current knowledge, without independent investigation or inquiry, of
Xxxx Xxxxxx, Xxxxxx Xxxxxxx, Xx., and Xxxxx Xxxxxxxxx.
6
(d) The obligations of Landlord and Tenant under this Section 4.3 shall
survive the termination of this Lease.
5.0 RENT
5.1 Base Monthly Rent. Tenant shall pay to Landlord at the place designated in
Section 1.2, or at such place as Landlord may otherwise designate, in
writing, without prior notice or demand, as Base Monthly Rent for the
Premises, the amount specified in Section 1.6(a) for the applicable Lease
Month, All such rent payments shall be payable in advance on the first day
of each month during the Lease Term (subject to the provisions of Section
17.3), provided that in the event the Commencement Date is other than the
first day of a calendar month, then the rent for the period from and
including the Commencement Date to and including the last day of said
calendar month, shall be that proportion of said Base Monthly Rent which
the number of days between the Commencement Date and the first, day of said
calendar month bears to thirty (30), and shall be due and payable on the
Commencement Date. The payment of advance rent made by Tenant pursuant to
Section 1.6(b) shall be applied to the Base Monthly Rent first due from and
after the Commencement Date until credited in full.
5.2 Interest. Any installment of rent due under this Lease, or any other sum
not paid to Landlord, within five (5) days of the date due hereunder, shall
bear interest to the extent enforceable by law, at a rate (the "Default
Rate") equal to the lesser of the maximum rate Landlord may then lawfully
charge for the lending of money or 10% per annum from the first day of the
month in which such installment of rent or other sum became due and payable
until the same shall have been fully paid, but the payment of such interest
shall not excuse or cure any default by Tenant under this Lease.
5.3 Late Charge. Tenant hereby acknowledges that the late payment by Tenant to
Landlord of rent or any other sum due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which
will be extremely difficult to ascertain. Such costs may include, but are
not limited to, administrative, processing and accounting charges, and late
charges which may be imposed on Landlord by the terms of any ground lease,
mortgage or trust deed covering the Premises. Accordingly, if any
installment of rest, or any other sum due from Tenant, shall not be
received by Landlord within five (5) days after the date due under this
Lease, then Tenant shall pay to Landlord, in addition to the interest
provided above, A LATE CHARGE IN THE AMOUNT OF FIVE CENTS FOR EACH ONE;
DOLLAR DUE. The parties agree that such late charge represents a fair, and
reasonable estimate of the cost Landlord will incur by reason of late
payment by Tenant. Acceptance of such late charge by Landlord shall in no
event constitute a waiver of Tenant s default with respect to such overdue
amount, or prevent Landlord from exercising any of its rights or remedies
hereunder.
5.4 Additional Rent; Payment. All sums of money due Landlord hereunder not
specifically characterized as rent shall nevertheless constitute additional
rent, and if a time for payment is not expressly stated herein, such sums
shall be payable on the date on which the next installment of Base Monthly
Rent is payable, All payments due from Tenant to Landlord shall be paid to
Landlord without deduction, offset or counterclaim.
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6.0 OPERATIONS
6.1 Building Operations and Management.
6.1.1 Management and Operation of the Premises. Landlord, through its
property management company, shall provide all services reasonably
required in connection with the ordinary management and operation of
the Premises. The property manager shall contract with third party
providers to provide the following services to the Premises:
janitorial; janitorial supplies; window washing; pest control;
exterior and lobby landscaping; fire safety monitoring; HVAC
maintenance; elevator maintenance; and parking lot maintenance. The
original service providers shall be the companies presently employed
by Raiser Property Management Company at the Premises. In the event
Tenant is dissatisfied with the services of such provider, Tenant
shall give written notice to Landlord's property manager, who shall
work with the provider to rectify promptly the deficiencies
identified by Tenant; provided, however, that if the deficiencies
have not been corrected to Tenant's reasonable satisfaction within
ninety (90) days, Tenant shall give written notice thereof to
Landlord and Landlord shall select a new service provider, after
consultation with Tenant. In the event that Tenant is dissatisfied
with the services of Raiser Property Management Company, Tenant
shall notify Landlord in writing. Tenant agrees to work with
Landlord for a period of ninety (90) days following receipt by
Landlord of such notice to address Tenant's property management
concerns. If, at the end of such ninety (90) day period, Raiser
Property Management Company has failed to take any corrective action
reasonably requested by Tenant, Tenant may require Landlord to
select a replacement property management company. Tenant may also
require Landlord, not more frequently than once each Lease Year, to
solicit bids for the provision of services rendered by one or more
of the providers described above to ensure that the rates being paid
with respect to the Premises are competitive with the charges of
other providers for similar services. Landlord shall, in all events,
consult with Tenant before changing any service provider. All of the
foregoing costs shall be Operating Expenses of the Premises, Tenant
shall be responsible, at Tenant's sole cost, for all maintenance and
repair of its security, telecommunications and electronic systems.
In addition, if Tenant is entitled to a lower utility rate than
Landlord, Tenant shall pay directly such utilities for the Premises
as are available at the lower rate. Landlord shall be entitled to
include within Operating Expenses a property management fee equal to
2-1/2% of the Base Monthly Rent. Tenant shall pay no additional
charge for the services of Landlord's property management or
accounting staff. Operating Expenses shall, however, include the
salary costs of the day maintenance engineer.
6.1.2 Major Repairs Landlord shall make all necessary repairs and
replacements to the structural components of the Premises,
including, without limitation, the roof, exterior walls and
foundations, and all necessary replacements of building systems,
upon receipt of written notice from Tenant of the need for such
repairs or replacements or upon Landlord's reasonable determination
that such repairs or replacements are required. In addition,
Landlord shall make all alterations and improvements to the Premises
required by any governmental authority after
8
the commencement of the Lease Term or reasonably required for the
health and safety of Tenant or Tenant's employees. The cost of all
such repairs and replacements shall be amortized over the usable
life of the improvement, and Tenant shall pay to Landlord each month
as additional rent hereunder an amount equal to the monthly
amortization of such cost, together with interest on the unamortized
balance at the rate of 10% per annum. Notwithstanding the foregoing,
such repairs shall be made by Landlord at Tenant's expense, payable
by Tenant upon demand, in the event such repairs are required as a
result of damage caused by acts or omissions of Tenant.
6.1.3 Ordinary Repairs. By entry hereunder, Tenant accepts the Premises as
being in the condition in which Landlord is obligated to deliver the
Premises. Landlord, as an Operating Expense, shall maintain the
Premises in good order and condition promptly make all repairs
necessary to maintain such condition, and repair any damage to the
Premises caused by Tenant or its agents. Such maintenance and repair
obligation shall include without limitation (i) all subfloors and
floor coverings, (ii) all plumbing within the Premises (including
all sinks, toilets, faucets, pipes and drains), (iii) all fixtures,
interior walls, floors, carpets and ceilings, (iv) all interior and
exterior windows, doors, entrances, plate glass, showcase and
skylights, (v) all electrical facilities, wiring and equipment,
including lighting fixtures, lamps, bulbs and tubes, fans, vents and
exhaust equipment in the Premises, (vi) all automatic fire
extinguisher equipment and systems (including full sprinkler
testing) in the Premises, (vii) all HVAC systems appurtenant to the
Premises, and (viii) all interior repainting.
6.2 Taxes. Landlord shall pay, as a Shared Operating Expense (as defined in
Section 6.4.3) all taxes, including any form of assessment, license, fee,
commercial rental tax, levy, penalty or tax (other than net income,
franchise, inheritance or estate taxes) imposed by any authority having
the power to do so with respect to the Property or the improvements,
fixtures or activities conducted on the Premises. Shared Operating
Expenses shall also include Landlord's cost of contesting any such taxes
if Tenant, in its sole discretion, approves any such contest.
Alternatively, Tenant shall have the right, at its sole cost and expense,
to contest directly any such taxes, and Landlord will cooperate with
Tenant in connection with any contest of taxes undertaken by Tenant.
Taxes shall include without limitation taxes that are (i) upon any legal
or equitable interest of Landlord in the Property; (ii) upon this Lease,
the rent payable hereunder or the value thereof; (iii) with respect to
any right to occupancy, use, leasing, operation, management, maintenance,
alteration, or repair of the Property; or (iv) imposed in substitution
for, or in addition to, existing or additional taxes against any part of
the Property whether or not now customary or within the contemplation of
the parties. If it shall not be lawful for Tenant to reimburse Landlord
for any Of the taxes covered by this Article, the Base Monthly Rent
payable to Landlord under the terms of this Lease shall be increased by
the amount of such taxes. Tenant shall pay prior to delinquency all taxes
assessed against and levied upon its trade fixtures, furnishings,
equipment and other personal property.
6.3 Insurance.
6.3.1 Landlord's Insurance. During the Term of this Lease, Landlord shall
maintain in effect the following insurance coverages, the cost of which
shall be included in the Operating Expenses for the Premises.
9
(a) Coverages:
(i) Commercial general liability insurance in such amount as shall
be required by the holder of any deed of trust encumbering the
Premises or in such greater amount as may be reasonably
proposed by Landlord and approved by Tenant, which approval
will not be unreasonably withheld, insuring against personal or
bodily injury and property damage incurred in connection with
Landlord's acts or omissions and those Of Landlord's agents,
employees, representatives and contractors in, on or about the
Premises. Such policy or policies shall include a "separation
of insureds" provision and shall (as extended, if necessary, by
endorsement) provide contractual liability (including, without
limitation, Landlord's indemnity obligations under this Lease)
and owner and contractor protective liability.
(ii) Property Insurance. A policy or policies of insurance covering
loss or damage to the Premises (including any alterations),
except for foundations, footings and underground installations,
in an amount not less than the full replacement cost thereof,
on an agreed amount basis, without any deduction being made for
depreciation, as such. replacement cost may increase from time
to time, together with a "building ordinance" endorsement with
limits of not less than Five Hundred Thousand Dollars
($500,000) per occurrence, providing protection against all
perils included within the classification of fire, extended
coverage, vandalism, malicious mischief, special extended
perils (all risk) and sprinkler leakage.
(iii) Boiler and Machinery Insurance. Full coverage boiler and
machinery insurance on all boilers, air conditioning equipment
and other pressure vessel systems located in or about the
Premises, with limits of not less than One Million Dollars
($1,000,000) per occurrence.
(iv) Rent Loss. Rent (including Operating Expenses and Taxes) loss
insurance insuring against any loss of rental from damage or
destruction of the Premises for a period of one year from the
date of such damage or destruction.
(v) Any additional coverages which may be required from time to
time by applicable Laws or by any Encumbrance Holder (as
defined in Section 15.1).
(b) Approved Deductible. The deductible amount ("Approved Deductible")
under any property insurance policy to be obtained by Landlord shall
not exceed $25,000 per occurrence, unless Landlord proposes to Tenant
and Tenant shall consent to a higher deductible amount.
Notwithstanding the foregoing, the deductible under any policy of
earthquake insurance shall be in such amount as may be commonly
available under policies Of earthquake insurance covering properties
similar to the Premises. The "Approved Deductible" for purposes of
determining what portion of the costs of repairing any damage and
destruction arising from an
10
earthquake are includable in Operating Expenses shall be an amount
equal to the Approved Deductible applicable to other types of
casualties. The amount of any loss arising from an earthquake that
is within the deductible amount under the earthquake insurance
policy, but in excess of such "Approved Deductible" amount shall be
considered an uninsured loss for the purposes of Section 10.1.
(c) Tenant agrees not to do anything or fail to do anything which will
violate the terms of any such insurance, increase the cost of such
insurance or prevent Landlord from procuring policies satisfactory
to Landlord. Tenant shall pay any increases in insurance premiums
resulting from the nature of Tenant's occupancy or any act or
omission of Tenant upon receipt of written notice from Landlord
setting forth the amount of the premium increase and all reasons
therefor given by Landlord's insurer.
6.3.2 Tenant's Insurance. Tenant agrees to maintain in full force and effect at
all times during the Term, at its own expense, for the protection of
Tenant and Landlord, as their interests may appear, policies of insurance
issued by a responsible carrier or carriers reasonably acceptable to
Landlord which afford the following coverages:
(a) Worker's Compensation. Statutory limits.
(b) Employer's Liability - Not less than:
Bodily Injury by Accident: $250,000 each accident
Bodily Injury by Disease; $250,000 policy limit
Bodily Injury by Disease: $250,000 each employee
(c) Commercial General Liability Insurance with limits not less than the
following: $2,000,000 for the occurrence limit, general aggregate limit,
product/completed operations aggregate limit, personal injury and
advertising aggregate limit, $50,000 fire damage (any one fire), and
$5,000 medical expense (any one person), covering Bodily Injury, Personal
Injury and Property Damage liability occasioned by or arising out of or
in connection with the use, operation and occupancy of the Premises. Such
insurance shall be provided on a coverage form at least as broad as the
most recent edition of the standard Commercial General Liability Coverage
Form (CG0001) published by ISO Commercial Risk Services, Inc. Such policy
must cover events that occur during the policy period regardless of when
the claim is made. The policy must name Landlord and Raiser Property
Management Company as additional insureds using an endorsement form at
least as broad as the most recent addition of the Additional Insured
Managers or Lessors of Premises Endorsement (CG2011) as published by ISO
Commercial Risk Services, Inc. Such insurance shall be primary insurance
to, and non-contributing with, any other insurance that may be available
to Landlord.
11
(d) Prior to the commencement of any work with respect to the Initial
Tenant Improvements or any alterations (as defined in Section 7.2 below),
any contractor (other than Raiser Construction Company) retained by
Tenant shall file with Landlord valid certificates of insurance and
amendatory riders or endorsements to such contractor's insurance
policies, all in form and substance reasonably satisfactory to Landlord,
naming Landlord and Raiser Property Management Company as additional
insureds thereunder using an endorsement form at least as broad as the
most recent edition of Additional Insured - Owners, Lessors or
Contractors Form B (CG2010) published by the Insurance Services Office,
Inc. These policies shall be primary insurance to any other insurance
that may be available to Landlord. Such endorsements or amendatory riders
shall indicate that as respects such additional insureds, there shall be
severability of interests under such insurance policies for all coverages
provided under such insurance policies. The certificates and amendatory
riders or endorsements Shall clearly indicate the specific coverage and
shall contain a provision requiring the giving of written notice to
Landlord at least thirty (30) days prior to the cancellation, non-renewal
or material modification of any such policies. All insurance companies
must meet with the approval of Landlord and Landlord's lender, Landlord's
approval shall not be unreasonably withheld. The insurance required by
this Section 6.3.2(d) shall include the following coverages and limits of
liability, provided that such insurance shall in all events include all
coverages and limits required by Law:
(i) Commercial General Liability insurance in an aggregate limit of not
less than $2,000,000, including the following:
(1) Product-Comp/OPS aggregate limit of not less than $2,000,000;
(2) Personal and Advertising Injury limit of not less than
$2,000,000;
(3) Each occurrence limit of not less than $2,000,000;
(4) Fire Damage (any one fire) limit of not less than $50,000; and
(5) Medical Expense (any one person) limit of not less than
$5,000.
(ii) Automobile Liability (and auto) insurance in an aggregate limit of
not less than $2,000,000.
(iii) Workmen's Compensation and Employer's Liability insurance for not
less than the statutory limits and in no event less than the following:
1. Each accident $100,000
2. Disease. policy limit $500,000
3. Disease - each employee $100,000
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If any contractor (other than Raiser Construction Company) hired by
Tenant fails to purchase or maintain the liability insurance specified by
this Section 6.3.2(d) within ten (10) days following notice by Landlord
to Tenant that Landlord intends to purchase such insurance pursuant to
this Section 6.3.2(d). Landlord may (but shall not be obligated to)
purchase such insurance on such contractor's behalf and at Tenant's
expense, and Landlord shall be entitled to reimbursement from Tenant of
all sums so spent within ten (10) days of demand therefor, accompanied by
evidence of the premiums paid by Landlord, When such insurance, due to
the attainment of a normal expiration date or renewal date, shall expire,
such contractor shall, prior to expiration, supply Landlord with updated
replacement certificates of insurance and amendatory riders or
endorsements that clearly evidence the continuation of all coverage in
the same manner, limits of protection, and scope of coverage, as was
provided by the certificates and amendatory riders or endorsements
originally supplied. Tenant's contractor shall protect its own interests
against loss or damage by fire, lightning or any other cause to any parts
of its tools, equipment and any temporary structure provided by such
contractor to facilitate its work.
6.3.3 Certificates. For all insurance required to be maintained by Tenant under
this Lease, Tenant shall deliver to Landlord, prior to the Commencement
Data, duly executed certificates of insurance, and, with respect to the
insurance policy described in Subsection 6.3.2(c) above, a copy of the
Additional Insured Managers or Lessors of Premises Endorsement (CG2011).
Such certificates shall provide an obligation by the insurer to notify
Landlord in writing at least thirty (30) days prior to cancellation or
non-renewal of any such insurance, Tenant shall deliver to Landlord duly
executed renewal certificates at least thirty (30) days prior to the
expiration of any insurance policy required hereunder. Landlord shall
likewise deliver to Tenant, prior to the Commencement Date and prior to
any expiration date, certificates of insurance or renewal evidencing the
insurance coverages Landlord is obligated to maintain pursuant to Section
6.3.1.
6.3.4 Increased Coverage. Upon demand, Tenant shall provide Landlord, at
Tenant's expense, with such increased amount of existing insurance, and
such other insurance as Landlord or Landlord's lender may reasonably
require to afford Landlord and Landlord's lender adequate protection,
provided that absent a change in applicable law or in the requirements of
Landlord's lender. Landlord may not increase Tenant's insurance coverages
more often than once every three (3) years during the Term of this Lease.
6.3.5 Co-Insurer. If, on account of the failure of Tenant to comply with any of
the provisions hereunder, Landlord is adjudged a co-insurer by its
insurance carrier, then, any loss or damage Landlord shall sustain by
reason thereof, including reasonable attorneys' fees and costs, shall be
borne by Tenant and shall be immediately paid by Tenant upon receipt of a
xxxx therefor and evidence of such loss.
6.3.6 No Limitation or Liability. Landlord and its Agents make no
representation that the limits of liability specified to be carried by
Tenant under this Lease are adequate to protect Tenant. If Tenant
believes that any such insurance coverage is insufficient, Tenant shall
provide, at its own expense, such additional insurance as Tenant deems
adequate.
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6.3.7 Insurance Requirements. All insurance required to be maintained by Tenant
under this Lease shall be in a form reasonably satisfactory to Landlord
and shall be carried with companies that have a general policy holder's
rating of not less than "A" and a financial rating of not less than Class
"X" in the most current edition of Best's Insurance Reports; shall
provide that such policies shall not be subject to material alteration or
cancellation except after at least thirty (30) days' prior written notice
to Landlord; and shall be primary as to Landlord. Tenant's insurance may
be carried under blanket policies and, so long as Oracle Corporation is
the Tenant hereunder, a portion of such coverages reasonably approved by
Landlord may be the subject of self-insurance. If Tenant fails to procure
and maintain the insurance required hereunder, Landlord may, but shall
not be required to, upon ten (10) days' prior written notice to Tenant
and Tenant's continued failure to deliver evidence of the required
insurance, order such insurance at Tenant's expense and Tenant's
reimbursement to Landlord for the premiums therefor shall be deemed
additional rent hereunder. Such reimbursement shall include all sums
disbursed, incurred or deposited by Landlord including Landlord's costs,
expenses and reasonable attorneys' Fees with interest thereon at the
Default Rate.
6.3.8 Waiver. Notwithstanding anything to the contrary contained herein, to the
extent of insurance proceeds received with respect to the loss (or which
would have been received had the insurance required under this Lease been
maintained), Tenant and Landlord each hereby waive any right of recovery
against the other party for any loss or damage sustained by such other
party with respect to the Property, the Premises, the contents of same,
or any Operation therein, whether or not such loss is caused by the fault
or negligence of such other party. Landlord and Tenant shall each obtain
from their respective insurers under policies of property insurance
maintained by either of them at any time during the Term hereof insuring
or covering the Property or any portion thereof or operations therein, a
waiver of all rights of subrogation which the insurer of one party might
have against the other party, and Landlord and Tenant shall each
indemnify the other against any loss or expense, including reasonable
attorneys' fees, resulting from the failure to obtain such waiver.
6.4 Operating Expenses.
6.4.1 Tenant shall pay as additional rent, on a monthly basis and concurrently
with Base Monthly Rent, all "Operating Expenses" of the Premises.
Initially, Tenant shall pay the amount set forth in Section 1.7 (which
may be revised from time to time), which is Landlord's initial estimate
of the monthly Operating Expenses. Landlord shall provide Tenant with a
statement of the actual amount of such expenses within one hundred twenty
(120) days following the end of each calendar year, which statement shall
be certified by Landlord as to its accuracy and completeness. Within
thirty (30) days of Tenant's receipt of such statement, Tenant shall pay
to Landlord the amount by which actual Operating Expenses exceed Tenant's
Operating Expense payments for such year and any excess amounts paid by
Tenant shall be credited to reduce Tenant's payments for the next ensuing
period or paid to Tenant, if the Lease Term has expired. Notwithstanding
anything to the contrary in this Lease, at Landlord's request, Tenant
shall pay to Landlord in a single installment (rather than in monthly
installments): (a) each insurance premium included in the Operating
Expenses and (b) Tenant's pro rata share of each xxxx for "taxes" as such
term is used in Section 6.2 within ten (10) days before such amount is
due and payable by Landlord. The terms of this Section 6.4. i shall
survive the termination of this Lease.
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6.4.2 Definition of Operating Expenses. Operating Expenses shall include all
costs reasonably incurred by Landlord to ensure, pay taxes with respect
to, manage, operate and maintain and make all necessary repairs to the
Premises, including, without limitation, Tenant's pro rata share (as set
forth in Section 1.8) of the Shared Operating Expenses described in
Section 6.4.3. Operating Expenses shall include without limitation costs
of janitorial, maintenance, security (if any) and other services; the.
property management fee described in Section 6.1.1; costs of all
electricity, gas and other power and water, waste disposal and other
utilities attributable solely to Tenant's use; costs of materials and
supplies; license costs; depreciation on equipment and other personal
property; the deductible portion of any insured loss under Landlord's
casualty insurance (but not In excess of the amount of the Approved
Deductible); and the amortized costs of capital improvements made by
Landlord to the premises pursuant to 6.1.2. Operating Expenses shall not
include the following:
(a) leasing commissions and advertising, marketing or promotional
expenses, including such expenses incurred in leasing or procuring
new tenants;
(b) repairs or rebuilding necessitated by condemnation or casualty
(except for deductible amounts up to the amount of the Approved
Deductible);
(c) depreciation and amortization of the improvements on the Property;
(d) debt service payments on any indebtedness applicable to the
Premises, including any mortgage debt or ground rents;
(e) any costs associated with the sale or financing of the Premises or
any portion thereof;
(f) reserves for repairs, maintenance and/or replacement;
(g) any amounts paid to any person, firm or corporation related or
otherwise affiliated with Landlord or any general partner, officer
or director of Landlord or any of its general partners, to the
extent the amount paid exceeds arms-length competitive prices paid
in the Belmont/San Mateo/Redwood Shores area for the services or
goods provided;
(h) costs relating to maintaining Landlord's existence, either as a
corporation, partnership or other entity, such as trustee's fees,
annual fees, partnership or organization or administration expenses,
deed recordation expenses, legal and accounting fees;
(i) costs incurred as a result of Landlord's violation of any terms and
conditions of this Lease or any law, ordinance or governmental rule
or regulation affecting the Premises (other than changes at any time
after the Commencement Date in any building codes or other
ordinances applicable to the physical condition of the Premises);
and
15
(j) the cost of removal or replacement of halon, freon or CFC's in the
Premises, other than as a part of the ordinary maintenance of the
HVAC system.
Landlord shall not recover through Operating Expenses any item of cost
more than once. Subject to Tenant's approval of the Annual Budget in an
amount sufficient to do so, Landlord shall, at all times during the term
of this Lease, operate and repair the Premises in a lawful, efficient and
businesslike manner in accordance with sound property management
practices consistent with comparable first class office buildings in the
Belmont/San Mateo/Redwood Shores area. Tenant shall only be liable for
Operating Expenses incurred by Landlord which are attributable to the
Term of this Lease.
6.4.3 Shared Operating Expenses. Shared Operating Expenses shall include all
costs incurred by Landlord to pay taxes with respect to the Property and
to manage, operate and maintain and make all necessary repairs m the
"Common Areas," which shall mean all facilities within the Property,
other than the One Xxxxx Drive and Eleven Xxxxx Drive buildings, that are
provided by Landlord for the use of tenants of the Property, including,
without limitation, the parking areas, sidewalks, landscaped areas,
service areas, and trash disposal facilities. Shared Operating Expenses
shall include without limitation costs of landscape maintenance and
replacement; operation, repair and maintenance of concrete walkway curbs
and parking areas; costs of electricity, gas, water and other utilities
attributable to the Common Areas; and insurance premiums for any
insurance with respect to the Common Areas.
6.5 Waiver. Because this Lease contains the entire agreement of the parties
for maintenance of the Premises and the Property, the parties agree that
statutory provisions pertaining to maintenance of leased property shall
not be applicable to this Lease, and Landlord and Tenant waive their
rights under such provisions.
6.6 Annual Budget. Not later than November 1 of each Lease Year, Landlord
shall submit to Tenant, for Tenant's approval, an annual budget for
estimated Operating Expenses and capital repairs and replacements for the
ensuing calendar year (the "Annual Budget"). In addition, in the event
that Landlord experiences or anticipates a substantive deviation from the
Annual Budget previously approved by Tenant for any calendar year,
Landlord shall submit to Tenant a revised Annual Budget. Tenant's
approval of the Annual Budget and any revised Annual Budget shall not be
unreasonably withheld and shall be deemed given if not objected to in a
writing itemizing each objection on a line item basis delivered to
Landlord within ten (10) business days following receipt by Tenant of the
proposed Annual Budget. Landlord and Tenant shall endeavor in good faith
to resolve all disputed items within thirty (30) days following delivery
of Tenant's objections, and Landlord shall not expend any sums which are
within the control of Landlord in excess of the most recently approved
Annual Budget for any disputed line items unless required, in Landlord's
reasonable business judgment, to prevent injury to persons, damage to
Tenant's property or to prevent further deterioration of the Premises or
required by law. Tenant shall have the right, no more often than annually
and at Tenant's sole cost, to audit any Operating Expense statements
delivered by Landlord during the Term of the Lease.
7.0 ALTERATIONS, ADDITIONS OR FIXTURES
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7.1 Installation and Removal. Subject to Article 8, Tenant shall have the right
to install its trade fixtures in the Premises during the term of this
Lease; provided, however, that no such installation or removal thereof
shall adversely affect the structural portion of the Premises or building
operating systems and that Tenant shall repair any damage to the Premises
caused thereby.
7.2 Landlord's Approval. Except for repainting, carpeting, movement of
demountable partitions and other changes which are not structural in
nature, do not exceed $10,000 on a per project basis, and do not adversely
affect building operating systems or change the existing floor plan of the
Premises ("Minor Alterations"), Tenant shall not make or permit to be made
any alterations, additions or improvements (collectively "alterations") to
the Premises without Landlord's prior written approval as more particularly
described in this Section 7.2. Prior to commencing any alterations other
than Minor Alterations, Tenant shall submit to Landlord complete, finished
drawings and specifications (the "Drawings") for the alterations along with
a proposed schedule for their completion. The Drawings shall be subject to
Landlord's approval. The Drawings shall be prepared by architects and (if
necessary) mechanical, electrical and structural engineers who are duly
licensed by the State of California and shall be delivered to Landlord's
property manager for Landlord's approval. Within five (5) business days
after delivery of the Drawings to Landlord's property manager, Landlord
shall notify Tenant of its approval or disapproval of the Drawings, and if
Landlord disapproves the Drawings, Landlord shall notify Tenant of the
revisions that Landlord requires in order to obtain such approval. If
Landlord fails to approve or disapprove the Drawings within such five (5)
business day period, Landlord shall be deemed to have approved the
Drawings. Tenant and Tenant's architect and engineer (if any) shall meet
with Landlord, Landlord's architect, engineer and contractor (or, at
Landlord's sole discretion, any one or more of the foregoing) within a
reasonable period of time after any request for such meeting by Landlord to
answer questions or provide additional information with respect to the
Drawings, As promptly as reasonably possible thereafter, Tenant shall
submit to Landlord's properly manager modified Drawings, with changes
highlighted, incorporating the revisions required by Landlord. The modified
Drawings shall be subject to Landlord's approval. If Landlord fails to
approve or disapprove the modified Drawings within five (5) business days
after delivery of the modified Drawings, Landlord shall be deemed to have
approved the modified Drawings. The final Drawings approved by Landlord are
hereinafter referred to as the "Final Drawings," Tenant shall not commence
any work on the alterations until Landlord has finally approved the Final
Drawings. Any changes in the alterations from the Final Drawings shall be
subject to Landlord's prior approval. Landlord's review and approval of all
Drawings (including without limitation changes to the Final Drawings)
shall, at Landlord's election, include the review and approval of
Landlord's engineering consultants.
7.3 Alterations. This Section 7.3 shall apply to all alterations including
without limitation Minor Alterations. All alterations other than Minor
Alterations shall be made by Raiser Construction Company (provided that
Raiser Construction Company is then still an affiliate of Landlord)
pursuant to a contract substantially in the form of Exhibit "C" to this
Lease. Landlord shall not charge a separate fee for construction
administration or supervision for any alterations made by Raiser
Construction Company. In making any alterations, Tenant shall comply with
Article 8, All alterations shall be constructed in a good and workmanlike
manner, and shall comply with all laws, codes and ordinances applicable to
the Premises. In addition, all alterations other than Minor Alterations
shall be constructed in accordance
17
with the Final Drawings. Any damage caused by Tenant or its employees or
agents shall be repaired at Tenant's expense. Tenant shall hold Landlord
harmless from and indemnify, protect, defend and reimburse Landlord against
any and all claims arising from the errors and omissions of Tenant's
architects and engineers, and Tenant hereby waives all such claims against
Landlord. AI{ alterations to the Premises which are made by Tenant shall be
the property of Tenant until the expiration or earlier termination of this
Lease; at that time all such alterations shall remain on the Premises and
become the property of Landlord without payment therefor, unless, as a
condition to Landlord's approval of the alterations (other than minor
changes in office sizes and configurations, which shall not require
restoration provided the total number of offices is not reduced and the
reconfigured offices are of a standard and reusable size and incorporate
the same finishes as the remainder of the Premises). Landlord reserves the
right to require removal of the alterations and Landlord elects by written
notice to Tenant to remove the same, in which event Tenant shall remove
such alterations and restore to the Premises to its condition prior to
making the alterations, reasonable wear and tear excepted. Tenant shall be
responsible for the cost of all additional alterations or improvements
required by Law to be made to, in, or on the Premises as a result of any
alterations made by Tenant. Promptly upon completion of any alterations,
Tenant shall deliver to Landlord a complete set of "as-built" plans and
specifications showing the subject alterations as installed in the
Premises. In addition, upon completion of any alterations, Tenant shall
deliver to Landlord, within five (5) days after receipt thereof, copies of
any and all required certificates of occupancy (or other necessary
authorization to occupy the Premises) issued by the appropriate
governmental authorities.
8.0 MECHANICS' LIENS
8.1 Tenant's Rights. Tenant shall give Landlord ten (10) day's written notice
prior to the commencement of work in the Premises so that Landlord may post
notices of nonresponsibility. Tenant shall keep the Premises and Property
free and clear of any liens arising out of work done by or for Tenant.
Should any such lien or notice of lien be filed, Tenant shall bond against
or discharge the same within fifteen (15) days after such filing, and shall
indemnify, defend, reimburse, protect, and hold Landlord harmless from and
against any and all loss or liability arising out of Tenant's failure to do
so.
9.0 ENTRY BY LANDLORD
9.1 Landlord's Rights. Tenant shall permit Landlord and its agents to enter the
Premises at all reasonable times and upon reasonable advance notice for the
purpose of inspection, maintenance, making repairs, serving or posting
notices, showing the Premises to prospective purchasers, lenders, or
Tenants, or placing "For Lease" signs at any time within three hundred
sixty (360) days prior to the expiration of this Lease, without any rebate
of rent and without any liability to Tenant for any loss of occupation or
quiet enjoyment thereby occasioned. Tenant shall have the right to require
that Landlord or its agents be accompanied by a representative of Tenant
and to limit access to any high security or product development areas
within the Premises. Landlord shall make reasonable efforts to minimize any
inconvenience to Tenant in exercising the foregoing rights and shall make
all reasonable efforts to
18
insure that Landlord's maintenance and repair activities are conducted so
as not to interfere with Tenant's use of the Premises for Tenant's
business purposes, including scheduling work which might be disruptive
during non-business hours. Notwithstanding the foregoing, Landlord shall
have the right to enter any portion of the Premises without advance notice
if reasonably required to prevent injury to persons or damage to property
or otherwise to respond to emergencies.
10.0 DAMAGE BY FIRE OR OTHER CASUALTY
10.1 Repair; Landlord's Right to Terminate. If the Premises shall be damaged or
destroyed by fire or other casualty, Tenant shall promptly notify
Landlord, and Landlord, within thirty (30) days following the date of any
such notice, shall notify Tenant of Landlord's good faith estimate of the
time required to repair such damage in the manner described herein
("Landlord's Repair Notice"). Subject to the conditions set forth in this
Article 10, Landlord shall promptly repair such damage and restore the
Premises to substantially the same condition in which they were
immediately prior to such damage or destruction, using materials and
workmanship equal to or better in quality than those originally
incorporated in the Premises. Landlord's restoration shall not include the
repair, restoration or replacement of the fixtures, furniture or any other
property of Tenant. All statutory or common law rights of termination with
respect to the destruction of leased premises shall not be applicable to
this Lease. If a material casualty occurs during the last twelve (12)
months of the Term or any extension thereof, Landlord may cancel this
Lease, except that Landlord may not so terminate this Lease if Tenant has
the right, to extend the Term for at least three (3) more years and does
so within thirty (30) days after the date of casualty. If, pursuant to
Landlord's Repair Notice, net insurance proceeds available for restoration
will not be adequate to complete such restoration (unless due to
Landlord's failure to maintain the insurance coverage required hereunder),
or it; the Premises cannot be fully repaired within two hundred forty
(240) days from the date of such damage, either Landlord or Tenant may
terminate this Lease by giving written notice (in Landlord's case, such
notice to be given concurrently with the delivery of Landlord's Repair
Notice and, in Tenant's case, such notice to be delivered within thirty
(30) days after the delivery of Landlord's Repair Notice) which specifies
a termination date no less than thirty (30) days after its transmission.
10.2 Rent Abatement. The Base Monthly Rent and Operating Expenses shall xxxxx
during any period when there is substantial interference with Tenant's use
of the Premises (in proportion to the unusable area), commencing with the
damage or destruction and ending upon substantial completion by Landlord
of the repair or reconstruction of the Premises. Tenant shall not be
entitled to any compensation or damages from Landlord for loss of use of
the Premises, damage to Tenant's personal property or any inconvenience
occasioned by such damage, repair or restoration.
11.0 INDEMNIFICATION
11.1 Tenant's Obligations. Subject to Section 6.3.8 above, Tenant shall hold
harmless, indemnify, reimburse, protect, and defend Landlord and
Landlord's agents, employees, officers, directors,
19
shareholders and partners against all claims, actions, damages, liability
and expense (including, without limitation, reasonable fees of attorneys,
investigators and experts) howsoever caused (a) in connection with loss of
life, injury, or damage to property, in or about the Premises, or (b)
arising out of the occupancy or use of the Premises by Tenant or any
"transferee" (as defined in Section 14.1 below), or (c) occasioned wholly
or in part by any act or omission of Tenant or any transferee, or any
Agent of, or any person or entity claiming through, Tenant or any
transferee, except to the extent such loss, injury or damage was caused by
the negligence or willful misconduct of Landlord or its employees or
contractors. Tenant shall also indemnify, defend, reimburse, protect and
hold Landlord harmless from, any and all loss, cost, expense, liability or
damage howsoever caused arising out of any breach, violation, or
nonperformance by Tenant or any transferee, or any Agent of, or any person
or entity claiming through, Tenant or any transferee, of any term,
covenant, or provision of this Lease. Without limiting the foregoing,
Tenant forever releases and waives all claims against Landlord arising out
of loss of life, injury or damage to property arising at any time and from
any cause other than by reason of the negligence or willful misconduct of
Landlord or its employees or contractors. In no event shall Landlord be
liable to Tenant for any indirect or consequential damages, including
without limitation any claims for lost profits or business opportunities.
Tenant shall promptly notify Landlord of any casualty or accident on or
about the Premises. All obligations of Tenant set forth in this Section
11.1 or elsewhere in this Lease to hold harmless, indemnify, reimburse,
protect and defend shall survive the termination of this Lease with
respect to any event occurring prior to such termination.
11.2 Landlord's Obligations. Landlord shall indemnify, defend, protect and hold
harmless Tenant and Tenant's agents, employees, officers, directors,
shareholders and partners from and against all liabilities, obligations,
damages, penalties; claims, causes of action, costs, charges and expenses,
including reasonable attorneys' fees, court costs and administrative costs
which may be imposed upon or incurred by, or asserted by reason of, any of
the following that shall occur during the Term or during any period of
time prior to the Commencement Date:
(a) any work or act done in or about the Premises by Landlord or its
agents, contractors or employees;
(b) any accident, injury or damage to any persons or property occurring
in, or about the Premises to the extent caused by the negligence or
willful misconduct of Landlord or its agents, contractors or
employees; and
(c) any failure on the part of Landlord to perform or comply with any of
the covenants, agreements, terms; provisions, conditions or
limitations contained in this Lease on its part to be performed or
complied with.
The obligation of Landlord to indemnify contained in this section shall
not be limited by any limitation on the amount or type of damages,
compensation or benefits payable by or for Landlord, its agents, employees
or contractors under Workers' or Workmen's Compensation Acts, Disability
Benefit Acts or other employee benefit acts, or under any other insurance
coverage Landlord may obtain.
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12.0 CONDEMNATION
12.1 Permanent Taking. If (i) all of the Premises are covered by a
condemnation, (ii) any part of the Premises is covered by a condemnation
and the remainder thereof is insufficient for the reasonable operation
therein of Tenant's business, (iii) as a result of the condemnation,
Tenant no longer has. reasonable access to the Premises or Landlord is
unable to provide the minimum number of parking spaces required by law or
(iv) any of the part of the Premises is covered by a condemnation and, in
Landlord's opinion, it would be impractical to restore the remainder
thereof, then this Lease shall terminate and all obligations hereunder
shall cease as of the date upon which possession is taken by the
condemnor. If there is a condemnation and this Lease has not been
terminated pursuant to this Section, the obligations of Landlord and
Tenant shall be unaffected by such condemnation except that rent shall
xxxxx in proportion to the area, if any, of the Premises covered by such
condemnation. Statutory provisions with respect to termination upon a
partial taking of leased premises shall not be applicable to this Lease.
12.2 Award. In the event of a condemnation, Tenant shall have the right to make
a separate claim against the condemnor to the extent that such claim does
not reduce the sums otherwise payable by the condemnor to Landlord. Except
as aforesaid, Tenant hereby assigns to Landlord all other claims against
the condemnor.
12.3 Temporary Taking. No temporary taking of the Premises shall terminate this
Lease or give Tenant any right to any abatement of rent. Any award made to
Tenant by reason of such temporary taking shall belong entirely to Tenant
and Landlord shall not be entitled to share therein.
13.0 QUIET ENJOYMENT
13.1 Tenant's Rights. Landlord covenants that Tenant, upon performing the
terms, conditions and covenants of this Lease, shall have quiet and
peaceful possession of the Premises as against any person claiming the
same by, through or under Landlord, subject, however to the exceptions,
reservations and conditions of this Lease.
14.0 ASSIGNMENT AND SUBLETTING
14.1 Limitation. Tenant shall not transfer this Lease, voluntarily or by
operation of law, or allow any other person or entity to occupy the
Premises, without the prior written consent of Landlord, which consent
shall not be unreasonably withheld, "Transfer" shall include any sublease,
assignment, mortgage or hypothecation of this Lease or Tenant's interest
therein or in all or a portion of the Premises, but expressly shall not
include (i) any transfer of the stock of Tenant, (ii) any transfer to an
entity controlling, controlled by or under common control with Tenant,
whether as part of a corporate reorganization or otherwise, (iii) a
transfer incident to the sale of a material portion of the assets of
21
Tenant and (iv) subleases or occupancy agreements with user group
representatives, consultants or project development partners. A consent to
one transfer shall not be deemed to be a consent to any subsequent
transfers. Any transfer without Landlord's consent shall be void at the
option of Landlord, and Landlord may exercise any or all of its rights
under Article 17 hereof.
14.2 Offer to Landlord. Tenant acknowledges that the terms of this Lease,
including rent, have been based on the understanding that Tenant shall
physically occupy the Premises for the entire Term. Therefore, upon
Tenant's request, to transfer all or a portion of the Premises, Landlord
shall be entitled (a) to sublease from Tenant for Landlord's own account
the portion of the Premises proposed to be transferred by Tenant, upon the
same terms as those proposed but otherwise upon the form of this Lease, or
(b) if the proposed transfer is for the entire Premises for a term ending
within the last year of the Term of this Lease, to terminate this Lease.
If Landlord so subleases for its own account or terminates this Lease,
Landlord shall have the further right to transfer the Premises to any
person and, in the case of a sublet from Tenant by Landlord, Tenant shall
be relieved of any liability with respect to such portion of the Premises
so subleased by Landlord until the term of such sublease expires or is
terminated, Landlord's failure to elect to sublet from Tenant for
Landlord's own account or to terminate this Lease pursuant to this Section
shall not obligate Landlord to consent to the proposed transfer.
14.3 Conditions. Notwithstanding the above, the following shall apply to any
proposed transfer.
(a) No transfer shall relieve Tenant of its obligation to pay rent and to
perform all other obligations to be performed by Tenant hereunder,
unless Landlord expressly agrees to such release of Tenant in
writing. The acceptance of rent by Landlord from any person shall not
be deemed to be a waiver by Landlord of any provision of this Lease
or to be a consent to any transfer, Any breach of, or default under,
any provisions of this Lease by any transferee or any other person or
entity claiming through any transferee, shall be deemed to be a
breach of, or default under, such provision by Tenant, and in the
event of any such breach or default, Landlord may proceed directly
against Tenant without the necessity of exhausting remedies against
such transferee or other person or entity. Landlord may consent to
subsequent transfers of this Lease or amendments or modifications to
this Lease with transferees of Tenant, without notifying Tenant, or
any successor of Tenant, and without obtaining its or their consent
thereto, and such action shall not relieve Tenant of liability under
this Lease.
(b) One half of any consideration received by Tenant as a result of a
sublease or assignment which exceeds the total sums which Tenant is
obligated to pay Landlord under this Lease, or the prorated portion
thereof attributable to the subleased or assigned premises if only a
portion of the Premises is transferred, after deducting Tenant's
reasonable costs of assigning or subletting, shall be payable to
Landlord as additional rent under this Lease without affecting or
reducing any other obligation of the Tenant hereunder.
(c) Each transfer to which Landlord has consented shall be an instrument
in writing in a form satisfactory to Landlord, and shall be executed
by Tenant and the transferee. Tenant shall
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reimburse Landlord for Landlord's reasonable costs and attorneys'
fees incurred in conjunction with the processing and documentation of
any requested transfer.
15.0 SUBORDINATION; ESTOPPEL CERTIFICATES
15.1 Subordination. As a condition to the effectiveness of this Lease, Landlord
shall cause Landlord's existing lender to execute and deliver to Tenant on
or before May 1, 1996 a Non-Disturbance Agreement in a form reasonably
acceptable to Tenant containing an undertaking on the part of the existing
lender that Tenant's rights under this Lease shall not be terminated or
foreclosed by reason of any foreclosure of the deed of trust presently
encumbering the Property so long as Tenant is not in default under this
Lease, At the option of any ground lessor, mortgagee, deed of trust
beneficiary, or holder of any other hypothecation (each, an "Encumbrance
Holder") under any ground lease, mortgage, deed of trust, or other
hypothecation for security (each, an "Encumbrance") hereafter placed upon
the Premises, this Lease shall be subordinated to any such Encumbrance and
to any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof,
provided that the Encumbrance Holder executes a Non-Disturbance Agreement
reasonably acceptable to Tenant. Tenant shall execute any documents
required to effectuate such subordination and non-disturbance within ten
(10) days after written request. Tenant shall attorn to any purchasers at
any foreclosure sale, or to any grantee or transferee designated in any
deed given in lieu of foreclosure, provided that such purchaser or
transferee agrees to recognize Tenant under the terms of the Lease and
performs all of the obligations of Landlord to be performed from and after
the date of the transfer. Notwithstanding anything to the contrary in the
foregoing, if any Encumbrance Holder shall elect to have this Lease prior
to its Encumbrance, and shall give notice thereof to Tenant, then this
Lease shall be deemed prior to such Encumbrance.
15.2 Condition of Lease. Within ten (10) days after request therefor, Landlord
and Tenant Shall each provide a written statement acknowledging the
commencement and termination dates of this Lease, that it is in full force
and effect, has not been modified (or if it has, stating such
modifications), and providing any other pertinent information as the other
party might reasonably request.
15.3 Tenant's Failure. If Tenant fails to execute any of the documents referred
to in Section 15.1 within the time required, then Tenant hereby
irrevocably appoints Landlord as Tenant's attorney in fact to execute such
documents on Tenant's behalf, and all statements made in such documents
shall be deemed true and binding upon Tenant. Tenant understands that its
failure to execute such documents may cause Landlord serious financial
damage by causing the failure of a financing transaction. Failure to
comply with Section 15.1 shall be a material breach of this Lease by
Tenant, giving Landlord the right to recover damages in addition to the
remedies set forth in Article 17. If either Landlord or Tenant shall fail
to provide an estoppel certificate when and as required by Section 15.2,
all statements set forth in the certificate shall be deemed true and
binding on the party failing to execute such certificate.
15.4 Annual Reports. Upon request by Landlord from time to time, Tenant hereby
agrees to deliver to the person designated by Landlord the most recent
annual report of Tenant.
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16.0 SURRENDER AND HOLDOVER
16.1 Condition at End of Term. Subject to the terms of Articles 2, 7 and 10, at
the expiration or earlier termination of the Term, Tenant shall promptly
yield up, in the same condition, order and repair in which they are
required to be kept during the Term, the Premises and all alterations
thereto, and all fixtures and equipment servicing the Premises, ordinary
wear and tear excepted.
16.2 Holdover Terms. If Tenant, or any person claiming through Tenant, shall
continue to occupy the Premises after the expiration or earlier
termination of the Term or any renewal thereof, such occupancy shall be
deemed to be under a month-to-month tenancy under: the same terms set
forth in this Lease; except that the Base Monthly Rent during such
continued occupancy shall (except as otherwise provided in Section 16.3)
be one hundred seventy five percent (175%) of the Base Monthly Rent in
effect at the end of the Term. Notwithstanding the above, any holding over
by Tenant, or any person claiming through Tenant, without Landlord's prior
written consent shall constitute a default hereunder and shall be subject
to all remedies set forth in Article 17, and Tenant shall indemnify,
defend, protect, and reimburse Landlord and any replacement Tenant for the
Premises for any damages or loss suffered by either Landlord or the
replacement Tenant resulting from the failure of Tenant or any person or
entity claiming through Tenant timely to vacate the Premises.
16.3 Right to Hold Over. In the event Tenant gives Landlord not less than
twelve (12) months prior written notice of its intent to hold over after
the expiration of the Term of this Lease, Tenant shall have the right to
remain in possession of the Premises for an additional three (3) months on
all the terms and conditions of this Lease except that the Base Monthly
Rent during such period shall be one hundred twenty-five percent (125%) of
the Base Monthly Rent in effect at the end of the Term.
17.0 DEFAULT AND REMEDIES UPON DEFAULT
17.1 Events. The occurrence of any of the following shall constitute a material
default and breach of this Lease by Tenant:
(a) Any failure by Tenant to pay rent or to make any other payment
required to be made by Tenant hereunder within five (5) days after the
date due.
(b) A failure by Tenant to observe and perform any other provision of
this Lease, where such failure continues for thirty (30) days after
written notice thereof by Landlord to Tenant; provided, however, that if
the default cannot reasonably be cured within thirty (30) days, Tenant
shall not be deemed to be in default if Tenant shall, within such thirty
(30) day period, commence to cure and thereafter diligently prosecute the
same to completion.
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(c) Either (1) the appointment of a receiver (except a receiver appointed
at Landlord's request) to take possession of all or substantially all of
the assets of Tenant, or (2) a general assignment by Tenant for the
benefit of creditors, or (3) any action taken by Tenant or by any other
person against Tenant under any insolvency or bankruptcy act. In such
event, Landlord may, at its option, declare this Lease terminated and
forfeited by Tenant in a written notice to Tenant, and Landlord shall be
entitled to immediate possession of the Premises.
Tenant agrees that any notice given by Landlord pursuant to this Section
which is served in compliance with Article 21 of this Lease shall be
adequate notice for the purpose of Landlord's exercise of the remedies
specified in Section 17.2 or any other remedies provided by law.
Therefore, any statutory provision relating to the manner of giving notice
shall not be applicable to this Lease.
17.2 Landlord's Rights. In the event of any default by Tenant, Landlord, in
addition to all other remedies provided by law or in equity, shall have
the immediate option to terminate this Lease and all rights of Tenant
hereunder by giving written notice of such intention to terminate. If
Landlord shall elect to so terminate this Lease, Landlord may recover from
Tenant all damages suffered by Landlord as result of Tenant's default,
including, but not limited to, the worth at the time of award (computed in
accordance with Paragraph (3) of Subdivision (a) of Section 1951.2 of the
California Civil Code) of the amount by which unpaid rent for the balance
of the Term after the time of award exceeds the amount of such rent loss
that Tenant proves could be reasonably avoided. In the event of any such
termination of this Lease, Landlord may then or at any time thereafter by
judicial process, re-enter the Premises and remove therefrom all persons
and property and again repossess and enjoy the Premises, without prejudice
to any other remedies that Landlord may have by reason of Tenant's default
or of such termination. Landlord has the remedy described in California
Civil Code Section 1951.4 (Landlord may continue this Lease in effect
after Tenant's abandonment and recover rent as it becomes due, if Tenant
has the right to sublet or assign, subject only to reasonable
limitations). Consequently, if Landlord does not elect to terminate this
Lease, Landlord may from time to time, without terminating this Lease,
either recover all rent as it becomes due or re-let the Premises or any
part thereof for such term and at such rent and upon such other terms and
conditions as Landlord in its sole discretion may deem advisable with the
right to make alterations and repairs to the Premises, Any rent received
by Landlord from a re-letting shall be applied to the payment of (a) any
indebtedness other than rent due hereunder; (b) the reasonable cost of
such re-letting; (c) the reasonable cost of any necessary alterations and
repairs to the Premises; (d) rent due and unpaid hereunder; and (e) the
residue, if any, shall be held by Landlord and applied in payment of
future rent as the same may become due and payable hereunder; provided,
however, that with respect to the costs specified in clauses (b) and (c)
above ("Reletting Costs"), if the term of any such reletting extends
beyond the scheduled expiration of the Lease Term, only a portion of such
Reletting Costs shall be payable by Tenant, such portion to be equal to
such Reletting Costs multiplied by a fraction, the denominator of which is
the number of calendar months in the term of such, reletting and the
numerator of which is the number of calendar months from the commencement
of such term to the scheduled expiration date of the Lease Term. If the
rent received from such re-letting is less than the rent payable by
Tenant, then Tenant shall pay such deficiency to Landlord immediately upon
demand thereof by Landlord. Such deficiency shall be calculated and paid
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monthly. Tenant shall also pay to Landlord as soon as ascertained, any
expenses incurred by Landlord which are not covered by the rent received
from such re-letting.
17.3 Quarterly Payments. In the event that Tenant, during any period of twelve
(12) consecutive months, fails on two or more occasions to make payments
of rent hereunder on or before the date due, Landlord may require Tenant
thereafter to make advance payments of rent on a quarterly basis and/or by
certified check.
17.4 Termination. No re-entry or taking possession of the Premises or any other
action under this Section shall be construed as an election to terminate
this Lease unless a written notice of such intention be given to Tenant or
unless the termination thereof is decreed by a Court of competent
jurisdiction. Notwithstanding any re-letting without termination by
Landlord because of any default by Tenant, Landlord may at any time after
such re-letting elect to terminate this Lease for any such default.
17.5 No Waiver. No waiver by either party of any breach by the other shall be a
waiver of any subsequent breach, nor shall any forbearance by either party
to seek a remedy for any breach by the other be a waiver of any rights and
remedies with respect to such or any subsequent breach. Efforts by either
party to mitigate the damages caused by the other's default in this Lease
shall not constitute a waiver of the mitigating party's right to recover
damages hereunder. No custom or practice which may develop between the
parties in the administration Of the terms hereof shall be construed to
waive or to lessen the right of either party to insist upon the
performance by the other in strict accordance with such terms. The
subsequent acceptance of rent hereunder by Landlord shall not be deemed to
be a waiver of any preceding breach by Tenant of any agreement, condition
or provision of this Lease, other than the failure of Tenant to pay the
particular rent so accepted, regardless of Landlord's knowledge of the
preceding breach at the time of acceptance or payment of the rent.
17.6 Landlord's Cure of Tenant's Default. Should Tenant fail to perform any
obligation imposed by this Lease, Landlord may perform or contract for the
performance of Tenant's obligation after having given Tenant reasonable
notice of the failure(s) and a reasonable opportunity which in no case
shall exceed thirty (30) days to remedy the failure, and Tenant shall pay
Landlord for all costs incurred in connection therewith. The exercise of
one right or remedy by Landlord shall not in any way impair its right to
any other right or remedy. Should Tenant consist of more than one person
or entity, they shall be jointly and severally liable on this Lease.
18.0 LIABILITY OF LANDLORD
18.1 Tenant's Right to Cure; Limitations on Liability. If Landlord shall fail
to keep or perform any of its obligations under the Lease in respect to
the making of any payment to Tenant or the performance of any other
obligation hereunder, and upon the continuance of such failure on
Landlord's part for thirty (30) days after the delivery to Landlord and
any mortgagee of written notice of such default (or, in the case of any
such failure which cannot reasonably be cured within thirty (30) days,
within such additional period, if any, as may be reasonably required by
Landlord to cure such failure, provided Landlord has
26
promptly commenced such cure and thereafter continuously prosecutes such
cure with all due diligence), and without waiving or releasing Landlord
from any obligation, then Tenant may (but is under no obligation to) (i)
in the event of Landlord's failure to restore the Premises in accordance
with Section 10.1, terminate this Lease without incurring any termination
fee if Tenant's use of the Premises or a substantial portion thereof for
Tenant's normal business operations has been materially and adversely
affected or (ii) in the event of Landlord's failure to perform any
required maintenance or. repair of the Premises, make such payment or
perform such obligation, and all sums actually paid or incurred by Tenant
in connection therewith shall reduce the Operating Expenses otherwise
payable by Tenant under this Lease, or (iii) pursue any other remedies
available to Tenant at law and in equity to cause Landlord to cure such
default or to recover damages attributable to Landlord's breach.
Landlord's (which term includes Landlord's partners, co-ventures, co-
Tenants, officers, directors, employees, agents (including any property
manager for the Property), or representatives, all of whom have the
authority to act on Landlord's behalf) liability to Tenant for any such
default shall be limited to its ownership interest in the Premises or the
proceeds of a public sale of such interest pursuant to foreclosure of a
judgment against Landlord, plus any insurance proceeds actually received
by Landlord with reference to the Premises and not expended on the
Premises or to pay claims covered by such proceeds and the net proceeds of
any sale or refinancing of the Premises. Landlord shall not be liable for
any deficiency beyond its interest in the Premises and the amount of such
insurance proceeds; provided, however, that nothing set forth herein shall
prevent Tenant from seeking specific performance, declaratory relief or
other equitable relief with respect to the enforcement of any obligation
of Landlord under this Lease.
18.2 Release or Transfer; Successor Liability. If the original Landlord
hereunder or any successor owner of the Premises shall transfer its
interest in the Premises and the transferee shall assume in writing the
performance of Landlord's obligations under the Lease from and after the
date of the transfer, then from and after the effective date of the
transfer, such individual or entity shall be released from all obligations
under this Lease, except those already accrued. If such individual or
entity transfers the security deposit to the transferee, such individual
or entity shall be discharged from any further liability in reference
thereto. Tenant acknowledges that any successor to Landlord's interest in
the Premises pursuant to sale or foreclosure under any deed of trust or
mortgage shall not be bound by any agreement between Landlord and Tenant
which has not been approved by the holder of such instrument, including
without limitation, any agreement relating to any advance rents or
security deposits paid by Tenant in excess of an amount equal to two
months' rent.
19.0 ATTORNEYS' FEES
19.1 Right to Recover. If as a result of any breach or default in the
performance of any of the provisions of this Lease, Landlord or Tenant
uses the services of an attorney in order to secure compliance with such
provisions or recover damages therefor, or to terminate this Lease or, in
the case of Landlord to evict Tenant, the defaulting party shall reimburse
the non-defaulting party upon demand for any and all reasonable attorneys'
fees and expenses so incurred by the non-defaulting party.
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20.0 INTERPRETATION
20.1 Captions. The captions in this Lease are for convenience only and are not
a part of this Lease and do not in any way define, limit, describe or
amplify the terms and provisions of this Lease or the scope or intent
thereof.
20.2 Entire Agreement. This Lease represents the entire agreement between the
parties hereto and there are no collateral or oral agreements or
understandings between Landlord and Tenant with respect to the Premises.
No right, easements or licenses are acquired in the Premises or any land
adjacent to the Premises by Tenant by implication or otherwise. There are
no representations between Landlord and Tenant other than those contained
in this Lease and all reliance with respect to any representations is
solely upon the representations contained in tills Lease. All implied
warranties, including implied warranties of merchantability and fitness,
are excluded. This Lease shall not be modified in any manner except by an
instrument in writing executed by the parties. The masculine (or neuter)
pronoun, singular number, shall include the masculine, feminine and neuter
genders and the singular and plural number.
20.3 Exhibits. Each writing or plan referred to herein as being attached hereto
as an Exhibit or otherwise designated herein as an Exhibit hereto is
hereby made a part hereof.
20.4 Severability; Governing Law. If any provision of this Lease shall be
declared unenforceable in any respect, such unenforceability shall not
affect any other provision of this Lease, and each such provision shall be
deemed to be enforceable and to preserve to the extent possible the intent
of the parties as set forth herein. This Lease shall be construed and
enforced in accordance with the laws of the State of California.
21.0 NOTICES
21.1 Methods. Any notice or other communication under this Lease by either
party to the other shall be in writing and shall be delivered personally
or by private messenger service, or by overnight commercial delivery
service, or by certified mail, return receipt requested, postage prepaid,
and addressed to the parties at the addresses specified in Section 1.2
hereof, or to such other places as Landlord and Tenant may from time to
time designate by written notice to the other party. All such notices and
other communications shall be deemed delivered, given and received: (a)
the day of sending via personal delivery or private messenger service; (b)
the following business day after sending via overnight commercial delivery
service; or (c) three (3) calendar days after deposit in the United States
mail.
22.0 GOOD FAITH DEPOSIT
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22.1 Application of Deposit. Landlord presently holds Tenant's security deposit
in the amount of One Hundred Fifty Thousand Dollars ($150,000), plus
accrued interest, under the terms of Tenant's current lease of the office
building located at 00 Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxx, which lease
expires on December 31, 1995, and a good faith deposit in the amount of
Thirty Thousand Dollars ($30,000) delivered to Landlord upon execution of
that certain letter of intent, dated November 9, 1995, with respect to the
lease by Tenant of the Premises and the 00 Xxxxx Xxxxx office building.
Landlord shall return to Tenant upon expiration of the current lease that
portion of the security deposit which, when added to the good faith
deposit, exceeds one month's aggregate Base Monthly Rent under the terms
of this Lease and the lease executed simultaneously herewith with respect
to the 00 Xxxxx Xxxxx premises. Seventy-Nine Thousand One Hundred Forty
Dollars ($79,140.00) shall be applied in payment of the first Base Monthly
Rent due and payable under the terms of this Lease and the balance shall
be applied in payment of the first Base Monthly Rent due and payable under
the terms of the lease of the 00 Xxxxx Xxxxx premises.
23.0 RULES AND REGULATIONS
23.1 Tenant shall faithfully observe and comply with the rules and regulations
which are attached hereto as Exhibit "D" and made a part of this Lease and
all modifications of and additions thereto from time to time put into
effect by Landlord of which Tenant shall have notice.
24.0 PARKING
24.1 Tenant shall have the exclusive right to use and control the use of all of
the parking spaces located on the Property, including the right to assign
specific parking spaces to designated individuals, other than the
seventeen (17) parking spaces located adjacent to Eleven Xxxxx Drive
identified by cross-hatching on the site plan attached hereto as Exhibit
"B" which shall be reserved for the exclusive use of the tenant of Eleven
Xxxxx Drive. In doing so, Tenant shall comply at all times during the term
of the Lease with all handicapped and other parking requirements which may
be imposed from time to time by the City of Belmont or any other
governmental entity having jurisdiction with respect to parking on the
Property.
25.0 SIGNAGE; SATELLITE DISH
25.1 Signage. Tenant shall have the right to install monument and building
signs on the Premises, which signs shall comply with all requirements
imposed by the City of Belmont and shall be subject to the reasonable
approval of Landlord. Except to the extent paid for from the Tenant
Improvement Allowance, Tenant shall bear all costs associated with the
installation of such signage.
25.2 Satellite Dish. Tenant shall have the right, at Tenant's sole cost, to
install a satellite dish on the roof of the Premises, provided that Tenant
shall have obtained all required governmental approvals and shall
29
otherwise install the satellite dish in accordance with the provisions of
all applicable laws. In the event Landlord installs any other electronic
transmitter or receiver on the roof of the Premises, such transmitter or
receiver shall not interfere with the operation of Tenant's satellite
dish, shall be separately metered for utility purposes and shall not cause
any increase in Operating Expenses under this Lease.
26.0 OPTION TO EXTEND TERM.
26.1 Condition to Exercise. Tenant shall have two (2) options to extend the
Term of the Lease (each, an "option" and collectively, the "options") for
consecutive periods of five (5) years each (each, an "Option Period"); the
first Option Period shall commence, if at all, on the day immediately
succeeding the last day of the initial Term (the "Term Expiration Date").
Tenant's right to exercise each option shall be subject to the following
conditions:
(a) Each option shall be exercised by notice of exercise given to
Landlord (1) in the case of the first Option Period, not sooner than the
day which is fifteen (15) months prior to the Term Expiration Date nor
later than the day which one (1) year prior to the Term Expiration Date,
and (2) in the case of the second Option Period, not sooner than the day
which is fifteen (15) months prior to the last day of the first Option
Period nor later than the day which is one (1) year prior to the last day
of the first Option Period.
(b) At the time an option is exercised, and at the commencement of the
applicable Option Period, the Lease shall be in full force and effect and
Tenant shall not then be in default thereunder and, as to the second
option, the first option shall have been exercised.
(c) At the time an option is exercised, and at the commencement of the
applicable Option Period, Tenant shall have a net worth which is not less
than one-half of Tenant's net worth as of the date of this Lease.
26.2 Terms of Option. In the event an option is timely exercised, the Lease
shall be extended for the term of the applicable Option Period upon all of
the terms and conditions of the Lease; provided that the Base Monthly Rent
for each Option Period shall be an amount equal to the "Fair Market Rent"
for the Premises; and further provided that Tenant shall not be entitled
to any additional Tenant Improvement Allowance or similar allowance. For
purposes hereof, the "Fair Market Rent" shall mean the effective triple-
net rate being received by owners of similar single occupancy buildings in
the vicinity (i.e., of a similar age and quality considering any recent
renovations or modernization and floor plate size; or, if such comparable
space is not available, adjustments shall be made in the determination of
Fair Market Rent to reflect the age and quality of the Premises as
contrasted to other buildings used for comparison purposes), with similar
amenities, taking into consideration: location, leasehold improvements or
allowances provided or to be provided, proposed term of the lease, extent
of services to be provided, the financial qualifications of the tenant,
the time the particular rate under consideration became or is to become
effective, and any other relevant terms or conditions applicable to both
new and renewing tenants, but excluding any consideration of the
improvements to the Premises paid for by Tenant after
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the Commencement Date of the Term. In no event, however, shall any
adjustment of Base Monthly Rent pursuant to this section result in a Base
Monthly Rent for any year of the first Option Period that is less than the
Base Monthly Rent in effect during the final month of the initial Term, or
a Base Monthly Rent for any year of the second Option Period that is less
than the Base Monthly Rent in effect during the final month of the first
Option Period.
26.3 Establishment of Base Monthly Rent.
(a) For each Option Period, within thirty (30) days after receipt of
Tenant's notice of exercise, Landlord shall notify Tenant in writing of
Landlord's estimate of the Base Monthly Rent for each year of the
applicable Option Period, based on the provisions of Section 26.2 above.
Within thirty (30) days after receipt of such notice from Landlord, Tenant
shall have the right either to (i) elect to cancel the notice of exercise
by written notice to Landlord; (ii) accept Landlord's statement of Base
Monthly Rent as the Base Monthly Rent for the applicable Option Period: or
(iii) elect to determine the Base Monthly Rent for each year of the Option
Period pursuant to the "Negotiation/Appraisal Method" set forth below.
Failure on the part of Tenant to cancel the notice of exercise or to
require determination of the Base Monthly Rent for the applicable Option
Period within said thirty (30) day period shall constitute acceptance of
the Base Monthly Rent for the applicable Option Period as calculated by
Landlord. To the extent that the determination of Base Monthly Rent for
the Option Period has not been completed prior to the commencement of the
Option Period, Tenant shall pay Base Monthly Rent at the rate calculated
by Landlord, with an adjustment (if applicable) to be made once the Fair
Market Rent is ultimately determined pursuant to the provisions hereof.
(b) The "Negotiation/Appraisal Method" of determining the Base Monthly
Rent for an Option Period shall consist of the following:
(i) During the period commencing with Tenant's election to use the
Negotiation/Appraisal Method and ending ten (10) days thereafter (the
"First Negotiation Period"), Landlord and Tenant may, but shall not
be obligated to, negotiate the subject Base Monthly Rent. If the
parties agree on such abase Monthly Rent and have executed a written
agreement establishing the same prior to the expiration of the First
Negotiation Period, then said Base Monthly Rent shall be binding upon
the parties. If the parties have not executed such an agreement prior
to the expiration of the First Negotiation Period, then Tenant shall,
within fifteen (15) days after the expiration of the First
Negotiation Period, (1) engage an appraiser ("Tenant's Appraiser"),
who shall be a member of the American Institute of Real Estate
Appraisers and familiar with the Fair Market Rent of first-class
office space in San Mateo County, California, and (2) notify Landlord
thereof. If Tenant does not engage such appraiser within such fifteen
(15) day period, then the Base Monthly Rent initially proposed by
Landlord pursuant to Section 26.3(a) above shall be deemed the
Minimum Monthly Rent for the applicable Option Period and shall be
binding upon the parties. If Tenant engages such an appraiser within
such fifteen (15) day period, then Tenant shall, within thirty (30)
days after the expiration of the First Negotiation Period, deliver to
Landlord a copy of Tenant's Appraiser's determination of Fair Market
Rent for each year of the applicable Option Period. If Tenant fails
to so deliver a copy of Tenant's Appraiser's determination within
such thirty (30) day period, then the Base Monthly Rent
31
initially proposed by Landlord pursuant to Section 26.3(a) above
shall be deemed the Base Monthly Rent for the applicable Option
Period and shall be binding upon the parties.
(ii) If the Base Monthly Rent for each year of the applicable Option
Period has not been determined by the date which is thirty (30) days
after the expiration of the First Negotiation Period, then during the
following ten (10) days (the "Second Negotiation Period") Landlord
and Tenant may, but shall not be obligated to, negotiate the subject
Base Monthly Rent. If the parties agree on such a Base Monthly Rent
and have executed a written agreement establishing the same prior to
the expiration of the Second Negotiation Period, then said Base
Monthly Rent shall be binding upon the parties. If the parties have
not executed Such an agreement prior to the expiration of the Second
Negotiation Period, then Landlord shall, within fifteen (15) days
after the expiration of the Second Negotiation Period, (1) engage an
appraiser ("Landlord's Appraiser") who shall have qualifications
which satisfy the requirements set forth above for Tenant's
Appraiser, and (2) notify Tenant thereof. If Landlord does not engage
such an appraiser within such fifteen (15) day period, then the Fair
Market Rent proposed by Tenant's Appraiser shall be deemed the Base
Monthly Rent for the applicable Option Period and shall be binding
upon the parties. If Landlord engages such an appraiser within such
fifteen (15) day period, then Landlord shall, with in thirty (30)
days after the expiration of the Second Negotiation Period, deliver
to Tenant a copy of Landlord's Appraiser's determination of Fair
Market Rent for each year of the applicable Option Period. If
Landlord fails to so deliver a copy of Landlord's Appraiser's
determination within such thirty (30) day period, then the Pair
Market Rent Proposed by Tenant's Appraiser shall be deemed the Base
Monthly Rent for the applicable Option Period and shall be binding
upon the parties.
(iii) If the Base Monthly Rent for each year of the applicable Option
Period has not been determined by the date which is thirty (30) days
after the expiration of the Second Negotiation Period, then during
the following ten (10) days (the "Third Negotiation Period") Landlord
and Tenant may, but shall not be obligated to, negotiate the subject
Base Monthly Rent. If the parties agree on such a Base Monthly Rent
and have executed a written agreement establishing the same prior to
the expiration of the Third Negotiation Period, then said Base
Monthly Rent shall be binding upon the parties. If the parties have
not executed such an agreement prior to the expiration of the Third
Negotiation Period, then Tenant's Appraiser and Landlord's Appraiser
shall, within fifteen (15) days after the expiration of the Third
Negotiation Period, (1) appoint a third appraiser (the "Third
Appraiser") who shall have qualifications which satisfy the
requirements set forth above for Tenant's Appraiser, and (2) notify
Landlord and Tenant of their appointment. If Tenant's Appraiser and
Landlord's Appraiser shall be unable to timely agree on the
appointment of the Third Appraiser, then either Landlord or Tenant,
on behalf of both, may request such an appointment by the American
Arbitration Association. Within twenty (20) days after the
appointment of the Third Appraiser, the Third Appraiser shall
determine the Fair Market Rent for each year of the applicable Option
Period by selecting either (A) the Pair Market Rent determined by
Tenant's Appraiser pursuant to clause (i) above, or (B) the Fair
Market Rent determined by Landlord's Appraiser pursuant to clause
(ii) above, whichever most closely approximates the Third Appraiser's
determination of Fair Market Rent for each year of
32
the applicable Option Period. The Third Appraiser shall have no right
to propose a middle ground or any modification of either of the two
proposed determinations. The determination he or she chooses as most
closely approximating his or her determination shall constitute the
decision of the app, raisers and such amount shall be final and
binding upon the parties as the Base Monthly Rent for each year of
the applicable Option Period.
(iv) Each party shall pay the fees and expenses of its respective
appraiser (if any) and both shall share equally the fees and expenses
of the Third Appraiser (if any). In the event any of the dates set
forth in this Section 26.3(b) occur on a Saturday, Sunday, or federal
holiday, then the time for performance shall be extended to the next
business day.
(v) Notwithstanding any provisions of this Section 26.3(b) to the
contrary, Tenant shall have (he right at any time on or before the
date which is nine (9) months prior to the expiration of the then
current term of the Lease to cancel its notice of exercise by
delivery of written notice of cancellation to Landlord.
27.0 FIRST RIGHT OF OFFER
27.1 Terms. In the event Landlord decides to sell the Property during the Term
of the Lease (including any Option Period and provided that Tenant is not
then in default under the Lease, Landlord shall give Tenant written notice
of Landlord's desire to sell and the terms, including the purchase price,
which price shall be net of all sales commissions, upon which Landlord is
willing to sell the Property ("Landlord's Notice") prior to offering the
Property for sale to any other person or entity. Tenant shall have a
period of thirty (30) days following receipt of Landlord's Notice in which
to notify Landlord of Tenant's interest in purchasing the Property
substantially on the terms set forth in Landlord's Notice ("Tenant's
Notice"). The parties shall then enter into good faith negotiations with
respect to all of the terms of purchase, which shall be set forth in a
separate Purchase and Sale Agreement. In the event Landlord and Tenant
fail to enter into a binding Purchase and Sale Agreement on terms
acceptable to both parties within thirty (30) days following delivery of
Tenant's Notice to Landlord or in the event Tenant elects not to purchase
the Property or fails to respond to Landlord's Notice within the thirty
(30) day period following receipt thereof Landlord shall have the right to
sell the Property to a third party for a purchase price, after deduction
of any applicable commissions, which is not less than 90% of the purchase
price set forth in Landlord's Notice and otherwise on terms substantially
no less favorable to Landlord than those set forth in Landlord's Notice
without again offering the Property to Tenant. Tenant shall have the right
to assign its rights under the terms of any Purchase and Sale Agreement
executed by Landlord and Tenant pursuant to the provisions of this Section
27.1 to any assignee, provided that Tenant shall not be relieved of any
liability thereunder for the failure of its assignee to perform the terms
of the Agreement. In addition, Tenant shall agree to cooperate with
Landlord in effecting, at no cost to Tenant, a tax-deferred exchange of
the Property qualifying as such under the terms of Section 1031 of the
Internal Revenue Code.
28.0 RIGHT OF FIRST REFUSAL
33
28.1 Terms. Tenant shall have a right of first refusal to lease the
approximately 8,450 rentable square foot warehouse building located
adjacent to the Premises, having a street address of Eleven Xxxxx Drive,
Belmont, California (the "Warehouse"). If, at any time during the Lease
Term, Landlord receives a bona fide offer from a third party to lease the
Warehouse, Landlord must give Tenant notice of its intent to lease and the
terms upon which it proposes to lease. Tenant shall then have five (5)
days in which to accept or reject Landlord's offer to lease. In the event
Tenant fails to give written notice of its acceptance to Landlord prior to
the close of business on the fifth day following receipt of the offer, the
offer shall expire and Landlord shall have the right to rent the offered
space to any other person or entity on terms not less favorable than those
contained in the offer. In the event Landlord fails to enter into a lease
with another tenant for such space within six months following the date of
the offer, Landlord must again offer the space to Tenant prior to entering
into a lease with any other party.
29.0 REASONABLENESS STANDARD
29.1 In any instance under this Lease where a party proposing to take some
action is required to obtain the consent or approval of the other party,
the party whose consent or approval is required agrees that such consent
or approval shall not be unreasonably withheld or delayed unless otherwise
expressly set forth herein. Tenant agrees that with respect to assignments
or subleases, it would be reasonable for Landlord to withhold its consent
if the proposed assignee (a) would make a more intensive or burdensome use
of the Premises than Tenant's use thereof, or (b) did not have adequate
financial capacity to perform the obligations of Tenant under the Lease.
30.0 BROKERAGE COMMISSIONS
30.1 Landlord and Tenant each represents and warrants to the other that it has
dealt with no broker, agent or other person in connection with this
transaction and that no broker, agent or other person brought about this
transaction, other than Landlord's Broker and the Cooperating Broker
identified in Section 1.13, and Landlord and Xxxxx each agrees to
indemnify and hold the other harmless from and against any claims by any
other broker, agent or other person claiming a commission or other form of
compensation by virtue of having dealt with the indemnifying party with
regard to this leasing transaction. The provisions of this Section shall
survive the termination of this Lease.
31.0 MISCELLANEOUS
31.1 Time is of the essence of this Lease and each and all of its provisions.
Submission of this instrument for examination Or signature by Tenant does
not constitute a reservation of or option for lease, and it is not
effective as a lease or otherwise until execution and delivery by both
Landlord and Tenant. The agreements, conditions and provisions herein
contained shall, subject to the provisions as to assignment, apply to and
bind the heirs, executors, administrators, successors and assigns of the
parties hereto. The voluntary or other surrender of this Lease by Tenant,
or a mutual cancellation thereof, shall not work
34
a merger, and shall, at the option of Landlord, terminate all or any
existing subleases or subtenancies, or operate as an assignment to it of
any or all such subleases or subtenancies, if Tenant signs as a
corporation, each of the persons executing this Lease on behalf of Tenant
warrants that Tenant is a duly authorized and existing corporation, that
Tenant has and is qualified to do business in California, that the
corporation has full right, and authority to enter into this Lease, and
that each of the persons signing on behalf of the corporation are
authorized to do so; if so requested by Landlord, Tenant shall deliver to
Landlord a corporate resolution to this effect.
31.2 If requested by Tenant, Landlord and Tenant shall execute and cause to be
recorded in the Official Records of San Mateo County, California, a
memorandum of this Lease in a form reasonably acceptable to both Landlord
and Tenant.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the respective dates set forth below.
LANDLORD: DAVIS ASSOCIATES, a California limited partnership
By: /s/ ^^^
----------------------------
General Partner
Date of Execution by Landlord: 12.21.95
----------------
TENANT: ORACLE CORPORATION, a Delaware corporation
By: /s/ Xxxxx Xxxxx
----------------------------------
Its: XXXXX XXXXX
----------------------------------
VP AND CORPORATE TREASURER
Date of Execution by Tenant: 12/21/95
-----------------
35
EXHIBIT A FOUNDERS TITLE COMPANY
---------
LEGAL DESCRIPTION ORDER NO. 153322
ONE XXXXX DRIVE Run-to-Date
The land referred to in this Report is situated in the County of San Mateo, City
---------------
of Belmont, State of California, and is described as follows:
-----------
A portion of Lot 1, as delineated upon that certain Map entitled "XXXXXXX PARK
SUBDIVISION, BELMONT, SAN MATED COUNTY, CALIFORNIA", filed for record in the
Office Of the Recorder of the County of San Mateo, State of California, on
February 10th, 1965 in Book 61 of Maps, at Page 37, said portion of Lot 1, being
more particularly described as follows:
BEGINNING at the most Northerly corner of said Got l; thence from said point of
beginning along the most Northerly line of said Xxx 0 Xxxxx 00 52' 04" East
363.78 feet; thence tangent to the preceding course along the arc of a curve to
the left having a radius of 1250 feet and a central angle of 0 degrees 37' 06",
an arc length of 13.49 feet; thence South l0 degrees 04' 26" West 41.89 feet;
thence South 79 degrees 55' 34" East 45.00 feet; thence North 10 degrees 04' 26"
East 40.00 feet; thence from a tangent that bears South 78 degrees 33' 02" East,
along the arc of a curve to the left having a radius of 1250 feet and a central
angle of 3 degrees 33' 31", an arc length of 77.64 feet; thence leaving said
Northerly line South 2 degrees 38' 36" West 338.22 feet to a point on the
Northerly line of Xxxxx Drive as shown on the herein described Map; thence from
said point along said Northerly line South 76 degrees 25' 44" West 234.24 feet;
thence tangent to the preceding course along the arc of a curve to the right
having a radius of 50 feet and a central angle of 33 degrees 21' 19", an arc
length of 29.11 feet; thence tangent to the preceding curve North 70 degrees 12'
57"West 36.80 feet; thence tangent to the preceding course along the arc of a
curve to the right having a radius of 50 feet and a central angle of 48 degrees
11' 23", an act length of 42.05 feet; thence tangent to the preceding curve
North 22 degrees 01' 34" West 420.56 feet; thence tangent to the preceding
course along the arc of a curve to the right having a radius of 50 feet and a
central angle of 31 degrees 54'30", an arc length of 27.85 feet; thence tangent
to the preceding course North9 degrees 52' 56" East 40.33 feet; thence tangent
to the preceding course along the arc of a curve to the right having a radius of
22 feet and a central angle of 23 xxxxxxx00' 29", an arc length of 9.12 feet to
the point of beginning.
EXCEPTING THEREFROM an area Deeded to the City of Belmont for Xxxxxxx Avenue
Widening described as follows:
BEGINNING at the above described point of beginning of Parcel I; thence from
said point of beginning along the Northerly line of said Parcel I, South 75
degrees 52' 04" East 237.10 feet; thence leaving said Northerly line North 77
degrees 52' 04" West 168.67 feet; thence along the arc of a curve to the right,
tangent to the preceding course, having a radius of 1006.50 feet through a
central angle of 2 degrees 00' 00", an arc length of 35.13 feet; thence tangent
to the preceding curve North 75 degrees S2' 04" West 15.13 feet; thence along
the arc of a curve to the left, tangent to the preceding course, having a radius
of 21.50 feet and a central angle of 61 degrees 09' 52", an arc length of 22.95
feet to a point of cusp on the Easterly line of Xxxxx Drive as shown on the
herein described Map; thence along said Easterly line in a Northerly direction
North 9 degrees 52' 56" East 8.68 feet;
Page 2 of 8 Pages
---- ----
FOUNDERS TITLE COMPANY
ORDER NO. 153322
Run-to-Date
thence along the arc of a curve to the right, tangent to the preceding course,
having a radius of 22.00 feet and a central angle 23 degrees 44' 29", an arc
length of 9.12 feet to the point of beginning.
A.P.N. 000-000-000 J.P.N. 43-34-340-13
Page 3 of 8 Pages
---- ----
SITE PLAN
--------------------------------------------------------------------------------
[DIAGRAM APPEARS HERE] EXHIBIT B
---------
One Davis Drive
CONSTRUCTION AGREEMENT
FOR
INTERIOR IMPROVEMENTS
IN
----------------------
__________, CALIFORNIA
_________, 199__
EXHIBIT C
TABLE OF CONTENTS
Page
----
A. The Work and the Contract Documents..................... 1
B. Cost of the work........................................ 1
C. Commencement of the Work................................ 6
D. Time of Substantial Completion.......................... 8
E. Force Majeure: Damages for Delays....................... 8
F. Contractor's Duties and Status.......................... 9
G. Change Orders........................................... 12
H. Progress Payments....................................... 13
I. Substantial Completion Procedures and Payments.......... 17
J. Mechanic's Liens........................................ 19
K. Insurance............................................... 20
L. Contractor's Warranties................................. 23
M. Owner's Occupancy Before Completion of Work............. 00
X. Xxxxxxxxxxx of Agreement................................ 25
O. General Provisions...................................... 27
1. Assignment.......................................... 27
2. Notices............................................. 27
3. Complete Agreement.................................. 28
4. Successors.......................................... 28
5. Governing Law....................................... 28
6. Remedies............................................ 28
7. No Waiver........................................... 28
8. Governing Contract Documents........................ 28
9. Contractor's Notice................................. 29
10. Subcontract Work.................................... 29
11. Status of Architect................................. 29
12. Confidentiality..................................... 30
13. Attorneys' Fees..................................... 30
i
CONSTRUCTION AGREEMENT
THIS CONSTRUCTION AGREEMENT is made as of the __ day of _________________,
199 __ by and between ORACLE CORPORATION, a Delaware corporation (hereinafter
"Owner"), and ________________ ,a ___________________ corporation (hereinafter
"Contractor"), with respect to the construction of the interior improvements in
the building located at ______________________ in ____________, California (the
"Building"), which Building contains approximately __________________rentable
square feet of space. The construction and completion of the interior
improvements for the Building pursuant to this Agreement is referred to as the
"Project". The Architect for the Project is _______________ (hereinafter called
"Architect").
A. The Work and the Contract Documents. Contractor agrees to provide all
-----------------------------------
labor, materials, supplies, appliances, tools, equipment and supervision and to
do all things necessary to construct and complete the interior improvements for
the Building as described in and reasonably inferable from the plans and
specifications identified in Exhibit A attached hereto (the "Work"). This
---------
Agreement, including all exhibits hereto, the drawings, plans, specifications,
and any addenda or amendments thereto, together with all Change Orders, are
sometimes referred to collectively herein as the "Contract Documents."
B. Cost of the Work.
----------------
1. Owner shall reimburse Contractor for the "Cost of the Work" (as
defined in Paragraph B.6 below) plus a fee ("Contractor's Fee") determined as
provided in Paragraph B.4 below. Contractor guarantees that the maximum price to
the Owner for the Cost of the Work and the Contractor's Fee, subject to
authorized adjustments, shall not exceed the sum of _________ Dollars ($______),
which sum shall be called the Guaranteed Maximum Price, hereinafter sometimes
referred to as the "GMP."
2. A contingency fund (the "Contingency Fund") in the amount of
___________________ Dollars ($ ______) is included in the Guaranteed Maximum
Price; this represents _________ percent (______%) of the estimated Cost of
the Work. The Contingency Fund shall be administered jointly by Owner and
Contractor; however, Owner shall not unreasonably withhold approvals of
withdrawals from the Contingency Fund. This Contingency Fund shall not be used
for changes in the Scope of Work (as defined in Article G below) or for upgrades
in the quality of finishes, nor shall the Contingency Fund be used for the
convenience of Contractor in the ordinary scheduling or execution of the Work.
General examples of the use of the Contingency Fund are as follows:
(a) Coordination items necessary for a complete Project and
inadvertently missed in the Exhibit A documents by
---------
Architect or other consultants. Examples include items not shown on plans and/or
in specifications which cause a "gap" between subcontractor scope of work or
"gap" between general contractor and subcontractor work and items which are
shown incorrectly, or are impractical, in the plans and/or specifications and
must be modified at a cost.
(b) Building costs associated with Fire Department plan check
revisions, or compliance with local interpretation of the building/fire codes.
3. Allowances for items of equipment and materials are included in
the Guaranteed Maximum Price to the extent the Contract Documents are not
sufficiently specific to permit Subcontractor or vendor pricing for such items.
From time to time after commencement of performance of the Work, Owner shall
cause plans and specifications for the Allowances, or portions thereof, to be
delivered to Contractor. Such plans and specifications shall be deemed to be
part of the Contract Documents. Contractor shall obtain bids for all Allowance
items in accordance with the procedure set forth in Paragraph O.10 below. If the
actual Cost of the Work with respect to an item covered by an Allowance is
greater than the Allowance, the Contractor shall be paid the actual Cost of the
Work for such item, plus a profit and overhead fee equal to ______ percent (_%)
of the amount by which the actual Cost of the Work for that item exceeds the
Allowance for the item. The Guaranteed Maximum Price shall be increased by the
aggregate amount of such excess costs and fees. If the Cost of the Work for an
item is less than the Allowance for that item, the Guaranteed Maximum Price
shall be decreased by the aggregate of the difference between the Allowance and
the actual Cost of the Work for such item, plus ______ percent (___%) of the
amount by which the Allowance for such item exceeds the actual Cost of the Work
for the item (representing the decrease in the Contractor's profit and overhead
fee). Any such increases or decreases in the Guaranteed Maximum Price and
payments relating thereto shall be confirmed in a Change Order pursuant to the
provisions of Article G below.
4. In consideration of the performance of this Agreement, Owner
agrees to pay to Contractor in current funds as compensation for his services a
Contractor's Fee equal to _____ percent (__%) of the total Cost of the Work,
subject to the Guaranteed Maximum Price provisions of Paragraph B.1 above. The
Contractor's Fee will be payable in pro rata installments as payments for Cost
of the Work are made to Contractor, pursuant to the progress payment provisions
of Article H below.
5. In the event the Cost of the Work plus the Contractor's Fee shall
equal a sum which is less than the Guaranteed Maximum Price, as adjusted
pursuant to the terms of this Agreement, the resulting savings shall be
returned _____ percent ( ___%) to the Owner and percent (____%) to the
Contractor.
2
6. The term "Cost of the Work" shall mean only the following costs
necessarily incurred by Contractor in the proper performance of the Work at
rates no higher than the standard paid at the place of the Project, except
with the prior written consent of Owner:
(a) Application, permit, license, and testing fees required to
commence and perform the Work, with the exception of testing fees related to
defective or nonconforming Work.
(b) Losses, expenses, damages and costs reasonably sustained or
incurred in connection with the Work, when not compensated by insurance or
otherwise, and lost deposits (including deposits, lost by reasons of settlement
of disputes related to such deposits), which are sustained by the Contractor in
connection with the Work, but excluding all such losses, expenses, damages and
costs caused by Contractor's (or any supervisory, administrative, managerial or
other personnel of Contractor) negligence, willful misconduct or breach of this
Agreement and warranty repair work required of Contractor by this Agreement.
(c) Rental charges of all machinery and equipment, exclusive of
hand tools, used for the performance of the Work, whether rented from the
Contractor or others, including installations, repairs and replacements,
dismantling, removal, and cost of lubrication, transportation and delivery
thereof. Notwithstanding the foregoing, any machinery or equipment rented by
Contractor shall be subject to the prior written approval of Owner. The rental
rates for such machinery and equipment shall not exceed eighty percent (80%) of
the blue book rates, and the total rental charges for any such machinery and
equipment shall not exceed the market value of such items.
(d) All sales, use, gross receipts and other taxes related to the
Work or purchases made in connection therewith which are imposed by any
governmental authority and for which Contractor is liable.
(e) A pro rata portion, up to an agreed maximum percentage, of
premiums on all bonds and insurance policies to be furnished by Contractor under
this Agreement, with respect to the period of time Contractor is performing the
Work hereunder and taking into consideration other projects of the Contractor
being performed simultaneously with the Work.
(f) The reasonable travel expenses of the Contractor or employees
of the Contractor outside the counties of San Mateo, San Francisco, Santa Xxxxx
and Alameda, incurred in the discharge of duties related to the performance of
the Work (other than travel between the Project site and the Contractor's main
office or any employee's home), if approved in advance by Owner.
3
(g) The following costs incurred by Contractor, as specified in
the Schedule of General Conditions attached hereto as Exhibit B:
---------
(i) All labor costs with respect to personnel in the direct
employment of Contractor in the performance of the Work, including such standard
fringe benefits as employee group insurance coverage, employer payroll taxes,
workers' compensation premiums, and other similar costs related thereto.
(ii) Salaries and related standard fringe benefits of
Contractor's employees working solely at the field office, either full-time or
part-time and in whatever capacity employed, covering such portion of their time
as they have devoted to the Work.
(iii) Costs of utilities and all materials, supplies and
equipment used in connection with or incorporated into the Work, including costs
of transportation and storage thereof.
(iv) Costs, including transportation and maintenance, of all
materials, supplies, equipment, temporary facilities and hand tools (other than
those owned by the workmen) which are employed or consumed in the performance of
the Work. All purchases of such materials, supplies, equipment, temporary
facilities and hand tools shall be recorded in a log maintained at the Project
site or Contractor's principal office and shall be subject to inspection by
Owner upon demand. Any such materials, supplies, equipment or tools which are
used, but not consumed, in the performance of the Work shall remain the property
of the Contractor upon completion of the Work; provided, however, that with
respect to any such equipment or tools which cost in excess of $2,000 and have a
useful life of more than one year, the cost of same shall be adjusted as
appropriate on the basis of their market value.
(v) Miscellaneous expenses such as telegrams, facsimiles,
telephone services, express mail, and similar xxxxx cash items related to the
Work and customarily incurred in projects of this nature.
(vi) Costs (excluding promotional expenses, costs of safety
awards and incentives) incurred in connection with job safety requirements for
the performance of the Work such as handrails, ramps, barricades, warning
lights, and required scaffolding, and costs incurred due to an emergency
affecting the safety of persons or property.
(vii) Costs of removal of debris and the final Building
clean-up.
(viii) Amounts due to all Subcontractors under subcontracts
related to the performance of the Work.
4
7. The term Cost of the Work shall not include any of the following:
(a) Salaries of the off-site employees of Contractor.
(b) Overhead or general expenses of any kind, except as may be
expressly provided otherwise in this Agreement.
(c) Contractor's capital expenses, including interest on
Contractor's capital employed either in construction plants or in expenditures
on the Work, except as may be expressly provided otherwise in this Agreement.
(d) Costs due to any warranty work required from Contractor
hereunder or due to the negligence or wilful misconduct of, or the breach of
this Agreement or any other agreement related to the Work by, the Contractor,
any Subcontractor, anyone directly or indirectly employed by any of them, or for
whose acts any of them may be liable, including, but not limited to, costs for
the correction of defective or nonconforming Work, disposal and replacement of
materials and equipment incorrectly ordered or supplied, making good any damage
to property or the Work, or repair of casualty losses not included in
Subparagraph B.6(b) above.
(e) Costs in excess of the Guaranteed Maximum Price, as set forth
in Article B above and adjusted pursuant to Change Order.
(f) Fines, penalties, assessments and other costs related to the
failure of Contractor or any Subcontractor to comply with any law, statute,
ordinance, code, rule or regulation applicable to the Work or its performance,
including, without limitation, the Federal Occupational Safety and Health Act,
federal and state fair employment laws, and federal and state wage and hours
laws.
(g) Amounts to be paid by Contractor for federal, state or local
income and franchise taxes.
(h) Increases in the Cost of the Work caused by events of Force
Majeure (as defined in Article E below), except to the extent otherwise provided
by way of Change Order in accordance with Articles E and G below.
(i) Expenses of Contractor's principal office and offices other
than the site office.
(j) Rental costs of machinery and equipment, except as expressly
provided in Paragraph B.6.
(k) Any cost not specifically and expressly described in
Paragraph B.6.
5
(l) Costs that would cause the GMP (as adjusted by approved
Change Orders) to be exceeded.
(m) Cost of overtime premium required to meet the Construction
Schedule, unless approved by Change Order.
(n) Cost of consultants unless approved by Owner in writing.
(o) Salaries of corporate officers, directors, key administrators
or sales personnel of Contractor.
(p) Costs due to weather delays.
8. The following items shall be credited against the Cost of the Work
or shall be reimbursed by Contractor to Owner:
(a) Proceeds of any sale by Contractor of surplus materials,
construction equipment, and temporary structures which have been charged to the
Cost of the Work (other than as a rental charge), whether such sale is made to
Owner, to Contractor, or to a third party, plus the fair market value of non-
expendable tools purchased by the Contractor.
(b) Discounts earned by the Contractor through advanced or prompt
payments. The Contractor shall obtain all possible trade and time discounts on
bills for materials, supplies and equipment furnished, and shall pay said bills
within the discount periods, provided that Owner timely pays Contractor pursuant
to the terms of this Agreement.
(c) The full amount of any deposits originally funded by or
charged to Owner which have been returned to the Contractor.
9. Contractor shall keep full and detailed accounts and exercise such
controls as may be necessary for proper financial management under this
Agreement, and Contractor's accounting and control systems shall be satisfactory
to Owner. Owner and Owner's accountants shall have access to Contractor's
records, books, correspondence, instructions, drawings, receipts, subcontracts,
purchase orders, vouchers, memoranda and other data relating to this Agreement,
and Contractor shall preserve such items for a period of three (3) years after
final payment, or for such longer period as may be required by law.
C. Commencement of the Work. The date the Work is commenced shall be
------------------------
known as the "Construction Commencement Date," and the Contractor shall
thereafter promptly execute the Work in a diligent manner.
1. The Work shall commence after all of the following conditions have
been satisfied and a separate document in the form of Exhibit C has been
---------
executed by Owner and Contractor.
6
(a) Receipt by Contractor of a copy of this Agreement, fully
executed by the Owner and Contractor.
(b) Receipt by the Owner of certificates of insurance evidencing
that the insurance coverages required by this Agreement are in force.
(c) Receipt by Contractor of certificates of insurance evidencing
that the insurance coverages required by this Agreement are in force.
(d) Issuance of all necessary building permits, which shall be
obtained by Contractor but with all permit fees to be at Owner's expense.
(e) Receipt by the Contractor of fully authorized Working Drawings
and Space Plans for the Work in accordance with the following:
(i) The "Space Plan" shall be an easily readable and scalable
floor plan of the entire occupiable space in the Building. Each blueprint
component of the Space Plan shall identify the name, address and phone number of
the architect; name and address of the Project, the date drawn, the name of the
draftperson, a sheet number, the room and intended use; it shall also include
mechanical, electrical and plumbing requirements specifying the rooms or areas
to receive finishes.
(ii) The "Working Drawings" shall be a complete set of
blueprints developed from the Space Plan and suitable to permit competitive
subcontractor bidding and the issuance of all building permits. The level of
detail of Working Drawings is intended to permit commencement of construction
and completion of the Work in accordance with such Working Drawings. Working
Drawings include but are not limited to all fully dimensioned floor plans; plans
for all reflected ceilings, electrical outlets/data/telephones, finishes, HVAC,
fire sprinklers, plumbing and electrical installations and all necessary
elevations, details and specifications.
2. Within _________ (__) days following execution of this Agreement,
Contractor shall prepare a submittal schedule for all shop drawings, details,
samples, equipment data and other submittal information required herein. In
addition, Contractor shall comply with the Project Schedule prepared by the
Architect or Owner, as such may be periodically updated, for the processing of
all governmental approvals and permits, the prepurchasing of materials and
equipment and the attainment of designated milestones.
3. Contractor agrees to keep Owner informed as to the progress of the
Work, and throughout the performance of the Work, Contractor will confer and
cooperate with Owner and will plan and
7
execute the Work so as to ensure the timely and efficient completion thereof.
D. Time of Substantial Completion. Subject to the occurrence of any events
------------------------------
of Force Majeure as defined below in Article E and to all other provisions of
this Agreement, Contractor agrees to cause the Work to be "Substantially
Completed" as defined in Article I below on or before __________, all in
accordance with the schedule (including delivery dates for materials and
equipment) attached hereto as Exhibit D (the "Construction Schedule").
---------
E. Force Majeure; Damages for Delays. If Contractor shall be delayed at
---------------------------------
any time in the progress of the work by any act or neglect of Owner or
Architect, any contractor independently employed by Owner (or any agent or
employee of the foregoing), by changes in the Work ordered by Owner, by
governmental act or failure to act (including issuance of building permits), by
embargo, strike or labor disputes (except where such disputes arise because
Contractor without the consent of Owner has hired non-union workers), by fire or
other casualty, unusual delay in transportation, unavoidable casualties,
unavailability of materials, acts of God (including inclement weather
conditions), or by other causes beyond Contractor's reasonable control, or by
any other cause which Owner and Architect decide justify the delay
(collectively, events of "Force Majeure,") then the time allowed for the Work to
be Substantially Completed shall be extended by the period of such delay and the
GMP shall be equitably adjusted. Contractor shall deliver written notice to
Owner, within five (5) business days after the cause of such delay is known, or
reasonably should be known, to Contractor, of the fact and estimated extent of
such delay. In case of a continuing cause of delay, only one claim is necessary
as long as it is submitted within five (5) business days from the date that the
cause first became known to Contractor.
If the Work is not Substantially Completed by _____________ (__) days
after the date required for Substantial Completion under the Construction
Schedule, as such date may be extended for events of Force Majeure, then on the
thirty-first (31st) day after such date Contractor will pay Owner for such
delay as damages, an amount equal to ___________________ ($_____) per day until
the Work is Substantially Complete. THE PARTIES HAVE AGREED THAT OWNER'S ACTUAL
DAMAGES, IN THE EVENT THAT CONTRACTOR FAILS TO SUBSTANTIALLY COMPLETE THE WORK
WITHIN THE TIME ESTABLISHED BY THIS AGREEMENT, WOULD BE EXTREMELY DIFFICULT OR
IMPRACTICABLE TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS BELOW, THE
PARTIES ACKNOWLEDGE THAT THE ABOVE AMOUNT HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF OWNER'S DAMAGES IN THE EVENT
THAT CONTRACTOR FAILS TO SUBSTANTIALLY COMPLETE THE WORK WITHIN THE TIME
ESTABLISHED BY THIS AGREEMENT.
Contractor: _______ Owner: _______
8
If Contractor has not Substantially Completed the entire Work by _________ (___)
the date the Work is to be Substantially Completed under the schedule in Article
D above (as such date may be extended by events of Force Majeure), Owner may
terminate this Agreement in accordance with the provisions of Article N below
and in addition may retain the damages for delay provided above.
F. Contractor's Duties and Status.
------------------------------
1. Contractor recognizes the relationship of trust and Confidence
established between Contractor and the Owner by this Agreement. Contractor
covenants with the Owner to furnish its best skill and judgement and to
cooperate with the Architect in promoting the interest of the Owner. Contractor
agrees to (a) furnish efficient business administration and superintendence, (b)
keep upon the Work at all times an adequate supply of skilled and qualified
workmen and materials; (c) secure the execution of the Work in an expeditious
and economical manner; and (d) maintain quality standards commensurate with
reputable northern California contractors. Owner and Architect shall at all
times have access to the Work for review thereof.
2. The Contractor shall carefully study and compare the Contract
Documents with each other and with information furnished by the Owner and shall
at once report to the Architect errors, inconsistencies or omissions (including,
without limitation, any variance from applicable laws) discovered. The
Contractor shall not be liable to the Owner or Architect for damage resulting
solely from errors, inconsistencies or omissions in the Contract Documents
unless the Contractor recognized such error, inconsistency or omission and
knowingly failed to report it to the Architect. If the Contractor performs any
construction activity knowing it involves a recognized error, inconsistency or
omission in the Contract Documents without such notice to the Architect, the
Contractor shall assume appropriate responsibility for such performance and
shall bear the attributable costs for correction. Nothing in this Paragraph F.2
shall relieve the Contractor from responsibility to use good faith efforts in
its examination and review of the existing conditions at the Project, the
Construction Schedule, and the Contract Documents, to the end that errors,
omissions or inconsistencies in the Contract Documents that are discovered shall
be promptly reported to the Architect and Owner.
3. Before ordering any materials or doing any Work, Contractor and
each of its Subcontractors shall verify all measurements at the site and shall
be responsible for the correctness of same. No extra charge or compensation will
be allowed on account of differences between actual dimensions and the
measurements indicated on the drawings or the plans and specifications. It shall
be understood as part of the Agreement that Contractor and each of its
Subcontractors visited the site and examined the environs and satisfied
themselves as to the conditions under which they would be required to perform
the Work. No
9
allowance shall be made on behalf of Contractor or any Subcontractor for any
failure to so acquaint themselves with working conditions except concealed and
unforeseeable conditions.
4. The Contractor shall supervise and direct the Work, using the
Contractor's best skill and attention. The Contractor shall be solely
responsible for and have control over construction means, methods, techniques,
sequences and procedures and for coordinating all portions of the Work under the
Contract, unless Contract Documents give other specific instructions concerning
these matters.
5. The Contractor shall be responsible to the Owner for acts and
omissions of the Contractor's employees, Subcontractors and their agents and
employees, and any other persons performing portions of the Work under a
contract with the Contractor or claiming by, through or under the Contractor and
for any damages, losses, costs and expenses resulting from such acts or
omissions.
6. The Contractor shall not be relieved of obligations to perform the
Work in accordance with the Contract Documents either by activities or duties of
the Architect in the Architect's administration of the Contract, or by tests,
inspections or approvals required or performed by persons other than the
Contractor.
7. The Contractor shall be responsible for inspection of portions of
Work already performed under this Contract to determine that such portions are
in proper condition to receive subsequent Work.
8. If any of the Work is required to be inspected or approved by any
public authority, the Contractor shall cause such inspection or approval to be
performed. No inspection performed or failed to be performed by the Owner shall
be a waiver of any of the Contractor's obligations hereunder or be construed as
an approval or acceptance of the Work or any part thereof.
9. Unless otherwise provided in the Contract Documents, the
Contractor shall provide and pay for labor, materials, equipment, tools,
construction equipment and machinery, water, heat, utilities, transportation,
and other facilities and services necessary for proper execution and completion
of the Work, whether temporary or permanent and whether or not incorporated or
to be incorporated in the Work.
10. The Contractor shall enforce strict discipline and good order
among the Contractor's employees and other persons carrying out the Contract.
The Contractor shall not permit employment of unfit persons or persons not
skilled in tasks assigned to them.
11. Tradesmen whose work is unsatisfactory to the Owner or Architect,
or are considered by either Owner or the Architect to
10
be careless, incompetent, unskilled or otherwise objectionable, shall be
dismissed immediately from the work upon notice from the Owner.
12. Contractor shall construct and complete the Project in strict
compliance with all laws, statutes, ordinances, codes, rules and regulations of
all governmental and public authorities having jurisdiction over the Project or
any aspect thereof. Contractor represents and warrants that it is an experienced
general contractor and that it has inspected and is familiar with all visible
conditions at the Project site. It shall be the obligation of Contractor to
review the Contract Documents to determine and to notify the Owner and the
Architect of any discrepancy with building codes and regulations of which the
Contractor has knowledge. If the Contractor observes that portions of the
Contract Documents are at variance with applicable laws, statutes, ordinances,
building codes, rules or regulations, the Contractor promptly shall notify the
Owner and Architect in writing, and necessary changes shall be accomplished by
appropriate Change Order. If Contractor performs any Work which it knows is
contrary to laws, statutes, ordinances, building codes, rules and regulations,
the Contractor shall assume appropriate responsibility therefor and shall bear
the costs and expenses attributable thereto.
13. Contractor shall prepare as part of the Work all shop and other
detailed drawings that are required to enable Contractor to perform the work.
Before submitting shop drawings for review, Contractor shall check drawings of
all Subcontractors for conformity with contract requirements, and Contractor
shall see that all work contiguous with and having bearing on the work indicated
on the shop drawings is accurately and distinctly illustrated. Contractor shall
stamp the drawings as evidence that such drawings have been checked, approved or
corrected. Such stamp shall constitute Contractor's warranty to Owner and
Architect that (a) Contractor has utilized reasonable efforts to insure that
such drawings are in strict conformity with the plans and specifications, and
(b) such submitted shop and other drawings have been coordinated with other
components of the Work. Architect will review and approve shop drawings and
other submissions for general conformance with the design concept only and such
review shall not relieve Contractor and each Subcontractor from the
responsibility for adherence to this Agreement concerning quantity and quality
of materials and workmanship, nor shall it relieve Contractor of the
responsibility for dimensions, tolerance and proper assembly.
14. Owner reserves the right to perform construction or operations
related to the Project with Owner's own forces, and to award separate contracts
in connection with other portions of the Project or other construction or
operations on the site; provided, however, that Owner shall use all reasonable
efforts to ensure that the exercise of such right does not interfere with the
Construction Schedule or create labor disputes.
11
15. Unless otherwise provided in the Contract Documents, the
Contractor shall secure and pay for the building permit and other permits and
governmental fees, approvals, licenses and inspections necessary for proper
execution and completion of the Work.
16. The Contractor shall comply with and give notices required by
laws, ordinances, rules, regulations and lawful orders of public authorities
bearing on performance of the Work.
17. Notwithstanding the fact that a dispute, controversy or question
shall have arisen in the interpretation of any provision of the Agreement, the
performance of any work, the delivery of any material, the payment of any monies
to Contractor, or otherwise, Contractor agrees that it will not directly or
indirectly stop or delay the Work, or any part thereof, or stop or delay the
delivery of any materials on its part required to be furnished under this
Agreement, pending the determination of such dispute or controversy. Owner shall
continue to make payments for Work that is not the subject of a dispute.
18. Contractor at all times shall keep the Project free from
accumulation of waste materials or rubbish caused by its operations. At the
completion of the Work, Contractor shall remove all of Contractor's waste
materials and rubbish from and about the Project, as well as all of Contractor's
tools, construction equipment, machinery and surplus materials, and shall clean
the inside of all glass surfaces and leave the Work clean and ready for
occupancy in accord with the standards of a first class office facility. If the
Contractor fails to clean up as provided in the Contract Documents, the Owner
may do so and the cost thereof shall be charged to the Contractor who shall pay
such cost immediately upon demand of Owner.
G. Change Orders. Changes in the scope of the Work and/or the Guaranteed
-------------
Maximum Price may be made only in accordance with the following Change Order
provisions.
1. Owner may from time to time, by written instructions or drawings
issued to the Contractor, make changes in the Work, issue additional
instructions, require additional Work, or direct the omission of Work previously
ordered, and the provisions of this Agreement shall apply to all such changes,
modifications, and additions (all of the foregoing constitute changes in the
"Scope of the work") with the same effect as if they were embodied in the
original plans and specifications. Any such change shall hereinafter be referred
to as a "Change Order". A Change Order shall consist of a written document
signed by Owner, Architect and Contractor and shall include (i) a description of
the change in the Work; (ii) the amount of adjustment, if any, to the Guaranteed
Maximum Price; and (iii) the amount of adjustment, if any, to the Construction
Schedule.
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2. Owner may request changes in the Work by giving Contractor a
written Change Order request through the Architect ("Change Order Request"),
setting forth the nature of the requested change. Upon receipt of a Change Order
Request, Contractor shall promptly furnish to Owner a statement setting forth in
detail (with a labor and material breakdown by trade and work classification)
Contractor's good faith estimate of (i) the changes, be they additive or
deductive in nature, in the Guaranteed Maximum Price attributable to the changes
set forth in such Change Order Request, and (ii) the adjustment, if any, to the
Construction Schedule and the date of Substantial Completion resulting from such
Change Order Request. Upon approval by Owner, a Change Order shall be issued and
the Guaranteed Maximum Price and Construction Schedule shall be adjusted as set
forth in such Change Order.
3. If a Change Order results in additional costs in order to
prosecute the Work, the Owner shall pay to Contractor an amount equal to the sum
of such additional costs plus a Contractor's Fee of ______ percent (__%) of the
sum of such additional costs; the Guaranteed Maximum Price shall be increased by
the aggregate amount of such additional costs and fees. If a Change Order
results in a decrease in the Cost of the work, the Guaranteed Maximum Price
shall be decreased by an amount equal to the sum of the decrease in such costs
plus _________ percent (__%) of the decrease in such costs. Additional costs
shall be limited to (a) costs of labor; (b) costs of materials, supplies and
equipment; (c) rental costs of machinery and equipment, exclusive of hand tools;
and (d) additional costs of supervision and field office personnel directly
attributable to the change. As work is completed pursuant to a Change Order, the
Contractor shall be reimbursed the Cost of the Work completed pursuant to a
Change Order and paid a pro rata portion of the Contractor's Fee payable with
respect to the Change Order on a percentage of completion basis in accordance
with the provisions of Article H. Retention on Change Orders shall be withheld
in accordance with the provisions of Article H.
H. Progress Payments. owner agrees to make progress payments to
-----------------
Contractor according to the following procedures.
1. Included in this Agreement and attached hereto as Exhibit E is a
---------
Schedule of Values representing a line item breakdown of the Cost of the Work.
This Schedule of Values shall be used as a basis for Contractor's Applications
for Payment.
2. By close of business on the last day of each month Contractor will
submit to Owner an Application for Payment ("Application for Payment") based on
the Schedule of Values and showing as of the end of the month covered by the
Application the percentage of completion of the Work performed under this
Agreement, the value of said completed Work based on the Schedule of Values, and
the amount due and owing to Contractor under the terms of this Agreement,
including amounts due under any fully executed Change Orders. The Application
for Payment shall be
13
submitted on AIA forms G702 and G703 and shall contain such supporting data as
Owner or Architect may reasonably request, together with lien waivers,
conditional upon payment, for Contractor and any Subcontractor, supplier and
vendor for which payment is requested in such Application for Payment, and
unconditional lien waivers for all prior payment periods from Contractor, and
all Subcontractors, suppliers and vendors. Without limiting the generality of
the foregoing, with each Application for Payment Contractor shall submit
payrolls, xxxxx cash accounts, receipted invoices or invoices with check
vouchers attached, and any other evidence required by Owner or Architect to
demonstrate that cash disbursements already made by Contractor on account of the
Cost of the Work equal or exceed (1) progress payments already received by
Contractor; less (2) that portion of those payments attributable to the
Contractor's Fee; plus (3) payrolls for the period covered by the present
Application for Payment; plus (4) retainage applicable to prior progress
payments. In addition, Contractor's Applications for Payment shall be submitted
together with Contractor's Declaration to Procure Payment, in a form approved by
Owner, listing all persons and firms who have furnished subcontract work,
equipment or materials to the Contractor for the Project and stating that full
payment for all such work, equipment and materials has been made except as
otherwise stated therein. Materials and equipment not yet incorporated into the
Work but delivered, clearly marked as Owner's property, and suitably stored at
the site of the Project shall be considered completed items of Work for purposes
of an Application for Payment, and may be included therein. Contractor shall not
made advance payments to Contractor's, Subcontractors, materialmen or suppliers
without Owner's prior written approval.
3. Within twenty-five (25) days after receipt by Owner of an
Application for Payment, and provided Contractor is not in default under this
Agreement, Owner shall pay to Contractor the amount requested subject to the
provisions regarding retainage and disputed amounts described below.
4. Owner shall retain ten percent (10%) of the aggregate amount
requested for payment with respect to each Application for Payment. Funds so
retained shall be released in accordance with Paragraph 1.4.
5. If any item on an Application for Payment is disputed by Owner or
Architect, Contractor immediately shall be notified of such dispute and shall
submit a verification of such item or a revised Application for Payment. This
procedure, however, shall not be deemed cause for any delay in making a timely
progress payment with regard to all undisputed items on the Application for
Payment. Any payments due Contractor for undisputed items in an Application for
Payment that are not made within thirty-five ('35) days after receipt by Owner
of such Application for Payment shall bear interest at the rate of eight percent
(8%) per annum. For any disputed amount that is later determined to be due
Contractor, Owner shall also pay Contractor
14
eight percent (8%) interest per annum on such amount from the date that is
thirty-five (35) days after receipt by Owner of the Application for Payment with
respect to such amount until the date of payment.
6. Should Contractor neglect or refuse to pay, within thirty (30)
days after it falls due, any xxxx legitimately incurred and due from Contractor
for which Contractor has been paid on a progress payment basis, Owner, after
giving five (5) days written notice to Contractor of its intention to do so,
shall have the right but not the obligation to pay such xxxx directly. In such
event, said payment shall be treated as a progress payment made for the benefit
of Contractor.
7. Contractor shall promptly pay each Subcontractor, materialman and
supplier, upon receipt of payment from Owner, out of the amount paid to
Contractor on account of such Subcontractor's, materialman's or supplier's
portion of the work, the amount to which such Subcontractor, materialman or
supplier is entitled, reflecting percentages actually retained from payments to
Contractor on account of such Subcontractor's, materialman's or supplier's
portion of the work. Contractor shall, by appropriate agreement with each
Subcontractor, require such Subcontractor to make payments to Sub-subcontractors
in similar manner.
8. The amount of each progress payment shall be computed as follows:
(a) Take that portion of the Guaranteed Maximum Price properly
allocable to completed Work as determined by multiplying the percentage
completion of each portion of the Work by the share of the Guaranteed Maximum
Price allocated to that portion of the Work in the Schedule of Values, less
retainage of ten percent (10%).
(b) Add that portion of the Guaranteed Maximum Price properly
allocable to materials and equipment delivered and suitably stored at the site
for subsequent incorporation in the Work, less retainage of ten percent (10%).
(c) Add the Contractor's Fee, less retainage of ten percent (10%).
The Contractor's Fee shall be computed upon the Cost of the Work described in
the two preceding clauses at the rate stated in Paragraph B.4.
(d) Subtract the aggregate of previous payments made by Owner.
(e) Subtract the shortfall, if any, indicated by Contractor in the
documentation required to substantiate prior Applications for Payment, or
resulting from errors subsequently discovered by the Owner's accountants in such
documentation.
15
(f) Subtract amounts, if any, for which Architect or Owner has
withheld or nullified a Certificate for Payment.
9. Except with Owner's prior approval, payments to Subcontractors
included in Contractor's Applications for Payment shall not exceed an amount for
each Subcontractor calculated as follows:
(a) Take that portion of the Subcontract sum properly allocable
to completed Work as determined by multiplying the percentage completion of each
portion of the Subcontractor's Work by the share of the total Subcontract sum
allocated to that portion in the Subcontractor's Schedule of Values, less
retainage of ten percent (10%).
(b) Add that portion of the Subcontract sum properly allocable
to materials and equipment delivered and suitably stored at the site for
subsequent incorporation in the Work, less retainage of ten percent (10%).
(c) Subtract the aggregate of previous payments made by
Contractor to the Subcontractor.
(d) Subtract amounts, if any, for which Architect or Owner has
withheld or nullified a Certificate for Payment by Owner to Contractor for
reasons which are the fault of the Subcontractor.
(e) Add, upon Substantial Completion of the entire Work of
Contractor, a sum sufficient to increase the total payments to the Subcontractor
to one hundred percent (100%) of the Subcontract sum, less amounts, if any, for
incomplete Work and unsettled claims. The Subcontract sum is the total amount
stipulated in the Subcontract to be paid by Contractor to the Subcontractor for
the Subcontractor's performance of the Subcontract.
10. Nothing contained in this Article H shall be construed to affect
the right to reject in whole or in part any of the Work, should such Work later
be found not to comply with the provisions of this Agreement. All progress
payments are subject to review and correction on subsequent progress payments
and/or on the final payment, to such extent as may be necessary in the
reasonable opinion of Owner to protect Owner from loss arising from the default
of Contractor or the existence of claims. Payment by Owner and acceptance by
Contractor of progress payments based on periodic estimates of quantities of
Work performed shall not, in any way, constitute acceptance of the estimated
quantities used as the basis for computing the amounts of the progress payments.
11. Owner shall have title to all completed work, all Work in the
course of construction, and all materials, equipment, tools and supplies for
which payment has been made by Owner under the terms of this Agreement. The
Contractor warrants that title to
16
all such Work, materials, equipment, tools and supplies shall pass to the Owner
simultaneously upon payment therefor. The Contractor further warrants that upon
submittal of an Application for Payment all Work for which Certificates of
Payment have been previously issued and payments received from the Owner shall,
to the best of the Contractor's knowledge, information and belief, be free and
clear of liens, claims, security interests or encumbrances in favor of the
Contractor, Subcontractors, material suppliers, or other persons or entities
making a claim by reason of having provided labor, materials and equipment
relating to the Work.
I. Substantial Completion Procedures and Payments.
----------------------------------------------
1. Upon receipt from Contractor of written notice that the Work is
Substantially Completed and ready for final inspection and acceptance and
Contractor has obtained a Certificate of Occupancy for the Project, if
applicable (or, if not applicable, evidence of the applicable final inspection
by any relevant governmental authority) (an "Inspection Notice"), Owner and
Architect shall, within ten (10) days, inspect the Work for compliance with the
requirements of this Agreement. The Inspection Notice shall be submitted
together with a complete set of "As Built" drawings and plans covering all of
the Work. For purposes of this Agreement, "Substantially Completed" means
completion of the entire Work, including floor coverings, ceiling systems,
partitions, mechanical equipment, and all utilities in accordance with the Plans
and this Agreement so as to permit occupancy or use of the Project for the
purposes intended by Owner, subject only to minor corrective work or "punch
list" work not rendering the premises unfit for occupancy or use, such as
replacement of broken or defective materials, and adjustments to mechanical
systems. In the event that Owner and Architect shall find the Work described in
the Inspection Notice to have been Substantially Completed in accordance with
this Agreement, the Architect shall promptly issue a Certificate of Substantial
Completion which shall set forth: (i) A statement that the Work described in the
Inspection Notice is Substantially Completed in accordance with this Agreement
and has been accepted by the Owner and Architect; and (ii) the total unpaid
balance of the amount due to Contractor hereunder for such Work, including any
amounts due under Change Orders and any retained amounts.
2. All minor corrective work or "punch list" work shall be completed
by Contractor within thirty (30) days after preparation of the punchlist, except
that those items that Contractor, using reasonably diligent efforts, is not able
to complete in such thirty-day period shall be completed as soon as reasonably
possible. If any "punch list" work that would reasonably be expected to be
completed within such thirty (30) day period remains uncompleted at the
expiration of such thirty (30) day period, or if any "punch list" work that
would take longer than thirty (30) days to complete remains uncompleted at the
time such work should reasonably be expected to have been completed, then, in
either such case, the GMP shall be reduced by $_________________ per day
17
for each day thereafter that any "punch list" work remains uncompleted.
3. If the inspection by Architect and Owner discloses any item that
is not in accordance with the requirements of this Agreement, Contractor shall,
before issuance of the Certificate of Substantial Completion, complete or
correct such item(s) upon notification from Architect or Owner. Contractor shall
then submit a request for another inspection by Architect and Owner to determine
Substantial Completion. All warranties shall commence on the date of Substantial
Completion of the Work unless otherwise provided in the Certificate of
Substantial Completion.
4. Upon issuance of the Certificate of Substantial Completion, Owner
shall file a Notice of Completion with the County Recorder of San Mateo County.
Subject to the provisions of subparagraphs (a) through (e) of this Paragraph
1.4, and provided Contractor is not in default under this Agreement, upon the
expiration of a period of thirty-five (35) days after the filing of the Notice
of Completion, Owner shall pay to Contractor such amount (the "Final Payment")
as is shown by the Certificate of Substantial Completion to be the unpaid
balance of the Cost of Work and Contractor's Fee (including any remaining
retained funds and amounts due under Change Orders except those Change Orders
which expressly provide that the work described therein is to be completed and
paid for after the date of Substantial Completion and Final Payment).
(a) If any mechanic's or materialmen's lien has at that time
been recorded, Owner may withhold the amount thereof until the lien or claim is
removed and released of record or until the Owner is indemnified against such
claim by bond or other means reasonably satisfactory to the Owner; provided,
however, that Contractor shall have such lien removed from the Project by
bonding or otherwise if, as and when required by Owner.
(b) So long as any item of Work remains uncompleted, Owner shall
retain an amount equal to two hundred percent (200%) of the value of such
uncompleted item of work based on the Schedule of Values and Architect's
certification, which shall be paid only when such item of Work is completed to
the reasonable satisfaction of Architect and Owner.
(c) As condition precedent to the Final Payment, Contractor
shall furnish mechanic's lien waivers and releases from Contractor and from all
Subcontractors, suppliers, and vendors with remaining lien rights respecting the
Project; such waivers and releases shall be on forms acceptable to Owner.
(d) Any portion of the Final Payment not paid when due shall be
a late payment and shall bear interest at the rate of eight percent (8%) per
annum.
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(e) Upon Substantial Completion of all the items of Work
required by the Plans and any Change Orders for a separate and distinct floor of
the Building, and provided Contractor is not in default under this Agreement,
Contractor shall have the right to receive all retainages previously withheld
with respect to the Work allocable to that floor.
5. All plans and specifications, drawings, computations, sketches,
test data, survey results, models, photographs, renderings, plans, shop and
proposal drawings and material relating to the Work and prepared by Contractor
or any other person or entity under Contractor (i) are the property of Owner,
(ii) shall not be retained by Contractor or any Subcontractor, supplier or
materialman after the completion of the Work, (iii) shall be delivered to Owner
upon request by Owner (and Contractor shall see that all such material is
obtained from Subcontractors, materialmen and suppliers and delivered to Owner)
and (iv) shall not be used by Contractor or any other person or entity under
Contractor in any way connected with any other work. Contractor shall deliver to
Owner a complete set of coordinated and bound "As Built" drawings and plans
covering all of the Work, plus all operating manuals and warranties relating to
the Work, prior to Final Payment by the Owner.
J. Mechanic's Liens. Contractor agrees to make prompt payment to all
----------------
Subcontractors, laborers, materialmen and suppliers performing labor upon or
furnishing materials for the Work, subject only to receipt of timely payment
from the Owner for such labor and materials through the progress payments to
which Contractor is then entitled. Contractor agrees to keep the Project and the
Project site free and clear of any and all liens and claims of such
Subcontractors, laborers, materialmen and suppliers, subject to Owner's
performance of its own payment obligations. If any such lien shall be filed at
any time during the progress of the Work, Owner may withhold the amount of such
lien from payments otherwise due Contractor until the same is discharged and
released of record or until the Owner is indemnified by bond or other means
reasonably satisfactory to Owner; provided, however, that Contractor shall have
such lien removed from the Project by bonding or otherwise if, as and when
required by the Owner. Provided that Owner makes timely progress payments of all
undisputed amounts in accordance with the provisions of this Agreement,
Contractor will indemnify Owner from and hold Owner harmless against all liens
and claims of liens for such materials, equipment, labor and other costs, or any
of them, filed against the Project or the Project site or any part thereof
(unless the lien results from a disputed payment that is later resolved against
the Owner), and from and against all expense and liability in connection
therewith, including, but not limited to, court costs and reasonable attorneys'
fees resulting or arising therefrom. Notwithstanding anything to the contrary
contained herein, Contractor shall not be responsible for liens filed or claims
made against the Project by Architect or by any contractor (other than
Contractor) under direct contract with Owner, or by the agents or employees of
any such contractor.
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K. Insurance.
----------
1. Contractor's Safety Responsibility. Contractor shall take all
----------------------------------
reasonable and legally required precautions for the safety of employees and all
other persons in or about the Project and at any other location where any
portion of the Work is being performed, including, without limitation, the
maintenance of fences, barricades, warning lights, scaffolds, walkways and
ladders which are adequate for safety of such employees and other persons.
Contractor shall also exercise due care in order to protect all work and
material against loss, injury or destruction and shall take all precautionary
measures reasonably required for such purpose.
2. Loss or Damage to Work. With the exception of any loss or damage
----------------------
to the Work for which Owner is reimbursed under the insurance coverage described
in Paragraph K.6(b) below, Contractor shall be responsible for any loss or
damage to the Work to be performed and furnished under this Agreement however
caused, until after Substantial Completion and final acceptance and payment by
Owner. Contractor shall be responsible for loss of or damage to materials,
tools, equipment, appliances or other personal property owned, rented or used by
Contractor or any Subcontractor or anyone employed by them in the performance of
the Work from whatever cause.
3. Contractor's Indemnification and Insurance.
------------------------------------------
(a) Contractor agrees to indemnify, defend (with counsel
reasonably satisfactory to Owner), and hold Owner and Owner's officers,
directors, agents and employees harmless from and against all liability, claims,
demands, causes of action, damages, losses, or expenses (including attorney's
fees) of any kind or nature arising out of or resulting from any negligent act
or omission, willful misconduct, or breach of this Agreement by Contractor, any
Subcontractor engaged by Contractor, anyone directly employed by any of them or
anyone whose acts any of them may be liable for, except if such shall arise from
the negligence or wilful misconduct of Owner. The obligations of Contractor
under this Paragraph K.3(a) shall not extend to the liability of the Architect,
engineers or other consultants hired and retained directly by Owner, or their
respective agents or employees, arising out of (i) the preparation or approval
of maps, drawings, opinions, reports, surveys, Change Orders, designs, or
specifications, or (ii) the giving or the failure to give directions or
instructions by the Architect, engineers or other consultants hired by Owner, or
their respective agents or employees, provided such giving or failure to give
directions or instructions is the sole cause of the injury or damage. This
indemnification shall survive termination of this Agreement.
(b) Contractor and its Subcontractors shall price all Work with
and without the insurance coverage required pursuant to this Paragraph K.3(b).
Owner shall notify Contractor whether
20
Contractor and its Subcontractors shall be required to procure and maintain such
coverage. If Owner so notifies Contractor, then prior to the commencement of the
Work, or any portion thereof, Contractor shall procure the following insurance
coverage, at its own expense, with respect to performance of the Work. Such
insurance shall be issued by insurance carriers satisfactory to Owner with
minimum limits as set forth below. Such insurance shall be maintained in full
force and effect until Substantial Completion and final acceptance and payment
by Owner:
(c) Workers Compensation: Statutory Workers Compensation as
required by state law and Employer's Liability with a minimum limit of
$1,000,000.
(d) Commercial General Liability Insurance including Completed
Operations and Contractual Liability Insurance against the liability assumed in
this Agreement with the following minimum limits for bodily injury and property
damage on a claims made basis:
$5,000,000 per claim made;
$5,000,000 aggregate per project.
(e) Comprehensive Automobile Liability Insurance covering owned,
non-owned and hired automobiles used in connection with the Work covering bodily
injury and property damage with a minimum limit of $1,000,000 per accident.
Prior to commencing the Work, the Contractor shall furnish a
certificate, satisfactory to Owner, from each insurance company showing that the
above insurance is in force, stating policy numbers, dates of expiration and
limits of liability, and further providing that the insurance will not be
canceled or changed until the expiration of at least thirty (30) days after
written notice of such cancellation or change has been mailed to and received by
Owner. Owner shall be named as an additional insured under each such policy of
insurance with the exception of Contractor's workers compensation policy.
Further, the certificate shall show that the Contractor's insurance is primary.
(f) Completed Operations Coverage: Contractor shall provide
Owner with evidence that completed operations insurance is maintained in effect
covering loss sustained during a period of four (4) years following Owner's
filing for record a Notice of Completion.
4. Subcontractors' Insurance. Subject to Owner's notification that
-------------------------
Subcontractors shall be required to procure and maintain insurance, Contractor
shall be responsible to ensure that all Subcontractors have procured Workers
Compensation Insurance, Commercial General Liability Insurance and Comprehensive
Automobile Liability Insurance for losses arising out of the performance of
their work. Contractor shall obtain a certificate from each Subcontractors
insurance company showing that the above insurance
21
is in force, stating policy numbers, dates of expiration and limits of
liability, and further providing that the insurance will not be canceled or
changed until the expiration of at least thirty (30) days after written notice
of such cancellation or change has been mailed and received by Contractor.
Contractor shall ensure that Owner is named as an additional insured under each
such policy of insurance. Subcontractor limits shall be as follows:
(a) Statutory Workers Compensation as required by state law and
Employer's Liability Insurance as follows:
(i) $500,000 each accident for bodily injury by accident;
(ii) $500,000 policy limit for bodily injury by disease;
(iii) $500,000 each employee for bodily injury by
disease.
(b) Comprehensive General Liability Insurance:
(i) $1,000,000 each occurrence;
(ii) $1,000,000 aggregate, or
Occurrence form Commercial General Liability Insurance:
(i) $1,000,000 each occurrence;
(ii) $1,000,000 personal injury liability;
(iii) $1,000,000 aggregate for products-completed
operations;
(iv) $1,000,000 general aggregate.
5. Owner's Liability Insurance. Owner shall be responsible for
---------------------------
purchasing and maintaining the Owner's usual liability insurance. Optionally,
Owner may purchase and maintain other insurance for self-protection against
claims which may arise from operations under this Agreement, Contractor shall
not be responsible for purchasing and maintaining this optional Owner's
liability insurance unless specifically required by the Contract Documents.
6. Property Insurance.
------------------
(a) Loss of Use Insurance. Owner, at its option, may purchase
---------------------
and maintain such insurance as will insure Owner against loss of use of
Owner's property during construction due to fire or other hazards, however
caused, prior to Substantial Completion and final acceptance and payment.
Owner waives all
22
rights of action against Contractor for loss of use of Owner's property
prior to Substantial Completion, including consequential losses due to fire
or other hazards, however caused, to the extent covered by such insurance
and provided Owner's insurance company agrees to such waiver.
(b) Builder's Risk Coverage.
-----------------------
(i) Owner shall obtain builder's risk insurance on an "all
risk" policy form, in an amount not less than one hundred percent (100%) of the
completed insurable value of the Work being performed, including, to the extent
not covered by other insurance, the structures upon and in which the Work is
being done and all Work in progress including materials to be incorporated in
the Work which qualify for payment under the terms of this Agreement. Such
insurance shall cover the interests of both Owner and Contractor in the Work as
their interests may appear.
(ii) Contractor shall assist Owner in filing and pursuing
any claim and collecting any amounts payable under the builder's risk coverage
described above. All sums payable under the builder's risk coverage shall be
paid to Owner for the purpose of paying the cost, in whole or in part, of
restoring or rebuilding the Work to be constructed in order to assure
Contractor's compliance with its obligation to complete the Work. Owner shall
have the authority to adjust and settle any loss with the insurers. Any costs
incurred in connection with restoring or rebuilding the work which are not
reimbursed by the insurance proceeds shall be treated as a Change Order within
the meaning of Article G of this Agreement, and the Guaranteed Maximum Price
shall be adjusted accordingly.
7. Waivers of Subrogation. Contractor and Owner hereby grant to each
----------------------
other on behalf of any insurer providing insurance under this Agreement, a
waiver of any right of subrogation as such insurer may acquire against the other
party by virtue of payment of any loss under such insurance; provided, however,
that any such waiver shall be effective only in the event that, and only so long
as, both parties are empowered to grant such a waiver under the terms of the
policy or policies involved without affecting the insurance coverage. This
waiver shall apply only with respect to insurance proceeds and shall not be
applicable to deductibles.
8. Bonds. If Owner requests a performance bond and/or a payment bond
-----
from any of Contractor's Subcontractors, Contractor will be responsible for
ensuring that such Subcontractors provide the same to Owner.
L. Contractor's Warranties.
-----------------------
1. Contractor warrants that (i) Contractor is a duly licensed
contractor in compliance with all applicable laws, Contractor will exercise due
care and diligence in the construction of the Work and the Work shall be
performed in accordance with this
23
Agreement, (ii) all of the Work and services to be performed by Contractor
pursuant to this Agreement shall be the standard and quality specified in the
Contract Documents, and (iii) subject to the qualifications hereunder,
performance of the Work shall comply with the Contract Documents and all safety
codes. Wherever the plans specify use of certain materials and equipment,
Contractor, upon written approval by Owner and Architect, which approval may be
withheld in their sole discretion, may use equivalent materials and equipment.
The Contractor also shall have the right to employ alternate methods of
construction upon written approval of Owner and Architect to the extent that the
scope of the Work and the standards of quality set forth in the Contract
Documents are not adversely affected. Contractor shall be solely responsible for
the adequacy of design executed by Contractor or its Subcontractors in employing
any such alternate methods or materials.
2. Contractor warrants for one (1) year from the date of issuance of
the Certificate of Substantial Completion (the "Warranty Period"), on behalf of
the Contractor, its Subcontractors, materialmen and suppliers, that the Work
performed under this Agreement shall be of good quality and free from defects in
workmanship and materials and in compliance with the provisions of Paragraph
L(1). All warranties procured by Contractor from its Subcontractors, materialmen
and suppliers shall be properly executed on a form approved by Owner and shall
be submitted to the Owner prior to the final acceptance of the Work. Contractor
shall cause such warranties to be made directly to Owner, or if the same shall
be made to Contractor, Contractor, if possible, shall assign same to Owner.
During the Warranty Period, upon written request from Owner, such warranties as
may not be assignable shall be enforced (to the extent enforceable) by
Contractor for the Owner's benefit. Contractor shall also deliver to Owner all
operating manuals for equipment installed in the Work.
3. Contractor shall to Owner's satisfaction (i) re-execute any parts
of the Work that fail to conform with the requirements of the Contract Documents
and that become apparent during the progress of the Work, (ii) remedy any
defects in the Work due to faulty materials or workmanship that become apparent
within the Warranty Period or within such longer period of time as may be set
forth in the plans and specifications, and (iii) replace, repair or restore any
other parts of the Work or furniture, fixtures, equipment or other items placed
therein (whether by Owner or any other party) that are injured or damaged by any
parts of the Work that do not conform to the requirements of the Contract
Documents or as a result of defects in the Work. The cost to Contractor of
performing any of Contractor's obligations under this Paragraph L shall not be
included in the Cost of the Work, and all corrective work shall be at no cost to
Owner. If Contractor fails to proceed within ten (10) business days after
written notice from Owner to comply with the terms of this paragraph, Owner may
correct any defects in the Work and Contractor shall be liable for all
reasonable costs of such corrective work. If, however, Owner does not desire
Contractor to repair Work
24
damaged or not done in accordance with this Agreement, a deduction reasonably
specified by Owner from the Contractor's Fee and the Guaranteed Maximum Price
shall be made by Owner, such deduction to be based upon the reasonably
anticipated cost to the Owner of such corrective work.
4. Contractor's express warranty in this Paragraph L shall be in
addition to, and not in lieu of, any other remedies Owner may have under this
Agreement, at law, or in equity for defective Work. No payment made by Owner to
Contractor, nor any acceptance, use or occupancy of the Work by Owner or any
other person or entity, shall constitute acceptance of any defective Work or any
Work not in compliance with this Agreement.
M. Owner's Occupancy Before Completion of Work. Owner shall have the
-------------------------------------------
right to occupy any part or parts of the project, and to install its own
fixtures and equipment thereon prior to completion of the Work by Contractor,
provided, however, that any such occupancy or use shall not constitute
acceptance of Work not complying with the requirements of this Agreement. Any
such occupancy must be consistent with the Contractor's sequence for completing
the Work in the occupied part or parts or in other areas of the Project, and may
not materially interfere with the completion of such Work. Contractor shall
coordinate its efforts with any occupancy prior to completion of the Work, and
shall give reasonable notice to Owner of any damage or delay likely to result
from such occupancy, but Owner will assume the risk of Owner's fixtures,
equipment and other personal property, and of any damage to or material delay in
the Work arising out of such occupancy.
N. Termination of Agreement.
------------------------
1. Contractor shall have the following rights with respect to
termination of this Agreement.
(a) If through no act or fault of Contractor or any of its
subcontractors, or anyone employed by them, Owner, without justification under
provisions of this Agreement, orders the Work to be stopped for a period in
excess of ninety (90) consecutive days, Contractor, after five (5) days' written
notice to Owner, may elect to terminate this Agreement. If Owner shall not make
any undisputed payment due to Contractor hereunder within thirty (30) days after
the due date for such payment, and provided Contractor is not in default under
this Agreement, Contractor may suspend the Work upon written notice to Owner.
Owner shall be liable to Contractor for the amount of Contractor's actual,
reasonable costs of shut-down, delay and start-up occasioned by a stoppage or
suspension of the Work pursuant to this paragraph, by adjustment to the GMP and
Construction Schedule.
(b) If through no act or fault of Contractor or any of its
Subcontractors, construction of the Work shall be stopped pursuant to court
order, or other governmental act or regulation, fire or action of the elements,
national emergency, or any other
25
cause beyond Contractor's reasonable control (other than those causes described
in Subparagraph N.1(a)), then Contractor, after seven (7) days' written notice
to Owner, may temporarily cease construction of the Work. If the cause of such
stoppage of work is removed within sixty (60) days after Contractor so ceases
construction, Contractor shall resume construction and proceed with the Work;
provided, however, that the amount payable to Contractor hereunder and the
Guaranteed Maximum Price and the Construction Schedule shall be subject to
equitable adjustment as provided above in Article G to account for the
Contractor's additional cost and delays caused by the work stoppage. If the
cause of such stoppage of work cannot be removed for a period of six (6) months,
then either the Contractor or the Owner may elect in writing to terminate this
Agreement.
(c) If this Agreement should be terminated as provided in
Subparagraph (a) or (b) above, then Owner shall pay the Contractor, subject to
the provisions of Article H (Progress Payments) for all costs incurred in
connection with the Work (including, without limitation, any costs incurred
pursuant to a Change Order) theretofore completed, plus a Contractor's Fee in an
amount, equal to percent ( %) of the sum of such costs.
2. Termination by Owner.
(a) If the Contractor should be adjudged as bankrupt, or if the
Contractor should make a general assignment for the benefit of his creditors, or
if a receiver should be appointed on account of Contractor's insolvency, or if
Contractor should fail to supply enough properly skilled workmen or proper
materials to prosecute the Work as provided herein, or if Contractor should fail
to make prompt payment of amounts properly due to Subcontractors or for
materials or labor after receiving payments from Owner, or if Contractor should
disregard applicable laws or ordinances or otherwise be guilty of a breach of
any material provision of this Agreement or if Contractor should fail to remove
a mechanic's lien on the Project for which Contractor is responsible in the
manner required under this Agreement, then the Owner, upon ten (10) days'
written notice to Contractor, may terminate the employment of the Contractor and
take possession of the Project, the Project site, materials, suppliers,
equipment and tools and finish the Work by whatever method Owner may deem
expedient, and, at Owner's option, assume any or all of the subcontracts now or
hereafter executed by the Contractor hereunder. If this Agreement is so
terminated by Owner, Contractor shall be entitled to receive payment only for
Work completed as of the date of termination, which amounts shall be paid upon
Substantial Completion of the Work by Owner. Contractor shall be responsible for
all costs incurred by Owner due to Contractor's non-performance, default or
negligence. Contractor shall execute and deliver all papers and take all steps,
including assignment of contractual rights, as Owner may reasonably require to
permit Owner to complete the Work.
26
(b) Owner may, without cause, order Contractor in writing to
suspend, delay or interrupt the Work in whole or in part for such period of time
as Owner may determine. Should Owner choose to suspend, delay or interrupt the
Work, an adjustment shall be made to the Construction Schedule and for increases
in the cost of performance of the Contract caused by such suspension, delay or
interruption. No adjustment shall be made to the extent that performance is, was
or would have been so suspended, delayed or interrupted by another cause for
which Contractor is responsible, or if an equitable adjustment is made or denied
under another provision of the Agreement.
(c) If Contractor defaults or neglects to carry out the Work in
accordance with this Agreement and fails within a seven (7) day period after
receipt of written notice from Owner to commence and continue correction of such
default or neglect with diligence and promptness, Owner shall have the right,
without prejudice to other remedies Owner may have, to correct such
deficiencies. In such case an appropriate Change Order shall be issued deducting
from payments then or thereafter due Contractor the cost of correcting such
deficiencies, including compensation for Architect's additional services and
expenses made necessary by such default, neglect or failure. If payments then or
thereafter due Contractor are not sufficient to cover such amounts, Contractor
shall pay the difference to Owner.
(d) If this Agreement shall be terminated by Owner pursuant to
Subparagraph (a) above, Owner shall have the right to recover from Contractor
any costs in excess of the GMP incurred due to Contractor's nonperformance,
default or negligence. Contractor shall execute and deliver all papers and take
all steps, including assignment of contractual rights, as Owner may reasonably
require to permit Owner to complete the Work.
O. General Provisions.
------------------
1. Assignment. Contractor shall not assign this Agreement, nor shall
----------
Contractor assign any monies due or to become due to Contractor hereunder,
without the prior written consent of Owner, which consent may be withheld in
Owner's sole discretion. Owner shall have the right to assign this Agreement
only to a financially responsible person or entity that is capable of
discharging the obligations of the Owner hereunder.
2. Notices. All notices hereunder shall be in writing, shall be sent
-------
by registered or certified mail, return receipt requested, or by personal
delivery or courier service with a request for an acknowledgment of receipt, and
shall be effective on receipt. Notices shall be sent to or delivered to the
following addresses or such other address(es) as a party may designate by notice
given in the manner provided herein:
27
Oracle Corporation
000 Xxxxxx Xxxxxxx, Xxx 000000
Xxxxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Treasurer
with a copy to:
Oracle Corporation
000 Xxxxxx Xxxxxxx, Xxx 000000
Xxxxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
and in the case of the Contractor to:
_____________________________
_____________________________
_____________________________
Attention:___________________
and in the case of the Architect to:
_____________________________
_____________________________
_____________________________
Attention:___________________
3. Complete Agreement. This Agreement, including all exhibits
------------------
hereto, represents the full complete understanding of the parties and supersedes
any previous agreements, representations, or understandings, oral or written,
with respect to the subject matter hereof. This Agreement may be modified or
altered only by a written instrument signed by the parties.
4. Successors. This Agreement shall inure to the benefit of and
----------
shall be binding upon the successors and assigns of Owner and upon the permitted
successors and assigns of Contractor.
5. Governing Law. This Agreement shall be governed by and
-------------
interpreted under the laws of the State of California.
6. Remedies. Remedies available hereunder shall be in addition to
--------
and not a limitation of remedies otherwise available by law.
7. No Waiver. No consent or waiver either expressed or implied by
---------
either Owner or Architect to any breach by Contractor of any covenant,
obligation, or liability shall be construed as a waiver of right or consent to
any other breach of the same or any other covenant, obligation, or duty.
8. Governing Contract Documents. In general, plans and
----------------------------
specifications indicate qualities of materials and workmanship, and drawings
indicate dimensions, locations, quantities, and details of
28
construction. Detailed drawings and specifications shall take precedence over
general drawings and specifications. Supplementary or revised details and
instructions, if approved by the Owner, shall take precedence over original
documents, information and earlier addenda to which they refer. Any item of Work
mentioned in specifications but not shown on drawings or shown on drawings but
not mentioned in specifications, shall be provided as if shown and mentioned in
both.
9. Contractor's Notice. Contractors are required by law to be
-------------------
licensed and regulated by the Contractor's State License Board. Any questions
concerning a contractor may be referred to the Registrar, Contractor's State
License Board, 0000 X. Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxx 00000. Contractor's
license number is __________________.
10. Subcontract Work. All portions of the Work shall be performed by
----------------
Contractor or under subcontracts entered into by Contractor. The Contractor
shall obtain a minimum of three (3} responsive bids from Subcontractors and from
suppliers of materials or equipment fabricated especially for the Work, all of
which bids shall be presented to the Contractor as sealed bids and which sealed
bids shall be delivered to the Architect and opened and tabulated in the
presence of the Owner, Architect and Contractor. The Owner will then determine
which bids will be accepted. The Owner may designate specific persons or
entities from whom the Contractor shall obtain bids; however, the Contractor
shall not be required to contract with anyone to whom the Contractor has
reasonable objection. Owner shall have, at Owner's request, the right to review
the bid invitations and bid packages prepared by Contractor. Contractor will
receive warranties from all Subcontractors in accordance with specifications and
contractor licensing requirements.
Contractor shall secure from the electrical and mechanical
subcontractors a covenant warranting the adequacy of their design or engineering
specifications and holding Owner and Contractor harmless from any injury,
liability, delay, or other expenses resulting from any fault or negligence of
the subcontractor in the preparation thereof.
Each subcontract agreement is assigned by Contractor to Owner,
provided that such assignment shall be effective only after the termination of
this Agreement and only for those subcontract agreements that Owner accepts by
notifying the Subcontractor in writing.
11. Status of Architect. Whenever a right to approve or make a
-------------------
determination or other right is reserved hereunder to Owner, it is understood
that Owner may delegate the exercise of such right to Architect or any other
entity in writing, and Contractor shall be wholly protected in relying upon any
action taken by such representative in the exercise of such right, unless
Contractor is earlier notified in writing by the Owner to the contrary.
29
Architect shall have authority to review and approve shop drawings for the Work
and, upon prior approval of Owner, Architect also shall have authority to stop
the Work whenever such stoppage may be necessary in Architect's reasonable
opinion to ensure proper performance of this Agreement. Reexamination of
questioned work may be ordered by the Architect or Owner and, if so ordered, the
Work must be uncovered by Contractor. If such Work is found not to be
substantially in accordance with the requirements of the Contract Documents,
Contractor shall pay the cost of uncovering the Work. If the Work is found to be
in accordance with the Contract. Documents, Owner shall pay said cost.
Contractor shall promptly correct all Work rejected by Architect because it
fails to conform to the requirements of the Contract Documents, whether observed
before or after Substantial Completion and whether or not fabricated, installed
or completed. Contractor shall bear the costs of correcting such rejected Work,
including additional testing and inspections and compensation for Architect's
services and expenses made necessary thereby.
It is understood that the performance of this Agreement by Contractor
is dependent upon the cooperation and the prompt performance by the Owner and
Architect of their respective duties. Owner shall cause Architect to promptly
provide all necessary design details, working drawings, and changes in drawings
or specifications as may be required from time to time. Should errors,
omissions, or discrepancies appear to Contractor in or between the drawings
and/or specifications, or in the work done by others affecting the Work, the
Contractor shall notify the Architect and Owner at once, and the Architect,
subject to Owner's approval, shall instruct the Contractor regarding the manner
in which the Contractor is to proceed with respect to the Work so affected. If
the Contractor proceeds with the work affected without instructions from the
Architect, Contractor shall be responsible for, and shall make good, any
resulting damage or defect.
12. Confidentiality. Contractor shall treat all information relating
---------------
to the Work and all information supplied to Contractor by Owner or Architect as
confidential and proprietary information of Owner and shall not permit its
release to other parties or make any public announcement or publicity releases
without Owner's written authorization. Contractor shall also require all
Subcontractors, materialmen and suppliers to comply with this requirement.
13. Attorneys' Fees. If any party brings any action for the
---------------
enforcement or interpretation of this Agreement, the losing party shall pay to
the prevailing party a reasonable sum for attorneys' fees and costs incurred by
the prevailing party. The "prevailing party" will be determined, at the
conclusion of any appeals, if any, by the court before whom the action was
brought, based upon an assessment of which party's major arguments or positions
taken in the suit or proceeding could fairly be said to have prevailed over the
other party's major arguments or positions
30
on major disputed issues, in the final decision of the court or any appellate
court.
IN WITNESS WHEREOF, the Owner and Contractor have executed this
Agreement as of the date first written above.
OWNER: ORACLE CORPORATION,
a Delaware corporation
By: /s/ Xxxxx Xxxxx
-----------------------------------
Its: VP and Corporate Treasurer
-----------------------------------
CONTRACTOR: Xxxxxx Construction, Inc.
--------------------------
By: /s/ XXX
-----------------------------------
Its: President
-----------------------------------
31
Exhibit A
---------
PLANS AND SPECIFICATIONS
[TO BE COMPLETED]
Exhibit B
---------
SCHEDULE OF GENERAL CONDITIONS
[TO BE COMPLETED]
EXHIBIT D
RULES AND REGULATIONS
1. Landlord shall have the right to prescribe the weight, size and
position of all equipment, materials, furniture and other property brought into
the Premises. Heavy objects shall, if considered necessary by Landlord, stand
on wood strips of such thickness as is necessary to distribute properly the
weight. Landlord will not be responsible for loss of or damage to any such
property from any cause, and all damage done to the Premises by moving or
maintaining such property shall be repaired at the expense of Tenant.
2. Tenant shall not use or keep in or about the Premises any kerosene,
gasoline or other inflammable or combustible fluid or material other than
limited quantities thereof reasonably necessary for the operation or maintenance
of office equipment or, without Landlord's prior written approval, use any
method of heating or air conditioning other than that supplied by Landlord.
3. No curtains, draperies, blinds, shutters, shades, screens or other
coverings, hangings or decorations shall be attached to, hung or placed in, or
used in connection with, any window of the Premises without the prior written
consent of Landlord. With the prior consent of Landlord, such items shall be
installed on the office side of the standard window covering for the Premises
and shall in no way be visible from the exterior of the Premises.
4. Tenant shall see that the doors of the Premises are closed and locked
and that all water faucets, water apparatus and utilities are shut off before
Tenant or Tenant's employees leave the Premises, so as to prevent waste or
damage, and for any default or carelessness in this regard Tenant shall make
good all injuries sustained to the Premises.
5. The toilet rooms, toilets, urinals, washbowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed, no foreign substance of any kind whatsoever shall be thrown therein
and the expense of any breakage, stoppage or damage resulting from the violation
of this rule shall he borne by Tenant.
6. No materials shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash or garbage in the City of
Belmont without being in violation of any law or ordinance governing such
disposal.
7. The requirements of Tenant will be attended to only upon application
by telephone or in person at the office of Landlord's Property Manager.
Employees of Landlord or Landlord's Property Manager shall not perform any work
or do anything outside of their regular duties unless under special instructions
from Landlord.
8. These rules and regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of the Lease.
9. Landlord reserves the right to make such other and reasonable rules
and regulations as in its judgment may from time to time be needed for the
safety, care and cleanliness of the Premises and for the preservation of good
order therein.
D-1
