EXHIBIT 10.18
BASIC LEASE INFORMATION
LEASE DATE: October 2, 1996
TENANT: Pure Atria Corporation, a Delaware corporation
ADDRESS OF TENANT: 0000 X. Xxxx Xxx., Xxxxxxxxx, XX 00000
(Section 23.1)
LANDLORD: Tandem Computers Incorporated, a Delaware corporation
ADDRESS OF LANDLORD: 00000 Xxxxxx Xxxxxxx, Xxxxxxxxx, XX 00000
(Section 23.1) ATTN: Corporate Real Estate
PREMISES: A parcel of land containing approximately 5.772 net
(Section 1.1) acres +-, excluding Homestead Road public road
dedication and including the area of portions of Swallow
Way and Forge Drive, private streets, improved with a
two-story office building of approximately 101,373
square feet, commonly known as 00000 Xxxxxxxxx Xxxx,
Xxxxxxxxx, XX 00000, (the "Building") and a two story
parking structure containing approximately 139,340
square feet (the "Parking Structure"). (See Exhibit A,
Legal Description, Exhibit B, Site Plan)
USE: General office, training, research and development,
sales,
Lease.19.
October 2, 1996
Page 1
(but not sales requiring retail zoning)
and related storage, shipping & receiving, all to the
extent allowed by the applicable zoning statutes
(Section 6.1)
SHELL DELIVERY DATE: September 19, 1996
LEASE COMMENCEMENT
DATE: January 1, 1997
RENT COMMENCEMENT
DATE: January 5, 1997
EXPIRATION DATE: Ten (10) years after the Lease Commencement Date
TERM: One Hundred and Twenty (120) months
(Section 2.1)
OPTIONS TO EXTEND: Two Options to Extend for 5 years each
OPTION RENT: Fair Market Value, not less than prior month's
Base Rent, except as modified by Article 10
INITIAL BASE RENT: $177,400 per month
ANNUAL RENT
ADJUSTMENT: 4% over previous Lease year's Base Rent
LIABILITY INSURANCE: Five Million Dollars ($5,000,000)
SECURITY DEPOSIT:
Letter of Credit for Three Million Dollars ($3,000,000.00)
Lease.19.
October 2, 1996
Page 2
LEASE
-----
THIS LEASE is made as of the date specified in the Basic Lease Information, by
and between the landlord specified in the Basic Lease Information ("Landlord"),
and the tenant specified in the Basic Lease Information ("Tenant").
W I T N E S S E T H:
ARTICLE 1
------- -
Premises
1.1 Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord,
for the term and subject to the covenants hereinafter set forth, to all of which
Landlord and Tenant hereby agree, the land, Building and Parking Structure
specified in the Basic Lease Information, and as shown on Exhibits A and B, (the
"Premises").
ARTICLE 2
------- -
Term
2.1 The term of this Lease shall be the term specified in the Basic Lease
Information, which shall commence on the commencement date specified in the
Basic Lease Information (the "Lease Commencement Date") and, unless sooner
terminated as hereinafter provided, shall end on the expiration date specified
in the Basic Lease Information (the "Expiration Date").
2.2 Landlord and Tenant agree that Landlord has substantially completed
("Substantially Completed") Landlord's Work, in accordance with the requirements
set forth in (S)1 of the Addendum to Lease (attached hereto and made a part
hereof by this reference) subject only to "punch-list" items (determined
pursuant to the procedure set forth in (S)1 of the Lease Addendum). Xxxxxx's
possession of the Premises constitutes Tenant's acknowledgment that (except for
"punch-list" items) the Premises are in all respects in the condition in which
Landlord is required to deliver the Premises to Tenant under this Lease and that
Xxxxxx has examined the plans
Lease.19.
October 2, 1996
Page 3
and specifications and the Premises and is fully informed to Xxxxxx's
satisfaction of the physical and environmental condition and the utility of the
Premises. Tenant acknowledges that Landlord, its agents and employees and other
persons acting on behalf of Landlord have made no representation or warranty of
any kind in connection with any matter relating to the physical or environmental
condition, value, fitness, use or zoning of the Premises upon which Xxxxxx has
relied directly or indirectly for any purpose.
Notwithstanding the above, with regard to the land, the Building and Parking
Structure, and except as caused by Xxxxxx's Work or Tenant's use of the
Premises, Landlord agrees to correct, or cause to be corrected, at Landlord's
cost, i) any defect in the design of the Building and the Parking Structure with
Landlord's Work completed (which Building and Parking Structure as so completed
by Landlord's Work is referred herein as the "Completed Shell") that causes a
foreseeable unreasonable risk to the life and safety of the occupants of the
Building, any defect in construction resulting from Landlord's Work, and any
defect in the installation of equipment in the Completed Shell resulting from
Xxxxxxxx's Work, and ii) any failures of the Completed Shell to comply with the
applicable building codes, Title 24 and the Americans with Disabilities Act of
1990, but only to the extent that any such defect or failure to comply existed
as of the Shell Delivery Date. Except as otherwise provided by law, in any
action under this section against Landlord or Landlord's People (defined below),
Tenant shall have the burden of proof as to each fact essential to the claim or
defense being asserted by Tenant. Except as otherwise provided by law, in any
action under this section against Tenant or Tenant's People (defined below),
Landlord shall have the burden of proof as to each fact essential to the claim
or defense being asserted by Landlord. Tenant shall insure that its use complies
with applicable zoning regulations. Xxxxxxxx agrees to obtain any necessary
Cupertino City final approvals with respect to Xxxxxxxx's Work within thirty
(30) days of the Shell Delivery Date.
2.3 Provided that at the time of exercising the applicable option to renew
described below or at the time such renewal term commences, there is no Event of
Default (as defined in (S)14.1) that remains uncured, Tenant shall have the
option to renew this Lease for two (2) additional terms of five (5) years each.
Tenant shall exercise each option to renew by delivering to
Lease.19.
October 2, 1996
Page 4
Landlord written notice of Xxxxxx's election to renew the term of this Lease at
least eight (8) months before the expiration of the then existing term of this
Lease. Xxxxxxxx's failure to receive Xxxxxx's written notice duly electing to
renew the term of this Lease shall be conclusively deemed Tenant's election not
to exercise its option to renew, in which event the term shall expire on the
last day of the then-existing term. If Tenant duly exercises an option to renew,
then Tenant shall continue to occupy the Premises on all of the terms and
conditions of this Lease, except that: (a) the Base Rent payable by Tenant
during the applicable renewal term shall be increased as set forth in Lease
Addendum (S)3; and (b) after the second renewal term, Tenant shall have no
further renewal options under this Lease. Tenant's rights to extend the term of
this Lease may not be exercised by or be assigned to any person or entity not
approved by Landlord according to the same standards applicable to proposed
subtenants or assignees contained elsewhere herein. Notwithstanding the
foregoing, Tenant shall have the right to assign the options to extend (or to
make the options part of a sublease with) i) to an "Affiliated Entity" (meaning
any entity that controls, is controlled by, or is under common control with the
entity that is then the Tenant, with control consisting of ownership of fifty-
one percent (51%) or more of the beneficial ownership of the entity in question,
which in the case of a corporation shall be deemed to be those shares of common
stock issued, outstanding, and entitled to vote for the election of directors)
to whom this Lease has been assigned or otherwise transferred pursuant to
(S)12.1 hereof, ii) in connection with a corporate reorganization or merger
where the surviving or resulting entity has a net worth determined in accordance
with generally accepted accounting principles of not less than Fifty Million
Dollars ($50,000,000.00), and iii) in connection with a sale of substantially
all of the assets of Tenant to an entity with a net worth determined in
accordance with generally accepted accounting principles of not less than Fifty
Million Dollars ($50,000,000.00).
2.4 [Omitted]
2.5 Landlord acknowledges that Tenant will attempt to gain early access to the
Premises to begin its tenant improvements, and each party agrees to make all
reasonable efforts to insure that the various contractors and subcontractors do
not interfere with each other during the period prior to the withdrawal of
Xxxxxxxx's contractors and subcontractors. In the event of
Lease.19.
October 2, 1996
Page 5
early access to the Premises, Tenant shall not be obligated to pay rent, and the
term of the Lease shall not begin, but Tenant shall be and remain responsible
for injury, damage or costs caused by the intentional acts or negligence of
Tenant, or those under Tenant's control, including without limitation, Tenant's
employees, agents, contractors, subcontractors, assignees, invitees and
appointees. Tenant ("Tenant's People")
ARTICLE 3
------- -
Rent
3.1 Tenant shall pay to Landlord the following amounts as rent for the
Premises:
(a) During the period between the Rent Commencement Date and the last day of the
twelfth (12th) full calendar month thereafter, Tenant shall pay to Landlord, as
base monthly rent, the amount of monthly rent specified in the Basic Lease
Information (the "Base Rent"). Commencing on the first day of the thirteenth
(13th) full calendar month after the Commencement Date, and on each anniversary
of that date thereafter (including during all renewal terms), the Base Rent
shall be increased as provided in Lease Addendum (S)2.
(b) Throughout the term of this Lease, Tenant shall pay, as additional rent, all
other amounts of money and charges required to be paid by Tenant under this
Lease, whether or not such amounts of money or charges are designated additional
rent as used in this Lease, rent shall mean and include all Base Rent and
additional rent payable by Tenant in accordance with this Lease.
3.2 It is the intention of Landlord and Tenant that the Base Rent payable by
Tenant to Landlord during the term of this Lease shall be net of all costs and
expenses incurred in connection with the management, operation, maintenance,
repair and replacement of the Premises in accordance with this Lease, except as
specifically set forth otherwise herein. Tenant will be charged no management
fee by Landlord.
Except as provided in Section 8.2, Landlord shall have no obligations or
liabilities whatsoever with respect to the management, operation, maintenance,
repair or replacement of the Premises during the term of this
Lease.19.
October 2, 1996
Page 6
Lease, and Tenant shall manage, operate, maintain, repair and replace the
Premises in accordance with this Lease and shall pay all costs and expenses
incurred in connection therewith before such costs or expenses become
delinquent.
Without limiting the generality of the foregoing, throughout the entire term of
this Lease, Tenant shall pay, as additional rent, all premiums for all property
and liability insurance required under this Lease, all Property Taxes (as
defined in section 4.1) and all Other Taxes (as defined in section 5.1) that
accrue during or are allocable to the term of this Lease. Notwithstanding any
provision herein to the contrary, Tenant shall only have liability, obligation
or responsibility for or in connection with Hazardous Material (defined below)
introduced in, on, under or about the Premises on or after the Shell Delivery
Date, by Tenant or Tenant's People. Except as otherwise provided by law, in any
action under this section against Landlord or Landlord's People (defined below),
Tenant shall have the burden of proof as to each fact essential to the claim or
defense being asserted by Tenant. Except as otherwise provided by law, in any
action under this section against Tenant or Tenant's People, Landlord shall have
the burden of proof as to each fact essential to the claim or defense being
asserted by Landlord.
3.3 Tenant shall pay all Base Rent to Landlord, in advance, on or before the
first day of each and every calendar month during the term of this Lease. Tenant
shall pay all additional rent upon demand. Tenant shall pay all rent to Landlord
without notice, demand, deduction or offset, in lawful money of the United
States of America, at the address of Landlord specified in the Basic Lease
Information, or to such other person or at such other place as Landlord may from
time to time designate in writing.
3.4 Tenant acknowledges that the late payment by Tenant of any Base Rent or
additional rent (including the items described in section 3.2) will cause
Landlord to incur costs and expenses, the exact amount of which is extremely
difficult and impractical to fix. Such costs and expenses will include
administration and collection costs and processing and accounting expenses.
Therefore, if any Base Rent or additional rent is not received by Landlord
within five (5) days after it is due, Tenant shall immediately pay to Landlord a
late charge equal to six percent (6%) of such delinquent amount.
Lease.19.
October 2, 1996
Page 7
Landlord and Tenant agree that such late charge represents a reasonable estimate
of such costs and expenses and is fair compensation to Landlord for the loss
suffered by Xxxxxx's failure to make timely payment. In no event shall such late
charge be deemed to grant to Tenant a grace period or extension of time within
which to pay any rent or prevent Landlord from exercising any right or enforcing
any remedy available to Landlord upon Tenant's failure to pay all rent due under
this Lease in a timely fashion, including the right to terminate this Lease All
amounts of money payable by Tenant to Landlord hereunder, if not paid when due,
shall bear interest from the due date until paid at the maximum annual interest
rate allowed by law for business loans (not primarily for personal, family or
household purposes) not exempt from the usury law at such due date or, if there
is no such maximum annual interest rate, at the rate of eighteen percent (18%)
per anum.
ARTICLE 4
------- -
Property Taxes
-----
4.1 "Property Taxes" shall mean all taxes, assessments, excises, levies, fees
and charges (and any tax, assessment, excise, levy, fee or charge levied wholly
or partly in lieu thereof or as a substitute therefor or as an addition thereto)
of every kind and description, general or special, ordinary or extraordinary,
foreseen or unforeseen, secured or unsecured, whether or not now customary or
within the contemplation of Landlord and Tenant, that are levied, assessed,
charged, confirmed or imposed by any public or government authority on or
against, or otherwise with respect to, the Premises or any part thereof or any
personal property used in connection with the Premises. Property Taxes shall not
include net income (measured by the income of Landlord from all sources or from
sources other than solely rent), franchise, inheritance or capital stock taxes
of Landlord, unless levied or assessed against Landlord in whole or in part in
lieu of, as a substitute for, or as an addition to any Property Taxes. Property
Taxes shall not mean i) any city, local or county transfer taxes imposed as a
result of the sale or other transfer of the Premises, or ii) any investigation
and/or remediation costs related to Hazardous Materials unless caused to be
present in, on, under or about the Premises on or after the Shell Delivery Date
by Tenant or Tenant's People.
Lease.19.
October 2, 1996
Page 8
ARTICLE 5
------- -
Other Taxes
5.1 "Other Taxes" shall mean all taxes, assessments, excises, levies, owner's
association dues or similar charges, fees and charges, including all payments
related to the cost of providing facilities or services, whether or not now
customary or within the contemplation of Landlord and Tenant, that are levied,
assessed, charged, confirmed or imposed by any public or government authority
upon, or measured by, or reasonably attributable to (a) the Premises, (b) the
cost or value of Tenant's equipment, furniture, fixtures and other personal
property located in the Premises or the cost or value of any leasehold
improvements made in or to the Premises by or for Tenant, regardless of whether
title to such improvements is vested in Tenant or Landlord, (c) any rent payable
under this Lease, including any gross income tax or excise tax levied by any
public or government authority with respect to the receipt of any such rent, (d)
the possession, leasing, operation, management, maintenance, alteration, repair,
replacement, use or occupancy by Tenant of the Premises, or (e) this transaction
or any document to which Tenant is a party creating or transferring an interest
or an estate in the Premises. Other Taxes shall not include net income (measured
by the income of Landlord from all sources or from sources other than solely
rent), franchise, inheritance or capital stock taxes of Landlord, unless levied
or assessed against Landlord in whole or in part in lieu of, as a substitute
for, or as an addition to any Other Taxes. Other Taxes shall not include i) any
city, local or county transfer taxes imposed as a result of the sale or other
transfer of the Premises, or ii) any investigation and/or remediation costs
related to Hazardous Materials unless caused to be present in, on, under or
about the Premises on or after the Shell Delivery Date by Tenant or Tenant's
People.
ARTICLE 6
------- -
Use
6.1 The Premises shall be used only for the purpose specified in the Basic
Lease Information and no other purpose without Landlord's prior written consent,
which consent shall not be unreasonably withheld or delayed; provided, however,
Xxxxxxxx's withholding of consent shall be conclusively
Lease.19.
October 2, 1996
Page 9
presumed reasonable if the proposed use would materially increase the wear and
tear on or the risk of damage to the Premises above levels or risks resulting
from Xxxxxx's use as of the date of this Lease or the proposed use is for an
illegal, immoral or disreputable purpose. Tenant shall not do or permit to be
done in, on or about the Premises, nor bring or keep or permit to be brought or
kept therein, anything which is prohibited by or will in any way conflict with
any law, ordinance, rule, regulation or order now in force or which may
hereafter be enacted, or which is prohibited by any insurance policy for the
Premises, or will in any way cause a cancellation of any insurance for the
Premises. Tenant shall not do or permit anything to be done in, on or about the
Premises which will in any way obstruct or interfere with the rights of
Landlord. Tenant shall not maintain or permit any nuisance in, on or about the
Premises or commit or suffer to be committed any waste in, on or about the
Premises.
ARTICLE 7
------- -
Services
7.1 Tenant shall, at Tenant's sole cost and expense, supply the Premises with
electricity, heating, ventilating and air conditioning, water, natural gas,
lighting replacement for all lights, restroom supplies, telephone service,
window washing, security service, janitor, scavenger and disposal services, and
such other services as Tenant determines to furnish to the Premises. Landlord
shall not be in default hereunder or be liable for any damage or loss directly
or indirectly resulting from, nor shall the rent be abated or a constructive or
other eviction be deemed to have occurred by reason of, the installation, use or
interruption of use of any equipment in connection with the furnishing of any of
the foregoing services, any failure to furnish or delay in furnishing any such
services, whether such failure or delay is caused by accident or any condition
beyond the control of Landlord or Tenant or by the making of repairs or
improvements to the Premises, or any limitation, curtailment, rationing or
restriction on use of water, electricity, gas or any form of energy serving the
Premises, whether such results from mandatory governmental restriction or
voluntary compliance with governmental guidelines. Tenant shall pay the full
cost of all of the foregoing services as additional rent.
Lease.19.
October 2, 1996
Page 10
ARTICLE 8
------- -
Maintenance and Repairs; Capital Improvements
8.1 Except as otherwise provided herein, Tenant shall, at all times during the
term of this Lease and at Tenant's sole cost and expense, maintain, repair and
replace the Premises and every part thereof and all grounds, landscaping,
parking areas, lighting, roof, interior walls, floors, signs, heating,
ventilating and air conditioning, mechanical, electrical, plumbing, sprinkler
and life safety systems, equipment, fixtures, alterations, additions and
improvements therein or thereon and keep all of the foregoing clean and in good
order and operating condition (including painting the exterior of the Premises
as often as reasonably needed to keep such exterior in a good, well painted
condition, cleaning interior and exterior doors, windows and glass, and
repairing and replacing any exterior windows and glass that is broken, cracked
or damaged). Tenant shall engage a duly licensed independent contractor to
perform all maintenance and repair services on all heating, ventilating and air
conditioning, mechanical, electrical, plumbing, sprinkler and life safety
systems and equipment in the Premises that is to be performed by Tenant in
accordance with this section 8.1. Landlord and its consultants or contractors
shall have the right to inspect the Premises to determine Tenant's compliance
with this section 8.1, and Tenant shall promptly complete any work recommended
by Landlord or its consultants or contractors as a result of any such
inspection. Tenant hereby waives all rights to make repairs at the expense of
Landlord or in lieu thereof to vacate the Premises. Subject to section 9.2,
Tenant shall, at the end of the term of this Lease, surrender to Landlord the
Premises and all alterations, additions, fixtures and improvements therein or
thereto in the same condition as when received, ordinary wear and tear and
damage thereto by fire or other casualty, condemnation and Hazardous Materials
unless caused to be present in, on, under or about the Premises on or after the
Shell Delivery Date by Tenant or Tenant's People, excepted. Except as otherwise
provided by law, in any action under this section against Landlord or Landlord's
People (defined below), Tenant shall have the burden of proof as to each fact
essential to the claim or defense being asserted by Tenant. Except as otherwise
provided by law, in any action under this section against Tenant or Tenant's
People Landlord shall have the burden of proof as to each fact essential to the
claim or defense being asserted by Landlord.
Lease.19.
October 2, 1996
Page 11
8.2 Landlord shall be and remain responsible for maintenance and repair of the
Premises' foundation, and structural roof members, for structural aspects of the
Completed Shell, except (subject to the waiver of subrogation set forth
elsewhere herein) for damages caused by the intentional act or negligence of
Tenant or Tenant's People. Landlord shall be and remain responsible for i) any
defect in the design of the Completed Shell that causes a foreseeable
unreasonable risk to the life and safety of the occupants of the Building, any
defect in construction resulting from Xxxxxxxx's Work, and any defect in the
installation of equipment in the Completed Shell resulting from Xxxxxxxx's Work,
and ii) any failures of the Completed Shell to comply with the appropriate
building codes, Title 24 and the Americans with Disabilities Act of 1990, but
only to the extent that any such defect or failure to comply existed as of the
Shell Delivery Date. Except as otherwise provided by law, in any action under
this section against Landlord or Landlord's People (defined below), Tenant shall
have the burden of proof as to each fact essential to the claim or defense being
asserted by Tenant.
8.3 Notwithstanding the provisions of sections 8.1 above, if at any time after
the first ten (10) year term of this Lease it becomes necessary to make a
capital improvement or replacement costing in excess of Five Thousand Dollars
($5,000.00), (including replacement of the roof structure [but not the membrane]
or any major building system) then such capital improvement or replacement shall
be made by Landlord at its cost, and upon completion thereof, Tenant shall pay
on a monthly basis for the remainder of the term of this Lease an amount
sufficient to amortize the cost of such improvement over its anticipated useful
life. The obligation to pay amortization shall cease upon the termination of the
Lease or at any time that an option to extend is exercised and the rent is
adjusted based upon the fair market rental value of the Premises. The provisions
of this Section 8.3 shall not apply to any improvements required to be made
pursuant to Section 8.2, or to the restoration of damage caused by fire or other
peril, which subject is governed by Article 15.
ARTICLE 9
------- -
Alterations
Lease.19.
October 2, 1996
Page 12
9.1 Tenant shall not make any alterations, additions or improvements in or to
the Premises or any part thereof, or attach any fixtures or equipment thereto,
without Landlord's prior written consent.
Notwithstanding the preceding sentence, Tenant may make such alterations,
additions or improvements without Landlord's consent only if the total cost of
any such integrated work of improvement constituting an alteration or addition
or other improvement is fifteen percent (15%) of the then monthly Base Rent or
less and such alterations, additions or improvements will not affect in any way
the structural, exterior or roof elements of the Premises or mechanical,
electrical, plumbing, utility or life safety systems of the Premises, but Tenant
shall give prior written notice of any such alterations, additions or
improvements to Landlord.
As a part of any consent to alterations, additions or improvements, Landlord
shall inform Xxxxxx as to whether the proposed alterations, additions or
improvements are to be removed at the termination of the Lease.
In no event shall Tenant be permitted to install underground storage tanks or
fuel systems on the Premises Landlord's refusal to consent to the installation
of an underground tank or fuel system shall be conclusively presumed to be
reasonable. All alterations, additions and improvements in or to the Premises to
which Landlord consents, or which do not require Landlord's consent, shall be
made by Tenant, at Tenant's sole cost and expense, as follows:
(a) Tenant shall submit to Landlord, complete plans and specifications for all
work to be done by Tenant (which plans must be approved by Landlord if
Landlord's approval is required for the alterations, additions or improvements
described by such plans); provided, however, that plans need not be submitted
for any work not requiring a building permit from the city of Cupertino. Such
plans and specifications shall be prepared by the licensed architect(s) and
engineer(s), shall comply with all applicable codes, laws, ordinances, rules and
regulations, shall not adversely affect the structural elements of the Premises,
shall be in a form sufficient to secure the approval of all government
authorities with jurisdiction over the
Lease.19.
October 2, 1996
Page 13
Premises, and shall be otherwise satisfactory to Landlord in Landlord's
reasonable discretion.
(b) In those cases wherein Landlord's approval is required, Landlord shall
notify Tenant promptly in writing whether Landlord approves or disapproves such
plans and specifications and, if Landlord disapproves such plans and
specifications, Landlord shall describe the reasons for disapproval. Xxxxxxxx's
consent shall not be unreasonably withheld. Notwithstanding the previous
sentence, however any objection to any proposed change in the use of the
Premises shall be conclusively deemed to be reasonable. Tenant may submit to
Landlord revised plans and specifications for Landlord's prior written approval.
Tenant shall pay all costs, including the fees and expenses of the licensed
architect(s) and engineer(s), in preparing such plans and specifications.
(c) All changes in the plans and specifications requiring Landlord's approval
shall be subject to Landlord's prior written approval. If Tenant wishes to make
any such change in such approved plans and specifications, Tenant shall have
such architect(s) and engineer(s) prepare plans and specifications for such
change and submit them to Landlord for Landlord's written approval. Landlord
shall notify Tenant in writing promptly whether Landlord approves or disapproves
such change and, if Landlord disapproves such change, Landlord shall describe
the reasons for disapproval. Tenant may submit to Landlord revised plans and
specifications for such change for Landlord's written approval. After Landlord's
written approval of such change, such change shall become part of the plans and
specifications approved by Landlord.
(d) Tenant shall obtain and comply with all building permits and other
governmental permits and approvals required in connection with the work. Tenant
shall, through Tenant's licensed contractor, perform the work substantially in
accordance with (i) the plans and specifications submitted to Landlord (and
where Landlord's approval is required, in accordance with the plans and
specifications so approved by Landlord), (ii) the permits obtained by Tenant,
and (iii) all applicable codes, laws, ordinances, rules and regulations. Tenant
shall pay, as additional rent, the entire cost of all work (including the cost
of all utilities, permits, fees, taxes, and property and liability insurance
premiums in connection therewith) required to make
Lease.19.
October 2, 1996
Page 14
the alterations, additions and improvements. Under no circumstances shall
Landlord be liable to Tenant for any damage, loss, cost or expense incurred by
Tenant on account of any plans and specifications, contractors or
subcontractors, design of any work, construction of any work, or delay in
completion of any work.
(e) Tenant shall give written notice to Landlord of the date on which
construction of any work will be commenced at least ten (10) days prior to such
date. Tenant shall keep the Premises free from mechanics', materialmen's and all
other liens arising out of any work performed, labor supplied, materials
furnished or other obligations incurred by Tenant. Tenant shall promptly and
fully pay and discharge all claims on which any such lien could be based.
Landlord shall have the right to post and keep posted on the Premises any
notices that may be provided by law or which Landlord may deem to be proper for
the protection of Landlord and the Premises from such liens, and to take any
other action Landlord deems necessary to remove or discharge liens or
encumbrances at the expense of Tenant. Tenant shall have the right, upon
notification by Landlord of Landlord's intent to take action to remove or
discharge liens or encumbrances pursuant to this section, to take actions deemed
necessary by Tenant to protest or contest any such liens or encumbrances and
Landlord shall allow Tenant to take such actions if Tenant first deposits,
either in cash or by means of a bond reasonably acceptable by Landlord, with
Landlord sufficient funds with which Landlord may satisfy the lien or
encumbrance in the event Tenant's attempts are unsuccessful or untimely.
9.2 All alterations, additions, fixtures and improvements, whether temporary
or permanent in character, made in or to the Premises by Landlord or Tenant
shall become part of the Premises and Landlord's property.
Upon termination of this Lease, Landlord shall have the right, at Xxxxxxxx's
option, by giving written notice to Tenant at any time before or within ten (10)
days after such termination, to retain all such alterations, additions, fixtures
and improvements in the Premises, without compensation to Tenant, or to remove
all such alterations, additions, fixtures and improvements from the Premises,
repair all damage caused by any such removal, and restore the Premises to the
condition in which the Premises existed before such alterations, additions,
fixtures and improvements were
Lease.19.
October 2, 1996
Page 15
made, and in the latter case Tenant shall pay to Landlord, upon billing by
Landlord, the cost of such removal, repair and restoration (including a
reasonable charge for Landlord's overhead and profit).
Notwithstanding the above, Xxxxxx's original tenant improvements need not be
removed, and any reconfiguration of the interior of the Premises that does not
result in any configuration that is more "special use" than the original
configurations shall be treated as if they were original tenant improvements for
purposes of this section.
All movable furniture, equipment, trade fixtures and other personal property
shall remain the property of Xxxxxx. Upon termination of this Lease, Tenant
shall, at Tenant's expense, remove all such movable furniture, equipment, trade
fixtures other personal property from the Premises and repair all damage caused
by any such removal. Termination of this Lease shall not affect the obligations
of Tenant pursuant to this section 9.2 to be performed after such termination.
ARTICLE 10
------- --
Insurance
10.1 Landlord shall not be liable to Tenant for any damage to or loss or theft
of any property or for any bodily or personal injury, illness or death of any
person in, on or about the Premises arising at any time and from any cause
whatsoever, except to the extent caused by the active negligence or willful
misconduct of Landlord, or those under Landlord's control, including without
limitation, Landlord's employees, agents, contractors, subcontractors,
assignees, invitees and appointees, ("Landlord's People").
Tenant waives all claims against Landlord arising from any liability described
in this section 10.1, except to the extent caused by the active negligence or
willful misconduct of Landlord or Landlord's People.
10.2 Except to the extent caused by the breach of this Lease by Landlord or by
the active negligence or willful misconduct of Landlord or Landlord's People,
Tenant shall indemnify and defend Landlord against and hold
Lease.19.
October 2, 1996
Page 16
Landlord harmless from all claims, demands, liabilities, damages, losses, costs
and expenses, including reasonable attorneys' fees and disbursements, arising
from or related to any use or occupancy of the Premises, or any condition of the
Premises, or any default in the performance of Tenant's obligations, or any
damage to any property (including property of employees and invitees of Tenant)
or any bodily or personal injury, illness or death of any person (including
employees and invitees of Tenant) occurring in, on or about the Premises or any
part thereof or any part of the building or the land containing the Premises
arising at any time and from any cause whatsoever or occurring outside the
Premises when such damage, bodily or personal injury, illness or death is caused
by any act or omission of Tenant or Xxxxxx's People. The foregoing
indemnification i) is subject to the waiver of subrogation contained in (S)10.7,
ii) shall not apply to the performance of Landlord's obligations under the
Lease, or iii) shall not apply to Hazardous Materials [see Article 21]). This
section 10.2 shall survive the termination of this Lease with respect to any
damage, bodily or personal injury, illness or death occurring prior to such
termination.
10.3. Tenant shall, at all times during the term of this Lease and at Tenant's
sole cost and expense, obtain and keep in force commercial general liability
insurance, including contractual liability (specifically covering this Lease),
cross liability, fire legal liability, and premises operations, all on an
occurrence policy form, with a minimum combined single limit in the amount
specified in the Basic Lease Information per occurrence for bodily or personal
injury to, illness of, or death of persons and damage to property occurring in,
on or about the Premises. Such insurance shall name the Landlord and any other
parties designated by Landlord as additional insureds, to the extent of their
interests under this Lease. Tenant shall, at Xxxxxx's sole cost and expense, be
responsible for insuring Tenant's furniture, equipment, fixtures, computers,
office machines and personal property.
10.4 Tenant shall, to the extent required by law, at all times during the term
of this Lease and at Tenant's sole cost and expense, obtain and keep in force
Worker's Compensation and employer's liability insurance in all states in which
the Premises and any other operations of the Tenant are located and any other
state in which the Tenant or its contractors or subcontractors may be subject to
any statutory or other liability arising in any manner
Lease.19.
October 2, 1996
Page 17
whatsoever out of the actual or alleged employment of others. The total limits
of the employer's liability coverage required hereunder shall not be less than
the amounts specified in section 10.3.
10.5 Tenant shall, at all times during the term of this Lease, at Tenant's
sole cost and expense, obtain and keep in force (a) insurance against loss or
damage to the Premises by fire and all other risks of physical loss covered by
insurance of the type now known as "all risk," (including earthquake, flood and
increased code cost endorsements; the increased code cost endorsement
certificate must be delivered not later than two (2) weeks after the Lease Date
shown on the Basic Lease Information) in an amount not less than the full
replacement cost of the Premises (without deduction for depreciation), including
the cost of debris removal and such endorsements as Landlord may reasonably
require, and containing the "Replacement Cost Endorsement;" (b) boiler and
machinery insurance covering pressure vessels, air tanks, boilers, machinery,
pressure piping, heating, ventilation and air conditioning equipment, and
elevator and escalator equipment, provided the Premises contain equipment of
such nature and insurance against loss of occupancy or use arising from any
breakdown of any such items, in such amounts as Landlord may reasonably
determine; (c) plate glass insurance in such amounts as Landlord may reasonably
determine if the Premises contain plate glass, and (d) rental loss insurance
(see section 15.1). Insurance required hereunder may be obtained through
multiple layered policies.
Notwithstanding the foregoing, in the event that Tenant is unable to acquire
earthquake insurance from a domestic (continental USA) insurer with a Best's
rating of at least A-,V with a deductible amount no greater than ten percent
(10%) of the face amount of the policy, ("Qualifying Insurance") then Landlord
will attempt to provide Qualifying Insurance, at Tenant's cost. If Landlord is
unable to acquire Qualifying Insurance, Landlord or Tenant may obtain earthquake
insurance from an insurer which would not qualify as Qualifying Insurance, but
the other party shall not be obligated to pay any part of the cost thereof.
Tenant shall remain liable for payment of any deductible amount, not to exceed
ten percent (10%) of the face amount of the policy.
Lease.19.
October 2, 1996
Page 18
10.6 All insurance (except that insuring against earthquakes) required to be
maintained by Tenant under this Article 10 and all renewals thereof shall be
issued by good and responsible domestic companies qualified to do and doing
business in the state where the Premises are located and having a rating in
Best's Insurance Guide of at least A-,XII, with deductible amounts not to exceed
10% of the face amount. Tenant agrees that it shall be solely responsible for
payment of those deductibles, subject to the exceptions and conditions set forth
elsewhere herein.
All earthquake insurance required to be maintained by Tenant under this Article
10 and all renewals thereof shall be issued by good and responsible domestic
companies qualified to do and doing business in the state where the Premises are
located and having a rating in Best's Insurance Guide of at least A-,V, with
deductible amounts not to exceed 10% of the face amount. Tenant agrees that it
shall be solely responsible for payment of those deductibles, subject to the
exceptions and conditions set forth elsewhere herein.
Each policy to be maintained by Tenant shall expressly provide that the policy
shall not be canceled or altered without sixty (60) days' prior written notice
to Landlord and shall remain in effect notwithstanding any such cancellation or
alteration until such notice shall have been given to Landlord and such period
of sixty (60) days shall have expired. All insurance under this Article 10 to be
maintained by Tenant shall name Landlord and any other parties designated by
Landlord as an additional insured to the extent of its interest under the Lease
or in the Premises, shall be primary and noncontributing with any insurance
which may be carried by Landlord, shall afford coverage for all claims based on
any act, omission, event or condition that occurred or arose (or the onset of
which occurred or arose) during the policy period, and shall expressly provide
that Landlord and other additional insureds, although named as an additional
insured, shall nevertheless be entitled to recover under the policy for any
loss, injury or damage to Landlord or such other additional insureds. Upon the
issuance and renewal of each such policy to be maintained by Tenant, Tenant
shall deliver a certificate of insurance to Landlord for retention by Landlord.
If Tenant fails to insure or fails to furnish to Landlord upon notice to do so
any certificate of insurance as required, Landlord shall have the right from
time to time to effect such insurance for the benefit of Tenant or Landlord or
Lease.19.
October 2, 1996
Page 19
both of them and all premiums paid by Landlord shall be payable by Xxxxxx as
additional rent on demand. Tenant shall pay to Landlord, immediately upon demand
all costs incurred by Landlord as a result of Xxxxxx's failure to obtain and
maintain in effect the policies of insurance required under this Article 10. The
waivers here contemplated shall be given only the extent not prohibited by the
respective insurance carriers involved.
10.7 The parties hereto release each other and their respective agents,
employees, successor, assignees and subtenants from all liability for injury to
any person or damage to any property that is caused by or results from a risk
which is actually insured against or which is required to be insured against
under the Lease, without regard to the negligence or willful misconduct of the
entity so released. Each party shall use its best efforts to cause each property
casualty insurance policy it obtains to provide that the insurer thereunder
waives all right of recovery by way of subrogation as required herein in
connection with any injury or damage covered by the policy. If a party cannot
obtain such insurance policy with such waiver of subrogation, such party shall
promptly notify the other party. The provisions of this section 10.7 shall
supersede any and all inconsistent provisions of this Lease, except Article 21.
ARTICLE 11
------- --
Compliance With Legal Requirements
11.1 Tenant shall, at Tenant's sole cost and expense, promptly comply with all
laws, ordinances, rules, regulations, orders and other requirements of any
government or public authority now in force or which may hereafter be in force,
with all requirements of any board of fire underwriters or other similar body
now or hereafter constituted, and with all directions and certificates of
occupancy issued pursuant to any law by any governmental agency or officer,
insofar as any thereof relate to or are required by the condition, use or
occupancy of the Premises or the operation, use or maintenance of any personal
property, fixtures, machinery, equipment or improvements in the Premises.
Notwithstanding any provision to the contrary herein, Landlord shall be and
remain responsible for i) any defect in the design of the Completed Shell that
causes a foreseeable unreasonable risk to the life and safety of the
Lease.19.
October 2, 1996
Page 20
occupants of the Building, any defect in construction resulting from Xxxxxxxx's
Work, and any defect in the installation of equipment in the Completed Shell
resulting from Xxxxxxxx's Work, and ii) any failures of the Completed Shell to
comply with the applicable building codes, Title 24 and the Americans with
Disabilities Act of 1990, but only to the extent that any such defect or failure
to comply existed as of the Shell Delivery Date. Except as otherwise provided by
law, in any action under this section against Landlord or Landlord's People,
Tenant shall have the burden of proof as to each fact essential to the claim or
defense being asserted by Tenant. Except as otherwise provided by law, in any
action under this section against Tenant or Tenant's People Landlord shall have
the burden of proof as to each fact essential to the claim or defense being
asserted by Landlord.
ARTICLE 12
------- --
Assignment or Sublease
12.1 Tenant shall not, directly or indirectly, without the prior written
consent of Landlord (which consent shall not be unreasonably withheld), assign
this Lease or any interest herein or sublease the Premises or any part thereof,
or permit the use or occupancy of the Premises by any person or entity other
than Tenant; provided, however, that Landlord's withholding of consent shall be
conclusively presumed reasonable if: a) the financial condition of the proposed
transferee is not suitable to perform the obligations being assumed by it
hereunder; or b) the proposed use of the Premises is not permitted hereunder or
under any legal and other requirements described in Article 11, or c) would
materially increase the wear and tear on or the risk of damage to the Premises
above levels or risks resulting from Xxxxxx's use as of the date of this Lease,
or d) is for any illegal purpose. This Lease shall not, nor shall any interest
herein, be assignable as to the interest of Tenant involuntarily or by operation
of law without the prior written consent of Landlord.
Any of the foregoing acts without such prior written consent of Landlord shall
be void and shall, at the option of Landlord, constitute a default that entitles
Landlord to terminate this Lease. Xxxxxx agrees that the instrument by which any
assignment or sublease to which Landlord consents is
Lease.19.
October 2, 1996
Page 21
accomplished shall expressly provide that the assignee or subtenant will perform
all of the covenants to be performed by Tenant under this Lease (in the case of
a sublease, only insofar as such covenants relate to the portion of the Premises
subject to such sublease) as and when performance is due after the effective
date of the assignment or sublease and that Landlord will have the right to
enforce such covenants directly against such assignee or subtenant. Any
purported assignment or sublease without an instrument containing the foregoing
provisions shall be void. Tenant shall in all cases remain liable for the
performance by any assignee or subtenant of all such covenants.
Notwithstanding any provision to the contrary herein, Xxxxxxxx's consent shall
not be required for the following transfers, and Tenant shall nevertheless
remain primarily responsible for compliance with the terms of this Lease: i) to
an Affiliated Entity to whom this Lease has been assigned or otherwise
transferred pursuant to (S)12.1 hereof, ii) in connection with a corporate
reorganization or merger where the surviving or resulting entity has a net worth
determined in accordance with generally accepted accounting principles of not
less than Fifty Million Dollars ($50,000,000.00), and iii) in connection with a
sale of substantially all of the assets of Tenant to an entity with a net worth
determined in accordance with generally accepted accounting principles of not
less than Fifty Million Dollars ($50,000,000.00).
12.2 Landlord must respond with a consent or denial of the proposed transfer
within twenty-one (21) days after receipt of a written request, accompanied by
all reasonably necessary information concerning the proposed transaction and the
proposed transferee. Landlord shall notify Tenant within five (5) days after
receipt of the request if Landlord determines that all reasonably necessary
information has not been provided, and in such notification Landlord shall
identify with specificity the types of information that are missing and which
must be provided by Tenant in order to make the request complete, and if
Landlord fails to do so within such five (5) day period, then Tenant shall be
deemed to have submitted all reasonably necessary information concerning the
proposed transaction and the proposed transferee. If Landlord consents in
writing, Tenant may complete the intended assignment or sublease subject to the
following covenants: (a) no assignment or sublease shall be valid and no
assignee or
Lease.19.
October 2, 1996
Page 22
subtenant shall take possession of the Premises or any part thereof until an
executed duplicate original of such assignment or sublease, in compliance with
section 12.1, has been delivered to Landlord, (b) Tenant remains primarily
liable for compliance with the terms of the Lease.
12.3 No assignment or sublease whatsoever shall release Tenant from Tenant's
obligations and liabilities under this Lease or alter the primary liability of
Tenant to pay all rent and to perform all obligations to be paid and performed
by Xxxxxx. The acceptance of rent by Landlord from any other person or entity
shall not be deemed to be a waiver by Landlord of any provision of this Lease.
Consent to one assignment or sublease shall not be deemed consent to any
subsequent assignment or sublease. If any assignee, subtenant or successor of
Tenant defaults in the performance of any obligation to be performed by Tenant
under this Lease, Landlord may proceed directly against Tenant without the
necessity of exhausting remedies against such assignee, subtenant or successor.
Xxxxxxxx may consent to subsequent assignments or subleases or amendments or
modifications to this Lease with assignees, subtenants or successors of Xxxxxx,
without notifying Tenant or any successor of Xxxxxx and without obtaining any
consent thereto from Tenant or any successor of Xxxxxx, and such action shall
not release Tenant from liability under this Lease.
ARTICLE 13
------- --
Entry by Landlord
13.1 Landlord shall have the right to enter the Premises at any time to (a)
inspect the Premises, (b) exhibit the Premises to prospective purchasers,
lenders or tenants (with respect to tenants, only during the last nine (9)
months of the Lease term), (c) determine whether Tenant is performing all of
Tenant's obligations, (d) perform any obligations of Tenant in accordance with
section 14.5, (e) post notices of non-responsibility, "For sale" and "For lease"
signs (only during the last six (6) months of the Lease term) in and about the
Premises, (f) make any repairs to the Premises and (g) investigate and perform
tests to determine Xxxxxx's compliance with Article 21. Tenant waives all claims
for damages for any injury or inconvenience to or interference with Xxxxxx's
business, any loss of occupancy or quiet enjoyment of the Premises or any other
loss occasioned by such entry.
Lease.19.
October 2, 1996
Page 23
Landlord shall have the right to use any and all means which Landlord may deem
proper in an emergency to obtain entry to the Premises. Any entry to the
Premises obtained by Landlord by any of such means shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into or
a detainer of the Premises or an eviction, actual or constructive, of Tenant
from the Premises or any portion thereof.
Notwithstanding any provision herein to the contrary, "For Lease" signs may only
be posted during the last nine (9) months of the term of the Lease, "For Sale"
signs may be posted only with the prior written consent of Tenant (which consent
may be given, withdrawn or withheld in Tenant's sole discretion) , and any entry
by Landlord or its agents must be undertaken in such a way (barring emergencies)
that Tenant's occupation and utilization of the Premises is infringed to the
slightest extent reasonably possible. Landlord shall be responsible for damage
or injury caused by the active negligence or willful misconduct of Landlord or
Landlord's People during any such entry.
ARTICLE 14
------- --
Events of Default and Remedies
14.1 The occurrence of any one or more of the following events ("Event of
Default") shall constitute a breach of this Lease by Tenant:
(a) Tenant fails to pay any Base Rent, additional rent or other amount of money
or charge payable by Tenant hereunder as and when such additional rent or amount
or charge becomes due and payable and such failure continues for more than ten
(10) days after Xxxxxxxx gives written notice thereof to Tenant; provided,
however, that after the second (2nd) such failure for which Landlord has given
Tenant notice and the opportunity to cure as described above in a calendar year,
then, with respect to the third (3rd) and any subsequent failures during each
calendar year, only the passage of time, but no further notice, shall be
required to establish an Event of Default in the same calendar year; or
(b) Tenant fails to perform or breaches any other agreement or covenant of this
Lease to be performed or observed by Xxxxxx as and when performance
Lease.19.
October 2, 1996
Page 24
or observance is due and such failure or breach continues for more than thirty
(30) days after Landlord gives written notice thereof to Tenant; provided,
however, that if, by the nature of such agreement or covenant, such failure or
breach cannot reasonably be cured within such period of thirty (30) days, an
Event of Default shall not exist as long as Tenant commences with due diligence
and dispatch the curing of such failure or breach within such period of thirty
(30) days and, having so commenced, thereafter prosecutes with diligence and
dispatch and completes the curing of such failure or breach within a reasonable
time; or
(c) If (i) Tenant files, or consents by answer or otherwise to the filing
against it of, a petition for relief or reorganization or arrangement or any
other petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy, insolvency or other debtors' relief law of any jurisdiction, (ii)
Tenant makes an assignment for the benefit of its creditors, (iii) Tenant
consents to the appointment of a custodian, receiver, trustee or other officer
with similar powers of Tenant or of any substantial part of Tenant's property,
(iv) Tenant takes action for the purpose of any of the foregoing, (v) without
consent by Xxxxxx, a court or government authority enters an order appointing a
custodian, receiver, trustee or other officer with similar powers with respect
to Tenant or with respect to any substantial part of Tenant's property and such
order is not dissolved or rescinded within forty-five (45) days, or (vi) a court
or governmental authority enters an order constituting an order for relief or
approving a petition for relief or reorganization or arrangement or any other
petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy, insolvency or other debtors' relief law of any jurisdiction and such
order is not dissolved or rescinded within forty-five (45) days, or (vii) a
court or other governmental authority orders the dissolution, winding up or
liquidation of Tenant; or
(d) This Lease or any estate of Tenant hereunder is levied upon under any
attachment or execution and such attachment or execution is not vacated within
forty-five (45) days; or
(e) Tenant abandons the Premises. (The parties acknowledge that the mere
vacation of the Premises does not constitute abandonment.)
Lease.19.
October 2, 1996
Page 25
14.2 If an Event of Default occurs, Landlord shall have the right at any time
to give a written termination notice to Tenant and, on the date specified in
such notice, Tenant's right to possession shall terminate and this Lease shall
terminate. Upon such termination, Landlord shall have the right to recover from
Tenant:
(a) The worth at the time of award of all unpaid rent which had been earned at
the time of termination;
(b) The worth at the time of award of the amount by which all unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rental loss that Tenant proves could have been reasonably
avoided;
(c) The worth at the time of award of the amount by which all unpaid rent for
the balance of the term of this Lease after the time of award exceeds the amount
of such rental loss that Tenant proves could be reasonably avoided; and
(d) All other amounts necessary to compensate Landlord for all the detriment
proximately caused by Xxxxxx's failure to perform all of Tenant's obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom The worth at the time of awards of the amounts referred to in
clauses (a) and (b) above shall be computed by allowing interest at the maximum
annual interest rate allowed by law for business loans (not primarily for
personal, family or household purposes) not exempt from the usury law at the
time of termination or, if there is no such maximum annual interest rate, at the
rate of eighteen percent (18%) per annum. The worth at the time of award of the
amount referred to in clause (c) above shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank located nearest the
Premises at the time of award plus one percent (1%). For the purpose of
determining unpaid rent under clauses (a), (b) and (c) above, the rent reserved
in this Lease shall be deemed to be the total rent payable by Tenant under
Articles 3, 4 and 5 hereof.
14.3 Even though Xxxxxx has breached this Lease, this Lease shall continue in
effect for so long as Landlord does not terminate Tenant's right to
Lease.19.
October 2, 1996
Page 26
possession, and Landlord shall have the right to enforce all its rights and
remedies under this Lease, including the right to recover all rent as it becomes
due under this Lease. Acts of maintenance or preservation or efforts to relet
the Premises or the appointment of a receiver upon initiative of Landlord to
protect Xxxxxxxx's interest under this Lease shall not constitute a termination
of Tenant's right to possession unless written notice of termination is given by
Landlord to Tenant.
14.4 The remedies provided for in this Lease are in addition to all other
remedies available to Landlord at law or in equity by statute or otherwise.
14.5 All agreements and covenants to be performed or observed by Tenant under
this Lease shall be at Tenant's sole cost and expense and without any abatement
of rent. If Tenant fails to pay any sum of money to be paid by Tenant or to
perform any other act to be performed by Tenant under this Lease, Landlord shall
have the right, but shall not be obligated, and without waiving or releasing
Tenant from any obligations of Tenant, to make any such payment or to perform
any such other act on behalf of Tenant in accordance with this Lease. All sums
so paid by Xxxxxxxx and all necessary incidental costs shall be deemed
additional rent hereunder and shall be payable by Tenant to Landlord on demand,
together with interest on all such sums from the date of expenditure by Landlord
to the date of repayment by Xxxxxx at the maximum annual interest rate allowed
by law for business loans (not primarily for personal, family or household
purposes) not exempt from the usury law at the date of expenditure or, if there
is no such maximum annual interest rate, at the rate of eighteen percent (18%)
per annum. Landlord shall have, in addition to all other rights and remedies of
Landlord, the same rights and remedies in the event of the nonpayment of such
sums plus interest by Xxxxxx as in the case of default by Xxxxxx in the payment
of rent.
14.6 If Tenant abandons or surrenders the Premises, or is dispossessed by
process of law or otherwise, any movable furniture, equipment, trade fixtures or
personal property belonging to Tenant and left in the Premises shall be deemed
to be abandoned, at the option of Landlord, and Landlord shall have the right to
sell or otherwise dispose of such personal property in any commercially
reasonable manner.
ARTICLE 15
----------
Lease.19.
October 2, 1996
Page 27
Damage or Destruction
15.1 If the Premises, or any part thereof, is damaged by fire or other
casualty before the Commencement Date or during the term of this Lease, then, in
accordance with the applicable provisions of this Article 15, Tenant shall
repair such damage and restore the Premises to substantially the same or better
condition as existed before the occurrence of such fire or other casualty,
Tenant shall repair and replace all such movable furniture, equipment, trade
fixtures and personal property, and this Lease shall remain in full force and
effect. Such repair and replacement by Tenant shall be done in accordance with
Article 9. In no event shall rent xxxxx, except to the extent that proceeds from
rental loss insurance are received by Landlord. (see section 10.5(d)). If Tenant
is required to rebuild hereunder, then Tenant shall (i) deliver to Landlord
plans and specifications and a budget for such repair and restoration for
Landlord's approval in its reasonable judgement and (ii) deposit with a third
party escrow holder reasonably acceptable to both parties, cash in the sum equal
to the excess, if any, of the total cost set forth in such approved budget over
the amount of insurance proceeds received by both parties on account of such
casualty, and each party shall also deposit into such escrow all insurance
proceeds actually received by the parties, respectively, on account of such
casualty, for application to the costs of such approved repair and restoration,
as follows:
No more frequently than once per calendar month, Xxxxxx may request that such
third party escrow holder pay invoices then payable in connection with the
repair and restoration of the Premises during the immediately preceding calendar
month. Each such request shall be accompanied to the extent applicable, by
standard architect's certifications required under AIA construction contracts
and by conditional mechanics' lien releases with respect to the payment then
invoiced and unconditional mechanics' lien releases with respect to work for
which funds were released at the time of the immediately preceding draw from all
contractors and subcontractors and major materials suppliers in form and
substance required by law.
15.2. If the Premises, or any part thereof, is damaged by fire or other
casualty and (a) such fire or other casualty occurs during the last twelve (12)
months of the term of this Lease and the repair and restoration work to be
Lease.19.
October 2, 1996
Page 28
performed by Tenant in accordance with section 15.1 cannot, as reasonably
estimated by Landlord and Tenant, be completed within two (2) months after the
occurrence of such fire or other casualty, Tenant may, by giving written notice
to Landlord within sixty (60) days after the occurrence of such fire or other
casualty, to terminate this Lease as of the date of such notice or if (b) the
insurance proceeds received by Landlord and Tenant in respect of such damage are
not adequate to pay the entire cost, as reasonably estimated by Landlord and
Tenant, of the repair and restoration work to be performed by Tenant in
accordance with section 15.1 and Tenant does not deposit such shortfall with the
escrow holder, then, in any such event, Landlord shall have the right, by giving
written notice to Tenant within sixty (60) days after the occurrence of such
fire or other casualty, to terminate this Lease as of the date of such notice,
in which case all insurance proceeds on account of such casualty shall be paid
to Landlord. If Tenant or Landlord does not exercise the right to terminate this
Lease in accordance with this section 15.2 when it has the right to do so,
Tenant shall repair such damage and restore the Premises in accordance with
section 15.1 and this Lease shall remain in full force and effect. However, if
the Lease is terminated pursuant to this section 15.2, Tenant shall not be
obligated to repair or restore such damage.
15.3 If there is an uninsured loss, and the failure of insurance to cover the
loss is caused not by the actions or inactions of Tenant, but solely by the
insolvency of a properly qualified insurance carrier (see Article 10), or solely
by the insolvency of an insurer providing earthquake insurance at the request of
Tenant pursuant to the last sentence of section 10.5 insuring the Building and
the Premises, Tenant shall be relieved of its obligations under this Lease to
rebuild the Building, Premises and Parking Structure and Tenant may terminate
this Lease by written notice to Landlord.
15.4 In the event of an uninsured loss greater than ten percent (10%) and less
than twenty-five percent (25%) of the replacement cost of the Building, other
than an uninsured loss described in section 15.3 hereof, Tenant shall rebuild
and restore any damage to the Building, Premises and Parking Structure
(including damage to the outside areas adjacent to the Building and the Parking
Structure) as otherwise required by this Article 15, and, in that event, Tenant
shall have one (1) additional five (5) year option to extend the term of this
Lease. Annual adjustments to the Rent during the
Lease.19.
October 2, 1996
Page 29
one (1) additional option period shall continue to be calculated based upon a
four percent (4%) annual increase, without an adjustment in the fair market
value of the Premises or the Completed Shell. This additional option shall
become effective at the end of the then-current term of this Lease.
15.5 In the event of an uninsured loss equal to or greater than twenty-five
percent (25%) of the replacement cost of the Building, other than an uninsured
loss described in section 15.3 hereof, Tenant shall rebuild and restore any
damage to the Building, Premises and Parking Structure (including damage to the
outside areas adjacent to the Building and the Parking Structure) as otherwise
required by this Article 15, and, in that event, at Tenant's discretion, either
i) the remaining term of this Lease and the options available to Tenant under
this Lease shall remain unchanged, or ii) the remaining term this Lease shall,
beginning upon substantial completion of the repair and restoration, be extended
for one-hundred and twenty (120) months. In that event, Tenant shall have only
two (2) five (5) year options to extend the term of this Lease. Annual
adjustments to the Rent during the initial extended period and also during each
of the two (2) option periods shall continue to be calculated based upon a four
percent (4%) annual increase, without adjustment to fair market value.
ARTICLE 16
------- --
Eminent Domain
16.1 If a substantial portion of the Premises is taken and the remaining
portion of the Premises is not reasonably suitable for Tenant's purposes, or if
a portion of the Premises is taken resulting in loss of access to and from the
Premises without reasonable substitute access being available, Landlord and
Tenant each shall have the right, by giving written notice to the other within
thirty (30) days after the date of such taking, to terminate this Lease If
either Landlord or Tenant exercises such right to terminate this Lease ln
accordance with this section 16.1, this Lease shall terminate as of the date of
such taking.
If neither Landlord nor Tenant exercises such right to terminate this Lease in
accordance with this section 16.1, this Lease shall terminate as to the portion
of the Premises so taken as of the date of such taking and shall
Lease.19.
October 2, 1996
Page 30
remain in full force and effect as to the portion of the Premises not so taken,
Tenant shall restore the portion of the Premises not so taken to an integrated
architectural unit in accordance with Article 9 and the Base Rent then being
paid under the terms of this Lease shall be reduced as of the date of such
taking in the proportion that Xxxxxx's use and occupancy of the Premises as
contemplated hereunder has been impaired. In the event of a failure by the
parties to agree on the nature and scope of any such reductions, the matter
shall be submitted to binding arbitration as described in (S)3 of the Addendum.
If all of the Premises is taken by exercise of the power of eminent domain
before the Commencement Date or during the term of this Lease, this Lease shall
terminate as of the date of such taking.
16.2 If all or any part of the Premises is taken by exercise of the power of
eminent domain, all awards, compensation, damages, income, rent and interest
payable in connection with such taking ("Condemnation Compensation") shall,
except as expressly set forth in this section 16.2, be paid to and become the
property of Landlord, and Tenant hereby assigns to Landlord all of the
foregoing. Without limiting the generality of the foregoing, Tenant shall have
no claim against Landlord or the entity exercising the power of eminent domain
for the value of the leasehold estate created by this Lease or any unexpired
term of this Lease. Notwithstanding the foregoing, Landlord shall make
Condemnation Compensation available to pay for Tenant's restoration of the
Premises as described in (S)16.1 pursuant to the procedure set forth in (S)16.3
below.
Tenant shall have the right to claim and receive directly from the entity
exercising the power of eminent domain only the share of any award determined to
be owing to Tenant for the taking of improvements installed in the portion of
the Premises so taken by Tenant at Tenant's sole Cost and expense based on the
unamortized cost actually paid by Tenant for such improvements, for the taking
of Tenant's movable furniture, equipment, trade fixtures and personal property,
for loss of goodwill, for interference with or interruption of Tenant's
business, or for removal and relocation expenses.
16.3 In the event of any taking other than a taking referred to in section
16.1, this Lease shall continue in full force and effect, Tenant shall continue
to pay all of the rent and to perform all of the covenants of Tenant in
Lease.19.
October 2, 1996
Page 31
accordance with this Lease and Tenant shall restore the Premises to an
integrated architectural unit in accordance with Article 9. If Tenant is
required to restore hereunder, then Tenant shall (i) deliver to Landlord plans
and specifications and a budget for such repair and restoration for Landlord's
approval in its reasonable judgement and (ii) deposit with a third party escrow
holder reasonably acceptable to both parties, cash in the sum equal to the
excess, if any, of the total cost set forth in such approved budget over the
amount of Condemnation Compensation received by both parties on account of such
taking, and each party shall also deposit into such escrow all Condemnation
Compensation actually received by the parties, respectively, on account of such
taking, for application to the costs of such approved restoration, as follows:
No more frequently than once per calendar month, Xxxxxx may request that such
third party escrow holder pay invoices then payable in connection with the work
being done to the Premises during the immediately preceding calendar month. Each
such request shall be accompanied to the extent applicable, by standard
architect's certifications required under AIA construction contracts and by
conditional lien releases with respect to the payment then invoiced and
unconditional mechanics' lien releases with respect to work for which funds were
released at the time of the immediately preceding draw from all contractors and
subcontractors and major materials suppliers in form and substance required by
law.
16.4 As used in this Article 16, a "taking" means the acquisition of all or
part of the Premises for a public use by exercise of the power of eminent domain
(or a sale of any or all of the Premises in lieu, or under threat, thereof) and
the taking shall be considered to occur as of the earlier of the date on which
possession of the Premises (or part so taken) by the entity exercising the power
of eminent domain is authorized as stated in an order for possession or the date
on which title to the Premises (or part so taken) vests in the entity exercising
the power of eminent domain.
ARTICLE 17
------- --
Subordination, Merger and Sale
Lease.19.
October 2, 1996
Page 32
17.1 This Lease shall be subject and subordinate at all times to the lien of
all mortgages and deeds of trust securing any amount or amounts whatsoever, and
any ground lease or master lease of the Premises, which may now exist or
hereafter be placed on or against the Premises or on or against Landlord's
interest or estate therein, all without the necessity of having further
instruments executed by Tenant to effect such subordination. Landlord represents
that as of the execution of this Lease, the Premises is not encumbered by any
mortgage, deed of trust, ground lease, or master lease to which this Lease would
be subordinate. Notwithstanding Tenant's agreement to subordinate this Lease to
any future mortgage, deed of trust, ground lease or master lease, any such
instrument shall provide that condemnation proceeds and insurance proceeds shall
be held, disbursed, and applied as provided in this Lease. Notwithstanding the
foregoing, in the event of a foreclosure of any such mortgage or deed of trust
or of any other action or proceeding for the enforcement thereof, or of any sale
thereunder, if no Default then exists under this Lease, this Lease shall not be
terminated or extinguished, nor shall the rights and possession of Tenant
hereunder be disturbed, and the person or entity succeeding to the position of
Landlord under this Lease shall assume the obligations of Landlord arising after
such person's succession under the Lease, including the obligations to make
insurance proceeds available for restoration of the Premises if the Lease is not
terminated as a result of casualty damages, to cure any continuing defaults of
Landlord under the Lease which relate to maintenance, and to recognize any
offset or reduction in rent that results from any draw on the $3,000,000.00
Letter of Credit (defined in (S)6 of the Lease Addendum) that has been
improperly applied or is in excess of the amount needed to cure defaults by
Xxxxxx) and Tenant shall attorn to the person who acquires Landlord's interest
hereunder through any such mortgage or deed of trust. Xxxxxxxx agrees to provide
Tenant evidence of any such successor's agreement to make insurance proceeds
available prior to granting any such potential successor an interest in the
Completed Shell. Xxxxxx agrees to execute, acknowledge and deliver upon demand
such further instruments evidencing such subordination of this Lease to the lien
of all such mortgages and deeds of trust or to all such ground leases or master
leases of the Premises as may reasonably be required by Landlord, but Xxxxxx's
covenant to subordinate this Lease to mortgages or deeds of trust, or ground
leases or master leases, hereafter executed is conditioned upon each holder of
such senior mortgage or deed of trust, or ground lease or master lease,
Lease.19.
October 2, 1996
Page 33
executing and acknowledging a separate subordination agreement, containing the
commitments specified in this section 17.1. Without limiting the generality or
applicability of the foregoing, Xxxxxx agrees to enter into a subordination,
nondisturbance and attornment agreement in the form reasonably required by the
holder of any such mortgage or deed of trust or by any party to any such ground
lease or master lease, so long as the provisions of such agreement do not
increase Tenant's obligations and liabilities hereunder or reduce Tenant's
rights and benefits hereunder.
17.2 The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation thereof, shall not work a merger and shall, at the option of
Landlord, terminate all or any existing subleases or subtenancies or operate as
an assignment to Landlord of any or all such subleases or subtenancies.
17.3 If the original Landlord hereunder, or any successor owner of the
Premises, sells or conveys the Premises, all liabilities and obligations on the
part of the original Landlord, or such successor owner, under this Lease
accruing after such sale or conveyance shall terminate and the original
Landlord, or such successor owner, shall automatically be released therefrom,
and thereupon all such liabilities and obligations shall be binding upon the new
owner. Xxxxxx agrees to attorn to such new owner.
Notwithstanding the foregoing, Landlord shall not be released from liability for
(i) Hazardous Materials as set forth in Article 21, (ii) correction of any
defect in design, construction, materials and equipment of the "shell" of the
Building or the Parking Structure (to the extent such design defect is
Xxxxxxxx's responsibility under Section 8.2), or (iii) any amounts drawn down
under the Letter of Credit in excess of amounts required to cure the monetary
default(s) of Tenant under this Lease as permitted by (S)6 of the Lease
Addendum, or (iv) from the proper application of amounts drawn down under the
Letter of Credit in accordance with the requirements of (S)6 of the Addendum.
Landlord shall not sell, transfer or convey the Premises prior to the completion
of its obligations with respect to the "shell" of the Building and the Parking
Structure as set forth in (S)1 of the Lease Addendum. Xxxxxxxx further agrees
that in the event of such a sale or transfer prior to disbursal of the entire
Landlord's portion of the tenant improvement allowance,
Lease.19.
October 2, 1996
Page 34
Landlord shall transfer the remainder to an escrow account at Xxxxxx's Title for
the benefit of Tenant and the new owner, to be disbursed and administered by any
new owner according to the terms agreed to by Landlord and Tenant, which terms
shall be substantially duplicative of other terms on which Landlord would have
been required to disburse and administer such allowance to fulfill its
obligations with respect to such allowance under this Lease.
ARTICLE 18
------- --
Estoppel Certificate
18.1 At any time and from time to time, Tenant shall, within ten (10) days
after written request by Landlord, execute, acknowledge and deliver to Landlord
a certificate, in the form attached as Exhibit G or such other form as Landlord
may reasonably require, certifying: (a) that this Lease is unmodified and in
full force and effect (or, if there have been modifications, that this Lease is
in full force and effect as modified, and stating the date and nature of each
modification); (b) the Commencement Date and the Expiration Date determined in
accordance with Article 2 and the date, if any, to which all rent and other sums
payable hereunder have been paid; (c) that to the best of Tenant's knowledge,
there is no default by Tenant hereunder which has not been cured, except as to
defaults specified in such certificate; (d) that Landlord is not in default
under this Lease, except as to defaults specified in such certificate; and (e)
certifying as to the existence of such other facts as may be reasonably
requested by Landlord or any actual or prospective purchaser or mortgage lender.
Any such certificate may be relied upon by Landlord and any actual or
prospective purchaser or mortgage lender of the Premises or any part thereof.
ARTICLE 19
------- --
Holding Over
19.1 If, without objection by Landlord, Xxxxxx holds possession of the
Premises after expiration of the term of this Lease, Tenant shall become a
tenant from month to month upon the terms herein specified but at a Base Rent
equal to one hundred and fifty percent (150%) of the Base Rent in
Lease.19.
October 2, 1996
Page 35
effect at the expiration of the term of this Lease pursuant to Article 3,
payable in advance on or before the first day of each month. Such month to month
tenancy may be terminated by either Landlord or Tenant by giving thirty (30)
days' written notice of termination to the other at any time.
ARTICLE 20
------- --
Financial Statements
20.1 On or before April 1 of each year, Tenant shall deliver to Landlord
Tenant's audited financial statements ("Financial Statements") for the fiscal
year of Tenant ended on the previous December 31, which Financial Statements
shall include an audited consolidated balance sheet of Tenant and its
consolidated subsidiaries as at the end of such fiscal year. a consolidated
statement of operations of Tenant and its consolidated subsidiaries for such
fiscal year, and a certificate of Tenant's auditor (which shall be a recognized
national or regional independent accounting firm) to the effect that such
Financial Statements were prepared in accordance with generally accepted
accounting principals consistently applied and fairly present the financial
condition and operations of Tenant and its consolidated subsidiaries for and as
at the end of such fiscal year.
ARTICLE 21
------- --
Hazardous Materials
21.1 As used herein, the term "Hazardous Material" means any hazardous or
toxic substance, material or waste, or any pollutant or contaminant, or words of
similar import, which is or becomes regulated by any local governmental
authority, the state in which the Premises are located, or the United States
Government. The term "Hazardous Material" includes, but is not limited to, any
material or substance which is, designated as a "hazardous substance" pursuant
to section 311 of the Federal Water Pollution Control Act (33 U.S.C. section
1317), (ii) defined as a hazardous waste" pursuant to section 1004 of the
Federal Resource Conservation and Recovery Act, 42 U.S.C. section 6901, et seq.
(42 U.S.C. section 6903), (iii) defined as a "hazardous substance" pursuant to
section 101 of the Comprehensive Environmental Response Compensation and
Liability Act (42 U.S.C. section 9601, et seq.),
Lease.19.
October 2, 1996
Page 36
(iv) asbestos, (v) petroleum (including crude oil or any fraction thereof,
natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable
for fuel, or any mixture thereof), (vi) petroleum products, (vii)
polychlorinated biphenyls, (viii) urea formaldehyde, (ix) radon gas, (x)
radioactive matter, (xi) medical waste, and (xii) chemicals which may cause
cancer or reproductive toxicity.
21.2 As used herein, the term "Environmental Requirements" means all laws,
ordinances, rules, regulations, orders and other requirements of any government
or public authority now in force or which may hereafter be in force relating to
protection of human health or the environment, including all requirements
pertaining to reporting, licensing, permitting, investigation and remediation of
emissions, discharges, storage, disposal or releases of Hazardous Materials and
all requirements pertaining to the protection of the health and safety of
employees or the public.
21.3 Neither Tenant nor its agents, employees, contractors or invitees shall
conduct the handling, use, generation, treatment, storage or disposal on, in or
about the Premises of any Hazardous Material without prior written notice to
Landlord. Any such notice by Tenant to Landlord shall be in writing and shall
demonstrate to the reasonable satisfaction of Landlord that such Hazardous
Material is necessary to the business of Tenant, and that the uses of such
Hazardous Materials that are proposed to be made by Tenant are not in violation
of the ""Use" section of the Basic Lease Information, and will be handled,
used, generated, treated, stored or disposed of in a manner that complies with
all Environmental Requirements. Any such handling, use, generation, treatment,
storage or disposal of any Hazardous Material permitted by Landlord hereunder
shall be in compliance with all Environmental Requirements, and such use shall
be limited to reasonably small quantities of Hazardous Materials that may
legally be stored within the Building, except that Tenant may use and store fuel
in reasonably necessary quantities on site in above ground tanks located within
or outside the Building.
21.4 Tenant shall, within five (5) days after the receipt thereof, give
written notice to Landlord of any notice or other communication regarding any
(a) actual or alleged violation of Environmental Requirements by Tenant or with
respect to the Premises, (b) actual or threatened migration of
Lease.19.
October 2, 1996
Page 37
Hazardous Material from the Premises, or (c) the existence of Hazardous Material
in or on the Premises or regarding any actual or threatened investigation,
inquiry, lawsuit, claim, citation, directive, summons, proceeding, complaint,
notice, order, writ or injunction relating to any of the foregoing.
21.5 Tenant shall indemnify and defend Landlord against and hold Landlord
harmless from all claims, demands, liabilities, damages, fines, encumbrances,
liens, losses, costs and expenses, including reasonable attorneys' fees and
disbursements, and costs and expenses of investigation, arising from or related
to Xxxxxx's or Tenant's People causing i) the existence on or after the
Commencement Date of Hazardous Material in or on the Premises or ii) the actual
or threatened migration on or after the Commencement Date of Hazardous Material
from the Premises or iii) the existence on or after the Commencement Date of a
violation of Environmental Requirements by Tenant or Tenant's People with
respect to the Premises.
The obligations of Tenant under this section 21.5 shall not be affected by any
investigation by or on behalf of Landlord or by any information which Landlord
may have or obtain with respect thereto. Tenant shall, to the reasonable
satisfaction of Landlord, perform all remedial actions necessary to remove any
Hazardous Material in, on or under the Premises on or after the Commencement
Date or to remedy actual or threatened migration from the Premises of any
Hazardous Material or to remedy any actual or threatened violation of
Environmental Requirements, provided such remedial action is required under
Environmental Requirements and provided that Tenant or Tenant's People caused
the Hazardous Material requiring removal to be present in or on the Premises or
caused the threatened migration from the Premises of the Hazardous Material in
question or caused the actual or threatened violation of Environmental
Requirements in question This section 21.5 shall survive termination of this
Lease. Except as otherwise provided by law, in any action under this section
against Landlord or Landlord's People (defined below), Tenant shall have the
burden of proof as to each fact essential to the claim or defense being asserted
by Tenant. Except as otherwise provided by law, in any action under this section
against Tenant or Tenant's People (defined below),
Lease.19.
October 2, 1996
Page 38
Landlord shall have the burden of proof as to each fact essential to the claim
or defense being asserted by Landlord.
21.6 Landlord represents and warrants to Tenant that, to the best of its
knowledge (without imputation of knowledge except by Landlord's Hazardous
Materials personnel, its facilities department heads and the personnel in
Landlord's Corporate Real Estate Department) i) it is unaware of any Hazardous
Material contamination of the Premises except as disclosed to Tenant in the
environmental reports described in Exhibit F attached hereto, ii) Landlord has
disclosed all reports and studies concerning the environmental status of the
Premises in its possession or control to Tenant. Landlord shall indemnify,
defend, protect and hold Tenant harmless from all claims, demands, fines,
encumbrances, liens, losses, costs, damages, expenses and liabilities (including
investigation costs and attorney's fees) paid, incurred or suffered as a result
of Hazardous Materials contamination of the Premises unless such Hazardous
Materials contamination was caused by Tenant or Tenant's People on or after the
Shell Delivery Date. Landlord releases Tenant from and waives all claims against
Tenant for, any and all liability for Hazardous Materials in, on under or about
the Premises except to the extent caused to be present by Tenant or Tenant's
People after the Shell Delivery Date. Except as otherwise provided by law, in
any action under this section against Landlord or Landlord's People, Tenant
shall have the burden of proof as to each fact essential to the claim or defense
being asserted by Tenant. Except as otherwise provided by law, in any action
under this section against Tenant or Tenant's People, Landlord shall have the
burden of proof as to each fact essential to the claim or defense being asserted
by Landlord.
ARTICLE 22
------- --
Waiver
22.1 The waiver by Landlord or Tenant of any breach of any covenant in this
Lease shall not be deemed to be a waiver of any subsequent breach of the same or
any other covenant in this Lease, nor shall any custom or practice which may
grow up between Landlord and Tenant in the administration of this Lease be
construed to waive or to lessen the right of Landlord or Tenant to insist upon
the performance by Landlord or Tenant in
Lease.19.
October 2, 1996
Page 39
strict accordance with this Lease. The subsequent acceptance of rent hereunder
by Xxxxxxxx or the payment of rent by Tenant shall not waive any preceding
breach by Tenant of any covenant in this Lease, nor cure any Event of Default,
nor waive any forfeiture of this Lease or unlawful detainer action, other than
the failure of Tenant to pay the particular rent so accepted, regardless of
Landlord's or Tenant's knowledge of such preceding breach at the time of
acceptance or payment of such rent.
ARTICLE 23
------- --
Notices
23.1 All requests, approvals, consents, notices and other communications given
by Landlord or Tenant under this Lease shall be properly given only if made in
writing and either deposited in the United States mail, postage prepaid,
certified with return receipt requested, or delivered by hand (which may be
through a messenger or recognized delivery or courier service) and addressed as
follows: To Landlord at the address of Landlord specified in the Basic Lease
Information, or at such other place as Landlord may from time to time designate
in a written notice to Tenant; and to Tenant, before the Commencement Date, at
the address of Tenant specified in the Basic Lease Information, and after the
Commencement Date, at the Premises, or at such other place as Tenant may from
time to time designate in a written notice to Landlord. Such requests,
approvals, consents, notices and other communications shall be effective on the
date of receipt (evidenced by the certified mail receipt) if mailed or on the
date of delivery if hand delivered.
ARTICLE 24
------- --
Miscellaneous
24.1 The words "Landlord" and "Tenant" as used herein shall include the plural
as well as the singular. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." If there is more
than one Tenant, the obligations hereunder imposed upon Tenant shall be joint
and several. Time is of the essence of this Lease and each and all of its
provisions. Submission of this instrument for examination or signature by Xxxxxx
does not constitute a reservation of
Lease.19.
October 2, 1996
Page 40
or option for lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Xxxxxx. Subject to Article 12, this
Lease shall benefit and bind Landlord and Xxxxxx and the personal
representatives, heirs, successors and assigns of Landlord and Xxxxxx. If any
provision of this Lease is determined to be illegal or unenforceable, such
determination shall not affect any other provision of this Lease and all such
other provisions shall remain in full force and effect. This Lease shall be
governed by and construed in accordance with the laws of the state where the
Premises are located. Except as specifically provided otherwise in the
Workletter, in any case hereunder requiring the consent of one party to an
action of another, that consent may not be unreasonably withheld or delayed.
Except as otherwise specifically provided otherwise in the Workletter, any
consent not given by the last day due shall be deemed given within 14 days of
the last day due, and if no time period is specified, within 14 days of the
receipt of a request for such a consent.
24.2 If there is any legal action or proceeding between Landlord and Tenant to
enforce this Lease or to protect or establish any right or remedy under this
Lease, the unsuccessful party to such action or proceeding shall pay to the
prevailing party all costs and expenses, including reasonable attorneys' fees
and disbursements, incurred by such prevailing party in such action or
proceeding and in any appeal in connection therewith. If such prevailing party
recovers a judgment in any such action, proceeding or appeal, such costs,
expenses and attorneys' fees and disbursements shall be included in and as a
part of such judgment.
24.3 The exhibits and addenda, if any, specified in the Basic Lease
Information are attached to and made a part of this Lease.
24.4 Tenant warrants and represents to Landlord that Tenant and has not
authorized or employed, or acted by implication to authorize or to employ, any
real estate broker or salesman to act for Tenant in connection with this Lease,
other than Xxxxx & Xxxxx. Tenant acknowledges that Landlord has, at Xxxxxx's
request, added the amount of the commission that would otherwise have been paid
to Xxxxx & Xxxxx to the Tenant's Work allowance.
Lease.19.
October 2, 1996
Page 41
24.5 Tenant and each person executing this Lease on behalf of Tenant
represents and warrants to Landlord that (a) Tenant is a corporation duly
organized and validly existing under the laws of the State of Delaware,(b)
Tenant is qualified to do business in the state where the Premises is located,
(c) Tenant has full right, power and authority to enter into this Lease and to
perform all of Tenant's obligations hereunder, and (d) each person signing this
Lease on behalf of Xxxxxx is duly and validly authorized to do so.
24.6 There are no oral agreements between Landlord and Tenant affecting this
Lease, and this Lease supersedes and cancels any and all previous negotiations,
arrangements, brochures, offers, agreements and understandings, oral or written,
if any, between Landlord and Tenant or displayed by Landlord to Tenant with
respect to the subject matter of this Lease or the Premises. There are no
representations between Landlord and Tenant or between any real estate broker
and Tenant other than those expressly set forth in this Lease and all reliance
with respect to any representations is solely upon representations expressly set
forth in this Lease. This Lease may not be amended or modified in any respect
whatsoever except by an instrument in writing signed by Landlord and Tenant.
IN WITNESS WHEREOF, Xxxxxxxx and Xxxxxx have executed this Lease as of the date
first hereinabove written.
Landlord: Tenant:
Tandem Computers Incorporated, Pure Atria Corporation,
a Delaware Corporation a Delaware Corporation
by __________________________ by _____________________
Lease.19.
October 2, 1996
Page 42
ADDENDUM TO LEASE
1. CONDITION OF PREMISES (See Lease (S)2.2)
Tenant has been provided with copies of Tandem Loc 240 - Building Reconstruction
specifications Sheet dated 8-29-96; of As-built drawings of the "American
Microsystem project" done by Cebak Associates, dated 8-20-74, as follows:
Drawings cover sheet, A1, A2, A4-A14, C1, C2, S1-S11, H1-H8, P1-P5, and E1-E8;
and Project drawings for Tandem Computers by Xxxx Xxxxxx & Associates, including
drawing sheets A0-A20, S1-S16, and L1-L4. The foregoing (together with
Xxxxxxxx's architect's "scope of work" description and any additional plans,
specifications, drawings or documents necessary to result in a full set of
design, construction and installation documents for the preparation and
construction of the "shell" of the Building and the Parking Structure following
the review and approval of Tenant, shall constitute the plans and specifications
(the "Plans and Specifications") for the construction and other work which
Landlord is required to perform with respect to the "shell" of the Building and
the Parking Structure. The work and compliance with the law obligations of
Landlord described above are referred to herein as "Landlord's Work". Landlord
shall not make or cause to be made any changes to the approved Plans and
Specifications without the prior written consent of Tenant.
Landlord shall perform Landlord's Work, including any done in outside areas
(such as parking areas and sidewalks) substantially in compliance with the Plans
and Specifications (any modifications thereto approved by both parties) and all
applicable laws (including compliance with ADA, Title 24, and current seismic
requirements) free from i) any defect in the design of the Completed Shell that
causes a foreseeable unreasonable risk to the life and safety of the occupants
of the Building, any defect in construction resulting from Xxxxxxxx's Work, and
any defect in the installation of equipment in the Completed Shell resulting
from Landlord's Work, and ii) any failures of the Completed Shell to comply with
the applicable building codes, Title 24 and the Americans with Disabilities Act
of 1990, but only to the extent that any such defect or failure to comply
existed as of the Shell Delivery Date. Landlord's obligation to comply with ADA
shall be limited to the Parking Structure, sidewalks, ramps, and other outside
areas, exterior doors and the Building elevator. Tenant shall have
responsibility to cause the restroom cores, interior doors, and other interior
areas to comply with ADA. Xxxxxxxx has completed Xxxxxxxx's Work and Tenant has
accepted it as conforming, subject to "punch-list" items. Landlord shall cause
its general contractor to complete and/or repair all "punch list" items within
thirty (30) days after the date on which the completed "punch list:" is signed
by Landlord and Tenant. Landlord and Xxxxxx shall review and agree to the
satisfactory completion of the "punch-list" items. The provisions of this
section related to acceptance by Tenant shall not serve to waive any claim
Tenant may have related to defects in design or construction as described in
this Lease.
2. ANNUAL INCREASES IN BASE RENT (See Lease (S)3.1(a))
Base rent shall be increased annually per lease Section 3.1(a) by 4% over the
previous lease year's base rent.
3. OPTION RENEWAL TERM BASE RENT (See lease (S)2.3)
Base Rent. Base rent at the commencement of the applicable renewal term of this
---------
lease shall be at the fair market rental rate for the premises determined as of
the date of commencement of the renewal period in question. During each renewal
period, Base Rent shall be increased by four percent (4%) over the previous
year's base rent, and in determining the fair market rental rate for the
Premises for such option period, such increase shall be taken into account. The
fair market rental rate for the Premises shall be established by written
agreement of Landlord and Tenant on or before the one hundred and fiftieth
(150th) day preceding the Expiration Date of the then-current Lease term. Absent
such agreement, such fair market rental rate shall be determined by arbitration
as follows: Either party may commence the process by appointing an arbitrator
who shall be a member of the Appraisers' Institute and shall not have been
employed or engaged by either Landlord or Tenant during the three (3) year
period preceding the date for which the fair market rental rate is to be
determined and shall have had at least ten (10) year's experience in leasing
buildings similar to the Building in the geographic area of the Premises. Such
commencing party shall promptly notify the other party of the identity of the
arbitrator selected and shall instruct the other party to appoint an arbitrator
and to notify the commencing party of the identity of such arbitrator within the
ten (10) day period following the date of such other party's receipt of the
commencing party's notice. Such arbitrator shall have the qualifications
described above.
The two arbitrators shall, within thirty (30) days after both have been
appointed, select a third similarly qualified arbitrator. The decision of any
two of the three arbitrators in writing shall be binding on both Landlord and
Tenant. Should no two arbitrators be able to agree within 30 days after the
appointment of the third arbitrator, the report of the arbitrators most
favorable to Landlord and the report of the arbitrators most favorable to Tenant
shall both be disregarded and the report of the remaining arbitrator shall be
binding on both landlord and Tenant. Fair market value must be determined to
reflect the fact that rent is adjusted at the rate of four percent (4%) per
year. Should either Landlord or Tenant fail to appoint an arbitrator within ten
(10) days after receiving written notice from the other to do so, the arbitrator
selected by the other party shall act for both and his decision in writing shall
be binding upon both Landlord and Xxxxxx. The fair market rental value so
established shall continue in effect during such renewal period. In no event
will the rent for the renewal period be less than rent prior to the renewal.
Each party shall bear the cost of the arbitrator it selects, and the two parties
shall share equally the cost of the third arbitrator.
4. TENANT ALLOWANCE
Landlord will contribute $2,504,860.00 toward the cost of Xxxxxx's Work in
accordance with the Work Letter Agreement attached as Exhibit E (the "Tenant
Improvement Allowance"). Notwithstanding the fact that it is not newly
manufactured, Landlord consents to Tenant's installation of the air conditioning
equipment described on Exhibit D attached hereto.
5. SIGNAGE.
Subject to City approval, Tenant shall be permitted to install a sign in a
location of its choice on the building, and an additional monument sign at a
mutually agreeable location. The signs are to be installed at Tenant's expense.
Landlord shall cooperate with Tenant in making application to the City of
Cupertino.
6. LETTER OF CREDIT.
No later than November 1, 1996, Tenant will provide Landlord with an
unconditional irrevocable standby letter of credit made payable to Landlord and
available for drawing in San Francisco, California on a sight draft and
Xxxxxxxx's certificate stating that Xxxxxxxx is entitled to draw on the letter
of credit, in a form substantially similar to the form attached to this Lease as
Exhibit C. The letter of credit shall be in the initial amount of $3,000,000 as
security for payment of all amounts payable by Tenant under the Lease and the
Workletter (the "Letter of Credit"). Except as otherwise provided herein, the
Letter of Credit, (as it may be renewed or replaced), must stay in effect
beginning on November 1, 1996 and continuing throughout the Term of this Lease,
including renewal terms. The Letter of Credit shall be renewed annually, and
must be issued by a bank reasonably acceptable to Landlord. The bank issuing the
letter of credit must be required to give Landlord at least thirty (30) days
prior written notice of intent not to renew the letter of credit each year. In
the event of the receipt of such notice, Tenant must either provide a
replacement letter of credit one (1) week prior to the commencement of the last
full week (7 day period) prior to the expiration of the then current letter of
credit, or Landlord shall be authorized to draw on the letter of credit in full
and to hold the funds in Landlord's name, in a separate interest bearing
account, as a security deposit, subject to the provisions below concerning the
use and return of funds held as a security deposit. All interest earned on such
funds shall be maintained in such interest bearing account and shall be paid to
Tenant at the expiration or sooner termination of this Lease. At Tenant's
option, Tenant may instruct Landlord to invest such funds in an conservative
manner selected by Tenant which will allow Landlord reasonable access to such
funds, but will provide a higher rate of return than an interest bearing
account. All of the provisions herein concerning relief from the obligation to
maintain the Letter of Credit and to reduce the amount of the Letter of Credit
shall apply to such funds held by Landlord. If the requirement of the Letter of
Credit would be waived, Landlord shall return such funds and all interest earned
thereon to Tenant. If the requirement for the amount of the Letter of Credit
would be reduced, Landlord shall return that portion of the funds to Tenant
which is equal to the amount of such reduction each time such reduction would
occur.
Tenant shall execute and deliver, or cause to be executed and delivered, any
documents reasonably required in connection with the acquisition of this letter
of credit.
Landlord shall be entitled to draw on the Letter of credit i) only in the amount
necessary to cure an Event of Default with respect to the payment of
an amount payable to Landlord by Xxxxxx (including late charges and interest as
provided herein) under the Lease, or ii) to fund the completion of Tenant's
Work, including any excess costs and damages suffered as a result of Tenant's
failure to complete Xxxxxx's Work. Any amount drawn down by Landlord not
utilized to cure the Event of Default in question shall be held by Landlord as a
security deposit (and returned to Tenant at the expiration or sooner termination
of the Lease, less any amount required to cure a then-existing Event of Default
with respect to the payment of any amount payable to Landlord by Tenant under
the Lease, including any amounts properly applicable to repair of the Premises
at the end or early termination of the Lease) or, at Tenant's option, shall be
deemed credited to Xxxxxx's obligation to pay rent (which credit shall be
binding upon any lender or transferee of Landlord's interest). Tenant shall
replenish the Letter of Credit to its initial amount following any draw on the
Letter of Credit by Landlord in accordance with this Paragraph and the terms and
conditions of the Letter of Credit.
In the event of any partial draw under the letter of credit, Tenant shall,
within thirty (30) days thereafter, either cause the amount available for draw
thereunder to be returned to the full amount, and if Tenant fails to so, such
failure shall be an Event of Default and Landlord may terminate this Lease and
draw on the letter of credit and/or exercise its other Remedies. Tenant shall be
responsible for Landlord's damages caused by such default.
In the event that Tenant achieves a Standard and Poor's investment grade rating
of BBB or better during the term, as it may be extended, of the Lease, this
Letter of Credit requirement shall be deemed waived.
In the event that Tenant exercises its option to extend the term of the Lease,
and the amount of the Letter of Credit has been reduced in accordance with the
last paragraph of this section 6, then the Letter of Credit shall be adjusted
(or replaced with a new Letter of Credit) to provide for recourse in the
original amount of Three Million Dollars ($3,000,000,00).
During the last eighteen (18) months of the then-current term of the Lease
(including any extension term), if Tenant has not exercised an option to extend
the then current term. Tenant shall have the right to reduce the amount of the
Letter of Credit from time to time so long as the amount of the Letter of Credit
is not reduced below an amount necessary to pay the
greater of i) any rent due under this Lease for the term remaining at the time
of any such reduction, or ii) three (3) months' rent.
7. EASEMENT.
Tenant has reviewed the text of certain reciprocal easement agreements that
provide for maintenance and repair of those easements and roads by Landlord.
This section is intended to clarify that, as this is a NNN lease, Tenant will
bear responsibility for any maintenance and repair obligations connected with
these easements, but that Landlord retains the responsibility to replace any
such easements that may be destroyed or otherwise become unusable, except as
such use is impaired by failure to repair or maintain.
EXHIBIT A
------- -
LEGAL DESCRIPTION
EXHIBIT B
---------
SITE PLAN
EXHIBIT C
---------
LETTER OF CREDIT
EXHIBIT D
---------
AIR CONDITIONING EQUIPMENT
EXHIBIT E
---------
WORK LETTER AGREEMENT
EXHIBIT F
---------
ENVIRONMENTAL REPORTS
EXHIBIT G
---------
ESTOPPEL CERTIFICATE
EXHIBIT A-l
WORK LETTER AGREEMENT
---- ------ ---------
October 2, 1996
To: Pure Atria Corporation
0000 X. Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Re: Premises Located at:
00000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx
Gentlemen:
Simultaneously with the execution of this Workletter Agreement
("Workletter), you ("Tenant") and the undersigned ("Landlord") are entering into
a lease agreement (the "Lease" ) pertaining to the space referred to above (the
"Premises"). Capitalized terms used herein shall have the meanings ascribed to
them in the Lease, unless otherwise defined herein.
In consideration of the covenants contained in this Workletter and in
the Lease, Landlord and Tenant agree as follows:
1. Work. Tenant, at its sole cost and expense (but subject to
-----
Landlord's Contribution under Paragraph 8(b) below), shall perform or cause to
be performed the work (the "Work") in the Premises provided for in the Plans and
Specifications (as defined in Paragraph 2 hereof) submitted to and approved by
Landlord. Tenant's Work shall be constructed in the highest and workmanlike
standards, in accordance with the requirements set forth herein and in
compliance with all applicable laws, ordinances, codes, and other governmental
requirements. Tenant's Work shall include well defined description of T.I.'s.
Tenant shall commence the construction of the Work promptly following (i)
Landlord's delivery of the Completed Shell (as defined in the Lease) to Tenant
and (ii) completion of the preconstruction activities provided for in Paragraph
2 below and shall diligently proceed without delay with all such construction.
Both Tenant and Landlord shall
coordinate their Work so as to avoid interference with any other work being
performed by or on behalf of Landlord or Tenant at the Building.
2. Preconstruction Activities.
--------------- -----------
(a) Prior to commencement of any Work, Tenant shall submit the following
information and items to Landlord for Landlord's review and written approval, as
specified below, which approval shall not be unreasonably withheld or delayed:
(i) an itemized statement of the estimated construction cost, including
permits and architectural and engineering fees and consultant costs;
(ii) the names and addresses of all of Tenant's consultants, contractors
(and the contractors' subcontractors) to be engaged by Tenant for the
Work ("Tenant's Contractors). Xxxxxxxx has the right of approval of
Xxxxxx's General Contractor, and has given its approval for X.X.
X'Xxxxx, Inc. X.X. X'Xxxxx shall employ persons or entities as
subcontractors or consultants in its discretion, and
(iii) Certificates of Insurance as hereinafter described. Tenant shall
not permit Tenant's Contractors to commence work until the required
insurance has been obtained and certificates reasonably satisfactory
to Landlord have been delivered to Landlord.
Tenant will update such information and items by written notice to
Landlord of any intended changes, and said changes shall not take place without
prior written Landlord approval, which approval shall not be unreasonably
withheld or delayed.
(b) As used herein the term "Plans" shall mean full and detailed architectural
and engineering plans and specifications covering the Work (including, without
limitation, architectural, structural, mechanical, electrical, life safety, fire
protection and plumbing working drawings for the
Tandem Workletter
Workltr.5
October 2, 1996
Work). The Plans shall be subject to Landlord's approval and the approval of all
local governmental authorities requiring approval if any. The Plans shall be
submitted to Landlord for review and comment at the 50%, 75% and 100% completion
stages. If Landlord notifies Tenant that changes are required to the final Plans
submitted by Tenant, Tenant shall, within five (5) business days thereafter,
submit to Landlord, for its approval, the Plans amended in accordance with the
changes so required. Such submission of revised Plans shall be accompanied by a
written response from Tenant specifically responding to any disapprovals or
other responses delivered by Landlord to Tenant. The Plans shall also be
revised, and the Work shall be changed, to incorporate any work required in the
Premises by any local governmental field inspector. Landlord's approval of the
Plans shall in no way be deemed to be acceptance or approval of any element
therein contained which is violation of any applicable statutes, laws,
ordinances, orders, codes, rules, regulations, building or fire codes or other
governmental requirements. Tenant's ADA and Title 24 requirements are those set
forth in the second grammatical paragraph of Paragraph 1 of the Addendum to
Lease: Tenant shall have the responsibility to cause the restroom cores,
interior doors, and other interior areas to comply with ADA. For purposes of
this provisions, the elevator, exterior doors and any other parts of the
Building which are not a part of the interior of the Building shall not be
deemed to be areas for which Tenant has responsibility for ADA.
(c) No Work shall be undertaken or commenced by Tenant in the
Premises until:
(i) all necessary building permits have been obtained by Xxxxxx;
(ii) all required insurance coverages have been obtained by Tenant
and certificates received and approved by Landlord (failure of
Landlord to receive evidence of such coverage upon commencement
of the Work shall not waive Tenant' s obligations to obtain such
coverages);
Tandem Workletter
Workltr.5
October 2, 1996
(iii) items required to be submitted to Landlord prior to
commencement of construction of the Work have been so submitted
and have been approved in writing, where required;
(iv) Landlord has given written notice that the Work may proceed, and
subject to the contractor regulations for the building
identified on Attachment A attached hereto and incorporated
herein.
3. Delays. In the event Tenant, for any reason other than Landlord caused
-------
delays, and force majeure is unable to complete the Work on or before the
scheduled commencement date of the term of the Lease, Tenant shall be
responsible for rent and all other obligations as set forth in the Lease from
the scheduled date for the commencement date under the Lease, regardless of the
degree of completion of the Work on such date, and no such delay in completion
of the Work shall relieve Tenant of any of its obligations under said Lease.
4. Landlord's Overhead. Subject to Paragraph 8 below, Tenant shall be
----------- ---------
responsible for all reasonable costs and expenses attributable to the Work.
Landlord shall make no charges to Tenant in connection with its review,
administration and approval of Xxxxxx's Plans.
5.Change Orders. All changes to the final Plans must be effected by
--------------
written change orders ("Change Orders") in accordance with the following
procedure. Tenant must notify Landlord of all Change Orders. Tenant need not
obtain the prior consent of Landlord for Change Orders which do not increase or
decrease the cost of the Work by more than five thousand dollars ($5,000).
Tenant must obtain Landlord's consent to Change Orders which increase or
decrease the cost of the Work by more than $5,000 and less than $20,000 prior to
issuance of such Change Orders. Landlord will approve or disapprove any such
Change Order (i) within 48 hours after request for approval, provided that with
respect to Change Orders involving additional work by consultants, preparation
of additional drawings or the like ("Extraordinary Measures"), Tenant notifies
Landlord of the cause for the Change Order and the action Tenant is
contemplating promptly after Xxxxxx realized that Extraordinary Measures will be
required and (ii) within a reasonable period of time if a Change Order involves
Extraordinary
Tandem Workletter
Workltr.5
October 2, 1996
Measures and Xxxxxx fails to give Landlord the notice referred to in clause (i)
immediately above. Landlord must in any event, give its approval or disapproval
within five (5) days after receipt of a request for approval. Xxxxxxxx must
notify Tenant in writing within eight (8) business hours after receipt of a
request for approval whether Landlord will require additional time for approval
or disapproval (up to a maximum of three (3) days beyond the initial two (2)
days). Landlord shall have the right to the additional up-to-three (3) days only
if, at the time Landlord notifies Tenant in writing this it will require
additional time beyond the initial forty-eight (48) hours, Landlord has already
delivered to its consultants all material necessary for such consultants to
assist Landlord in rendering its approval or disapproval of the proposed change
order. If Landlord has not satisfied the conditions for such extended review
period within the initial forty-eight (48) hour period identified above and has
not given its approval or disapproval within such initial forty-eight (48) hour
period, Landlord shall be deemed to have approved the proposed change order.
Tenant must obtain Landlord's consent to Change Orders which increase or
decrease the cost of the Work by more than $20,000 prior to issuance of such
Change Orders. Landlord will notify Tenant of its approval or disapproval
within a reasonable period of time, which time period will be shortened if
Tenant gives Landlord the notice described in clause (i) above. Landlord must in
any event, give its approval or disapproval within five (5) days after receipt
of a request for approval. Xxxxxxxx must notify Tenant in writing within eight
(8) business hours after receipt of a request for approval whether Landlord will
require additional time for approval or disapproval (up to a maximum of three
(3) days beyond the initial two (2) days). Landlord shall have the right to the
additional up-to-three (3) days only if, at the time Landlord notifies Tenant in
writing this it will require additional time beyond the initial forty-eight (48)
hours, Landlord has already delivered to its consultants all material necessary
for such consultants to assist Landlord in rendering its approval or disapproval
of the proposed change order. If Landlord has not satisfied the conditions for
such extended review period within the initial forty-eight (48) hour period
identified above and has not given its approval or disapproval within such
initial forty-eight (48) hour period, Landlord shall be deemed to have approved
the proposed change order.
Tandem Workletter
Workltr.5
October 2, 1996
Tenant is liable for all work begun on a change order without Landlord's written
approval, for which Landlord does not grant approval. Subject to Paragraph 8
below, Tenant shall be responsible for all cost and expenses attributable to any
changes. All delays caused by Xxxxxx initiated change orders, including, without
limitation, any stoppage of work during the change order review process, are
solely the responsibility of Tenant and shall cause no delay in the commencement
date, or payment of rent and performance of other obligations set forth in the
Lease. Landlord shall have a reasonable time to review any such changes and
shall not be coerced into approval due to the lateness of Tenant's delivery of
the change order or pending commencement of rent. Landlord shall make every
attempt to review and/or approve Tenant's change request, so as not to delay
construction. In no event shall Landlord's approval, or deemed approval relieve
Tenant of its obligations to conform to all applicable rules, regulations and
laws.
6. Standards of Design and Construction and Conditions of Tenant's
--------- -- ------ --- ------------ --- ---------- -- --------
Performance. All work done in or upon the Premises by Tenant shall be done
------------
according to the standards set forth in this Paragraph 6, except as the same may
be modified in the Plans approved by or on behalf of Landlord in writing.
(a) Tenant's Plans and all design and construction of the Work shall comply
with all applicable statutes, ordinances, laws, building and fire codes as well
as other governmental requirements. Approval by Landlord of the Plans shall not
constitute a waiver of this requirement or assumption by Landlord of
responsibility for compliance.
(b) Tenant shall obtain, at its sole cost and expense, all required plan
check fees and building permits and, when construction has been completed, shall
obtain an occupancy permit for the Premise. A copy of said permit shall be
delivered to Landlord. Tenant's failure to obtain such permits shall not cause a
delay in the commencement of the Lease or the rental and other obligations
therein set forth.
(c) Tenant's Contractors shall be licensed by the State of California,
possessing good labor relations, capable of performing quality workmanship and
working in harmony with Xxxxxxxx's contractors and
Tandem Workletter
Workltr.5
October 2, 1996
subcontractors and with other contractors and subcontractors hired by Xxxxxx.
Any scheduling conflict between Xxxxxx's contractors and the contractors of the
Landlord shall be resolved by Landlord, with the understanding that Landlord
shall diligently strive to avoid delaying Tenant from meeting its Lease
commencement date.
(d) If Tenant doesn't do so in a timely manner, Landlord shall have the
right (but not the obligation) to perform on behalf of and at Tenant's cost, any
work necessary to remedy or mitigate any emergency situation related to
structural components, building systems, general utility systems or patching of
the Work or of any other work in the Building.
(e) Tenant shall use only new materials that are of good quality in every
particular in the Work, except where explicitly shown otherwise in the Plans and
approved in writing by Landlord. Tenant warrants to Landlord that all materials,
supplies and equipment furnished by Tenant for the Work shall be new,
merchantable, of the most suitable grade, and fit for their intended purposes.
Notwithstanding the foregoing, Tenant may install the two (2) used Pace air
handlers described on Exhibit "A" attached hereto, but the following repairs
must be made: i) fan motors must be replaced with Premium Efficiency motors if
required by local zoning regulations and ii) replace fan drives (belts due to
age, and pulleys if they appear rusted, and replace fan bearings, install new
Variable frequency drives for static pressure control.
Tenant shall obtain warranties of at least one (l) year's duration from the
completion of the Work against defects in workmanship and materials on all work
performed and equipment installed in the Premises as part of the Work, which
shall enure to Landlord should Tenant default on or abandon the lease.
(f) deleted
(g) After written notice to Tenant and failure of Tenant to promptly cure
any violation, Landlord shall have the right to order Tenant or any of Tenant's
Contractors who violate material requirements imposed on Tenant or Tenant's
Contractors in performing work and consequently endanger person or property or
otherwise materially disturb the adjoining neighbors,
Tandem Workletter
Workltr.5
October 2, 1996
to cease work and remove its equipment and employees from the Building. No such
action by Landlord shall delay the commencement of the Lease or the rental and
other obligations therein set forth.
(h) Utility costs or charges for any service to accommodate the Work to the
Premises shall be the responsibility of Tenant from the date Tenant is obligated
to commence or commences the Work and shall be paid for by Tenant. Tenant shall
arrange and pay for removal of construction debris and shall not place debris in
any of Landlord's waste containers, and shall reimburse Landlord for costs
incurred by Landlord in cleaning the Premises or adjoining area caused by
Xxxxxx's work.
(i) Tenant shall permit access to the Premises, and the Work shall be
subject to inspection, by Landlord and Xxxxxxxx's architects, engineers,
contractors and other representatives at all times during the period in which
the Work is being constructed and installed and following completion of the
Work. Such inspections by Landlord shall not delay Tenant's construction work,
except where safety or threat to life causes Landlord to order work to cease.
(j) Tenant shall proceed with its work with due diligence. Tenant shall
notify Landlord upon completion of the Work and shall furnish Landlord with such
further documentation as may be necessary under Paragraph 8 below.
(k) Except as provided in Paragraph 5 above, Tenant shall have no authority
to deviate from the Plans in performance of the Work, except as authorized by
Landlord and its designated representative in writing. Tenant shall furnish to
Landlord "as-built" drawings of the Work within thirty (30) days after
completion of the Work.
(l) deleted
(m) Tenant shall impose on and enforce all applicable terms of this
Workletter against Xxxxxx's consultants and Xxxxxx's Contractors.
7. Insurance and Indemnification.
--------- --- ---------------
Tandem Workletter
Workltr.5
October 2, 1996
(a) In addition to any insurance which may be required under the Lease,
Tenant shall secure, pay for and maintain or cause Tenant's Contractors to
secure, pay for and maintain during the continuance of construction and
fixturing work within the Building or Premises, insurance in the following
minimum coverages and limits of liability:
(i) Workers' compensation and employer's liability insurance, with limits
---------------------------------------------------------
of not less than $1,000,000, or such higher amounts as may be
required from time to time by employee benefit acts or other statutes
applicable in the Sate of California.
(ii) Commercial General Liability Insurance: (including owner's
---------- ------- --------- ----------
contractors' protective liability) in an amount not less than
$2,000,000.00 per occurrence, whether involving bodily injury
liability (or death resulting therefrom) or property damage liability
or a combination thereof with a minimum aggregate limit of
$2,000,000.00. Such insurance shall provide for explosion and
collapse, completed operations coverage and contractual liability
coverage and shall insure Tenant's Contractors against any and all
claims for bodily injury, including death resulting therefrom, and
damage to the property of others and arising from its operations
under the contracts whether such operations are performed by Tenant's
Contractors or by anyone directly or indirectly employed by any of
them;
(iii) Comprehensive Automobile Liability Insurance: including the
------------- ---------- --------- ----------
ownership, maintenance and operation of any automotive equipment,
owned, hired or non-owned, in an amount not less than $500,000.00 for
each person in one accident and $1,000,000.00 for injuries sustained
by two or more persons in any one accident, and property damage
liability in an amount not less than $1,000,000.00 for each accident.
Such insurance shall insure Tenant's Contractors against any and all
claims for bodily injury, including death resulting therefrom, and
damage to the property of others arising from its operations under
the contracts, whether such operations are performed by Xxxxxx's
Tandem Workletter
Workltr.5
October 2, 1996
Contractors or by anyone directly or indirectly employed by any of
them;
(iv) "all risk" builder's risk insurance upon the entire Work to the full
---- ---- --------- ---- ---------
insurable value thereof. This insurance shall include the interests
of Landlord and Tenant (and their respective contractors and
subcontractors of any tier to the extent of any insurable interest
therein) in the Work and shall insure against the perils of fire and
extended coverage and shall include "all risk" builder' s risk
insurance for physical loss or damage including, without duplication
of coverage, theft, vandalism and malicious mischief. If portions of
the Work are stored off the site of the Building or in transit to
said site are not covered under said "all risk" builder's risk
insurance, then Tenant shall effect and maintain similar property
insurance on such portions of the Work. Any loss insured under said
"all risk" builder's risk insurance is to be adjusted with Landlord
and Tenant and made payable to Landlord as trustee for the insureds,
as their interests may appear.
All polices (except the workers' compensation policy) and any certificate
evidencing the existence of such policy shall be endorsed to include as
--
additional insured parties Landlord ("Tandem Computers Incorporated, its
directors, officers, employees and agents) with respect to (ii) and (iii) above.
The waiver of subrogation provisions contained in the Lease shall apply to all
insurance policies (except the workers' compensation policy) to be obtained by
Tenant pursuant to this Paragraph. The insurance policy endorsements shall also
provide that all additional insured parties shall be given thirty (30) days'
prior written notice of any reduction, any material change, cancellation or
nonrenewal of coverage (except that ten (10) days' notice shall be sufficient in
the case of cancellation for nonpayment of premium) and shall provide that the
insurance coverage afforded to the additional insured parties thereunder shall
be primary to any insurance carried independently by said additional insured
parties. Each of the insurance policies shall be issued by insurance companies
reasonably acceptable to Landlord. At least five (5) days prior to commencement
of services under this Agreement, Tenant shall furnish Landlord with a
certificate of insurance evidencing each of the above-mentioned policies.
Tandem Workletter
Workltr.5
October 2, 1996
Neither the issuance of any insurance policy required under this Agreement, nor
the minimum limits specified herein with respect to Tenant's insurance coverage,
shall be deemed to limit or restrict in any way Tenant's liability arising under
or in connection with the goods or services provided pursuant to, or the
performance or nonperformance of, this Agreement.
(b) Without limitation of the indemnification provisions contained in the
Lease, but except as hereinafter waived, to the fullest extent permitted by law,
except to the extent caused by the active negligence or misconduct of Landlord
or its employees, agents, contractors or invitees, Xxxxxx agrees to indemnify,
protect, defend and hold harmless Landlord, Landlord's agent, Xxxxxxxx's
contractors and Landlord's architects and their partners, directors, officers,
employees and agents, from and against all claims, liabilities, losses, damages
and expenses of whatever nature arising out of or in connection with performance
of the Work or the entry of Tenant or Tenant's Contractors into the Building and
the Premises, including, without limitation, mechanics' liens or the cost of any
repairs to the Premises or Building necessitated by activities of Tenant or
Tenant's Contractors and bodily injury to persons or damage to the property of
Tenant, its employees, agents, invitees or licensees or others. It is understood
and agreed that the foregoing indemnity shall be in addition to the insurance
requirements set forth above and shall not be in discharge of or in substitution
for same or any other indemnity or insurance provision of the Lease. The
indemnification provisions of this section are nevertheless subject to the
waiver of subrogation provisions of the Lease.
(c) Landlord shall maintain, at Landlord's cost, an "all risk" builder's
risk policy of insurance covering the building's shell as it is being
constructed, up through and including the Commencement Date, as that term is
used in the Lease.
8. Landlord's Contribution: Excess Amounts.
---------- ------------- ------ --------
(a) Landlord shall make a dollar contribution ("Landlord's Contribution")
in an amount of $2,504,860 for application to the extent thereof to the cost of
the Work (including, without limitation, payment of architectural and
engineering building and permit fees and construction costs). Landlord's
Contribution shall be applied as the Work progresses. If
Tandem Workletter
Workltr.5
October 2, 1996
the cost of the Work exceeds Xxxxxxxx's Contribution, Tenant shall have sole
responsibility for the payment of such excess cost. Should Tenant fail to
complete the Work, Landlord shall have the right to draw down the Letter of
Credit in a sufficient amount to complete the Work and to reimburse Landlord for
any excess costs and damages suffered as a result of Xxxxxx's failure to
complete the Work. If the cost of the Work is less than Landlord's Contribution,
Tenant shall be entitled to a credit against Base Rent next due and payable
under the Lease in an amount equal to 50% of any such unused portion of
Landlord's Contribution. Xxxxxxxx's and Xxxxxx's payments for the Work shall be
made prorata as costs of the Work are incurred based on the then most current
estimate of the cost of the Work submitted to and approved by Landlord under
Paragraph 2(a) above.
(b) Periodically, but no more frequently than once per month, Tenant may
submit to Landlord a payment request for costs of the Work incurred and not
previously paid. Requests for payment of Tenant Improvement Costs (less a ten
percent (10%) retention) received by Landlord by the twenty-fifth (25th) day of
a calendar month, accompanied by all documentation required hereunder, shall be
paid by the tenth (10th) day of the next succeeding calendar month. Each monthly
payment request shall be paid by a single check made payable to Tenant, except
that Landlord shall have the right to issue joint checks to Tenant and the Prime
Contractor.
Each monthly progress request for payment of Tenant Improvement Costs shall be
accompanied by the following:
(i) an itemized application for payment in the form of an application
and certification for payment (AIA Document G702) confirming the
character and amount of the cost for which payment is requested;
(ii) Certification from the Project Architect that the construction
which is the subject of any payment request has been completed or
properly stored and substantially conforms to the Approved Plans; and
Tandem Workletter
Workltr.5
October 2, 1996
(iii) Original conditional waivers of lien form each of Tenant's
contractors and all materialmen and vendors requesting payment
covering the requested payment.
Payment of the ten percent (10%) retention shall be made by Landlord to Tenant
upon certification of the Project Architect that the Tenant's Work (including
all "punch-list items) has been completed.
(c) Within thirty (30) days after final completion and installation
of the Work, Tenant shall submit to Landlord a detailed breakdown of the total
amount of costs of the Work, together with final waivers of liens, contractors'
affidavits, and architects' certificates in such form as may be reasonably
required by Landlord, Xxxxxxxx's title insurance company and Landlord's lender,
if any, from all parties performing labor or supplying materials or services in
connection with the Work, showing that all of said parties have been compensated
in full and waiving all liens in connection with the Premises and Building.
(d) Any and all tenant improvements shown on Xxxxxx's space plan, as
provided to and approved by Landlord, need not be removed at the end of the
Lease Term.
9. Miscellaneous.
-------------
(a) Except as expressly set forth herein or in the Lease, Landlord
has no agreement with Tenant and has no obligation to do any work with respect
to the Premises.
(b) deleted
(c) Time is of the essence under this Workletter.
(d) Any person signing this Workletter on behalf of Landlord and/or
Tenant warrants and represents he has authority to do so.
(e) If Tenant fails to make any payment relating to the Work as
required hereunder, and such failure is not caused by Xxxxxxxx's failure to
disburse Landlord's Contribution as required hereunder and neither makes
Tandem Workletter
Workltr.5
October 2, 1996
such payment or "bonds over" such payment within the ten (10) day period
following Xxxxxx's receipt of written notice from Landlord that such payment is
past due Landlord, at its option, may complete the Work pursuant to the approved
Plans and continue to hold Tenant liable for the costs thereof. Both Xxxxxx's
and Xxxxxxxx's failures to perform their obligations hereunder shall constitute
a breach of the Lease. No such breach by Tenant shall become an "Event of
Default" until the giving of notice and the passage of the applicable cure
period specified in Article 14 of the Lease without cure (or without the
commencement of cure during such applicable time period and the prosecution of
such cure thereafter until completion if the cure cannot reasonably be effected
within the applicable cure period).
(f) Notices under this Workletter shall be given in the same manner as
under the Lease.
(g) The headings set forth herein are for convenience only.
(h) This Workletter sets forth the entire agreement of Tenant and
Landlord regarding the Work. This Workletter may only be amended if in writing
and duly executed by both Landlord and Xxxxxx.
10. The terms and provisions of the Lease, insofar as they are applicable to
this Workletter, are hereby incorporated herein by reference.
11. All amounts payable by Tenant to Landlord hereunder shall be deemed to be
Rent under the Lease and upon any Event of Default, Landlord shall have all of
the rights and remedies provided for in the Lease.
12. The attachment "Construction Requirements" are incorporated herein.
Tandem Workletter
Workltr.5
October 2, 1996
IN WITNESS WHEREOF, this Workletter is executed as of this day of , 1996.
TENANT: LANDLORD:
PURE ATRIA CORPORATION TANDEM COMPUTERS, INC.
a Delaware corporation A Delaware corporation
By______________________ By: _________________________
Name: Name:
Title: Title:
Tandem Workletter
Workltr.5
October 2, 1996
ATTACHMENT TO WORKLETTER - A
CONTRACTOR REGULATIONS
1. Prior to commencement of construction, Tenant shall have all utilities (gas,
water, electricity, sewer, sprinkler monitoring, etc.) placed in its name for
billing and use purposes.
2. The landscaping and irrigation will be turned over to Tenant at the time of
construction. Maintenance and repairs will be the responsibility of Tenant and
Contractors.
3. Tenant, its consultants and contractors shall strictly observe Cupertino's
Noise Ordinance regarding start and cessation times of construction work, both
on work days and weekends.
4. Tenant should be advised that the parking lot and driveways will have been
recently repaired and resurfaced. Care should be taken in the placement of
construction trailers, storage containers, equipment and material, so as not to
damage this surface.
5. Construction materials not stored inside the building, may be stored at the
parking garage. However, the security of these materials is solely the
responsibility of Tenant and its contractors. A temporary security fence around
these materials is recommended.
6. Construction debris will not be allowed to remain outside the building for
longer than 24 hours. It must be removed or placed in a construction debris box
Owner's trash containers are not to be used for this purposes under any
circumstances. Evidence to the contrary will result in Tenant being backcharged
for dump fees of Owner's trash containers. Tenant should contact Los Altos
Garbage and make arrangements for debris containers and trash removal
7. It is strongly recommended that the newly installed elevator not be used
during construction, as access to both floors of the building can be reached
from the exterior without use of the elevator. Damage to the new elevator may
void the 1 year warranty commencing on or about 9/15/96.
Tandem Workletter
Workltr.5
October 2, 1996
8. Tenant must notify and obtain prior written approval from Owner before using
any helicopter service for the purpose of lifting equipment onto the roof. A
crane is recommended for this purpose.
9. Deliveries to the building must not block the public streets of Forge or
Swallow drive longer than for the purpose of maneuvering the vehicles onto the
site.
10. All contractors must comply with federal and state OSHA requirements, as
well as have in placed and comply with a written company safety program.
11. Contractors working within the building must have and be prepared to furnish
Material Safety Data Sheets (MSDS) for all chemicals, solvents, glues, etc. used
during the course of construction.
Tandem Workletter
Workltr.5
October 2, 1996
