EXHIBIT 10.17
FIRST AMENDMENT TO
STANDARD LEASE AGREEMENT
THIS FIRST AMENDMENT TO STANDARD LEASE AGREEMENT (the "Amendment") is
entered into as of the 17th day of January, 2003 ("Effective Date"), by and
between TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS, a retirement
system created pursuant to the laws of the State of Illinois ("Landlord"), and
CRAY INC., a Washington corporation ("Tenant").
R E C I T A L S:
A. Landlord and Tenant entered into that certain Standard Lease Agreement
for Office/Service Space dated August 10, 2000 (the "Lease") for certain
premises consisting of approximately 13,887 square feet ("Building V Premises")
of office and service building at 0000 Xxxxxxx Xxxxxxx Xxxx, Xxxxxxx Xxxxxxx, XX
and approximately 25,620 square feet of office and service premises ("Building
VI Premises") located at 0000 Xxxxxxx Xxxxxxx Xxxx, Xxxxxxx Xxxxxxx, XX both as
more particularly set forth in the Lease (collectively, the "Existing
Premises").
B. Landlord and Tenant have agreed to amend the Lease to provide for the
expansion of the Building V Premises to include 15,756 rentable square feet in
the Building V and to extend the Term of the Lease and otherwise amend the Lease
as hereinafter provided.
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant agree to amend the Lease as follows:
1. RECITALS INCORPORATED: CERTAIN DEFINED TERMS. The Recitals set forth above
are hereby incorporated by this reference and shall be deemed terms and
provisions hereof with the same force and effect as if fully set forth in
this Section 1. Capitalized terms which are not otherwise defined herein
shall be deemed to have the same meanings herein as are ascribed to such
terms in the Lease.
2. EXPANSION OF PREMISES. Subject to the provisions of Section 11 below,
effective on that date when Landlord has delivered possession of the
Expansion Area (as hereinafter defined) to Tenant, which date is estimated
to be March 1, 2003 (the "Effective Date"), there shall be added to the
Premises under the Lease that area of Building V containing approximately
15,756 rentable square feet and graphically shown on Exhibit A attached
hereto (the "Expansion Area"). The Premises under the Lease shall then
consist of the Existing Premises and the Expansion Area and shall total
55,263 rentable square feet.
3. TERM. The Term of the Lease is hereby amended to expire at midnight on
September 30, 2009, unless further extended by Tenant pursuant to Section
10 below.
4. RENT.
(a) Except as set forth to the contrary in this Amendment, Tenant's
possession of the Premises, including without limitation the Expansion Area,
shall be upon all of the terms and conditions set forth in the Lease.
(b) Commencing on that day which is the 91st day after the Effective Date
until October 1, 2003, in addition to the Minimum Rent set forth in the Lease,
Tenant shall pay to Landlord Minimum Rent for the Expansion Area in an amount
equal to Twelve Thousand Sixty Six and 47/100 Dollars ($12,066.47) per month
[said amounts as based on an annual rental rate of Nine and 19/100 Dollars
($9.19) per square foot of rentable area in the Expansion Area]. In the event
that the Expansion Area Rent Commencement commences on a day other than the
first day of a month, the Minimum Rent payable for such a partial month shall be
prorated on a per diem basis at the rate of one-thirtieth (1/30th) of the
monthly installment of Minimum Rent payable during such period as set forth
above.
(c) Commencing on the Effective Date, Tenant shall pay Additional Rent
based upon the Premises, including the Expansion area.
(d) Commencing on October 1, 2003 until the expiration of the Term, the
Minimum Rent for the Premises shall be as follows:
Period of Term Annual Rate Per SF Monthly Minimum Rent
10/1/03 to 9/30/05 $ 9.69 $ 44,624.87
10/1/05 to 9/30/06 $ 10.00 $ 46,052.50
10/1/06 to 9/30/07 $ 10.20 $ 46,973.55
10/1/07 to 9/30/08 $ 10.40 $ 47,894.60
10/1/08 to 9/30/09 $ 10.61 $ 48,861.70
(e) Tenant hereby acknowledges and agrees that except as set forth in
Section 6 below, Landlord shall have no obligation to make any improvements,
decorations, repairs, alterations or additions to the Premises as a condition of
Tenant's obligation to pay Rent during the Term as amended hereby.
5. CONSTRUCTION AND POSSESSION. Article 4 of the Lease is hereby deleted and
replaced with the following:
The Tenant shall accept the Expansion Area "as is where is" and, except as
set forth in Section 6 below, Landlord has made no agreement to improve or
perform any work thereon. Tenant shall be responsible for constructing
improvements in the Premises pursuant to plans that have been approved by
Landlord, which approval shall not be unreasonably withheld, delayed or
conditioned ("Tenant Improvements"). Tenant shall submit the plans for
such Tenant Improvements to Landlord for review and approval prior to
beginning any of the Tenant Improvements. Landlord's approval of such
plans
shall not be considered a representation or warranty that such plans or
Tenant Improvements comply with all applicable laws, codes and/or
regulations. Tenant shall have the right to select the contractor to build
the Tenant Improvements which contractor shall be acceptable to Landlord,
which acceptance shall not be unreasonably withheld, delayed or
conditioned. Any and all contractors must comply with any and all
applicable codes, laws and regulations applicable to the Premises
including without limitation Landlord's reasonable rules and regulations
applicable to the Premises. Landlord has agreed to provide Tenant with an
allowance of $867,750.00 to be used towards the cost of the Tenant
Improvements ("the "TI Allowance"), which TI Allowance and the Tenant
Improvements shall be subject to the following provisions: (i) any TI
Allowance that remains after payment of all of the costs associated with
the Tenant Improvements up to a maximum of $110,526.00 will be credited by
Landlord to Tenant towards the Minimum Rent next becoming due and any
amounts remaining which are in excess of such maximum shall belong to
Landlord; (ii) the TI Allowance shall be used only for the payment of
costs relating to the construction of the Tenant Improvements (including
without limitation the costs of preparing plans and construction drawings,
the cost of any and all voice and data cabling, and the cost to relocate
Tenant's existing employees within the Existing Premises as necessary to
perform the construction of the Tenant Improvements; (iii) the Tenant
Improvements shall be made by Tenant at the sole cost and expense of
Tenant subject to the reimbursement thereof with the TI Allowance and
shall be performed in accordance with all provisions of the Lease
(including without limitation Article 15 thereof), including compliance
with all applicable governmental laws, ordinances and regulations; (iv)
Tenant shall be solely responsible for any and all costs of the Tenant
Improvements in excess of the TI Allowance; (v) if the cost of the Tenant
Improvements is in excess of the TI Allowance ("Excess"), Tenant shall
have the option of either paying all costs incurred for such Excess first
out of Tenant's funds before any of the TI Allowance is disbursed or
depositing Tenant's funds in the amount of the Excess into a construction
type escrow to be held and disbursed in accordance with an escrow
agreement mutually acceptable to Tenant and Landlord; (vi) it shall be a
condition of Landlord's obligation to pay any installment of the TI
Allowance for work performed by any contractor or supplier, that Tenant
shall provide or cause to be provided to Landlord a copy of all contracts
with contractors and subcontractors and contractor's and subcontractor's
affidavits and waivers of lien covering all labor and material used and
expended for which contractors and subcontractors are requesting payment,
all in form and content reasonably satisfactory to Landlord; (vii) it
shall be a condition to Landlord's obligation to pay or credit any amount
of TI Allowance that Tenant is not then in default under any of the other
material terms, covenants and conditions of this Lease beyond any
applicable notice and cure period provided for in the Lease; and (viii)
the TI Allowance shall be advanced as costs are incurred.. Tenant shall
not be responsible for or obligated to pay any fee to or to reimburse
Landlord for any expenses associated with Landlord's review, approval or
coordination of such Tenant Improvements.
6. LANDLORD'S RESPONSIBILITY FOR HVAC. Section 7(A) shall be amended to add
the following to the end thereof: "Without in any way limiting or
diminishing the Tenant's obligations under Article 6 hereof, including
without limitation Section 6A, Landlord
shall be responsible for the replacement, but not the repair of the HVAC
units, unless such replacement is caused by the fault or negligence of
Tenant, its employees, or invitees.
7. SIGNAGE. Article 22 of the Lease is hereby amended to delete the last
sentence thereof and to add the following: "Notwithstanding the foregoing,
Tenant shall be permitted to install three monument signs on the Property
and two fascia-mounted signs on the Building, at Tenant's sole cost and
expense, provided (i) such signage is in compliance with any and all
applicable laws, codes and regulations; (ii) Tenant has received
Landlord's approval of the location and aesthetics of such signage, which
approval shall not be unreasonably withheld, delayed or conditioned; and
(iii) at the expiration or termination of the Lease, Tenant shall, at
Tenant's sole cost and expense, remove such signage and repair any damage
to the Property and Building to the state existing prior to the
installation of such signage; provided, however, that if Landlord, in its
sole discretion, chooses to have any of such signage remain at the
Property and/or the Building, Landlord shall notify Tenant in writing and
Tenant shall not remove any such signage that Landlord has chosen to
remain."
8. SECURITY DEPOSIT. Upon the Effective Date, Landlord shall return the
Security Deposit to Tenant and Article 26 shall be deemed to be deleted in
its entirety.
9. TERMINATION OPTION. Article 31 of the Lease is hereby deemed to be deleted
in its entirety.
10. OPTION TO EXTEND. The following is hereby added as a new Article 31 to the
Lease:
Provided that Tenant has not assigned any of its rights under the Lease
and/or no more than 5,000 square feet of the Premises are subject to any
sublease with an entity that is not an affiliate of Tenant as of the date
of such Renewal Notice and/or as of the first day of such Extended Term,
and further provided Tenant is not in default under the Lease at the time
of giving the Renewal Notice or at any time thereafter up to the
commencement of the applicable Extended Term, Tenant shall have the right
to extend the Term of the Lease for three separate but consecutive
additional periods of three (3) years each (each an "Extended Term") by
giving written notice of its intention to extend the Term no later than
nine (9) months prior to the commencement of the applicable Extended Term,
time being of the essence (the "Renewal Notice"). If Tenant does not
timely give the Renewal Notice prior to the expiration of the Term or any
applicable Extended Term, Tenant shall forfeit its rights to any and all
remaining rights to extend the Term. In the event a Renewal Notice is
timely given, Tenant shall lease the Premises from Landlord for the
applicable Extended Term on the same terms and conditions as are
applicable to the then expiring Term or Extended Term; provided, however,
(i) Tenant shall have no future rights to extend the Term after the
exercise of the third extension right, (ii) there shall be no obligation
on the part of Landlord to make any betterments or improvements or to
reimburse Tenant for any such betterments or improvements in connection
with any Extended Term, and (iii) the Minimum Rent payable during the
first Extended Term shall be equal to $10.82 per rentable square feet for
the Premises for the first year of such
Extended Term, $11.04 per rentable square feet for the second year of such
Extended Term and $11.26 per rentable square feet for the third year of
such Extended Term, and (iv) the Minimum Rent payable during the second
Extended Term shall be equal to $11.49 per rentable square feet for the
Premises for the first year of such Extended Term, $11.72 per rentable
square feet for the second year of such Extended Term and $11.95 per
rentable square feet for the third year of such Extended Term, and (v) the
Minimum Rent payable during the third Extended Term shall be equal to
$12.19 per rentable square feet for the Premises for the first year of
such Extended Term, $12.43 per rentable square feet for the second year of
such Extended Term and $12.68 per rentable square feet for the third year
of such Extended Term.
11. CONTINGENCY. The following is hereby added as a new Article 32 to the
Lease:
Notwithstanding anything in this Lease to the contrary, the obligation of
Landlord to lease the Premises under this Lease Agreement to Tenant in
accordance with the terms hereof shall be contingent upon Landlord entering into
a written agreement with Kinko's, Inc. on terms and conditions acceptable to
Landlord in its sole and absolute discretion whereby Kinko's, Inc. agrees to
terminate its lease of the Expansion Area and vacate possession of same no later
than February 28, 2003. If such written agreement with Kinko's, Inc. is not
entered into by February 28, 2003 and/or Kinko's Inc. does not vacate possession
of its space on or before May 31, 2003, this Amendment shall automatically
become null and void and of no further force and effect except for the right of
Tenant to terminate set forth below in this Paragraph 11. In the event that
Kinko's Inc does not vacate possession of its space by February 28, 2003,
Landlord shall use its commercially reasonable efforts to remove Kinko's Inc
from the space, including without limitation exercising Landlord's rights under
the Kinko's lease. In the event that Kinko's, Inc. does not vacate possession of
its space on or before May 31, 2003, provided Tenant is not in default under the
Lease beyond any applicable notice and/or cure period at the time of giving the
Termination Notice (as defined below) or at any time thereafter to and including
the Effective Date of Termination (as defined below), Tenant shall have the one
time right, without payment of any termination fee or penalty, to terminate the
Lease, as amended hereby, early as to all of the Premises effective as of April
30, 2004 (the "Effective Date of Termination") by giving written notice of
termination to Landlord no later than June 30, 2003, time being of the essence
("Termination Notice").
12. TIME IS OF THE ESSENCE. Time is of the essence for this Amendment and the
Lease and each provision hereof and thereof.
13. SUBMISSION OF AMENDMENT. Submission of this instrument for examination
shall not bind Landlord and no duty or obligation on Landlord shall arise
under this instrument until this instrument is signed and delivered by
Landlord and Tenant.
14. ENTIRE AGREEMENT. This Amendment and the Lease contain the entire
agreement between Landlord and Tenant with respect to Tenant's leasing of
the Premises. Except for the Lease and this Amendment, no prior agreements
or understandings with respect to the Premises shall be valid or of any
force or effect.
15. SEVERABILITY. If any provision of this Amendment or the application
thereof to any person or circumstance is or shall be deemed illegal,
invalid or unenforceable, the remaining provisions hereof shall remain in
full force and effect and this Amendment shall be interpreted as if such
legal, invalid or unenforceable provision did not exist herein.
16. FULL FORCE AND EFFECT. Except as modified by this Amendment, all of the
terms, conditions, agreements, covenants, representations, warranties and
indemnities contained in the Lease remain in full force and effect. In the
event of any conflict between the terms and conditions of this Amendment
and the terms and conditions of the Lease, the terms and conditions of
this Amendment shall prevail.
17. SUCCESSORS AND ASSIGNS. This Amendment is binding upon and shall inure to
the benefit of the parties hereto and their respective successors and
assigns.
18. LANDLORD'S LIABILITY. Anything in this Amendment or the Lease to the
contrary notwithstanding, covenants, undertakings and agreements herein
and/or therein made on the part of Landlord are made and intended not as
personal covenants, undertakings and agreements or for the purpose of
binding Landlord personally or the assets of Landlord (except Landlord's
interest in the Building) but are made and intended for the purpose of
binding only Landlord's interest in the Building. No personal liability or
personal responsibility is assumed by, or shall at any time be asserted to
be enforceable against Landlord, its partners or any of its members,
trustees, board of directors or officers, its investment manager or any
employee or agent of its investment manager on account of this Amendment
or the Lease or on account of any covenant, undertaking or agreement of
Landlord contained in this Amendment or the Lease.
19. LANDLORD'S AGENT. Capri/Capital Advisors LLC ("Capital") is acting solely
as agent for Landlord in connection with this Amendment. All of the terms,
provisions, stipulations, covenants and conditions to be performed by
Landlord are undertaken solely as said agent and not personally or
individually by Capital. No personal liability shall be asserted or
enforced against Capital or any of its employees, officers, directors,
shareholders, members or agents by reason of any of the terms, provisions,
stipulations, covenants and conditions contained in this Amendment.
20. TRS. Without limitation of any other provision of this Amendment, this
Amendment is being executed by and on behalf of the Teachers' Retirement
System of the State of Illinois ("TRS"). Neither TRS nor any present or
future officer, director, employee, trustee, member or agent of TRS shall
have any personal liability, directly or indirectly, and recourse shall
not be had against TRS or any such officer, director, employee, trustee,
member or agent, under or in connection with this Amendment or any other
document or instrument heretofore or hereafter executed in connection with
same. Tenant hereby waives and releases any all such personal liability
and recourse. Tenant and its successors and assigns and all other persons
claiming by, through or under Tenant shall look solely to Landlord's
interest in the Building of which the Premises are a part with respect to
any claim against Landlord arising under or in connection with this
Amendment or any other document or instrument heretofore or hereafter
executed in connection with this Amendment. The limitations of liability
provided herein are in addition to, and not in limitation of, any
limitations of liability otherwise set forth herein or applicable to TRS
by law or in any other contract, agreement or instrument.
21. BROKERS. Tenant represents and warrants to Landlord that it has had no
dealings with any real estate broker, finder, commission or other person
entitled to compensation for services rendered in connection with the
negotiation or execution of this Amendment, except United Properties
("Broker"), whose commission shall be paid solely by Landlord pursuant to
the terms of a separate agreement between Landlord and Broker. Tenant
hereby agrees to indemnify, defend and hold Landlord, its trustees,
partners and agents and their respective agents and employees harmless
from all claims of any other broker or brokers claiming to have dealt with
Tenant in connection with this Amendment and the Lease. Landlord
represents and warrants to Tenant that it has had no dealings with any
real estate broker, finder, commission or other person entitled to
compensation for services rendered in connection with negotiation or
execution of this Amendment, except Broker. Landlord hereby agrees to
indemnify, defend and hold Tenant, its trustees, partners and agents and
their respective agents and employees harmless from all claims of any
other broker or brokers claiming to have dealt with Landlord in connection
with this Amendment and the Lease.
22. ADA COMPLIANCE. The following sentence is added to Section 29 of the Lease
immediately prior to the last sentence of such Section: "Landlord shall be
solely responsible for all Title III compliance and costs in connection
with the exterior portions of the Building other than "path of travel"
requirements triggered by Tenant's use of and/or construction or
alterations in the Premises."
23. COUNTERPARTS. This Amendment may be executed in duplicate, either
counterpart of which is to be considered an original and taken together
shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
LANDLORD:
TEACHERS' RETIREMENT
SYSTEM OF THE STATE OF
ILLINOIS
By: CAPRI/CAPITAL ADVISORS LLC,
its investment manager and duly authorized agent
By: /s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
Executive Vice President
TENANT:
CRAY INC., a Washington corporation
By: /s/ XXXXX X. XXXXXX
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Name: XXXXX X. XXXXXX
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Its: CHIEF TECHNOLOGY COUNSEL
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