OFFICE LEASE
between
OAIC Bush Street, LLC
a Delaware limited liability company
as Landlord
and
Xoom.com, Inc.,
A Delaware corporation
as Tenant
THE SUBMISSION OF THIS DOCUMENT FOR EXAMINATION, NEGOTIATION AND/OR SIGNATURE
DOES NOT CONSTITUTE AN OFFER TO LEASE. THIS DOCUMENT SHALL NOT BE BINDING AND IN
EFFECT AGAINST EITHER PARTY UNTIL AT LEAST ONE COUNTERPART, DULY EXECUTED BY
LANDLORD AND TENANT, HAS BEEN RECEIVED BY LANDLORD AND TENANT.
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TABLE OF CONTENTS
<TABLE>
PAGE
<S> <C>
1. DEFINITIONS.............................................................................................1
2. LEASE TERM; CONDITION OF PREMISES.......................................................................1
3. 8TH AND 9TH FLOORS......................................................................................2
4. RENTAL..................................................................................................3
5. ADDITIONAL RENT FOR EXPENSES AND REAL ESTATE TAXES......................................................5
6. USE....................................................................................................10
7. SERVICES...............................................................................................11
8. TENANT REMEDIES........................................................................................14
9. IMPOSITIONS PAYABLE BY TENANT..........................................................................15
10. ALTERATIONS............................................................................................16
11. LIENS..................................................................................................18
12. REPAIRS; CONDITION OF PREMISES.........................................................................19
13. DESTRUCTION OR DAMAGE..................................................................................19
14. INSURANCE..............................................................................................21
15. WAIVER OF SUBROGATION..................................................................................23
16. INDEMNIFICATION........................................................................................24
17. COMPLIANCE WITH LEGAL REQUIREMENTS.....................................................................24
18. ASSIGNMENT AND SUBLETTING..............................................................................25
19. RULES; NO DISCRIMINATION...............................................................................29
20. ENTRY BY LANDLORD......................................................................................29
21. EVENTS OF DEFAULT......................................................................................30
22. TERMINATION UPON DEFAULT...............................................................................31
23. CONTINUATION AFTER DEFAULT.............................................................................32
24. OTHER RELIEF...........................................................................................32
25. LANDLORD'S RIGHT TO CURE DEFAULTS......................................................................32
26. LANDLORD DEFAULT.......................................................................................32
27. ATTORNEYS' FEES........................................................................................33
28. EMINENT DOMAIN.........................................................................................33
29. SUBORDINATION AND NONDISTURBANCE.......................................................................33
30. NO MERGER..............................................................................................34
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TABLE OF CONTENTS
(CONTINUED)
PAGE
31. AMENDMENTS.............................................................................................34
32. ESTOPPEL CERTIFICATE...................................................................................34
33. NO LIGHT, AIR, OR VIEW EASEMENT........................................................................34
34. HOLDING OVER...........................................................................................34
35. SECURITY DEPOSIT.......................................................................................35
36. WAIVER.................................................................................................37
37. NOTICES AND CONSENTS...................................................................................37
38. COMPLETE AGREEMENT.....................................................................................37
39. CORPORATE AUTHORITY....................................................................................37
40. STORAGE SPACE..........................................................................................38
41. NO CONSEQUENTIAL DAMAGES...............................................................................38
42. MISCELLANEOUS..........................................................................................38
43. ABANDONMENT............................................................................................39
44. AMERICANS WITH DISABILITIES ACT AND SIMILAR ACTS.......................................................39
45. EXHIBITS...............................................................................................39
46. LANDLORD'S LIABILITY; SALE OF BUILDING.................................................................39
47. NAME OF BUILDING AND SIGNAGE...........................................................................40
48. HAZARDOUS SUBSTANCE DISCLOSURE.........................................................................41
49. REAL ESTATE BROKERS....................................................................................43
50. NOTICE TO MORTGAGEE; FINANCIAL STATEMENT...............................................................43
51. OPTION TO EXTEND.......................................................................................43
52. RIGHT OF FIRST REFUSAL.................................................................................46
53. PARKING................................................................................................47
54. BICYCLE PARKING........................................................................................48
55. INTERNAL FIRE STAIRS...................................................................................48
56. DEDICATED ELEVATOR.....................................................................................48
57. YEAR 2000..............................................................................................48
</TABLE>
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OFFICE LEASE
BASIC LEASE INFORMATION
Lease Execution Date: August 13, 1999
The Lease Execution Date shall be the date upon which the Lease is
fully executed by both parties. Upon Lease execution by Landlord,
Landlord shall promptly send a copy of the fully executed Lease to
Tenant by facsimile, followed by overnight delivery of a complete,
fully executed original Lease.
Landlord: OAIC Bush Street, LLC, a Delaware limited liability company
Tenant: Xoom.com, Inc., a Delaware corporation
Building (Section 1(a)): 225 Bush Street, San Francisco, California
Premises (Section 1(b)):
Suite 800 on the entire 8th floor of the Building (the "8th Floor")
Suite 900 on the entire 9th floor of the Building (the "9th Floor")
Suite 1200 on the entire 12th floor of the Building (the "12th Floor")
Suite 1300 on the entire 13th floor of the Building (the "13th Floor")
Suite 1900 on the entire 19th floor of the Building (the "19th Floor")
Suite 2000 on the entire 20th floor of the Building (the "20th Floor")
Suite 2100 on the entire 21st floor of the Building (the "21st Floor")
Suite 2200 on the entire 22nd floor of the Building (the "22nd Floor")
Rentable Area of Premises (Section 1(b)):
25,233 rentable square feet on the 8th floor
26,042 rentable square feet on the 9th floor
26,041 rentable square feet on the 12th floor
26,034 rentable square feet on the 13th floor
24,157 rentable square feet on the 19th floor
22,123 rentable square feet on the 20th floor
18,751 rentable square feet on the 21st floor
18,314 rentable square feet on the 22nd floor
The total rentable square footage for the Premises is 186,695 rentable
square feet.
III
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The Premises rentable square footage was measured based upon ANSI/BOMA
Z65.1-1996 standards, except for the 22nd floor which calculation
excludes the exterior loggia area for the purposes of this Lease.
Landlord and Tenant have agreed to the Premises rentable square footage
for all purposes and said square footage will not be revised during the
entire term of the Lease, including all Extension Periods.
Term Commencement Date (Section 2(a)):
(1) The Term Commencement Date for the 19th Floor shall be on or
before September 1, 1999 (the "19th Floor Term Commencement Date").
(2) The Term Commencement Date for the 12th Floor and 13th Floor
shall be the earlier of twenty-six (26) weeks after the Lease Execution Date,
plus days attributable to Landlord Delays and Force Majeure Events, or
substantial completion of the Tenant Work and Base Building Work on the 12th and
13th Floor (the "12th and 13th Floor Term Commencement Date"). The estimated
12th and 13th Floor Term Commencement Date is February 4, 2000 (the "Estimated
12th and 13th Floor Term Commencement Date").
(3) The Term Commencement Date for the 20th Floor and 21st Floor
shall be the earlier of twenty-six (26) weeks after the Lease Execution Date,
plus days attributable to Landlord Delays and Force Majeure Events, or
substantial completion of the Tenant Work and Base Building Work on the 20th
Floor and 21st Floor (the "20th and 21st Floor Term Commencement Date"). The
estimated 20th and 21st Floor Term Commencement Date is February 4, 2000 (the
"Estimated 20th and 21st Floor Term Commencement Date").
(4) The Term Commencement Date for the 22nd Floor shall be the
earlier of fourteen (14) months after the Lease Execution Date, plus days
attributable to Landlord Delays and Force Majeure Events, or upon substantial
completion of the Tenant Work and Base Building Work on the 22nd Floor (the
"22nd Floor Term Commencement Date"). The estimated 22nd Floor Term Commencement
Date is October 15, 2000 (the "Estimated 22nd Floor Term Commencement Date").
(5) The Term Commencement Date for the 8th Floor and 9th Floor
shall be as set forth in Section 3 of the Lease.
Term Expiration Date (Section 2(a)): The last day of the month, one hundred
twenty (120) months after the 20th and 21st Floor Term Commencement Date.
IV
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Base Monthly Rental (Section 3(a)):
<TABLE>
<CAPTION>
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FLOOR OF PREMISES YEARS(2) 1-5: YEARS 6-10
<S> <C> <C>
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8th Floor $73,596.25/mo. $79,904.50/mo.
$883,155/an. ($35.00(1)) $958,854/an. ($38.00(1))
----------------------------------------------------------------------------------------
9th Floor $75,955.83/mo. $82,466.33/mo.
$911,470/an. ($35.00(1)) $989,596/an. ($38.00(1))
----------------------------------------------------------------------------------------
12th Floor $80,293.08/mo. $84,633.25/mo.
$963,517.00/an. ($37.00(1)) $1,015,599.00/an. ($39.00(1))
----------------------------------------------------------------------------------------
13th Floor $80,271.50/mo. $84,610.50/mo.
$963,258.00/an. ($37.00(1)) $1,015,326.00/an. ($39.00(1))
----------------------------------------------------------------------------------------
19th Floor $74,484.08/mo. $78,510.25/mo.
$893,809.00/an. ($37.00(1)) $942,123.00/an. ($39.00(1))
----------------------------------------------------------------------------------------
20th Floor $73,743.33/mo. $82,961.25/mo.
$884,920.00/an. ($40.00(1)) $995,535.00/an. ($45.00(1))
----------------------------------------------------------------------------------------
21st Floor $62,503.33/mo. $70,316.25/mo.
$750,040.00/an. ($40.00(1)) $843,795.00/an. ($45.00(1))
----------------------------------------------------------------------------------------
22nd Floor $67,151.33/mo. $70,203.67/mo.
$805,816.00/an. ($44.00(1)) $842,444.00/an. ($46.00(1))
----------------------------------------------------------------------------------------
Total: $587,998.73/mo. $633,606.00/mo.
$7,055,985.00/an. $7,603,272.00/an.
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</TABLE>
(1) Per rentable square, per annum.
(2) Years shall be measured from the 20th and 21st Floor Term Commencement Date
Base Expense Year (Section 1(c)): 2000
Base Tax Year (Section 1(d)): 2000
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Tenant's Expense Share (Section 5(a)): 33.62%
Tenant's Expense Share by floor of the Premises shall be
4.54% for the 8th Floor
4.69% for the 9th Floor
4.69% for the 12th Floor
4.69% for the 13th Floor
4.35% for the 19th Floor
3.98% for the 20th Floor
3.38% for the 21st Floor
3.30% for the 22nd Floor
Landlord and Tenant agree that Tenant's Expense Share is calculated
based upon the Building containing 555,325 rentable square feet
("Building Square Footage").
Tenant's Tax Share (Section 5(a)): 33.62% of the Building
Tenant's Tax Share by floor of the Premises shall be:
4.54% for the 8th Floor
4.69% for the 9th Floor
4.69% for the 12th Floor
4.69% for the 13th Floor
4.35% for the 19th Floor
3.98% for the 20th Floor
3.38% for the 21st Floor
3.30% for the 22nd Floor
Landlord and Tenant agree that Tenant's Tax Share is calculated based
upon the Building Square Footage (as defined above).
Security Deposit (Section 35): Upon full execution of the Lease: a Letter
of Credit in the amount of $4,500,000
subject to reduction and/or return to the
Tenant in accordance with the terms of
Section 35 of this Lease
Tenant's Address
for Notices (Section 37):
Prior to 19th Floor Term Commencement Date:
Xoom.com, Inc.
300 Montgomery Street, Suite 300
VI
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San Francisco, California 94104
Attn: Director of Operations and Administration
Phone: (415) 288-2500
Fax: (415) 288-2580
After the 19th Floor Term Commencement Date:
Xoom.com, Inc.
225 Bush Street, Suite ____
San Francisco, California 94104
Attn: Director of Operations and Administration
Phone: (415)_________________________
Fax: (415)___________________________
[blanks to be completed on occupancy]
Landlord's Address
for Notices (Section 37)
OAIC Bush Street, LLC
c/o Ocwen Capital Corporation
1675 Palm Beach Lakes Boulevard
The Forum, Suite 511
West Palm Beach, FL 33401
Attn: Secretary
Phone: (561) 682-8517
Fax: (561) 682-8177
with a copy to:
OAIC Bush Street, LLC
c/o Ocwen Capital Corporation
1675 Palm Beach Lakes Boulevard
The Forum
West Palm Beach, FL 33401
Attn: Real Estate Asset Management Department
Phone: (561) 682-8275
Fax: (561) 682-8163
VII
<PAGE>
with a copy to:
Jones Lang LaSalle
225 Bush Street, Suite 770
San Francisco, California 94104
Attn: Property Manager
Phone: (415) 835-0225
Fax: (415) 835-0222
Exhibit(s) and Addendum (Section 45):
Exhibit A: Floor Plan
Exhibit B: Rules and Regulations
Exhibit C: Work Letter
Exhibit D: Commencement Date Memorandum
Exhibit E: Tenant Estoppel
Exhibit F: Subordination, Attornment and Non-Disturbance Agreement
Real Estate Brokers (Section 49): Mark Rosen of Rosen and Reynolds for Tenant
and Angus Scott and Richard Dougherty of Grubb & Ellis for Landlord.
The provisions of the Lease identified above in parentheses are those provisions
where references to particular Basic Lease Information appear. Each such
reference shall incorporate the applicable Basic Lease Information. In the event
of any conflict between any Basic Lease Information and the Lease, the latter
shall control.
TENANT: LANDLORD:
Xoom.com, Inc. OAIC Bush Street, LLC,
a Delaware corporation a Delaware limited liability company
By: /s/ Chris Kitze By: /s/ Gregory Breskin
----------------------------- ---------------------------------
Name: Chris Kitze Name: Gregory Breskin
--------------------------- -------------------------------
Its: Chairman Its: Vice President
---------------------------- --------------------------------
By: /s/ John Harbottle By: /s/ Christine Reich
----------------------------- ---------------------------------
Name: John Harbottle Name: Christine Reich
--------------------------- -------------------------------
Its: CFO Its: President
---------------------------- --------------------------------
VIII
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OFFICE LEASE
THIS LEASE, dated August 13, 1999, for purposes of reference only,
is made and entered into by and between OAIC Bush Street, LLC, a Delaware
limited liability company ("Landlord"), and Xoom.com, Inc., a Delaware
corporation ("Tenant").
WITNESSETH:
Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, the premises described in Section 1(b) below for the term and
subject to the terms, covenants, agreements and conditions hereinafter set
forth, to each and all of which Landlord and Tenant hereby mutually agree.
1. DEFINITIONS. Unless the context otherwise specifies or
requires, the following terms shall have the meanings herein specified:
(a) The term "Building" shall mean the building or
buildings described in the Basic Lease Information, and the parcel or parcels
of land on which such building or buildings are situated, together with all
other improvements and other real property located on such parcel or parcels,
including without limitation the garage, as well as any property interest in
the area of the streets bounding the parcel described in the Basic Lease
Information, and all other improvements on or appurtenances to said parcel or
said streets.
(b) The term "Premises" shall mean the portion of the
Building located on the floors specified in the Basic Lease Information which
is shown crosshatched on the floor plan(s) attached to this Lease as EXHIBIT A.
Landlord and Tenant agree that the Premises consist of the number of square
feet of rentable area set forth in the Basic Lease Information. All the
outside walls and windows of the Premises and any space in the Premises used
for shafts, stacks, pipes, conduits, ducts, electric or other utilities,
sinks or other Building facilities, and the use thereof and access thereto
through the Premises for the purposes of operation, maintenance and repairs,
are reserved to Landlord.
(c) The term "Base Expense Year" shall mean the
calendar year specified in the Basic Lease Information as the Base Expense
Year.
(d) The term "Base Tax Year" shall mean the calendar
year specified in the Basic Lease Information as the Base Tax Year.
2. LEASE TERM; CONDITION OF PREMISES.
(a) The Lease term (the "Lease Term") shall commence
for the respective floors of the Premises on the Term Commencement Dates
specified in the Basic Lease Information, as modified by the terms of the
Lease and the Work Letter attached hereto as Exhibit C (the "Work Letter"),
and unless ended sooner as herein provided, shall expire on the Term
Expiration Date specified in the Basic Lease Information.
<PAGE>
(b) Tenant and Landlord shall construct or install in
the Premises the improvements to be constructed or installed pursuant to the
Work Letter. Landlord shall own all of said initial improvements to be
constructed or installed pursuant to the Work Letter as of the Term
Commencement Date for each respective floor in the Premises.
(c) If Landlord for any reason whatsoever cannot
deliver possession of the Premises to Tenant on the respective Premises
Delivery Date (as defined in Exhibit C), this Lease shall not be void or
voidable, no obligation of Tenant shall be affected hereby and Landlord shall
not be liable to Tenant for any loss or damage resulting therefrom.
3. 8TH AND 9TH FLOORS.
(a) In connection with the 8th floor (the "8th Floor")
and 9th floor (the "9th Floor") in the Building, Landlord shall give written
notice to Tenant upon the current 8th and 9th Floor tenant's vacation of the
8th and 9th Floors (the "Availability Notice"). In no event shall Landlord
give Tenant the Availability Notice prior to January 1, 2000. Tenant shall
have thirty (30) days after Landlord provides the Availability Notice (the
"Availability Notice Period") to give Landlord written notice that (i) Tenant
desires to build out the 8th and/or 9th Floors for Tenant's use ("Tenant
Build Out"), or (ii) Tenant desires to sublet the 8th and/or 9th Floor to a
third party sublessee and build out the 8th and 9th Floors accordingly
("Sublessee Build Out"). Tenant shall have the right to pursue a Tenant Build
Out or a Sublessee Build Out on either the 8th Floor or 9th Floor and is not
required to elect the same build out for both of said floors. If Tenant fails
to deliver written notice during the Availability Notice Period, Tenant shall
be deemed to have elected a "Sublessee Build Out" for both the 8th Floor and
9th Floor. Each and every provision of this Lease and Exhibit C shall apply
to a Tenant Build Out or Sublessee Build Out, except as provided to the
contrary in this Section or in Exhibit C.
(b) In the case of a Tenant Built Out on the 8th Floor
and/or 9th Floor, as applicable, (i) Tenant shall be entitled to a Tenant
Improvement Allowance in Section 5 of Exhibit C of Forty Dollars ($40.00) per
square foot of rentable area for the 8th Floor ($1,009,320) and/or Forty
Dollars ($40.00) per square foot of rentable area for the 9th Floor
($1,041,680), (ii) as required in Section 1(a) of Exhibit C, Tenant shall
deliver an initial draft of the Space Plan for the 8th Floor and/or 9th
Floor, as applicable, after the end of the Availability Notice Period,
(iii) the Premises Delivery Date (as defined in Exhibit C), in Section 2(c)
of Exhibit C, for the 8th Floor and/or 9th Floor, as applicable, shall be on
or before six (6) weeks after the end of the Availability Notice Period, as
extended by any Force Majeure Events and/or Landlord Delay, and (iv) the Term
Commencement Date for the 8th Floor and/or 9th Floor ("8th Floor Term
Commencement Date" and/or "9th Floor Term Commencement Date" as applicable)
shall be twelve (12) weeks after the Premises Delivery Date. In addition to
the definition of Landlord Delay in EXHIBIT C, for purposes of this Section 3,
every day after January 1, 2000 until the date on which Landlord delivers the
Availability Notice to Tenant shall be considered a Landlord Delay.
(c) In the case of a Sublessee Build Out on the
8th Floor and/or 9th Floor, as applicable, (i) Tenant shall be entitled to an
initial Tenant Improvement Allowance in Section 5
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of Exhibit C of up to and including Five Dollars ($5.00) per square foot of
rentable area for the 8th Floor ($126,165) and/or up to and including Five
Dollars ($5.00) per square foot of rentable area for the 9th Floor
($130,210), (ii) as required in Section 1(a) of Exhibit C, Tenant shall
deliver an initial draft of the Space Plan for the 8th Floor and/or 9th
Floor, as applicable, after the end of the Availability Notice Period,
(iii) the Premises Delivery Date, in Section 2(c) of Exhibit C, for the
8th Floor and/or 9th Floor, as applicable, shall be the date that Landlord
receives written notice from the Tenant electing a Sublessee Build Out, but
in no event later than the expiration of the Availability Notice Period, and
(iv) the Term Commencement Date for the 8th Floor and/or 9th Floor
("8th Floor Term Commencement Date" and/or "9th Floor Term Commencement Date"
as applicable) shall be March 1, 2000, as extended by any Force Majeure
Events and/or Landlord Delay.
(d) In the event that Tenant elects a Sublessee Build
Out pursuant to this Section for either the 8th Floor and/or 9th Floor,
Tenant shall have the option, exercisable upon written notice to Landlord
("Additional Build Out Notice"), to further build out the 8th Floor and/or
9th Floor, as applicable for Tenant's use ("Additional Tenant Build Out"). In
connection therewith, Tenant shall be entitled to a total Tenant Improvement
Allowance in Section 5 of Exhibit C of Forty Dollars ($40.00) per square foot
of rentable area for the 8th Floor ($1,009,320) and/or ($40.00) per square
foot of rentable area for the 9th Floor ($1,041,680), less the amount of the
Tenant Improvement Allowance expended during the Sublessee Build Out of the
8th Floor and/or 9th Floor, as applicable. Notwithstanding anything to the
contrary contained herein, during the last twenty-four (24) months of the
original Lease Term, Tenant shall not be entitled to an any additional Tenant
Improvement Allowance from Landlord in connection with an Additional Tenant
Build Out. In the event that Tenant exercises the option contained in this
Section 3(d) Tenant shall deliver an initial draft of the Space Plan for the
tenant improvements to be constructed on the 8th Floor and/or 9th Floor, as
applicable, as required in Section 1(a) of Exhibit C after the Additional
Build Out Notice, and (ii) the parties agree that Landlord shall be required
to complete any remaining Base Building Work (as defined in Exhibit C) at the
time of the Additional Build Out.
(e) If the Tenant elects the Sublessee Build Out,
Tenant shall be entitled to a credit against the 8th Floor Base Monthly
Rental and 9th Floor Base Monthly Rental (collectively, "Rent Credit") in the
amount of three dollars ($3.00) per rentable square foot per year until the
earlier of (i) the nineteenth (19th) month after the 8th Floor Term
Commencement Date and/or the 9th Floor Term Commencement Date, as applicable,
or (ii) eighteen (18) weeks after the Additional Build Out Notice.
4. RENTAL.
(a) Commencing on the respective Rent Commencement
Dates, as defined below, with respect to each floor of the Premises and
thereafter through the remainder of the Lease Term, Tenant shall pay to
Landlord throughout the Lease Term as basic monthly rental for the Premises
the sum specified for each floor of the Premises in the Basic Lease
Information as the Base Monthly Rental. As additional rent hereunder during
such period, Tenant shall pay to Landlord the additional rent described in
Section 5 below. Base Monthly Rental and additional
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rent payable pursuant to Section 5 shall be collectively referred to herein
as "monthly rental." As used herein the "Rent Commencement Date" for each
floor of the Premises shall mean the Term Commencement Date for each
respective floor of the Premises as set forth in the Basic Lease Information.
Landlord and Tenant hereby agree to confirm the Rent Commencement Date and
Term Commencement Date for each floor of the Premises promptly after the Term
Commencement Date for each floor of the Premises, by executing and delivering
to each other a Commencement Date Memorandum in conformance with EXHIBIT D
attached hereto, but failure to do so shall not affect the Rent Commencement
Date, Term Commencement Date or Lease Term.
(b) Monthly rental shall be paid to Landlord on or
before the Rent Commencement Date and on or before the first day of each and
every successive calendar month thereafter during the term hereof. In the
event the Rent Commencement Date is on a day other than the first day of a
calendar month or the Lease Term ends on a day other than the last day of a
calendar month, the monthly rental for the first and last fractional months
hereof shall be appropriately prorated.
(c) All sums of money due from Tenant hereunder not
specifically characterized as rental shall constitute additional rent, and if
any such sum is not paid when due it shall nonetheless be collectible as
additional rent with the next installment of monthly rental thereafter
falling due, but nothing contained herein shall be deemed to suspend or delay
the payment of any sum of money at the time it becomes due and payable
hereunder, or to limit any other remedy of Landlord.
(d) Tenant hereby acknowledges that late payment by
Tenant to Landlord of monthly rental will cause Landlord to incur costs not
contemplated by this Lease, the exact amounts of which will be difficult to
ascertain. Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed on Landlord by the
terms of any encumbrances covering the Building and the Premises.
Accordingly, if any installment of monthly rental shall not be received by
Landlord prior to the expiration of any applicable grace period described in
Section 21(a), Tenant shall pay to Landlord a late charge equal to five
percent (5%) of such overdue amount; provided that, on not more than two
(2) occasions in any consecutive twelve (12) month period Tenant may be up to
five (5) days late in the payment of monthly rental after written notice from
Landlord; provided further that, if monthly rental is not paid when due three
(3) times during any Lease Year, then thereafter Tenant shall not be entitled
to any grace period, and such late charge shall be assessed on any monthly
rental not paid by 5:00 p.m. on the date due. The parties hereby agree that
such late charge represents a fair and reasonable estimate of the costs
Landlord will incur by reason of late payment by Tenant based on the
circumstances existing as of the date of this Lease. Acceptance of such late
charge by Landlord shall in no event constitute a waiver of Tenant's default
with respect to such overdue amount, nor prevent Landlord from exercising any
of the other rights and remedies granted hereunder.
(e) Any amount due from Tenant, if not paid when first
due, shall bear interest from the date first due until paid at an annual rate
of thirteen percent (13%) (but in no event in
4
<PAGE>
excess of the maximum rate of interest permitted by law), provided that
interest shall not be payable on late charges incurred by Tenant nor on any
amounts upon which late charges are paid by Tenant to the extent such
interest would cause the total interest to be in excess of that legally
permitted. Payment of interest shall not excuse or cure any default hereunder
by Tenant.
(f) Subject to the provisions of Section 21(a) below,
all payments due from Tenant to Landlord shall be paid to Landlord, without
notice, demand, deduction or offset, in lawful money of the United States of
America in immediately available funds or by good check as described below
and unless otherwise instructed, addressed to the Property Manager at the
address set forth in the Basic Lease Information, or to such other person or
at such other place as Landlord may from time to time designate by notice to
Tenant. Payments made by check must be drawn either on a California financial
institution or on a financial institution that is a member of the federal
reserve system. Notwithstanding the foregoing, Tenant may make any payments
due to Landlord by wire transfer and said payments shall be considered
received by Landlord upon receipt into Landlord's bank account.
5. ADDITIONAL RENT FOR EXPENSES AND REAL ESTATE TAXES.
(a) For purposes of this Section 5, the following
terms shall have the meanings hereinafter set forth:
(i) "Tenant's Tax Share" and "Tenant's
Expense Share" mean the percentage figures so specified in the Basic Lease
Information.
(ii) "Tax Year" means each twelve (12)
consecutive month period commencing January 1st of each year during the Lease
Term, including, without limitation, any partial year during which the Lease
may commence; provided that Landlord, upon notice to Tenant, may change the
Tax Year from time to time to any other twelve (12) consecutive month period
and, in the event of any such change, Tenant's Tax Share of Real Estate Taxes
shall be adjusted for the Tax Year involved in any such change.
(iii) "Real Estate Taxes" means all taxes,
assessments (whether general or special), levies, excises, fees and charges
of any kind whatsoever, ordinary or extraordinary, unforeseen as well as
foreseen, assessed, imposed or levied upon or with respect to the Building or
any part thereof or any personal property of Landlord used in the operation
thereof, or Landlord's interest in the Building or such personal property.
Real Estate Taxes shall include, without limitation: all general real
property taxes and general and special assessments, charges, fees, or
assessments for transit, housing, police, fire, or other governmental
services or purported benefits to the Building or the occupants thereof,
service payments in lieu of taxes, business taxes, and any tax, fee, or
excise on the act of entering into this Lease or any other lease of space in
the Building, or on the use or occupancy of the Building or any part thereof,
or on the rent payable under any lease or in connection with the business of
renting space in the Building, or any gross receipt taxes or excise taxes
that are now or hereafter levied or assessed against Landlord by the United
States of America, the State of California or any political subdivision
thereof, public corporation, district, or any other political or public
entity, and shall also include any other tax, fee, charge or other excise,
however described, that may be levied or assessed as a
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substitute for, or as an addition to, in whole or in part, any other Real
Estate Taxes, whether or not now customary or in the contemplation of the
parties on the date of this Lease. Real Estate Taxes shall not include taxes
assessed solely upon and/or paid by other tenants in the Building, franchise,
transfer, inheritance or capital stock taxes or income taxes measured by the
net income of Landlord from all sources unless, due to a change in the method
of taxation, any of such taxes is levied or assessed against Landlord as a
substitute for, or as an addition to, in whole or in part, any other tax that
would otherwise constitute a Real Estate Tax. Real Estate Taxes shall also
include legal fees, costs, and disbursements incurred in connection with
proceedings to contest, determine, or reduce Real Estate Taxes.
(iv) "Expense Year" means each twelve (12)
consecutive month period commencing January 1st of each year during the Lease
Term, including, without any limitation, any partial year during which the
Lease may commence; provided that Landlord, upon notice to Tenant, may change
the Expense Year from time to time to any other twelve (12) consecutive month
period and, in the event of any such change, Tenant's Expense Share of
Expenses shall be adjusted for the Expense Years involved in any such change.
(v) "Expenses" means the total costs and
expenses paid or incurred by Landlord in connection with the ownership,
management, operation, maintenance and repair of the Building, including,
without limitation: (i) the cost of air conditioning, electricity, steam,
water, sewer, heating, mechanical, telephone, ventilating, escalator and
elevator systems and all other services and utilities; (ii) the cost of
repairs and replacements and all labor and material costs related thereto,
and the cost of general maintenance, cleaning and service contracts and the
cost of all supplies, tools and equipment required in connection thereof;
(iii) the cost of the Building delivery and messenger service; (iv) the cost
incurred by Landlord for all insurance carried on the Building or in
connection with the use and/or occupancy thereof and the amount of any
deductible on uninsured loss (earthquake insurance shall either be included
in the base year Expenses calculation or, if earthquake insurance is not so
included in the base year Expenses calculation, and Landlord in the future
desires to carry earthquake insurance, only that portion of the earthquake
insurance cost as represents the reasonable increase in the cost of such
earthquake insurance over an imputed base year cost shall be included as an
Expense); (v) wages, salaries, payroll taxes and other labor costs and
employee benefits for employees up to and including the level of Building
manager; (vi) management fees, which shall not exceed the market range for
such fees; (vii) fees, charges and other costs of all independent contractors
engaged by Landlord, including those providing janitorial, window cleaning,
security, extermination, rubbish removal, planting and other services;
(viii) accounting and legal expenses and the costs of other professionals and
consultants; (ix) Landlord's share of any shared expenses under any
reciprocal easement agreement or similar document; (x) depreciation on
personal property, including, without limitation, carpeting in public
corridor and common areas and window coverings provided by Landlord; (xi) the
rental paid for offices in the Building for the property manager and related
management and operations personnel; (xii) the cost of any capital
improvements made to the Building, or capital assets acquired by Landlord,
after completion of the Building's construction that are (A) a labor-saving
or energy saving device or to enhance the health and safety of the public
(including tenants) or to effect other economies in the operation or
maintenance of the Building to the extent of the actual savings, enhancement
or effect on other
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economies, or (B) made to the Building after the date of this Lease that are
required under any governmental law or regulation or insurance carrier that
was not applicable to the Building at the time that permits for the
construction thereof were obtained; provided that the total cost of said
improvements or assets that shall be included in the Expenses calculation
shall not exceed Three Hundred Thousand Dollars ($300,000) during any Expense
Year; (C) to the extent that the cost of any such improvement or asset is
less than One Hundred Thousand Dollars ($100,000.00), provided that the total
cost of said improvements or assets that shall be included in the Expenses
calculation shall not exceed Two Hundred Thousand Dollars ($200,000) during
any Expense Year, or (D) which improvements or assets have a useful life of
five (5) years or less (and the cost of which is not otherwise included in
Expenses pursuant to this Section 5(a)(v)), so long as the amortized amount
under this subsection (D) above that is included in the Expenses calculation
for any Expense year, when combined with the costs under subsection (C),
shall not exceed Two Hundred Thousand Dollars ($200,000); the costs pursuant
to this subsection 5(a)(v)(xii) (other than those described in clause (C)
above) are to be amortized over such period as Landlord shall determine
(including, without limitation, with respect to any improvements which result
in cost savings with respect to the Building, such period as would allow
Landlord to amortize the improvements to the extent of such cost savings in
any year or to any greater extent deemed appropriate to Landlord, together
with interest on the unamortized balance at the rate of ten percent (10%) per
annum or such higher rate as may have been paid by Landlord on funds borrower
for the purpose of constructing such capital improvements (GAAP shall be used
to determine if an item is an expense or a capital expenditure); (xiii) the
amortized cost of the Transit Impact Development Fee of the City and County
of San Francisco; (xiv) the cost of contesting the validity or applicability
of any governmental enactments which may affect operating expenses; (xv)
license, permit and inspection fees and charges; (xvi) sales, use and excise
taxes on goods and services purchased by Landlord in connection with the
operation, maintenance or repair of the Building and building systems and
equipment; (xvii) supplies, tools, materials and equipment used in connection
with the operation, maintenance or repair of the Building; (xviii) painting
the exterior or the public or common areas of the Building and the cost of
maintaining the sidewalks, landscaping and other common areas of the
Building; and (xiv) any other expenses and costs of any kind whatsoever
incurred in connection with the ownership, management, operation, maintenance
and repair of the Building. Expenses shall not include Real Estate Taxes, the
cost of tenant improvements, real estate broker's commissions, or interest or
principal payments on loans which are secured by a deed of trust or mortgage
encumbering the Building.
Actual Expenses for both the Base Expense Year and each
subsequent Expense Year shall be adjusted to equal Landlord's reasonable
estimate of the Expenses had the total area of the Building been occupied for
each such Expense Year. Landlord and Tenant acknowledge and agree that
certain costs of the ownership, management, operation maintenance and repair
of the Building may be allocated exclusively to a single component of the
Building (for example, and without limitation, to an office area, a retail
area or a parking facility) and certain of such costs may be allocated among
such components. The determination of such costs and their allocation shall
be made by Landlord in Landlord's reasonable discretion. To the extent costs
and expenses described above relate to both the Building and other property,
such costs and
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expenses shall, in determining the amount of Expenses, be allocated as
Landlord may determine to be appropriate.
Notwithstanding anything to the contrary in the definition
of Expenses, Expenses shall not include:
(i) Depreciation (except as provided in
Section 5(a)(v)(x) above), interest, or amortization on mortgages payments;
(ii) Leasing commissions, attorney's fees and
other costs and expenses incurred in connection with negotiations or disputes
with present or prospective tenants or other occupants of the Building;
(iii) Advertising and promotional expenditures
related to leasing tenant space in the Building;
(iv) Costs incurred with respect to the
installation of tenant improvements made for new tenants in the Building or
incurred in renovating or otherwise improving, decorating, painting or
redecorating space leased by or exclusively available to other tenants or
other occupants of the Building;
(v) Expenses, costs, and disbursements
relating to, or arising directly or indirectly from, the testing for or
analysis, handling, removal, treatment, disposal, remediation, or replacement
of asbestos or asbestos-containing materials, lead or Hazardous Materials in,
on, around, beneath, or from the Building;
(vi) To the extent that retail tenants in the
Building are separately metered or separately billed, the cost of
electricity, chilled and hot water for heating and cooling air, and
janitorial service for such retail tenants in their premises and in excess of
standard water service to retail tenants in the Building;
(vii) Cost for public art (including, without
limitation, paintings and sculptures); and
(viii) Expenses, to the extent reimbursed by
third parties; and
(ix) Any sales, mortgage or other brokerage
commissions in connection with the sale of financing of the Building.
(b) Tenant shall pay to Landlord as additional rent
one twelfth (1/12) of Tenant's Tax Share of increases in the Real Estate
Taxes for each Tax Year or portion thereof during the Lease Term after the
Base Tax Year when compared to Real Estate Taxes for the Base Tax Year (the
"Tax Increases"), in advance, on or before the first day of each month during
such Tax Year, in an amount estimated by Landlord in a writing delivered to
Tenant. Landlord may revise such estimates from time to time and Tenant will
thereafter make payments on the basis of such revised estimates.
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(c) Tenant shall pay to Landlord as additional rent
one twelfth (1/12) of Tenant's Expense Share of increases in the Expenses for
each Expense Year or portion thereof during the Lease Term after the Base
Expense Year when compared to Expenses for the Base Expense Year (the
"Expense Increases"), in advance, on or before the first day of each month
during such Expense Year, in an amount estimated by Landlord in a writing
delivered to Tenant. Landlord may revise such estimates from time to time and
Tenant will thereafter make payments on the basis of such revised estimates.
(d) With reasonable promptness after the expiration of
each Expense Year and Tax Year after the Base Expense Year and Base Tax Year,
including, without limitation, the Expense Year and Tax Year during which
this Lease terminates, Landlord will furnish Tenant with a statement (herein
called "Landlord's Expense Statement" and "Landlord's Tax Statement"),
prepared by Landlord or its accountant, setting forth in reasonable detail
the Expenses and Real Estate Taxes for each such Expense Year and Tax Year
and Tenant's Expense Share of the Expense Increases and Tenant's Tax Share of
the Tax Increases, which statement shall be conclusive and binding upon
Tenant, subject to Section 5(e). If the total of Tenant's Expense Share of
the Expense Increases for any such Expense Year as set forth in Landlord's
Expense Statement exceeds the total estimated payments for Expense Increases
paid by Tenant for such Expense Year, Tenant shall pay to Landlord (whether
or not this Lease has terminated) the difference between the total amount of
estimated payments paid by Tenant with respect to Expense Increases and the
total of Tenant's Expense Share of the actual Expense Increases within thirty
(30) days after the receipt of Landlord's Expense Statement. If the total
amount paid by Tenant for any such Expense Year shall exceed Tenant's Expense
Share of the actual Expense Increases for such Expense Year, such excess
shall be credited against the next installment of Expenses Increases due from
Tenant to Landlord hereunder. If this Lease has terminated and no amounts are
due or are to become due to Landlord from Tenant hereunder, any excess shall
be paid to Tenant by check within thirty (30) days after such final
determination of the actual Expenses. If the total of Tenant's Tax Share of
the Tax Increases for any Tax Year as set forth in Landlord's Tax Statement
exceeds the total estimated payments for Tax Increases paid by Tenant for
such Tax Year, Tenant shall pay to Landlord (whether or not this Lease has
terminated) the difference between the total amount of estimated payments
paid by Tenant with respect to Tax Increases and the total of Tenant's Tax
Share of the actual Tax Increases within thirty (30) days after the receipt
of Landlord's Tax Statement. If the total amount paid by Tenant for any such
Tax Year shall exceed Tenant's Tax Share of the actual Tax Increases for such
Tax Year, such excess shall be credited against the next installment of Tax
Increases due from Tenant to Landlord hereunder. If this Lease has terminated
and no amounts are due or are to become due to Landlord from Tenant hereunder,
any excess shall be paid to Tenant by check within thirty (30) days after
such final determination of the actual Tax Increases. Notwithstanding
anything to the contrary contained herein, in the event that the Expenses for
any subsequent Expense Year are less than Expenses for the Base Expense Year
or in the event that the Real Estate Taxes for any subsequent Tax Year are
less than the Real Estate Taxes for the Base Tax Year, Tenant shall not be
entitled to a credit against any Base Monthly Rental or other sums payable by
Tenant hereunder or to a payment from Landlord to Tenant with respect
thereto. Notwithstanding anything to the contrary contained herein, in no
event shall Tenant pay for Real Estate Taxes or Expenses attributable to the
period prior to the commencement of the Lease
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Term and following the Term Expiration Date, as the same may be extended
pursuant to the terms of the Lease.
(e) Tenant shall have the right, during the nine (9)
month period following delivery of a Landlord's Expense Statement or a
Landlord's Tax Statement, at Tenant's sole cost, to review in Landlord's
offices Landlord's records of Expenses or Real Estate Taxes for the subject
calendar year. Such review shall be carried out only by regular employees of
Tenant or by a major national accounting firm and not by any other third
party. No person conducting such an audit shall be compensated on a
"contingency" or other incentive basis. If, as of the end of the ninth (9th)
month after delivery to Tenant of a Landlord's Expense Statement or a
Landlord's Tax Statement, Tenant shall not have delivered to Landlord an
objection statement (as defined below), then such Landlord's Expense
Statement or Landlord's Tax Statement shall be final and binding upon
Landlord and Tenant, and Tenant shall have no further right to object thereto
or to obtain any further review or accounting thereof, all of which rights
Tenant expressly waives. If within such nine (9) month period, Tenant
delivers to Landlord a written statement specifying objections to such
Landlord Expense Statement or Landlord's Tax Statement (an "objection
statement"), then Tenant and Landlord shall meet to attempt to resolve such
objection within ten (10) days after delivery of the objection statement. If
such objection is not resolved within such ten (10) day period, then either
party shall have the right to require that the dispute be submitted to
binding arbitration under the rules of the American Arbitration Association.
Notwithstanding that any such dispute remains unresolved, Tenant shall be
obligated to pay when billed Landlord all amounts payable in accordance with
this Section 5 (including any disputed amount). If such dispute results in an
agreement or an arbitrator's determination that Tenant is entitled to a
refund, Landlord shall, at its option, either pay such refund or credit the
amount thereof to the monthly rental next becoming due from Tenant, or if the
Lease has terminated, pay Tenant such refund of credit within thirty (30)
days.
(f) If any of the respective Rent Commencement Dates
or Term Expiration Date of the term shall occur on a date other than the
first or last day, respectively, of a Tax Year and/or Expense Year, then
Tenant's Tax Share of the Tax Increases and/or Tenant's Expense Share of
Expense Increases for the year in which the Rent Commencement Date or Term
Expiration Date occurs shall be prorated based on a 365 day year , but shall
remain subject to adjustment based on receipt of information after the Term
Expiration Date.
6. USE.
(a) The Premises shall be used for general business
and professional office purposes only and for no other purpose without the
prior written consent of Landlord, which consent may be granted or denied in
Landlord's absolute discretion. Tenant shall not do or permit to be done in
or about the Premises, nor bring or keep or permit to be brought or kept
therein, anything which is prohibited by or would in any way conflict with
any law, statute, ordinance or governmental rule or regulation now in force
or which may hereafter be enacted or promulgated. Tenant shall not do or
permit anything to be done in or about the Premises which would in any way
obstruct or interfere with the rights of other tenants of the Building, or
injure or annoy them, or use or allow the Premises to be used for any
improper, immoral, unlawful or
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objectionable purposes, nor shall Tenant cause, maintain or permit any
nuisance or waste in, on or about the Premises.
(b) Tenant shall not cause or permit the storage, use,
generation, release, or disposal (collectively, "Handling") of any Hazardous
Materials (as defined below), in, on, or about the Premises or the Building
by Tenant or any agents, employees, contractors, licensees, subtenants,
customers, guests or invitees of Tenant (collectively with Tenant, "Tenant
Parties"), except that Tenant shall be permitted to use normal quantities of
office supplies or products (such as copier fluids or cleaning supplies)
customarily used in the conduct of general business office activities
("Common Office Chemicals"), providing that the Handling of such Common
Office Chemicals shall comply at all times with all Hazardous Materials Laws
(as defined below). Notwithstanding anything to the contrary contained
herein, however, in no event shall Tenant permit any usage of Common Office
Chemicals in a manner that may cause the Premises or the Building to be
contaminated by any Hazardous Materials or in violation of any Hazardous
Materials Laws. Tenant's obligations under this Section shall survive the
expiration or other termination of this Lease. For purposes of this Section
"Hazardous Materials" means any explosive, radioactive materials, hazardous
wastes, or hazardous substances, including without limitation, asbestos and
asbestos containing materials ("ACMs"), PCBs, CFCs, or substances defined or
regulated as hazardous substances or hazardous materials in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
42 U.S.C. Section 9601-9657; the Hazardous Materials Transportation Act of
1975, 42 U.S.C. Section 1001-1012; the Resource Conservation and Recovery Act
of 1976, 42 U.S.C. Section 6901-6987; or any other federal, state or local
law, ordinance or regulation. "Hazardous Materials Laws" shall mean all
federal, state, and local laws, ordinances and regulations defining,
regulating, restricting or otherwise governing the storage, use, generation,
release or disapproval of Hazardous Materials.
(c) Tenant shall immediately furnish Landlord with any
(i) notices received from any insurance company or governmental agency or
inspection bureau regarding any unsafe or unlawful conditions within the
Premises, and (ii) notices or other communications sent by or on behalf of
Tenant to any person relating to environmental laws or hazardous substances.
7. SERVICES.
(a) Landlord shall maintain the public and common
areas of the Building, including the lobbies, stairs, internal fire-stairs,
elevators, corridors and rest rooms (with hot water), windows, mechanical,
plumbing and electrical equipment, and the roof, external walls, foundations
and the structure itself in reasonably good order and condition except for
damage occasioned by the acts of Tenant, its employees, agents, contractors
or invitees, which damage shall be repaired by Landlord at Tenant's expense.
Tenant shall, at all times, have access to the Building, the Premises and,
for those individuals with monthly parking rights, the garage, twenty four
(24) hours a day, seven (7) days a week during the Lease Term , and the
utilities and services described in this Section shall be available to Tenant
twenty four (24) hours a day, seven (7) days a week. Landlord hereby agrees
that it shall do all of the foregoing in a manner
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consistent with the standards for other comparable first class office
buildings in the financial district of San Francisco north of Market Street
("Comparable Buildings").
(b) Landlord shall furnish the Premises with
(1) electricity for lighting and the operation of customary office machines
in an amount normally used for ordinary office use, (2) heat to the extent
reasonably required for the comfortable occupancy by Tenant in its use of the
Premises during the period from 7 a.m. to 6 p.m. on weekdays (except
holidays) ("Building Hours"), or such shorter period as may be prescribed by
any applicable policies or regulations adopted by any utility or governmental
agency, (3) elevator service, (4) lighting replacement (for building standard
lights), (5) restroom supplies, (6) window washing with reasonable frequency,
and (7) lobby attendant services and janitor service during the times and in
the manner that such services are customarily furnished in comparable
buildings; provided that, Landlord shall not be required to maintain any HVAC
system service to the Tenant's server room and Tenant shall be required to
maintain said service to Tenant's server room. Landlord hereby agrees that it
shall furnish said services to the Building in a manner consistent with the
standards for such services provided to other Comparable Buildings.
(c) Landlord may establish reasonable measures to
conserve energy, including but not limited to, automatic switching off of
lights after hours, so long as such measures do not unreasonably interfere
with Tenant's use of the Premises. Except to the extent due to Landlord's or
Landlord's agents', employees' or contractors' gross negligence or willful
misconduct, Landlord shall not be in default hereunder or be liable for any
damages directly or indirectly resulting from, nor shall the rental herein
reserved be abated, or this Lease terminated, by reason of (i) the
installation, use or interruption of use of any equipment in connection with
the furnishing of any of the foregoing services, (ii) failure to furnish or
delay in furnishing any such services or the making of necessary repairs or
improvements to the Premises or to the Building, or (iii) the limitation,
curtailment, rationing or restrictions on use of water, electricity, gas or
any other utilities serving the Premises or the Building, nor, in any event,
shall any such matter constitute or be construed as a constructive eviction.
Tenant hereby waives the provisions of California Civil Code Section 1932(1)
or any other applicable existing or future law, ordinance or governmental
regulation permitting the termination of this Lease due to such failure or
interruption. Landlord shall use reasonable diligent efforts to remedy any
interruption in the furnishing of such services. In the event any
governmental authority or public utility promulgates or revises any law,
ordinance, rule or regulation, or issues mandatory controls or voluntary
controls relating to the use or conservation of energy, water, gas, light or
electricity, the reduction of automobile or other emissions, or the provision
of any other utility or service (collectively "Controls"), or in the event
Landlord is required or elects to make alterations to the Premises or the
Building in order to comply with such mandatory or voluntary Controls,
Landlord may, in its discretion, take any reasonably appropriate action to
comply with such Controls or make such alterations to the Premises and/or
Building related thereto. Such compliance and the making of such alterations
shall not entitle Tenant to any abatement of rent, constitute an eviction of
Tenant, constructive or otherwise, or impose upon Landlord any liability
whatsoever, including but not limited to, liability for consequential damages
or loss of business by Tenant. In carrying out such compliance and
alterations, Landlord shall use its reasonable efforts to minimize any
disruptions to Tenant's business in the Premises.
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(d) Landlord shall provide twenty-four (24) hour
security service (either manned or electronic), comparable to other
Comparable Buildings, three hundred sixty-five (365) days per year. The
parties acknowledge that safety and security devices, services and programs
provided by Landlord, if any, while intended to deter crime and ensure
safety, may not in given instances prevent theft or other criminal acts, or
ensure safety of persons or property. The risk that any safety or security
device, service or program may not be effective, or may malfunction, or be
circumvented by a criminal, is assumed by Tenant with respect to Tenant's
property and interests, and Tenant shall obtain insurance coverage to the
extent Tenant desires protection against such criminal actions and other
losses, as further described in this Lease. Tenant agrees to cooperate in any
reasonable safety or security program developed by Landlord or required by
law. Tenant, at Tenant's sole cost and expense, may install a security system
in the Premises, including an electronic, magnetic card or similar door
access system, provided that said electric, magnetic card or similar door
access system complies with all applicable codes, regulations and law and
provided that Landlord shall have the right to approve any such system. In
the event that Landlord installs an electronic, magnetic or similar door
system, Landlord shall use reasonable efforts to inform Tenant about said
system and discuss and compare said system with any similar system of
Tenant's; provided that, said information and discussion shall in no way
increase Landlord's responsibility or obligations with respect to the
security of the Building or Premises.
(e) Whenever heat-generating equipment or lighting
other than building standard lights are used in the Premises by Tenant in
excess of ordinary office use, Landlord shall have the right, after notice to
Tenant, to install supplementary air conditioning facilities in the Premises
or otherwise modify the ventilating and air conditioning system serving the
Premises, and the cost of such facilities and modifications shall be borne by
Tenant.
(f) Landlord makes no representation to Tenant
regarding the adequacy or fitness of the heating or ventilation equipment in
the Building to maintain temperatures that may be required for, or because
of, any of Tenant's equipment which uses other than the fractional horsepower
normally required for office equipment, and Landlord shall have no liability
for loss or damage suffered by Tenant or others in connection therewith.
Landlord shall provide up to five (5) watts of electrical current per
rentable square foot, exclusive of lighting and life safety systems (the
"Electrical Allowance"); provided, however, (i) without Landlord's consent,
Tenant shall not install, or permit the installation, in the Premises of any
type of equipment or machines which will increase Tenant's use of electric
current in excess of that which Landlord is obligated to provide hereunder
(provided the foregoing shall not preclude the use of personal computers or
similar office equipment); (ii) if Tenant shall require electric current in
excess of the Electrical Allowance, Landlord may condition its consent upon
Tenant's payment of the cost of installing and providing any additional
facilities required to furnish such excess power to the Premises and upon the
installation in the Premises of electric current meters to measure the amount
of electric current consumed, in which latter event Tenant shall pay for the
cost of such meter(s) and the cost of installation, maintenance and repair
thereof, as well as for all excess electric current consumed at the rates
charged by the applicable local public utility, plus a reasonable amount to
cover the additional expenses incurred by Landlord in keeping account of the
electric current so consumed; (iii) if Tenant's increased electrical
requirements materially affect the temperature
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level in the Premises or the Building, Landlord's consent may be conditioned
upon Tenant's requirement to pay such amounts as will be incurred by Landlord
to install and operate any machinery or equipment necessary to restore the
temperature level to that otherwise required to be provided by Landlord,
including but not limited to the cost of modifications to the air
conditioning system, if any, in other parts of the Building. Landlord shall
not, in any way, be liable or responsible to Tenant for any loss or damage or
expense which Tenant may incur or sustain if, for any reasons beyond
Landlord's reasonable control, either the quantity or character of electric
service is changed or is no longer available or suitable for Tenant's
requirements. Tenant covenants that at all times its use of electric current
shall never exceed the capacity of the feeders, risers or electrical
installations of the Building. If submetering of electricity in the Building
will not be permitted under future laws or regulations, the Base Monthly
Rental will then be equitably adjusted to include an additional payment to
Landlord reflecting the cost to Landlord for furnishing electricity to the
Premises. Any amounts which Tenant is required to pay pursuant to this
Section shall be payable upon demand by Landlord and shall constitute
additional rent.
(g) In the event that Landlord, at Tenant's request,
provides services to Tenant that are not otherwise provided for in this Lease
(including electrical power or heating at times other than Building Hours or
in amounts in excess of the Electrical Allowance), Tenant shall pay
Landlord's reasonable charges for such services upon billing therefor,
including, without limitation, Landlord's then current administrative fee
therefor. Currently, the cost for HVAC outside of Business Hours, is
approximately sixty dollars ($60) per hour, which cost is subject to
adjustment by Landlord from time to time in Landlord's reasonable discretion.
Any such request for extra services shall be made not less than twenty-four
(24) hours in advance.
8. TENANT REMEDIES.
(a) Notwithstanding any contrary provision of this
Lease, in the event that there is a water leak into the Tenant's server room,
for a reason not caused by the acts of Tenant ("Water Leak"), Tenant shall
promptly provide written notice of a Water Leak as set forth in Section 8(c)
below ("Water Leak Notice"). If the Water Leak Notice is delivered to
Landlord during Building Hours, Landlord shall have four (4) hours to
commence curing said Water Leak and shall thereafter diligently pursue such
cure to completion using commercially reasonable efforts, subject to Force
Majeure Events. If the Water Leak Notice is delivered to Landlord outside of
Building Hours, Landlord shall have until the next business day, but in no
event longer than eight (8) hours, to commence curing said Water Leak and
shall diligently pursue such cure to completion using commercially reasonable
efforts, subject to Force Majeure Events. In the event that the Landlord
fails to commence the cure of a Water Leak within the applicable cure
commencement period as extended by Force Majeure Events, Tenant shall be
entitled to undertake such commercially reasonable efforts as are reasonably
necessary to cure the Water Leak. Subject to the rights of other tenants in
the Building, Tenant shall have the right to enter such portions of the
Building as may be reasonably required to effectuate any reasonable cure of
such Water Leak, provided that (i) Tenant shall use all reasonable efforts to
include the Building manager or Building personnel in connection with the
entry into any portions of the Building outside of the Premises, and (ii)
Tenant shall repair any damage caused by any such repair
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activities of Tenant and shall indemnify and hold Landlord harmless from any
claims, including any related attorneys fees, by other tenants in the
Building for damage to persons or property resulting from such activities of
Tenant. Tenant shall be entitled to reimbursement for the sums reasonably
expended by Tenant to effectuate such cure within thirty (30) days after
submitting a written invoice of said sums to Landlord. If Landlord fails to
reimburse Tenant within said thirty (30) days, Tenant shall be entitled to
offset said sums from its Base Monthly Rental; provided that, if Landlord
disputes the amount of such claim for reimbursement, Landlord shall give
Tenant written notice of such dispute prior to the end of such thirty (30)
day period in which event Landlord and Tenant shall meet and confer on not
less than two (2) occasions (at a mutually agreeable time and place in
San Francisco, California) in the ensuing sixty (60) days in an attempt to
resolve such dispute and Tenant shall not offset said sums until ninety (90)
days after the date of submission of such written invoice. Notwithstanding
anything to the contrary contained herein, nothing contained in this
subsection or elsewhere in this Lease shall be construed in any way to make
Landlord liable to Tenant in any way for a Water Leak which is caused by
Force Majeure Events.
(b) Notwithstanding any contrary provision of this
Lease, in the event that there is a failure in supply of electrical power to
the Premises or a telecommunications or data interruption in the Premises,
for a reason not caused by the acts of Tenant ("Communication Failure"),
Tenant shall promptly provide written notice of a Communication Failure as
set forth in Section 8(c) below ("Communication Failure Notice"). If the
Communication Failure Notice is delivered to Landlord during Building Hours,
Landlord shall have four (4) hours to commence curing said Communication
Failure and shall thereafter diligently pursue such cure to completion using
commercially reasonable efforts, subject to Force Majeure Events. If the
Communication Failure Notice is delivered to Landlord outside of Building
Hours, Landlord shall have until the next business day, but in no event
longer than eight (8) hours, to commence curing said Communication Failure
and shall diligently pursue such cure to completion using commercially
reasonable efforts, subject to Force Majeure Events. In the event that the
Landlord fails to commence the cure of a Communication Failure within the
applicable cure commencement period as extended by Force Majeure Events,
Tenant shall be entitled to undertake such commercially reasonable efforts as
are reasonably necessary to cure the Communication Failure. Subject to the
rights of other tenants in the Building, Tenant shall have the right to enter
such portions of the Building as may be reasonably required to effectuate any
reasonable cure of such Communication Failure, provided that (i) Tenant shall
use all reasonable efforts to include the Building manager or Building
personnel in connection with the entry into any portions of the Building
outside of the Premises, and (ii) Tenant shall repair any damage caused by
any such repair activities of Tenant and shall indemnify and hold Landlord
harmless from any claims, including any related attorneys fees, by other
tenants in the Building for damage to persons or property resulting from such
activities of Tenant. Tenant shall be entitled to reimbursement for the sums
reasonably expended by Tenant to effectuate such cure within thirty (30) days
after submitting a written invoice of said sums to Landlord. If Landlord
fails to reimburse Tenant within said thirty (30) days, Tenant shall be
entitled to offset said sums from its Base Monthly Rental; provided that, if
Landlord disputes the amount of such claim for reimbursement, Landlord shall
give Tenant written notice of such dispute prior to the end of such thirty
(30) day period in which event Landlord and Tenant shall meet and confer on
not less than two (2)
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occasions (at a mutually agreeable time and place in San Francisco,
California) in the ensuing sixty (60) days in an attempt to resolve such
dispute and Tenant shall not offset said sums until ninety (90) days after
the date of submission of such written invoice. Notwithstanding anything to
the contrary contained herein, nothing contained in this subsection or
elsewhere in this Lease shall be construed in any way to make Landlord liable
to Tenant in any way for a Communication Failure which is caused by Force
Majeure Events.
(c) For purposes of Section 8, during Building Hours,
Tenant shall provide written notice to the Building Manager or Building Chief
Engineer and outside of Building Hours, Tenant shall provide written notice
to the Building Manager, Building Chief Engineer or the Building security
guard in the main lobby.
9. IMPOSITIONS PAYABLE BY TENANT. In addition to the monthly
rental and other charges to be paid by Tenant hereunder, Tenant shall pay or
reimburse Landlord for any and all of the following items (hereinafter
collectively referred to as "Impositions"), whether or not now customary or
in the contemplation of the parties hereto: taxes (other than local, state
and federal personal or corporate income or franchise taxes measured by the
net income of Landlord from all sources), assessments (including, without
limitation, all assessments for public improvements, services or benefits,
irrespective of when commenced or completed), excises, levies, business
taxes, license, permit, inspection and other authorization fees, transit
development fees, assessments or charges for housing funds, service payments
in lieu of taxes and any other fees or charges of any kind, which are levied,
assessed, confirmed or imposed by any public authority, but only to the
extent the Impositions are: (a) upon, measured by or reasonably attributable
to 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 (b) upon, with respect to or
by reason of the development, possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises
or (c) upon this transaction or any document to which Tenant is a party
creating or transferring an interest or an estate in the Premises (including
any sales, excise or gross receipts tax measured by the rental payable
hereunder). In the event that it shall not be lawful for Tenant to reimburse
Landlord for the Impositions but it is lawful to increase the monthly rental
to take into account Landlord's payment of the Impositions, the monthly
rental payable to Landlord shall be revised to net Landlord the same net
return without reimbursement of the Impositions as would have been received
by Landlord with reimbursement of the Impositions.
10. ALTERATIONS.
(a) Tenant may make alterations, additions or
improvements (collectively, "Alterations") to the Premises or install
fixtures in the Premises after first obtaining Landlord's consent, which
consent shall not be unreasonably withheld; provided however, that it shall
be deemed reasonable for Landlord to withhold its consent if: (a) the cost of
the work will exceed Two Hundred Fifty Thousand Dollars ($250,000) (b) a
building permit will be required; or (c) if there will be any material
modifications to any exterior or structural components of the Building or any
of the Building's operating systems, including, without limitation, heating,
ventilating, air
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conditioning, plumbing, electrical, and other operating systems.
Notwithstanding the foregoing, Tenant may make any Alterations which are
cosmetic (e.g. minor painting, changes of floor coverings or wall coverings,
installation of artwork or decorations, etc.), without Landlord's consent
being required, provided such cosmetic alterations do not require a building
permit and do not effect the exterior of the Building or the structural or
mechanical components of the Building. Upon Tenant's written request for
Landlord's consent to certain Alterations pursuant to this Section, Landlord
shall have thirty (30) days from the date on which Landlord receives all
information reasonably required by Landlord for Landlord's review of said
request to provide Tenant with notice of Landlord's consent or withholding of
consent to Tenant's request (along with a written description of Landlord's
reason(s) for withholding of consent, if applicable). In the event that
Landlord elects to and has a right to oversee (or cause to be overseen)
Tenant's requested Alteration(s), Landlord shall provide Tenant with notice
of such election within said thirty (30) day period. In connection with
Tenant's request for Landlord's consent under this Lease, Tenant shall
pre-pay to Landlord the sum of Two Hundred Fifty Dollars ($250.00) for
Landlord's review of applicable documents and plans. Tenant also shall
reimburse Landlord for any third-party costs and expenses incurred or to be
incurred by Landlord related to such review within ten (10) days of receipt
of Landlord's statement therefor. Furthermore, in the event Landlord may
elect to oversee, or cause to be overseen, such Alterations, Landlord shall
be entitled to receive a fee for such oversight in an amount equal to three
(3%) of the cost of such alterations, additions or improvements. Landlord's
review and approval of Tenant's plans and specifications for any work
performed for or on behalf of Tenant shall not be deemed to be a
representation by Landlord that such plans and specifications comply with
applicable insurance requirements, building codes, ordinances, laws or
regulations including, without limitation, the provisions of the Americans
With Disabilities Act, 42. U.S.C. 12101 et seq. and any governmental
regulations with respect thereof (the "ADA") and Title 24 of the California
Administrative Code ("Title 24"), and other similar federal, state, and local
laws and regulations or that the Alterations are constructed in accordance
with such plans and specifications or that such plans and specifications will
be adequate for Tenant's use. In no event, however, may the Tenant make any
Alterations or install fixtures which, in Landlord's reasonable judgment,
might adversely affect the structural components of the Building or Building
mechanical, utility or life safety systems. At the time such consent is
requested, Tenant shall furnish to Landlord a description of the proposed
work, an estimate of the cost thereof and such information as shall
reasonably be requested by Landlord substantiating Tenant's ability to pay
for such work. Landlord, at its sole option, may require as a condition to
the granting of such consent to any work costing in excess of Five Hundred
Thousand Dollars ($500,000), that Tenant provide to Landlord, at Tenant's
sole cost and expense, a lien and completion bond in an amount equal to one
and one-half (1-1/2) times any and all estimated costs of the proposed work,
to insure Landlord against any liability for mechanics' and materialmen's
liens and to insure completion of the work. Before commencing any work,
Tenant shall give Landlord at least twenty (20) days written notice of the
proposed commencement of such work in order to give Landlord an opportunity
to prepare, post and record such notice as may be permitted by law to protect
Landlord's interest in the Premises and the Building from mechanics' and
materialmen's liens. Within a reasonable period following completion of any
work for which plans and specifications were required to obtain a building
permit for such work, Tenant shall furnish to Landlord "as built" plans
showing the changes made to the Premises.
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(b) All Alterations shall be constructed in a good and
workmanlike manner using building standard materials or other new materials
of equal or greater. Landlord, to the extent necessary to avoid any
disruption to the tenants and occupants of the Building, shall have the right
to designate the reasonable times when any such Alterations may be performed
(Tenant hereby agrees that it is reasonable for Landlord to require
Alterations to be performed on nights and weekends) and to otherwise
designate reasonable rules, regulations, and procedures for the performance
of work in the Building. Any Alterations to the Premises shall be made by
Tenant at Tenant's sole cost and expense, and any contractor, subcontractor
or other person selected by Tenant to make the same shall be selected from
Landlord's approved bidder list. Tenant's contractor and its subcontractors
shall employ union labor to the extent necessary to insure, so far as may be
possible, the progress of the Alterations and the performance of any other
work or the provision of any services in the Building without interruption on
account of strikes, work stoppage or similar causes of delay. All work
performed by Tenant shall comply with the laws, rules, orders, directions,
regulations and requirements of all governmental entities having jurisdiction
over such work including, without limitation, any laws, regulations or
requirements respecting asbestos or ACMs, the ADA and Title 24 and shall
comply with the rules, orders, directions, regulations and requirements of
any nationally recognized board of insurance underwriters. All Alterations
shall immediately become Landlord's property and shall remain on the Premises
without compensation to Tenant; provided, however, that unless Landlord has
previously agreed in writing that an Alteration does not have to be removed
by Tenant at the end of the Lease Term, Tenant shall, prior to the end of the
Lease Term, at its sole cost and expense, remove the Alterations required to
be removed by Landlord and repair and restore the Premises to their condition
at the commencement of the Lease Term. At the time that Tenant requests
Landlord's consent to an Alteration(s), Tenant may also request and require
that Landlord determine whether said Alteration(s) must be removed by Tenant
at the end of the Lease Term. If so requested by Tenant, Landlord shall
provide notice to Tenant of the Alteration(s) that Tenant is required to
remove at the end of the Lease Term simultaneous with Landlord's consent to
said Alteration(s), if Landlord's consent is given. In the event that
Landlord determines that an Alteration(s) must be removed by Tenant at the
end of the Lease Term, Tenant shall remove said Alteration(s) at Tenant's
sole cost and expense and repair and restore the Premises to their condition
prior to said Alteration.
(c) Tenant may, in a manner consistent with the
provisions of this Lease, install, maintain, replace, remove or use any
communications or computer wires, cables, and related devices (collectively,
the "Lines") at the Building in or serving the Premises, provided: (i) Tenant
shall obtain Landlord's prior written consent, which consent may be
conditioned as reasonably required by Landlord, (ii) if Tenant at any time
uses any equipment that may create an electromagnetic field exceeding the
normal insulation ratings of ordinary twisted pair riser cable or cause
radiation higher than normal background radiation, the Lines therefor
(including riser cables) shall be appropriately insulated to prevent such
excessive electromagnetic fields or radiation, and (iii) Tenant shall pay all
costs in connection therewith. Landlord reserves the right to require that
Tenant remove any Lines which are installed in violation of these provisions.
Landlord may (but shall not have the obligation to): (i) install new Lines at
the Property, and (ii) create additional space for Lines at the Property, and
(iii) adopt reasonable and uniform rules and regulations with respect to
Lines.
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Notwithstanding anything to the contrary contained in this Lease,
Landlord reserves the right to require Tenant to remove any or all Lines
installed by or for Tenant within or serving the Premises upon the Expiration
Date or earlier termination of this Lease. Tenant shall not, without the
prior written consent of Landlord in each instance, grant to any third party
a security interest or lien in or on the Lines, and any such security
interest or lien granted without Landlord's written consent shall be null and
void. Except to the extent arising from the gross negligence or intentional
acts of Landlord, Landlord or Landlord's agents or employees, Landlord shall
have no liability for damages arising from, and Landlord does not warrant
that Tenant's use of any Lines will be free from the following (collectively
"Line Problems"): (i) any eavesdropping or wire-tapping by unauthorized
parties, or (ii) any failure of any lines to satisfy Tenant's requirements.
Except to the extent arising from the Landlord's breach of Section 21(b) of
this Lease, or the gross negligence or intentional acts of Landlord or
Landlord's agents or employees, Landlord shall have no liability for damages
arising from, and Landlord does not warrant that Tenant's use of any Lines
will be free from any shortages, failures, variations, interruptions,
disconnections, loss or damage caused by the installation, maintenance,
replacement, use or removal of lines by or for other tenants or occupants at
the Property. Under no circumstances shall any Line Problems be deemed an
actual or constructive eviction of Tenant, render Landlord liable to Tenant
for abatement of Base Monthly Rental, or relieve Tenant from performance of
Tenant's obligations under this Lease. Landlord in no event shall be liable
for damages by reason of loss of profits, business interruption or other
consequential damages arising from any Line Problems.
11. LIENS. Tenant shall pay when due all costs for work
performed and materials supplied to the Premises. Tenant shall keep Landlord,
the Premises and the Building free from all liens, stop notices and violation
notices relating to the work performed, materials furnished or obligations
incurred by or for Tenant and Tenant shall protect, indemnify, hold harmless
and defend Landlord, the Premises and the Building of and from any and all
loss, cost, damage, liability and expense, including attorney's fees and
costs, arising out of or related to any such liens or notices. During the
progress of such work, Tenant shall, upon Landlord's request, furnish
Landlord with sworn contractor's statements and lien waivers covering all
work theretofore performed. Tenant shall satisfy or otherwise discharge all
liens, stop notices or other claims or encumbrances within twenty (20) days
after Tenant obtains knowledge that any such lien, stop notice, claim or
encumbrance has been filed. If Tenant fails to pay and remove such lien,
claim or encumbrance within such twenty (20) days, or Tenant fails to
diligently pursue, discharge or satisfy said lien, stop notice, claim or
encumbrance, Landlord, at its election, may pay and satisfy the same and in
such event the sums so paid by Landlord, with interest from the date of
payment as set forth in Section 3(e) hereof for amounts owed Landlord by
Tenant, shall be deemed additional rent due and payable by Tenant at once
without notice or demand. Notwithstanding the foregoing, if Tenant is
contesting any mechanics lien and provides to Landlord a bond reasonably
satisfactory to Landlord and sufficient to remove the lien of record under
California law, Landlord shall have no right to pay such lien after said bond
has been provided to Landlord.
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12. REPAIRS; CONDITION OF PREMISES.
(a) Subject to the Work Letter, by entry hereunder,
Tenant accepts the Premises as being in the condition in which Landlord is
obligated to deliver the Premises. Subject to the Work Letter, Tenant shall,
at all times during the term hereof and at Tenant's sole cost and expense,
keep the Premises in good condition and repair, in compliance with all laws,
including without limitation, the ADA and Title 24 (as defined hereafter);
ordinary wear and tear and damage thereto by fire, earthquake, act of God or
the elements excepted. Tenant hereby waives all rights to make repairs at the
expense of Landlord or in lieu thereof to vacate the Premises, abate rent or
terminate this Lease. Subject to the Work Letter, and subject to Landlord's
rights to require the removal of Alterations, Tenant shall at the end of the
term hereof surrender to Landlord the Premises and all Alterations thereto in
the same condition as when received, ordinary wear and tear and damage by
fire, earthquake, act of God or the elements excepted. Landlord has no
obligation and has made no promise to alter, remodel, improve, repair,
decorate or paint the Premises or any part thereof, except as specifically
herein set forth. No representations respecting the condition of the Premises
or the Building have been made by Landlord or Landlord's agents to Tenant,
except as specifically herein set forth.
(b) Subject to the Work Letter, Tenant has examined
the Premises and is fully informed to Tenant'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,
express or implied, with respect to: (i) the physical or environmental
condition, value, zoning or legal status or the Building; (ii) the fitness of
the Premises for Tenant's intended use; (iii) the degree of sound transfer
within the Building; (iv) the absence of electrical or radio interference in
the Premises or the Building; (v) the condition, capacity or performance of
electrical or communications systems or facilities; or (vi) the absence of
objectionable odors, bright lights or other conditions which may affect
Tenant's use and enjoyment of the Premises or the Building, upon which Tenant
has relied directly or indirectly for any purpose, except as specifically set
forth in this Lease.
13. DESTRUCTION OR DAMAGE.
(a) In the event the Premises or the portion of the
Building necessary for Tenant's use and enjoyment of the Premises are damaged
by fire, earthquake, act of God, the elements or other casualty, Landlord
shall repair the same (including the Tenant Work in the portion of the
Premises damaged to the extent of the actual cost of said Tenant Work, but
not to exceed the Tenant Improvement Allowance plus an additional Five
Dollars ($5.00) per rentable square foot for the portion of the Premises so
damaged), subject to the provisions of this Section hereinafter set forth, if
(i) such repairs can, in Landlord's reasonable opinion, be made within a
period of twelve (12) months after the date of casualty, (ii) the cost of
repairing damage for which Landlord is not insured shall be less than five
percent (5%) of the then full insurable value of the Premises with respect to
repairing any damage to the Premises, or five percent (5%) of the then full
insurable value of the Building with respect to repairing any damage to other
areas of the Building, (iii) the damage or destruction does not occur during
the last twelve (12) months of
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the Lease Term as the same may be extended under the terms of this Lease
(said twelve (12) months shall be measured after taking into account any
extension of the Lease Term under the terms of this Lease), and (iv)
Landlord's mortgagee does not require that the insurance proceeds payable as
a result of a casualty be applied to the payment of the mortgage debt. This
Lease shall remain in full force and effect except that so long as the damage
or destruction is not caused by the negligence or fault of Tenant, its
contractors, agents, employees or invitees, an abatement of monthly rental
shall be allowed Tenant for such part of the Premises as shall be rendered
unusable by Tenant in the conduct of its business during the time such part
is so unusable and Tenant does not actually occupy such part.
(b) As soon as is reasonably possible following the
occurrence of any damage, Landlord shall notify Tenant of the estimated time and
cost required for the repair or restoration of the Premises or the portion of
the Building necessary for Tenant's occupancy (including the Tenant Work in the
portion of the Premises damaged to the extent of the actual cost of said Tenant
Work, but not to exceed the Tenant Improvement Allowance plus an additional Five
Dollars ($5.00) per rentable square foot for the portion of the Premises so
damaged). If, in Landlord's reasonable opinion, such repairs cannot be made
within twelve (12) months as set forth in Section 13(a)(i) above, Landlord or
Tenant may elect by written notice to the other within thirty (30) days after
Landlord's notice of estimated time and cost is given (i) in the event of damage
or destruction to two entire floors in the Premises or less, to terminate this
Lease only as to the portion of the Premises damaged or destroyed, effective as
of the date of such damage, or (ii) in the event of damage or destruction to
more than two floors in the Premises, to terminate this Lease effective as of
the date of such damage. If Landlord is not obligated to effect the repair based
upon the circumstances set forth in Sections 13(a)(ii) or 13(a)(iii) above,
Landlord shall have the right to terminate this Lease, by written notice to
Tenant within thirty (30) days after Landlord's notice of time and cost is
given, effective as of the date of such damage or destruction. If neither party
so elects to terminate this Lease, this Lease shall continue in full force and
effect, but the rent shall be partially abated as provided in Section 13(a)
above, and Landlord shall proceed with reasonable promptness to repair such
damage.
(c) A total destruction of the Building shall
automatically terminate this Lease. Tenant hereby waives all statutory rights of
termination, including any such rights under California Civil Code Section 1933.
(d) In no event shall Tenant be entitled to any
compensation or damages from Landlord, specifically including, but not limited
to, any compensation or damages for (i) loss of the use of the whole or any part
of the Premises, (ii) damage to Tenant's personal property in or improvements to
the Premises, or (iii) any inconvenience, annoyance or expense occasioned by
such damage or repair (including moving expenses and the expense of establishing
and maintaining any temporary facilities).
(e) Landlord, in repairing the Premises, shall not be
required to repair any injury or damage to the personal property of Tenant, or
to make any repairs to or replacement of any alterations, additions,
improvements or fixtures installed on the Premises by or for Tenant, except the
Tenant Work to the extent of the actual cost of the Tenant Work, not to exceed
the
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Tenant Improvement Allowance plus an additional Five Dollars ($5.00) per
rentable square foot for the portion of the Premises so damaged.
14. INSURANCE.
(a) Tenant shall, at its sole cost and expense, during
the Lease Term, cause all improvements at any time located in the Premises
(other than Tenant Work to the extent of the actual cost thereof not to exceed
the Tenant Improvement Allowance plus an additional five dollars ($5.00) per
rentable square foot of the Premises) and all equipment and fixtures from time
to time used or intended to be used in connection with the operation and
maintenance of the Premises, to be insured for the mutual benefit of Landlord
and Tenant against loss or damage by fire and against loss or damage by other
risks now or hereafter included in an All-Risk insurance policy, in an amount
equal to the full insurable value thereof. All proceeds from such insurance
shall be used for the repair or replacement of such improvements, equipment and
fixtures.
(b) All coverage shall be written on an occurrence basis
and shall be primary and non-contributory over any insurance the Landlord may
elect to provide on its behalf. Upon the commencement of the Lease Term, and
upon renewal of such insurance coverage, Tenant shall deliver to the Landlord
certified copies of Tenant's insurance policies, or an original certificate of
such insurance from the insurer providing a minimum of thirty (30) days' notice
of cancellation or modification. In the event Tenant shall fail to procure such
insurance or to deliver such policies and certificates, Landlord may, at
Landlord's option and in addition to Landlord's other remedies in the event of a
default by Tenant hereunder, procure the same for the account of Tenant, and the
cost thereof shall be paid to Landlord as additional rent. All policies of
insurance required to be carried by Tenant under this Section 14 shall be in
form reasonably satisfactory to Landlord and, except for workers compensation,
business interruption and property, shall name Landlord, Landlord's mortgagee,
Landlord's managing agent and any other party designated by Landlord as
additional insureds. All policies of insurance required by Landlord under this
Lease shall be issued by responsible insurance companies which are licensed to
do business in the State of California, and shall have a Best's rating of at
least "A-" and a financial rating of not less than "X" and have been approved in
writing by Landlord. The Commercial General Liability policy shall contain
cross-liability endorsements or its equivalent, and shall be for the mutual and
joint benefit and protection of Landlord, Tenant and any other party designated
by Landlord as an additional insured.
Notwithstanding any other provisions of this Lease, Tenant, at its own
expense, shall also maintain the following insurance coverage:
(i) WORKER'S COMPENSATION AND EMPLOYER'S
LIABILITY. Tenant shall maintain Worker's Compensation insurance sufficient to
comply with all applicable State and/or Federal laws and an Employer's Liability
policy with a limit of not less than One Million Dollars ($1,000,000.00).
(ii) COMMERCIAL GENERAL LIABILITY. Tenant shall
maintain a Commercial General Liability policy applying to the use and occupancy
of the Premises and the Building, and any part of either, and any areas adjacent
thereto, and the business operated by
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Tenant, or by any other occupant of the Premises with limits of liability not
less than Two Million Dollars ($2,000,000.00) per occurrence and Three
Million Dollars ($3,000,000.00) general aggregate for Bodily Injury and
Property Damage and Three Million Dollars ($3,000,000.00) aggregate
products/completed operations coverage. Such policy shall specifically name
the Landlord, Landlord's mortgagee and Landlord's managing agent as
additional insureds. All such insurance shall provide for severability of
interests; shall provide that an act or omission of one of the named insureds
shall not reduce or avoid coverage to the other named insureds; and shall
afford coverage for all claims based on acts, omissions, injury and damage,
which claims occurred or arose (or the onset of which occurred or arose) in
whole or in part during the policy period. Tenant's Commercial General
Liability policy shall not provide for a deductible in excess of Two Hundred
Thousand Dollars ($200,000) without the prior written approval of Landlord
which shall not be unreasonably withheld. The amounts of insurance required
in this Section 14(b)(ii) may be satisfied by purchasing coverage for the
limits specified or by a combination of underlying and umbrella limits, so
long as the total amount of insurance is not less than the limits specified.
(iii) BUSINESS INTERRUPTION. Tenant shall also
maintain a policy of (or obtain an endorsement providing) business interruption
insurance insuring Tenant against losses from interruption of its use of the
Premises for any reason with coverage for a period of not less than one (1)
year.
(iv) PROPERTY INSURANCE. Tenant shall, at its
sole cost and expense, during the Lease Term, cause all improvements at any time
located in the Premises (other than the Building standard tenant improvements)
and all equipment and fixtures from time to time used or intended to be used in
connection with the operation and maintenance of the Premises, to be insured for
the mutual benefit of Landlord and Tenant against loss or damage by fire and
against loss or damage by other risks now or hereafter included in an All-Risk
insurance policy, in an amount equal to the full insurable value thereof. All
proceeds from such insurance shall be used for the repair or replacement of such
improvements, equipment and fixtures. Tenant's property policy shall not provide
for a deductible in excess of One Hundred Thousand Dollars ($100,000) without
the prior written approval of Landlord which shall not be unreasonably withheld.
(v) ADDITIONAL INSURANCE. Whenever good business
practice, in Landlord's reasonable judgment, indicates the need for additional
insurance coverage or different types of insurance in connection with the
Premises or Tenant's use and occupancy thereof, Tenant shall, upon request,
obtain such insurance at Tenant's expense and provide Landlord with evidence
thereof.
(c) Before any repairs, alterations, additions,
improvements, or construction are undertaken by or on behalf of Tenant, Tenant
shall carry and maintain at its expense, or Tenant shall require any contractor
performing work in the Premises to carry and maintain, at no expense to
Landlord, in addition to workers' compensation insurance as required by the
jurisdiction in which the Building is located, All Risk Builder's Risk Insurance
in the amount of the replacement cost of any alterations, additions or
improvements (or such other amount
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reasonably required by Landlord) and Commercial General Liability Insurance
(including, without limitation, Contractor's Liability coverage), written on
an occurrence basis with a minimum combined single limit of $2,000,000.00 and
adding the "owners of the Building and its (or their) respective members,
principals, beneficiaries, partners, officers, directors, employees, managing
agents, agents (and their respective members and principals) and
mortgagee(s)" (and any other designees of Landlord as the interest of such
designees shall appear) as additional insureds.
(d) Tenant shall not do or fail to do anything in, upon
or about the Premises which will: (i) violate the terms of any of Landlord's
insurance policies; (ii) prevent Landlord from obtaining policies of insurance
acceptable to Landlord or any mortgagees; or (iii) result in an increase in the
rate of any insurance on the Premises, the Building, any other property of
Landlord or of others in the Building. In the event of the occurrence of any of
the events set forth in this Section 14(d), Tenant shall pay Landlord, upon
demand, as additional rent, the cost of the amount of any increase in any such
insurance premium, provided that the acceptance by Landlord of such payment
shall not be construed as a waiver of any rights by Landlord in connection with
a default by Tenant under the Lease.
(e) Tenant shall, prior to and throughout the Lease Term,
procure from each of its insurers under all policies of fire, theft, public
liability, commercial general liability and any other insurance policies of
Tenant now or hereafter existing, pertaining in any way to the Premises or the
Building or any operation therein (except workers' compensation), a waiver, as
set forth in Section 15 of this Lease, of all rights of subrogation which the
insurer might otherwise, if at all, have against the Landlord or any officer,
agent or employee of Landlord (including, without limitation, Landlord's
managing agent).
(f) Landlord also shall maintain (i) a Commercial General
Liability policy applying to its use and occupancy of the Building and any areas
adjacent thereto, and the business operated by Landlord, with limits of
liability not less than One Million Dollars ($1,000,000.00) per occurrence and
Two Million Dollars ($2,000,000.00) general aggregate for Bodily Injury and
Property Damage with an umbrella liability policy with a minimum limit of Five
Million Dollars ($5,000,000) per occurrence and in the aggregate (the "Umbrella
Policy"), and (ii) a policy covering loss by fire or other casualty in the form
of an All-Risk policy covering the Building and the Tenant Work, but only the
extent of the actual cost of the Tenant Work, not to exceed the Tenant
Improvement Allowance plus five dollars ($5.00) per rentable square foot of the
Premises, in such amounts and with such coverages as would generally be carried
in Comparable Buildings, provided that Landlord may, but shall not be required
to, carry earthquake insurance.
15. WAIVER OF SUBROGATION. Landlord and Tenant shall each have
included in all policies of fire, extended coverage, business interruption and
other insurance respectively obtained by them covering the Premises, the
Building and contents therein, a waiver by the insurer of all right of
subrogation against the other in connection with any loss or damage thereby
insured against. Any additional premium for such waiver shall be paid by the
primary insured party. To the full extent permitted by law, Landlord and Tenant
each waives all rights of
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recovery against the other for, and agrees to release the other from
liability for, loss or damage to the extent such loss or damage is covered by
valid and collectible insurance in effect at the time of such loss or damage
or would be covered by the insurance required to be maintained under this
Lease by the party seeking recovery.
16. INDEMNIFICATION. Tenant hereby waives all claims against
Landlord and any employee or agent of Landlord and the direct or indirect
constituent partners, members, shareholders or other owners thereof and the
officers, directors, managers, agents and employees of all such persons
(collectively the "Landlord Indemnitees") for damage to any property or injury
or death of any person in, upon or about the Premises arising at any time and
from any cause except to the extent caused by reason of gross negligence or
willful act of Landlord, its agents, employees or contractors. Landlord shall
provide Tenant with prompt notice of such claims and Tenant shall defend
Landlord against, hold Landlord and each of the Landlord Indemnitees harmless
from, and reimburse Landlord and each of the Landlord Indemnitees for any and
all claims, liabilities, damages, losses, costs and expenses, including without
limitation, reasonable attorneys' fees and costs arising out of or in any way
connected with (a) injury to or death of any person, and (b) damage to or
destruction of any property, occurring in, on or about the Premises or
attributable to or resulting from the condition, use or occupancy of the
Premises by Tenant or Tenant's failure to perform its obligations under this
Lease, except such as is caused principally by gross negligence or willful
misconduct of Landlord, its contractors or employees. Landlord shall have the
right to approve the attorneys used by Tenant pursuant to this Section, which
approval shall not be unreasonably withheld or delayed; provided that, Landlord
shall have the right to use attorneys selected by Landlord, subject to Tenant's
approval which shall not be unreasonably withheld or delayed, if a conflict
between Landlord and Tenant exists which would make representation of Landlord
by Tenant's attorneys infeasible. Subject to the foregoing provision regarding
the use of a mutually acceptable attorney for a common defense, the foregoing
indemnity obligation of Tenant shall include reasonable attorneys' fees,
investigation costs and all other reasonable costs and expenses incurred by
Landlord or any Landlord Indemnitee from the first notice that injury, death or
damage has occurred or that any claim or demand is to be made or may be made.
The provisions of this Section 16 shall survive the termination of this Lease
with respect to any damage, injury or death occurring prior to such termination.
17. COMPLIANCE WITH LEGAL REQUIREMENTS. Tenant, at its sole cost
and expense, shall promptly comply with all laws, statutes, ordinances and
governmental rules, regulations or requirements now in force or which may
hereafter be in force; with the requirements of any board of fire underwriters
or other similar body now or hereafter constituted; with any direction or
occupancy certificate issued pursuant to any law by any public officer or
officers, insofar as any thereof relate to or affect the condition, use or
occupancy of the Premises, including, without limitation, structural, utility
system and life safety system changes necessitated by Tenant's acts and specific
use of the Premises (but not by Tenant's mere occupancy of the Premises) or by
improvements made by or for Tenant.
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18. ASSIGNMENT AND SUBLETTING.
(a) Subject to the other provisions hereof, Tenant shall
not, without the prior written consent of Landlord, which consent shall not be
unreasonably withheld or delayed by Landlord, transfer or assign this Lease or
any interest herein, sublet the Premises or any part thereof, or permit the use
of the Premises by any party other than Tenant. Subject to the other provisions
hereof, this Lease shall not, nor shall any interest herein, be assignable as to
the interest of Tenant by operation of law without the consent of Landlord,
which consent shall not be unreasonably withheld or delayed. Tenant shall not
hypothecate or encumber this Lease or any interest herein without the prior
written consent of Landlord, which consent may be granted or denied in
Landlord's reasonable discretion. Any of the foregoing acts without such consent
shall be void and shall at the option of Landlord, terminate this Lease.
(b) Notwithstanding any of the provisions of this Section
18, Tenant shall have the right (i) to assign the Premises or sublet the
Premises or any portion thereof to an Affiliate (as defined below) of Tenant,
and (ii) to sublet any portion of the Premises or permit the use or occupancy of
the Premises, either temporarily or long term, but in no event in excess of
10,000 square feet in the aggregate at any one time, to a supplier of services
to Tenant (e.g. data processing, photocopy, messenger, travel, communications,
facilities management, accounting, etc.), Tenant's consultants or Tenant's
contractors (the transfers described in (i) and (ii) above are referred to as
"Permitted Transfers" and the transferees described in (i) and (ii) above are
referred to as "Permitted Transferees"). "Affiliate" shall mean (i)the National
Broadcasting Company ("NBC"), (ii) any corporation in which or with which Tenant
is merged or consolidated in accordance with applicable statutory provisions for
merger or consolidation of corporations, so long as the liabilities of the
corporations participating in such merger or consolidation are assumed by the
corporation surviving such merger or created by such consolidation, (iii) to any
corporation or other entity acquiring this Lease and all or substantially all of
Tenant's assets, or (iv) to any corporation or other entity which purchases all
of the stock of Tenant, provided that Landlord has approved in writing the
financial condition of any such entity described in clauses (i), (ii), (iii) and
(iv) pursuant to Landlord's reasonable discretion, and any such entity has
assumed all obligations of Tenant hereunder pursuant to an assumption agreement
acceptable to Landlord; provided that, Landlord shall be deemed to have approved
the financial condition under (iv) above for NBC and that company resulting from
the merger transaction described in the S-4 Registration document filed July 12,
1999 by Tenant.
Tenant shall provide written notice to Landlord of any Permitted
Transfers and the full name of any Permitted Transferee using, occupying,
subletting or taking by assignment the Premises. The use of the Premises by each
Permitted Transferee is subject to all the terms and conditions of the Lease. No
subletting or assignment to a Permitted Transferee shall release Tenant of
Tenant's obligations under this Lease or alter the primary liability of Tenant
to pay the rental and to perform all other obligations to be performed by Tenant
hereunder. The acceptance of rental by Landlord from a Permitted Transferee
shall not be deemed to be a waiver by Landlord of any provision hereof and
Landlord has no obligation to accept any rental from a Permitted Transferee. In
the event of default by any Permitted Transferee in the performance of
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any of the terms hereof, Landlord may proceed directly against Tenant without
the necessity of exhausting remedies against such assignee, sublessee or
successor.
(c) If Tenant is a publicly held corporation, the public
trading of stock in Tenant shall not be deemed an assignment or transfer within
the meaning of this Section.
(d) Without limiting the other instances in which it may
be reasonable for Landlord to withhold its consent to an assignment or
subletting, Landlord and Tenant acknowledge that it shall be reasonable for
Landlord to withhold or delay its consent in the following instances:
(1) if, at the time consent is requested, or at
any time prior to the granting of consent, Tenant is in default under this
Lease or would be in default under this Lease but for the pendency of any
grace or cure period under Section 21 below;
(2) if the proposed assignee or sublessee is
a governmental agency;
(3) if, in Landlord's sole and absolute
discretion, the use of the Premises by the proposed assignee or sublessee
would not be compatible with the operation and uses of other tenants in the
Building, would entail any alterations which would lessen the value of the
leasehold improvements in the Premises, would result in an increased burden
on the Building, the Premises and systems and structures thereof, would
likely cause an increase in insurance premiums for insurance policies
applicable to the Building, would conflict with any so-called "exclusive" or
percentage lease then in favor of another tenant of the Building or would
likely impair the dignity, reputation or character of the Building.
(4) if, in Landlord's reasonable judgement,
the financial worth or capacity of the proposed assignee or sublessee does
not meet the credit standards applied by Landlord for other tenants under
leases with comparable terms, or in Landlord's sole and absolute discretion,
the character, reputation, or business of the proposed assignee or sublessee
is not consistent with the quality of the other tenancies in the Building;
(5) any portion of the Building or Premises
would become subject to additional or different governmental laws and
regulations including, without limitation, the ADA and Title 24; provided
that, if Tenant elects to be responsible and pay for all costs resulting from
said additional or different governmental laws and regulations including,
without limitation, the ADA and Title 24, it shall not be reasonable for
Landlord to withhold or delay its consent;
(6) if the proposed assignee or sublessee is
an existing tenant, or affiliate of an existing tenant, of the Building; or
(7) if the proposed use is prohibited by law
or by any provision of this Lease, including, without limitation, the rules
and regulations then in effect; or
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(8) if Landlord is negotiating with, and has
at any time within the past sixty (60) days negotiated with, the proposed
assignee or sublessee for space in the Building.
(e) If, at any time during the Lease Term, Tenant desires
to assign its interest in this Lease or sublet all or any part of the Premises,
Tenant shall give written notice to Landlord ("Tenant's Notice") setting forth
the terms of the proposed transaction, which shall be expressly subject to the
provisions of this Lease, the identity of the parties to the transaction, the
proposed documentation for the transaction and reasonably detailed information
regarding the business and financial condition of the parties involved as
requested by Landlord. Landlord shall have the option, exercisable by notice
given to Tenant ("Landlord's Election Notice") within fifteen (15) days after
Tenant's Notice is given ("Landlord's Option Period"), to either (i) consent to
the assignment or subletting, in which event the provisions of Section 18(g)
hereof shall be applicable, or (ii) disapprove the proposed assignment or
subletting. In the event that Landlord fails to provide Landlord's Election
Notice during the Landlord's Option Period, Landlord shall be deemed to have
consented to the assignment or sublet, in which event the provisions of Section
18(g) hereof shall be applicable.
Notwithstanding the foregoing or anything else to the contrary
contained herein, in the event that Tenant desires to assign its interest in
this Lease or sublet more than fifty percent (50%) of the Premises during the
last five (5) years of the Lease Term (as the same may be extended pursuant to
the terms of this Lease), Tenant shall give written notice of its intent to
market and offer such space to any third party ("Intent to Market Space") and
Landlord shall have the option, exercisable by written notice given to Tenant
within thirty (30) days after receipt of Tenant's Intent to Market Space
("Landlord's Notice") to (i) consent to Tenant's intent to market and offer such
space to a third party, or (ii) in the case of an assignment, terminate this
Lease in its entirety or, in the case of a subletting, terminate this Lease as
to the portion of the Premises proposed to be sublet, in which event Tenant
shall, on the date specified by Landlord (which shall be no less than forty-five
(45) days and no more than ninety (90) days after Landlord's Notice) surrender
the Premises, or the portion proposed to be assigned or sublet, to Landlord (if
only a portion of the Premises on a given floor is involved, Landlord shall
retain such rights of access to and from such portion of the Premises as may be
reasonably required for Landlord or its tenant(s)' use and enjoyment and Tenant
shall receive a proportionate adjustment in the Base Monthly Rental payable
hereunder). If Landlord fails to provide Tenant notice under either (i) or (ii)
above within said thirty (30) day period, Landlord shall be deemed to have
consented to Tenant's intent to market and offer such space to a third party and
the process shall be governed by the first grammatical paragraph of this Section
18(e).
Notwithstanding anything to the contrary contained herein, in the event
that Tenant desires to sublet any part of the 20th Floor and/or 21st Floor other
than to a Permitted Transferee, it shall be a requirement that said floors be
sublet together and at the same time on a full floor basis.
(f) No sublessee shall have a right further to sublet
without Landlord's prior consent, which Tenant acknowledges may be withheld in
Landlord's absolute discretion, and any
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assignment by a sublessee of its sublease shall be subject to Landlord's
prior consent in the same manner as if Tenant were entering into a new
sublease. No sublease, once consented to by Landlord, shall be modified or
terminated by Tenant without Landlord's prior consent, which consent shall
not be unreasonably withheld.
(g) In the case of an assignment or sublet, fifty percent
(50%) of any sums above the rate paid by Tenant, or other economic consideration
received by Tenant as a result of such assignment or sublet, shall be paid to
Landlord, after subtracting out-of-pocket leasing commissions paid to third
party brokers by Tenant (not to exceed market rate leasing commissions) and
tenant improvement costs paid by Tenant in connection with the assignment or
sublet (provided that in no event shall said tenant improvement costs exceed Ten
Dollars ($10.00) per rentable square foot).
(h) If, at any time during the Lease, Tenant sublets a
portion of the Premises pursuant to Section 18(e) above which is less than fifty
percent (50%) of the Premises, but more than twenty-five thousand (25,000)
square feet, Tenant shall only have a right to sublet said portion of the
Premises a total of four (4) times during the Lease Term; provided that, if
Tenant initially sublets the 8th Floor and/or 9th Floor (as opposed to an
initial occupancy on the 8th Floor and/or 9th Floor by Tenant), said initial
sublets on the 8th Floor and/or 9th Floor shall not be included in the four (4)
allowed sublets discussed above.
(i) Regardless of Landlord's consent and regardless of
whether Landlord consent is required pursuant to the terms hereof, no subletting
or assignment shall release Tenant of Tenant's obligations under this Lease or
alter the primary liability of Tenant to pay the rental and to perform all other
obligations to be performed by Tenant hereunder. The acceptance of rental by
Landlord from any other person shall not be deemed to be a waiver by Landlord of
any provision hereof. Consent to one assignment or subletting shall not be
deemed consent to any subsequent assignment or subletting. In the event of
default by any assignee of Tenant or any successor of Tenant in the performance
of any of the terms hereof, Landlord may proceed directly against Tenant without
the necessity of exhausting remedies against such assignee or successor.
(j) Any request for Landlord's consent pursuant to this
Section 18 shall also be accompanied by a payment to Landlord of Five Hundred
Dollars ($500.00) for the review, evaluation, and/or preparation of any
materials or documents; provided however, if Landlord elects to terminate
pursuant to Section 18, the Five Hundred Dollars ($500.00) shall be refunded to
Tenant. Under no other event shall any of these costs be reimbursable to Tenant.
In addition, Tenant shall pay Landlord, within ten (10) days after demand, the
amount of Landlord's reasonable out-of-pocket costs incurred in processing each
proposed assignment, transfer or sublet (including, without limitation,
attorneys' and other professional fees and costs).
(k) Notwithstanding anything to the contrary contained
herein, any and all unexercised options to expand the Premises and any and all
rights of first refusal and similar rights are intended by both Landlord and
Tenant to be personal to the original Tenant set forth in the Basic Lease
Information and any Affiliates, and are not intended to benefit any other
assignee
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or sublessee hereunder. Except in the case of assignment or subletting to an
to an Affiliate, upon any assignment of the Premises or a subletting of more
than fifty percent (50%) of the Premises, any such options or rights to
expand or rights of first refusal set forth in Section 52 shall automatically
and without any further action by Landlord terminate and be of no further
force and effect;
(l) Notwithstanding anything to the contrary contained
herein, any and all unexercised options to extend or renew the term of the Lease
are intended by both Landlord and Tenant to be personal to the original Tenant
set forth in the Basic Lease Information and any Affiliates, and are not
intended to benefit any other assignee or sublessee hereunder. Except in the
case of assignment or subletting to an Affiliate, upon any assignment of the
Premises or a subletting of more than fifty percent (50%) of the Premises, any
such options or rights to extend or renew the term of the Lease in Section 51
shall automatically and without any further action by Landlord terminate and be
of no further force and effect;
(m) Notwithstanding anything to the contrary contained
herein, regardless of whether Tenant initially sublets or occupies the 8th Floor
and/or 9th Floor, the 8th Floor and 9th Floor shall not be included in the fifty
percent calculations described in Sections 18(k) and 18(l) above for the first
thirty-six (36) months after the earlier of the 8th Floor Term Commencement Date
or the 9th Floor Term Commencement Date; if Tenant initially sublets the 8th
and/or 9th Floor and the sublease has a term of five (5) years or more, then
said sublease shall not be included in the fifty percent calculations described
in Sections 18(k) and 18(l) above.
(n) Notwithstanding any contrary provision of law,
including California Civil Code section 1995.310, Tenant shall have no right,
and Tenant hereby waives and relinquishes any right, to cancel or terminate this
Lease in the event Landlord is determined to have unreasonably withheld or
delayed its consent to a proposed transfer, assignment or subletting.
19. RULES; NO DISCRIMINATION. Tenant shall faithfully observe and
comply with the rules and regulations attached to this Lease as EXHIBIT B, and
after notice thereof, all reasonable modifications thereof and additions thereto
from time to time promulgated in writing by Landlord. Landlord shall not be
responsible to Tenant for the nonperformance by any other tenant or occupant of
the Building of any of said rules and regulations. Tenant specifically covenants
and agrees that Tenant shall not discriminate against or segregate any person or
group of persons on account of race, sex, creed, color, national origin, or
ancestry in the occupancy, use, sublease, tenure or enjoyment of the Premises.
20. ENTRY BY LANDLORD.
(a) Upon prior reasonable notice, except in the case of
an emergency when Landlord shall provide such notice as is reasonable under the
circumstances, Landlord may enter the Premises at reasonable hours to (a)
inspect the same; (b) exhibit the same to prospective purchasers, lenders or
tenants (provided, however, that Landlord shall only exhibit the Premises to
prospective tenants during or after the final one hundred eighty (180) days of
the Lease Term); (c) make repairs or perform maintenance required of Landlord
under the terms hereof or repairs to any adjoining space or utility services or
make repairs, alterations or improvements to any
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other portion of the Building; (d) supply janitor service and any other
service to be provided by Landlord to Tenant under this Lease; and (e) post
notices of non-responsibility (provided, however, that all such work shall be
done as promptly as reasonably practical and so as to cause as little
interference to Tenant as reasonably practical). Tenant hereby waives any
claim for damages for any inconvenience to or interference with Tenant's
business or any loss of occupancy or quiet enjoyment of the Premises
occasioned by such entry. Landlord shall at all times have and retain a key
with which to unlock all of the doors in, on or about the Premises (excluding
Tenant's vaults, safes and similar areas designated in writing by Tenant in
advance); and Landlord shall have the right to use any and all means which
Landlord may deem proper to open Tenant's doors in an emergency in order to
obtain entry to the Premises, and any entry to the Premises obtained by
Landlord in an emergency shall not be construed or deemed to be a forcible or
unlawful entry into or a detainer of the Premises or an eviction, actual or
construction, of Tenant from the Premises or any portion thereof and Landlord
shall have no liability to Tenant as a result thereof.
(b) Notwithstanding anything to the contrary contained
herein, except in the case of an emergency, Landlord shall not enter into any
electrical or telephone closet, or any LAN communication or computer server
area (collectively, "Secured Areas") on any floor occupied by Tenant so long
as Tenant occupies the entire floor; provided that, upon prior reasonable
notice, Landlord shall have the right to enter a Secured Area with
appropriate Tenant personnel and in the event of an emergency Landlord shall
have the right to enter the Secured Area at any time.
21. EVENTS OF DEFAULT. The following events shall constitute
Events of Default under this Lease:
(a) a default by Tenant in the payment when due of any
rent or other sum payable hereunder and the continuation of such default for
a period of five (5) days after written notice from Landlord that the same is
due; provided, however, that after the second failure in any calendar year to
pay any rent or other sum on or before the date it is due, any further
failure during such calendar year to pay any rent or other sum on or before
the date it is due shall be an immediate Event of Default and shall not
require any written notice from Landlord pursuant to the Lease;
(b) a default by Tenant in the performance of any of
the other terms, covenants, agreements or conditions contained herein and, if
the default is curable, the continuation of such default for a period of
thirty (30) days after notice by Landlord or beyond the time reasonably
necessary for cure if Tenant is diligently pursuing a cure, if default is of
a nature to require more than thirty (30) days to remedy; provided, however,
in no event shall Tenant have more than a period of one hundred eighty (180)
days to remedy any such default;
(c) the bankruptcy or insolvency of Tenant, transfer
by Tenant in fraud of creditors, an assignment by Tenant for the benefit of
creditors, or the commencement of any proceedings of any kind by or against
Tenant under any provision of the Federal Bankruptcy Act or under any other
insolvency, bankruptcy or reorganization act unless, in the event any such
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proceedings are involuntary, Tenant is discharged from the same within sixty
(60) days thereafter;
(d) the appointment of a receiver for a substantial part
of the assets of Tenant;
(e) the abandonment of the Premises by Tenant;
(f) the levy upon this Lease or any estate of Tenant
hereunder by any attachment or execution and the failure to have such attachment
or execution vacated within thirty (30) days thereafter; or
(g) the default of a guarantor under a guaranty or
repudiation of a guaranty required under this Lease.
In no event shall this Lease be assigned or assignable by reason of
any voluntary or involuntary bankruptcy proceedings, nor shall any rights or
privileges hereunder be an asset of Tenant, the trustee,
debtor-in-possession, or the debtor's estate in any bankruptcy, insolvency or
reorganization proceedings.
22. TERMINATION UPON DEFAULT. Upon the occurrence of any Event
of Default by Tenant hereunder, Landlord may, at its option and without any
further notice or demand, in addition to any other rights and remedies given
hereunder or by law, terminate this Lease and exercise its remedies relating
thereto in accordance with the following provisions:
(a) Landlord shall have the right, so long as the
Event of Default remains uncured, to give notice of termination to Tenant,
and on the date specified in such notice this Lease shall terminate.
(b) In the event of any such termination of this
Lease, Landlord may then or at any time thereafter by judicial process,
re-enter the Premises and remove therefrom all persons and property and again
repossess and enjoy the Premises, without prejudice to any other remedies
that Landlord may have by reason of Tenant's default or of such termination.
(c) In the event of any such termination of this
Lease, and in addition to any other rights and remedies Landlord may have,
Landlord shall have all of the rights and remedies of a landlord provided by
Section 1951.2 of the California Civil Code. The amount of damages which
Landlord may recover in event of such termination shall include, without
limitation: (1) the worth at the time of award (computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at
the time of award plus one percent) of the amount by which the unpaid rent
for the balance of the term after the time of award exceeds the amount of
rental loss that Tenant proves could be reasonably avoided; (2) all legal
expenses and other related costs incurred by Landlord following Tenant's
default; (3) all costs incurred by Landlord in restoring the Premises to good
order and condition, or in remodeling, renovating or otherwise preparing the
Premises for reletting; (4) all costs (including, without limitation, any
brokerage commissions) actually incurred by Landlord in reletting the
Premises; and (5) any and all other damages suffered by Landlord.
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(d) After terminating this Lease, Landlord may remove
any and all personal property located in the Premises and place such property
in a public or private warehouse or elsewhere at the sole cost and expense of
Tenant. In the event that Tenant shall not immediately pay the cost of
storage of such property after the same has been stored for a period of
thirty (30) days or more, Landlord may sell any or all thereof at a public or
private sale in such manner and at such times and places as Landlord in its
sole discretion may deem proper, without notice to or demand upon Tenant.
Tenant waives all claims for damages that may be caused by Landlord's
removing or storing or selling the property as herein provided, and Tenant
shall indemnify and hold Landlord free and harmless from and against any and
all claims, damages, liabilities, losses, costs and expenses, including,
without limitation, all costs of court and attorneys' fees of Landlord
occasioned thereby.
(e) In the event of the occurrence of any of the
events specified in Section 21(c) of this Lease, if Landlord shall not choose
to exercise, or by law shall not be able to exercise, its rights hereunder to
terminate this Lease, then, in addition to any other rights of Landlord
hereunder or by law, (i) Landlord may discontinue the services provided
pursuant to Section 7 of this Lease, unless Landlord has received
compensation in advance for such services in the amount of Landlord's
reasonable estimate of the compensation required with respect to such
services, and (ii) neither Tenant, as debtor-in-possession, nor any trustee
or other person (collectively, the "Assuming Tenant") shall be entitled to
assume this Lease unless on or before the date of such assumption, the
Assuming Tenant (a) cures, or provides adequate assurance that the Assuming
Tenant will promptly cure, any existing default under this Lease, (b)
compensates, or provides adequate assurance that the Assuming Tenant will
promptly compensate Landlord for any pecuniary loss (including, without
limitation, attorneys' fees and disbursements) resulting from such default,
and (c) provides adequate assurance of future performance under this Lease.
For purposes of this Section 22(e) "adequate assurance" of such cure,
compensation or future performance shall be effected by the establishment of
an escrow fund for the amount at issue or by bonding.
23. CONTINUATION AFTER DEFAULT. Landlord shall have the remedy
described in California Civil Code Section 1951.4 (i.e. Landlord may continue
this Lease in effect after Tenant's abandonment and recover rental as it
becomes due, because Tenant has the right to sublet or assign, subject only
to reasonable limitations). Even though Tenant has breached this Lease and
abandoned the Premises, this Lease shall continue in effect for so long as
Landlord does not terminate Tenant's right to possession, and Landlord may
enforce all its rights and remedies 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 Landlord's
interest under this Lease shall not constitute a termination of Tenant's
right to possession.
24. OTHER RELIEF. The remedies provided for in this Lease are
in addition to any other remedies available to Landlord at law or in equity,
by statute or otherwise.
25. LANDLORD'S RIGHT TO CURE DEFAULTS. All agreements and
provisions to be performed by Tenant under any of the terms of this Lease
shall be at its sole cost and expense
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and without any abatement of rental. If Tenant shall fail to pay any sum of
money, other than rental, required to be paid by it hereunder or shall fail
to perform any other act on its part to be performed hereunder and such
failure shall continue for thirty (30) days after notice thereof by Landlord,
or such longer period as may be allowed hereunder, Landlord may, but shall
not be obligated so to do, and without waiving or releasing Tenant from any
obligations of Tenant, make any such payment or perform any such other act on
Tenant's part to be made or performed as in this Lease provided to the extent
Landlord may deem desirable. All sums so paid by Landlord (with interest at
an annual rate of thirteen percent (13%), but in no event in excess of the
maximum rate of interest permitted by law) and all necessary incidental costs
shall be payable to Landlord on demand.
26. LANDLORD DEFAULT. Landlord's failure to perform any of its
obligations under this Lease shall constitute an Event of Default by Landlord
if the failure continues for thirty (30) days after written notice of the
failure from Tenant to Landlord. If the required performance cannot be
completed within thirty (30) days, Landlord's failure to perform shall not
constitute an Event of Default, provided Landlord undertakes to cure the
failure within the thirty (30) days and diligently and continuously attempts
to complete this cure as soon as reasonably possible.
27. ATTORNEYS' FEES. If any action arising out of this Lease is
brought by either party hereto against the other, then and in that event the
unsuccessful party to such action shall pay to the prevailing party all costs
and expenses of such action and any appeal related thereto, including
reasonable attorneys' fees, incurred by such prevailing party, and if the
prevailing party shall recover judgment in such action, such costs expenses
and attorneys' fees shall be included in and as part of such judgment.
28. EMINENT DOMAIN. If all or any part of the Premises shall be
taken as a result of eminent domain action or voluntary deed under threat
thereof, this Lease shall terminate as to the part so taken as of the date of
taking, and, in the case of a partial taking, either Landlord or Tenant shall
have the right to terminate this Lease as to the balance of the Premises by
notice to the other within thirty (30) days after such date; provided,
however, that a condition to the exercise by Tenant of such right to
terminate shall be that the portion of the Premises taken shall be of such
extent and nature so as substantially to handicap, impede or impair Tenant's
use of the balance of the Premises. In the event of any taking, Landlord
shall be entitled to any and all compensation, damages, income, rent, awards,
or any interest therein whatsoever which may be paid or made in connection
therewith, and Tenant shall have no claim against Landlord for the value of
any unexpired Lease Term or otherwise. In the event of a partial taking of
the Premises which does not result in a termination of this Lease, the
monthly rental thereafter to be paid shall be equitably reduced. Nothing
contained herein, however, shall be deemed to give Landlord any interest in,
or to require Tenant to assign to Landlord, any award made to Tenant
specifically for its relocation expenses, the taking of personal property and
fixtures belonging to Tenant, or the interruption of or damage to Tenant's
business if such award is made separately to Tenant and not as part of the
damages recoverable by Landlord and if Tenant's claim does not adversely
affect Landlord's award or interfere with Landlord's prosecution of its claim
for the condemnation or taking.
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29. SUBORDINATION AND NONDISTURBANCE.
(a) This Lease shall be subject and subordinate to any
mortgage, deed of trust, or any other hypothecation for security now or
hereafter placed upon the Building and to any and all advances made on the
security thereof or Landlord's interest therein, and to all renewals,
modifications, consolidations, replacements and extensions thereof. In the
event any mortgage or deed of trust to which this Lease is subordinate is
foreclosed or a deed in lieu of foreclosure is given to the mortgagee or
beneficiary, Tenant shall attorn to the purchaser at the foreclosure sale or
to the grantee under the deed in lieu of foreclosure. Tenant agrees to
execute within ten (10) days any documents required to effectuate such
subordination, to make this Lease prior to the lien of any mortgage or deed
of trust as may be requested by the holder of any such mortgage or deed of
trust, or to evidence such attornment, provided, however, as a pre-condition
to Tenant's subordination to a mortgage and any subordination set forth in
this Section below, the mortgagee shall first provide Tenant with a
Subordination, Non-Disturbance and Attornment Agreement in the form attached
hereto as Exhibit F.
(b) In the event any mortgage or deed of trust which
is entered into by Landlord after the date hereof to which this Lease is
subordinate is foreclosed or a deed in lieu of foreclosure is given to the
mortgagee or beneficiary, this Lease shall not be barred, terminated, cut off
or foreclosed, nor shall the rights and possession of Tenant hereunder be
disturbed if Tenant shall not then be in default in the payment of rental and
other sums due hereunder or otherwise be in default under the terms of this
Lease, and if Tenant shall attorn to the purchaser, or grantee as provided in
Section 29(a) above (provided, that, the non-disturbance of Tenant's rights
and possession of this Section 29(b) shall not be contingent on whether
Landlord requests Tenant's attornment) or, if requested, enter into a new
lease for the balance of the term hereof upon the same terms and provisions
as are contained in this Lease.
(c) Landlord shall obtain a non-disturbance agreement
from the holder of the existing first deed of trust covering the Building in
the form attached hereto as Exhibit F.
30. NO MERGER. 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 it of any or all such subleases
or subtenancies.
31. AMENDMENTS. This Lease may not be amended or modified in
any respect whatsoever except by an instrument in writing signed by Landlord
and Tenant.
32. ESTOPPEL CERTIFICATE.
At any time and from time to time but on not less than ten
(10) business days prior notice by Landlord, Tenant shall execute,
acknowledge, and deliver to Landlord, promptly upon request, a certificate in
substantially the form attached hereto as EXHIBIT E 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 date, if any, to
which rental and other sums payable hereunder have been
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paid, (c) that no notice has been received by Tenant of any default which has
not been cured, except as to defaults specified in the certificate, (d)
whether there is then existing any claim by Tenant of default hereunder by
Landlord, and, if so, specifying the nature thereof, and (e) such other
matters as may be reasonably requested by Landlord Any such certificate may
be relied upon by any prospective purchaser, mortgagee or beneficiary under
any deed of trust on the Building or any part thereof.
33. NO LIGHT, AIR, OR VIEW EASEMENT. Any diminution or shutting
off of light, air or view by any structure which may be erected on lands
adjacent to the Building shall in no way affect this Lease or impose any
liability on Landlord.
34. HOLDING OVER. If Tenant holds possession of the Premises
after expiration of the Lease Term, Tenant shall become a tenant from month
to month upon the terms herein specified but at a monthly rental equivalent
to one hundred fifty percent (150%) of the monthly rental payable by Tenant
during the last full month prior to the expiration of the Lease Term, payable
in advance on or before the first day of each month. Without limiting and in
addition to the foregoing, Tenant hereby agrees to indemnify, defend and hold
harmless Landlord, its beneficiary, and their respective agents, contractors
and employees, from and against any and all claims, liabilities, actions,
losses, damages (including without limitation, direct, indirect, incidental
and consequential) and expenses (including, without limitation, court costs
and reasonable attorneys' fees) asserted against or sustained by any such
party and arising from or by reason of such retention of possession, which
obligations shall survive the expiration or termination of the Lease Term.
35. SECURITY DEPOSIT.
(a) Within five (5) business days of execution of the
Lease by both parties, Tenant shall deposit with Landlord an unconditional,
irrevocable letter of credit (the "Letter of Credit"), in the amount of Four
Million Five Hundred Thousand Dollars ($4,500,000) as a security deposit.
The Letter of Credit shall (i) be issued by a commercial bank reasonably
satisfactory to Landlord ("Issuer"); (ii) be an unconditional and irrevocable
letter of credit; (iii) be payable to Landlord; (iv) require that any draw on
the Letter of Credit shall be made only upon receipt by the Issuer of a
demand notice from Landlord (the "Demand Notice"); (v) provide that it is
governed by the Uniform Customs and Practice for Documentary Credits (1993
revisions), International Chamber of Commerce Publication No. 500; (vi)
comply with any requirements for the Letter of Credit as set forth in Exhibit
F; and (vi) otherwise be in a form reasonably acceptable to Landlord. Tenant
shall keep the Letter of Credit, or a renewal thereof, in effect during the
entire Lease Term, as the same may be extended, plus a period of four (4)
weeks thereafter. At least thirty (30) days prior to the expiration of the
Letter of Credit, the term thereof shall be renewed or extended pursuant to
an amendment thereto reasonably acceptable to the Landlord and any failure to
so renew or extend the Letter of Credit shall entitle Landlord to immediately
draw down all sums available thereunder. If Tenant fails to renew or extend
the Letter of Credit and Landlord draws downs all sums available thereunder,
Tenant shall have the right to replace the expired Letter of Credit with a
letter of credit meeting the requirements set forth herein. Upon Tenant's
replacement of the Letter of Credit with a substitute letter of credit
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meeting the requirements set forth herein, Landlord shall immediately return
the drawn down sums to Tenant upon demand.
(b) Provided that Tenant has not committed a monetary
Event of Default during the previous twelve (12) months (or by the time of
the merger described below) and that any other Event of Default has not
occurred with respect to Tenant which remains uncured, Tenant may reduce the
amount of the Letter of Credit to Two Million Two Hundred Fifty Thousand
Dollars ($2,250,000) upon completion of Tenant's merger transaction as
described in the S-4 Registration document filed July 12, 1999 by Tenant, by
an amendment or by substitution of a new letter of credit which complies with
the requirements of this paragraph, which reflects such reduced amount (the
"Amended Amount").
(c) Provided that Tenant has not committed a monetary
Event of Default during the previous twenty-four (24) months and that any
other Event of Default has not occurred with respect to Tenant which remains
uncured, Tenant may reduce the amount of the Letter of Credit to Six Hundred
Thirty Three Thousand Six Hundred Six Dollars ($633,606) by an amendment or
by substitution of a new letter of credit which complies with the
requirements of this paragraph, which reflects such reduced amount (the
"Further Amended Amount").
(d) Provided that Tenant has not committed a monetary
Event of Default during the previous twelve (12) months and that any other
Event of Default has not occurred with respect to Tenant and remains uncured,
in the event that Tenant obtains a "BBB" credit rating from Standard & Poors,
or a rating equivalent to such Standard & Poors' rating from Moody's, Fitch,
or any other comparable rating agency acceptable to Landlord, for senior
unsecured debt, the Letter of Credit shall be returned to Tenant within
thirty (30) days after Tenant's prior written notification to Landlord that
it has received such rating. In the event that said senior unsecured debt
credit rating is later withdrawn or reduced, then Tenant shall have thirty
(30) days to post a new Letter of Credit in an amount calculated in
accordance with the reductions permitted under this subparagraph and
subparagraphs 32(a) and (b) above.
(e) If an Event of Default occurs, Landlord shall be
entitled to draw upon the Letter of Credit in the amount determined by
Landlord necessary to cure such Event of Default and compensate Landlord for
any damages suffered by Landlord as a result thereof. Tenant shall
immediately restore the face amount of the Letter of Credit to the face
amount which was applicable immediately prior to Landlord's drawing down sums
thereunder pursuant to an amendment to the Letter of Credit reasonably
acceptable to Landlord or a replacement of the Letter of Credit (provided the
Letter of Credit requirements in Section 35(a) are satisfied, or shall
deposit with Landlord a cash sum in an amount which when added to the amount
available to be drawn under the Letter of Credit equals the amount of the
Letter of Credit immediately prior to Landlord's draw under the Letter of
Credit. Any cash deposited with Landlord shall be held by Landlord as a
Security Deposit pursuant to subparagraph 32(b) of this Lease.
Notwithstanding anything to the contrary contained herein, any failure by
Tenant to restore the face value of the Letter of Credit to such amount, to
replace the Letter of Credit or to deposit with Landlord a corresponding cash
amount, within five business (5) days after its receipt of a written request
from Landlord shall be an Event of Default. Without limiting any other rights
or remedies of
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Landlord as a result of such Event of Default, Landlord may draw down any
sums then remaining under the Letter of Credit and Tenant shall within five
(5) business days after its receipt of a written request from Landlord
deposit cash with Landlord in an amount sufficient to bring the sums held by
Landlord to an amount equal to the current Amended Amount. The cash then held
by Landlord in the amount of such current Amended Amount shall be held as the
Security Deposit pursuant to the provisions of subparagraph 32 of the Lease
for the remainder of the term of the Lease. In the event of termination of
Landlord's interest in this Lease, Landlord shall transfer said deposit to
Landlord's successor in interest.
(f) The Security Deposit shall be held by Landlord as
security for the faithful performance by Tenant of all the provisions of this
Lease to be performed or observed by Tenant. If Tenant fails to pay rent or
other sums due hereunder, or otherwise defaults with respect to any provision
of this Lease, Landlord may use, apply or retain all or any portion of the
Security Deposit for the payment of any rent or other sum in default or for
the payment of any other sum to which Tenant compensates Landlord for any
loss or damage which Landlord may suffer thereby. If Landlord so uses or
applies all or any portion of the Security Deposit, Tenant shall within ten
(10) days after demand therefor deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to the full amount thereof and
Tenant's failure to do so shall be a material breach of this Lease.
(g) Subject to the other provisions of this Lease, at
the end of the Lease Term, as the same may be extended as provided hereunder,
the then current Letter of Credit and any amount held by Landlord as a
Security Deposit shall be returned to Tenant within sixty (60) days of the
Term Expiration Date. The Letter of Credit and Security Deposit amount, if
any, shall be returned to Tenant pursuant to this Section 35(g) by the then
Landlord regardless of whether the then Landlord, or any buyer in a
foreclosure sale has received the Letter of Credit or Security Deposit;
provided the foregoing shall not apply to any lender or mortgagee, unless
specifically agreed to in writing by such lender or mortgagee.
36. WAIVER. The waiver by Landlord or Tenant of any agreement,
condition or provision herein contained shall not be deemed to be a waiver of
any subsequent breach of the same or any other agreement, condition or
provision herein contained, nor shall any custom or practice which may grow
up between the parties in the administration of the terms hereof be construed
to waive or to lessen the right of either party to insist upon the
performance by the other party in strict accordance with such terms. The
subsequent acceptance of rental hereunder by Landlord shall not be deemed to
be a waiver of any preceding breach by Tenant of any agreement, condition or
provision of this Lease, other than the failure of Tenant to pay the
particular rental so accepted, regardless of Landlord's knowledge of
preceding breach at the time of acceptance of the rental.
37. NOTICES AND CONSENTS. All notices, consents, demands and
other communications from one party to the other that are given pursuant to
the terms of this Lease shall be in writing and shall be deemed to have been
fully given (i) three (3) days after deposit in the United States mail,
certified or registered, postage prepaid, (ii) one (1) day after mailed by
overnight courier service, (iii) on the date of delivery if personally
delivered (provided that, personal delivery in
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the Building is not effective delivery to the Landlord) and addressed as
follows: prior to the Rent Commencement Date, to Tenant at the address
specified in the Basic Lease Information, and to the Premises thereafter, or
to such other place as Tenant may from time to time designate in a notice to
Landlord; and to Landlord at the address specified in the Basic Lease
Information, or to such other place as Landlord may from time to time
designate in a notice to Tenant.
38. COMPLETE AGREEMENT. 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,
agreements, letters of intent and understandings if any, between Landlord and
Tenant or displayed by Landlord to Tenant with respect to the subject matter
of this Lease, the Building or related facilities.
39. CORPORATE AUTHORITY. If Tenant signs as a corporation,
partnership or other entity, each of the persons executing this Lease on
behalf of Tenant warrants that Tenant is duly organized and existing, that
Tenant has been and is qualified to do business in California, that Tenant
has full right and authority to enter into this Lease, and that each and both
of the persons signing on behalf of Tenant were authorized by Tenant to do so
on its behalf. If Landlord signs as a corporation, partnership or other
entity, each of the persons executing this Lease on behalf of Landlord
warrants that each of the persons signing on behalf of Landlord were
authorized by Landlord to do so on its behalf.
40. STORAGE SPACE. Tenant shall have the right, exercisable by
written notice to Landlord prior to December 31, 1999, to lease up to
approximately 7,000 square feet of storage space in the Building, but
noncontiguous to the Premises, on a month to month basis at the rate of
$16.00 per square foot per annum commencing on the date which is thirty (30)
days after Tenant has provided notice to Landlord of its intention to lease
such storage space. After December 31, 1999, Tenant may only lease such
storage space as available and at such rates as Landlord may then be offering
such space to third parties. Upon Tenant's written notice to Landlord
pursuant to this Section 40, Tenant and Landlord shall enter into a separate
lease for the storage space.
41. NO CONSEQUENTIAL DAMAGES. Notwithstanding any other
provision of this Lease, Landlord shall not be liable for any consequential
damages, nor shall Landlord be liable for loss of or damage to artwork,
currency, jewelry, bullion, unique or valuable documents, securities or other
valuables, or for other property not in the nature of ordinary fixtures,
furnishings and equipment used in general administrative and executive office
activities and functions.
42. MISCELLANEOUS. If there be more than one Tenant, the
obligations hereunder imposed upon Tenant shall be joint and several. The
words "include," "includes" and "including" shall be deemed to be followed by
the phrase "without limitation." The term "Landlord" or any pronoun used in
place thereof includes the plural as well as the singular and the successors
and assigns of Landlord. The term "Tenant" or any pronoun used in place
thereof includes the plural as well as the singular and individuals, firms,
associations, partner-ships and corporations, and their and each of their
respective heirs, executors, administrators, successors and permitted
assigns, according to the context hereof. The term "person" includes the
plural as
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well as the singular and individuals, firms, associations, partnerships and
corporations. Words used in any gender include other genders. Time is of the
essence of this Lease and each and all of its provisions. Submission of this
instrument for examination or signature by Tenant does not constitute a
reservation of or option for lease, and it is not effective as a lease or
otherwise until execution and delivery by both Landlord and Tenant. The
agreements, conditions and provisions herein contained shall, subject to the
provisions as to assignment, apply to and bind the heirs, executors,
administrators, successors and assigns of the parties hereto. Subject to the
provisions of Section 47 below, Tenant shall not, without the consent of
Landlord, use the name of the Building for any purpose other than as the
address of the business to be conducted by Tenant in the Premises. Upon the
request of Landlord, Tenant shall provide to Landlord from time to time, at
no expense to Landlord, copies of such financial statements with respect to
Tenant as may have been prepared by or for Tenant. Landlord's acceptance of a
partial rent payment shall not constitute a waiver of any rights of Tenant or
Landlord, including, without limitation, any right Landlord may have to
recover possession of the Premises, in unlawful detainer, or otherwise.
Tenant shall not record this Lease or any portion or any reference hereto. If
Tenant shall record this Lease, or shall permit or causes this Lease, or any
portion hereof or reference hereto to be recorded, this Lease shall, at
Landlord's option terminate, or Landlord may declare a default hereunder and
pursue any and all remedies provided for in this Lease. If any provisions of
this Lease shall be 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 pursuant to the laws of the State of California.
43. ABANDONMENT. Subject to Tenant's rights under Section 18 of
this Lease, Tenant shall not vacate or abandon the Premises or any part
thereof at any time during the Lease Term. Tenant shall not be deemed to have
vacated the Premises if, upon prior written notice to Landlord, Tenant
temporarily vacates not more that two floors in the Premises for a period not
to exceed three (3) months. Tenant understands that if Tenant should leave
the Premises or any part thereof vacant or abandoned, the risk of fire, other
casualty, and vandalism to the Premises and the Building will be increased
and that, therefore, such action by Tenant shall constitute a material breach
of this Lease, whether or not Tenant continues to pay rent and additional
rent under this Lease. If Tenant shall vacate, abandon or surrender the
Premises, or be dispossessed by process of law or otherwise, any personal
property belonging to Tenant and left on the Premises shall be deemed to be
abandoned, at the option of Landlord, and Landlord may sell or otherwise
dispose of such personal property in any commercially reasonable manner.
44. AMERICANS WITH DISABILITIES ACT AND SIMILAR ACTS.
Notwithstanding anything to the contrary contained herein or in the Lease,
Tenant, at its sole cost and expense, shall (i) cause all alterations,
additions, improvements and repairs to the Premises to comply with the
provisions of the ADA, Title 24 of the California Administrative Code, and
other similar federal, state, and local laws and regulations, including,
without limitation, any alterations required under ADA for the purposes of
"public accommodations" (as that term is used in the ADA), and (ii) reimburse
Landlord upon demand for any and all costs and expenses incurred by Landlord
to comply with ADA, Title 24, or such similar federal, state, or local laws
and regulations in any other portion of the Building in which the Premises
are located arising out of Tenant's specific use of or construction in the
Premises, excluding any such costs and expenses arising out of the
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tenant improvement work described in EXHIBIT C and approved by Landlord.
Except as provided above, Tenant shall have no responsibility to comply with
such laws in portions of the Building outside of the Premises.
45. EXHIBITS. The exhibit(s) and addendum, if any, specified
in the Basic Lease Information are attached to this Lease and by this
reference made a part hereof.
46. LANDLORD'S LIABILITY; SALE OF BUILDING. The term
"Landlord," as used in this Lease, shall mean only the owner or owners of the
Building at the time in question. Tenant acknowledges and agrees that the
liability of Landlord with respect to its obligations under this Lease, or
arising in connection with the ownership, operation, management, leasing,
repair, renovation, alteration or any other matter relating to the Building
or the Premises, is limited to Landlord's interest in the Building, and
Tenant agrees to look solely to Landlord's interest in the Building to
satisfy any claim or judgment against or any liability or obligation of
Landlord to Tenant under this Lease. In no event shall any partner, officer,
director, employee, trustee, beneficiary, advisor, investment manager,
manager, agent, member, advisor, or shareholder of Landlord have any personal
liability to Tenant with respect to any liability or obligation of Landlord
to Tenant, and no recourse shall be had by Tenant against any such parties or
the assets of any such parties to satisfy any claim or judgment of Tenant for
Landlord's breach of any of its obligations under this Lease. In addition, in
the event of any conveyance of title to the Building, Landlord shall be
relieved of all liability with respect to Landlord's obligations to be
performed under this Lease after the date of such conveyance; provided that,
the new owner has assumed the obligations under this Lease in writing. If
Tenant provides Landlord with any security for Tenant's performance of its
obligations hereunder, Landlord shall transfer such security to the grantee
or transferee of Landlord's interest in the Real Property, and once such
transfer has been made, Landlord shall be released from any further
responsibility or liability of such security. Wherever in this Lease Tenant
(i) releases Landlord from any claim or liability, (ii) waives or limits any
of its rights to assert any claim against Landlord or to seek recourse
against any property of Landlord or (iii) agrees to indemnify Landlord
against any matters, the relevant release, waiver, limitation or indemnity
shall run in favor of and apply to Landlord, the direct and indirect
constituent shareholders, partners, trustees, beneficiaries, members or other
owners of Landlord, and the directors, officers, employees and agents of
Landlord and each such constituent shareholder, partner or other owner.
47. NAME OF BUILDING AND SIGNAGE.
(a) Landlord shall provide Tenant, at Landlord's sole
cost and expense, with a proportionate share of the existing Building
directory in the main lobby and in any future directory in the Building annex
lobby. Tenant may display its name or logo in such directory, consistent with
the current directory format and in a manner approved by Landlord. Landlord
shall provide Tenant, at Landlord's sole cost and expense, enhanced building
signage at the top of the Building directory in the main lobby and the future
directory in the Building annex lobby. Landlord shall provide Tenant, at
Landlord's sole cost and expense, building standard tenant identification on
each floor of the Premises.
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(b) During the Lease Term and so long as Tenant
occupies at least one hundred thousand (100,000) rentable square feet in the
Building, Tenant shall have the exclusive right, at Tenant's sole cost and
expense, to erect and maintain signage with its corporate name and/or logo,
subject to Landlord's approval, on the exterior of the Building in the
current location of the Standard Oil plaque at the entrance to the Building
and at the top of Building directories within the main lobby and annex lobby
of the Building as set forth in Section 47(a) above. If Tenant does not
occupy at least one hundred thousand (100,000) rentable square feet in the
Building, Tenant shall have a nonexclusive right to erect and maintain such
signage within the main lobby and annex lobby of the Building, in size and
location appropriately reflecting Tenant's proportional occupancy of the
Building. Tenant shall comply, at its sole cost and expense, with any and all
laws, statutes, ordinances and governmental rules, regulations or
requirements applicable to such signage, including, without limitation, all
historical designation regulations and requirements ("Signage Legal
Requirements"), and all such signage shall be subject to Landlord's prior
approval, which approval shall not be unreasonably withheld. Tenant may
request additional signage on the exterior of the building, subject to
Landlord's approval. In the event that Landlord approves such additional
signage on the exterior of the Building, Tenant shall be responsible for
obtaining all necessary approvals from governmental authorities and paying
all costs thereof, including, but not limited to any historical review
agencies, for said additional signage and complying with all Signage Legal
Requirements and paying all costs for the manufacturing and installation of
said signage. For purposes of this Section 47, space shall be deemed
"occupied" by Tenant if, and only if, such space is leased to Tenant and,
such space is not subject to a sublease or assignment by Tenant or any other
form of occupancy agreement between Tenant and any third party.
(c) During the Lease Term and so long as Tenant
occupies at least one hundred thousand (100,000) rentable square feet in the
Building, (i) Tenant shall have the exclusive right to name the Building, as
reasonably approved by Landlord, and Landlord shall adopt and reasonably use
the name as designated by Tenant on or before December 31, 1999, and
(ii) Tenant shall have the exclusive right to the exterior premier office
signage at the main lobby entrance and the annex entrance to the Building.
Notwithstanding the foregoing, Tenant and any Affiliate shall have the right
to use its corporate name or a variation thereof as the Building name. Tenant
shall have the right to rename the Building up to four (4) times during the
Lease Term, as extended pursuant to the terms herein, subject to Landlord's
reasonable approval. Landlord shall use such name designated by Tenant in
Building marketing or promotional materials produced by or on behalf of
Landlord; provided, that, Tenant grants Landlord a license to use such name
for said purposes and in the case of a logo, Tenant provides Landlord with
the appropriate logo art work for use in connection with said materials.
Tenant agrees that Landlord and other tenants of the Building may, but are
not required to, use such name as part of their address. If Tenant changes
its designation of the Building name after Tenant's initial designation of
the Building name pursuant to this Section 47(c), Tenant shall reimburse
Landlord for all actual out-of-pocket costs and expenses incurred by Landlord
in reprinting the Building stationary, advertising and promotional materials
and making all required signage changes.
(d) In the event that Tenant does not occupy at least
one hundred thousand (100,000) rentable square feet in the Building, either
Landlord or Tenant shall have the right to
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remove any signage erected by Tenant on the exterior of the Building at the
sole cost and expense of Tenant, upon which all use of the name designated by
Tenant pursuant to Section 47(c) above to identify the Building shall cease
and Landlord shall thereafter have the right, in its sole and absolute
discretion, to cease using such name in Building marketing and promotional
materials and to rename the Building.
(e) The rights granted to Tenant pursuant to this
Section shall be personal to Xoom.com, Inc. and any Affiliate, and such right
shall not inure to the benefit of any assignee or subtenant of Xoom.com, Inc.,
except to an Affiliate.
(f) Notwithstanding anything to the contrary contained
herein, any signage rights specifically designated to retail tenants in the
Building shall be excluded from Tenant's rights herein.
48. HAZARDOUS SUBSTANCE DISCLOSURE.
(a) California law requires landlords to disclose to
tenants the existence of certain Hazardous Materials. Accordingly, the
existence of gasoline and other automotive fluids, asbestos containing
materials, maintenance fluids, copying fluids and other office supplies and
equipment, certain construction and finish materials, tobacco smoke,
cosmetics and other personal items must be disclosed. Gasoline and other
automotive fluids are found in the garage area of the Building. Cleaning,
lubricating and hydraulic fluids used in the operation and maintenance of the
Building are found in the utility areas of the Building not generally
accessible to Building occupants or the public. Many Building occupants use
copy machines and printers with associated fluids and toners, and pens,
markers, inks, and office equipment that may contain Hazardous Materials.
Certain adhesives, paints and other construction materials and finishes used
in portions of the Building may contain Hazardous Materials. Although smoking
is prohibited in the public areas or the Building, these areas may from time
to time be exposed to tobacco smoke. Building occupants and other persons
entering the Building from time to time may use or carry prescription and
non-prescription drugs, perfumes, cosmetics and other toiletries, and foods
and beverages, some of which may contain Hazardous Materials.
(b) Tenant acknowledges that certain reports and
letters (collectively "Reports") dealing with the presence of ACMs in the
Building are available for its review in the property management office of
the Building. The Reports contain the specific locations within the Building
where ACMs are present, describe potential health risks or impacts that may
result from exposure to asbestos contained in the ACMs, and set forth certain
information to convey that moving, drilling, boring or otherwise disturbing
the ACMs may present a health risk, and consequently, should not be attempted
by any person who is not qualified to handle ACMs. Tenant acknowledges that
it is aware of the existence, location and condition of ACMs, both friable
and non-friable in the Building and (if applicable) in the Premises. Tenant
agrees that it has been afforded full and adequate opportunity to inspect or
otherwise evaluate asbestos and ACMs in the Building and Premises and that,
subject to the Work Letter, by taking possession of the Premises, it accepts
the condition of such Premises and the Building with respect thereto. During
the Lease Term, and so long as Tenant occupies any portion of the Premises,
Tenant shall
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familiarize itself and comply with all recommendations under the Reports,
with respect to the maintenance of any and all ACMs in the Premises so as to
prevent the release of any asbestos fibers or other ACMs. Tenant shall be
responsible for insuring that all employees of Tenant and all individuals
entering the Premises are aware of the matters set forth in the Reports with
respect to the presence of ACMs in the Premises and the Building. To the
extent any individuals enter the Premises, who are not engaged by Landlord,
to perform maintenance, repairs, alterations or renovations, such individuals
will be apprised by Tenant of the presence of ACMs and Tenant will make the
contents of the Reports available to such individuals to ensure that all
statutes, codes and regulations applicable to the handling of all ACMs in the
Building. Tenant shall inform Landlord in a timely manner of any work to be
undertaken in the Premises that may disturb any ACMs, so that Landlord may
obtain a release, in form satisfactory to Landlord in its sole discretion,
from those involved in such activities with respect to any liability accruing
from such work undertaken in the Premises. Such notification shall be in
addition to, and not in lieu of, any and all notifications and consents
required under this Lease with respect to alterations or other work in the
Premises by Tenant. Tenant shall indemnify, defend, protect and hold Landlord
harmless from any and all claims, losses, liabilities or damages, including
attorney's fees and costs, resulting from Tenant's failure to comply with the
foregoing provisions related to ACMs and asbestos, including, without
limitation, the failure to notify Landlord in the manner described above.
Tenant will further indemnify, defend, protect and hold Landlord harmless
from any and all claims (known and unknown), losses, liabilities or damages
(including attorneys' fees) relating to exposure to or injury caused or
aggravated by ACMs, directly or indirectly, from Tenant's failure to follow
the prescribed safety requirements, precautions and procedures outlined in
the Reports as the same may be hereinafter modified, updated or revised; or
which results from Tenant's failure to inform individuals and employees of
Tenant of the contents of the Reports, including, without limitation, failure
to so inform individuals who are so undertaking alterations, renovations,
maintenance or repairs of ACMs containing areas of the Premises or the
Building; or which results from any failure of such individuals or Tenant's
employees to comply with recommendations or requirements set forth in the
Reports. By its execution of this Lease, Tenant acknowledges that the notice
set forth hereinabove shall constitute the notice required under California
Health and Safety Code Section 25915.5.
(c) Tenant shall have no liability for the removal or
remediation of Hazardous Material existing in the Building prior to the date
of the execution and delivery of this Lease. Subject to Tenant's obligations
in Section 48, Landlord shall indemnify, defend, protect and hold Tenant
harmless from any and all claims, losses, liabilities or damages, including
reasonable attorney's fees and costs, resulting from or arising out of the
presence of any Hazardous Material found on, in or under the Building or
Premises, other than any Hazardous Materials brought into the Premises or
Building by Tenant and Tenant's agents, employees and contractors and any
claims, losses, liabilities or damages resulting from or arising out of the
negligence of Tenant, its agents, employees, contractors or invitees.
49. REAL ESTATE BROKERS. Landlord and Tenant each represents
and warrants to the other that such party has negotiated this Lease directly
with the Real Estate Brokers identified in the Basic Lease Information and
has not authorized or employed, or acted by implication to authorize or to
employ, any other real estate broker or salesman to act for such party in
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connection with this Lease. All leasing commissions due in connection with
this Lease shall be paid by Landlord in accordance with (i) a separate
agreement between Landlord and Grubb & Ellis, and (ii) that certain Brokerage
Commission Agreement by and between Landlord and The Robax Group, Inc.,
dba Rosen & Reynolds. Landlord shall indemnify, defend and hold Tenant
harmless from and against any and all claims for said leasing commissions by
the Real Estate Brokers identified in the Basic Lease Information. Each party
shall indemnify, defend and hold the other harmless from and against any and
all claims by any real estate broker or salesman other than the Real Estate
Brokers identified in the Basic Lease Information for a commission, finder's
fee or other compensation as a result of the inaccuracy of such party's
representation above.
50. NOTICE TO MORTGAGEE; FINANCIAL STATEMENT. If the holder of
any mortgage covering all or a portion of the Premises shall give notice to
Tenant that it is the holder of such mortgage and such notice includes the
address to which notices to such mortgagee are to be sent, then Tenant agrees
to give to said holder of such mortgage notice simultaneously with any notice
given to Landlord to correct any default of Landlord and agrees that the
holder of such mortgage shall have the right, within sixty (60) days after
receipt of said notice, to commence correction of such default and diligently
prosecute completion thereof before Tenant may take any action under this
Lease by reason of any default. Should Landlord or mortgage holder under this
Lease request a copy of Tenant's current financial statement, Tenant agrees
to furnish a certified copy of same to Landlord within fifteen (15) days of
such request; provided, that, so long as Tenant is a public company, Tenant
agrees to provide the most recent financial statements publicly available.
51. OPTION TO EXTEND.
(a) Tenant shall have two (2) consecutive options to
extend the Term of this Lease with respect to all of the Premises for a
period of five (5) years each commencing on the Term Expiration Date (the
"Extension Period") subject to the conditions contained in this Section. The
options to extend are sometimes referred to collectively herein as an "Option
to Extend."
(i) The Option to Extend shall be exercised,
if at all, by written notice of exercise given to Landlord by Tenant not more
than eighteen (18) months nor less than twelve (12) months prior to the
expiration date of the Term Expiration Date. In the event that Tenant fails
to deliver such exercise notice to Landlord on or before the date that is
exactly twelve (12) months prior to the Term Expiration Date, the Option to
Extend shall be null and void and of no further force or effect.
(ii) Anything herein to the contrary
notwithstanding, if an Event of Default has occurred with respect to Tenant
which remains uncured following the expiration of any applicable notice and
cure period, either at the time Tenant exercises the Option to Extend or on
the commencement date of the Extension Period, then Landlord shall have, in
addition to all of Landlord's other rights and remedies provided in this
Lease, the right to terminate the Option
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to Extend upon thirty (30) days written notice to Tenant (with Tenant having
failed to cure the default during such thirty (30) day period).
(b) In the event the Option to Extend is exercised in
a timely fashion, this Lease shall be extended for an additional five (5)
years upon all of the terms and conditions of this Lease; provided, that, the
Base Expense Year and Base Tax Year shall be adjusted to the calendar year in
which each Option to Extend is effective (however, if the Option to Extend is
effective during the last three (3) months of a calendar year, the Base
Expense Year and Base Tax Year shall be the next calendar year); and provided
further that, the Base Monthly Rent and additional rent for such Extension
Period shall be adjusted to equal ninety-seven percent (97%) of the "Fair
Market Rent" for each floor of the Premises and provided further that there
shall be no tenant improvement allowance and, upon the exercise of the second
Option to Extend, no further option to extend the Lease Term. For purposes
hereof, "Fair Market Rent" shall mean the prevailing gross rental rate per
annum per square foot as of the date six (6) months prior to the commencement
of the Extension Period, including, without limitation, base rent, additional
rent and all other monetary payments (including base rent increases and
step-ups) agreed to be paid by new tenants generally for similar space in a
condition (including the state of build out) and location (within the
Building and any comparison buildings) comparable to each floor of the
Premises in comparable buildings for five (5) year terms, pursuant to new
leases entered into by such other tenants, and considering any rental
abatement and any other similar concessions granted in connection with new
leases for such comparable space (including tenant improvement allowances and
other similar items but excluding the payment of any leasing commissions in
comparable transactions).
(c) On or before the date that is nine (9) months
prior to the commencement of the Extension Period, Landlord shall notify
Tenant in writing of Landlord's proposed Fair Market Rental for the term of
the Extension Period, based on the provisions of this Section above. Within
thirty (30) days after receipt of such notice from Landlord, Tenant shall
have the right either to (i) accept Landlord's statement of Fair Market Rent
as the Fair Market Rental for the Extension Period, or (ii) elect to
arbitrate Landlord's estimate of Fair Market Rent, such arbitration to be
conducted pursuant to the provisions hereof. Failure on the part of Tenant to
require arbitration of Fair Market Rent within thirty (30) such day period
shall constitute acceptance of the Fair Market Rental for the Extension
Period, as proposed by Landlord. If Tenant elects arbitration, the
arbitration shall be concluded as expeditiously as reasonably possible with
the goal of being concluded within ninety (90) days after the date of
Tenant's election. To the extent that arbitration has not been completed
prior to commencement of the Extension Period, Tenant shall pay Base Monthly
Rental, additional rent and all other charges in an amount equal to the Fair
Market Rent proposed by Landlord, and the Base Monthly Rental, additional
rent and all other charges shall be adjusted, if necessary, once the Fair
Market Rent is ultimately determined by arbitration. Should the monthly
installments of Base Monthly Rental, additional rent and all other charges as
adjusted for the period following the completion of such arbitration exceed
the amount previously paid by Tenant for such period, Tenant shall pay the
entire difference to Landlord within thirty (30) days following delivery of
written demand. Should the monthly installments of Base Monthly Rental,
additional rent and all other charges as adjusted following completion of
such arbitration be less than the amount previously paid by
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Tenant for such period, Landlord shall credit such difference against the
next installment(s) of Base Monthly Rental coming due. Upon determination of
the Fair Market Rent for the Extension Period (whether by mutual agreement or
by arbitration), the parties shall enter into an amendment to this Lease
memorializing such determination.
(d) In the event of arbitration, the judgment or the
award rendered in any such arbitration may be entered in any court having
jurisdiction and shall be final and binding between the parties. The
arbitration shall be conducted and determined in the City and County of San
Francisco in accordance with the then prevailing rules of the American
Arbitration Association or its successor for arbitration of commercial
disputes except to the extent that the procedures mandated by said rules
shall be modified as follows:
(i) Tenant shall make demand for arbitration
in writing within thirty (30) days after service of Landlord's determination
of Fair Market Rent given as provided above, specifying therein the name and
address of the person to act as the arbitrator on its behalf. The arbitrator
shall be qualified as a real estate appraiser with at least five (5) years
experience or a real estate broker with at least ten (10) years experience
and otherwise familiar with the Fair Market Rent of office space in the
above-described area who would qualify as an expert witness over objection to
give opinion testimony addressed to the issue in a court of competent
jurisdiction. Failure on the part of Tenant to make a proper demand in a
timely manner for such arbitration shall constitute a waiver of the right
thereto. Within fifteen (15), days after the service of the demand for
arbitration, Landlord shall give notice to Tenant, specifying the name and
address of the person designated by Landlord to act as arbitrator on its
behalf who shall be similarly qualified. If Landlord fails to notify Tenant
of the appointment of its arbitrator, within or by the time above specified,
then the arbitrator appointed by Tenant shall be the arbitrator to determine
the issue.
(ii) In the event that two (2) arbitrators are
chosen pursuant to the provisions of this Section, the arbitrators so chosen
shall, within fifteen (15) days after the second arbitrator is appointed,
appoint a third arbitrator, who shall be a competent and impartial person
with qualifications similar to those required of the first two (2)
arbitrators pursuant to subparagraph (d)(1). In the event the two (2)
arbitrators are unable to agree upon such appointment within ten (10) days
after expiration of said fifteen (15) day period, the third arbitrator shall
be selected by the parties themselves, if they can agree thereon, within a
further period of fifteen (15) days. If the parties do not so agree, then
either party, on behalf of both, may request appointment of such a qualified
person by the then Chief Judge of the United States District Court having
jurisdiction over the City and County of San Francisco, acting in his private
and not in his official capacity, and the other party shall not raise any
question as to such Judge's full power and jurisdiction to entertain the
application for and make the appointment. The third arbitrator shall decide
the dispute if it has not previously been resolved by following the procedure
set forth below.
(iii) Where an issue as to Fair Market Rent
cannot be resolved by settlement between the parties during the course of
arbitration, the issue shall be resolved by the third arbitrator in
accordance with the following procedure. The arbitrator selected by each of
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the parties shall state in writing his or her determination of the Fair
Market Rent supported by the reasons therefor with counterpart copies to each
party. The arbitrator shall arrange for a simultaneous exchange of the
determination of Fair Market Rent. The role of the third arbitrator shall be
to select which of the two proposed determinations of Fair Market Rent most
closely approximates his or her determination of Fair Market Rent. The third
arbitrator shall have no right to propose a middle ground or any modification
of either of the two proposed determinations of Fair Market Rent. The
resolution he or she chooses as most closely approximating his or her
determination shall constitute the decision of the arbitrators and be final
and binding upon the parties.
(iv) In the event of a failure, refusal or
inability of any arbitrator to act, his or her successor shall be appointed
by him, but in the case of the third arbitrator, his or her successor shall
be appointed in the same manner as provided for appointment of the third
arbitrator. The arbitrators shall decide the issue within fifteen (15) days
after the appointment of the third arbitrator. Any decision in which the
arbitrator appointed by Landlord and the arbitrator appointed by Tenant
concur shall be binding and conclusive upon the parties. Each party shall pay
the fee and expenses of its respective arbitrator and both shall share the
fee and expenses of the third arbitrator. The attorneys' fees and expenses of
counsel for the respective parties and of witnesses shall be paid by the
respective party engaging such counsel or calling such witnesses.
(v) The third arbitrator shall have the right
to consult experts and competent authorities to obtain factual information or
evidence pertaining to a determination of Fair Market Rent, but any such
consultation shall be made in the presence of both parties with full right on
their part to cross-examine. The third arbitrator shall render his or her
decision in writing with counterpart copies to each party. The third
arbitrator shall have no power to modify the provisions of this Lease.
(e) The Option to Extend granted to Tenant pursuant to
this Section shall be personal to Xoom.com, Inc. and any Affiliate, and such
right shall not inure to the benefit of any assignee or subtenant of
Xoom.com, Inc., except to an Affiliate.
52. RIGHT OF FIRST REFUSAL.
(a) Tenant shall have a continuing right of first
refusal with respect to any contiguous space in the Building of ten thousand
(10,000) square feet or greater as measured by the ANSI/BOMA Z65.1-1996
standards that becomes available during the term of the Lease, excluding any
space on the ground floor of the Building (the "Refusal Space"), subject to
the existing rights of existing tenants to the Refusal Space. Provided that
no Event of Default has occurred which has not been cured, if Landlord shall
receive an offer to lease any portion of the Refusal Space, which offer
Landlord shall desire to accept, Landlord shall give written notice of the
said offer to Tenant ("Landlord's Refusal Notice"). The Landlord's Refusal
Notice shall set forth in reasonable detail the terms of the offer, including
a description of the space, the Base Monthly Rental (including escalations
thereof), condition of the space (i.e., as is, building standard construction,
tenant improvement allowances), taxes, maintenance costs and other
pass-throughs, term and any other material terms of the offer. Within ten
(10) days of receiving
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Landlord's Refusal Notice, Tenant may elect, by written notice to Landlord,
to accept the Refusal Space upon the terms and conditions stated in the
Landlord's Refusal Notice. Tenant's failure to make a timely election to
accept the specified space shall be deemed a rejection of the Refusal Space.
Upon Tenant's rejection or deemed rejection of the Refusal Space, Landlord
shall be free to accept the offer to lease and lease the space to a third
party pursuant to the terms thereof. Upon Tenant's acceptance of the Refusal
Space, the parties shall prepare and execute an amendment incorporating the
Refusal Space into the Lease subject to all of the terms, covenants, and
conditions herein, except as modified by the terms of the offer. The right
contained in this Section is personal to Xoom.com, Inc. and its Affiliates,
and such right shall not inure to the benefit of any assignee or subtenant of
Xoom.com, Inc., except for its Affiliates and such right shall be subject to
the provisions of Section 18.
(b) Tenant's rights under this Section are subject and
subordinate to and only to the rights of the existing tenants of the Building
which currently have expansion rights, rights of first refusal or rights of
first negotiation with respect to space on the Refusal Space. A list of said
existing tenants is set forth on SCHEDULE 1 attached hereto and made a part
hereof.
Notwithstanding the foregoing, Landlord shall have the right to
negotiate amendments to the Lease of any tenant in the Building to provide
for an extension of said tenant's expiration of Lease Term for a reasonable
period of time to facilitate said tenant's vacation of its Premises.
53. PARKING.
(a) Tenant shall lease two (2) parking stalls in the
Building's parking garage (the "Parking Garage") in connection with the
8th Floor, an additional two (2) parking stalls in connection with the
9th Floor, an additional (two) parking stalls in connection with the
19th Floor, an additional four (4) parking stalls in connection with the
12th and 13th Floors, an additional six (6) parking stalls in connection with
the 20th and 21st Floors and an additional two (2) parking stalls in
connection with the 22nd Floor, for an aggregate total of eighteen (18)
parking stalls (the "Parking Stalls"). If Tenant leases any additional full
floor space in the Building, Tenant shall be granted the option to lease up
to two (2) additional parking stalls for each additional full floor space.
(b) Tenant shall execute the standard form parking
lease for the Parking Garage with Landlord's third-party contractor (the
"Garage Operator") within ten (10) days after mutual execution of the Lease
(the "Parking Lease"). The lease term for a Parking Stall(s) shall commence
on the Term Commencement Date of the floor to which the Parking Stall(s) is
attributable. Tenant's use of the Parking Stalls shall subject to all other
terms and conditions contained in the Parking Lease, including without
limitation the then-current monthly rental rate per parking stall, as the
same may be adjusted from time to time by Landlord's third-party contractor.
Landlord agrees that Tenant, to the extent Tenant has a Parking Garage
monthly pass, shall have access to the Parking Garage twenty-four (24) hours
per day, seven (7) days a week. From time to time during the Term, Tenant
shall be entitled to decrease (on thirty (30) days' prior notice to the third
party parking operators with a copy to Landlord) or increase (on three (3)
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months' prior notice to such third party parking operator with a copy to
Landlord) its number of parking spaces up to the maximum number of Parking
Stalls specified above.
54. BICYCLE PARKING.
(a) Landlord shall cooperate to provide Tenant access
to bicycle parking in the Parking Garage, subject to the rights of the Garage
Operator under the terms of its lease for the Parking Garage. Any additional
compliance with applicable codes, regulations and law required as a result of
such bicycle parking shall be Tenant's obligation, including, but not limited
to fees and expenses in connection therewith.
(b) If Tenant provides bicycle parking in Tenant's
Premises, all bicycles are required to enter to and from the Building through
the Parking Garage. Tenant and Tenant's employees, agents or contractors may
only bring bicycles to and from the Premises via the freight elevator.
(c) In the event that Tenant or Tenant's employees,
agents or contractors bring bicycles to and from Tenant's Premises through
the lobby areas of the Building, as opposed to through the Parking Garage and
the freight elevator, Landlord shall provide written notice of such activity
to Tenant ("Bicycle Violation Notice"). After the fifth Bicycle Violation
Notice in any consecutive twelve (12) month period, Tenant shall be required
to reimburse Landlord for the cost of providing a security guard in the lobby
area in order to enforce Tenant's obligations under this Section. In the
event that a security guard is required pursuant to this Section, Landlord
and Tenant shall review the necessity for such guard after twelve (12) months
after the security guard is first required.
55. INTERNAL FIRE STAIRS. Tenant shall have the right to use
the internal stair cases and internal fire-stairs in the Building for travel
between the floors in the Premises, subject to any applicable governmental
law, regulation or code related restriction. Tenant shall be responsible for
any and all costs in connection with the installation of access code key pads
on each floor and all code related expenses if any.
56. DEDICATED ELEVATOR. Landlord shall provide Tenant with
access to one elevator in the annex portion of the Building that exclusively
services and provides direct access to the floors on which the Premises are
located, including, but not limited to the 22nd Floor. Notwithstanding
anything to the contrary contained herein, in the event that Tenant occupies
less than one hundred thousand (100,000) rentable square feet in the
Building, Tenant shall no longer be entitled to an elevator that exclusively
services Tenant's Premises. For purposes of this Section 56, space shall be
deemed "occupied" by Tenant if, and only if, such space is leased to Tenant
and, such space is not subject to a sublease or assignment by Tenant or any
other form of occupancy agreement between Tenant and any third party.
57. YEAR 2000. Landlord agrees that Landlord shall pay all
costs necessary to correct any problems, and will cause such problems to be
corrected, in the operation of the operating systems in the Building
resulting from any deficiencies in the computer software of the Building to
convert to dates after January 1, 2000. All such costs shall be excluded from
Expenses.
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IN WITNESS WHEREOF, the parties have executed this Lease on the
respective dates indicated below:
TENANT: LANDLORD:
Xoom.com, Inc., a OAIC Bush Street, LLC,
Delaware corporation a Delaware limited liability company
By: /s/ Chris Kitze By: /s/ Gregory Breskin
---------------------------- ------------------------------
Name: Chris Kitze Name: Gregory Breskin
-------------------------- -----------------------------
Its: Chairman Its: Vice President
--------------------------- -----------------------------
Date of Execution: 8/9/99 Date of Execution: Aug. 9, 1999
------------- --------------
By: /s/ John Harbottle By: /s/ Christine Reich
----------------------------- ---------------------------------
Name: John Harbottle Name: Christine Reich
--------------------------- -------------------------------
Its: CFO Its: President
---------------------------- --------------------------------
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EXHIBIT A
DIAGRAMS OF FLOOR PLANS
FOR 8TH, 9TH, 12TH, 13TH,
19TH, 20TH, 21ST, AND 22ND FLOORS
A-1
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EXHIBIT B
RULES AND REGULATIONS
1. The sidewalks, halls, passages, exits, entrances, shopping
malls, elevators, escalators and stairways of the Building shall not be
obstructed by any of the tenants or used by them for any purpose other than for
ingress to and egress from their respective premises. The halls, passages,
exits, entrances, shopping malls, elevators, escalators and stairways are not
for the general public, and Landlord shall in all cases retain the right to
control and prevent access thereto of all persons whose presence in the judgment
of Landlord would be prejudicial to the safety, character, reputation and
interests of the Building and its tenants, provided that nothing herein
contained shall be construed to prevent such access to persons with whom any
tenant normally deals in the ordinary course of its business, unless such
persons are engaged in illegal activities. No tenant and no employee or invitee
of any tenant shall go upon the roof of the Building except such roof or portion
thereof as may be contiguous to the premises of a particular tenant and may be
designated in writing by Landlord as a roof deck or roof garden area; provided
that, so long as Tenant remains in occupancy of the 22nd Floor, the loggia area
on the 22nd Floor shall be designated a roof garden area for Tenant's exclusive
use.
2. No sign, placard, picture, name, advertisement or notice
visible from the exterior of any tenant's premises shall be inscribed, painted,
affixed or otherwise displayed by any tenant on any part of the Building without
the prior written consent of Landlord. Landlord will adopt and furnish to
tenants general guidelines relating to signs inside the Building on the office
floors. Each tenant shall conform to such guidelines, but may request approval
of Landlord for modifications, which approval will not be unreasonably withheld.
All approved signs or lettering on doors shall be printed, painted, affixed or
inscribed at the expense of the Tenant by a person approved by Landlord, which
approval will not be unreasonably withheld. Material visible from outside the
Building will not be permitted.
3. The Premises shall not be used for the storage of merchandise
held for sale to the general public or for lodging; provided that, the Premises
may be used for the incidental sale of merchandise to Tenant's employees of up
to Twenty-Five Thousand Dollars ($25,000) per year, subject to the rights of
other current and future tenants in the Building and subject to Tenant's
compliance with all applicable laws, including, without limitation, zoning laws,
with respect thereto. No cooking shall be done or permitted by any tenant on the
premises, except that use by the tenant of food and beverage vending machines
and Underwriters' Laboratory approved microwave ovens and equipment for brewing
coffee, tea, hot chocolate and similar beverages shall be permitted, provided
that such use is in accordance with all applicable federal, state and city laws,
codes, ordinances, rules and regulations.
B-1
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4. No tenant shall employ any person or persons other than
Landlord's janitorial service for the purpose of cleaning the premises, unless
otherwise approved by Landlord; provided, that, Tenant may contract for
additional janitorial services, subject to Landlord's reasonable approval
thereof. No person or persons other than those approved by Landlord shall be
permitted to enter the Building for the purpose of cleaning the same. No tenant
shall cause any unnecessary labor by reason of such tenant's carelessness or
indifference in the preservation of good order and cleanliness. Janitor service
will not be furnished on nights when rooms are occupied after 9:30 p.m. unless,
by prior arrangement with Landlord, service is extended to a later hour for
specifically designated rooms.
5. Landlord will furnish each tenant, free of charge, with two
keys to each door lock in its premises. Landlord may make a reasonable charge
for any additional keys. No tenant shall have any keys made. No tenant shall
alter any lock or install a new or additional lock or any bolt on any door of
its premises without the prior consent of Landlord. The tenant shall in each
case furnish Landlord with a key for any such lock. Each tenant, upon the
termination of its tenancy, shall deliver to Landlord all keys to doors in the
Building which shall have been furnished to the tenant.
6. The freight elevator shall be available for use by all tenants
in the Building, subject to such reasonable scheduling as Landlord in its
discretion shall deem appropriate. The persons employed to move such equipment
in or out of the Building must be acceptable to Landlord. Landlord shall have
the right to prescribe the weight, size and position of all equipment,
materials, furniture or other property brought into the Building. Heavy objects
shall, if considered necessary by Landlord, stand on wood strips of such
thickness as is necessary to properly distribute the weight. Landlord will not
be responsible for loss of or damage to any such property from any cause, and
all damage done to the Building by moving or maintaining such property shall be
repaired at the expense of the tenant.
7. No tenant shall use or keep in the premises or the Building
any kerosene, gasoline or inflammable or combustible fluid or material other
than limited quantities thereof reasonably necessary for the operation or
maintenance of office equipment, or, without Landlord's prior approval, use any
method of heating or air conditioning other than that supplied by Landlord.
8. No tenant shall use or keep or permit to be used or kept any
foul or noxious gas or substance in the premises, or permit or suffer the
premises to be occupied or used in a manner offensive or objectionable to
Landlord or other occupants of the Building by reason of noise, odors or
vibrations, or interfere in any way with other tenants or those having business
therein.
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9. Landlord reserves the right to exclude from the Building
between the hours of 6 p.m. and 7 a.m. and at all hours on Saturdays, Sundays
and legal holidays all persons who do not present a pass signed by Landlord to
the Building. Landlord will furnish passes to persons for whom any tenant
requests the same in writing. Each tenant shall be responsible for all persons
for whom it requests passes and shall be liable to Landlord for all acts of such
persons. Landlord shall in no case be liable for damages for any error with
regard to the admission to or exclusion from the Building of any person. In the
case of invasion, mob, riot, public excitement or other circumstances rendering
such action advisable in Landlord's opinion, Landlord reserves the right to
prevent access to the Building during the continuance of the same by such action
as Landlord may deem appropriate.
11. The directories of the Building, located in the two lobby
areas, will be provided for the display of the name and location of tenants and
a reasonable number of the principal officers and employees of tenants (based on
a pro rata share between all of the tenants in the Building, the denominator of
which shall be the total directory space available in the two lobby areas), and
Landlord reserves the right to exclude any other names therefrom. Tenant shall
have the right to directory space in both of the lobby area directories, but in
no event shall Tenant have more than its pro rata share of directory space. Any
additional name which a tenant desires to have added to the directory shall be
subject to Landlord's approval and may be subject to a charge therefor.
12. No curtains, draperies, blinds, shutters, shades, screens or
other coverings, hangings or decorations shall be attached to, hung or placed
in, or used in connection with any exterior window in the Building without the
prior consent of Landlord. If consented to by Landlord, such items shall be
installed on the office side of the standard window covering and shall in no way
be visible from the exterior of the Building.
13. Messenger services and suppliers of bottled water, food,
beverages, and other products or services shall be subject to such reasonable
regulations as may be adopted by Landlord. Landlord may establish a central
receiving station in the Building for delivery and pick-up by all messenger
services, and may limit delivery and pick-up at tenant premises to Building
personnel.
14. Each tenant shall see that the doors of its premises are
closed and locked and that all water faucets or apparatus, cooking facilities
and office equipment (excluding office equipment required to be operative at all
times) are shut off before the tenant or its employees leave the premises at
night, so as to prevent waste or damage, and for any default or carelessness in
this regard the tenant shall be responsible for any damage sustained by other
tenants or occupants of the Building or Landlord. On multiple-tenancy floors,
all tenants shall keep the doors to the Building corridors closed at all times
except for ingress and egress.
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15. The toilets, urinals, wash bowls and other rest room
facilities shall not be used for any purpose other than that for which they were
constructed, no foreign substance of any kind whatsoever shall be thrown
therein, and the expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by the tenant who, or whose employees or
invitees, shall have caused it.
16. Except with the prior consent of Landlord, no tenant shall
sell, or permit the sale at retail, of newspapers, magazines, periodicals,
theater tickets or any other goods or merchandise to the general public in or on
the premises, nor shall any tenant carry on, or permit or allow any employee or
other person to carry on, the business of stenography, typewriting or any
similar business or from the premises for the service or accommodation of
occupants of any other portion of the Building, nor shall the premise of any
tenant be used for manufacturing of any kind, or any business or activity other
than that specifically provided for in such tenant's lease.
17. No tenant shall install any antenna, loudspeaker, or other
device on the roof or exterior walls of the Building.
18. There shall not be used in any portion of the Building, by any
tenant or its invitees, any hand trucks or other material handling equipment
except those equipped with rubber tires and side guards unless otherwise
approved by Landlord.
19. Each tenant shall store its refuse within its premises. No
material shall be placed in the refuse boxes or receptacles if such material is
of such nature that it may not be disposed of in the ordinary and customary
manner of removing and disposing of refuse in the City and County of San
Francisco without being in violation of any law or ordinance governing such
disposal. All refuse disposal shall be made only through entryways and elevators
provided for such purposes and at such times as Landlord shall designate.
20. Canvassing, peddling, soliciting, and distribution of
handbills or any other written materials in the Building are prohibited, and
each tenant shall cooperate to prevent the same.
21. The requirements of the tenants will be attended to only upon
application by telephone or in person at the office of the Building. Employees
of Landlord shall not perform any work or do anything outside of their regular
duties unless under special instructions from Landlord.
22. Landlord may waive any one or more of these Rules and
Regulations for the benefit of any particular tenant or tenants, but no such
waiver by Landlord shall be construed as a wavier of such Rules and Regulations
in favor of any other tenant or tenants, nor prevent Landlord from thereafter
enforcing any such Rules and Regulations against any or all of the tenants of
the Building.
23. These Rules and Regulations are in addition to, and shall not
be construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of any lease of premises in the Building.
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24. Landlord reserves the right to make such other and reasonable
rules and regulations as in its judgment may from time to time be needed for the
safety, care and cleanliness of the Building, and for the preservation of good
order therein.
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EXHIBIT C
Work Letter and Construction Agreement
THIS AGREEMENT supplements the Lease dated for reference
purposes only as of August 13, 1999 (the "Lease") executed concurrently
herewith by OAIC BUSH STREET, LLC, a Delaware limited liability company, as
Landlord, and Xoom.com, Inc., a Delaware corporation , as Tenant.
1. GENERAL.
(a) The purpose of this Work Letter and Construction
Agreement ("Work Letter") is to set forth how the Tenant Work (as defined
below) in the Premises (as defined in the Lease) are to be designed and
constructed, who will pay for the design and construction of the Tenant Work,
and the time schedule for completion of the Tenant Work.
(b) Except as otherwise defined in this Work Letter, all
capitalized terms utilized in this Work Letter shall have the meanings set forth
in the Lease.
(c) The provisions of the Lease, except where clearly
inconsistent or inapplicable to this Work Letter, are incorporated into this
Work Letter.
(d) Except for the Tenant Work and Base Building Work (as
defined below) to be constructed pursuant to this Work Letter, Tenant accepts
the Premises in their "AS IS" condition and acknowledges that it has had an
opportunity to inspect the Premises and the Building prior to signing the Lease
and finds them to be in satisfactory condition. Notwithstanding anything to the
contrary in the preceding sentence, Landlord hereby assumes full responsibility,
at its sole cost, for the removal, encapsulation or other maintenance of
asbestos which is encountered during the construction of Part I of the Base
Building Work and the Tenant Work, provided that the decision to remove,
encapsulate or perform other maintenance of such Hazardous Materials shall be
made at Landlord's sole discretion and Landlord shall notify Tenant in writing
upon substantial completion of Part I of the Base Building Work of the
location(s) of encapsulated Hazardous Materials.
2. PREPARATION OF PLANS; SELECTION OF DESIGNER/ARCHITECT.
(a) Tenant shall have the right to engage the services
of SMP/SHG Incorporated as Tenant's space planner ("Tenant's Space Planner")
and as Tenant's architect ("Tenant's Architect") for purposes of the Work
Letter, including the design and initial space planning of each respective
floor of the Premises which design shall address the tenant improvements,
exclusive of the Base Building Work, to be initially installed in each floor
of the Premises pursuant to this Work Letter (such tenant improvements are
referred to herein as the "Tenant Work"). Tenant and Tenant's Space Planner
shall take such action as is reasonably necessary and otherwise shall
cooperate with Landlord's architect, RMW Architects ("Landlord's Architect"),
in Tenant's Space Planner's preparation of a "hard line space/pricing plan"
for each floor of the Premises (collectively, the "Space Plan"), which shall
contain all of the information on SCHEDULE 1, attached hereto and made a part
hereof. Tenant's Space Planner
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shall complete and deliver for Landlord's review (i) an initial draft of the
Space Plan for the 12th Floor, 13th Floor, 19th Floor, 20th Floor and 21st
Floor, (ii) an initial draft of the Space Plan for the 22nd Floor, and (iii)
in the case of either an initial Sublessee Build Out or a Tenant Build Out
(as these terms are defined in Section 3 of the Lease) on the 8th Floor and
9th Floor, an initial draft of the Space Plan for the 8th Floor and 9th Floor
after the expiration of the Availability Notice Period (as defined in Section
3 of the Lease). Landlord, within ten (10) business days after its receipt of
the initial draft of a Space Plan for a particular floor in the Premises,
shall provide Tenant's Space Planner with its written approval or disapproval
thereof (with a statement of the specific reasons therefor in the event of
any such disapproval). Tenant's Space Planner, within five (5) business days
after receipt of Landlord's response, shall produce a final Space Plan for
said floor that shall reflect any comments/corrections proposed by Landlord.
(b) After Landlord's approval of the final Space Plan for
each respective floor of the Premises, Tenant's Architect shall have prepared
and shall have submitted the same to Landlord or its representative for its
review and approval, an initial draft of engineered mechanical and electrical
drawings and architectural working drawings, which show all doors, light
fixtures, electrical outlets, telephone outlets and other improvements to the
respective floor of the Premises beyond the demolition, asbestos abatement,
remediation and/or other maintenance (as set forth in SCHEDULE 2), to the extent
not already completed, and shell and core improvements to be provided by
Landlord as described in SCHEDULE 2 attached hereto (such demolition, asbestos
abatement and/or remediation and shell and core improvements are referred to
herein as the "Base Building Work"), as well as all wall finishes and floor
coverings (collectively, the "Tenant's Plans"). Landlord, within five (5)
business days after its receipt of the initial draft of the Tenant's Plans for a
particular floor in the Premises, shall provide Tenant's Architect with its
written approval or disapproval thereof (with a statement of the specific
reasons therefore in the event of such disapproval). Tenant's Architect shall
produce final Tenant's Plans for said floor of the Premises that shall reflect
any comments/corrections proposed by Landlord, and shall deliver four (4) copies
of the same to Landlord and Tenant for their final approval. All mechanical,
electrical and plumbing related design work in connection with the Tenant Work
must be completed by a consultant designated or approved in writing by Landlord
in Landlord's sole discretion.
(c) The parties acknowledge and agree that the Tenant
Work shown on the Tenant's Plans must (i) be compatible with the Base Building
Work and the design, construction and equipment of the Building, (ii) comply
with all applicable laws, rules, regulations and ordinances, including, without
limitation, the provisions of the American with Disabilities Act, 42 U.S.C.
Section 12101 et. seq. and any governmental regulations with respect thereto
(the "ADA"), Title 24 of the California Administrative Code ("Title 24") and
other similar federal, state and local laws and regulations, including, without
limitation, the requirements under the ADA for the purposes of "public
accommodations" (as that term is used in the ADA) and (iii) be approved by
Landlord.
(d) The term "Tenant Work" shall mean all improvements,
standard or special, shown on the Tenant's Plans. Tenant shall be responsible
for the suitability for the Tenant's needs and business of the design and
function of all the Tenant Work. Landlord's review and approval of any plans or
specifications shall not constitute, and Landlord shall not be deemed to have
made, a representation or warranty as to the compliance of the Tenant Work
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with any and all applicable state and local laws, statutes, codes, rules or
regulations including regulations or procedures promulgated by Landlord (the
"Laws") or as to the suitability of the Premises, or the Tenant Work for
Tenant's needs. Accordingly, notwithstanding the fact that any plans are
reviewed and/or approved by Landlord or its architect, engineers and
consultants, and notwithstanding any advice or assistance which may be
rendered to Tenant by Landlord or Landlord's architect, engineers and
consultants, Landlord shall have no liability whatsoever in connection
therewith and shall not be responsible for any omissions or errors contained
in such plans.
(e) Notwithstanding anything to the contrary contained
herein, in the event that there is any portion of the Tenant Work which Landlord
will require Tenant to remove at the end of the Lease Term, Landlord shall
notify Tenant in writing of such at the time that Landlord reviews the initial
draft of the Tenant's Plans for a particular floor pursuant to Section 2(b)
above. At the end of the Lease Term (as the same may be extended under the terms
of the Lease), Tenant shall remove said Tenant Work at Tenant's sole cost and
expense and repair and restore the Premises to their condition at the
commencement of the Lease.
3. BASE BUILDING WORK AS CONSTRUCTION BY LANDLORD.
(a) Promptly after the full execution and delivery of
this Lease by Landlord and Tenant, Landlord shall proceed to complete the Base
Building Work in each floor of the Premises; provided that Landlord shall
proceed to complete the Base Building Work on the 8th Floor and 9th Floor
promptly after the current tenant vacates said floors or, in the event Tenant
elects to sublease the 8th Floor and/or 9th Floor pursuant to Section 3 of the
Lease, after such subtenant vacates said floor(s). The "Base Building Work"
shall consist of only the items (the cost of which shall not be deducted from
the Tenant Improvement Allowance as hereafter defined) set forth in SCHEDULE 2.
As set forth on SCHEDULE 2 the Base Building Work shall be divided into Part I
and Part II. Part I of the Base Building Work shall be completed by Landlord
prior to the Premises Delivery Date for the applicable floor. Part II of the
Base Building Work shall be completed by Landlord concurrently with the
completion of the Tenant Work for the applicable floor, provided that Landlord
shall use reasonable efforts to not interfere with the completion of the Tenant
Work.
(b) Landlord shall give Tenant or shall cause its space
planner, architect or management company to give Tenant notice of the date on
which Part I of the Base Building Work is substantially completed with respect
to a particular floor. Tenant shall have three (3) business days following said
notice, to inspect said Base Building Work and supply Landlord with a written
list (the "Tenant Part I List") setting forth material objections with respect
to said Base Building Work, which list shall be subject to Landlord's reasonable
approval. In the event that no such Tenant Part I List is provided by Tenant
within said three (3) business day period, Tenant shall be deemed to have
accepted the Part I of Base Building Work for the particular floor. Landlord
shall use commercially reasonable efforts to complete all of the items on the
Tenant Part I List, as reasonably approved by Landlord, as expeditiously as
possible. Following Landlord's Architect's certification that all items which
are required to be completed in connection with the Part I of the Base Building
Work have been completed for said floor, Part I of the Base Building Work for
the particular floor shall be deemed "Substantially Complete",
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and Landlord shall have no further obligation with respect to completion of
Part I of the Base Building Work on said floor.
(c) Upon Substantial Completion of Part I of the Base Building
Work for a particular floor in the Premises, Landlord shall deliver said
floor, Part I of the Base Building Work and any additional completed Base
Building Work on said floor to Tenant (the "Premises Delivery Date"), and
Tenant shall accept said floor, Part I of the Base Building Work and any
additional completed Base Building Work on said floor from Landlord in their
presently existing, "as-is" condition. The Premises Delivery date for the
19th Floor shall be the date of the mutual execution of the Lease (the "19th
Floor Premises Delivery Date"); the Premises Delivery date for the 12th and
13th Floors shall be on or before September 1, 1999 (the "12th and 13th
Floors Premises Delivery Date"); the Premises Delivery date for the 20th and
21st Floors shall be on or before October 1, 1999 (the "20th and 21st Floors
Premises Delivery Date"), and; the Premises Delivery date for the 22nd Floor
shall be on or before June 1, 2000 (the "22nd Floor Premises Delivery Date").
With respect to the 8th and 9th Floor, in the case of a Sublessee Build Out
on either the 8th Floor or 9th Floor, the Premises Delivery Date shall be on
or before the expiration of the Availability Notice Period (as defined in
Section 3 of the Lease). In the case of an initial Tenant Build Out on the
8th Floor or 9th Floor, the Premises Delivery Date shall be on or before six
(6) weeks after the expiration of the Availability Notice Period. Each
Premises Delivery Date referenced above is subject to delay by an Event of
Force Majeure (as defined below)
(d) Prior to the completion by Tenant of all Tenant Work on a
particular floor and the occurrence of the Term Commencement Date for each
floor in the Premises, subject to an Event of Force Majeure, Landlord shall
substantially complete all Base Building Work for said floor. Landlord shall
give Tenant or shall cause its space planner, architect or management company
to give Tenant notice of the date on which the Base Building Work is
substantially completed with respect to a particular floor. Tenant shall have
three (3) business days following said notice, to inspect said Base Building
Work and supply Landlord with a written list (the "Tenant Base Building Work
List") setting forth material objections with respect to said Base Building
Work, which list shall be subject to Landlord's reasonable approval. In the
event that no such Tenant Base Building Work List is provided by Tenant
within said three (3) business day period, Tenant shall be deemed to have
accepted the Base Building Work for the particular floor. Landlord shall use
commercially reasonable efforts to complete all of the items on the Tenant
Part I List, as reasonably approved by Landlord, as expeditiously as
possible. Following Landlord's Architect's certification that all items which
are required to be completed in connection with the Base Building Work have
been completed for said floor, said Base Building Work shall be deemed
"Substantially Completed" and Landlord shall have no further obligation with
respect to completion of the Base Building Work on said floor. Upon
Substantial Completion of the Base Building Work on a particular floor,
Tenant shall accept said floor and the Base Building Work on said floor from
Landlord in their presently existing, "as-is" condition.
(e) Any failure of Landlord to attach a cold air equipment into
the HVAC system servicing the Premises shall not be deemed a breach of
Landlord's obligation, so long as such attachment is complete by April 1,
2000, and so long as said failure does not adversely affect the heat and free
air exchange in the Premises
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4. CONSTRUCTION.
(a) Promptly after the Tenant's Plans for each
respective floor in the Premises are approved by Landlord, Tenant shall (i)
enter into a construction contract, in the form of the contract attached
hereto as SCHEDULE 3 (the "OAIC Construction Contract"), with a contractor
reasonably satisfactory to Landlord and chosen from a list of approved
Contractors supplied by Landlord (the "Contractor"), pursuant to which the
Tenant Work shall be constructed, (ii) obtain or cause to be obtained all
necessary building permits and other governmental approvals in connection
with the Tenant Work, and (iii) promptly proceed with due diligence to cause
to be constructed and installed, as soon as reasonably practicable,
consistent with industry custom and practice, the Tenant Work indicated on
the Tenant's Plans. Landlord will provide to Tenant's Architect path of
travel drawings to the Premises only, wet sealed by Landlord's Architect
suitable for permitting. Landlord shall not be responsible for any delays in
the approval of the Tenant's Plans or the issuance of necessary permits and
approvals. Tenant hereby agrees that neither Landlord nor Landlord's
consultants shall be responsible for obtaining any building permit or other
approvals or certificate of occupancy for the Premises and that obtaining the
same shall be Tenant's responsibility; provided, however, that Landlord shall
cooperate with Tenant in executing permit applications and performing other
ministerial acts reasonably necessary to enable Tenant to obtain any such
permit or certificate of occupancy. No changes, modifications or alterations
in the Tenant's Plans may be made without the prior written consent of
Landlord, which consent may not be unreasonably withheld, provided the
requested change, modification or alteration does not adversely affect the
Building's structure, systems, equipment, security system or appearance. If
the requested change, modification or alteration adversely affects the
Building's structure, systems, equipment, security system or appearance, then
Landlord may withhold its consent thereto in Landlord's sole discretion.
(b) Notwithstanding anything to the contrary contained herein,
prior to commencing the Tenant Work, Tenant shall obtain one hundred percent
(100%) performance and labor and material payment bonds, in form and
substance satisfactory to Landlord, issued by a company acceptable to
Landlord, naming Landlord as an obligee and issued in respect of the contract
with the Contractor and each subcontractor.
(c) Trash removal in connection with the Tenant Work will be
done continually at Tenant's cost and expense. No trash, or other debris, or
other waste may be deposited at any time outside the Premises other than in
areas which Landlord designates for dumpsters or temporary consolidation of
trash prior to collection. If Tenant does not deposit its trash in accordance
with this Section 4(c), Landlord may remove it at Tenant's expense, which
expense shall equal the cost of removal plus twenty-five percent (25%) of
such costs as a management fee.
(d) Storage of Contractor's construction material, tools and
equipment shall be confined within the Premises and in areas designated for
such purpose by the general contractor and approved by Landlord. In no event
shall any materials or debris be stored outside of the Premises, except as
otherwise provided herein.
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(e) Landlord shall have the right to post in a conspicuous
location on Tenant's Premises, as well as record with the City and County of
San Francisco, a Notice of Nonresponsibility.
(f) Without limiting the generality of the foregoing, any work
to be performed outside of the Premises shall be coordinated with Landlord,
and shall be subjected to reasonable scheduling requirements of Landlord, and
Tenant shall coordinate all after-hours, weekend work and use of the elevator
with Landlord.
(g) During construction of the Tenant Work, there shall be no
charge for Tenant's or Tenant's space planner's, architect's, contractors' or
engineers' use of designated elevators, water, electricity, HVAC, or security
services during Building Hours. In the event that Tenant shall require said
services after Building Hours there shall be an after hours charge.
Currently, the costs for HVAC, elevator and security services outside of
Building Hours, are approximately sixty dollars ($60) per hour, thirty
dollars ($30) per hour, and thirty-five dollars ($35) per hour, respectively,
which costs are subject to adjustment by Landlord from time to time in
Landlord's discretion. In addition, in the event that Tenant shall require
parking stalls during the construction of the Tenant Work on a particular
floor, Tenant shall be entitled to enter into the parking agreements
described in Section 52 of the Lease prior to the Term Commencement Date for
said floor pursuant to a separate agreement with the third party contractor
operating the parking garage.
5. SUBSTANTIAL COMPLETION AND PUNCH LIST ITEMS.
(a) "Substantial Completion" as used in the Lease and
this Work Letter with respect to the Tenant Work shall mean that (i) the
applicable improvements are substantially complete in accordance with the
requirements of this Work Letter, (ii) the architect designing and
supervising such improvements has certified that such improvements are
substantially complete in accordance with the applicable plans and
specifications and the Landlord's Architect, if different from the design
architect, shall have concurred in such certification, (iii) to the extent
applicable the contractor performing such work has issued a notice of
completion under the applicable contract, (iv) to the extent applicable, a
temporary certificate of occupancy or other governmental approval has been
issued in connection with such work. A floor in the Premises may be deemed
Substantially Complete even though improvements in certain portions of the
Building outside the Premises have not been fully completed and even though
Tenant's personal property may have not been installed in the Premises.
Notwithstanding anything to the contrary contained herein, in no event shall
the date of Substantial Completion of the Tenant Work for any floor in the
Premises be later than the Estimated Term Commencement Date for such floor,
subject to extension due to Landlord Delay or Force Majeure.
(b) Within ten (10) business days after Tenant's Architect's
certification of Substantial Completion for a particular floor of the
Premises, Landlord shall supply to Tenant a written punch list (the "Tenant
Work Punch List") setting forth the additional corrective and/or completion
work with respect to the Tenant Work for said floor which Landlord believes
is required to be performed pursuant to the Tenant's Plans. In the event that
no such Tenant Work Punch List is provided by Landlord within said ten (10)
business day period, Landlord shall be deemed to have accepted the Tenant
Work for the particular floor. Tenant shall use
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commercially reasonable efforts to complete all of the items on the Tenant
Work Punch List as expeditiously as possible; and the Tenant Work Punch List
items shall not be deemed complete until so certified in writing by
Landlord's Architect.
(c) Notice of Completion: Copy of Record Set of Plans. Within
ten (10) days after completion of construction of the Tenant Work, Tenant
shall cause a Notice of Completion to be recorded in the office of the
Recorder of the County of San Francisco in accordance with Section 3093 of
the Civil Code of the State of California or any successor statute, and shall
furnish a copy thereof to Landlord upon such recordation. If Tenant fails to
do so, Landlord may execute and file the same on behalf of Tenant as Tenant's
agent for such purpose, at Tenant's sole cost and expense. At the conclusion
of construction, (i) Tenant shall cause the Contractor, (A) to update the
Tenant's Plans to reflect the completed construction, (B) to certify to the
best of their knowledge that the "record-set" of mylar as-built drawings
resulting from such update (which Tenant hereby agrees to have created) are
true and correct, which certification shall survive the expiration or
termination of this Lease, and (C) to deliver to Landlord two (2) sets of
copies of such record set of drawings within ninety (90) days following
issuance of a certificate of occupancy for the Premises, and (ii) Tenant
shall deliver to Landlord a copy of all warranties, guaranties, and operating
manuals and information relating to the improvements, equipment and systems
in the Premises.
6. COST OF DESIGN AND CONSTRUCTION.
(a) Tenant Improvement Allowance. Landlord shall bear
the cost of all Base Building Work, as set forth in this EXHIBIT C. In
addition, Landlord shall bear the cost of Tenant Work ("Tenant Work Cost") to
the extent such cost does not exceed an amount equal to the sum of Forty
Dollars ($40.00) per square foot of rentable area for the Tenant Work
allocable to the 8th Floor (a total of $1,009,320), Forty Dollars ($40.00)
per square foot of rentable area for the Tenant Work allocable to the 9th
Floor (a total of $1,041,680), Forty Dollars ($40.00) per square foot of
rentable area for the Tenant Work allocable to the 12th Floor (a total of
$1,041,640), Forty Dollars ($40.00) per square foot of rentable area for the
Tenant Work allocable to the 13th Floor (a total of $1,041,360), Ten Dollars
($10.00) per square foot of rentable area for the Tenant Work allocable to
the 19th Floor (a total of $241,570), Forty One Dollars ($41.00) per square
foot of rentable area for the Tenant Work allocable to the 20th Floor (a
total of $907,043), Forty One Dollars ($41.00) per square foot of rentable
area for the Tenant Work allocable to the 21st Floor (a total of $768,791),
and Forty One Dollars ($41.00) per square foot of rentable area for the
Tenant Work allocable to the 22nd Floor (a total of $750,874) (collectively,
the "Tenant Improvement Allowance"). In addition, Landlord shall provide
Tenant with an additional Five Thousand Dollars ($5,000) of Tenant
Improvement Allowance beyond the total of the amounts set forth above.
Notwithstanding anything to the contrary contained herein, the Tenant
Improvement Allowance allocated to the 8th Floor and 9th Floor are subject to
the provisions set forth in Section 3 of the Lease. In the event that the
Tenant Improvement Allowance allocable to each floor of the Premises is not
entirely exhausted by the Tenant Work Cost for the particular floor in the
Premises, Tenant shall be entitled to apply the remaining Tenant Improvement
Allowance for such floor towards the Tenant Work Cost of a different floor in
the Premises. Notwithstanding the foregoing and subject to the provisions of
Section 7 below, at least eighty percent (80%) of the Tenant Improvement
Allowance allocated to each floor of the Premises must be used towards the
Tenant Work Cost on the particular floor to which the allowance is
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<PAGE>
allocated. In the event the Tenant Work Cost exceeds the Tenant Improvement
Allowance, Tenant shall bear the cost of such excess and shall pay such
excess. Landlord shall retain any and all unused portions of the Tenant
Improvement Allowance. The Tenant Improvement Allowance shall be only for the
following items and costs (collectively the "Tenant Improvement Allowance
Items"):
(1) The costs of preliminary space planning, the hard line space
plan and the Tenant's Plans for the Premises, and the cost of Landlord's
review thereof;
(2) All costs of obtaining building permits and other necessary
authorizations from all governmental authorities having jurisdiction;
(3) The cost of any changes to the Construction Drawings or
Tenant Work required by Code;
(4) Sales and use taxes and fees required under ADA, Title 24 or
such other similar federal, state or local laws;
(5) All other costs, if any, Landlord reasonably anticipates
Landlord will incur in connection with the construction of the Tenant Work;
and
(6) All direct and indirect costs of procuring and installing
the Tenant Work in the Premises, including any construction fee for overhead
and profit, a construction review fee charged by Landlord (i) in connection
with the 12th, 13th, 19th, 20th, 21st and 22nd Floors in the amount of three
percent (3%) of the total cost of the design and construction of the Tenant
Work (to which fee Tenant hereby consents), provided that said fee shall not
exceed One Hundred Fifty Thousand Dollars ($150,000), and (ii) in connection
with the 8th Floor and 9th Floor, in the amount of three percent (3%) of the
total cost of the design and constructions of the Tenant Work (to which fee
Tenant hereby consents (collectively, the "Construction Review Fee"), and all
reasonable costs and fees, including without limitation, architect's and
engineer's fees, incurred by Landlord in its review and approval of the
preliminary space planning, the hard line space plan and the Tenant's Plans
for the Premises and any amendments or modifications thereto, which costs and
fees shall be in addition to the Construction Review Fee. Landlord shall have
the right to pay itself the Construction Review Fee directly from the Tenant
Improvement Allowance without further authorization from Tenant.
(b) To the extent required under Section 8(b) below, Tenant
shall bear the cost of any increase in the cost of the design or construction
of the Tenant Work incurred by reason of (i) any Tenant Delay or (ii) any
Change Order requested by Tenant or any governmental agency following
preparation and approval of the final Tenant's Plans.
7. DISBURSEMENT OF TENANT IMPROVEMENT ALLOWANCE.
(a) During the construction of the Tenant Work, Landlord
shall make monthly disbursements of the Tenant Improvement Allowance for
Tenant Improvement Allowance Items for the benefit of Tenant and shall
authorize the release of monies for the benefit of Tenant as follows:
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(b) MONTHLY DISBURSEMENTS. On or before the first day of each
calendar month, as determined by Landlord, during the construction of the
Tenant Work (or such other date as Landlord may designate), Tenant shall
deliver to Landlord: (i) a request for payment of the "Contractor," as that
term is defined in Section 4(a) of this Work Letter, approved by Tenant, in a
form to be provided by Landlord, showing the schedule, by trade, of
percentage of completion of the Tenant Work in the Premises, detailing the
portion of the work completed and the portion not completed; (ii) invoices
from (i) the Contractor and (ii) all subcontractors, laborers, materialmen
and suppliers used by Tenant or Contractor (together with the Contractor,
"Tenant's Agents"), for labor rendered and materials delivered to the
Premises; (iii) executed mechanic's lien releases from all of Tenant's Agents
which shall comply with the appropriate provisions, as reasonably determined
by Landlord, of California Civil Code Section 3262(d); (iv) a check payable
to Landlord in the amount of Tenant's Share (as defined in Section 7(d)
below) of the particular amount of the payment requested by the Contractor,
(v) the information and documentation set forth on SCHEDULE 4 attached
hereto, and (vi) all other information reasonably requested by Landlord ((i),
(ii), (iii), (iv), (v) and (vi) are collectively referred to as a "Complete
Payment Request"). Tenant's request for payment shall be deemed Tenant's
acceptance and approval of the work furnished and/or the materials supplied
as set forth in Tenant's payment request. Thereafter, provided that Tenant
has fulfilled each and every covenant in this Work Letter to date, and Tenant
is not in default under the terms of this Work Letter or Lease, Landlord
shall deliver a check to Tenant made jointly payable to Contractor and Tenant
in payment of the lesser of: (A) the amounts so requested by Tenant, less a
ten percent (10%) retention (the aggregate amount of such retentions to be
known as the "FINAL RETENTION"), and (B) the balance of any remaining
available portion of the Landlord's Allowance (not including the Final
Retention), provided that Landlord does not dispute any request for payment
based on non-compliance of any work with the Plans, or due to any substandard
work, or for any other reason. Landlord's payment of such amounts shall not
be deemed Landlord's approval or acceptance of the work furnished or
materials supplied as set forth in Tenant's payment request. Payment shall be
made to Tenant within thirty (30) days after Landlord's receipt of a Complete
Payment Request.
(c) FINAL RETENTION. Subject to the provisions of this Work
Letter, a check for the Final Retention payable jointly to Tenant and
Contractor shall be delivered by Landlord to Tenant provided the following
conditions have been satisfied: (i) the construction of the Tenant Work has
been completed, (ii)Tenant has delivered to Landlord properly executed
mechanics lien releases in compliance with both California Civil Code Section
3262(d)(2) and either Section 3262(d)(3) or Section 3262(d)(4) from Tenant's
Agents or any other person or entity entitled to file a mechanic's lien,
(iii) Landlord has determined that no substandard work exists which adversely
affects the mechanical, electrical, plumbing, heating, ventilating and air
conditioning, life-safety or other systems of the Building, the curtain wall
of the Building, the structure or exterior appearance of the Building, or any
other tenant's use of such other tenant's leased premises in the Building,
(iv) Tenant has delivered to Landlord a certificate of occupancy for the
Premises, (v) Tenant has not done and has not permitted anything to be done
that would affect the coverage of any performance or labor and material
payment bonds required pursuant to Section 4(b) above, (vi) the information
and documentation set forth on SCHEDULE 4 attached hereto, (vii) Tenant
delivers to Landlord a certificate, in a form reasonably acceptable to
Landlord, certifying that the construction of the Tenant Work in the Premises
has been
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substantially completed, and (viii) Tenant has complied with all of the other
terms of the Work Letter, including, without limitation, Section 7(b).
(d) FINAL COSTS. Prior to the commencement of the construction
of the Tenant Work, and after Tenant has accepted all bids for the Tenant
Work, Tenant shall provide Landlord with a detailed breakdown, by trade, of
the final costs to be incurred or which have been incurred, as set forth more
particularly in Sections 6(a)(1) - (6), above, in connection with the design
and construction of the Tenant Work to be performed by or at the direction of
Tenant or the Contractor, which costs form a basis for the amount of the
Contract (the "FINAL COSTS"). Thereafter, in connection with each payment
requested by Tenant pursuant to Section 7(a) above, Tenant shall pay a
fraction (the "Tenants Share") of such payment, which fraction shall have the
Final Costs less the Tenant Improvement Allowance and the Construction Review
Fee as the numerator and the Final Costs as the denominator. By way of
example, if Tenant Improvement Allowance were $1,000 and the Final Costs were
$1,200, Tenant's share would be 1/6. In the event that, after the Final Costs
have been delivered by Tenant, to Landlord, the costs relating to the design
and construction of the Tenant Work shall change, any additional costs
necessary to such design and construction in excess of the Final Costs, shall
be paid by Tenant to Landlord immediately or at Landlord's option, Tenant
shall make payments for such additional costs out of its own funds, but
Tenant shall continue to provide Landlord with the documents described in
Section 7(a) of this Work Letter, above, for Landlord's approval, prior to
Tenant paying such costs.
(e) OTHER TERMS. Landlord shall only be obligated to make
disbursements from the Tenant Improvement Allowance to the extent costs are
incurred by Tenant for Tenant Improvement Allowance Items and disbursement of
the Landlord's Allowance shall be subject to the provisions of paragraphs
7(b) and (c) above.
8. CHANGES AND DELAYS.
(a) Tenant may request any change, addition or
alteration in the Tenant Work as shown on the final approved Tenant's Plans
(a "Change Order") by delivery of a written request therefor and complete
working drawings showing the proposed change, addition or alteration to
Landlord. Landlord shall not unreasonably withhold its consent to any such
Change Order, provided the requested change does not adversely affect the
Building's structure, systems, equipment, security system or appearance. If
the requested change adversely affects the Building's structure, systems,
equipment, security system or appearance, then Landlord may withhold its
consent to such Change Order in Landlord's sole discretion. Following receipt
of such request, Landlord shall promptly give Tenant a written description of
the changes in such Change Order, if any, required for approval thereof by
Landlord. The standards and conditions of Landlord's approval for Tenant's
Plans shall also apply to Change Orders.
(b) "Tenant Delay" shall include, but not be limited to, any
delay in the Rent Commencement Date for each respective floor of the Premises
or in the completion of the Tenant Work or Base Building Work resulting from
(i) a request of Tenant to delay the same, (ii) Tenant's failure to comply
with the provisions of this Work Letter, including failure to provide
information or give approvals within the time periods specified herein and
failure to pay any sums payable by Tenant within the time periods specified
herein, (iii) Tenant's default under
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Section 14(c) hereof, (iv) any other act or omission of Tenant, (iv) any
additional time, as reasonably determined by Landlord, required for ordering,
receiving, fabricating and/or installing items of material or other
components of the Tenant Work, including, without limitation, millwork, which
unreasonably delay Substantial Completion of the Tenant Work and which are
not used for construction of Building standard tenant improvement work in the
remainder of the Building, (v) the submission by Tenant of a request for any
Change Order following preparation and approval of the Tenant's Plans, (vi)
any additional time, as reasonably determined by Landlord, required for
implementation of any Change Order with respect to the Tenant Work, or (vii)
any delay caused by Tenant's Space Planner. Notwithstanding the foregoing
provisions of this Section 8(b), a Tenant Delay shall not include any delay
resulting from a Landlord Delay or a Force Majeure Event. In the event that a
Tenant Delay occurs, Tenant shall immediately pay to Landlord as additional
rent the total costs and any expenses occasioned by such delay, including,
without limitation, any costs and expenses attributable to increases in labor
or materials or incurred by Landlord to review and approve a Change Order.
Landlord must give Tenant written notice of claims of Tenant Delay within
five (5) days of the occurrence of the event on which such Tenant Delay claim
is based. If such notice is not provided within the said five (5) day period,
Landlord shall has no right to claim a Tenant Delay for any period prior to
five (5) days prior to the date on which such notice is given.
(c) "Landlord Delay" shall be any delay in the completion of the
Tenant Work resulting from (i) a request of Landlord to delay the same, (ii)
Landlord requirement of any Change Order to the Tenant Work following
commencement of the Base Building Work and any additional time required for
implementation of such Change Order, (iii) Landlord's failure to comply with
the provisions of this Work Letter, including failure to provide information
or give approvals within the time periods specified herein and failure to pay
any sums payable by Landlord within the time periods specified herein, (iv)
material and unreasonable interference by Landlord, its agents or contractors
with the completion of the Tenant Work, which interference objectively
precludes construction of Tenant Work in the Premises by any person, or which
interference relates to access by Tenant, its agents and contractors to the
Building and/or the Premises or any Building facilities (including loading
docks and freight elevators) or service (including temporary power and
parking areas) during normal construction hours, or the use thereof during
normal construction hours, (v) Landlord's failure to complete Part I of the
Base Building Work to Tenant by the designated Premises Delivery Date for a
particular floor, or (vi) Landlord's failure to complete Part II of the Base
Building Work to Tenant on or before Landlord's receipt of Tenant's
Architect's certification of Substantial Completion pursuant to Section 5(b)
above. Notwithstanding the foregoing, a Landlord Delay shall not include any
delay resulting from a Tenant Delay or a Force Majeure Event. Tenant must
give Landlord written notice of claims of Landlord Delay within five (5) days
of each day on which such Landlord Delay is claimed to have occurred. If such
notice is not provided within the said five (5) day period, Tenant shall lose
the right to receive a delay of the Term Commencement Date on a particular
floor for such day or days. Notwithstanding anything to the contrary
contained herein, any delay in completion of either Part I or Part II of the
Base Building Work resulting from the failure of Tenant to deliver those
plans required pursuant to Section 2 above within a time period so as not to
impede any design, demolition or construction work to be done by Landlord
shall not be deemed a Landlord Delay
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(d) "Force Majeure Event" shall mean any delay in the Base
Building Work or the Tenant Work caused directly or indirectly, by reason of
acts of God, governmental restrictions, strikes, labor disturbances,
shortages of materials or supplies or any other cause or event beyond
Landlord's or Tenant's reasonable control. Unless any of the causes or events
listed above permanently renders completion of the Base Building Work or the
Tenant Work on a particular floor in the Premises impossible or
impracticable, however, such cause or event shall only suspend the time for
performance of, and shall not discharge or release the parties from, their
obligations hereunder.
9. INDEMNITY.
Tenant's indemnity of Landlord as set forth in Section 14
of this Lease shall also apply with respect to any and all costs, losses,
damages, injuries and liabilities related in any way to any act or omission
of Tenant or Tenant's Agents, or anyone directly or indirectly employed by
any of them, or in connection with Tenant's non-payment of any amount arising
out of the Tenant Work and/or Tenant's disapproval of all or any portion of
any request for payment. Such indemnity by Tenant, as set forth in Section 14
of this Lease, shall also apply with respect to any and all costs, losses,
damages, injuries and liabilities related in any way to Landlord's
performance of any ministerial acts reasonably necessary (i) to permit Tenant
to complete the Tenant Work, and (ii) to enable Tenant to obtain any building
permit or certificate of occupancy for the Premises.
10. REQUIREMENTS OF TENANT'S AGENTS.
Each of Tenant's Agents shall guarantee to Tenant and for
the benefit of Landlord that the portion of the Tenant Work for which it is
responsible shall be free from any defects in workmanship and materials for a
period of not less than one (1) year from the date of completion thereof.
Each of Tenant's Agents shall be responsible for the replacement or repair,
without additional charge, of all work done or furnished in accordance with
its contract that shall become defective within one (1) year after the later
to occur of (i) completion of the work performed by such contractor or
subcontractors and (ii) the Rent Commencement Date for the floor upon which
the work was done. The correction of such work shall include, without
additional charge, all additional expenses and damages incurred in connection
with such removal or replacement of all or any part of the Tenant Work,
and/or the Building and/or common areas that may be damaged or disturbed
thereby. All such warranties or guarantees as to materials or workmanship of
or with respect to the Tenant Work shall be contained in the Contract or
subcontract and shall be written such that such guarantees or warranties
shall inure to the benefit of both Landlord and Tenant, as their respective
interests may appear, and can be directly enforced by either Tenant covenants
to give to Landlord any assignment or other assurances which may be necessary
to effect such right of direct enforcement.
11. MEETINGS.
Commencing upon mutual execution of the Lease, Tenant shall
hold weekly meetings at a reasonable time with the Contractor regarding the
progress of the preparation of Plans and the construction of the Tenant Work,
which meetings shall be held at a location mutually designated by Landlord
and Tenant, and Landlord and/or its agents shall receive prior
12
<PAGE>
notice of, and shall have the right to attend, all such meetings, and, upon
Landlord's request, certain of Tenant's Agents shall attend such meetings. In
addition, minutes shall be taken at all such meetings, a copy of which
minutes shall be promptly delivered to Landlord. One such meeting each month
shall include the review of Contractor's current request for payment.
12. AMERICAN WITH DISABILITIES ACT AND SIMILAR ACTS.
Except as set forth in Section 2 of this Work Letter with
respect to the Base Building Work, Tenant shall reimburse Landlord upon
demand for any and all costs incurred by Landlord to comply with the
provisions of the ADA, Title 24 and other similar federal, state and local
laws and regulations, including, without limitation, any alterations required
under the ADA for the purposes of "public accommodations" (as that term is
used in the ADA), and alterations required under the ADA, Title 24 or such
other similar federal, state or local laws and regulations in any other
portion of the floor on which the Premises are located or any other portion
of the Building arising out of Tenant's specific use of the Premises, or any
aspect of Tenant's Work, other than customary ADA upgrades outside of the
Premises required in connection with customary and ordinary general office
uses.
13. EARLY ACCESS.
Tenant may, with Landlord's written consent which shall be
granted or withheld in Landlord's reasonable discretion, enter the premises
prior to the term commencement date of a particular floor in the premises
solely for the purposes of installing tenant's personal property and
equipment as long as such entry will not interfere with the orderly
construction and completion of the premises. Tenant shall notify Landlord of
its desired time(s) of entry and shall submit for Landlord's approval the
scope of the work to be performed and the name(s) of the contractor(s) who
will perform such work. Tenant shall have all applicable insurance and shall
comply with all building rules and regulations. Tenant hereby indemnifies and
agrees to protect, defend and hold Landlord, Landlord's property manager, any
mortgagee, ground lessor or beneficiary of a deed of trust related to the
premises or the building, and any officers, agents or employees of any
thereof, from and against any claims, liabilities or causes of action
(including claims for worker's compensation) of any nature whatsoever,
together with reasonable attorneys' fees for counsel of Landlord's choice,
arising out of or in connection with such entry onto the premises or the
installation of Tenant's personal property or equipment (including but not
limited to claims of breach of warranty, personal injury or property damage).
Landlord shall have the right, in Landlord's sole and exclusive discretion,
to settle, compromise, or otherwise dispose of any and all such suits, claims
and actions.
14. MISCELLANEOUS.
(a) Tenant's Representative. Tenant has designated Katherine
Andreasen as its sole representative with respect to the matters set forth in
this Work Letter, who shall have full authority and responsibility to act on
behalf of the Tenant as required in this Work Letter.
(b) Landlord's Representative. Landlord has designated Frank
Miskus as its sole representative with respect to the matters set forth in
this Work Letter, who, until further
13
<PAGE>
notice to Tenant, shall have full authority and responsibility to act on
behalf of the Landlord as required in this Work Letter.
(c) Tenant's Lease Default. Notwithstanding any provision to
the contrary contained in this Lease, if an event of default as described in
the Lease or this Work Letter has occurred at any time on or before the
Substantial Completion of the Premises, then (i) in addition to all other
rights and remedies granted to Landlord pursuant to the Lease, Landlord shall
have the right to withhold payment of all or any portion of the Tenant
Improvement Allowance and/or Landlord may cause any contractor to cease the
construction of the Premises (in which case, Tenant shall be responsible for
any delay in the Substantial Completion of the Base Building Work and/or the
Tenant Work caused by such work stoppage), and (ii) all other obligations of
Landlord under the terms of this Work Letter shall be suspended until such
time as such default is cured pursuant to the terms of this Lease (in which
case, Tenant shall be responsible for any delay in the Substantial Completion
of the Premises caused by such inaction by Landlord).
(d) Merger. Except as expressly set forth in this Work Letter
or in the Lease, Landlord has no other agreement with Tenant and has no other
obligation to do any work or pay any amounts with respect to the Premises.
Any other work in the Premises which may be permitted by Landlord pursuant to
the terms and conditions of the Lease shall be done at Tenant's sole cost and
expense and in accordance with the terms and conditions of the Lease.
(e) Applicability of Work Letter. This Work Letter shall not be
deemed applicable to any additional space added to the original Premises at
any time or from time to time, whether by any options under the Lease or
otherwise, or to any portion of the original Premises or any additions
thereto in the event of damage or destruction of the Premises, condemnation
of the Premises, or renewal or extension of the initial term of the Lease,
whether by any options under the Lease or otherwise, unless expressly so
provided in the Lease or any amendment or supplement thereto.
(f) Execution in Conjunction with Lease. This Work Letter is
being executed in conjunction with the Lease and is subject to each and every
term and condition thereof, including, without limitation, the limitations of
Landlord's liability set forth therein.
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IN WITNESS WHEREOF, the parties have executed this Work Letter on the
respective dates indicated below:
TENANT: LANDLORD:
Xoom.com, Inc., a OAIC Bush Street, LLC,
Delaware corporation a Delaware limited liability company
By: /s/ Chris Kitze By: /s/ Gregory Breskin
---------------------------- ------------------------------
Name: Chris Kitze Name: Gregory Breskin
---------------------------- ------------------------------
Its: Chairman Its: Vice President
---------------------------- ------------------------------
Date of Execution: 8/9/99 Date of Execution: Aug. 9, 1999
-------------- ---------------
By: /s/ John Harbottle By: /s/ Christine Reich
---------------------------- ------------------------------
Name: John Harbottle Name: Christine Reich
---------------------------- ------------------------------
Its: CFO Its: President
---------------------------- ------------------------------
15
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SCHEDULE 1
INFORMATION IN THE SPACE PLAN
1. Location and type of all partitions.
2. Location and type of all doors. Indicate hardware and provide
keying schedule.
3. Location and type of glass partitions, windows, and doors.
Indicate framing and reference full-height partitions.
4. Critical dimensions necessary for construction, with
indication of required clearances.
5. Location and types of all electrical items: outlets,
switches, telephone outlets and lighting.
6. Location and type of equipment that will require special
electrical requirements. Provide manufacturers'
specifications for use and operation, including heat output.
7. Location, weight per square foot, and description of any
heavy equipment or filing system.
8. Requirements for special air-conditioning or ventilation.
9. Location and type of plumbing.
10. Location and type of kitchen equipment.
11. Location, type and color of floor covering, wall covering,
paint and finishes.
DETAILS SHOWING
1. All millwork with verified dimensions of all equipment to be
built in.
2. Corridor entrance.
3. Bracing or support of special walls, glass partitions, etc.,
if desired.
If not included with the plans, Tenant's engineer will design
all support or bracing required at Tenant's expense.
ADDITIONAL INFORMATION
1. Provide Landlord with Title 24 energy calculations with
submittal of the Final Plans.
<PAGE>
SCHEDULE 2
BASE BUILDING WORK
Landlord and Tenant acknowledge and agree that no Base Building Work will be
required by Landlord in connection with the 19th Floor
PART I
1. Demolition of the 8th, 9th, 12th, 13th, 20th, 21st and 22nd floor of
the Premises; provided that, in the event that Tenant initially
elects a Sublessee Build Out for the 8th and/or 9th Floors pursuant
to Section 3 of this Lease, Landlord shall not be required to
perform any demolition work on the 8th and/or 9th Floor; provided
further that, in the event that Tenant initially elects a Sublessee
Build Out for the 8th and/or 9th Floors and later elects to proceed
with the Tenant Build Out pursuant to Section 3 of this Lease,
Landlord shall have six (6) weeks to complete the demolition on said
floor.
2. As set forth in Section 1(d) of this Work Letter, Landlord shall
remove, encapsulate or perform other maintenance of asbestos which is
encountered during the construction of Part I of the Base Building
Work, excluding the 19th Floor, provided that the decision to remove,
encapsulate or perform other maintenance of such Hazardous Materials
shall be made at Landlord's sole discretion. Tenant may request
additional information with respect to asbestos removal through the
Building management office.
3. In connection with the 22nd Floor, Landlord shall perform additional
work under this Part I substantially in accordance with the proposed
plan set forth on Exhibit A-1 attached hereto (the "22nd Floor
Proposed Plan") and the loggia window and door treatment conceptual
plan set forth on Exhibit A-2 attached hereto (the "22nd Floor
Loggia Window and Door Conceptual Plan").
4. All exterior windows, transoms and related hardware shall be operable,
excluding those windows which are permanently sealed.
5. Landlord shall deliver to Tenant within thirty (30) days of the Lease
Execution Date, the base Building specifications for the HVAC system.
6. In connection with the 21st Floor, Landlord shall also demolish the
existing railing in the former library area.
PART II
1. Landlord shall provide adequate electrical service, including main
breakers and transformers, as required, up to maximum of five (5)
watts per square foot.
2. Landlord shall provide the main sprinkler loop and branch distribution
for the Premises on an unoccupied basis.
<PAGE>
3. The Landlord shall supply the existing HVAC loop on the 8th Floor, 9th
Floor, 12th Floor and 13th Floor and install the HVAC loop on the 20th
Floor, 21st Floor and 22nd Floor. Tenant shall be responsible for all
distribution.
4. Landlord shall provide the main life safety loop on the 8th, 9th, 12th
Floor, 13th Floor, 20th Floor, 21st Floor, and 22nd Floor, including
devices as required for unoccupied space.
5. A men's restroom and women's restroom on each floor of the Premises,
excluding the 19th Floor, in a location, with designs and finishes,
all designated by Landlord in Landlord's sole discretion, shall
comply with Title 24, and ADA as required by the City of San
Francisco code.
<PAGE>
EXHIBIT A-1 TO SCHEDULE 2
DIAGRAM OF 22ND FLOOR PROPOSED PLAN
<PAGE>
EXHIBIT A-2 TO SCHEDULE 2
DIAGRAM OF 22ND FLOOR LOGGIA WINDOW AND DOOR CONCEPTUAL PLAN
<PAGE>
SCHEDULE 3
OAIC CONSTRUCTION AGREEMENT
[SEE ATTACHED]
<PAGE>
CONSTRUCTION AGREEMENT
BETWEEN
OWNER:
AND
CONTRACTOR:
CONTRACT NO.:
X ON CALL SINGLE PROJECT
-- ---
JOB/LOCATION: ON CALL
------------------------------------------------------------------
1
<PAGE>
CONSTRUCTION AGREEMENT
PROJECT NAME: ___________________ (if for single project)
THIS CONSTRUCTION AGREEMENT (this "Agreement"), is made and entered into
as of the ____ day of _________, 1998, by and between __________, a _________
(the "Owner") and _____________, a ________________ (the "Contractor").
In consideration of the mutual covenants hereinafter set forth, and
other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
Capitalized terms which are used in this Agreement and not otherwise
defined in this Agreement shall have the meanings given to such terms in the
General Conditions. Unless otherwise specified, references herein to numbered
articles and paragraphs are to those in this Agreement. This Agreement shall
be referred to throughout the Contract Documents as the "Agreement". The
following terms shall have the meanings set forth below:
2
<PAGE>
1.1 "COMMENCEMENT DATE" shall mean the earlier of ____(ON CALL)___ or
the date fixed in a Notice to Proceed to be delivered by Owner to Contractor
after the date of this Agreement if this Agreement is for an individual
project or service. If this Agreement if for continuing (on-call) Work (as
defined hereafter) on multiple projects or continuing (on-call) services, the
Commencement Date shall be the date fixed in the job specific Work
Authorization forms delivered by Owner to Contractor after the date of this
Agreement. The Commencement Date shall be the date from which any deadlines
for completion of the Work or portions thereof shall be measured, provided,
however no notice to proceed and no Commencement Date may become effective
until after all applicable permits have been issued unless the Contractor,
any subcontractor, and/or any of their respective agents, representatives,
suppliers or any other person or entity directly or indirectly employed,
utilized and/or controlled by any of them are responsible for obtaining the
applicable permits.
1.2 "CONTRACT DOCUMENTS" shall mean this Agreement, the General
Conditions, any special, supplementary or other conditions set forth on
EXHIBIT B (collectively, "Special Conditions"), the Drawings, the
Specifications, all Addenda (except portions thereof relating purely to the
bidding form or bidding procedure), all Modifications and all other documents
enumerated on EXHIBIT A attached hereto. The Contract Documents collectively
form the Contract and all are fully a part thereof as if attached to this
Agreement or repeated herein.
1.3 "CONTRACT SUM" shall mean: As full compensation for Contractor's
performance of its Work (as defined hereafter) under this Agreement, Owner
will pay Contractor in accordance with the terms and conditions of this
Agreement, only the amount authorized in writing in accordance with the basis
of compensation and fees noted below; or as agreed to by Owner and
Contractor. Such compensation shall include all taxes incurred by Contractor
in its performance of its Work:
( ) Lump Sum. The sum of ___________________ Dollars ($ ),
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subject to additions and deductions as provided in the Contract Documents.
( ) Hourly Rate as set forth in the attached ADDENDUM 1, subject to
additions and deductions as provided in the Contract Documents.
( ) In accordance with the fees described in ADDENDUM 1, subject to
additions and deductions as provided in the Contract Documents.
(X) As detailed on job specific Work Authorization, subject to
additions and deductions as provided in the Contract Documents.
1.4 "CONTRACT TIME" shall have the meaning ascribed thereto in
Section 5.1 below.
1.5 "GENERAL CONDITIONS" shall mean the General Conditions of the
Contract for Construction attached hereto as EXHIBIT C.
1.6 "PROJECT" shall mean for Work at the following location(s):
_______(ON CALL)_______________________________________________________________
unless this Agreement is for continuing (on-call) Work (as defined hereafter)
on multiple project or continuing (on-call) services in which case the
Project shall mean the Work at the locations set forth in the job specific
Work Authorization form.
1.7 "NATURE OF PROJECT" this Agreement is for:
( ) An individual project or an individual service contract:
Project or contract name: ________________
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Owner's contract number: _______________
Owner's assigned job number: ____________
(X) Continuing (on-call) Work (as defined hereafter) on multiple
projects, or continuing (on-call) services. Each project or request for Work
must be individually described in the job specific Work Authorization on the
Owner approved form, which must include a description of (i) the location(s),
(ii) scope(s) of Work, (iii) timetables (i.e. Commencement Date, Substantial
Completion Dates and Milestone Dates), (iv) basis of compensation, and
(v) Authorization(s) to Proceed on the Owner approved form. The terms and
conditions of the agreement shall apply separately to each project or
service. One or more project(s) or service(s) may be in process at any time,
or during certain periods of time no project or service may be in process.
1.8 "SUBSTANTIAL COMPLETION DATE" shall be ___(ON CALL)____ if this
Agreement is for an individual project or service. If this Agreement if for
continuing (on-call) Work on multiple project or continuing (on-call)
services, the Substantial Completion Date shall be as set forth in the job
specific Work Authorization form. In either event, the Substantial Completion
Date is subject to adjustment in accordance with the Contract Documents.
1.9 "WORK" shall mean and include the totality of the obligations
imposed upon the Contractor by this Agreement and by all other provisions of
the Contract Documents, including, without limitation, the structures to be
built, the materials, equipment and supplies to be provided and the labor to
be performed pursuant to the Contract Documents as set forth on Exhibit A
attached hereto which are incorporated herein by reference.
5
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1.10 "MILESTONE DATES" shall be as set forth on Exhibit D attached
hereto unless this Agreement is for continuing (on-call) Work on multiple
projects or continuing (on-call) services in which case the Milestone Dates
shall be as set forth in the job specific Work Authorization form.
1.11 "SCHEDULE OF VALUES" shall allocate the entire Contract Sum among
the various portions of the Work, generally following the Uniform
Construction Index (CSI) cost analysis format as set forth on Exhibit J
attached hereto.
ARTICLE 2
PERFORMANCE OF THE WORK
2.1 The Contractor shall fully perform and complete the Work in
compliance with the terms and provisions of the Contract. In connection
therewith, the Contractor shall perform or cause to be performed all actions
and shall provide and pay for all materials, tools, equipment, supplies,
labor and professional and non-professional services, and shall perform all
other acts and supply all other things necessary to fully and properly
perform and complete the Work pursuant to the Contract Documents.
2.2 The Contractor shall be solely responsible for the construction
means, methods, techniques and procedures utilized to perform and complete
the Work.
ARTICLE 3
OWNER'S REPRESENTATIVE
3.1 The Owner's authorized representative (herein referred to as the
"Owner's Representative") shall be Ken Kuropatkin; provided, however, that
the Owner may, without liability to the Contractor, unilaterally amend this
Article from time to time by designating a
6
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different person or organization to act as its representative and so advising
the Contractor in writing, at which time the person or organization so
designated shall be the Owner's Representative for purposes of the Contract.
ARTICLE 4
THE ARCHITECT/ENGINEER
4.1 The Architect/Engineer for the Project (herein referred to as the
"A/E" or "Architect") is ___(ON CALL)_____, whose mailing address is
_______________, _________________ unless otherwise set forth in the job
specific Work Authorization, if applicable; provided, however, that the Owner
may, without liability to the Contractor, unilaterally amend this Article
from time to time by designating a different person or organization to act as
the A/E and so advising the Contractor in writing, at which time the person
or organization so designated shall be the A/E for the purposes of the
Contract.
ARTICLE 5
TIME OF COMMENCEMENT AND COMPLETION
5.1 The Contractor will commence the Work promptly on the Commencement
Date and shall substantially complete all Work on or before the Substantial
Completion Date (such period of time is herein referred to as the "Contract
Time") and in accordance with such interim milestone dates (herein referred
to as the "Milestones Dates") as may be specified in the Contract Documents.
The Contract Time and such Milestones Dates are of the essence of the
Contract.
5.2 If any Work is performed by the Contractor prior to the execution
of this Agreement based on receipt of a written Notice to Proceed, all such
Work performed shall be in accordance with and governed by the Contract
Documents.
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ARTICLE 6
CONTRACT SUM
6.1 Provided that the Contractor strictly and completely performs all
of its obligations under the Contract Documents in a timely manner, and
subject only to additions and deductions by Change Order or as otherwise
provided in the General Conditions, the Owner shall pay to the Contractor, at
the times and in the installments hereinafter specified, the Contract Sum, to
cover the Contractor's profit, general overhead and all costs and expenses of
any nature whatsoever (including, without limitation, taxes, labor and
materials), and any increases in said costs and expenses, incurred by the
Contractor in connection with the performance of the Work, all of which costs
and expenses shall be borne solely by the Contractor.
ARTICLE 7
APPLICATIONS FOR PAYMENT
7.1 The Contractor shall, on or before the fifth (5th) day of each
calendar month (the "Payment Application Date"), deliver to the Owner an
Application for Payment in accordance with the provisions of Article 9 of the
General Conditions. Each Application for Payment submitted by the Contractor
shall cover one calendar month, and shall cover a period commencing on the
first day of the previous month and ending on the last day of the previous
month. The Schedule of Values shall be used as a basis for the Contractor's
Applications for Payment and the review thereof by Owner. Each Application
for Payment shall include the Schedule of Values and be further broken down
by facility, labor and material, all as required by the Owner.
ARTICLE 8
8
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PROGRESS PAYMENTS AND FINAL PAYMENT
OF THE CONTRACT SUM
8.1 Based on the Contractor's Application for Payment, the Approved
Schedule of Values and the approval of the Application for Payment issued by
the Owner pursuant to Article 9 of the General Conditions, the Owner shall
make monthly payments to the Contractor on account of the Contract Sum. Such
monthly payment shall be made on or before the thirtieth (30th) day after
receipt by the Owner of the Contractor's Application for Payment, and of all
documentation, in proper form, to substantiate the amount owed, whichever is
later; provided, however, that the Owner shall have no obligation to make
payment as aforesaid if Owner withholds approval thereof as permitted under
Subparagraph 9.3.1 of the General Conditions or if the Contractor has not
submitted to the Owner with its Application for Payment all required
documentation. Each such monthly payment shall be in an amount equal to
ninety percent (90%) of the net amount allowed the Contractor for labor,
materials and equipment incorporated or used in the Work through the Payment
Application Date (or suitably stored at the Job Site and verified by material
invoice), as indicated in the Owner's approval of the Application for
Payment, after deducting any sums withheld by the Owner pursuant to the
Contract Documents and the aggregate of all previous payments to the
Contractor on account of the Contract Sum. Upon Substantial Completion of the
Work, as set forth in Subparagraph 1.12 of the General Conditions, the Owner
shall pay to the Contractor an amount necessary to increase the aggregate
payments theretofore made to the Contractor on account of the Contract Sum to
ninety percent (90%) of the Contract Sum, less such retainage as the Owner
shall determine is necessary for all incomplete Work, unsettled claims or
other matters for which the Owner is permitted to withhold under the General
Conditions.
8.1.1 All monthly payments approved by Owner in accordance with this
Agreement not paid on or before the thirtieth (30th) day after receipt by the
Owner of the Contractor's Application for Payment shall accrue interest at
the rate of Twelve Percent (12%) per year.
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8.2 Final payment, constituting the entire unpaid balance of the
Contract Sum, shall be paid by the Owner to the Contractor within forty-five
(45) days after approval by the Owner of the final Application for Payment in
accordance with the General Conditions; provided, however, that final payment
shall in no event be due unless and until the Contractor shall have complied
with all provisions of the Contract Documents, including those contained in
Subparagraph 9.4.2 of the General Conditions. In addition, defects in the
Work discovered prior to final payment shall be treated as non-conforming
Work and shall be corrected by the Contractor prior to final payment and not
treated as warranty items.
ARTICLE 9
CONTRACTOR'S REPRESENTATIONS,
WARRANTIES AND COVENANTS
9.1 The Contractor hereby represents and warrants to the Owner that:
(a) Contractor is duly licensed to observe and perform the terms,
covenants, conditions and other provisions on its part to be observed or
performed hereunder;
(b) Contractor is experienced and skilled in the construction and
work of the type described in or required by the Contract Documents;
(c) All equipment and materials used in connection with the Work
shall be new (except if otherwise required by the Specifications), and the
equipment, the materials and the Work shall be in accordance with industry
standards, free from faults and defects and shall strictly conform to the
Contract Documents; and
10
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9.2 The Contractor accepts the contractual relationship established
between Contractor and the Owner. Contractor shall furnish its best skill and
judgment and cooperate with the Owner in furthering the interests of the
Owner. Contractor shall furnish efficient business administration and
superintendence to perform the Work in a workmanlike manner consistent with
industry standards and consistent with the Specifications.
9.3 Contractor hereby represents, warrants and covenants that (i)
Contractor has provided nothing of material value to any employee, agent or
independent contractor of Owner or any of its affiliates in connection with
this Agreement or any other agreement between Contractor and Owner and (ii)
Contractor shall not at any time provide anything of material value to any
employee, agent or independent contractor of Owner or any of its affiliates
in connection with this Agreement or any other agreement between Contractor
and Owner. Contractor hereby acknowledges and intends that Owner shall rely
upon Contractor's representations, warranties and covenants contained in this
Section, and Contractor shall execute a certificate confirming the foregoing
at Owner's request.
ARTICLE 10
TERMINATION
10.1 Termination of the Contract by the Owner, with or without
cause, and by the Contractor are provided for in Article 15 of the General
Conditions. If the Owner terminates the Contract pursuant to Paragraph 15.2
of the General Conditions, and the unpaid balance of the Contract Sum exceeds
the costs and expenses incurred by or on behalf of the Owner in finishing the
Work, including compensation for any additional architectural, engineering,
management and administrative services, such excess shall, upon the
completion of the Work, be paid to the Contractor. If such costs exceed such
unpaid balance, the Contractor shall pay the difference to the Owner upon
demand.
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ARTICLE 11
MISCELLANEOUS
11.1 No notice or other communication will be deemed given unless
sent in any of the manners, and to the persons, specified in this Section.
All notices and other communications hereunder will be in writing and will be
deemed given (a) upon receipt if delivered personally (unless subject to
clause (b)) or if mailed by registered or certified mail, (b) at noon on the
date after dispatch if sent by overnight courier or (c) upon the completion
of transmission (which is confirmed by telephone or by a statement generated
by the transmitting machine) if transmitted by telecopy or other means of
facsimile which provides immediate or near immediate transmission to
compatible equipment in the possession of the recipient, in any case to the
parties at the following addresses or telecopy numbers (or at such other
address or telecopy number for a party as will be specified by like notice):
if to Contractor:
Attention:
Telecopy Number: ( )
Confirmation Number: ( )
or if to the Owner:
c/o Ocwen Federal Bank FSB
The Forum, Suite 400
1675 Palm Beach Lakes Boulevard
West Palm Beach, FL 33401
Attention: William H. Stolberg
Telecopy Number: 561 682-8275
Confirmation Number: 561 682-8182
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cc: Secretary
Telecopy Number:
-------------------
Confirmation Number:
---------------
cc Owner's Representative: Compass Management and Leasing, Inc.
1 Front Street, Suite 1200
San Francisco, CA 94111
Attention:
Telecopy Number:
Confirmation Number:
11.2 Contractor will not use Owner's or any of Owner's affiliates'
names, marks, logos or other designations for any reason (including, without
limitation, advertising, publicity and promotional materials) without Owner's
express prior written consent in each instance, and all such names, marks,
logos and other designations of Owner will at all times be and remain the
sole and exclusive property of Owner. The foregoing notwithstanding,
Contractor will have the right to include representations of the design of
the Project, including photographs of the exterior and interior, among
Contractor's promotional materials. The Owner agrees to provide professional
credit for the Contractor on the construction sign and in the promotional
materials for the Project, if any, in a form chosen by Owner.
11.3 No payment made under this Agreement shall be conclusive
evidence of the performance of this Agreement by Contractor, either wholly or
in part, and no payment will be construed to be an acceptance of, or to
relieve Contractor of liability for, Contractor's failure to perform its
duties and obligations under this Agreement in accordance with the terms of
this Agreement.
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11.4 This Agreement and the respective rights and obligations of the
parties hereto will be governed and construed in all respects in accordance
with the laws of the state where the Job Site is located, without regard to
its conflicts of laws provisions.
11.5 Contractor will at all times be an independent contractor and
nothing in this Agreement will at any time be construed so as to create the
relationship of employer and employee, principal and agent, partnership or
joint venture as between Contractor and Owner. Contractor acknowledges that
it will have no authority to bind Owner to any contractual or other
obligation.
11.6 All rights available to either party under this Agreement, or
allowed it by law or equity, are and will be cumulative and may be exercised
separately or concurrently and from time to time without waiver of any other
remedies. No party hereto will be deemed to waive any right, power or
privilege under this Agreement unless such waiver is expressed in a written
instrument signed by the waiving party. The failure of any party hereto to
enforce any provision of this Agreement will in no way be construed as a
waiver of such provision or a right of such party to thereafter enforce such
provision or any other provision of this Agreement.
11.7 The Contract constitutes the entire agreement of the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements, understandings, representations, proposals, discussions and
communications, whether oral or in writing, between the parties with respect
to the subject matter of this Agreement. EXHIBIT A, EXHIBIT B, EXHIBIT C,
EXHIBIT D, EXHIBIT E, EXHIBIT F, EXHIBIT G, EXHIBIT H, EXHIBIT I, EXHIBIT J,
ADDENDUM 1, AND ADDENDUM 2 to this Agreement are each hereby incorporated
into this Agreement in their entirety by this reference.
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11.8 The Contract may not be amended or modified in any manner
except by a written agreement executed by each of the parties hereto.
11.9 If any provision of the Contract is held to be invalid or
unenforceable for any reason, such provision will be conformed to prevailing
law rather than voided, if possible, in order to achieve the intent of the
parties and, in any event, the remaining provisions of this Agreement will
remain in full force and effect and will be binding upon the parties hereto.
11.10 This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered will be deemed an original, but
all of which will together constitute one and the same agreement.
11.11 The enumeration and headings contained in this Agreement are
for convenience of reference only and will not control or affect the meaning
or interpretation of any of the provisions of this Agreement.
11.12 In its performance of its duties and obligations under the
Contract, Contractor and its employees and subcontractors will at all times
fully comply with all federal, state and local laws, statutes, ordinances,
rules, regulations and orders.
11.13 THE PARTIES HERETO HEREBY KNOWINGLY AND VOLUNTARILY WAIVE ANY
RIGHT WHICH EITHER OR BOTH OF THEM WILL HAVE TO RECEIVE A TRIAL BY JURY WITH
RESPECT TO ANY CLAIMS, CONTROVERSIES OR DISPUTES WHICH WILL ARISE OUT OF THIS
AGREEMENT OR THE SUBJECT MATTER HEREOF. ANY SUCH CLAIMS OR CONTROVERSIES OR
DISPUTES SHALL BE HEARD BY A JUDGE.
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11.14 Unless the context of this Agreement otherwise clearly
requires, (i) references in this Agreement to the plural include the
singular, the singular the plural, the masculine the feminine, the feminine
the masculine and the part the whole and (ii) the word "or" will not be
construed as exclusive and the word "including" will not be construed as
limiting.
11.15 All employees of Contractor, whether performing their
functions at Contractor's place of business, the Job Site or elsewhere,
shall, at all times, be and remain employees of Contractor and shall not be
employees of Owner. Contractor shall pay all wages, salaries and other
amounts due to its employees who perform on Contractor's behalf under this
Agreement or any other agreement between Owner and Contractor, and Contractor
shall be solely responsible for all reports, payments and other obligations
respecting such employees, including, without limitation, those obligations
relating to social security, income tax withholding, unemployment
compensation and workers' compensation.
16
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed the day and year first above written.
OWNER:
By: Compass Management and Leasing, Inc.
Its authorized representative
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
CONTRACTOR:
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
17
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LIST OF EXHIBITS
<TABLE>
<CAPTION>
<C> <S>
EXHIBIT A - List of Contract Documents
EXHIBIT B - Special Conditions
EXHIBIT C - General Conditions of the Contract for
Construction
EXHIBIT D - Milestone Dates
EXHIBIT E - Contractor's Guarantee to Owner
EXHIBIT F - Payment Bond
EXHIBIT G - Performance Bond
EXHIBIT H - Change Order Form
EXHIBIT I - Project Real Estate - Legal Description
EXHIBIT J - Schedule of Values
ADDENDUM 1 - Hourly Rate or Fee Schedule, if applicable
ADDENDUM 2 - Work Authorization Form
</TABLE>
18
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EXHIBIT A
LIST OF CONTRACT DOCUMENTS
19
<PAGE>
EXHIBIT B
SPECIAL CONDITIONS
C. Materials purchased by Owner
Certain Materials specified in the Contract Documents and to be incorporated
into the Work have been purchased by Owner. The cost for loading, transporting
and unloading these Materials at the Project site are included in the Contract
Sum. The list of materials purchased by the Owner is bound within this Agreement
and made apart of the Contract Documents between Owner and Contractor.
20
<PAGE>
EXHIBIT C
GENERAL CONDITIONS OF THE
CONTRACT FOR CONSTRUCTION
The General Conditions of the Contract for Construction is bound within this
Agreement and made apart of the Contract Documents between Owner and Contractor.
21
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================================================================================
GENERAL CONDITIONS
OF THE
CONTRACT FOR CONSTRUCTION
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE 1
DEFINITIONS
1.1 The Contract............................................................................................. 1
1.2 The Owner................................................................................................ 1
1.3 The Owner's Representative............................................................................... 1
1.4 The Contractor........................................................................................... 1
1.5 Subcontractor; Sub-subcontractor......................................................................... 2
1.6 The Job Site............................................................................................. 2
1.7 Work; Contract Time; Contract Sum........................................................................ 2
1.8 Provide.................................................................................................. 2
1.9 Plans.................................................................................................... 2
1.10 Specifications........................................................................................... 2
1.11 Substantial Completion................................................................................... 2
ARTICLE 2
THE CONTRACT DOCUMENTS
2.1 Execution, Intent and Interpretations.................................................................... 2
2.2 Copies Furnished, Ownership.............................................................................. 3
2.3 No Oral Waiver........................................................................................... 3
ARTICLE 3
OWNER
3.1 Easements................................................................................................ 4
3.2 Access................................................................................................... 4
ARTICLE 4
THE OWNER'S REPRESENTATIONS
4.1 Contractual Relationships................................................................................ 4
4.2 Role..................................................................................................... 4
ARTICLE 5
CONTRACTOR
5.1 Supervision and Construction Procedures.................................................................. 4
5.2 Materials and Equipment.................................................................................. 5
5.3 Warranty................................................................................................. 5
5.4 Taxes; Fees and Licenses; Royalties and Patents.......................................................... 5
5.5 Compliance with Laws..................................................................................... 6
5.6 Tests.................................................................................................... 6
5.7 Drawings................................................................................................. 6
5.8 Binders.................................................................................................. 7
5.9 Cleaning................................................................................................. 7
5.10 Start Up................................................................................................. 7
5.11 General.................................................................................................. 7
ARTICLE 6
SUBCONTRACTORS
6.1 General.................................................................................................. 7
6.2 Award of Subcontracts.................................................................................... 7
6.3 Subcontractual Relations................................................................................. 7
ARTICLE 7
SEPARATE CONTRACTS
7.1 Owner's Right to Award Separate Contracts................................................................ 8
7.2 Mutual Responsibility of Contractors..................................................................... 8
ARTICLE 8
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TIME
8.1 Definitions.............................................................................................. 9
8.2 Progress and Completion; Scheduling...................................................................... 9
8.3 Delays, Extensions of Time and Overtime.................................................................. 10
8.4 Temporary Suspension of Work............................................................................. 12
ARTICLE 9
PAYMENTS AND COMPLETION
9.1 Application for Payment; Passage of Title................................................................ 12
9.2 Approvals of Applications for Payment.................................................................... 12
9.3 Payments Withheld; Owner's Right to Make Direct Payments for Work; Failure of Payment.................... 13
9.4 Substantial Completion and Final Payment................................................................. 14
9.5 Beneficial Use and Occupancy; Partial Substantial Completion............................................. 15
ARTICLE 10
PROTECTION OF PERSONS AND PROPERTY
10.1 Responsibility for Safety and Health..................................................................... 16
10.2 Protection of Work and Property; Responsibility for Loss................................................. 17
10.3 Emergencies.............................................................................................. 17
10.4 Cleanup.................................................................................................. 18
10.5 Owner's Standards........................................................................................ 18
ARTICLE 11
INSURANCE
11.1 Insurance Provided by Owner.............................................................................. 18
11.2 Contractor's Insurance................................................................................... 18
11.3 Schedule of Insurance Coverages.......................................................................... 19
11.4 Contractors Equipment Policy............................................................................. 20
11.5 Release of Waiver........................................................................................ 20
11.6 Claims Made Policies..................................................................................... 20
11.7 Indemnification.......................................................................................... 21
ARTICLE 12
CHANGES IN THE WORK
12.1 Change Orders and Directives............................................................................. 21
12.2 Changes Requiring an Increase in Contract Sum............................................................ 22
12.3 Changes Requiring a Decrease in Contract Sum............................................................. 23
12.4 Disputes Regarding Changes............................................................................... 23
12.5 Audit Rights............................................................................................. 23
ARTICLE 13
CLAIMS
13.1 Claims for Extensions of Contract Time................................................................... 23
13.2 Claims for Increases in Contract Sum..................................................................... 23
13.3 Resolution of Claims..................................................................................... 24
13.4 No Other Claims.......................................................................................... 24
13.5 No Arbitration........................................................................................... 24
ARTICLE 14
UNCOVERING AND CORRECTION OF WORK;
OWNER'S RIGHT TO CARRY OUT WORK
14.1 Uncovering of Work....................................................................................... 24
14.2 Correction of Work....................................................................................... 24
14.3 Owner's Right to Carry Out Work.......................................................................... 25
14.4 Acceptance of Defective or Non-Conforming Work........................................................... 25
ARTICLE 15
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TERMINATION OF CONTRACT
15.1 Termination by Contractor................................................................................ 26
15.2 Termination by Owner for Cause........................................................................... 26
15.3 Termination by Owner Without Cause....................................................................... 27
ARTICLE 16
MISCELLANEOUS PROVISIONS
16.1 Governing Law............................................................................................ 27
16.2 Assignability; Successors and Assigns.................................................................... 27
16.3 Performance and Payment Bonds............................................................................ 27
16.4 Union Agreements......................................................................................... 27
16.5 General.................................................................................................. 28
16.6 Immigration Reform Control Act........................................................................... 28
16.7 Attorney's Fees.......................................................................................... 28
</TABLE>
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GENERAL CONDITIONS OF THE
CONTRACT FOR CONSTRUCTION
ARTICLE 1
DEFINITIONS
The following terms shall have the meanings set forth below in this Article
1. Any terms not otherwise defined in these General Conditions shall have the
meaning given to such terms in the Agreement.
1.1 THE CONTRACT. The Contract for Construction (referred to herein as the
"Contract") is the sum of all Contract Documents. It represents the entire and
integrated agreement between the Owner and the Contractor and supersedes all
prior negotiations, representations, understandings or agreements, either
written or oral. The Contract may be amended or modified only by a Modification.
1.1.1 CONTRACT DOCUMENTS. The Contract Documents are as defined
in the Agreement. The Contract Documents do not include bidding
documents, such as the Advertisement or Invitation to Bid, the
Instructions to Bidders, sample forms, the Contractor's Bid or
portions of Addenda relating to and to the extent that they may
relate to any of the bidding documents or bidding procedure.
1.1.2 ADDENDUM. An Addendum is a written or graphic instrument
issued by the Owner prior to the execution of the Agreement which
sets forth additions, deletions or other revisions to the Contract
Documents or clarifications thereof.
1.1.3 MODIFICATION. A Modification is any change or
modification to the Contract agreed to in writing by Owner and
Contractor. A Modification may be accomplished by: (a) a Change
Order; (b) a Directive or (c) any other written amendment to the
Contract signed by both parties. A Modification may be made only
after execution of the Agreement. No Directive shall be construed
as a Change Order or other Modification unless it expressly so
states.
1.1.4 CHANGE ORDER. A Change Order is a written Modification
executed by both parties (except in the event of a unilateral
Change Order as herein provided) and consisting of additions,
deletions or other changes to the Contract. A Change Order may be
accompanied by and/or may identify additional or revised Drawings,
sketches or other written instructions which become and form part
of the Contract Documents by virtue of the executed Change Order.
Except as otherwise provided in Subparagraph 1.1.5, a change in the
Work, or a change in the Contract Time or the Contract Sum shall
become the subject of a Change Order.
1.1.5 DIRECTIVE. A Directive is a written document issued by
the Owner and consisting of additions, deletions, clarifications or
other written instructions issued by the Owner with respect to the
performance of the Work or the activities of the Contractor on the
Job Site or the property of the Owner. A Directive may include, but
shall not be limited to, a bulletin, an engineering change or other
orders or instructions. Directives may become the subject of a
Change Order, either singularly or collectively. Directives shall
become the subject of a Change Order if they involve a Change in
the Work or a change in the Contract Time or the Contract Sum.
1.2 THE OWNER. The Owner is the person or entity identified as such in
the Agreement. The term "Owner", whenever it appears in the Contract
Documents, means the Owner and/or the Owner's Representative acting on behalf
or for the benefit of the Owner (except as otherwise specified in the
Contract Documents or as the context otherwise requires); provided, however,
that with respect to any provisions of the Contract which require the
Contractor to provide insurance for the protection of the Owner or to release
the Owner from, or waive, any claims the Contractor may have against it, the
term "Owner" shall mean the Owner and the Owner's Representative, and the
parent, related, affiliated and subsidiary companies or partnerships of the
Owner (if any) and the officers, directors, shareholders, agents, employees,
partners and assigns of each, and shall, to the extent applicable partners,
include the parent, related, affiliated and subsidiary companies of the
Owner's Representative and the officers, directors, shareholders, agents,
employees and assigns of each.
1.3 THE OWNER'S REPRESENTATIVE. The Owner's Representative is the
person or entity designated from time to time by the Owner to act as its
representative as identified in Article 3 of the Agreement or the most
current Modification thereto.
1.4 THE CONTRACTOR. The Contractor is the person or entity identified as
such in the Agreement. The Contractor shall so designate a sufficient number
of Project representatives that there shall be at least one authorized
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representative on the Job Site at all times during which the Work is being
performed including, without limitation, a project manager (herein referred
to as the "Project Manager") who shall at all times have authority to act (in
all capacities necessary for the Work) for and bind the Contractor.
1.5 SUBCONTRACTOR; SUB-SUBCONTRACTOR.
1.5.1 A Subcontractor is a person or entity having a direct
contract with the Contractor to perform any of the Work at the Job
Site or to supply any materials or equipment to be incorporated in,
or utilized in connection with, the Work.
1.5.2 A Sub-subcontractor is a person or organization having a
direct or indirect contract (on any tier) with a Subcontractor to
perform any of the Work at the Job Site or to supply any materials
or equipment to be incorporated in, or utilized in connection with,
the Work.
1.6 JOB SITE. The Job Site shall mean the area in which the Work is to
be performed and such other areas as may be designated by the Owner for the
storage of the Contractor's materials and equipment.
1.7 WORK; CONTRACT TIME; CONTRACT SUM. The Work, the Contract Time and
the Contract Sum are as defined in the Agreement.
1.8 PROVIDE. Except as the context otherwise requires, the term
"provide" means to furnish, fabricate, complete, deliver, install and erect,
including all labor, materials, equipment, apparatus, appurtenances and
expenses necessary to complete in place, ready for operation or use under the
terms of the Specifications.
1.9 PLANS Wherever the words "Plan" or "Plans" are used in the Contract
Documents, they shall be construed as having the same meaning as Drawing or
Drawings (as referred to in the Agreement).
1.10 SPECIFICATIONS. The Specifications shall include those referred to
in the Agreement.
1.11 SUBSTANTIAL COMPLETION. Substantial Completion shall occur when
Owner, in Owner's reasonable discretion, certifies that all construction is
sufficiently complete in accordance with the Contract Documents so that the
Owner may, if it so elects, occupy and use the Work or designated portion
thereof for the purpose for which it was intended.
ARTICLE 2
THE CONTRACT DOCUMENTS
2.1 EXECUTION, INTENT AND INTERPRETATIONS
2.1.1 The Contractor warrants and represents that, in executing
the Agreement and undertaking the Work, it has not relied upon any
oral inducement or representation by the Owner, the Owner's
Representative or any of their officers or agents as to the nature
of the Work, the Job Site, the Project conditions or otherwise.
2.1.2 Execution of the Contract by the Contractor is a
representation by the Contractor that the Contact Documents are
sufficient to have enabled the Contractor to determine the cost of
the Work described therein and that the Contract Documents are
sufficient to enable Contractor to construct the Work described
therein, and otherwise to fulfill all of its obligations hereunder,
including, but not limited to, Contractor's obligation to construct
the Work for an amount not in excess of the Contract Sum on or
before the date(s) of Substantial Completion for the Work or
designated portion(s) thereof established in the Agreement.
The Contractor further acknowledges and declares that it has
visited and, as an experienced and prudent contractor, carefully
examined the Job Site, including all existing structures, and is
fully familiar with all of the conditions thereon affecting the
same. In connection therewith, Contractor specifically represents
and warrants to Owner that it has, by careful examination,
satisfied itself as to: (a) the nature, location, and character of
the Project and the Job Site, including the conditions of the Job
Site and all structures and obstructions thereon, both natural and
man-made; (b) the nature, location, and character of the general
area in which the Project is located, including its climatic
conditions, available labor supply and labor costs, and available
equipment supply and equipment costs; and (c) the quality and
quantity of all materials, supplies, tools, equipment, labor, and
professional services necessary to complete the Work in the manner
and within the cost and time frame required by the Contract
Documents.
The Contractor further acknowledges that it shall be solely
responsible for understanding the location of subsurface lines,
cables, pipes and water as well as the conditions and
characteristics of all subsoils based upon a careful review, as a
prudent and experienced Contractor, of reports as
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provided by professionals affiliated with the Project, and that it
has made all reasonable interpretations, as an experienced and
prudent Contractor, of such reports, in combination with a review
of the Job Site conditions, to complete the Work as per the
Contract Documents.
In connection with the foregoing, and having carefully
examined all Contract Documents, as aforesaid, and having visited
the Job Site, the Contractor acknowledges and declares that it has
no knowledge of any discrepancies, omissions, ambiguities, or
conflicts in said Contract Documents and that if it becomes aware
of any such discrepancies, omissions, ambiguities, or conflicts, it
will promptly notify Owner and Architect of such matters.
Further, Contractor recognizes that care is required under
urban site construction circumstances with respect to safety,
protection of pedestrians, cleanliness of the site, health and
other laws, and protection of existing utilities, adjacent streets
and property. In arriving at the Contract Sum and the Contract
Time, Contractor has, as an experienced and prudent contractor,
exercised its best judgment and expertise to include the impact of
such circumstances upon the Contract Sum and the Contract Time.
2.1.3 The Contract Documents include all items necessary for the
proper execution and completion of the Work by the Contractor. The
Work shall consist of all items specifically included in the
Contract Documents as well as additional items of work which an
experienced and prudent contractor would include along with that
which is specified in order to complete the Work in accordance with
the Contract Documents. The Contract Documents are complementary,
and what is required by any one Contract Document shall be as
binding as if required by all. Contractor acknowledges that any
differences between the requirements of the Drawings and the
Specifications or any differences noted within the Drawings
themselves or within the Specifications themselves and have been
referred to the Owner and Architect by Contractor prior to the
submission of bids and have been clarified to the satisfaction of
the Contractor. If any such differences or conflicts were not
called to the Owner's and Architect's attention prior to submission
of bids, the Architect and/or the Owner shall decide which of the
conflicting requirements will govern based upon the most stringent
of the requirements, and, subject to the approval of the Owner, the
Contractor shall perform the Work at no additional cost and/or time
to the Owner in accordance with the Architect's and/or Owner's
decision. Subject to confirmation or approval by the Owner, large
scale Drawings take precedence over smaller scaled Drawings,
figured dimensions on the Drawings take precedence over scaled
dimensions, and noted items on the Drawings take precedence over
graphic representations.
2.1.4 All discrepancies and ambiguities in the Contract
Documents shall be interpreted so as to result in quality and
complete performance. Where variances occur between the drawings
and the specifications or within either document itself, or between
Contract Documents and site conditions, they shall be brought, in
writing to the immediate attention of the Architect and the Owner.
In case of discrepancies between Contract Documents, the Contractor
shall secure written instructions from the Architect and the Owner
before proceeding with the Work affected by omissions or
discrepancies. The Contractor shall assume full responsibility for
proceeding with such work without approval from the Architect and
the Owner including, but not limited to, the duty to remove such
work and correct any consequences of such removal.
2.1.5 When more than one material, brand or process is
specified for a particular item of Work, the choice shall be the
Contractor's. Contractor may, after notifying the Architect and
Owner, select the one it considers to be the best. Approval by
Architect or Owner of materials, suppliers, processes or
Subcontractors does not imply a waiver of any Contract requirements
including, without limitation, Contractor's warranty.
2.2 COPIES FURNISHED; OWNERSHIP. All Contract Documents and copies
thereof furnished by the Owner or the Owner's Representative are and shall
remain the Owner's property. They are not to be published or used by the
Contractor on any other project and, with the exception of one complete set
for the Contractor, are to be returned to the Owner upon completion of the
Work.
2.3 NO ORAL WAIVER. The provisions of this Contract cannot be amended,
modified, varied or waived in any respect except by a Modification signed by
the Owner and the Contractor. The Contractor is hereby given notice that no
person has authority to orally waive, or to release the Contractor from, any
of the Contractor's duties or obligations under or arising out of this
Contract. Any waiver, approval or consent granted to the Contractor shall be
limited to those matters specifically and expressly stated thereby to be
waived, approved or consented to and shall not relieve the Contractor of the
obligation to obtain any future waiver, approval or consent. Despite any
prior waiver, approval or consent as to any particular matter, the
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Owner may at any time require strict compliance with the Contract Documents
as to any succeeding obligation respecting the same matter or as to any other
matter.
ARTICLE 3
OWNER
3.1 EASEMENTS. The Owner shall obtain and pay for any easements
required for permanent structures.
3.2 ACCESS The Owner A/E, and governmental inspectors, shall at all
times have access to the Work at each and every stage of preparation and
progress. The Contractor shall provide facilities for such access.
ARTICLE 4
THE OWNER'S REPRESENTATIONS
4.1 CONTRACTUAL RELATIONSHIPS. Nothing contained in the Contract
Documents shall create any contractual relationship between the Owner's
Representative and the Contractor; provided, however, that the Owner's
Representative shall be deemed to be a third party beneficiary of those
obligations of the Contractor to the Owner's Representative as imposed by the
Contract Documents, (including, but not limited to, the Owner's
Representative's rights pursuant to Paragraph 7.2 and Articles 10 and 11 of
these General Conditions).
4.2 ROLE Except as otherwise provided in the Contract Documents, and
until the Contractor is notified in writing to the contrary, all actions to
be taken by, all approvals, notices, consents, directions and instructions to
be given by, all notices and other matters to be delivered to, all
determinations and decisions to be made by and, in general, all other action
to be taken by, or given to, the Owner shall be taken, given and made by, or
delivered or given to, the Owner's Representative in the name of and on
behalf of the Owner; provided, however, that the Owner (and not the Owner's
Representative) shall be solely obligated to the Contractor for all sums
required to be paid by the Owner to the Contractor hereunder. If the Owner's
Representative is an organization, then it shall, in turn, act through such
person or persons as it may designate in writing from time to time. Only
those so designated are authorized to grant on behalf of the Owner any
approval, consent or waiver with respect to the Contract Documents or the
Work, or to otherwise act for the Owner in any capacity whatsoever.
ARTICLE 5
CONTRACTOR
5.1 SUPERVISION AND CONSTRUCTION PROCEDURES
5.1.1 The Contractor shall supervise and direct the Work using
its best skill and attention. The Contractor shall be solely
responsible for all construction means, methods, techniques,
sequences, coordination, scheduling (subject to Article 8) and
procedures for all cleanup and for all safety and weather
precautions and programs in connection with the Work.
5.1.2 The superintendent and project manager selected by the
Contractor shall be subject to Owner's approval, which approval
will not be unreasonably denied, and shall be approved in writing
by Owner. If, for any reason and at any time, the services of the
superintendent and/or project manager selected by Contractor and
approved by Owner are no longer available, then the Contractor
shall not select a substitute superintendent and/or project manager
without the prior written consent of the Owner in accordance with
this paragraph.
5.1.3 The Contractor shall be fully responsible to the Owner
for the acts and omissions of its employees and of all
Subcontractors and Sub-subcontractors and their agents and
employees, and all other persons performing any of the Work in the
same manner as if they were the acts and omissions of persons
directly employed by the Contractor.
5.1.4 The Contractor shall not be relieved of its obligations
to perform the Work in accordance with the Contract Documents
either by the activities or duties of the Owner in its
administration of the Contract, including any inspections or tests
required or performed under Paragraph 5.6, or by approvals or other
similar
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action with regard to shop drawings or submittals (of any type), or
by the activities of persons other than the Contractor with respect
to the Project. Further, notwithstanding the fact that a dispute,
controversy or other question may have arisen between the parties
hereto relating to the execution or progress of the Work, the
interpretation of the Contract Documents, the payment of any
monies, the delivery of any materials or any other matter
whatsoever, the Contractor shall not be relieved of its obligations
to pursue the Work diligently under the Contract Documents pending
the determination of such dispute, controversy or other question.
5.1.5 The Contractor shall establish and maintain bench marks and all
other grades, lines and levels necessary for the Work, report
errors and inconsistencies to the Owner and A/E before commencing
Work, and, if applicable, review the placement of the building(s)
and permanent facilities on the Job Site with the Owner and A/E
after all lines are staked out and before foundation Work is
started. Any encroachments made by Contractor or its Subcontractors
or Sub-subcontractors (of any tier) on adjacent properties due to
construction as revealed by an improvement or other survey shall be
the sole responsibility of the Contractor (except for encroachments
arising from errors and omissions in the Contract Documents not
reasonably discoverable by Contractor), and Contractor shall
correct such encroachments within thirty (30) days of the
improvement survey (or as soon thereafter as reasonably possible),
at Contractor's sole cost and expense, either by the removal of the
encroachment (and subsequent reconstruction on the Project site) or
agreement with the adjacent property owner(s) (in form and
substance satisfactory to Owner in its sole discretion) allowing
the encroachments to remain.
5.2 MATERIALS AND EQUIPMENT.
5.2.1 The Contractor shall submit to Owner, in a form
acceptable to Owner, a submittal log which will outline the
requirements of each submittal of materials or equipment by the
architectural division breakdown, including status dates of
delivery of such materials or equipment.
5.2.2 Materials shall conform to manufacturer's standards in
effect at the date of execution of the Agreement and shall be
installed in strict accordance with manufacturer's directions. The
Contractor shall, reasonably require by Owner or Architect, furnish
satisfactory evidence as to the kind and quality of all materials.
After the Contract Documents are executed, if it becomes necessary
for the Contractor to substitute a material or product of a
different brand or manufacturer in lieu of that specified,
Contractor shall submit a written request to the owner for approval
of such proposed substitutions. Each request for substitution shall
be accompanied by complete descriptive literature and performance
data upon the specified item and the proposed substitution, plus
any samples as may be required by the Owner. Each proposed
substitution shall require the written approval of the Owner before
its incorporation into the Work, which shall not constitute
authorization or approval of a change in the Contract Sum or
Contract Time. The Contractor shall submit requests for
substitution as soon as practicable after the need for the
substitution is determined to allow for adequate consideration of
such request and to minimize delay in the progress of the Work.
5.3 WARRANTY. The Contractor represents and warrants to the Owner that
all materials and equipment furnished under the Contract shall be new unless
otherwise specified, and that all Work shall be (i) of good quality, free
from faults and defects, and (ii) in conformance with the Contract Documents.
All Work not so conforming to these standards shall be considered defective.
This warranty is not limited by the provisions of Paragraph 14.2 of these
General Conditions or Article 9 of the Agreement. All warranties and
guarantees from Subcontractors or Sub-subcontractors (including
manufacturers) shall be assignable to the Owner regardless of whether it is
so stated therein, and the Contractor agrees to assign all such warranties
and guarantees to the Owner and deliver them pursuant to Subparagraph 9.4.2.
The Contractor's obligations under this Paragraph shall survive the
expiration or sooner termination of the Contract.
5.4 TAXES; FEES AND LICENSES; ROYALTIES AND PATENTS.
5.4.1 The Contractor shall pay, or cause to be paid, all import
duties and sales, consumer, use, excise, value added and ad valorem
taxes required to be paid in connection with the Work or upon
materials, tools or equipment brought to the Job Site or used in
the Work. If any of the foregoing taxes are not paid in a timely
manner, the Owner may withhold the amount of any such taxes from
any amounts owing to the Contractor under the Contract Documents,
submit the amount so withheld to the appropriate taxing authority
on behalf of the Contractor or its Subcontractors or
Sub-subcontractors and offset said amount against the Contract Sum.
5.4.2 The Contractor shall secure and pay for all governmental
fees, permits and licenses which
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the Owner is not specifically required to provide and pay for under
the Contract Documents. The Contractor shall secure and pay for all
temporary utility connection required to perform the Work,
including, without limitation, electrical power, gas and water.
5.4.3 The Contractor shall pay all royalties and license fees
incident to the use of any invention, design, process or device
which is the subject of patent rights, copyrights or other
proprietary rights held by others, all of which shall be deemed
included in the Contract Sum. The Contractor shall not unlawfully
use or install any patented or copyrighted article and shall
indemnify the Owner from and against any and all actions, suits,
judgments, losses, costs or expenses, including attorneys' fees,
arising out of any claims for infringement of, or otherwise related
to, any patent rights or copyrights. In the event of any injunction
or legal action arising out of any such infringement which has the
effect of delaying the Work, the Owner may require the Contractor
to substitute such other articles of like kind as will make it
possible to proceed with and complete the Work, and all costs and
expenses occasioned thereby shall be borne by the Contractor.
5.5 COMPLIANCE WITH LAWS. The Contractor shall, at its cost and
expense, comply with each and every federal, state and local law, ordinance,
code, rule and regulation, as well as the lawful order or decree of any
public or quasi-public authority, bearing on the performance and not the
design (unless Contractor, any Subcontractor, and/or any of their respective
agents, representatives, suppliers or any other person or entity directly or
indirectly employed, utilized and/or controlled by any of them prepared the
design)of the Work specifically including, but not limited to, those
specified in Subparagraph 10.1.2 and all applicable building codes. The
Contractor shall review the Contract Documents, as an experienced and prudent
contractor, in order to determine whether they are in accordance with all
building laws, codes and regulations. Contractor shall immediately provide
written notice to Architect and Owner of any building laws, codes or
regulations that the Contract Documents are in violation of and that
Contractor knows of or should, as an experienced and prudent contractor, know
of. The Contractor shall not violate any zoning, set back or other location
requirements of law, or of any recorded covenants. If Contractor performs the
Work or any portion thereof in violation of any laws, statutes, ordinances,
building codes or rules and regulations without express prior written
approval from Architect and Owner, Contractor shall be fully and solely
responsible for such Work and all costs and expenses attributable thereto.
5.6 TESTS
5.6.1 If the Contract Documents, or any laws, ordinances,
rules, regulations or any orders or decrease of any public or
quasi-public authority having jurisdiction, or common practice in
the industry, require or dictate that the Contractor have any
portion of the Work inspected, tested or approved, the Contractor
shall advise the Owner in a timely manner (in writing, if
practicable) of its readiness and of the date arranged so that the
Owner may observe such inspection, testing or approval. The
Contractor shall bear all costs of such inspections, tests and
approvals except as otherwise specified in the Contract Documents.
5.6.2 The Owner may require any special inspection, testing or
approval of the Work not included under Subparagraph 5.7.1, or any
more stringent inspection, testing or approval thereof, in which
event it shall instruct the Contractor to order such inspection,
testing or approval, and the Contractor shall advise the Owner in a
timely manner (in writing, if practicable) as in Subparagraph
5.7.1. If such inspection or testing reveals any failure of the
Work or the performance thereof to comply with the requirements of
the Contract Documents, or reveals any defect in the Work, the
Contractor shall bear the costs of such inspection or testing and
all costs to correct the Work to the satisfaction of the Owner,
which, if incurred by the Owner, may be deducted or offset by the
Owner against any amounts then or thereafter due to the Contractor.
If such inspection or testing proves that the Work was performed
properly, the Owner shall bear the costs of such inspection or
testing.
5.6.3 Required certificates of inspection, testing or approval
shall be secured by the Contractor and promptly delivered by it to
the Owner.
5.7 DRAWINGS. Shop Drawings for architectural, structural, mechanical
and electrical work shall be submitted for approval to the A/E and a copy of
all such submissions shall be provided simultaneously to the Owner.
Contractor shall maintain an accurate record of all deviations from the
approved shop Drawings and the Plans and the Specifications which occur in
the Work as actually constructed, and shall submit to the A/E for approval
two (2) sets (one to be reproducible) of complete information, including
descriptions, drawings, sketches, marked prints and similar data, indicating
the "as-built" conditions. Contractor shall keep "record" and shop drawings
up to date as the Work progresses and shall at all times keep such up-to-date
drawings available to Owner and A/E at the Work site. Submission of all
"record" drawings to Owner is required prior to Contractor's Application for
Final Payment.
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5.8 BINDERS. The Contractor shall assemble for approval by the A/E and the
Owner three (3) complete copies in loose leaf binders of all operating and
maintenance data for all equipment and machinery, if any, installed as a part
of the Work.
5.9 CLEANING. The Contractor shall be responsible for damaged or broken
glass and at completion of the Work shall replace such damaged or broken
glass. The Contractor shall perform the following final cleaning at
completion of the Work, as applicable: (a) removal of all temporary
protections; (b) removal of all marks, stains, fingerprints and other soil or
dirt from all surfaces and other work; (c) removal of all spots, mortar,
plaster, soil and paint from ceramic tile, marble, and other finish materials
and from all surfaces and other work; (d) cleaning of all fixtures,
cabinetwork and equipment, removal of all stains, paint, dirt, and dust and
leave same in an undamaged and new condition; and (e) cleaning of all
surfaces and other work in accordance with recommendations of the
manufacturer.
5.10 START UP. After Substantial Completion, the Contractor shall perform
or assist Owner in the start-up of all Equipment and other mechanical
operations and systems included as a part of the Work.
5.11 GENERAL. The duties and responsibilities of the Contractor as set
forth in this Article 5 are in addition to, and not in lieu of, other duties
and responsibilities of the Contractor enumerated elsewhere in the Contract
Documents.
ARTICLE 6
SUBCONTRACTORS
6.1 GENERAL. Nothing contained in the Contract Documents shall create any
contractual relationship between the Owner or the Owner's Representative and
any Subcontractor or Sub-subcontractor. However, it is acknowledged that the
Owner and Owner's Representative are intended third party beneficiaries of
the obligations of the Subcontractors and Sub-subcontractors related to the
Work and the Project.
6.2 AWARD OF SUBCONTRACTS. The Contractor shall, prior to awarding any
subcontract, notify the Owner in writing of the names of all Subcontractors
proposed for the several parts of the Work and shall include with any such
notice the completed insurance information form and any insurance
certificates required by this Contract for any proposed Subcontractor. The
Owner may also require such lists and information regarding any proposed
Sub-subcontractors. The Contractor shall also advise the Owner in writing of
any Subcontractor or Sub-subcontractor with which it shares any business
relationship or financial interest, and of the nature and extent of any such
relationship or interest. No Subcontractor or Sub-subcontractor shall be
engaged if objected to by the Owner; provided, however, that if the Owner
does not take exception to a Subcontractor or Sub-subcontractor in writing
within fifteen (15) days of its receipt of such notification, such
Subcontractor or Sub-subcontractor shall be deemed acceptable to the Owner.
The Owner shall not be liable to the Contractor in any manner arising out of
the Owner's objection to a proposed Subcontractor or Sub-subcontractor. The
Contractor shall not terminate the employment of a Subcontractor or
Sub-subcontractor engaged in the Work prior to the expiration of that
subcontract without good cause shown and the Owner's prior approval after
reasonable notice of the Contractor's intent to so terminate. If any
Subcontractor withdraws, becomes insolvent or otherwise incapacitated,
abandons the Work or is dismissed by Contractor, then Contractor shall
promptly submit a substitute Subcontractor to Owner for Owner's approval,
which approval shall not be unreasonably withheld. If Owner rejects any
proposed substitute Subcontractor, Owner will provide Contractor with Owner's
reason for such rejection. All costs incurred by Contractor in replacing any
Subcontractor shall be borne by Contractor. The Contractor shall provide the
Owner with copies of each subcontract with the subcontractor within ten (10)
days after execution of the subcontract by the Contractor. If the Owner
provides Contractor with a list of pre-approved Subcontractors prior to bid,
the Owner may elect to reject a listed Subcontractor and that portion of the
Contractor's bid relating thereto. In that event, Owner shall be liable for
the difference in cost between the bid of the original Subcontractor and that
of the Subcontractor hired to perform the Work. If the Owner provides no such
pre-approved list, Owner may elect to reject any Subcontractor proposed by
Contractor and shall be liable for the difference in cost between the bid of
the originally proposed Subcontractor and that of the Subcontractor hired to
perform the work only if Owner's rejection is unreasonable or arbitrary.
6.3 SUBCONTRACTUAL RELATIONS.
6.3.1 All subcontracts and sub-subcontracts shall be in writing.
Each subcontract and sub-subcontract shall contain a reference to
this Contract and shall incorporate the terms and conditions hereof
to the full extent applicable to the portion of the Work covered
thereby. Each Subcontractor must agree, for the benefit of the
Owner, to be bound by, and to require each of its Sub-subcontractors
to be bound by, such terms and conditions to the full extent
applicable to its portion of the Work. In addition, each
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Subcontract and sub-subcontract must: (i) require that the Work
be performed in strict accordance with the requirements of the
Contract Documents; (ii) waive all rights that the
subcontractor or sub-subcontractor may have against the Owner for
damages caused by fire or other perils covered by the property
insurance required by the Contract Documents; (iii)
require the subcontractor or sub-subcontractor to carry and
maintain insurance of the types and in the amounts required of
Contractor by the Contract; (iv) require the subcontractor or
sub-subcontractor to furnish such certificates and waivers as the
Owner, any lender or title insurer may reasonably request,
including waivers of mechanics', labor and materialmens' lien
rights to the extent permitted by law; and (v) provide that the
subcontract is freely assignable by Contractor to Owner and its
assigns.
6.3.2 Each subcontract awarded hereunder by Contractor is hereby
assigned by Contractor to Owner; provided, however, that such
assignment is effective only after termination of the Contract by
Owner (in whole or in part) and only as to those subcontracts
which the Owner affirmatively accepts by notifying the
Subcontractor in writing. Upon the acceptance of a particular
subcontract by Owner, (i) Contractor will promptly furnish to Owner
the original signed copy of the subcontract and (ii) Owner
shall only be required to compensate the designated Subcontractor
for compensation accruing for Work done or materials delivered
from and after the date on which Owner accepts the Subcontract.
Contractor shall be solely responsible for promptly paying all sums
due and owing by Contractor to the designated Subcontractor for
work performed or material supplied prior to Owner's acceptance of
the applicable Subcontract.
6.3.3 Contractor shall be solely and fully responsible for the
payment of all Subcontractors and all other persons or entities
directly or indirectly employed by the Contractor, whether or not
such persons or entities are entitled to assert mechanics' lien,
equitable lien or labor and materialmens' lien rights against the
property of Owner or the Work. If Contractor fails to make payment
to any Subcontractors, Owner will have the right to make payment
directly to such subcontractors for the amount claimed to be due by
such party, and the amount of any such payment may be charged to
Contractor (which Contractor will promptly pay) or deducted from the
amount due or to become due contractor under the Contract.
ARTICLE 7
SEPARATE CONTRACTS
7.1 OWNER'S RIGHT TO AWARD SEPARATE CONTRACTS. The Owner reserves the right
to award other contracts in connection with the Project or other work on the
Job Site on any terms and conditions which the Owner may from time to time
determine in its sole discretion (hereinafter referred to as "Separate
Contracts"; and such other Contractors are hereinafter referred to as
"Separate Contractors").
7.2 MUTUAL RESPONSIBILITY OF CONTRACTORS.
7.2.1 The Contractor shall afford all Separate Contractors and the
Owner reasonable opportunity for the introduction and storage of their
materials and equipment and for the execution of their work and shall
properly cooperate, connect and coordinate the Work with such other work
as shall be in the best interest of the Project as reasonably determined
by the Owner.
7.2.2 If the execution or result of any part of the Work depends upon
any work of the Owner or of any Separate Contractor, the Contractor
shall, prior to proceeding with the Work, inspect and promptly
report to the Owner in writing any apparent discrepancies or
defects in such work of the Owner or of any Separate Contractor
that render it unsuitable for the proper execution or result
of any part of the Work. Failure of the Contractor to so inspect
and report shall constitute an acceptance of the Owner's or
Separate Contractor's work as fit and proper to receive the Work,
except as to defects which may develop in the Owner's or Separate
Contractor's work after completion of the Work and which the
Contractor could not have discovered by its inspection prior to the
completion of the Work.
7.2.3 Should the Contractor cause damage to the work or property of the
Owner or of any Separate Contractor on the Project, or to other work
on the Job Site, or delay or interfere with the Owner's or any
Separate Contractor's work, the Contractor shall be liable for the
same; and, in the case of a Separate Contractor, the Contractor
shall attempt to settle said claim with such Separate Contractor
prior to such Separate
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Contractor's institution of litigation or other proceedings against
the Contractor. If so requested by the parties to the dispute, the
Owner may, but shall not be obligated to, arbitrate the dispute, in
which event the decision of the Owner shall be final and binding on
the parties to the dispute.
7.2.4 Should any Separate Contractor cause damage to the Work or to
the property of the Contractor or cause delay or interference with the
Contractor's performance of the Work, the Contractor shall present to
such Separate Contractor any claims it may have as a result of such
damage, delay or interference (with an information copy to the
Owner) and shall attempt to settle its claim against such Separate
Contractor prior to the institution of litigation or other
proceedings against said such Separate Contractor. If so requested by
the parties to the dispute, the Owner may, but shall not be obligated to,
arbitrate the dispute, in which event the decision of the Owner shall be
final and binding on the parties to the dispute. In no event shall the
Contractor seek to recover from the Owner or the Owner's Representative,
and the Contractor hereby represents that it will not seek to recover
from them, any costs, expenses or losses incurred by the Contractor as a
result of any damage to the Work or property of the Contractor or any
delay or interference caused or allegedly caused by any Separate
Contractor.
7.2.5 If a dispute arises between the Contractor and any Separate
Contractors as to the responsibility for cleaning as required by the
Contract Documents, the Owner may clean and charge the cost thereof to
the responsible contractor, or apportion it among the several responsible
contractors, as the Owner shall reasonably determine to be just.
ARTICLE 8
TIME
8.1 DEFINITIONS.
8.1.1 Whenever the word "day" is used in the Contract Documents, it
shall mean a calendar day unless otherwise specifically provided.
8.2 PROGRESS AND COMPLETION; SCHEDULING.
8.2.1 All times and dates stated in the Contract Documents
including, without limitation, the Commencement Date, Milestone Dates,
the Substantial Completion Date, and all dates and times for the
delivery and installation of materials and equipment, are of the
essence of the Contract.
8.2.2 The Contractor shall begin the Work on the Commencement Date
and shall perform the Work diligently, expeditiously and with adequate
resources so as to meet all Milestones and complete all the Work within
the Contract Time. The scheduling of the Work shall be performed and
monitored by the Contractor utilizing a reasonable method to be chosen
by the Owner. The Contractor (and its Subcontractors, if the Owner
requires) shall prepare a construction time schedule (the "Schedule")
setting forth the times by which each significant segment of the Work
must be commenced and completed and the schedule pursuant to which the
Work must be performed in order for the Work to be completed on time.
The Schedule shall be subject to Owner's approval. In addition, the
Contractor (and its Subcontractors, if the Owner requires) shall
furnish all scheduling information requested by the Owner (in such form
and detail as requested for the particular portion of the Work and as
approved by Owner) within two (2) weeks of the Owner's request and
shall attend such meetings concerning scheduling as the Owner may call
from time to time. The Contractor shall comply with the Schedule or
Schedules established by it and approved by the Owner. With respect to
any portion of the Work for which a Schedule has not been established,
the Contractor shall commence such portion of the Work within three (3)
days of the date on which the Owner directs such commencement and shall
thereafter prosecute and complete the same with all due diligence or as
otherwise directed by the Owner. Neither the scheduling information
submitted by the Contractor or its Subcontractors, the acceptance or
approval thereof by the Owner nor the establishment or implementation
of, or failure to establish or implement, a Schedule by the Owner shall
relieve the Contractor of its obligation to perform and complete the
Work in a timely manner or to otherwise perform in accordance with the
Contract Documents.
8.2.3 The Contractor shall update the Schedule every two weeks to
reflect any authorized changes in the Contract Time and
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shall provide a chart showing the progress of each separate segment of
the Work and any new projected completion date(s).
8.2.4 Float or slack time associated with any one chain of
activities is defined as the amount of time between earliest start
date and latest start date or between earliest finish date and
latest finish date for such activities, as set forth in an approved
Schedule (assuming the critical path method is used), including any
revision or updates thereto. Float or slack time is not for the
exclusive use or benefit of either the Owner or the Contractor.
However, if float time associated with any chain of activities is
expended but not exceeded by any actions attributable to the Owner,
the Contractor shall not be entitled to an extension in the Contract
Time.
8.3 DELAYS, EXTENSIONS OF TIME AND OVERTIME.
8.3.1 If the Contractor is delayed at any time in progress of the
Work solely by (i) an act or neglect of the Owner or Architect, an
employee of either or a separate contractor employed by Owner or
(ii) by a Force Majeure Event, then the Contract Time may be
extended as is necessary to reflect the length of the delay actually
and directly caused by such occurrence; provided, however, that no
claim by the Contractor for an extension of time for any such delay
shall be considered unless made in accordance with Paragraph 13.1
below. For the purposes of the Contract, the term "Force Majeure
Event" shall mean fire, flood, earthquake, strike (provided the
strike does not arise from the actions or inactions of Contractor,
any Subcontractor, and/or any of their respective agents,
representatives, suppliers or any other person or entity directly or
indirectly employed, utilized and/or controlled by any of them) or
other Act of God not caused or permitted by Contractor and which
could not have been anticipated by Contractor. The Contractor shall,
in the event of any occurrence likely to cause a delay, cooperate in
good faith with the Architect and Owner to minimize and mitigate the
impact of any such occurrence and do all things reasonable under the
circumstances to achieve this goal. Contractor understands and
agrees that, regardless of the cause of any delay and whether or not
any extension of time may be agreed to in connection therewith,
Contractor shall continue to prosecute all Work not affected by said
delay and, with respect to such portion or portions of the Work as
may be so affected, Contractor shall use its best efforts to
minimize the effect of said delay. The foregoing terms and
provisions of this Paragraph 8.3.1 notwithstanding, in no event and
under no circumstances will the Contract Time be extended in the
event of any delay caused by (i) an act or neglect or the fault of
Contractor, any Subcontractor, any Sub-subcontractor and/or any of
their respective agents, employees, representatives, suppliers or
any other person or entity directly or indirectly employed, utilized
and/or controlled by any of them, (ii) intentionally omitted, (iii)
delays in transportation, (iv) lack of supplies or unavailability of
specific mechanical elements or (v) labor disputes within the work
force of Contractor, any Subcontractor, and/or any of their
respective agents, representatives, suppliers or any other person or
entity directly or indirectly employed, utilized and/or controlled
by any of them unless such labor disputes are not the result of the
actions or inactions of Contractor, any Subcontractor, and/or any of
their respective agents, representatives, suppliers or any other
person or entity directly or indirectly employed, utilized and/or
controlled by any of them.
8.3.2 No change in the Work, whether by way of alteration or
addition to the Work, shall be the basis of an extension in the
Contract Time unless and until such alteration or addition has been
authorized by a Change Order executed and issued in accordance with
and in strict compliance with the requirements of the Contract
Documents. Any claim for increased cost for delay shall be asserted
in accordance with the provisions of Paragraph 13.1 unless the time
is extended in writing by the Owner. This requirement is of the
essence of the Contract Documents. Accordingly, no course of conduct
or dealings between the parties, nor express or implied acceptance
of alterations or additions to the Work, and no claim that the Owner
has been unjustly enriched by an alteration or addition to the Work,
whether or not there is in fact any such unjust enrichment, shall be
the basis for any claim to an increase in the Contract Sum or an
extension in the Contract Time.
8.3.3 Notwithstanding any other term or provision of the Contract
to the contrary, if Contractor fails to achieve Substantial
Completion of any phase of the Work on or before the expiration of
the Contract Time for any reason other than the occurrence of a
Force Majeure Event, Contractor shall pay to Owner the following as
liquidated delay damages the sum of $____N/A______ for each calendar
day for which Substantial Completion shall not have occurred on or
before the expiration of
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the Contract Time ("Delay Damages") (if this Agreement if for
continuing (on-call) Work on multiple projects or continuing (on-call)
services, the Delay Damages shall be as set forth in the Owner
approved Work Authorization form). It is hereby expressly agreed by
Contractor that the Delay Damages to which Owner is entitled under
this Paragraph 8.3.3 are a reasonable forecast of just compensation
for the harm that would be caused by Contractor's failure to achieve
Substantial Completion by the expiration of the Contract Time, but do
not compensate Owner for any other damages of any type or kind,
including without limitation any damages related to or in connection
with Contractor's failure to fully and properly perform the Contract
Documents or any damages resulting from ______________ (if this
Agreement if for continuing (on-call) Work on multiple projects or
continuing (on-call) services, this information shall be as set forth
in the Owner approved Work Authorization form).
8.3.4 All Delay Damages will be due and payable immediately upon
Owner's demand therefor, and all Delay Damages that remain unpaid
shall bear interest from the date of demand until paid at the
maximum lawful rate, or if there is no applicable maximum lawful
rate, at the rate of 12% per annum. Owner shall have the right, but
not the obligation, to set off all Delay Damages against any amounts
due from Owner to Contractor, including without limitation any
retainage amounts.
8.3.5 In addition to the Delay Damages, Owner shall at all times
be entitled to all of its remedies under the Contract Documents and
at law and in equity, including, without limitation, the recovery of
damages related to or in connection with Contractor's failure to
fully and properly perform the Contract Documents or any damages
resulting from _________________ (if this Agreement if for
continuing (on-call) Work on multiple projects or continuing
(on-call) services, this information shall be as set forth in the
Owner approved Work Authorization form).
8.3.6 Whenever the Work falls behind schedule due to the fault of
the Contractor, the Contractor shall, to the extent necessary to
meet said schedule, increase its labor force and/or provide
overtime, extra shifts, Saturday, Sunday and/or holiday work, and
shall have each Subcontractor do likewise, all at no additional cost
to or compensation from the Owner. Further, the Owner shall have the
right to deduct or offset against any amounts then or thereafter due
to the Contractor, or to be reimbursed by the Contractor for, any
additional costs the Owner may incur as a direct result of said
increase in labor force or overtime, extra shifts, Saturday, Sunday
and/or holiday work.
8.3.7 The Owner may, in its sole discretion and for any reason,
direct the Contractor to accelerate the schedule of performance by
providing overtime, extra shifts, Saturday, Sunday and/or holiday
work and/or by having all or any Subcontractors or
Sub-subcontractors designated by the Owner provide overtime, extra
shifts, Saturday, Sunday and/or holiday work.
8.3.7.1 In the event of overtime, extra shifts, Saturday,
Sunday or holiday work by the Contractor's own forces
pursuant to this Subparagraph 8.3.7, the Owner's sole and
exclusive obligation to the Contractor (except as
hereinafter provided) on account thereof shall be to
reimburse the Contractor for the direct cost to the
Contractor of the premium time (or shift differential for
any extra shifts) for all labor utilized by the Contractor
in such overtime, extra shifts, Saturday, Sunday or holiday
work (but not for the straight time costs of such labor),
together with any Social Security and state or Federal
unemployment insurance taxes in connection with such
premium time (or shift differential for any extra shifts).
8.3.7.2 In the event of overtime, extra shifts, Saturday,
Sunday or holiday work by a Subcontractor pursuant to this
Subparagraph 8.3.7, the Owner's sole and exclusive
obligation to the Contractor (except as hereinafter
provided) on account thereof shall be to reimburse the
Contractor for the direct cost to the Subcontractor for the
premium time (or shift differential for any extra shifts)
of all labor utilized in such overtime, extra shifts,
Saturday, Sunday or holiday work (but not for the straight
time costs of such labor), together with any Social
Security and state or Federal unemployment insurance taxes,
benefits and mark up in connection with such premium time.
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8.4 TEMPORARY SUSPENSION OF WORK. The Owner shall have the authority to
suspend the Work, in whole or in part, for such periods and such reasons as
it may deem necessary or desirable, in its sole discretion, including without
limitation: (a) unsuitable weather; (b) other conditions considered
unfavorable for the suitable prosecution of the Work; (c) special events
and/or (d) other conditions considered adverse to the best interests of the
Owner. Any such suspension shall be in writing to the Contractor. The
Contractor shall immediately obey such orders of the Owner and shall not
resume the Work until so ordered in writing by the Owner. The Contractor
shall be entitled to an extension of the Contract Time not to exceed the
length of time that the Work was suspended provided the claim is submitted in
accordance with Paragraph 13.1 and the suspension is not due to an act or
omission of the Contractor, any Subcontractor or Sub-subcontractor.
ARTICLE 9
PAYMENTS AND COMPLETION
9.1 APPLICATION FOR PAYMENT; PASSAGE OF TITLE.
9.1.1 The "Payment Application Date" shall be that day of each
Calendar month designated in Section 7.1 of the Agreement when the
Contractor shall deliver the "Application for Payment", as hereinafter
defined, to the Owner.
9.1.2 The "Application for Payment" shall be an invoice prepared
by the Contractor and submitted to the Owner in accordance with the
Contract Documents. It shall show in detail all monies properly
payable to the Contractor in accordance with the Approved Schedule
of Values, including those items of labor, materials and equipment
used or incorporated in the Work (and, if the Owner has agreed in
advance in writing, suitably stored at the Job Site) through and
including the Payment Application Date. The Application for Payment
shall have, as attachments, (a) conditional mechanics' lien releases
from the Contractor and all applicable Subcontractors,
Sub-subcontractors and suppliers with respect to materials supplied
and services provided for which current payment is requested, (b)
unconditional mechanics' lien releases from the Contractor and all
applicable Subcontractors, Sub-subcontractors and suppliers with
respect to materials supplied and services provided for which
payment by the Owner was made pursuant to the previous Application
for Payment (provided that if a required payment has not been made
by Owner pursuant to the terms of this Agreement for any previous
month, Contractor shall attach conditional lien releases from the
Contractor and all applicable Subcontractors, Sub-subcontractors and
suppliers for which payment has not been made pursuant to this
Agreement and, upon receipt of the required payment, Contractor
shall immediately deliver to Owner unconditional mechanics' lien
releases) and (c) such other evidence of performance of the Work,
the costs thereof and payment therefor as the Owner may deem
necessary or desirable. The submission of the foregoing waivers and
other evidence shall be express conditions precedent to Owner's
obligation to make payment and to Contractor's entitlement to
payment. All such mechanics' lien releases shall be subject to the
approval of the Owner and shall comply with the laws of the state
where the Project is located, as amended from time to time. The date
of coverage and total dollar amount of the mechanics' liens released
shall be provided on all such releases.
9.1.3 The Contractor warrants that title to all Work, materials
and equipment covered by an Application for Payment shall pass to
the Owner, free and clear of all liens, claims, security interests
or encumbrances, upon the sooner occurrence of: (a) the delivery of
any such materials or equipment to the Job Site and incorporation
into the Work; or (b) the tender of payment of the applicable
Application for Payment by the Owner to the Contractor; and that no
Work, materials or equipment covered by an Application for Payment
shall have been acquired, whether by the Contractor or by any
Subcontractor or Sub-subcontractor, subject to an agreement under
which an interest therein or an encumbrance thereon is retained by
the seller or otherwise imposed by the Contractor or such other
person. The passage of title to the Owner as provided herein shall
not alter or limit the obligations and duties of the Contractor with
respect to the Work and the materials or equipment incorporated
therein or used in connection therewith as set forth in the Contract
Documents.
9.2 APPROVALS OF APPLICATIONS FOR PAYMENT.
9.2.1 If the Contractor has submitted an Application for Payment in
the manner prescribed in the Contract Documents, the Owner shall, with
reasonable promptness, approve the same (or such portions thereof
covering amounts it determines to be properly due) or shall state in
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writing its reasons for withholding its approval (whether of all or a
part).
9.2.2 The Owner's approval of an Application for Payment shall
not constitute a representation by the Owner that the conditions
precedent to the Contractor's entitlement to payment have been
fulfilled, nor shall approval of an Application for Payment by the
Owner be deemed a representation by the Owner: (a) that it has made
exhaustive or continuous on-site inspections to check the quality or
quantity of the Work; (b) that it has reviewed the construction
means, methods, techniques, sequences, coordination or procedures,
or the cleanliness of the Job Site, or the safety precautions and
programs, in connection with the Work; (c) that it has made any
examination to ascertain how or for what purpose the Contractor has
used the monies previously paid on account of the Contract Sum.
9.2.3 No approval of an Application for Payment, progress payment
or any beneficial, partial payment or any partial or entire use or
occupancy of the Project by the Owner shall constitute an acceptance
of any Work which is not in accordance with the Contract Documents;
and regardless of approval of an Application for Payment by the
Owner, the Contractor shall remain totally obligated and liable for
the performance of the Work in strict compliance with the Contract
Documents.
9.2.4 Subject to the Owner's rights to deduct, offset or withhold
as set forth in these General Conditions, after the Owner has
approved an Application for Payment, in whole or in part, it shall
make payment of the amount approved to the Contractor as provided in
the Contract Documents.
9.3 PAYMENTS WITHHELD; OWNER'S RIGHT TO MAKE DIRECT PAYMENTS FOR WORK;
FAILURE OF PAYMENT.
9.3.1 The Owner may withhold its approval of an Application for
Payment, in whole or in part, or nullify the whole or any part of an
approval previously given, if Owner reasonably determines that the
Application for Payment covers portions of the Work which have not, in
fact, been completed, or that it includes amounts for claims
allegedly made but not actually made (or subsequently withdrawn),
and/or for which payment is not then due or if, and to the extent that
Owner deems it necessary or desirable, to protect itself against
loss or damage due to: (a) defective Work not remedied; (b)
Subcontractor or Sub-subcontractor or other third-party claims or
liens or reasonable evidence indicating such probable third-party
claims or liens; (c) failure or alleged failure of the Contractor
to make payments to Subcontractors (or of Subcontractors to make
payments to Sub-subcontractors) as required by the Contract Documents,
or failure to provide lien waivers; (d) inability, or reasonable doubt
as to the ability, of the Contractor to complete the Work within the
Contract Time, for the unpaid balance of the Contract Sum or within the
estimates prepared by the Contractor and submitted to and approved
by the Owner; (e) damage to the Owner or a Separate Contractor;
(f) unsatisfactory prosecution of the Work by the Contractor, its
Subcontractors or Sub-subcontractors; (g) failure of the Contractor to
maintain the Job Site in a clean and safe condition; (h) failure of the
Contractor to meet any other monetary obligation imposed upon it
pursuant to the Contract Documents or (i) failure of the Contractor
to comply with any other provision of the Contract Documents.
9.3.2 The Owner, after giving the Contractor notice, may make
payments on account of labor, materials and/or equipment for the Work
directly to any or all of the Subcontractors, Sub-subcontractors or
persons entitled to the same in lieu of paying the Contractor therefor
or make joint payment to any such person and the Contractor. Any
amounts so paid shall be credited against the Contract Sum. No such
payment shall create any relationship between the recipient thereof
and the Owner, nor any duty on the part of the Owner. The Contractor
shall cooperate with the Owner to facilitate any such direct payments
and shall provide such evidence as the Owner may request for purposes
of determining any amount to be so paid. If the Owner elects to make
such payments as a result of a failure on the part of the Contractor to
perform in accordance with the Contract, or as a result of a request
from the Contractor that the Owner make such payments, then the Owner
may deduct the amount of its administrative costs incurred in making
said such payments from the Contract Sum or render an invoice to
the Contractor for such administrative costs, which invoice the
Contractor shall promptly pay.
9.3.3 If the Owner does not pay the Contractor within seven days,
after the date established in the Contract Documents the amount
certified by the Architect, for reasons other than a default by
Contractor or the Work in question has been rejected by any
governmental authority, the Owner, or any lender of the Owner, then
the Contractor may, upon seven additional days written notice to the
Owner, stop the Work until payment of the amount owing has been
received. The Contract Time shall be extended
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appropriately and the Contract Sum shall be increased by the amount
of the Contractor's reasonable costs of shut-down, delay and
start-up, which shall be accomplished as provided in Article 8.
Notwithstanding the foregoing, the Contractor may not stop Work
during the pendency of a bona fide dispute between Owner and
Contractor, provided any sums in dispute claimed by the Contractor
are placed in escrow or the Owner's lender, if any, agrees to
withhold and pay said disputed sums when the dispute is resolved.
9.4 SUBSTANTIAL COMPLETION AND FINAL PAYMENT.
9.4.1 On the Date of Substantial Completion, the Contractor shall
prepare and submit to the Owner a list of items to be completed
and/or corrected ("punch-list" items) and its final bill, including
itemized projected amounts for any portions of the Work not yet
completed. The failure to include any items on such "punch-list"
shall not alter the responsibility of the Contractor to complete
and/or correct the Work in accordance with the Contract Documents.
When the Owner, on the basis of an inspection, confirms the
notification from the Contractor that the Work is Substantially
Completed or, without being notified by the Contractor, determines
that the Work is Substantially Completed, the Owner shall prepare
and deliver to the Contractor a Certificate of Substantial
Completion which may state the responsibilities of the Owner and the
Contractor for maintenance, heat, utilities and insurance and shall
list the items determined by the Owner to require completion or
correction as applicable, and fix the time within which the
Contractor shall complete or correct the items listed and submit to
the Owner all documents and other matters required by the Contract
Documents to be submitted by the Contractor upon completion of the
Work. The Certificate of Substantial Completion shall constitute a
demand for a formal billing (including all costs, claims or fees for
any outstanding Change Orders, or any other matter which the
Contractor has not previously waived pursuant to the General
Conditions, and itemized projections for any incomplete Work), and
the Contractor shall be deemed conclusively to have waived the right
to payment of any such item, fee or cost of any kind not billed to
the Owner within thirty (30) days of delivery to the Contractor of
the Certificate of Substantial Completion. The issuance of the
Certificate of Substantial Completion shall not constitute a waiver
of any rights of the Owner, including without limitation the right
to those retainages permitted by the Contract Documents. If the
Contractor does not complete and/or correct the "punch-list" items
listed in the Certificate of Substantial Completion within the time
fixed therein, the Owner shall have the right to accomplish the same
and deduct or offset all costs thereof against any amounts then or
thereafter due to the Contractor. If the amounts then or thereafter
due to the Contractor are not sufficient to cover such costs, the
Contractor shall pay the difference to the Owner. The Owner's
decision as to the Date of Substantial Completion shall be final and
binding.
9.4.2 Within a reasonable time following the Owner's receipt of
written notification from the Contractor that the Work is ready for
final inspection and acceptance, and receipt of the final
Application for Payment, the Owner shall make such inspection and,
when the Work is found to be acceptable under the Contract Documents
and the Contract fully performed, shall approve the final
Application for Payment; provided, however, that neither the final
payment nor any retention shall become due until the Contractor
submits to the Owner: (a) evidence of payment in a form approved by
the Owner, that all payrolls, bills for materials, supplies and
equipment and other indebtedness connected with the Work for which
the Owner or its property might in any way be responsible have been
paid in full or otherwise satisfied; (b) consent of sureties, if
any, to final payment; (c) all Contract Documents (except one set
thereof to be retained by the Contractor), including a complete set
of as-built and record documents (as defined in and to the extent
required by the Specifications); (d) such other data as the Owner
reasonably may require establishing payment or satisfaction of all
obligations of the Contractor in connection with the Work including
receipts of final satisfaction and releases and waivers of liens and
releases of any and all claims by the Contractor, Subcontractors and
Sub-subcontractors, conforming in all material respects with the
laws of the state where the Project is located and evidencing
performance of the Work in accordance with the Contract Documents;
(e) a release of the Owner and its insurers from and against any
claims under the insurance required to be provided by the Owner
hereunder (except to the extent of any claims theretofore timely
filed which are owing but unpaid) and a release of the Owner from
and against any claims between the Contractor and a separate
contractor; (f) any governmental certificates required by the
Contract Documents or otherwise to evidence compliance of the
Contractor and the Work with applicable laws, ordinances, rules,
codes and regulations and the Contract Documents and (g) warranties,
guarantees, assignments thereof, and maintenance or other manuals,
required by the
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Specifications in the forms approved by the Owner, in favor of the
Owner and such other persons as the Owner may direct. The submission
of all of the foregoing is an express condition precedent to
Contractor's entitlement to final payment.
9.4.3 The making of final payment shall not constitute a waiver
of any claims or rights by the Owner.
9.4.4 The acceptance of final payment by Contractor shall
constitute a waiver of all claims by the Contractor and shall
constitute a general release of the Owner and the Owner's
Representative by the Contractor.
9.4.5 If at any time any Subcontractor or Sub-subcontractor
refuses to furnish any release, satisfaction or waiver of lien
required at any time by the Owner under Paragraphs 9.1, 9.3 or 9.4,
or files a claim of lien against the Owner or any of the Owner's
property, the Contractor shall, if requested by the Owner and at the
Contractor's expense, furnish and record a Mechanic's Lien Release
Bond (separate and apart from any other bond provided by the
Contractor hereunder) that is in full compliance with the
then-current laws, rules, regulations and ordinances of the state
and the locality where the Project is located. If any Subcontractor
or Sub-subcontractor serves a Stop Notice (bonded or otherwise) on
Owner, Contractor shall, if requested by Owner and at Contractor's
expense, furnish a Stop Notice Release Bond (separate and apart from
any other bond provided by the Contractor hereunder) that is in full
compliance with the then-current laws, rules, regulations and
ordinances of the state and the locality where the Project is
located. The Contractor authorizes the Owner, and shall cause its
Subcontractors and Sub-subcontractors to authorize the Owner, to
check directly with any suppliers of labor and material with respect
to any item chargeable to the Owner's property, to confirm balances
due and to obtain sworn statements and waivers of lien, all if the
Owner so elects. If any lien remains unsatisfied after all payments
are made to the Contractor, the Contractor shall reimburse the Owner
upon Owner's demand the full amount of all monies that the Owner may
be compelled to pay in discharging such lien, including all costs
and attorneys' fees.
9.5 BENEFICIAL USE AND OCCUPANCY; PARTIAL SUBSTANTIAL COMPLETION.
9.5.1 The Owner and its lessees and separate contractors may
occupy or use any completed or partially completed portion of the
Work at any stage of construction regardless of whether the Contract
Time has expired (hereinafter sometimes referred to as "Partial
Occupancy"). Such Partial Occupancy may commence whether or not the
applicable portion of Work is substantially complete.
9.5.2 In the event of Partial Occupancy, the Contractor shall
promptly secure endorsement from its insurance carrier(s), consent
from its surety(ies), if any, and consent from public authorities
having jurisdiction over the Work permitting Partial Occupancy.
9.5.3 In the event of Partial Occupancy before substantial
Completion as provided above, the Contractor shall cooperate with
the Owner in making available for the Owner's use and benefit such
building services as heating, ventilating, cooling, water, lighting,
telephone, elevators and security for the portion or portions to be
occupied, and if the work required to furnish such services is not
entirely completed at the time the Owner desires to occupy the
aforesaid portion or portions, the Contractor shall make every
reasonable effort to complete such Work or make temporary provisions
for such Work as soon as possible so that the aforementioned
building services may be put into operation and use.
9.5.4 In the event of Partial Occupancy prior to Substantial
Completion, mutually acceptable arrangements shall be made between
the Owner and Contractor in respect of the operation and cost of
necessary security, maintenance and utilities, including heating,
ventilating, cooling, water, lighting and telephone services and
elevators. The Owner shall assume proportionate and reasonable
responsibility for the cost of the above services reduced by any
savings to contractor for such services realized by reason of
Partial Occupancy. Further, mutually acceptable arrangements shall
be made between the Owner and Contractor in respect of insurance and
damage to the Work. Contractor's acceptance of arrangements proposed
by Owner in respect of such matters shall not be unreasonably
withheld, delayed or conditioned.
9.5.5 In each instance, when the Owner elects to exercise its right
of Partial Occupancy as described herein, Owner will give Contractor
and Architect advance written notice of its election to take the
portion or portions involved, and immediately prior to Partial
Occupancy, the Owner, Contractor and Architect shall jointly inspect
the area to be occupied or portion of the Work to be used to
determine and record the conditions of the same.
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9.5.6 It shall be understood, however, that Partial Occupancy shall
not: (i) constitute acceptance of any Work, (ii) relieve the
Contractor for responsibility for loss or damage because of or
arising out of defects in, or malfunctioning of, any Work, material
or equipment, nor from any other unfulfilled obligations or
responsibilities under the Contract Documents or (iii) commence any
warranty period under the Contract Documents; provided that
Contractor shall not be liable for ordinary wear and tear resulting
from such Partial Occupancy and provided further that warranty of
the portions of the Work and systems utilized only for that portion
of the Work receiving Partial Occupancy shall commence on the date
of Partial Occupancy.
9.5.7 Subject to the terms and conditions provided herein, if the
Contractor claims that delay or additional cost is involved because
of Partial Occupancy by the Owner, Contractor shall make such Claim
as provided elsewhere in the Contract Documents.
ARTICLE 10
PROTECTION OF PERSONS AND PROPERTY
10.1 RESPONSIBILITY FOR SAFETY AND HEALTH.
10.1.1 The Contractor shall be responsible for initiating,
maintaining and supervising safety and anti-substance abuse
precautions and programs in connection with the Work, and shall
provide all protection to prevent injury to all persons involved in
any way in the Work and all other persons, including without
limitation, the employees, agents, guests, visitors, invitees and
licensees of the Owner who may visit or be affected thereby. These
precautions shall include, but in no event be limited to: the
posting of danger signs and personal notification to all affected
persons of the existence of a hazard of whatever nature; the
furnishing and maintaining of necessary traffic control barricades
and flagman services; the use, or storage, removal and disposal of
required explosives or other hazardous materials only under the
supervision of qualified personnel and after first obtaining
permission of all applicable governmental authorities; and the
maintenance of adequate quantities of both hose and operable fire
extinguishers at the Job Site. The Contractor shall set forth in
writing its safety and anti-substance abuse precautions and programs
in connection with the Work and, if requested by the Owner, submit
the same to the Owner for review. The Owner may, but shall not be
obligated to, make suggestions and recommendations to the Contractor
with respect thereto.
10.1.2 All Work and not design (unless Contractor, any
Subcontractor, and/or any of their respective agents,
representatives, suppliers or any other person or entity directly or
indirectly employed, utilized and/or controlled by any of them
prepared the design), whether performed by the Contractor, its
Subcontractors or Sub-subcontractors, or anyone directly or
indirectly employed by any of them, and all equipment, appliances,
machinery, materials, tools and like items incorporated or used in
the Work, shall be in compliance with, and conform to: (a) all
applicable laws, ordinances, rules, regulations and orders of any
public, quasi-public or other governmental authority relating to the
safety of persons and their protection against injury, specifically
including, but in no event limited to, the Federal Occupational
Safety and Health Act of 1970, as amended, and all rules and
regulations now or hereafter in effect pursuant to said Act; and (b)
all codes, rules, regulations and requirements of the Owner and its
insurance carriers relating thereto. In the event of conflicting
requirements, the more stringent shall govern.
10.1.3 The Contractor shall designate a responsible member of its
organization at the Job Site as the Project Safety Officer, whose
duties it shall be to enforce the Contractor's safety and
anti-substance abuse programs, to assure compliance with
Subparagraph 10.1.2 and to prevent accidents. This person shall be
the Contractor's Project Manager unless otherwise designated in
writing by the Contractor and approved by the Owner. The Contractor
shall further cause each of its Subcontractors and
Sub-subcontractors to designate a responsible supervisory
representative to assist the Contractor's Project Safety Officer
representative in the performance of his or her duties as aforesaid.
10.1.4 Should the Contractor fail to provide a safe area for the
performance of the Work or any portion thereof, the Owner shall have
the right, but not the obligation, to suspend Work in the unsafe
area. All costs of any nature (including overtime pay) resulting
from the suspension, by
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whomsoever incurred shall be borne by the Contractor.
10.1.5 The Contractor shall provide to each worker on the Job Site
the proper safety equipment for the duties being performed by that
worker and will not permit any worker on the Job Site who fails or
refuses to use the same. The Owner shall have the right, but not the
obligation, to order the Contractor to send a worker home for the
day or to discharge a worker for his or her failure to comply with
safe practices or anti-substance abuse policies, with which order
the Contractor shall promptly comply.
10.1.6 The Contractor shall indemnify the Owner from and against any
and all liability, public or private, penalties, contractual or
otherwise, losses, damages, costs, attorneys' fees, expenses,
causes of action, claims or judgments resulting either in whole or
in part from any failure of the Contractor, its Subcontractors or
Sub-subcontractors or anyone directly or indirectly employed by
any of them or for whose acts any of them may be liable, to comply
with the provisions of Paragraph 10.1. The Contractor shall not
be relieved of its responsibilities under this Paragraph 10.1
should the Owner act or fail to act pursuant to its rights
hereunder, nor shall the Owner thereby assume, nor be deemed to
have assumed, any responsibilities otherwise imposed upon the
Contractor by this Contract in any manner whatsoever.
10.2 PROTECTION OF WORK AND PROPERTY; RESPONSIBILITY FOR LOSS.
10.2.1 The Contractor shall, throughout the performance of the
Work, maintain adequate and continuous protection of all Work
and temporary facilities against loss or damage from whatever
cause, shall protect the property of the Owner and third parties
from loss or damage from whatever cause arising out of the
performance of the Work and shall comply with the requirements
of the Owner and its insurance carriers and with all applicable
laws, codes, rules and regulations with respect to the
prevention of loss or damage to property as a result of fire or
other hazards. The Owner may, but shall not be required to,
make periodic patrols of the Job Site as a part of its normal
security program. In such event, however, the Contractor shall not
be relieved of its aforesaid responsibilities.
10.2.2 Until final acceptance of the Work by the Owner pursuant to
Paragraph 9.4 (unless and to the extent otherwise set forth in a
Certificate of Substantial Completion) the Contractor shall
have full and complete charge and care of and, except as otherwise
provided in this Subparagraph 10.2.2, shall bear all risk of loss
of, and injury or damage to, the Work or any portion thereof
(specifically including Owner-furnished supplies, equipment or
other items to be utilized in connection with, or incorporated
in, the Work) from any cause whatsoever. The Contractor shall
rebuild, repair, restore and make good all losses of, and
injuries or damages to, the Work or any portion thereof before
final acceptance of the Work. Such rebuilding, repair or
restoration shall be at the Contractor's sole cost and expense
unless the loss, injury or damage requiring such rebuilding,
repair or restoration: (a) is directly due to errors in the
Contract Documents which were not discovered by the Contractor and
which the Contractor could not have discovered through the
exercise of due diligence; (b) is caused by the Owner (unless (i)
the Contractor has waived its rights of subrogation against the
Owner on account thereof as provided in the Contract Documents,
or (ii) such loss or damage would be covered by any policy or
policies of insurance which the Contractor is required to
maintain hereunder, whether the Contractor actually maintains
such insurance or not, or (iii) is otherwise covered by a policy
or policies of insurance maintained by the Contractor, whether
or not required hereunder); or (c) is caused by a hazard against
which the Owner is required to insure under the provisions of
Article 11 hereof; provided, however, that if the loss, injury or
damage would not have occurred but for an act or omission of the
Contractor, any of its Subcontractors of Sub-subcontractors or
anyone directly or indirectly employed by any of them or for whose
acts any of them may be liable, the rebuilding, repair or
restoration shall be at the Contractor's cost and expense to the
extent of the deductible on said insurance.
10.3 EMERGENCIES. In any emergency affecting the safety of persons or
property, or in the event of a claimed violation of any federal or state
safety or health law or regulation, arising out of or in any way connected
with the Work or its performance, the Contractor shall act immediately to
prevent threatened damage, injury or loss or to remedy said violation,
whichever is applicable, failing which the Owner may immediately take
whatever action it reasonably deems necessary, including, but not limited to,
suspending the Work as provided in Paragraph 8.4. The Owner may deduct or
offset any and all costs or expenses of whatever nature, including attorneys'
fees, paid or incurred by the Owner in taking such option against any sums
then or thereafter due to the Contractor. The Contractor shall indemnify the
Owner against any and all costs of or expenses incurred pursuant to this
Paragraph 10.4. If the Contractor shall be entitled to any additional
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compensation or extension of time claimed on account of emergency work not
due to the fault or neglect of the Contractor or its Subcontractors or
Sub-subcontractors, it shall be handled as a claim as provided in Article 13.
10.4 CLEANUP. The Contractor shall at all times keep the Job Site clean
and free from accumulation of waste materials or rubbish (including, without
limitation, hazardous waste) caused by or during the performance of the Work
and shall continuously throughout performance of the Work remove and dispose
of all such materials from the Job Site and the Project. The Owner may
require the Contractor to comply with such standards, means and methods of
cleanup, removal or disposal as the Owner may make known to the Contractor.
In the event the Contractor fails to keep the Job Site clean and free from
such waste or rubbish, or to comply with such standards, means and methods,
the Owner may take such action and offset any and all costs or expenses of
whatever nature paid or incurred by the Owner in undertaking such action
against any sums then or thereafter due to the Contractor. The Contractor
shall notify the Owner in advance of the generation, importation, storage,
transportation, excavation or disposal, of any hazardous waste, toxic
materials to contaminants of any type in connection with the Project.
10.5 OWNER'S STANDARDS. The Owner reserves the right, but assumes no
duty, to establish and enforce standards, and to change the same from time to
time, for the protection of persons and property, with which the Contractor
shall comply, and to review the efficiency of all protective measures taken
by the Contractor. The exercise of or failure to exercise any or all of these
acts by the Owner shall not relieve the Contractor of its duties and
responsibilities under this Contract, and the Owner shall not thereby assume,
not be deemed to have assumed, any such duties or responsibilities of the
Contractor.
ARTICLE 11
INSURANCE
11.1 INSURANCE PROVIDED BY OWNER. The contractor, its subcontractors and
sub-subcontractors hereby waive all rights which they, or any of them, may at
any time, have against the Owner, the Owner's Representative, their respective
parent companies and partnerships, the subsidiary, related and affiliated
companies and partnerships of each and the officers, directors, agents,
employees, partners, and assigns of each, for damages caused by fire or other
perils to the extent covered by the insurance provided by the Owner (but not
their entitlement to any proceeds thereof).
11.2 CONTRACTOR'S INSURANCE.
11.2.1 Contractor shall, without in any way altering Contractor's
liability under the Contract or applicable law, obtain, pay for and
maintain insurance for the coverages and amounts of coverage not
less than those set forth below in the Schedule of Insurance
Coverages (Paragraph 11.2) with insurers licensed to do business in
the jurisdiction in which the Project is located and shall provide
to Owner certificates issued by such insurance companies
satisfactory to Owner to evidence such coverage before any Work
commences at the job site. Such certificates shall provide that
there shall be no termination, nonrenewal, modification or
expiration of such coverage without thirty (30) days' prior written
notice to Owner (except in the case of non-payment of premium, in
which case the certificate must require at least ten (10) days'
prior written notice to Owner before the coverage is terminated
(Contractor represents and warrants that it shall not default on
its obligation to make any premium payments). In the event of any
failure by Contractor to comply with the provisions of this
Paragraph 11.2, (i) Owner may, at its option, on notice to
Contractor, suspend the Contract for cause until there is full
compliance with this Paragraph 11.2 and/or terminate the Contract
for cause or (ii) Owner may purchase such insurance at Contractor's
expense, provided that Owner shall have no obligation to do so and
if Owner shall do so, Contractor shall not be relieved of or
excused from the obligation to obtain and maintain such insurance
amounts and coverages. Contractor shall provide to Owner a
certified copy of any and all applicable insurance policies upon
request of the Owner. Timely renewal certificates will be provided
to Owner as coverage renews.
11.2.2 The Indemnitees shall be named as additional insureds on each
insurance policy required by this Article 11 (other than workers'
compensation insurance) through an endorsement thereto which
provides for no different coverage to the Indemnitees than to the
Contractor. The additional insured endorsements shall provide the
following: (i) that the coverages afforded the additional insureds
will be primary insurance for the additional insureds with respect
to claims arising out of operations performed by or on behalf of the
Contractor, (ii) that the coverages afforded the additional insureds
shall not exclude claims asserted by the Contractor's employees,
(iii) that if the additional insureds have other insurance which is
applicable to a loss, such other insurance will be on an excess or
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contingent basis, (iv) that the amount of the insurance company's
liability under the insurance policy will not be reduced by the
existence of such other insurance and (v) that the additional
insureds will be given not less than thirty (30) days prior written
notice of the material modification or cancellation thereof (except
in the case of non-payment of premium, in which case the
endorsements must require at least ten (10) days' prior written to
notice to the Indemnitees before the coverage is materially modified
or canceled (Contractor represents and warrants that it shall not
default on its obligation to make any premium payments). Before any
Work commences at the job site, Contractor shall provide to Owner
certificates of insurance satisfactory to Owner to evidence
Contractor's compliance with the requirements of this Paragraph
11.2.2, The Indemnitees shall not, by reason of their inclusion as
additional insureds or otherwise, have any liability for the
payments of any deductibles or premiums.
11.2.3 Insurance of the types required of Contractor hereunder shall
be provided by all Subcontractors, or provided by Contractor on behalf
of all Subcontractors, to cover their operations performed under the
Contract Documents. Contractor shall be held responsible for any
modification in these insurance requirements as they apply to
Subcontractors. Contractor shall maintain Certificates of Insurance
from all Subcontractors, enumerating, among other things, the
waivers in favor of, and insured status of, the Indemnitees, as
required herein, and make them available to Owner upon request.
11.2.4 In the event Contractor fails to obtain the required
certificates of insurance from any Subcontractor and a claim is made
or suffered, the Contractor shall indemnify, defend and hold
harmless Owner, Owner's constituent partners, the parent companies
and affiliates of Owner and of any constituent partner, and
Architect and, to the extent applicable, their respective
shareholders, officers, directors, agents and employees parties from
any and all claims for which the required insurance would have
provided coverage. This indemnity obligation is in addition to any
other indemnity obligation provided in the Contract.
11.2.5 The term "Subcontractor(s)" for the purposes of
this Article 11 shall include all Subcontractors and
Sub-subcontractors.
11.3 SCHEDULE OF INSURANCE COVERAGES.
11.3.1 WORKERS' COMPENSATION.
Workers' Compensation Statutory Limits
Employer's Liability $500,000
The policy shall include a Waiver of Subrogation in favor of the
Indemnitees.
11.3.2 COMMERCIAL GENERAL LIABILITY.
Bodily Injury/Property $1,000,000 each
Damage occurrence, or
(occurrence Basis) equivalent, subject to
a $2,000,000 general
aggregate applicable
to the Project
This policy shall be on a form acceptable to Owner and shall include
the following coverages:
11.3.2.1 Premises/Operations
11.3.2.2 Independent Contractors
11.3.2.3 Completed Operations (This coverage shall be
renewed by the original insurance company or provided by
another insurance company so that coverage is maintained for
a period of not less than two years following the acceptance
of Contractor's Work)
11.3.2.4 Broad Form Contractual Liability specifically
in support of, but not limited to, the Indemnity sections of
the Contract
11.3.2.5 Broad Form Property Damage
11.3.2.6 Personal Injury Liability with employees and
contractual exclusions removed
11.3.2.7 Delete Exclusions relative to Collapse,
Explosion and Underground Property Damage Hazards
11.3.3 COMPREHENSIVE AUTOMOBILE LIABILITY.
11.3.3.1 Bodily Injury
$1,000,000 per person
$1,000,000 per accident
11.3.3.2 Property Damage
$1,000,000 per accident,
or equivalent
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This policy shall be on a standard form written to cover all
owned, hired and non-owned automobiles.
11.3.4 UMBRELLA EXCESS LIABILITY INSURANCE.
Bodily Injury/ $5,000,000 per occurrence
Property Damage $5,000,000 aggregate
(Occurrence Basis)
This policy shall be written on an umbrella excess basis above
coverages as described in 11.3.1, 11.3.2 and 11.3.3 above. In addition,
the policy shall be endorsed to provide defense coverage obligations
and shall follow the form of the underlying coverages.
11.3.5 BUILDER'S RISK INSURANCE. Contractor shall maintain, at its
sole expense, all-risk builder's risk insurance as follows:
11.3.5.1 Contractor shall carry completed value from
builder's risk property insurance (subject to a deductible
per loss not to exceed $2,500.00) upon the entire Work for
100% of the full replacement cost value thereof (100%
includes additional costs of architectural and engineering
services in the event of a loss). This policy shall include
the interests of the Owner and the other Indemnitees,
Contractor, and Subcontractors in the work as named
insureds, as their interests may appear, and shall be on an
"All Risk" basis for physical loss or damage including,
without limitation, fire, flood, earthquake, subsidence,
hail, theft, vandalism and malicious mischief and shall
include coverage for portions of the Work while it is
stored off the site or is in transit. This policy shall
provide, by endorsement or otherwise, that Contractor shall
be solely responsible for the payment of all premiums under
the policy, and that Owner and the other Indemnitees shall
have no obligation for the payment thereof, notwithstanding
that Owner and the other Indemnitees are named as insureds
under the policy. Any insured loss or claim of loss shall
be adjusted by the Owner and any settlement payments shall
be made payable to the Owner as trustee for the insureds,
as their interests may appear, subject to the requirements
of any applicable mortgage clause. Upon the occurrence of
an insured loss or claim of loss, monies received will be
held by Owner who shall make distribution in accordance
with an agreement to be reached in such event between Owner
and Contractor, If the parties are unable to agree between
themselves on the settlement of the loss, such dispute
shall be submitted to a court of competent jurisdiction to
determine ownership of the disputed amounts but the Work of
the Project shall nevertheless progress during such period
of dispute without prejudice to the rights of any party to
the dispute. The Contractor shall be responsible for any
loss within the deductible area of the policy.
11.3.6 BROAD FORM BOILER AND MACHINERY INSURANCE. Contractor shall
maintain, at its sole expense, such boiler and machinery insurance as
may be required by the Contract Documents or by law.
11.4 CONTRACTOR'S EQUIPMENT POLICY. Any such insurance policy covering
Contractor's or its Subcontractors' or Sub-subcontractors' equipment against
loss by physical damage shall include an endorsement waiving the insurer's
right of subrogation against the Indemnitees. Such insurance shall be
Contractor's and its Subcontractors' sole and complete means of recovery for
any such loss. Should Contractor or its Subcontractors choose to self-insure
this risk, it is expressly agreed that the Contractor and its Subcontractors
hereby waive any claim for damage or loss to said equipment in favor of the
Indemnitees.
11.5 RELEASE OF WAIVER--Contractor hereby releases, and shall cause its
Subcontractors to release, Owner and the other Indemnitees from any and all
claims or causes of action whatsoever which Contractor and/or its
Subcontractors might otherwise possess resulting in or from or in any way
connected with any loss covered or which should have been covered by
insurance, including the deductible portion thereof, maintained and/or
required to be maintained by Contractor and/or its Subcontractors pursuant to
the Contract Documents.
11.6 CLAIMS MADE POLICIES.. With respect to any of the insurance policies
provided by Contractor pursuant to the Contract Documents which are "Claims
made" policies, in the event that at any time such policies are canceled or
not renewed, Contractor shall provide a substitute insurance policy(ies) with
terms and conditions and in amounts which comply with the terms of the
Contract Documents and which provides for retroactive coverage to the date of
cancellation or non-renewal to fill any gaps in coverage which may exist due
to the cancellation or non-renewal of the prior "claims made" policies. With
respect to all "claims made" policies which are renewed, Contractor shall
provide coverage retroactive to the date of
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commencement of the Work in said renewed policy. All said substitute or
renewed "claims made" policies shall be maintained in full force and effect
for the longer of (I) two (2) years from the date of completion of the Work
or (ii) as otherwise required by the Contract Documents. A certificate
evidencing continuation of such policies shall be submitted with the final
Application of Payment as required by Article 9.1.2. Nothing herein shall
affect the continuing effectiveness of the indemnity clauses in the Contract
Documents..
11.7 INDEMNIFICATION. With the exception that this Paragraph 11.7 shall
in no event be construed to require indemnification by Contractor to a
greater extent than permitted under the public policy of the state where the
Project is located, Contractor shall indemnify, defend (if required by Owner
and with Counsel selected by Owner), and hold Owner, and the Owner's
Representative, the parent, subsidiary, related and affiliated companies or
partnerships of each and the officers, directors, agents, employees, partners
and assigns of each, harmless from and against any and all claims, demands,
suits, judgments, losses or expenses of any nature whatsoever (including
actual attorney's fees) ("Claims") arising directly or indirectly, in whole
or in part, from or out of any:
(a) Act or omission of Contractor, its officers, directors, agents,
employees, any contractor, subcontractor or subconsultant of any
tier, anyone directly or indirectly employed by any of them or
anyone for whose acts any of them may be liable;
(b) Personal injury, including but not limited to, bodily injury,
emotional injury, sickness or disease, or death to persons,
including but not limited to any employees or agents of Contractor,
Owner or any independent contractor, subcontractor or
sub-subcontractor and/or damage to property of anyone (including
loss of use thereof), caused or alleged to be caused in whole or in
part by any negligent act or omission of Contractor, or anyone
directly or indirectly employed or engaged by Contractor,
contracting or subcontracting by or under Contractor, or anyone or
whose acts Contractor may be liable, regardless of whether such
personal injury or damage is caused in part by a party indemnified
hereunder;
(c) Penalties imposed on account of the violation of any law, order,
citation, rule, regulation, standard, ordinance or statute, caused
by the action or inaction of Contractor, anyone directly or
indirectly employed or engaged by Contractor or contracting or
subcontracting by or under Contractor or anyone for whose acts
Contractor may be liable;
(d) Infringement of any patent, trademark, or copyright, or violation of
trade secret or other proprietary right by any structure or
equipment, contracted, modified or incorporated by or on behalf of
the Owner pursuant to this Contract;
(e) Any failure of Contractor or any of its subcontractors or
subconsultants of any tier to perform and complete the Work in
strict compliance with the Contract Documents (unless such failure
has been specifically and expressly waived by the Owner in writing);
(f) Failure of Contractor to comply with the insurance provisions of
this Paragraph 11.7;
(g) Any breach by Contractor of any of its duties, obligations or
representations and warranties contained in the Contract. The
indemnification provisions of this Paragraph 11.7 shall extend to
Claims occurring after this Contract is terminated as well as while
it is in force. Such indemnity provisions apply regardless of any
active and/or passive negligent act by omission or Owner, its
agents, independent contractors or employees. Contractor, however,
shall not be obligated under this Contract to indemnify Owner for
claims arising from the sole negligence or willful misconduct of
Owner or its agents, employees or independent contractors who are
directly responsible to Owner, or for defects in design furnished by
such persons. The indemnities set forth in this Paragraph 11.7 shall
not be limited by the insurance requirements contained herein. The
provisions of this paragraph shall survive the expiration or sooner
termination of the Contract.
ARTICLE 12
CHANGES IN THE WORK
12.1 CHANGE ORDERS AND DIRECTIVES. The Owner may, without affecting the
validity of the Contract Documents or any term or condition thereof, issue
Change Orders or Directives or give other orders and instructions regarding
the Work which may have the effect of ordering extra work or other changes in
the Work by altering, adding to or deducting from the Work, modifying the
method or manner of its performance or otherwise (herein sometimes referred
to as "Changes in the Work"). In any such event, the Contract Sum shall,
where applicable, be increased or decreased in the manner hereinafter set
forth; provided, however, that if the Contractor should proceed with a
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Change in the Work upon an oral order, by whomsoever given, it shall
constitute a waiver by the Contractor of any claim for an increase in the
Contract Sum or extension of the Contract Time on account hereof. All Changes
in the Work shall be performed in accordance with the Contract Documents.
12.2 CHANGES REQUIRING AN INCREASE IN CONTRACT SUM. If any Change in the
Work will result in an increase in the Contract Sum, the Owner shall have the
right to require the performance thereof on a lump sum basis, a unit price
basis or a time and material basis, all as hereinafter more particularly
described.
12.2.1 LUMP SUM BASIS. If the Owner elects to have any Change in the
Work performed on a lump sum basis, its election shall be based on a
lump sum proposal which shall be submitted by the Contractor to the
Owner within the time established by the Owner in the Owner's request
therefor. The Contractor's proposal shall be itemized and segregated
by labor and materials for the various components of the Change in
the Work and shall be accompanied by signed proposals of any
Subcontractors or Sub-subcontractors who will perform any portion of
the Change in the Work and of any persons who will furnish materials
or equipment for incorporation therein. The portion of the proposal
relating to labor, whether by the Contractor's forces or those of
its Subcontractors or Sub-subcontractors, may only include
reasonably anticipated gross wages of Job Site labor, including
foremen, who will be directly involved in the Change in the Work,
plus payroll costs (including Social Security, federal or state
unemployment insurance taxes and fringe benefits in connection with
such labor required by union and/or trade agreements if applicable)
and up to ten percent (10%) of such anticipated gross wages, but not
payroll costs, as overhead and profit for any such entity actually
performing the Change in the Work or a portion thereof. The portion
of the proposal relating to materials may only include the
reasonably anticipated direct costs to the Contractor, its
Subcontractors or Sub-subcontractors of materials to be purchased
for incorporation in the Change in the Work, plus transportation and
applicable sales or use taxes, and up to ten percent (10%) of said
direct material costs as overhead and profit for the entity actually
supplying the materials. The proposal may further include the
Contractor's or its Subcontractor's or Sub-subcontractor's
reasonably anticipated direct rental costs in connection with the
Change in the Work (either actual rates or discounted local
published rates), plus up to six percent (6%) thereof as overhead
and profit for the entity actually incurring such costs. If any of
the items included in the lump sum proposal are covered by unit
prices contained in the Contract Documents, the Owner may elect to
use these unit prices in lieu of the similar items included in the
lump sum proposal, in which event an appropriate deduction will be
made in the lump sum amount prior to the application of any allowed
overhead and profit percentages. No overhead and profit shall be
applied to any unit prices.
12.2.2 INTENTIONALLY OMITTED.
12.2.3 TIME AND MATERIAL BASIS. If the Owner elects to have the
Change in the Work performed on a time and material basis, the same
shall be performed, whether by the Contractor's forces or the forces
of any of its Subcontractors or Sub-subcontractors, at actual cost to
the entity performing the Change in the Work (without any charge for
administration, clerical expense, supervision or superintendence of
any nature whatsoever, except foremen directly involved in the
Change in the Work, or the cost, use or rental of small tools
defined as tools with a cost or value of less than $1,000, or
equipment owned by the Contractor or any of its related or
affiliated companies), plus ten percent (10%) of gross wages
(excluding payroll costs) of Job Site labor and direct material
costs and six percent (6%) of rental costs (other than small tools
defined as tools with a cost or value of less than $1,000, or
equipment owned by the Contractor or any of its related or
affiliated companies) as the total overhead and profit. The
Contractor shall submit to the Owner daily time and material
tickets, to include the identification number assigned to the Change
in the Work, the location and description of the Change in the Work,
the classification, names and social security numbers of labor
employed, the materials used, the equipment rented (not tools) and
such other evidence of cost as the Owner may require. The Owner may
require authentication of all time and material tickets and invoices
by persons designated by the Owner for such purpose. The failure of
the Contractor to secure any required authentication shall, if the
Owner elects to treat it as such, constitute a waiver by the
Contractor of any claim for the cost of that portion of the Change
in the Work covered by a non-authenticated ticket or invoice;
provided, however, that the authentication of any such ticket or
invoice by the Owner shall not constitute an acknowledgment by the
Owner that the items thereon were reasonably required for the Change
in the Work.
12.2.4 The Owner shall have no obligation or liability on account of
a Change in the Work except as specifically provided in this Paragraph
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12.2. If the Contractor fails to render any proposal within ten (10)
days after the date of the Owner's request pursuant to this
Paragraph 12.2 or such longer period of time established by the
Owner in its request, the Owner may issue a unilateral Change Order
for any such Change in the Work giving the Owner's reasonable
estimate of the cost of the Change, which shall become automatically
binding upon the Contractor. Overhead and profit, as allowed under
this Paragraph 12.2, shall be deemed to cover all costs and expenses
of any nature whatsoever including, without limitation, those for
clean-up, protection, supervision, estimating, field operations,
impacts, inefficiency, extended (Job Site and home office) overhead,
unabsorbed (Job Site and home office) overhead, delays, acceleration
(actual or constructive), ripple effect, small tools and security,
which the Contractor or any of its Subcontractors of
Sub-subcontractors may incur in the performance of or in connection
with a Change in the Work and which are not otherwise specifically
recoverable by them pursuant to this Paragraph 12.2.
12.2.5 The Work pursuant to this Contract shall be performed by the
Contractor at no extra cost to the Owner despite any order from the
Owner which designates or contemplates a portion of the Work as a
Change in the Work.
12.3 CHANGES REQUIRING A DECREASE IN CONTRACT SUM. If any Change in the
Work will result in a decrease in the Contract Sum, the Owner may request a
quotation by the Contractor of the amount of such decrease for use in
preparing a Change Order. The Contractor's quotation shall be forwarded to
the Owner within ten (10) days after the date of the Owner's request of such
longer period of time established by the Owner therein and, if acceptable to
the Owner, shall be incorporated in the Change Order. If not acceptable, the
parties shall make every reasonable effort to agree as to the amount of such
decrease, which may be based on a lump sum properly itemized, on unit prices
stated in the Contract Documents and/or on such other basis as the parties
may mutually determine. If the parties are unable to so agree, the amount of
such decrease shall be the total of the estimated reduction in the actual
cost of the Work, as determined by the Owner's Representative in its
reasonable judgment. If the Contractor fails to render any proposal within
the time required herein, the Owner may issue a unilateral deductive Change
Order giving the Owner's reasonable estimate of the deductive Change, which
shall become automatically binding upon the Contractor.
12.4 DISPUTES REGARDING CHANGES. If any dispute should arise between the
parties with respect to an increase or decrease in the Contract Sum as a
result of a Change in the Work, the Contractor shall not suspend performance
of any such Change in the Work or the Work itself unless otherwise so ordered
by the Owner in writing. The Owner may, however, notify the Contractor of its
determination regarding any such Change and, in the case of an increase, may
thereafter pay to the Contractor up to 50% of the Owner's reasonable estimate
of the value of the Change in the Work as its sole obligation with respect to
any such Change pending resolution of the dispute. The Contractor shall
thereafter be subject to the terms of Paragraph 13.2 regarding its claims for
any difference.
12.5 AUDIT RIGHTS. Where the Work performed is done pursuant to payment
based upon a negotiated, time and material or cost plus basis, then the
Contractor shall afford, access to the Owner at all reasonable times to any
accounting books and records, correspondence, instructions, invoices,
receipts, vouchers, memoranda and other records of any kind relating to the
Work, all of which each of them shall maintain for a period of at least four
(4) years from and after the Date of Substantial Completion. The Contractor
shall make the same available for inspection, copying and audit, in
accordance with general accepted accounting standards, within three (3) days
following notification to the Contractor of the Owner's intent to audit,
failing which any claims for an increase in the Contract Sum and/or extension
of the Contract Time, as applicable, shall be waived.
ARTICLE 13
CLAIMS
13.1 CLAIMS FOR EXTENSIONS OF CONTRACT TIME. No claim by the Contractor
for an extension of the Contract Time or any Milestones shall be considered
unless made in accordance with this Paragraph 13.1. The Contractor shall not
be entitled to any extension of the Contract Time or any milestones as a
result of any cause unless it shall have given written notice to the Owner
pursuant to Paragraph 16.3, within fourteen (14) days following the
commencement of each such condition or cause of the occurrence and probable
duration thereof. The Contractor hereby waives any claims for any such
extensions not timely made in accordance herewith.
13.2 CLAIMS FOR INCREASES IN CONTRACT SUM. Except as otherwise provided
in Paragraph 12.2, no claim by the Contractor for an increase in the Contract
Sum shall be considered unless made in accordance with this Paragraph. The
Contractor shall give the Owner written notice of any such claim not later
than fourteen (14) days after the occurrence of the event giving rise to the
claim (including, without limitation, any Owner determination pursuant to
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Paragraph 12.4), but (except in the event of emergencies pursuant to
Paragraph 10.3) prior to the incurring of any expenses by the Contractor.
Failure to give such notice shall constitute a waiver of the claim including,
but not limited to, any and all damages, cost, impacts, inefficiency,
extended overhead, unabsorbed overhead, ripple effect, or expenses of any
nature whatsoever which the Contractor, or its Subcontractors or
Sub-subcontractors, may suffer or incur. Claims shall be made in writing and
shall identify the instructions or other circumstances that are the basis of
the claim and shall set forth the Contractor's best estimate of the dollar
amount claimed. No claim shall be considered by the Owner if the Contractor
has otherwise waived its rights to file a claim pursuant to the Contract
Documents..
13.3 RESOLUTION OF CLAIMS.. The Architect will review Claims and within
ten (10) days after receipt of a Claim will either (i) reject the Claim in
whole or in part, (ii) recommend approval of the Claim in whole or in part,
(iii) request the claimant provide additional information in support of the
Claim, or (iv) suggest a compromise. The Architect's action under the
preceding sentence shall be promptly reported to the Owner and the
Contractor. If a Claim is not resolved after consideration of the foregoing
and of any further evidence provided to the Architect, the claimant shall be
entitled to pursue its Claim in any lawful manner, subject to any limitations
contained in the Contract Documents, if any. The foregoing notwithstanding,
none of Architect's decisions or recommendations with respect to Claims or
any other matters will be binding on Owner or Contractor unless Owner and
Contractor otherwise mutually agree in writing.
13.4 NO OTHER CLAIMS. The parties acknowledge that the provisions of
Paragraphs 13.1 and 13.2 are included herein for the purpose of fixing and
limiting the time within which, and the manner in which claims must be made;
and that Paragraphs 13.1 and 13.2 do not grant to the Contractor any right to
increase in the Contract Sum, or extensions in the Contract Time or any
Milestones, not otherwise permitted or provided by the other terms and
provisions of the Contract Documents.
13.5 NO ARBITRATION. Owner and Contractor hereby agree that no claims or
disputes between Owner and Contractor arising out of or relating to the
Contract Documents or a breach thereof shall be decided by any arbitration
proceeding including, without limitation, any proceeding under the Federal
Arbitration Act (9 U.S.C. Sections 1-14), or any applicable state arbitration
statute, except that in the event that Owner is subject to an arbitration
proceeding related to the Project, Contractor consents to being joined in the
arbitration proceeding if Contractor's presence is required or requested by
Owner for complete relief to be accorded in the arbitration proceeding.
ARTICLE 14
UNCOVERING AND CORRECTION OF WORK;
OWNER'S RIGHT TO CARRY OUT WORK
14.1 UNCOVERING OF WORK.
14.1.1 If any portion of the Work should be covered contrary to the
instructions or request of the Owner or the requirements of the
Contract Documents, the Contractor shall, if required by the Owner,
uncover such portions of the Work for the Owner's observation and
shall replace such Work, all at the Contractor's sole expense.
14.1.2 If any portion of the Work should be covered prior to a
specific request for observation or instruction by the Owner, the
Owner may request to see such Work, and it shall be uncovered by the
Contractor. If such Work is found to be in accordance with the
Contract Documents and without defect, the cost of uncovering and
replacement shall, by appropriate Change Order, be charged to the
Owner. If such work is found to be defective or not in accordance
with the Contract Documents, the Contractor shall bear such costs;
provided, however, that if it is found that the condition was caused
by a Separate Contractor employed as provided in Article 7, the
Contractor shall have the right to seek reimbursement of the costs
it incurs as aforesaid from said Separate Contractor.
14.2 CORRECTION OF WORK.
14.2.1 The Owner shall have the authority to reject any portion of
the Work which is defective or does not conform to the Contract
Documents, and the Contractor shall promptly correct all Work so
rejected by the Owner, whether observed before or after the Date of
Substantial Completion and whether or not fabricated, installed or
completed. In order that such corrective work shall not interrupt or
delay the Owner's schedule for completion of the Project or, if
applicable, disturb the occupants of the completed Project, the
Contractor shall perform such work according to a schedule therefor
established by the Owner (which may provide that the same be
performed on overtime, shift
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work, Saturdays, Sundays and/or holiday), utilizing in the
performance thereof such manpower as is necessary to complete the
corrective Work in accordance with said schedule. The Contractor
shall bear all costs of correcting such rejected Work, including,
without limitation, compensation for any additional architectural
and engineering services made necessary thereby.
14.2.2 If, within one (1) year after the Date of Substantial
Completion of the Work or within such longer period of time as may
be prescribed by law or by the terms of any applicable warranty or
guarantee required by the Contract Documents, any of the Work is
found to be defective or not in accordance with the Contract
Documents, the Contractor shall correct it promptly after receipt of
written instructions to that effect from the Owner unless the Owner
has previously given the Contractor a written acceptance of such
condition.
14.2.3 The Contractor shall remove from the Job Site all Work
which is defective or non-conforming and not corrected under
Paragraph 5.3 or Subparagraphs 14.2.1 or 14.2.2 unless removal is
waived by the Owner.
14.2.4 The Contractor shall bear the cost of making good all work
of Separate Contractors (and any of the Owner's other structures or
facilities) destroyed or damaged by such removal or correction.
14.2.5 If the Contractor does not remove such uncorrected
defective or non-conforming Work within a reasonable time fixed by
written instructions to that effect from the Owner, the Owner may
remove it and store the materials and equipment at the expense of
the Contractor. If the Contractor does not pay the cost of such
removal and storage within ten (10) days thereafter, the Owner may,
upon ten (10) additional days written notification to the
Contractor, sell such materials and equipment at public or private
sale and account to the Contractor for the net proceeds thereof,
after deducting all the costs that should have been borne by the
Contractor, including compensation for any additional architectural
and engineering services and attorneys' fees made necessary thereby.
If such proceeds of sale do not cover all costs which the Contractor
should have borne, the difference shall be deducted or offset
against any amounts then or thereafter due to the Contractor. If the
amounts then or thereafter due to the Contractor are not sufficient
to cover such difference, the Contractor shall, upon demand, pay the
same to the Owner. The obligations of the Contractor under this
Subparagraph 14.2.5 shall be in addition to, and not in limitation
of, any obligations imposed on it by law, by any other provision of
this Contract or by any warranty or guarantee under this Contract.
14.2.6 If the Contractor fails to correct any defective or
non-conforming Work, the Owner may correct it in accordance with
Paragraph 14.3. In the event of a defect found after final
acceptance of the Work by the Owner which the Contractor is
obligated to correct pursuant to Subparagraph 14.2.2, the Owner may,
at its option, after giving the Contractor an opportunity to correct
such defect, cause such corrective work to be performed by others
and charge the Contractor with the cost thereof. Such charge shall
be due and payable by the Contractor upon demand. The Contractor's
obligations under this Paragraph 14.2 shall survive the expiration
or sooner termination of this Contract.
14.3 OWNER'S RIGHT TO CARRY OUT WORK. If the Contractor defaults or
neglects to carry out the Work in accordance with the Contract Documents or
fails to perform any provision of this Contract, and such default, neglect or
non-performance shall continue for a period of 48 hours after written
notification thereof from the Owner (or if such default, neglect or
non-performance cannot be reasonably remedied within such 48-hour period, and
Contractor does not (in the sole determination of Owner) undertake in good
faith the remedy of the same within said period and thereafter proceed
diligently to completion), then the Owner may, without prejudice to any other
remedy the Owner may have, make good such deficiencies; provided, however,
that in the event of an emergency, as reasonably determined by the Owner, no
notification shall be required. The Owner shall have the right to take
possession of such portion of the Job Site as will enable it to make good
such deficiencies and, in connection therewith, to utilize the materials,
equipment, tools, construction equipment and machinery of the Contractor
located on the Job Site. If the Owner makes good any such deficiencies, the
costs of correcting the same, including compensation for additional
architectural and engineering service made necessary by such default, neglect
or non-performance, shall be deducted or offset against any amounts then or
thereafter due to the Contractor. If the amounts then or thereafter due to
the Contractor are not sufficient to cover such costs, then the Contractor
shall, upon demand, pay the difference to the Owner.
14.4 ACCEPTANCE OF DEFECTIVE OR NON-CONFORMING WORK. If the Owner
prefers to accept defective or non-conforming Work, it may do so instead of
requiring its removal and correction, in which case an appropriate amount
shall be deducted or offset against any amounts then or thereafter due to the
Contractor; or, if the said appropriate amount of offset is determined after
final payment (or if there is not then or thereafter due to the
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Contractor an amount sufficient to cover the deduction or offset available to
the Owner), the Contractor shall, upon demand, pay the appropriate amount (or
the difference after offset, as applicable) to the Owner.
ARTICLE 15
TERMINATION OF CONTRACT
15.1 TERMINATION BY CONTRACTOR. If the Owner should, without notifying
the Contractor of its cause for doing so, fail or refuse to approve an
Application for Payment or make payment thereon for a period of Twenty Five
(25) days after the same is required to be approved or paid pursuant to the
Contract Documents, then the Contractor shall have the right, as its sole and
exclusive remedy and upon Seven (7) days prior written notice to the Owner,
to terminate this Contract and recover from the Owner payment for all unpaid
Work executed up to the date of termination, including any proven loss of
reasonable profits sustained, based upon the percentage of Work completed
through the date of termination. If the Owner shall cure its said default
within such fourteen (14) day period, then the Contractor's notice of
termination shall thereby be rendered ineffective, and this Contract shall
continue in full force and effect. Prior to termination as aforesaid, the
Contractor shall not delay or suspend the Work in whole or in part. The
Contractor may not terminate this Contract on the grounds that the cause
given by the Owner for failing or refusing to pay is not in accordance with
fact or law, it being understood and agreed that the Contractor's sole remedy
in such event shall be to seek money damages. The Contractor acknowledges
that it can be adequately compensated by such money damages for any breach of
this Contract which may be committed by the Owner. Accordingly, and except as
hereinabove provided, the Contractor expressly agrees that no default, act or
omission of the Owner shall entitle the Contractor to cancel, rescind or
terminate this Contract or suspend or abandon its performance of the Work.
15.2 TERMINATION BY OWNER FOR CAUSE.
15.2.1 If the Contractor should become insolvent, file any
bankruptcy proceedings, make a general assignment for the benefit of
creditors, suffer or allow appointment of a receiver, refuse, fail
or be unable to make prompt payment to Subcontractors, disregard
applicable laws, ordinances, governmental orders or regulations or
the instructions of the Owner, or if the Contractor should otherwise
be guilty of a violation of, or in default under, any provision of
the Contract, then the Owner may, without prejudice to any other
right or remedy available to the Owner and after giving the
Contractor and its surety, if any, three (3) days' written notice,
terminate the Contract and the employment of the Contractor on the
Project, take possession of the Job Site and of all materials,
equipment, tools, construction equipment and machinery thereon owned
by the Contractor and finish the Work by whatever method the Owner
may deem expedient. In addition, without terminating this Contract
as a whole, the Owner may, under any of the circumstances set forth
above, terminate any portion of this Contract (by reducing, in such
manner as the Owner deems appropriate, the scope of the Work to be
performed by the Contractor) and complete the portion of this
Contract so terminated in such manner as the Owner may deem
expedient, taking possession of such part of the Job Site and
utilizing such materials, equipment, tools, construction equipment
and machinery owned by the Contractor as may be necessary to
accomplish the same. The Contractor hereby grants to the Owner the
further right: (a) to enter upon any premises or property other than
the Job Site in order to take possession of any materials, tools,
equipment, machinery or other items intended for incorporation in
the Work (or any portion thereof) or for use in the performance
thereof and (b) to receive an assignment of such subcontracts as the
Owner deems necessary or desirable at the time of termination of
this Contract or a portion thereof.
15.2.2 If this Contract is terminated pursuant to Subparagraph
15.2.1, the Contractor shall not be entitled to receive any further
payment until the Work is completed, and the Owner shall have the
same right to retain monies owing to the Contractor as it would have
to retain such monies from and against final payments. Upon the
completion of the Work, the Owner shall make payment to the
Contractor, or the Contractor shall reimburse the Owner, as the case
may be, as provided in Article 10 of the Agreement. If a portion of
this Contract is terminated pursuant to Subparagraph 15.2.1, such
termination shall not be treated as a reduction in the scope of the
Work pursuant to Article 12. Rather, in such event, the Owner shall
deduct or offset against any monies then or thereafter due to the
Contractor an amount determined by the Owner to be adequate to cover
all costs and expenses it will incur in performing, or cause to be
performed, the portion of this Contract so terminated. If the
Owner's costs and expenses prove to be less than the amount deducted
or offset, the Contractor shall be entitled to the difference unless
otherwise provided herein. If the amount then or thereafter due to
the Contractor is less than the amount to be deducted or offset
and/or if the Owner's costs
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and expenses prove to exceed the amount deducted or offset, the
Contractor shall pay the difference to the Owner upon demand.
15.2.3 The remedies provided to the Owner in this Paragraph 15.2
are in addition to, and not in lieu of, any other rights or remedies
available to the Owner under the Contract Documents, at law or in
equity. In the event of any breach of this Contract by the
Contractor, and whether or not this Contract is terminated by the
Owner, the Contractor shall be liable for all damages, losses, costs
and expenses incurred by the Owner as a result thereof.
15.3 TERMINATION BY OWNER WITHOUT CAUSE. Without limitation to the
provisions of Paragraph 15.2, the Owner shall have the right at any time,
upon not less than seven (7) days notice to the Contractor to terminate this
Contract without cause and/or for the Owner's convenience. Upon receipt of
such notice of termination, the Contractor shall forthwith discontinue the
Work and remove its equipment and employees from the Job Site. In the event
of termination under this Paragraph 15.3, the Contractor shall have the
right, as its sole and exclusive remedy, to recover from the Owner payment
for all unpaid Work executed up to the date of termination. In addition,
without terminating this Contract as a whole, the Owner may, for its
convenience, terminate a portion of this Contract (by reducing, in such
manner as the Owner deems appropriate, the scope of the Work to be performed
by the Contractor), in which event such termination of a portion of this
Contract shall be treated as a reduction in the scope of the Work pursuant to
Article 12.
ARTICLE 16
MISCELLANEOUS PROVISIONS
16.1 GOVERNING LAW. This Contract shall be governed by, and construed in
accordance with, the laws of where the Project is located, to the exclusion
of the rules of conflicts of laws of the state where the Project is located.
16.2 ASSIGNABILITY; SUCCESSORS AND ASSIGNS.
16.2.1 This Contract may be assigned by Owner at any time without
Contractor's consent; without limiting the generality of the
foregoing, all warranties and guarantees in favor of Owner under the
Contract Documents may be assigned without Contractor's consent by
Owner to any party designated by Owner and such assignee may
directly enforce any such warranty or guarantee. The Contractor
shall not assign this Contract in whole or in part without the
written consent of the Owner, which consent the Owner may withhold
in its sole discretion; nor shall this Contract be assignable by the
Contractor by operation of law. The Contractor shall not assign any
monies due or to become due to it hereunder without the prior
written consent of the Owner.
16.2.2 The Owner and the Contractor each binds itself and, to the
extent permitted herein, its successors and assigns, to the other
party and, to the extent permitted herein, the other party's
successors and assigns, in respect to all covenants, agreement and
obligations contained in the Contract Documents.
16.3 PERFORMANCE AND PAYMENT BONDS. Unless waived or otherwise agreed by
the Owner, the Contractor shall furnish before commencing any Work hereunder,
and under each continuing (on-call) Work on multiple projects or continuing
(on-call) services as set forth in the Owner approved Work Authorization
Forms, (and if directed by the Owner shall require all or certain of its
Subcontractors to furnish) a bond covering the faithful performance of this
Contract (or any such subcontract), as revised or modified from time to time,
and a bond covering the payment of all obligations arising thereunder in full
compliance with applicable law each in the full Contract Sum, as revised or
Modified from time to time, and with such sureties as may be approved by the
Owner. If such bonds, or either of them, are stipulated in the bidding
documents or in the Contract Documents, the premium therefor shall be paid by
the Contractor (or appropriate Subcontractors); but if required or increased
in amount pursuant hereto subsequent to award of Contract or due to Changes
in the Work, the premium therefor shall be reimbursed by the Owner. The
Contractor shall deliver promptly, and in any event no later than ten (10)
days after notice of award, to the Owner any required bonds or amendments
thereto. The Contractor's failure to timely obtain and deliver the required
bonds or amendments thereto shall constitute cause for the Owner to terminate
this Contract (or for the Contractor to terminate any subcontract). The Owner
shall not be obligated to respond to, and the Contractor shall assure that
the Owner is not sent any job status inquiries from the Contractor, any
surety, or any of their accountant or independent auditors.
16.4 UNION AGREEMENTS. Except as otherwise set forth in this Agreement
including but not limited to paragraph 8.3, regardless of the expiration of
any collective bargaining agreement during the term of this Contract which
may affect the Contractor in any of its activities including, without
limitation, with respect to the Work or the Project, the Contractor is
obligated to man the job and properly and timely perform the Work in a
diligent manner. Upon notification of expected or actual labor disputes or
job disruption arising out of any such collective bargaining negotiations,
the expiration of any union or
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trade agreement or any other cause, the Contractor and its Subcontractors and
Sub-subcontractors shall cooperate with the Owner concerning any legal,
practical or contractual actions to be taken by the Owner in response thereto
and shall perform any actions requested by the Owner to eliminate, neutralize
or mitigate the affects of such actions on the progress of the Work and the
impact of such actions on the public access to the Owner's facilities. It is
the Contractor's obligation, at the Contractor's own cost and expense, to
take all steps available to prevent any persons performing the Work from
engaging in any disruptive activities such as strikes, picketing, slowdowns,
job actions or work stoppages of any nature or ceasing to work due to
picketing or other such activities, which steps shall include, without
limitation, execution of an appropriate project agreement with appropriate
unions prohibiting all such activities on or about the Project.
Notwithstanding any such occurrences, the Contractor shall not be relieved of
its obligation to man the job and properly and timely perform the Work in a
diligent manner.
16.5 GENERAL.
16.5.1 The captions of divisions, sections, articles, paragraphs,
subparagraphs, clauses and the like in the Contract Documents are
for convenience only and shall in no way define the content or
limit the meaning or construction of the wording of the divisions,
sections, articles, paragraphs, subparagraphs, clauses and the
like. The parties agree that the Contract Documents shall not be
construed more strictly against any party regardless of the
identity of their drafter.
16.5.2 Unless otherwise specified, article, paragraph and
subparagraph references appearing in these General Conditions are to
articles, paragraphs and subparagraphs herein.
16.5.3 Wherever this Contract obligates the Contractor to
"indemnify" the Owner, such obligations shall include, but shall
not be limited by, the following: (i) the Contractor shall
indemnify the Owner and Owner's Representative, the parent,
related, affiliated and subsidiary companies of each, and the
officers, directors, agents, employees and assigns of each;
(ii) the Contractor shall defend (if requested by the Owner)
and hold each indemnitee harmless; (iii) in the event of any such
requested defense, the Owner may choose its legal counsel
and control the litigation including, without limitation,
determining legal strategy, settlement strategy and whether or not
to file any appeals; (iv) the Contractor shall not raise a defense
to its obligation to indemnify any comparative or contributing
negligence of any of those indemnified pursuant to any such
provision, it being understood and agreed that no such
comparative or contributing negligence shall relieve the
Contractor from its liability to so indemnify or entitle the
Contractor to any contribution, either directly or indirectly
by those indemnified; (v) no indemnification obligation hereunder
shall be limited in any way to any limit on the amount or type of
damage, compensation or benefits payable by or for the Contractor
or any Subcontractor or any Sub-subcontractor under any Worker's
Compensation Act, disability benefit acts or other employee benefit
acts and (vi) in all such indemnity provisions shall survive
the expiration or sooner termination of this Contract.
16.5.4 Unless otherwise specifically provided herein, the Owner
may withhold any consents, approvals or waivers required of it
pursuant to this Contract in its discretion, which consent shall not
be unreasonably withheld.
16.6 IMMIGRATION REFORM CONTROL ACT. All Contractors, Subcontractors and
Sub-subcontractors must adhere to the Immigration Reform Control Act of 1986
and shall maintain I-9 forms regarding all employees. It is not the Owner's
obligation to insure compliance with this law, however, the Owner reserves
the right to inspect and copy the Contractor's records in this regard upon
request.
16.7 ATTORNEY'S FEES. Any other terms of this Agreement to the contrary
notwithstanding, the parties agree that if any action or proceeding is
commenced by either party to enforce their rights under this Agreement or to
collect damages as a result of the breach of any of the provisions of this
Agreement, the prevailing party in such action or proceeding, shall be
entitled to recover all reasonable costs and expenses, including, without
limitation, reasonable attorneys' fees and court costs, including the costs
of expert witnesses and consultants, in addition to any other relief awarded
by the court.
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EXHIBIT D
MILESTONE DATES
(the Milestone Dates for continuing (on-call) Work on multiple projects or
continuing (on-call) services shall be described in the job specific Work
Authorization form)
EXHIBIT D, Milestone Dates, is bound within this Agreement and made apart of
the Contract Documents between Owner and Contractor.
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EXHIBIT E
CONTRACTOR'S GUARANTEE TO OWNER
In consideration of the above referenced Contract and pursuant to the
provisions thereof, the undersigned hereby guarantees to the Owner, its
successors and assigns, any and all Work which the undersigned has contracted
to perform, or cause to be performed, pursuant to the above referenced
Contract against any defects in workmanship, materials and/or equipment. Such
Work is defined in the Contract Documents.
In addition to the foregoing guarantee, the undersigned agrees to repair
and/or, at the option of the Owner, replace at its own cost and expense any
or all of the aforesaid Work that within a period of one (1) year from the
date of acceptance thereof by the Owner (or such longer period of time as may
be prescribed by law or otherwise specified in the Contract Documents) may
prove to be defective in workmanship, material and/or equipment or in any way
not be in strict accordance and compliance with the Contract Documents,
together with any adjacent structures or facilities which have been displaced
or damaged by so doing or which may have been damaged as a result of any
defect in workmanship, material and/or equipment or the failure of the Work
to comply with the Contract Documents. All such repairs and/or replacements
shall be performed in accordance with all agreements, terms, conditions,
covenants and provisions of the Contract Documents pursuant to which the said
Work was performed, except that such repairs and/or replacements shall be
without cost to the Owner, its successors or assigns, or to any related
company of the Owner.
Should the undersigned fail to perform its obligations under this Guarantee
promptly after being given notice of a defect by the Owner, then the Owner
may, at its option, perform such corrective work or cause it to be performed
by others and charge the undersigned with the cost
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thereof; provided, however, that if, in the sole judgment of the Owner, an
emergency exists as a result of any such defect which, in the Owner's
opinion, requires more immediate corrective action than the undersigned is
able to provide, then the Owner may, without notice to the undersigned,
perform such corrective work or cause it to be performed by others and charge
the undersigned with the cost thereof.
CONTRACTOR
Dome Construction Corporation Local Representative to be contacted for service:
By:_____________________
Name: Name: John Robertson, Vice President
Title: Address: 80 Carolina Street
San Francisco, California 94103-5116
Date:_____________________ Telephone Number (415) 864-6140
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EXHIBIT F
PAYMENT BOND
(If this Agreement is for continuing (on-call) Work on multiple projects or
continuing (on-call) services, a separate Payment Bond shall be
issued for each job specific project or service)
KNOW ALL MEN BY THESE PRESENTS, That we ______________________ as Principal
(Contractor) and as Surety, are held and firmly bound unto ___________ as
Obligee (OWNER), in the penal sum of _____________________________ DOLLARS
($__________) for the payment of which sum we jointly and severally bind
ourselves, our heirs, assigns, executors, administrators and successors
firmly by these presents.
THE CONDITION of the obligation is such that, whereas Contractor has entered
into a Contract with OWNER dated _______________ which Contract is hereto
attached and expressly made a part hereof to perform the following work:
NOW, THEREFORE, if the Contractor shall pay promptly and in full the claims
of all persons, firms, partnerships, corporations or others, supplying labor,
material, services, utilities or equipment in connection with the prosecution
of the work provided for in the Contract and any and all modifications,
additions or alterations of the Contract that may hereafter be made, and
shall fully indemnify and hold harmless the OWNER from all loss, liability
costs, damage penalty and attorney's fees or expenses for all taxes,
insurance premiums, any and all applicable contributions, allowances or other
payments or deductions however termed, required by statute or labor union
agreement, including voluntary payment thereof by the OWNER necessary to
insure orderly prosecution of work or other items or services in connection
with the Contract to be supplied or performed which OWNER may suffer by
reason of failure to do so and shall fully reimburse and repay the OWNER all
outlay and expense which the OWNER may incur in making good any such failure,
then this obligation shall be void; otherwise, it shall remain in full force
and effect.
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The Surety and the Contractor further agree that any changes, modifications,
additions or alterations which may be made in the terms of the Contract or in
the scope or character of the work to be done thereunder, or any extensions
of the Contract or in due time for completion thereof any change in the
manner, time or amount of a payment as provided therein, or other forbearance
on the part of either the OWNER or Contractor to the other, shall not in any
way release the Contractor and the Surety, or either of them, their heirs,
assigns, executors, administrators and successors from their liability
thereunder, nor affect the obligations of any of them hereunder, notice to
Surety of any such changes, modifications, additions, extensions or
forbearance being hereby expressly waived by the Surety.
The Surety and the Contractor further agree that this bond shall insure to
the benefit of, and may be sue directly upon by any person, firm or
corporation furnishing labor, material services, utilities or equipment, in
the prosecution of the work provided for in the Contract, or any
modifications, additions or alterations thereto, or who has the right to
establish a lien or claim against OWNER or OWNER's property, premises or
improvements or any funds accrued, or to accrue, from OWNER.
The sum of this Payment Bond is in addition to the sum of the Performance
Bond being executed concurrently herewith.
IN WITNESS HEREOF, the parties have executed this instrument under their
several seals this _____ day of ________________, 19___.
____________________________________ ________________________________________
CONTRACTOR CORPORATE SURETY
____________________________________ ________________________________________
Address Address
____________________________________ ________________________________________
By:_________________________________ By:_____________________________________
(SEAL) (SEAL)
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EXHIBIT G
PERFORMANCE BOND
(If this Agreement is for continuing (on-call) Work on multiple projects or
continuing (on-call) services, a separate Performance Bond shall
be issued for each job specific project or service)
KNOW ALL MEN BY THESE PRESENTS, That we ______________________ as Principal
(Contractor) and as Surety, are held and firmly bound unto _________________
as Obligee (OWNER), in the penal sum of ____________________________ DOLLARS
($___________) for the payment of which sum we jointly and severally bind
ourselves, our heirs, assigns, executors, administrators and successors
firmly by these presents.
THE CONDITION of the obligation is such that, whereas Contractor has entered
into a Contract with OWNER dated _______________ which Contract is hereto
attached and expressly made a part hereof to perform the following work:
NOW, THEREFORE, if the Contractor shall well and truly perform and fulfill
all the undertakings, covenants, terms, conditions and agreements of the
Contract and any extensions thereof that may be granted by the OWNER, and
during the term of any warranty required under the Contract, and shall also
well and truly perform and fulfill all the undertakings, covenants, terms,
conditions and agreements of any and all modifications, additions or
alterations of the Contract that may hereafter be made, and shall also fully
indemnify and hold harmless the OWNER from all loss, liability costs, damage
penalty and attorneys' fees which OWNER may incur by reason of failure to
well and truly keep and perform each, every and all of the terms and
conditions of said Contract as modified, amended, altered or added to on the
part of Contractor to be kept and performed, including but not limited to
completion within the time specified of all work covered by said Contract,
performance of all obligations, and guarantees of Contractors and shall fully
reimburse and repay the OWNER all outlay and
27
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expense which the OWNER may incur in making good any such failure, then this
obligation shall be void; otherwise it shall remain in full force and effect.
The Surety further agrees that whenever Contractor shall be, and is declared
by OWNER to be, in default under the Contract (and said default shall be
construed to be any breach of any of the provisions of the Contract on the
part of the Contractor) the Surety shall promptly remedy the default, or will
complete the Contract in accordance with its terms and conditions and shall
fully indemnify and hold harmless the OWNER from all costs, damages and
expenses which may arise thereafter (including reasonable attorney's fees)
and which the OWNER may suffer by reason of Surety's failure to do so.
The Surety and the Contractor further agree that any changes, modifications,
additions or alterations which may be made in the terms of the Contract or in
the scope or character of the work to be done thereunder, or any extensions
of the Contract, or in the time for completion thereof, any change in the
manner, time or amount or payment as provided therein, or other forbearance
on the part of either the OWNER or Contractor to the other, shall not in any
way release the Contractor and the Surety, or either of them, their heirs,
assigns, executors, administrators and successors, from their liability
hereunder, nor affect the obligations of any of them hereunder, notice to
Surety of any such modifications, additions, extensions or forbearance being
hereby expressly waived by the Surety.
The sum of this Performance Bond is in addition to the sum of the Payment
Bond being executed concurrently herewith.
IN WITNESS HEREOF, the above parties have executed this instrument under
their several seals this ____ day of __________________, 19___.
____________________________________ ________________________________________
CONTRACTOR CORPORATE SURETY
____________________________________ ________________________________________
Address Address
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____________________________________ ________________________________________
By:_________________________________ By:_____________________________________
(SEAL) (SEAL)
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EXHIBIT H
CHANGE ORDER
The "Change Order", AIA DOCUMENT G701, fourteenth edition, April 1987, is not
bound within this Agreement, but is made apart of the Contract Documents
between Owner and Contractor.
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EXHIBIT I
LEGAL DESCRIPTION
(If this Agreement is for continuing (on-call) Work on multiple projects or
continuing (on-call) services, a separate Legal Description shall
be attached to the Owner approved Work Authorization
Form for each job specific project or service)
The Legal Description is bound within this Agreement and made a part of the
Contract Documents between Owner and Contractor.
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LEGAL DESCRIPTION
225 BUSH STREET
CITY AND COUNTY OF SAN FRANCISCO
STATE OF CALIFORNIA
PARCEL ONE:
Beginning at the point formed by the intersection of the southerly line of
Bush Street with the westerly line of Sansome Street; Running thence
southerly along said line of Sansome Street 137 feet 6 inches; thence at a
right angle westerly 206 feet and 3 inches; thence at a right angle northerly
137 feet and 6 inches to the southerly line of Bush Street; thence at a right
angle easterly along said line of Bush Street 206 feet and 3 inches to the
point of beginning.
Being a portion of 50 Vara Block No. 56.
PARCEL TWO:
Beginning at a point on the southerly line of Bush Street, distant thereon
206 feet and 3 inches westerly from the westerly line of Sansome Street;
running thence westerly along said line of Bush Street 68 feet and 9 inches;
thence at a right angle southerly 137 feet and 6 inches; thence at a right
angle easterly 68 feet and 9 inches; thence at a right angle northerly
137 feet and 6 inches to the point of beginning.
Being a portion of 50 Vara Block No. 56.
PARCEL THREE:
Beginning at a point which is perpendicularly distant 245 feet westerly from
the westerly line of Sansome Street and perpendicularly distant 254 feet
southerly from the southerly line of Bush Street; running thence northerly
and parallel with the westerly line of Sansome Street 16 feet and 6 inches;
thence at a right angle westerly 30 feet; thence at a right angle southerly
16 feet and 6 inches; thence at a right angle easterly 30 feet to the point
of beginning.
Being a portion of 50 Vara Block No. 56.
PARCEL FOUR:
An exclusive easement appurtenant to parcels one, two and three above, as more
particularly described in the deed recorded December 18, 1973, in Book B835,
Page 939, official records, Instrument No. W-38605, affecting the following
described real property:
Beginning at a point on the southerly line of Bush Street, distant thereon
275 feet westerly from the point of intersection of said southerly line of
Bush Street and the westerly line of Sansome Street; running thence westerly
along said southerly line of Bush Street 25 feet; thence at a right angle
southerly 154 feet to a point perpendicularly distant 121 feet, more or less,
from the northerly line of Sutter Street; thence at a right angle easterly
25 feet; thence at a right angle northerly 154 feet to said southerly line of
Bush Street and the point of beginning.
Being a portion of 50 Vara Block No. 56.
<PAGE>
EXHIBIT J
SCHEDULE OF VALUES
The above Schedule of Values is to be allocated by building and division before
submission of the first Application for Payment as mutually agreed to by Owner
and Contractor.
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ADDENDUM 1
HOURLY RATE OR FEE SCHEDULE
(for continuing (on-call) Work on multiple projects or
continuing (on-call) services, the hourly rate or fee
schedule shall be as set forth in the job specific Work
Authorization)
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ADDENDUM 2
WORK AUTHORIZATION FORM
(an Owner approved Work Authorization Form shall be
issued for each project for continuing (on-call)
Work on multiple projects or continuing
(on-call) services)
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WORK AUTHORIZATION FORM
TO
CONSTRUCTION AGREEMENT
(The Work Authorization Form to Construction Agreement is only applicable if the
Agreement (as defined below), is for continuous on-call work on multiple
projects or continuous on-call services)
This Work Authorization Form to Construction Agreement ("Work Authorization")
which supplements the Construction Agreement dated _____________ ("Construction
Agreement"), is made and entered into as of the _________ day of _____________,
1998, by and between _____________ ("Owner") and _____________ ("Contractor").
ARTICLE I
CERTAIN DEFINITIONS
1.1 "WORK AUTHORIZATION #": _____________
1.2 "COMMENCEMENT DATE" shall mean the earlier of the _____________ or
the date fixed in a Notice to Proceed to be delivered by Owner to Contractor
after the date of this Work Authorization form.
1.3 "CONTRACT SUM" shall mean:
( ) Lump Sum. The sum of _____________ Dollars
($_____________), subject to additions and deductions as provided in the
Contract Documents.
( ) Hourly Rate as set forth in the attached ADDENDUM 1,
subject to additions and deductions as provided in the Contract Documents.
( ) In accordance with the fees described in ADDENDUM 1,
subject to additions and deductions as provided in the Contract Documents.
1.4 "PROJECT" shall mean Work at the following location(s): ____________
______________________________________________________________________________.
The Legal Description for the location(s) is set forth on Exhibit 1.
1.5 "INFORMATION ON PROJECT" this Agreement is for:
Project or Contract Name: _____________
Owner's Contract Number: _____________
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Owner's Assigned Job Number: _____________
1.6 "SUBSTANTIAL COMPLETION DATE" shall mean: _________________________.
1.7 "MILESTONE DATES" shall mean: _______________________________________
_______________________________________
_______________________________________
_______________________________________
1.8 "OWNER'S REPRESENTATIVE" for the Project is: __________________
(if different than set forth in the Construction Agreement)
__________________
__________________
__________________
1.9 "CONTRACTOR'S REPRESENTATIVE" for the Project is __________________
(if different that set forth in the Construction Agreement)
__________________
__________________
__________________
1.10 "A/E" for the Project is: __________________
(if different that set forth in the Construction Agreement)
__________________
__________________
__________________
1.11 "CONTRACT DOCUMENTS" shall mean this Work Authorization Form, the
Construction Agreement, the General Conditions, any special supplementary or
other conditions as set forth on Exhibit 2 (collectively "Special
Conditions"), the Drawings, the Specifications, all Addenda (except portions
thereof relating purely to the bidding form or bidding procedure), all
modifications and all other documents enumerated on Exhibit 3 attached
hereto. The Contract Documents collectively form the Contract and are fully
apart thereof as if attached to this Work Authorization Form or repeated
herein.
ARTICLE II
BONDING
2.1 A Payment Bond is required as set forth in Exhibit 4.
2.2 A Performance Bond is required as set forth in Exhibit 5.
ARTICLE III
DELAY DAMAGES
3.1 Delay Damages pursuant to Section 8.3.3 of the General Conditions of
the Contract for Construction shall be _____________ Dollars ($_____________)
for each calendar day
2
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for which Substantial Completion shall not have occurred on or before the
expiration of the Contract Time.
3.2 Delay Damages pursuant to Section 8.3.3 of the General Conditions of
the Contract for Construction do not compensate Owner for any other damages
of any type or kind, including without limitation any damages related to or
in connection with Contractor's failure to fully and properly perform the
Contract Documents or any damages resulting from _____________.
3.3 Pursuant to Section 8.3.5 of the General Conditions of the Contract
for Construction, in addition to Delay Damages under Section 8.3.3 of the
General Conditions of the Contract for Construction, Owner shall at all times
be entitled to all of its remedies under the Contract Documents and at law
and in equity, including, without limitation, the recovery of damages related
to or in connection with Contractor's failure to fully and properly perform
the Contract Documents or any damages resulting therefrom.
ARTICLE IV
MISCELLANEOUS
4.1 A fully executed copy of this Work Authorization hereby authorizes
the Contractor to proceed with the Work as set forth herein and described in
the Contract Documents.
4.2 By executing this document, Contractor acknowledges that - for the
purposes of any applicable Mechanics Lien Law - the Project described in this
document constitutes a separate work of improvement from other Projects
described in other Work Authorizations issued pursuant to the Construction
Contract.
4.3 Contractor shall inform all its consultants, suppliers and other
agents: (i) that the Project described in this Authorization constitutes a
separate work of improvement from other Projects on which they may have
performed Work for Contractor pursuant to the Contract, (ii) that they must
file a new Preliminary Notice to be entitled to lien rights on account of
Work on the Project described in this Work Authorization and (iii) Owner may
file a separate Notice of Completion for the Project described herein at
completion of any construction/installation of Work on this Project.
4.4 Contractor shall provide Owner with subcontractors' and
materialmans' acknowledgments, which indicate that they have been so informed.
4.5 This Work Authorization sets forth the terms and conditions for the
Project set forth herein only. The terms and conditions for other continuing
(on-call) Work on multiple projects or continuing (on-call) services shall be
set forth in separate Work Authorization form(s).
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4.6 Except as set forth herein or as a necessary corollary to this Work
Authorization, all terms, conditions and promises of the Construction
Agreement not inconsistent with the terms, conditions and provisions of this
Work Authorization shall remain in full force and effect and are hereby
reaffirmed by the parties. The terms used herein but not defined in the
foregoing Work Authorization shall have all of the meanings ascribed to such
terms in the Construction Agreement. This Work Authorization may be executed
in multiple counterparts.
OWNER: CONTRACTOR:
---------------------------------- -----------------------------------
By: By:
------------------------------- --------------------------------
Title: Title:
---------------------------- -----------------------------
Date: Date:
----------------------------- ------------------------------
4
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LIST OF EXHIBITS
EXHIBIT 1 - Legal Description
EXHIBIT 2 - Special Conditions
EXHIBIT 3 - List of Contract Documents
EXHIBIT 4 - Payment Bond
EXHIBIT 5 - Performance Bond
ADDENDUM 1 - Hourly Rate or Fee Schedule, if applicable
5
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EXHIBIT 1
LEGAL DESCRIPTION
The Legal Description is bound within this Agreement and made a part of the
Contract Documents between Owner and Contractor.
6
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EXHIBIT 2
SPECIAL CONDITIONS
[A. Materials purchased by Owner
Certain Materials specified in the Contract Documents and to be incorporated
into the Work have been purchased by Owner. The cost for loading, transporting
and unloading these Materials at the Project site are included in the Contract
Sum. The list of materials purchased by the Owner is bound within this Agreement
and made apart of the Contract Documents between Owner and Contractor.]
7
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EXHIBIT 3
LIST OF CONTRACT DOCUMENTS
8
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EXHIBIT 4
PAYMENT BOND
(If this Agreement is for continuing (on-call) Work on multiple projects
or continuing (on-tall) services, a separate Payment Bond shall
be issued for each job specific project or service)
KNOW ALL MEN BY THESE PRESENTS, That we _____________ as Principal
("Contractor") and as Surety, are held and firmly bound unto _____________ as
Obligee ("Owner"), in the penal sum of _______________________________ DOLLARS
($_____________) for the payment of which sum we jointly and severally bind
ourselves, our heirs, assigns, executors, administrators and successors,
firmly by these presents.
THE CONDITION of the obligation is such that, whereas Contractor has entered
into a Contract with Owner dated _____________ which Contract is hereto
attached and expressly made a part hereof to perform the following work:
NOW, THEREFORE, if the Contractor shall pay promptly and in full the claims
of all persons, firms, partnerships, corporations or others, supplying labor,
material, services, utilities or equipment in connection with the prosecution
of the work provided for in the Contract and any and all modifications,
additions or alterations of the Contract that may hereafter be made, and
shall fully indemnify and hold harmless the Owner from all loss, liability
costs, damage penalty and attorney's fees or expenses for all taxes,
insurance premiums, any and all applicable contributions, allowances or other
payments or deductions however termed, required by statute or labor union
agreement, including voluntary payment thereof by the Owner necessary to
insure orderly prosecution of work or other items or services in connection
with the Contract to be supplied or performed which Owner may suffer by
reason of failure to do so and shall fully reimburse and repay the Owner all
outlay and expense which the Owner may incur in making good any such failure,
then this obligation shall be void; otherwise, it shall remain in full force
and effect.
The Surety and the Contractor further agree that any changes, modifications,
additions or alterations which may be made in the terms of the Contract or in
the scope or character of the work to be done thereunder, or any extensions
of the Contract or in due time for completion thereof any change in the
manner, time or amount of a payment as provided therein, or other forbearance
on the part of either the Owner or Contractor to the other, shall not in any
way release the Contractor and the Surety, or either of them, their heirs,
assigns, executors, administrators and successors from their liability
thereunder, nor affect the obligations of any of them hereunder, notice to
Surety of any such changes, modifications, additions, extensions or
forbearance being hereby expressly waived by the Surety.
9
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The Surety and the Contractor further agree that this bond shall insure to
the benefit of, and may be sue directly upon by any person, firm or
corporation furnishing labor, material services, utilities or equipment, in
the prosecution of the work provided for in the Contract, or any
modifications, additions or alterations thereto, or who has the right to
establish a lien or claim against Owner or Owner's property, premises or
improvements or any funds accrued, or to accrue, from Owner.
The sum of this Payment Bond is in addition to the sum of the Performance
Bond being executed concurrently herewith.
IN WITNESS HEREOF, the parties have executed this instrument under their
several seals this _______ day of _____________, 19__.
____________________________________ ________________________________________
CONTRACTOR CORPORATE SURETY
____________________________________ ________________________________________
Address Address
____________________________________ ________________________________________
By:_________________________________ By:_____________________________________
(SEAL) (SEAL)
10
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EXHIBIT 5
PERFORMANCE BOND
(If this Agreement is for continuing (on-call) Work on multiple projects
or continuing (on-call) services, a separate Performance Bond
shall be issued for each job specific project or service)
KNOW ALL MIEN BY THESE PRESENTS, That we _____________ as Principal
("Contractor") and as Surety, are held and firmly bound unto _____________ as
Obligee ("Owner"), in the penal sum of __________________________
DOLLARS($_____________) for the payment of which sum we jointly and severally
bind ourselves, our heirs, assigns,. executors, administrators and successors
firmly by these presents.
THE CONDITION of the obligation is such that, whereas Contractor has entered
into a Contract with Owner dated ______________ which Contract is hereto
attached and expressly made a part hereof to perform the following work:
NOW, THEREFORE, if the Contractor shall well and truly perform and fulfill
all the undertakings, covenants, terms, conditions and agreements of the
Contract and any extensions thereof that may be granted by the Owner, and
during the term of any warranty required under the Contract, and shall also
well and truly perform and fulfill all the undertakings, covenants, terms,
conditions and agreements of any and all modifications, additions or
alterations of the Contract that may hereafter be made, and shall also fully
indemnify and hold harmless the Owner from all loss, liability costs, damage
penalty and attorneys' fees which Owner may incur by reason of failure to
well and truly keep and perform each, every and all of the terms and
conditions of said Contract as modified, amended, altered or added to on the
part of Contractor to be kept and performed, including but not limited to
completion within the time specified of all work covered by said Contract,
performance of all obligations, and guarantees of Contractors and shall fully
reimburse and repay the Owner all outlay and expense which the Owner may
incur in making good any such failure, then this obligation shall be void;
otherwise it shall remain in fun force and effect.
The Surety further agrees that whenever Contractor shall be, and is declared
by Owner to be, in default under the Contract (and said default shall be
construed to be any breach of any of the provisions of the Contract on the
part of the Contractor) the Surety shall. promptly remedy the default, or
will complete the Contract in accordance with its terms and conditions and
shall fully indemnify, defend, and hold harmless the Owner from all costs,
damages and expenses which may arise thereafter (including reasonable
attorney's fees) and which the Owner may suffe