LEASE AGREEMENT
This LEASE AGREEMENT, made as of this 30th day of April, 1998, between Ryan
Companies US, Inc., a Minnesota corporation ("Landlord"), and VERITAS Software
Corporation, a Delaware corporation ("Tenant");
WITNESSETH, THAT
1. PREMISES: Landlord, subject to the terms and conditions hereof, hereby leases
to Tenant certain premises ("Premises") consisting of the building to be built
at _________________________, Centre Pointe Drive, Roseville, Minnesota
("Building"), the land underlying and contiguous thereto and all improvements
thereon ("Project"). The legal description of the land is attached hereto as
Exhibit A-1. A schematic depiction of the Project is attached hereto as Exhibit
A-2.
2.1 TERM: Tenant takes the Premises from Landlord, upon the terms and conditions
herein contained for the term ("Term") of ten (10) years and zero (0) months
commencing on the date upon which a) construction which is the responsibility of
Landlord (including all leasehold improvements under Section 8.1) is
substantially complete and ready for Tenant's occupancy, with only minor
punchlist items, such as minor paint touch-up, replacement of damaged ceiling
tile, and the like, b) a Certificate of Occupancy for the Premises is issued by
the City of Roseville and terminating on the last day of the one hundred
twentieth full calendar month following commencement unless sooner terminated as
herein provided. Landlord has represented to Tenant that the Building and the
Premises will be complete, subject only to delay permitted under Section 29, on
October 1, 1998. If the Term has not commenced by December 1, 1998, (and with
Tenant having had at least two (2) weeks early access pursuant to Section 8.2
prior thereto) then Tenant may, at its election, delay the commencement of the
Term to any date thereafter which is prior to January 15, 1999. No Base Rent or
Additional Rent shall accrue prior to October 1, 1998, regardless of whether or
not the Term has commenced.
2.2. OPTION TO EXTEND: Tenant shall have the option to extend the Term of this
Lease with respect to the entire Premises for two (2) additional terms of five
(5) years, each, (collectively, the "Extended Terms", and individually, an
"Extended Term"). Each Extended Term shall be upon the same terms as provided in
this Lease for the Term, except for the Base Rent which shall be as set forth in
Section 1.3 of Exhibit C for each Extended Term. Landlord shall, not less than
twelve (12) months before the end of the then Term, give notice to Tenant of
Tenant's upcoming extension option and of Landlord's best estimate of the Market
Rent for the Extended Term covered thereby. Tenant shall exercise its option by
giving notice of such exercise to Landlord, not less than the later of thirty
(30) days after receipt of Landlord's notice of the option and estimate of
Market Rent or twelve (12) months prior to the end of the Term, or the then
current Extended Term, as the case may be. Should Tenant fail to exercise any
option to extend the term of this Lease within the time provided in this
Section, all of Tenant's rights to further extend the term hereof shall expire.
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3.1 MONTHLY BASE RENT: Tenant agrees to pay to Landlord during the Term a
monthly Base Rent ("Base Rent") as specified on Exhibit C hereto payable on the
first day of each month in advance, without deduction or setoff of any kind,
except as specifically authorized herein, to Landlord and delivered to
Landlord's managing agent , Ryan Properties, Inc., 700 International Centre, 900
Second Avenue South, Minneapolis, Minnesota 55402, or at such other place as may
from time to time be designated by Landlord.
4. USE: Tenant may use the Premises for any lawful business use. Landlord
represents and warrants that the Project is zoned B-4 Retail office , which does
not include outdoor storage but does permit as permitted uses, without necessity
of any conditional, special or other use permit and without variance of other
special authorization, the uses contemplated by Tenant for the Premises, which
are office, laboratory, equipment testing, and storage.
5. OPERATING COSTS: Tenant shall, for the entire Term, pay to Landlord as an
item of additional rent, without any setoff or deduction therefrom, except as
expressly provided, costs ("Operating Costs") which Landlord may incur in
maintaining and operating the Project during each calendar year of the Term.
"Operating Costs" are defined to include all reasonable expenses and costs (but
not specific costs which are separately billed to and paid by Tenant) which the
Landlord shall pay or become obligated to pay because of or in connection with
the operation and maintenance of the Project, including but not limited to all
real estate taxes and annual installments of special assessments payable in such
calendar year with respect to the Project; costs of any contest of such taxes,
including reasonable attorney's fees; management fees, insurance premiums,
utility costs, security costs, costs of wages, maintenance costs (relating to
the Project including sidewalks, landscaping and parking or service areas,
common areas, service contracts, equipment and supplies) which for federal tax
purposes may be expensed rather than capitalized, all in accordance with
Generally Accepted Accounting Principles, consistently applied but exclusive of
leasing commissions, depreciation, costs of leasehold improvements and all costs
of a capital nature except as provided in the next sentence and payments of
principal and interest on any mortgages, deeds of trusts, or other security
devices covering the Project. Operating Costs shall also include the yearly
amortization of capital costs incurred by the Landlord for improvements to the
Project required to comply with any change after the commencement date in the
laws, rules or regulations of any governmental authority having jurisdiction,
or, but only with Tenant's consent in its absolute discretion, for purposes of
reducing Operating Costs (other than by replacement of worn out and obsolete
equipment or building components, which shall in any event be excluded from
Operating Costs), which costs shall be amortized over the useful life of such
improvements as reasonably estimated by the Landlord, but in no event shall the
annual amortization be in excess of the savings. The management fee shall be
$0.55 per rentable square foot for the first twelve (12) months on the Term, and
shall not increase more than three percent (3%) per year during the remainder of
the Term, but in any event such increase shall not result in a fee in excess of
competitive market fees.
The following shall be excluded from Operating Costs:
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A. Landlord's costs and obligations under Section 7.D;
B. Costs directly or indirectly resulting from or relating to
(including repairs, restoration, security measures, emergency or
temporary services, inspection and, during the period of such
repair or restoration, any increase in operating expenses
resulting from) fire, windstorm or other casualty or damage or
destruction from any other cause, whether or not insured or
insurable;
C. Costs of correcting defects in, or inadequacy of, the design or
construction of the Building or the materials used in the
construction of the Building or in the Building equipment or
appurtenances thereto, except that, for the purposes of this
paragraph, conditions resulting from ordinary wear and tear and
use shall not be deemed defects;
D. Amounts which would otherwise be included in Operating Costs
which are payable to affiliates of Landlord, for services on or
to the Building or the Project to the extent that the costs of
such services exceed average competitive costs for such services
rendered by persons or entities of similar skill, competence and
experience, other than an affiliate of Landlord.
E. Financing and refinancing costs, interest or debt or
amortization payments on any mortgage or mortgages, and rental
under any ground or underlying leases or lease, together with
all costs incidental thereto;
F. Costs of Landlord's general corporate overhead and general
administrative expenses (including costs and expenses paid to
third parties to collect rents, prepare tax returns and
accounting reports and obtain financing);
G. Rentals and other related costs, if any, incurred in leasing air
conditioning, security, or other building operation or
management systems, elevators or other equipment of facilities
which, if purchased and owned by Landlord, would ordinarily be
considered to be of a capital nature;
H. Costs resulting from the negligence or misconduct of Landlord or
its employees, agents or contractors;
I. Costs in any manner associated with hazardous materials and
substances (as described in Section 17.1), except that routine
fees for disposal of building standard fluorescent lamps and
similar items may be included in Operating Costs;
J. Travel, entertainment and related expenses incurred by Landlord
or its personnel.
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As soon as reasonably practicable prior to the Commencement Date and the
commencement of each calendar year during the Term, Landlord shall, with input
and direction from Tenant, determine an estimate of, and budget for, Operating
Costs for the ensuing calendar year. All levels of service, operation and
maintenance, to the extent controllable, shall be determined from time to time
by Tenant in its discretion, but at all times consistent with similar Projects.
The budget, as initially established for any year, shall be adjusted to reflect
Tenant's determinations as to such levels. No expenditure in excess of any line
item in the budget (or which will, with reasonably anticipated expenses, cause
such excess) shall be made without Tenant's consent and an adjustment to the
budget, except in case of emergency where Landlord may take reasonable necessary
action without such prior authorization. Tenant shall pay, as additional rent
hereunder together with each installment of Base Rent, one-twelfth (1/12th) of
estimated Operating Costs less real estate taxes and installments of special
assessments. Real estate taxes and installments of special assessments shall be
due on or before the later of (a) ten (10) days after receipt of Landlord's
invoice or (b) twenty (20) days prior to the last date such taxes and
installments of special assessments are due without penalty. As soon as
reasonably practicable after the end of each calendar year during the Term and
in any event within 120 days, Landlord shall furnish to Tenant a statement of
the actual Operating Costs for the previous calendar year, and within thirty
(30) days thereafter Tenant shall pay to Landlord, or Landlord shall credit to
the next rent payments due Landlord from Tenant, as the case may be, any
difference between the actual Operating Costs and the estimated Operating Costs
paid by Tenant. Operating Costs for the years in which this Lease commences and
terminates shall be prorated by multiplying the actual Operating Costs by a
fraction the numerator of which is the number of days of that year of the Term
and the denominator of which is 365.
For a period of three (3) years following Tenant's receipt of Landlord's
statement of actual Operating Costs, Landlord shall keep available for Tenant's
inspection and/or audit complete books and records relating to Operating Costs.
During this period Tenant may copy, inspect and/or audit Landlord's Operating
Costs books and records upon reasonable notice to Landlord. The audit must be
performed during regular business hours in the offices where Landlord maintains
its accounting records. No subtenant will have the right to audit under this
provision. An assignee may have the right to audit as provided herein, however,
such right shall only apply to the assignee's term pursuant to the Lease. In the
event a discrepancy of five percent (5%) or more is found in favor of Tenant,
Landlord shall pay the cost of such audit. If the audit discloses an overcharge
by Landlord, Landlord shall reimburse Tenant for such overcharge within twenty
(20) days, unless Landlord disputes the result of the audit.
6. ADDITIONAL TAXES: Tenant shall pay as additional rent to Landlord, together
with each installment of Base Rent, the amount of any gross receipts tax, sales
tax or similar tax (but excluding therefrom any income, estate, inheritance,
corporate or franchise tax), payable by Landlord, on or measured by the receipt
of Base Rent and adjustments thereto. If any such tax is a progressive tax with
higher tax rates on higher receipts, then Tenant shall only pay the amount of
tax that would be payable if the Base Rent payable by Tenant were the only
amount subject to such tax.
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7. OBLIGATIONS OF LANDLORD: Landlord agrees that Tenant shall quietly enjoy the
Premises in accord with the provisions hereof, subject only to Section 18.
Landlord shall:
A. Furnish heat and air conditioning to provide an environment that
in Tenant's reasonable judgment is comfortable for occupancy of
the Premises for Tenant's business operations and in accordance
with any applicable regulations.
B. Provide passenger elevator service at all times.
C. Provide janitorial service in and about the Premises as
determined by Tenant in is reasonable judgment.
D. Keep the structure of the Building, and all structural
components thereof, including without limitation, footings,
foundations, columns, exterior walls, interior weight bearing
walls, floor and ceiling slabs, and roof (and all elements of
the roof, whether structural or non-structural), in good repair,
ordinary wear and tear excepted, and make all necessary or
appropriate replacements thereto, all at Landlord's sole cost
and without inclusion in Operating Costs.
E. Provide water for process, drinking, lavatory and toilet
purposes drawn through fixtures installed by Landlord.
F. Provide electricity to the Premises for lighting and operation
of small business office equipment (but not equipment using
amounts of power in excess of that for which the Premises are
presently designed and rated).
G. Landlord shall, consistent with the budget approved by Tenant,
operate, maintain and manage the Project, including grounds and
parking areas in a manner mutually satisfactory to Landlord and
Tenant or as reasonably requested by Tenant. All such
maintenance which is provided by Landlord shall be provided as
reasonably necessary for the comfortable use and occupancy of
the Premises during Tenant's business hours, upon the condition
that the Landlord shall not be liable for damages for failure to
do so due to causes beyond its control.
H. Maintain in full force and effect during the term hereof, a
policy of all-risk insurance, insuring the improvements for
their full replacement value.
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It is understood that Landlord does not warrant that any of the services and
utilities referred to above will be free from interruption from causes beyond
the reasonable control of Landlord. Such interruption of service or utilities
shall never be deemed an eviction or disturbance of Tenant's use and possession
of the Premises or any part thereof or render Landlord liable to Tenant for
damages by abatement of rent or otherwise or relieve Tenant from performance of
Tenant's obligations under this Lease, provided Landlord uses all reasonable
efforts to restore such services and utilities as soon as possible.
Following the transfer of Landlord's interest in the Project, other than a
transfer for security purposes only, to an entity which is not controlled by
Ryan Companies US, Inc., its parent, subsidiary or affiliate, or to an entity
which is not controlled by the principals of Ryan, its parent, subsidiary or
affiliates, Tenant may at any time during the Term, upon at least sixty (60)
days prior notice, elect to assume the obligation of Landlord to operate,
maintain and manage the Project (other than the obligations of Landlord under
Sections 7D, 12 and 13 and for capital improvements that may be included in
Operating Costs, which Landlord shall retain), in which event Operating Costs
shall be prorated as of the date Tenant assumes such obligations and Landlord
shall not thereafter be entitled to any management fee.
8.1. LEASEHOLD IMPROVEMENTS: Landlord shall make and install or provide for the
installation of leasehold improvements in accordance with the plans,
specifications, terms and conditions set forth in Exhibit C. Except as
specifically provided for in this Lease, Landlord shall have no obligation to
repair, improve, redecorate or remodel the Premises.
All contractors and subcontractors performing work at the Premises during the
initial build-out of the Building, whether for Landlord or Tenant, must be
recognized and approved by the AFL-CIO Building Trades Council having
jurisdiction and each such contractor or subcontractor must be bound by and a
signatory to an applicable bargaining agreement and observe area standards for
wages and other terms and conditions of employment, including fringe benefits;
provided, however, that this requirement does not apply to or affect any
maintenance or similar type of workers performing services at the Premises or
employees of Tenant after the Premises are complete.
Landlord shall make a commercially reasonable effort to enter into a Project
Labor Agreement for the Project with the AFL-CIO Building Trades Council having
jurisdiction.
8.2. EARLY ACCESS: Tenant and its vendors shall have early access to the
Premises at least two (2) weeks prior to the commencement of the Term to install
its equipment, telephone and data lines prior to completion of its move-in and
occupancy of the Premises in coordination with Landlord's work and schedule for
completion of the Building provided, however, that, without limiting the
foregoing, Landlord shall cooperate in all reasonable respects with Tenant in
the installation of its equipment.
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9. COVENANTS OF TENANT: Tenant agrees that it shall:
A. Observe such rules and regulations as from time to time may be
put in effect by Landlord for the general safety of Tenant and
the Building, subject, however, to Tenant's approval of such
rules and regulations, which approval shall not be unreasonably
withheld.
B. Give Landlord access to the Premises at all reasonable times,
accompanied by Tenant, without change or diminution of rent or
interference with Tenant's business, to enable Landlord to
examine the same and to make such repairs, additions and
alterations as Landlord may deem advisable, and during the nine
(9) months prior to the expiration of the Term, to exhibit the
Premises to prospective tenants and to place upon the door or in
the windows of the Premises any usual or ordinary "For Lease"
signs. Tenant may deny Landlord access to certain areas
reasonably designated by Tenant, from time to time, by reason of
security, confidentiality or function.
C. Pay as part of Operating Costs for all replacement electric
lamps, starters and ballasts used in the Premises.
D. Upon the termination of this Lease in any manner whatsoever,
remove Tenant's personal property and such of its equipment and
trade fixtures as it desires and those of any other person
claiming under Tenant, and quit and deliver up the Premises to
Landlord peaceably and quietly in as good order and condition as
the same are now in or hereafter may be put in by Landlord or
Tenant, reasonable use and wear thereof and repairs which are
Landlord's obligation and damage by fire or other casualty
excepted. Goods and effects not removed by Tenant at the
termination of this Lease, however terminated, shall be
considered abandoned and Landlord may dispose of the same as it
deems expedient. Tenant shall not be required to repair damage
(other than damage to the exterior of the Building or structural
damage) to the Premises caused by removal of such items provided
that it uses reasonable means to remove the same.
F. Not assign this Lease or sublet all or any part of the Premises
voluntarily, involuntarily or by operation of law, without first
obtaining Landlord's written consent thereto. Landlord shall,
within ten (10) days of its receipt of Tenant's request, approve
or reject the assignment or sublease and, if rejected, Landlord
shall specify its reason(s) for withholding approval. Landlord's
failure to respond within ten (10) days shall be deemed
approval. Landlord's consent will not be withheld provided that
(i) the occupancy of any such
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assignee or sublessee is not inconsistent with the character of
the Building; (ii) such assignee (but not any sublessee) shall
assume in writing the performance of the covenants and
obligations of Tenant hereunder which arise after the effective
date of the assignment; (iii) a fully executed copy of any such
assignment or sublease shall be immediately delivered to
Landlord and (iv) in the case of an assignment (but not
sublease), the assignee is reasonably creditworthy given the
financial obligations imposed by this Lease, but the making of
such assignment or sublease shall not be deemed to release
Tenant from the payment and performance of any of its
obligations under this Lease. Notwithstanding the foregoing,
Landlord's consent shall not be required for any assignment or
sublease made in connection with any merger, consolidation, or
sale of all or substantially all of the assets of Tenant which
are related to the business or division then operating at the
Premises or to any affiliate of Tenant. In the event of an
assignment, Landlord agrees to release Tenant from its
obligations under this Lease if the net worth and net operating
income of the assignee is reasonably sufficient, in Landlord's
reasonable business judgment, to meet the obligations of the
Tenant under this Lease.
G. Tenant may, at its sole expense (except as provided for in
Exhibits C and D), erect exterior signage not in excess of that
permitted by applicable code and regulation for the Premises.
H. Not do any act which may make void or voidable any insurance on
the Premises or the Building, or which may render an increased
or extra premium payable for any insurance deemed necessary or
advisable by Landlord, provided, however, that upon notice from
Landlord, Tenant may elect to pay such additional cost.
I. Not make any structural alterations or additions to the Premises
without obtaining the prior written approval of the Landlord
thereto, and all alterations, additions or improvements
(including carpeting or other floor covering which has been
glued or otherwise affixed to the floor) which may be made by
either of the parties hereto upon the Premises, shall be the
property of Landlord, and shall remain upon and be surrendered
with the Premises, as a part thereof, at the termination of this
Lease. Office furniture, trade fixtures and equipment shall be
the property of Tenant and may be removed by Tenant and the
termination of this Lease.
J. Except for the initial construction which is the obligation of
Landlord under Section 8.1 and Exhibits C and D, keep the
Premises and the Project free from any mechanics',
materialmen's, contractors' or other liens arising from, or any
claims for damages growing out of, any work performed, materials
furnished or obligations incurred by
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or on behalf of Tenant. Provided, however, that Tenant shall
have the right to contest any such lien, in which event such
lien shall not be considered a default under this Lease until
the existence of the lien has been finally adjudicated and all
appeal periods have expired. Tenant shall indemnify and hold
harmless Landlord from and against any such lien, or claim or
action thereon, reimburse Landlord promptly upon demand therefor
by Landlord for costs of suit and reasonable attorneys' fees
incurred by Landlord in connection with any such lien, claim or
action, and, upon written request of Landlord if Landlord
reasonably deems itself insecure with the prospect for payment
by Tenant, provide Landlord with a bond, letter of credit, cash
deposit or other reasonable security in an amount necessary to
obtain a release of the Premises or the Project from such lien
if the lien claimant ultimately prevails.
K. Tenant shall, at its own expense, comply with the requirements,
as to Tenant's particular use, of insurance underwriters and
insurance rating bureaus and governmental authorities having
jurisdiction, provided that Landlord shall be responsible for
assuring that the initial construction of the improvements
comply with the foregoing requirements.
L. Maintain in full force and effect during the term hereof, a
policy of public liability insurance under which Landlord is
named as additional insured. The minimum limits of liability of
such insurance shall be $1,000,000.00 combined single limit as
to bodily injury and property damage. Tenant agrees to deliver a
certificate of insurance evidencing such coverage to Landlord.
Such policy shall contain a provision requiring thirty (30) days
written notice to Landlord before cancellation of the policy can
be effected.
10. AMERICANS WITH DISABILITIES ACT: The parties agree that the liabilities and
obligations of Landlord and Tenant under that certain federal statute commonly
known as the Americans With Disabilities Act as well as the regulations and
accessibility guidelines promulgated thereunder as each of the foregoing is
supplemented or amended from time to time (collectively, the "ADA") shall be
apportioned as follows:
A. If any of the common areas of the Project, including, but not limited
to, exterior and interior routes of ingress and egress, off-street
parking and all rules and regulations applicable to the Premises, the
Building or the Project, fails to comply with the ADA, or if the
Building and the Premises as initially constructed does not conform to
the requirements of the ADA in effect at the time of substantial
completion thereof, then in any such case such nonconformity shall be
promptly made to comply by Landlord at its sole expense. Landlord shall
also cause its manager of the Building and the Project (the "Manager")
to comply with the ADA in its operation of the Building and the Project.
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B. From and after the commencement date of the Lease, Tenant covenants and
agrees to conduct its operations within the Premises in compliance with
the ADA. If any of the Premises fails to comply with the ADA (other than
by reason of a change in the ADA after the substantial completion of the
Premises, which shall be the responsibility of Landlord), such
nonconformity shall be promptly make to comply by Tenant. In the event
that Tenant elects to undertake any alterations to, for or within the
Premises, excluding initial build-out work, Tenant agrees to cause such
alterations to be performed in compliance with the ADA.
11. PARKING AND DRIVES: Tenant, its employees, and invitees shall have the
exclusive right to use the driveways and parking lots, except that the driveway
area designated on Exhibit B as "Shared Driveway" shall be for access to the
land and the parcel which is located Southerly of the land. Tenant, may, at its
own expense, designate parking spaces as being for visitors of Tenant. Any
changes, additions or deletions to such signage shall be at Tenant's expense.
Tenant further agrees not to use, or permit the use by its employees, the
parking areas for the long term storage of automobiles or other vehicles without
the written consent of Landlord. Landlord represents and warrants that the Site
Plan attached as Exhibit B shows parking sufficient to satisfy a parking ratio
of 4.5 spaces per 1000 square feet of rentable area in the Building with an area
designated on the Site Plan as "Future Parking" which is available to add
sufficient spaces to satisfy a parking ratio of five spaces per 1000 square feet
of area, all in accordance with applicable legal requirements. Landlord shall
not make any changes to the Site Plan or the improvements depicted thereon
without the approval of Tenant in its absolute discretion.
12. CASUALTY LOSS: If the Building is damaged in part or whole from any cause
and the Building can be substantially repaired and restored within the Repair
Period (as defined below) from the date of the damage using standard working
methods and procedures, Landlord shall at its expense promptly and diligently
repair and restore the Building, including all leasehold improvements, to
substantially the same condition as existed before the damage. This repair and
restoration shall be made within the Repair Period unless the delay is due to
causes beyond Landlord's reasonable control. As soon as reasonably possible and
in any event within thirty (30) days after the damage, Landlord shall notify
Tenant in writing of the number of days required for the completion of repairs
from the date of the damage, including a date certain for the completion thereof
(the "Repair Completion Date"). If the Repair Completion Date is more than 120
days, but less than 365 days, from the date of damage, Tenant may, at its
election made by giving written notice thereof to Landlord within ten (10) days
after receipt of Landlord's notice, extend the time for completion of repair
through the Repair Completion Date. As used herein, the "Repair Period" means
the period commencing with the date of damage and ending on the Repair
Completion Date unless, in any case where the Repair Completion Date is more
than 120 days after the date of the damage, Tenant does not elect, or does not
have the right to elect, as provided above to extend the time permitted for
repair beyond said 120 day period, in which event the Repair Period shall end
120 days after the date of the damage.
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If the Building cannot be repaired and restored within the Repair Period, then
either party may, within ten (10) days after the determination of the Repair
Period as provided above, cancel the Lease by giving notice to the other party.
If Landlord does not commence repairs within 30 days after the damage or
continue to prosecute such repair continuously with reasonable diligence, or if
the Building is not repaired and restored within the Repair Period, then Tenant
may cancel the Lease at any time thereafter and prior to completion of the
repair. Tenant shall not be able to cancel this Lease if its willful misconduct
caused the damage unless Landlord is not promptly and diligently repairing and
restoring the Premises.
The Base Rent and Additional Rent shall abate to the extent fair and equitable
and the abatement shall include any period that Tenant is unable to occupy or
use the Building, or its occupancy or use is materially adversely affected by
reason of any casualty or cause, whether or not the Premises are "untenantable"
and whether or not the Premises themselves are damaged. The abatement shall
consider the nature and extent of interference to Tenant's ability to conduct
business in the Premises and the need for access and essential services. The
abatement shall continue from the date the damage occurred until thirty (30)
business days after Landlord completes the repairs and restoration, or until
Tenant again uses the Premises or the part rendered unusable, whichever is
first.
Notwithstanding anything else in Section 13, Landlord is not obligated to repair
or restore damage to Tenant's trade fixtures, furniture, equipment, or other
personal property.
If the Lease is in the last twelve (12) months of its Term when material damage
to the Building occurs, then Landlord may cancel this Lease unless Tenant makes
one of the following elections and gives notice thereof within ten (10) days
after receipt of notice of such cancellation from Landlord: 1) elects to extend
the Term of the Lease for the next available Extended Term, if any, or 2) elects
to continue its occupancy for the balance of the Term without requiring Landlord
to repair the damage. Material is defined as costing more than 25% of the
replacement cost of the Building. To cancel, Landlord must give notice to Tenant
within ten (10) days after the Landlord knows of the damage. The notice must
specify the cancellation date, which shall be at least thirty (30) but not more
than sixty (60) days after the date notice is given.
13. CONDEMNATION: If the entire Premises is taken by eminent domain or
transferred under threat of such taking, this Lease shall automatically
terminate as of the date of taking. If a portion of the Premises, or any portion
of the Building or common area, including parking, or good and sufficient access
thereto, is taken by eminent domain and it is unfeasible, in Tenant's reasonable
judgment, for Tenant to continue to operate its business in the portion of the
Premises remaining, Tenant shall have the right to terminate this Lease as of
the date of taking by giving written notice thereof to Landlord within ninety
(90) days after date of taking. If Landlord or Tenant does not elect to
terminate this Lease, Landlord shall, at its expense, restore the Premises,
including any improvements or other changes made therein by Tenant, to as near
the condition which existed immediately prior to the date of taking as
reasonably possible, and to the extent that the Premises or the Project ,
including the common areas and access thereto or the use thereof
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by Tenant is adversely affected, the rent shall equitably abate. All damages
awarded for a taking under the power of eminent domain shall belong to and be
the exclusive property of Landlord, whether such damages be awarded as
compensation for diminution in value of the leasehold estate hereby created or
to the fee of the Premises; provided, however, that Landlord shall not be
entitled to any separate award made to Tenant for the value and cost of its
personal property and fixtures or for relocation benefits.
14.1 DELAY IN POSSESSION: Landlord has not and shall not grant to any third
party the right to possess or occupy the Project. If the Term has not commenced
pursuant to Section 2.1 by October 1, 1998, due to the possession or occupancy
thereof by any person not lawfully entitled thereto, or because construction has
not yet been completed, or by reason of any building operations, repair or
remodeling to be done by Landlord, Landlord shall use due diligence to complete
such construction, building operations, repair or remodeling and to deliver
possession of the Premises to Tenant. The Landlord, using such due diligence,
shall not be liable for failure to obtain possession of the Premises for Tenant
or to timely complete such construction, building operations, repair or
remodeling, and the rental and other charges payable by Tenant hereunder shall
be abated until the Premises shall, on Landlord's part, be ready for occupancy
by Tenant, this Lease remaining in all other respects in full force and effect.
14.2 If the Term has not commenced, pursuant to Section 2.1 by November 1, 1998,
due to the possession or occupancy thereof by any person not lawfully entitled
thereto, or because construction has not yet been completed, or by reason of any
building operations, repair or remodeling to be done by Landlord, Landlord shall
use due diligence to complete such construction, building operations, repair or
remodeling and to deliver possession of the Premises to Tenant. Landlord, using
such due diligence, shall be liable only for an amount equal to one day's Base
Rent and Operating Costs for each day of delay, such amount to be credited to
the Base Rent and Operating Costs first due under the terms of this Lease.
Subject to Section 14.3 and such use of due diligence, such credit shall be
Tenant's sole remedy for Landlord's failure to obtain possession of the Premises
for Tenant on or before March 31, 1999, this Lease remaining in all other
respects in full force and effect. Such day for day credit shall apply from and
after November 1, 1998 regardless of the cause for delay in commencement of the
Term and shall include the period during which Tenant elects to delay the
commencement of the Term pursuant to Section 2.1 even if the Term would have,
but for such election, commenced during such period.
14.3 If the Term has not commenced by March 31, 1999, ( and regardless of
whether such delay is permitted under Section 29), Tenant may, in addition to
any other rights or remedies, at its election upon notice given to Landlord,
terminate this Lease at any time thereafter but prior to substantial completion
and commencement of the Term of this Lease. If Tenant terminates this Lease
pursuant to this Section 14.3 and, but for the delays permitted under Section
29, the Premises could have been completed prior to March 31, 1999, Landlord
shall be liable to Tenant for damages.
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14.4 As used in the preceding Sections of this Article 14, the phrase "using due
diligence" means having used due diligence from the date hereof through the date
in question and thereafter continuing to use due diligence to complete the
Landlord's obligations within the time required.
15. LIABILITY AND INDEMNITY: Save for its negligence and that of its agents,
Landlord shall not be responsible or liable to Tenant for any loss or damage (i)
that may be occasioned by or through the acts or omissions of persons occupying
any part of the Building or any persons transacting any business in or about the
Building or persons present in or about the Building for any other purpose or
(ii) for any loss or damage resulting to Tenant or its property from burst,
stopping or leaking water, sewer, sprinkler or steam pipes or plumbing fixtures
or from any failure of or defect in any electric line, circuit or facility.
Subject to Section 16, Tenant shall defend, indemnify and save Landlord harmless
from and against all liabilities, damages, claims, costs, charges, judgments and
expenses, including, but not limited to, reasonable attorneys' fees, which may
be imposed upon or incurred or paid by or asserted against Landlord, the
Premises or any interest therein or in the Building by reason of or in
connection with any negligent or tortious act on the part of Tenant or any of
its agents, contractors, servants, employees, licensees or invitees, any
accident, injury, death or damage to any person or property occurring in, the
Premises or any part thereof, provided, however, that nothing contained in this
paragraph shall be deemed to require Tenant to indemnify Landlord with respect
to any negligence or tortious act or omission committed by Landlord or its
agents or any other tenant, occupant, licensee or invitee, or to any extent
prohibited by law.
Subject to Section 16, Landlord shall defend, indemnify and save Tenant harmless
from and against all liabilities, damages, claims, costs, charges, judgments and
expenses, including, but not limited to, reasonable attorneys' fees, which may
be imposed upon or incurred or paid by or asserted against Tenant, the Premises
or any interest therein or in the Building by reason of or in connection with
any negligent or tortious act on the part of Landlord or any of its agents,
contractors, servants, employees, licensees or invitees, any accident, injury,
death or damage to any person or property occurring in, the Premises or any part
thereof, provided, however, that nothing contained in this paragraph shall be
deemed to require Landlord to indemnify Tenant with respect to any negligence or
tortious act or omission committed by Tenant or its agents or any other tenant,
occupant, licensee or invitee, or to any extent prohibited by law.
16. MUTUAL RELEASE/WAIVER OF SUBROGATION: Each of Landlord and Tenant hereby
releases the other from any and all liability or responsibility to the other or
anyone claiming through or under them by way of subrogation or otherwise for any
loss or damage to property caused by any of the all risk casualties insurable
under an all risk property insurance policy, even if such casualty shall have
been caused by the fault or negligence of the other party, or anyone for whom
such party may be responsible.
Landlord shall maintain at all times from and after the date hereof and through
the Term commercial general liability insurance in the amount of not less than
$1,000,000 on a combined single limit basis and name the Tenant as an additional
named insured thereon.
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17.1 HAZARDOUS SUBSTANCES: Tenant shall use all reasonable efforts to not
(either with or without negligence) cause or permit the escape, disposal or
release of any biologically or chemically active or other hazardous substances
or materials. Tenant shall not allow the storage or use of such substances or
materials in any manner in violation of law or materially below the accepted
standards prevailing in the industry for the storage and use of such substances
or materials, nor allow to be brought into the Project any such materials or
substances except to use in the ordinary course of Tenant's business. After
written notice from Landlord requesting the identity of such substances or
materials, Tenant shall provide Landlord with a list of the same. Without
limitation, hazardous substances and materials shall include those described in
the Comprehensive Environmental Response Compensation and Liability Act of 1980,
as amended, 42 U.S.C. Section 9601 et. seq., and applicable state or local laws
and the regulations adopted under these acts. If any lender or governmental
agency shall ever require testing to ascertain whether or not there has been any
release of hazardous materials, then the reasonable costs thereof shall be
reimbursed by Tenant to Landlord upon demand as additional charges if such
requirement applies to the Premises and Tenant has caused the release. In
addition, Tenant shall certify on a reasonable basis from time to time at
Landlord's request concerning Tenant's best knowledge and belief regarding the
presence of hazardous substances or materials brought by Tenant on to the
Premises. In all events, Tenant shall indemnify Landlord in the manner elsewhere
provided in this Lease from any release of hazardous materials on the Premises
(but only if brought by Tenant or permitted by Tenant to be brought) occurring
while Tenant is in possession, or on adjoining land if caused by Tenant or
persons acting under Tenant. The within covenants shall survive the expiration
or earlier termination of the Term.
In all events, Landlord shall indemnify Tenant in the manner elsewhere provided
in this Lease from any release of hazardous materials on the Premises now
existing in, on, under or about the Premises or incorporated in the Project or
caused or permitted by Landlord, or on adjoining land if caused by Landlord or
persons acting under Landlord. The within covenants shall survive the expiration
or earlier termination of the Term.
17.2 To the best of Landlord's knowledge, there does not exist any toxic or
hazardous waste or material, or any pollutant or any substance regulated by any
environmental law in, under or above the Project or the Expansion Landlord (as
defined in Section 4.1 of Exhibit C) or any part thereof.
18. DEFAULT: Tenant hereby agrees that in case Tenant shall default in making
its payments hereunder or any of them or in performing any of the other
agreements, terms and conditions of this Lease and such default continues for
five days after written notice thereof as to the payment of Base Rent and
regular monthly installments of fixed estimates of operating costs (a "Monetary
Default") or thirty (30) days (or such longer period as Tenant, acting
diligently, may reasonably require) after written notice thereof as to all other
defaults, then, in any such event, Landlord, in addition to all other rights and
remedies available to Landlord by law or by other provisions hereof, may after
five days written notice, with due process, re-enter immediately into the
Premises and remove all
15
persons and property therefrom, and, at Landlord's option, annul and cancel this
Lease as to all future rights of Tenant and Tenant hereby expressly waives the
service of any notice in writing of intention to re-enter as aforesaid. Tenant
further agrees that in case of any such termination Tenant will indemnify the
Landlord against all loss of rents and other damage which Landlord incurs by
reason of such termination, including, but not being limited to, costs of
restoring and repairing the Premises as required by this Lease, costs of renting
the Premises to another tenant, loss or diminution of rents and other damage
which Landlord may incur by reason of such termination, and all reasonable
attorney's fees and expenses incurred in enforcing any of the terms of the
Lease. Neither acceptance of rent by Landlord, with or without knowledge of
breach, nor failure of Landlord to take action on account of any breach hereof
or to enforce its rights hereunder shall be deemed a waiver of any breach, and
absent written notice or consent, said breach shall be a continuing one.
19. NOTICES: All bills, statements, notices or communications which Landlord may
desire or be required to give to Tenant shall be deemed sufficiently given or
rendered if in writing and sent by registered or certified mail, or sent by a
nationally recognized overnight courier service addressed to Tenant at corporate
headquarters: VERITAS Software, 1600 Plymouth Street, Mountain View CA 94043
and, from and after the date Tenant occupies and commences business operations
at the Premises and until further notice from Tenant, at the Premises and the
time of rendition thereof of the giving of such notice or communication shall be
deemed to be the time when the same is deposited in the mail or with such
overnight courier as herein provided. Any notice by Tenant to Landlord must be
served by registered or certified mail, or sent by a nationally recognized
overnight courier service addressed to Landlord at the address where the last
previous rental hereunder was payable, or in case of subsequent change upon
notice given, to the latest address furnished. Either Landlord or Tenant may,
upon ten (10) days prior written notice to the other as herein provided, change
its address for notices under this Lease.
20. HOLDING OVER: Should Tenant continue to occupy the Premises after expiration
or termination for any reason of the Term or any renewal or renewals thereof
such tenancy shall be from month to month and in no event from year to year or
for any longer term, and shall be on all the terms and conditions hereof
applicable to a month to month tenancy except that Base Rent shall equal one
hundred percent (100%) if in the initial term and one hundred twenty-five
percent (125%) if in an Extended Term of the Base Rent payable at the time of
such expiration or termination. In addition, Tenant shall continue to pay
Operating Costs. Nothing in this Section 20, however, shall prevent Landlord
from removing Tenant forthwith and seeking all remedies available to Landlord in
law or equity.
21. SUBORDINATION: Subject to the non-disturbance provided for below, the rights
of Tenant shall be and are subject and subordinate at all times to the lien of
any first mortgage now or hereafter in force against the Project, and Tenant
shall, within twenty days (20) after request, execute such further instruments
subordinating this Lease to the lien of any such mortgage as shall be requested
by Landlord, which shall include
16
agreement by Tenant to attorn to the holder of such mortgage, covenant of
nondisturbance of Tenant's occupancy by such holder in the event that such
holder, its successors or assigns, succeeds to the interest of Landlord and such
holder consent to the application of insurance proceeds to restoration of
casualty loss damage, subject to such reasonable conditions as such holder may
impose. All such instruments shall be in form and substance satisfactory to
Landlord and Tenant, both acting reasonably.
22. ESTOPPEL CERTIFICATE: Tenant and Landlord shall each at any time and from
time to time, upon not less than ten (10) days prior written notice from the
other, execute, acknowledge and deliver to the other and any other parties
designated by the other, a statement in writing certifying (a) that this Lease
is in full force and effect and is unmodified (or, if modified, stating the
nature of such modification), (b) the date to which the rental and other charges
payable hereunder have been paid in advance, if any, and (c) that there are, to
such party's actual knowledge, no uncured defaults on the part of the other
hereunder (or specifying such defaults if any are claimed). Any such statement
may be furnished to and relied upon by any prospective purchaser or
encumbrancer, assignee or sublessee of all or any portion of the Project.
23. SERVICE CHARGE: Tenant agrees to pay interest at the per annum rate equal to
two percent (2%) plus the prime rate announced as such from time to time in the
Wall Street Journal under the section "Money Rates" of any payment of monthly
Base Rent or additional charge payable by Tenant hereunder which is not paid
within five (5) days from the date due.
24. BINDING EFFECT: The work "Tenant", wherever used in this Lease, shall be
construed to mean tenants in all cases where there is more than one tenant, and
the necessary grammatical changes required to make the provisions hereof apply
to corporations, partnerships or individuals, men or women, shall in all cases
be assumed as though in each case fully expressed. Each provision hereof shall
extend to and shall, as the case may require, bind and inure to the benefit of
Landlord and Tenant and their respective heirs, legal representatives,
successors and assigns.
25. TRANSFER OF LANDLORD'S INTEREST: In the event of any transfer or transfers
of Landlord's interest in the Premises or the Project, other than a transfer for
security purposes only, the transferor shall be automatically relieved of any
and all obligations and liabilities on the part of Landlord accruing from and
after the date of such transfer, provided that the transferee assumes this Lease
and agrees to pay and perform the obligations of Landlord which accrue
thereafter.
26. LIMITATION OF LIABILITY: In the event that Landlord is ever adjudged by any
court to be liable to Tenant in damages, Tenant specifically agrees to look
solely to Landlord for the recovery of any judgment from Landlord, it being
agreed that if Landlord is a partnership, its partners whether general or
limited, or if Landlord is a corporation, its directors, officers, or
shareholders, shall never be personally liable for any judgment. The provision
contained in the foregoing sentence is not intended to, and shall not, limit any
right that Tenant might otherwise have to obtain injunctive relief against
17
Landlord or Landlord's successor in interest, or to maintain any other action
not involving the personal liability of Landlord (or if Landlord is a
partnership, its partners whether general or limited, or if Landlord is a
corporation, requiring its directors, officers or shareholders to respond in
monetary damages from assets other than Landlord's in the Building) or to
maintain any suit or action in connection with enforcement or collection of
amounts which may become owing or payable under or on account of insurance
maintained by Landlord.
27. ADDITIONAL RENT AMOUNTS: Any amounts in addition to Base Rent payable to
Landlord by Tenant hereunder, including without limitation amounts payable
pursuant to Sections 5, 9K, 15, 17.1 and Exhibit C, and hereof ("Additional
Rent") shall be an obligation of Tenant hereunder and all such Additional Rent
shall be due and payable within twenty (20) days after receipt of written demand
thereof, accompanied by reasonable substantiation in case of amounts which are
not fixed under this Lease.
28. INCORPORATION OF EXHIBITS: The following exhibits to this Lease are hereby
incorporated by reference for all purposes as fully set forth at length herein:
Exhibit A-1 Legal Description
Exhibit A-2 Schematic Depiction
Exhibit B Site Plan
Exhibit C Additional Terms and Conditions
Exhibit D Outline Plans and Specifications
Exhibit E Construction Schedule
Exhibit F Elevation Plan
29. FORCE MAJEURE: All of the obligations of Landlord and of Tenant under this
Lease are subject to and shall be postponed for a period equal to any delay or
suspension resulting from fire, strikes, acts of God, and other causes beyond
the control of the party delayed in its performance hereunder this Lease
remaining in all other respects in full force and effect and the Term not
thereby extended. Landlord shall, with respect to the initial construction of
the Building and the Premises (including all leasehold improvements), notify
Tenant within five (5) days after Landlord or its general contractor actually
knows of the commencement of a cause beyond its control which will constitute a
permitted postponement of the time for performance of its obligations under this
Section, failing which such cause shall not constitute an excused delay under
this Section. With respect to any delay not caused by Tenant in such initial
construction of the Building and Premises (including all leasehold improvements)
otherwise excused under this Section, the period of postponement allowed
Landlord shall not exceed one day for each day that the cause of delay exists
and Landlord in any event shall, at its sole cost and expense, exercise its best
effort to make up for any such delay, including by working overtime.
30. BROKERS: Landlord acknowledges and agrees that it is obligated to pay a
brokerage fee to Tobin Real Estate Company in the amount of $181,364.00 and to
CB Commercial Real Estate in the amount of $90,682.00, payable one-half on the
first
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construction draw made by Landlord and the second-half payable upon occupancy by
Tenant.
31. GENERAL: The submission of this Lease for examination does not constitute
the reservation of or an option for the Premises, and this Lease becomes
effective only upon execution and delivery hereof by Landlord and Tenant. This
Lease does not create the relationship of principal and agent or of partnership,
joint venture or any association between Landlord and Tenant, the sole
relationship between Landlord and Tenant being that of lessor and lessee. No
waiver of any default of Tenant hereunder shall be implied from any omission by
Landlord to take any action on account of such default if such default persists
or is repeated, and no express waiver shall affect any default other than the
default specified in the express waiver and that only for the time and to the
extent therein stated. The topical headings of the several paragraphs and
clauses are for convenience only and do not define, limit or construe the
contents of such paragraphs or clauses. All preliminary negotiations are merged
into and incorporated in this Lease. This Lease can only be modified or amended
by an agreement in writing signed by the parties hereto, their successors or
assigns. All provisions hereof shall be binding upon the heirs, successors and
assigns of each party hereto.
Tenant may exercise and continue to exercise all of its rights under this Lease
upon the occurrence and during the continuance of any default under this Lease
up to the point of termination of this Lease, including but not limited to the
Right of First Refusal and the options to extend the Term.
Whenever the consent or approval of the Landlord or Tenant is required by this
Lease, such consent or approval shall not be unreasonably withheld or delayed.
Time is of the essence under this Lease.
32. SEVERABILITY: The invalidity of any provision, clause or phrase herein
contained shall not serve to render the balance of this Lease ineffective or
void and the same shall be construed as if such had not been herein set forth.
33. ADDITIONAL PROVISIONS:
A. If Tenant shall pay any Base Rent, Additional Rent or any other
amount under protest and later shall be deemed to have not owed
all or some part of the amount paid under protest, then Tenant
may recover the same from Landlord or offset against
installments of Base Rent, Additional Rent and other amounts
payable by Tenant hereunder the amount paid under protest and
determined not to have been owed, together with interest thereon
from and after the date of payment under protest to the date of
recovery or offset at the rate of interest equal to two percent
(2%) plus the prime rate announced as such from time to time in
the Wall Street Journal under the section "Money Rates".
B. Landlord represents and warrants to Tenant that:
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a) Landlord has good title to the Project and the Expansion
Land free and clear of any encumbrances that materially
affects Tenant's rights or obligations under this Lease.
b) Landlord has full power, right and authority to execute
and perform this Lease and all corporate action
necessary so to do has been duly taken.
If requested by Tenant, Landlord and Tenant shall enter into a short form
memorandum of lease in form and substance reasonably acceptable to Landlord and
Tenant for the purpose of reflecting on the record title to the Project and the
Expansion Land, Tenant's leasehold estate and other rights under this Lease.
IN WITNESS WHEREOF, the respective parties hereto have caused this Lease to be
executed the day and year first above written.
LANDLORD:
RYAN COMPANIES US, INC.
BY: /s/ KENT M. CARLSON
--------------------------------------
Its: Vice President
--------------------------------------
TENANT:
VERITAS SOFTWARE CORPORATION
BY: /s/ JAY A. JONES
--------------------------------------
Its: VICE PRESIDENT AND GENERAL COUNSEL
--------------------------------------
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EXHIBIT A-1
LEGAL DESCRIPTION:
Southerly Parcel of Lot 3 and Northerly Parcel of Lot 4
That part of Lot 3, Block 1, CENTRE POINTE BUSINESS PARK, according to the
recorded plat thereof, Ramsey County, Minnesota, lying southerly of the
following described line: Commencing at the northeast corner of said Lot 3;
thence South 30 degrees 00 minutes 00 seconds East, assumed bearing, 171.23
feet along the easterly line of said Lot 3; thence southerly 143.99 feet along
said east line of Lot 3 on a tangential curve concave to the west with a radius
of 275.00 feet and with a central angle of 30 degrees 00 minutes 00 seconds;
thence on a bearing of South 90.00 feet tangent to said curve along said east
line of Lot 3 to the point of beginning of the line to be described; thence on
a bearing West 408.50 feet to a point on the west line of Lot 3 and said line
there terminating.
ALSO
That part of Lot 4, Block 1, CENTRE POINTE BUSINESS PARK, according to the
recorded plat thereof, Ramsey County, Minnesota, lying northerly and
northeasterly of a line described as follows: Commencing at the northwest
corner of said Lot 4; thence South 00 degrees 00 minutes 00 seconds West,
assumed bearing, along the west line of said Lot 4 a distance of 98.78 feet to
the beginning of the line to be described; thence North 90 degrees 00 minutes
00 seconds East a distance of 194.99 feet; thence South 45 degrees 00 minutes
00 seconds East a distance of 89.36 feet to the easterly line of said Lot 4 and
said line there terminating.
CERTIFICATE OF SURVEY
FOR:
RYAN
COMPANIES
US, INC.
EXHIBIT B-1
Combination for
new Lot
[MAP]
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Centre Pointe Business Park (Roseville, MN) Lease Agreement - Ryan Companies US and VERITAS Software Corp.
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