MAINTENANCE SERVICES AGREEMENT
BETWEEN
NETWORK COMPUTER, INC.
('NCI')
AND
ORACLE CORPORATION
('ORACLE')
MAINTENANCE SERVICES AGREEMENT
THIS MAINTENANCE SERVICES AGREEMENT (the 'Agreement') is made as of
September 17, 1997, between NETWORK COMPUTER, INC., a Delaware corporation
('NCI'), and ORACLE CORPORATION, a Delaware corporation, ('Oracle'), with
reference to the following facts:
A. Pursuant to the terms of that certain Lease Agreement dated October 8,
1996 (the 'Master Lease') by and between Westport Investments ('Landlord'), as
Landlord, and Oracle as Tenant, Oracle leased from Landlord the entire building
located at 1000 Bridge Parkway, Redwood City, California consisting of
approximately 48,384 square feet of space (the 'Building'). Concurrently with
the execution of the Master Lease, Landlord and Oracle executed an additional
Lease (the '800 Bridge Lease') pursuant to which Oracle leased from Landlord the
Building located at 800 Bridge Parkway in Redwood City, California ('800
Building').
B. Pursuant to the provisions of that certain Sublease by and between
Oracle, as Sublandlord and NCI, as Subtenant, dated as of September 17, 1997
(the 'Sublease'), NCI subleased the Building from Oracle.
C. Pursuant to the provisions of the Master Lease, Oracle, as the tenant
thereunder, has responsibility for certain maintenance and repair of the
Building; such responsibility for maintenance and repair is assumed by NCI
pursuant to the provisions of the Sublease.
D. Pursuant to the provisions of the 800 Bridge Lease, Oracle, as the
tenant thereby has maintenance and repair responsibilities with respect to the
800 Building identical to NCI's maintenance and repair responsibilities
described in Recital C above.
E. NCI does not have the internal staffing necessary to perform all of the
maintenance and repair duties assumed by NCI under the Sublease, and desires to
obtain the services of Oracle in connection with the operation, maintenance and
repair of the Building as required under the Master Lease and Sublease, and
Oracle desires to render such services to NCI.
NOW, THEREFORE, in consideration of the foregoing and for good and other
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the mutual covenants herein contained, the parties hereto agree as
follows:
1. INCORPORATION OF RECITALS. Recitals A through E above are hereby
incorporated herein.
2. DUTIES OF ORACLE
2.1. Appointment of Oracle. Subject to the provisions hereof and during
the term hereof, NCI hereby appoints Oracle, and Oracle hereby accepts
appointment and agrees, to perform NCI's maintenance and repair responsibilities
with respect to the Building pursuant to the Sublease (the 'Services'). Oracle
shall at all times keep NCI informed as to all material matters concerning the
Building.
2.2. Duties of Oracle. Oracle agrees to do the following in connection
with the continuing operation of the Building and performance of the Services,
subject to the budgets approved by NCI and the availability of funds provided by
NCI for such purposes:
(a) Personnel. Hire and retain as employees of Oracle, and not as
employees of NCI, such personnel as may be required to perform properly Oracle's
functions hereunder. Such personnel shall include the following:
i. A maintenance manager who will oversee the operation,
supervision, equipment warranty management and general repair and maintenance of
the Building and who will be available 6 hours per week;
ii. A maintenance assistant who will be available 6 hours per
week to respond to general calls (to expedite lighting replacements, for
example);
iii. An engineering technician to oversee HVAC units and
resolve electrical and plumbing issues;
iv. Additional personnel will be allocated for a total of 293
hours during each calendar year to cover Building operations, lease
administration, financial reporting, and operations coordination (central
dispatch) to handle property maintenance requests from NCI.
Oracle personnel will be available Monday through Friday from 8:00 a.m. until
5:00 p.m., except during the following holidays: New Years Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving (2 days) and Christmas. A building
emergency contact number will be provided for after normal business hours. The
employees of Oracle shall be hired at Oracle's sole cost and expense; except
that the costs of the personnel included in the maintenance and administration
of the Building shall be paid in accordance with the approved operating budget
for the Building. The compensation, retention and performance of employees hired
by Oracle at its own expense shall be controlled exclusively by Oracle, and
Oracle shall be responsible for complying with all laws and regulations
affecting such employment, including the provision of any benefits or
compensation and payment of withholding taxes required by statute or contract.
2
(b) Contracts; Permits.
i. Assemble and retain all contracts, agreements and other
records and data as may be necessary to carry out Oracle's functions hereunder
and as may otherwise be required in connection with the repair and maintenance
of the Building and performance of the Services. A schedule of all real estate
and personal property taxes and assessments will be provided to NCI on an annual
basis. All notices or copies of such will be forwarded to NCI. All such
contracts, agreements and other records and data at all times shall be the
property of NCI (or of Oracle, as the tenant under the Master Lease).
ii. Retain and maintain in effect any permits and occupancy
certificates required for the operation and occupancy of the Building, and act
as a liaison between NCI and the City of Redwood City and all other entities
claiming jurisdiction over the Building. If the cost of compliance exceeds
$1,000 in any single instance NCI will be notified immediately for prior
approval.
(c) Books and Records. Maintain books and records in connection with
its maintenance of the Building (including all invoices and payment records).
Oracle will make the books of account and all other records relating to or
reflecting the maintenance of the Building available to NCI and its
representatives at reasonable times upon reasonable advance notice at a location
approved by NCI and Oracle for examination, audit, inspection and copying.
(d) Maintenance. Oversee maintenance and repairs, furniture and
equipment moving, and storage and warehouse fees. Oracle will keep the Building
in good order and repair at all times in compliance with NCI's responsibilities
under the Sublease. In this regard, Oracle shall undertake all necessary routine
maintenance and replacements, and shall make all repairs and improvements to any
portion of the Building that is the responsibility of NCI under the Sublease,
exterior or interior (including, without limitation, interior improvements),
that may be required from time to time, subject to the conditions set forth in
the following sentences. Except to the extent that such repairs, maintenance,
replacements, or improvements have been provided for in the operating and
capital expense budget approved by NCI and except for any emergency repairs to
the Building not exceeding Fifteen Thousand Dollars ($15,000) in cost per
repair, all repairs, maintenance, replacements, or improvements to the Building
shall be undertaken or made by Oracle only after securing NCI's written
approval. Oracle agrees to give prompt notice of any such emergency repairs to
NCI and to make every reasonable effort to secure NCI's prior written approval.
To the extent practicable, items of routine maintenance, repair and replacement
shall be undertaken and accomplished by the maintenance personnel.
3
(e) Alterations. If requested in writing by NCI, and subject to the
procurement of any required approvals from Landlord, Oracle (as sublandlord
under the Sublease) and any applicable governmental authorities, obtain, or
cause to be obtained, bids and supervise the construction and completion of
alterations, additions or improvements to the Building or any portion thereof
(collectively, 'Alterations'), including, without limitation, renovations,
changes and alterations of any interior improvements.
(f) Recommended Procedures. Recommend from time to time to NCI, in
writing, such procedures with respect to the Building as Oracle may deem
advisable for the more efficient and economic management and operation thereof;
publish applicable operating procedures, (e.g., property maintenance contact
system, etc.), organizational chart, emergency plans, hazardous materials
management plans and any other safety or similar plans that may be required; and
perform or Cause to be performed all other services which are customarily
performed in connection with the operation of a project of this type and perform
all services normally provided by property managers to first-class office
properties.
(g) Meetings with and Response to NCI. Be available upon reasonable
notice for meetings with NCI to discuss the Building and the management
activities conducted by Oracle hereunder. In addition, Oracle shall promptly
respond to all requests and inquiries of, and shall coordinate with, the
representatives of NCI who have responsibility for the Building in order to
facilitate and maintain complete communication between NCI and Oracle regarding
the Building.
2.3. On-Site Offices. Oracle shall maintain the Building from an office in
the building that is to be provided by NCI at no expense to Oracle, which shall
have sufficient room to accommodate two (2) individuals as well as necessary
equipment and minimal storage. Oracle shall supply equipment, furniture and
services (telephone and data) necessary and appropriate for such maintenance
office.
3. LIMITATIONS AND RESTRICTIONS ON ORACLE
3.1. Restricted Activities. Notwithstanding any provisions of this
Agreement, Oracle shall not take any action, expend any sum, make any decision,
give any consent, approval or authorization, or incur any obligation with
respect to any of the following matters unless and until the same has been
approved by NCI:
(a) making any expenditure or incurring any obligation by or on
behalf of NCI or the Building which would result in the amount of any Adjusted
Annualized (defined below) operating expense category (other than utilities), as
said expense categories are specified in Exhibit A hereto, exceeding the
approved annual operating expense budget for said expense category by the
greater
4
of five percent (5%) or Three Thousand Dollars ($3,000), except for such matters
as may be otherwise expressly delegated in writing to Oracle by NCI and except
in the event of emergency, in which event Oracle shall be authorized to expend
up to $15,000 as may be reasonably necessary, and provided that Oracle shall
notify NCI as promptly as reasonably possible (but in any event within two
business days) following the making of such expenditure or incurring of such
obligation. Adjusted Annualized operating expense(s) shall be the actual
expense(s) incurred to date during the budget year plus the estimated operating
expense(s), as estimated by Oracle, for the balance of the budget year. After
the total approved operating expense budget is exceeded pursuant to this
Subsection 3.1(a), all operating expense items that exceed the approved budget
will require NCI's approval; and
(b) expending more than what Oracle in good faith believes to be the
fair and reasonable market value at the time and place of contracting for any
goods purchased or leased or services engaged on behalf of NCI or otherwise in
connection with the Building.
4. EXPENSES BORNE BY NCI
Except as otherwise provided in this Agreement, all expenses incurred
pursuant hereto and in accordance with this Agreement shall be for and on behalf
of NCI and for its account. NCI shall fund Oracle in advance on a monthly basis
for the purpose of disbursement of expenses incurred in performing Oracle's
obligations hereunder, and Oracle's salary and management fee compensation as
detailed in Exhibits A and B. Notwithstanding the foregoing, under no
circumstances is Oracle to be considered an agent of NCI, but rather as an
independent contractor performing services for the benefit of NCI.
5. EXPENSES BORNE BY ORACLE
5.1 Expenses of Oracle. Oracle shall pay all salaries, wages, and other
usual compensation and fringe benefits (including, without limitation, the
workers' compensation insurance and other amounts referred to in Section 8.1) of
the personnel hired and retained by Oracle at the expense of Oracle as
specifically described in Section 1.2(a), provided that NCI shall reimburse
Oracle, as a budgeted expense as shown on Exhibit A, for a prorated portion of
such compensation.
6. BUDGETS AND REPORTS
6.1. Annual Budget. Oracle shall annually prepare operating and capital
expense budgets in the form attached hereto as Exhibit A approved by NCI, for
the current or next Fiscal Year (i.e., June 1 - May 31) of the Building and
submit such budgets to NCI.
5
6.2. Budget Revisions. No changes shall be made in any budget or any line
item therein without NCI's prior written approval. Oracle shall use diligence
and employ reasonable efforts to ensure that the actual costs of the Building
shall not exceed the approved budgets.
6.3 Payments, etc., on NCI's Direction. Notwithstanding the above, Oracle
agrees to make all repairs, replacements, renovations, additions and other
payments directed by NCI and shall establish such reserves as directed by NCI,
whether or not such items have been included in the approved construction,
operating and/or capital expense budgets provided that NCI makes adequate
provision for the payment or reimbursement of all costs connected with such
items.
6.4. Mid-Year Variance Reports. On or about the expiration of the month of
December in each Fiscal Year, Oracle shall prepare and submit to NCI a report
showing each component of the annual budget for such calendar year, and
variances from budgeted amounts in each such component, with associated notes
and explanations.
6.5. Reconciliation. Following the expiration of each Fiscal Year, Oracle
shall submit to NCI a reconciliation of actual costs incurred against the
estimated cost therefor as set forth in the approved budget for such Fiscal
Year. If it is determined that actual costs were less than the estimates upon
which NCI's payments were based, Oracle shall either refund any overpayments to
NCI within thirty (30) days following such determination or, at NCI's option,
credit such overpayment against amounts next due and payable under the
then-current budget. If it is determined that such actual costs exceeded NCI's
payments, NCI shall, within thirty (30) days following such determination,
deliver to Oracle the amount of any such excess.
7. COMPLIANCE
7.1. Legal and Insurance Requirements. Oracle shall make reasonable
efforts to comply with and abide by all laws, rules, regulations, requirements,
orders, notices, determinations and ordinances of any federal, state or
municipal authority, and the requirements of any insurance companies covering
any of the risks against which the Building is insured, as well as the
requirements of the Master Lease and the Sublease. To the extent such action is
not the responsibility of Landlord under the Master Lease, Oracle shall obtain
and maintain in effect any permits and occupancy certificates required in
connection with the occupancy and operation of the Building or any portion or
component thereof.
8. INSURANCE AND INDEMNIFICATION
8.1. Workers' Compensation. Oracle agrees to maintain and keep in force
all workers' compensation or similar insurance
6
required with respect to its employees who are employed in connection with the
performance of its obligations under this Agreement and to comply with any
Federal or State withholding tax, Social Security, or unemployment laws existing
or enacted in the future for the benefit of, or other laws affecting or
respecting, the employment of such employees. NCI shall reimburse Oracle in
accordance with the approved operating budget for the Building for the prorated
cost of workers' compensation insurance for the on-site personnel hired as an
expense of the Building, whose salaries are to be specified in the approved
budget for the Building.
8.2. Insurance Requirements for Contracts. Any service contract entered
into by Oracle for the Building in accordance with the requirements hereof shall
require each contractor to provide to NCI an insurance certificate prior to
commencement of work evidencing that (a) the contractor has in force Workers'
Compensation Insurance at statutory limits, Employers Liability Insurance in a
minimum amount of One Hundred Thousand Dollars ($100,000.00) per accident or
occurrence (or such greater amount as may be required by Landlord under the
Master Lease), General Liability and Contractual Liability Insurance, in a
minimum amount of Two Million Dollars ($2,000,000.00) per accident or occurrence
(or such greater amount as may be required by Landlord under the Master Lease),
and (b) Landlord, Oracle Corporation and NCI are named as additional insureds
under the contractor's aforementioned liability coverages.
8.3. Liability Insurance. Both NCI and Oracle shall obtain and maintain
commercial general liability insurance with respect to the Building in such
amounts as they shall reasonably determine from time to time, but in any event
not less than $3,000,000 combined single limit. Such liability policies shall
include blanket contractual liability coverage and a crossliability endorsement
(or provision) permitting recovery with respect to claims of one insured against
another. Each party's policy shall name the other as an additional insured and
shall provide that it may not be canceled, or the coverage reduced, without 30
days prior written notice to the other party. Each party shall, upon the request
of the other, provide certificates of such insurance.
8.4. Indemnification. Oracle agrees to indemnify, defend and hold NCI, and
NCI's officers and employees, harmless from and against all loss, cost,
liability, damage and expense, including but not limited to, reasonable counsel
fees, which may be occasioned by its negligence or willful misconduct in
connection with the Services provided hereunder and the breach by Oracle of any
of the provisions of this Agreement. NCI agrees (a) to indemnify, defend and
hold Oracle harmless from any loss, cost, liability, damage and expense,
including but not limited to, reasonable counsel fees, relating to the Building
which results from any acts of willful misconduct or acts or omissions which
7
constitute negligence on the part of NCI, and (b) to indemnify Oracle against
all claims arising out of the performance by Oracle of its duties hereunder to
the extent that such claims are not claims for which Oracle is obligated to
indemnify NCI as described above. The terms of this Section 8.4 shall survive
the expiration or sooner termination of this Agreement.
9. TERM OF AGREEMENT
9.1. Term. This Agreement shall become effective as of August 1, 1997, and
shall continue through the remainder of the initial term of the Sublease, (i.e.,
through September 30, 2002).
9.2. Termination. Notwithstanding Section 9.1 above, this Agreement may be
terminated and the obligations of the parties hereunder shall thereupon cease
with respect thereto, upon the occurrence of any of the events described in, and
in accordance with the terms of, paragraphs (a) through (f) below.
(a) In the event of the condemnation or destruction of the entire
Building, either party may terminate this Agreement upon ten (10) days' written
notice to the other party. Notwithstanding the foregoing, if the Building is to
be rebuilt following any such condemnation or destruction, this Agreement shall
not terminate but shall be suspended during such rebuilding and shall be
reinstated in accordance with its terms upon the completion of such rebuilding;
provided, however, that in no event shall the term of this Agreement be extended
beyond the date of expiration of the Sublease as a result of any such rebuilding
following condemnation or destruction.
(b) Upon the appointment, pursuant to an order of a court of
competent jurisdiction, of a trustee, receiver or liquidator of Oracle or NCI,
or any termination or voluntary suspension of the transaction of business of
Oracle or NCI, or any attachment, execution or other judicial seizure of all or
any substantial portion of the assets of Oracle or NCI, the party which is not
the subject of such action may terminate this Agreement upon ten (10) days'
written notice to the other party.
(c) If NCI or Oracle shall file a voluntary case under any
applicable bankruptcy, insolvency, debtor relief, or other similar law now or
hereafter in effect, or shall consent to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or
similar official) of NCI or Oracle, or shall make any general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, then the party which is not the subject of such action may terminate this
Agreement upon ten (10) days' written notice to the other party.
8
(d) If a court having jurisdiction shall enter a decree or order for
relief in respect of NCI or Oracle, in any involuntary case brought under any
bankruptcy, insolvency, debtor relief, or similar law now or hereafter in
effect, or if NCI or Oracle shall consent to or shall fail to oppose any such
proceeding, or if any such court shall enter a decree or order appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of NCI or Oracle, or ordering the winding up or liquidation of the
affairs of NCI or Oracle, then the party which is not the subject of such
action may terminate this Agreement upon ten (10) days' written notice to the
other party.
(e) If either party shall default in the performance of any of its
obligations hereunder and such default shall continue for twenty (20) days after
written notice from one party to the defaulting party designating such default
(or if such default cannot be cured within such twenty (20) day period, then if
such party does not commence to cure such, default and diligently pursue such
cure to completion with a reasonable period thereafter), the party not in
default may terminate this Agreement upon five (5) days' written notice to the
defaulting party.
(f) In the event of any termination of the Master Lease or the
Sublease, this Agreement shall terminate, effective on such date of termination
of the Master Lease or the Sublease.
(g) Additionally, Oracle shall have the right to terminate this
Agreement upon thirty (30) days advance written notice to NCI.
9.3 Authority Termination; Final Accounting. Upon termination of this
Agreement for any reason, the obligations created hereby shall immediately cease
and Oracle shall have no further right to or obligation to perform the Services
or draw checks on the Building Account. In the event of termination, Oracle
agrees to fulfill all reporting and accounting functions hereunder for the
period from the end of that covered by the last such report and/or accounting
until the date of termination. Upon termination, Oracle shall also (1) surrender
and deliver to NCI possession of the Building Account, and all rents and income
of the Building and other moneys of NCI on hand and in any bank account, (2)
deliver to NCI as received any moneys due NCI under this Agreement but received
after such termination, (3) deliver to NCI all materials and supplies, keys,
contracts and documents, and such other accounting papers and records pertaining
to the Building or this Agreement as the NCI shall request, (4) assign any right
Oracle may have in and to any existing contracts relating to the operation and
maintenance of the Building as the NCI shall require, and (5) deliver to NCI or
NCI's duly appointed agent all records, contracts, receipts for deposits, unpaid
bills, and all other papers or documents which pertain to the Building.
9
10. COMPENSATION
10.1. Management Fee. NCI agrees to pay Oracle a management fee as set out
on Exhibit B, which is attached hereto and incorporated herein by reference.
11. DISBURSEMENT OF FUNDS
11.1. Monthly Disbursement by NCI. On or before the first day of each
calendar month, NCI shall disburse to Oracle the amount of monthly costs
(including line-items for contingencies and the Management Fee) allocated to
such month in accordance with the approved budget. Oracle shall then pay
directly all expenses of the Building that are specified in the then current
budget for the Building. If at any time NCI fails to timely fund the amounts due
for any calendar month, Oracle shall have the option (but shall not be
obligated) to make such payments, in which event any amounts not timely paid by
NCI but so advanced shall bear interest at the rate of fourteen percent (14%)
per annum, or the maximum allowable under applicable law, whichever is less,
from the date disbursed by Oracle until the date paid by NCI. Oracle shall not
be liable hereunder for any penalties, damages, loss, costs or liabilities
incurred by NCI as a result of NCI' s failure to timely fund budgeted amounts
and Oracle' s failure to make payments of any Building operating cost if and to
the extent such failure to pay such Building operating cost is due to NCI's
failure to timely deposit with Oracle the budgeted amount therefor and NCI
hereby agrees to indemnify, defend, protect and hold Oracle harmless from and
against any and all loss, cost, damage or liability arising in any way out of
NCI's failure to timely fund sums due hereunder.
12. NOTICES
All notices hereunder shall be in writing, shall be sent by registered or
certified mail, postage prepaid and return receipt requested, or by personal
delivery or courier service with a request for an acknowledgment of receipt, and
shall be effective on receipt. Notices shall be sent or delivered to the
following addresses or such other address(es) as a party may designate by notice
given in the manner provided herein:
If to Oracle. Oracle Corporation
500 Oracle Parkway, Box LGN2
Redwood Shores, California 94065
Attention: Real Estate Controller
Oracle Corporation
500 Oracle Parkway, Box 50P7
Redwood Shores, California 94065
Attention: General Counsel
10
If to NCI: At the Building
13. MISCELLANEOUS
13.1. Entire Agreement. This Agreement is the entire agreement between the
parties with respect to the subject matter hereof, and no alteration,
modification, or interpretation hereof shall be binding unless in writing and
signed by both parties.
13.2. Severability. If any provision of this Agreement or application to
any party or circumstances shall be determined by any court of competent
jurisdiction to be invalid and unenforceable to any extent, the remainder of
this Agreement or the application of such provision to such person or
circumstances, other than those as to which it is so determined invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall be
valid and shall be enforced to the fullest extent permitted by law.
13.3. Applicable Law. This agreement shall be construed and enforced in
accordance with the laws of California.
13.4. Assignability. Oracle may not assign this Agreement without first
obtaining NCI's written consent, which consent NCI shall not unreasonably
withhold.
13.5. Relationship. Nothing contained in this Agreement shall be construed
to create a relationship of employer and employee or agent and principal between
Oracle and NCI, it being the intent of the parties hereto that the relationship
created hereby is solely that of an independent contractor. Nothing contained
herein shall be deemed to constitute NCI and Oracle as partners or joint
venturers.
13.6. Third Parties. Nothing contained in this Agreement is intended to be
for the benefit of any third party or to give any third party any claim or right
against NCI or Oracle beyond that which would exist in the absence of this
Agreement.
13.7. Successors Bound. This Agreement shall be binding upon and inure to
the benefit of NCI and Oracle and their respective successors and permitted
assigns.
13.8. Attorneys' Fees. In the event of any litigation arising out of this
Agreement, the prevailing party shall be entitled to reasonable costs and
expenses, including without limitation, reasonable attorneys' fees.
13.9. Waiver; Consents. No consent or waiver, express or implied, by
either party hereto to or of any breach or default by the other party in the
performance by the other of its obligations hereunder shall be valid unless in
writing, and no such consent or waiver shall be deemed or construed to be a
consent or waiver to or
11
of any other breach or default in the performance by such other party of the
same or any other obligations of such party hereunder. Failure on the part of
either party to complain of any act or failure to act of the other party or to
declare the other party in default, irrespective of how long such failure
continues, shall not constitute a waiver by such party of its rights hereunder.
The granting of any consent or approval in any one instance by or on behalf of
NCI shall not be construed to waive or limit the need for such consent in any
other or subsequent instance.
IN WITNESS WHEREOF, NCI and Oracle have executed this Agreement as of the
date set forth above.
ORACLE:
ORACLE CORPORATION,
a Delaware corporation
By: /s/ Bruce Lange
----------------------------------
Its:
---------------------------------
BRUCE LANGE
VP. AND CORPORATE TREASURER
OWNER:
NETWORK COMPUTER, INC.,
a Delaware corporation
By: /s/ Jerry Baker
----------------------------------
Its: CEO 9/24/97
---------------------------------
12
EXHIBIT A
INCOME AND EXPENSE PROJECTIONS
AND
VARIANCE REPORT
(SEE ATTACHED)
13
EXHIBIT A
(Revision 1)
1000 Bridge Parkway Property Maintenance Operating Budget - (proposed)
FY 98 (Financial Year begins June 1, 1997, and ends May, 31, 1998).
Expenditure = USD
48,384 RSF - two-story building
-----------------------------------------------------------------------------
Line No Expenses Jun-97 Jul-97 Aug-97 Sep-97 Oct-97 Nov-97 Dec-97 Jan-98
-------- -------- -----------------------------------------------------------------------------
1001 Utilities 13,306 13,306 13,306 13,306 13,306 13,306 13,306 13,306
1002 Cleaning (a) 4,158 4,158 4,158 4,158 4,158 4,158 4,158 4,158
1003 R & M - Electrical and Plumbing 605 605 605 605 605 605 605 605
1004 R & M - HVAC 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500
1005 R & M - Elevator 280 280 280 280 280 280 280 280
1006 R & M - Painting 150 150 150 150 150 150 150 150
1007 Life Safety 591 591 591 591 591 591 591 591
1008 (Invoice) Property Insurance 0 0 13,649 0 0 0 0 0
1009 Landscaping & PM Maintenance 734 734 734 734 734 734 734 734
1010 Property Taxes 658 658 40,658 658 658 658 658 658
1011 Landlord Fee @ 2% 1,210 1,210 1,210 1,210 1,210 1,210 1,210 1,210
1012 Maintenance & Repair Facility 373 373 373 373 373 373 373 373
1013 Moving - Furniture/Equipment 637 637 637 637 637 637 637 637
1014 Storage/Warehouse Fees 430 430 430 430 430 430 430 430
1015 Expense Contingency @ 3% 739 739 2,348 739 739 739 739 739
1016 Salaries 3,667 3,667 3,667 3,667 3,667 3,667 3,667 3,667
1017 Oracle Management Fee @ 7% 2,033 2,033 5,901 2,033 2,033 2,033 2,033 2,033
Totals: 31,069 31,069 90,196 31,069 31,069 31,069 31,069 31,069
-----------------------------------------------------------------------------
-------------------------------------------------------------------------
Line No Expenses Feb-98 Mar-98 Apr-98 May-98 Annualized FY 98 Cost/RSF
-------- -------- -------------------------------------------------------------------------
6/1/97 -
5/31/98
1001 Utilities 13,306 13,306 13,306 13,306 159,667 133,056 $3.30
1002 Cleaning (a) 4,158 4,158 4,158 4,158 49,896 41,580 $1.03
1003 R & M - Electrical and Plumbing 605 605 605 605 7,260 6,050 $0.15
1004 R & M - HVAC 1,500 1,500 1,500 1,500 18,000 15,000 $0.37
1005 R & M - Elevator 280 280 280 280 3,360 2,800 $0.07
1006 R & M - Painting 150 150 150 150 1,800 1,500 $0.04
1007 Life Safety 591 591 591 591 7,092 5,910 $0.15
1008 (Invoice) Property Insurance 0 0 0 0 13,649 13,649 $0.28
1009 Landscaping & PM Maintenance 734 734 734 734 8,806 7,338 $0.18
1010 Property Taxes 658 658 658 658 47,896 46,580 $0.99
1011 Landlord Fee @ 2% 1,210 1,210 1,210 1,210 14,515 12,096 $0.30
1012 Maintenance & Repair Facility 373 373 373 373 4,476 3,730 $0.09
1013 Moving - Furniture/Equipment 637 637 637 637 7,644 6,370 $0.16
1014 Storage/Warehouse Fees 430 430 430 430 5,160 4,300 $0.11
1015 Expense Contingency @ 3% 739 739 739 739 10,477 8,999 $0.22
1016 Salaries 3,667 3,667 3,667 3,667 44,000 36,667 $0.91
1017 Oracle Management Fee @ 7% 2,033 2,033 2,033 2,033 28,259 24,194 $0.58
Totals: 31,069 31,069 31,069 31,069 431,957 369,819 $8.93
-------------------------------------------------------------------------
(a) Cleaning $ (annual) based upon: $
Nightly Janitorial 34,451
Supplies at $0.09 psf. 4,355
Interior building window washing 1,680
Partition glass 1,920
Exterior window washing 7,490
------------
Total 12 months: 49,896
Partial 10 months: 41,580
Exhibit A (Revision 1)
1000 Bridge Parkway Property Management Operating Budget - (Notes)
Period: 8/1/97- 5/31/98
1001- Utilities - $133,056 - includes allowance for Electricity, Oil, Gas, Water
& Sewer, Trash Removal, and based upon annualized cost of $159,667 or $3.30 psf.
1002 - Cleaning - $41,580 - includes nightly janitorial service (5 x per week),
supplies, traffic area carpets (4 x per year), entrance carpets and other high
traffic areas (12 x per year), pressure washing entrance sidewalk, exterior pest
control service, and exterior window washing.
1003 - Electrical & Plumbing - $6,050 - covers emergency electrical repair and
emergency plumbing call out, and based upon $0.15 psf, as per Oracle campus.
1004 - HVAC - $15,000 - covers annual maintenance contract on roof package
units, house air systems maintenance, semi-annual air test, Oracle personnel
training, and 24 hour system coverage as required.
1005 - Elevator - $2,800 - annual maintenance and emergency call out for repair,
and includes phone line, panel monitor, and annual permit.
1006 - Painting - $1,500 - painting and repairs required for all base building
areas.
1007 - Life Safety - $5,910 - includes all NFPA standard testing of complete
fire life safety systems, panel monitoring contract, methane detection system
maintenance and panel monitoring contract, telephone lines, fire extinguisher
service, quarterly fire pump testing and service, generator load testing and
service, emergency training and supplies, generator fuel, and permits.
1008 - (Invoice) Property Insurance - $13,649 - Peery Arrillaga generated
Commercial Property Indemnity Insurance (paid once per year) for 1000 Bridge
Parkway as per lease agreement - payable upon occupancy.
1009 - Landscaping and PM Maintenance - $7,338 - Landscaping is calculated at
$0.01 per sf per month, and Property Maintenance is estimated at $250 per month.
(Includes parking lot sweep and holiday decorations).
1010 - Property Taxes - $46,580 - Property Tax is $0.136 per sf per Peery
Arillaga. Oracle's Personal Property Tax is 1% of CAPEX budget = $40k to hit in
August 97 (same time as Belmont Shores).
Exhibit A (Revision 1)
1000 Bridge Parkway Property Management Operating Budget - (Notes Contd.)
Period: 8/1/97- 5/31/98
1011 - Landlord Fee - $12,096 - Landlord Fee is a management fee based upon 2%
of rental income ($60,480) for Peery Arillaga, or $1,210 per month.
1012 - Maintenance & Repair Facility - $3,730- Includes allowance for outside
vendors for minor electrical/data work, patching & painting within tenant
improvements, and flooring/carpeting repairs within same. Based upon annualized
cost per square foot at Oracle HQ.
1013 - Moving Furniture/Equipment - $6,370 - Covers moves to and from warehouse,
furniture/equipment moves within the space that require more than one crew
member, and labor to do large space cleaning/recycling projects. Based upon
annualized cost per square foot at Oracle HQ.
1014 - Storage/Warehousing Fees - $4,300 - Includes furniture warehousing (based
upon cost per building square foot at Oracle HQ); document archival/retrieval,
and off-site storage based on the annual cost per headcount at Oracle HQ.
1015 - Expense Contingency @ 3% - $8,999 - Line item to cover miscellaneous
costs - office supplies, unplanned expense items, and includes consumable
maintenance supplies and tools.
1016 - Salaries - $36,667 - Prorated salary and related payroll burden costs of
the Manager, Property Maintenance Assistant, and Building Engineer. Includes
prorated salary and related payroll burden costs charged on a line item basis
for the following.
Property Maintenance Manager: 6 hours per week (15% x 40 hours)
Property Maintenance Assistant: 6 hours per week (15% x 40 hours)
Building Engineer: 3 hours per week (7.5% x 40 hours)
Building Operations Manager: 3 hours per week (7.5% x 40 hours)
Controller/Analyst: 85 hours per year (4% of annual hours)
Central Dispatch: 52 hours per year (2.5% of annual hours)
1017 - Oracle Management Fee - $24,194 - Oracle Management Fee is based upon 7%
of total facility maintenance expense.
EXHIBIT B
COMPENSATION
1. Management Fee. NCI shall pay to Oracle an annual management fee (the
'Management Fee ') of seven percent (7%) of all Building expenses (which
expenses shall include the expenses, contingency and personnel line items
included from time to time in the budget), payable in equal monthly
installments, as shall be set forth in the annual budget and if necessary
adjusted in any variance report. To the extent actual expenses vary from
budgeted expenses for any calendar year, such variance, and any necessary
increase or reduction in the Management Fee resulting therefrom, shall be set
forth in Oracle's annual reconciliation statement; NCI shall reimburse Oracle
for any underpayment of the Management Fee, or receive from Oracle a
reimbursement of any overpayment of the Management Fee, as shown in such
reconciliation, within thirty (30) days following submission of such
reconciliation.
14
Maintenance Services Agreement - Network Computer Inc. and Oracle Corp.
Was this helpful?