Detailed Office Building Work Letter With Shell Specifications Lease Exhibit
EXHIBIT [INSERT APPLICABLE LETTER]
THIS WORK LETTER ("Work Letter") sets forth the agreement of Landlord and Tenant with respect to the Tenant Improvements and Landlord's Work to be constructed on the Property. In the event of any inconsistency between the terms of this Work Letter and the terms of the Lease, the terms of the Lease shall control. All defined terms used herein shall have the meanings set forth in the Lease, unless otherwise defined in this Work Letter.
1. Landlord's Work. Landlord, at its sole cost and expense, shall perform or cause to be performed the "Landlord's Work," defined herein to mean demolition of the Existing Building and construction of two (2) concrete tilt-up building shells substantially in accordance with final plans and specifications to be submitted to and approved by the Tenant as provided herein and by the City (once so approved, the "Final Shell Plans"), which building shells shall contain only the items listed on Exhibit B-2 or shown on the Final Shell Plans (the "Building Shells"). Landlord's Work shall upon completion be in compliance with all then applicable Laws and Private Restrictions (except to the extent noncompliance is the result of Tenant requested changes in the Preliminary or Final Shell Plans). Landlord's Work shall be performed using a general contractor selected by Landlord.
2. Landlord shall cause XYZ Architects ("Architect") to prepare initial plans for construction of the Building Shells based on the shell specifications attached as Exhibit B-2 and the site plans attached as Exhibit B-3 (the "Preliminary Shell Plans"). The Preliminary Shell Plans shall provide for accommodation of Tenant's sewer line in the Buildings' slabs and may incorporate either of the site plans attached at Exhibit B-3 or be a combination thereof, as reasonably approved by Landlord and Tenant as set forth below, provided that in no event shall the design of the Project provide for a lobby larger than 6,000 square feet or for a number of parking spaces less than 3 spaces per 1,000 (in Landlord's discretion, provided that in no event shall the parking be less than 2.75 per 1,000) Rentable Square Feet (excluding the Rentable Square Feet of the lobby). Landlord shall submit the Preliminary Shell Plans to Tenant for Tenant's approval. Tenant will provide written approval of the Preliminary Shell Plans within five (5) days after such submission. If Tenant disapproves any part of the Preliminary Shell Plans, the disapproval shall include written instructions adequate for Architect to revise the Preliminary Shell Plans. Such revisions shall be subject to Landlord's approval, which shall not be unreasonably withheld, provided that neither Landlord nor Tenant shall be entitled to request or require changes to the Preliminary Shell Plans to the extent inconsistent with Exhibits B-2 and B- 3. Tenant will finally approve the revised Preliminary Shell Plans within two (2) business days after submission thereof to Tenant. If Tenant fails to approve the Preliminary Shell Plans within the applicable periods set forth in herein, then (A) Landlord shall not be obligated to commence construction of the Building Shells, (B) Tenant shall be responsible for any resulting delay, and the cost of such delay, in Landlord's completion of the Building Shells and delivery of the Leased Premises, and (C) any such delay shall be deemed a Tenant Delay (as defined below). After Tenant's approval of the Preliminary Shells Plans, such plans shall be submitted to the City for approval.
3. After approval by the City of the Preliminary Shell Plans, Landlord shall cause Architect to prepare Final Shell Plans. Tenant will provide written approval of the Final Shell Plans within five (5) days after such submission. If Tenant disapproves any part of the Final Shell Plans, the disapproval shall include written instructions adequate for Architect to revise the Final Shell Plans. Such revisions shall be subject to Landlord's approval, which shall not be unreasonably withheld. Tenant will finally approve the revised Final Shell Plans within two (2) business days after submission thereof to Tenant. If Tenant fails to approve the Final Shell Plans within the applicable periods set forth in herein, then (A) Landlord shall not be obligated to commence construction of the Building Shells, (B) Tenant shall be responsible for any resulting delay, and the cost of such delay, in Landlord's completion of the Building Shells and delivery of the Leased Premises, and (C) any such delay shall be deemed a Tenant Delay (as defined below). Landlord's Work shall be deemed to have been "Substantially Completed" or to have attained "Substantial Completion" as and when hereinafter set forth in this subparagraph 1(c).
4. When Landlord receives written certification from Architect that construction of the foundation, structural slab on grade (except to the extent delayed by Tenant's action or inaction, including at Tenant's request to accommodate Tenant's design requirements and/or any underslab aspects of the Tenant Improvements), Landlord's underslab plumbing work, structural steel framework, decking and concrete on second floor, roof structure and installation of main fire sprinkler risers in the Buildings and all other work shown on the Final Plans (other than the Late Delivery Items and punchlist items) have been completed in accordance with the Final Shell Plans approved by the City and the parties, Landlord shall prepare and deliver to Tenant a certificate signed by both Landlord and Architect (the "Structural Completion Certificate") certifying that the construction of such portions of the Buildings have been substantially completed in accordance with the Final Shell Plans in all material respects and specifying the date of that completion. To the extent reasonably available from the City, Landlord shall include reasonable evidence that the City has signed off on the items of Landlord's Work. The delivery of such Structural Completion Certificate (and evidence from the City, if any) shall memorialize the date that the Landlord's Work was "Substantially Completed," subject to concurrence by Tenant's architect, which concurrence shall not be unreasonably withheld and shall be given (or reasonably withheld) within five (5) business days after receipt of the Structural Completion Certificate. Within five (5) business after Landlord's delivery of the Structural Completion Certificate, Landlord and Tenant (and/or their representatives) shall conduct a walkthrough of the Building Shells using diligence to specify any items remaining incomplete (pursuant to the terms of the Work Letter) or in need of repair. Landlord and Tenant within said five (5) business day period after their inspection shall prepare a "punchlist" of any items remaining incomplete (pursuant to the terms of the Work Letter) or in need of repair, and Landlord shall cause such items to be completed or corrected at its sole cost and expense within a reasonable time thereafter. Promptly after Landlord provides Tenant with the Final Completion Certificate, Landlord shall cause the recordation of a Notice of Completion) with respect to Landlord's Work. The term "Substantially Completed" shall not include the parking areas or landscaping of the Property (the "Late Delivery Items") or punchlist items. Landlord and Tenant acknowledge and agree that the Late Delivery Items shall be completed by Landlord no later than the date which is the later to occur of (A) the date Tenant actually occupies the Leased Premises for the conduct of its business or (B) __________, 20__.
5. When Landlord receives written certification from Architect that construction of the remaining improvements constituting the Landlord's Work (including the Late Delivery Items and punchlist items) has been completed in accordance with the Final Shell Plans, Landlord shall prepare and deliver to Tenant a certificate signed by both Landlord and Architect (the "Final Completion Certificate") certifying that the construction of the remaining improvements constituting Landlord's Work has been substantially completed in accordance with Final Shell Plans in all material respects, and specifying the date of that completion. Upon receipt by Tenant of the Final Completion Certificate, the Landlord's Work will be deemed delivered to Tenant for all purposes of the Lease (subject to Landlord's continuing obligations with respect to the punchlist items).
6. Notwithstanding any other provisions of this Work Letter or of the Lease, if Landlord is delayed in substantially completing any of Landlord's Work necessary for issuance of the Structural Completion Certificate as a result of any Tenant Delay (as defined below), then the Rent Commencement Date (as otherwise determined in accordance with Article __ of the Lease) shall be advanced one day earlier for each day by which such Tenant Delay delayed completion of the portions of Landlord's Work necessary for issuance of the Structural Completion Certificate, and Tenant shall reimburse Landlord in cash, within thirty (30) days after written demand by Landlord (accompanied by reasonable documentation of the items claimed), for any increased construction- related costs and expenses actually incurred by Landlord as a result of the Tenant Delay, if any.
7. Any request by Tenant for a change in the Final Shell Plans after approval of thereof by Landlord, Tenant and City as provided herein, (a "Change") shall be accompanied by all information necessary to clearly identify and explain the proposed Change. As soon as practicable after receipt of the information describing the requested Change, Landlord shall notify Tenant of the estimated cost of such Change as well as the estimated increase in construction time caused by the Change, if any. Tenant shall approve in writing such estimates within two (2) business days after receipt of Landlord's notice. Upon receipt of such written request, Landlord shall be authorized to cause the Contractor to proceed with the implementation of the requested Change, subject to the City's approval, if required.
8. The increased cost and time, as determined by Landlord, of all Changes requested by Tenant, including the cost of architectural and engineering services required to revise the Final Shell Plans to reflect such Changes and the Contractor's overhead and fee shall be paid by Tenant within thirty (30) days after demand, subject only to Landlord's furnishing to Tenant appropriate back-up information from the Contractor concerning the increased costs and increased construction time.
9. Tenant shall construct, furnish or install all improvements, equipment or fixtures, that are necessary for Tenant's use and occupancy of the Premises (the "Tenant Improvements"). Tenant shall complete construction of the Minimum Tenant Improvements (as defined in subparagraph (m) below) no later than nine (9) months after the Landlord's Work was Substantially Completed, subject to delays caused by Force Majeure. Tenant shall also be responsible for the cost of any alterations to the Buildings required as a result of the Tenant Improvements. The Tenant Improvements shall be in conformity with drawings and specifications submitted to and approved by Landlord and shall be performed in accordance with the following provisions:
10. Tenant shall prepare and submit to Landlord for its approval two sets of fully dimensioned scale drawings (suitable for submission with a building permit application) for the Tenant Improvements (including plans, elevations, critical sections and details) and a specification of Tenant's utility requirements. Tenant shall cause all drawings and specifications for the Tenant Improvements to be prepared by licensed architects and where appropriate, mechanical, electrical and structural engineers.
11. Within 10 days after receipt of Tenant's drawings Landlord shall return one set of prints thereof with Landlord's approval and/or suggested modifications noted thereon. If Landlord has approved Tenant's drawings subject to modifications, such modifications shall be deemed to be acceptable to and approved by Tenant unless Tenant shall prepare and resubmit revised drawings for further consideration by Landlord. If Landlord has suggested modifications without approving Tenant's drawings Tenant shall prepare and resubmit revised drawings for consideration by Landlord. All revised drawings shall be submitted, with changes highlighted, to Landlord following Landlord's return to Tenant of the drawings originally submitted, and Landlord shall approve or disapprove such revised drawings within ten (10) days following receipt of the same.
12. Tenant shall obtain all building and other permits necessary in connection with the Tenant Improvements prior to the commencement of such work. The Tenant Improvements shall (i) be constructed in compliance with all of the terms and conditions of the Work Letter and with all applicable laws and regulations, (ii) not involve changes to structural components of the Buildings unless approved by Landlord in its reasonable discretion and (iii) shall not involve any floor, roof, or wall penetrations unless approved by Landlord in its reasonable discretion.
13. Prior to commencing construction, Tenant shall deliver to Landlord the following:
(a) The address of Tenant's general contractor, and the names of the primary subcontractors Tenant's contractor intends to engage for the construction of the Premises.
(b) The actual commencement date of construction and the estimated date of completion of the work, including fixturization.
(c) Evidence of insurance as called for hereinbelow.
(d) An executed copy of the applicable building permit for such work.
14. After final approval of Tenant's drawings by Landlord, Tenant shall proceed promptly to commence performance of the Tenant Improvements. Tenant's contractors and subcontractors shall be acceptable to and approved in writing by Landlord, which approval shall not be unreasonably withheld or delayed, and shall, at Landlord's option, be subject to coordination by Landlord until the Landlord's Work is Substantially Completed. Tenant shall furnish to Landlord a copy of the executed contract between Tenant and Tenant's general contractor covering all of Tenant's obligations under this Work Letter. Tenant shall use commercially reasonable efforts to cause such work to be performed in as efficient a manner as is commercially reasonable. Tenant shall reimburse Landlord on demand for the cost of repairing any damage to the Buildings caused by Tenant or its contractors during performance of the Tenant Improvements. Tenant shall cause its contractors and Landlord shall cause its contractors to conduct their work and employ labor in such manner as to maintain harmonious labor relations. Tenant's general contractor shall obtain a builder's risk policy of insurance in an amount and form and issued by a carrier reasonably satisfactory to Landlord, and Tenant's general contractor and subcontractors shall carry worker's compensation insurance for their employees as required by law. The builder's risk policy of insurance shall name Landlord as an additional insured and shall not be cancelable without at least 30 days' prior written notice to Landlord. To the extent feasible, Landlord and Tenant agree to obtain a builder's risk policy covering both the Landlord's Work and the Tenant Improvements, with the costs thereof the be prorated between the parties.
15. Any changes in the Tenant Improvements from the final drawings approved by Landlord which result in costs in excess of $25,000 shall be subject to Landlord's prior written approval, which shall not be unreasonably withheld or delayed (in no event longer than 5 days). Any deviation in construction from the design specifications and criteria set forth herein or from Tenant's plans and specifications as approved by Landlord shall constitute a default under the Lease. Only new materials shall be used in the construction of the Tenant Improvements, except with the written consent of Landlord.
16. During the construction of the Tenant Improvements, Tenant shall pay for utility service used by Tenant. Trash removal will be done continually at Tenant's sole cost and expense. Storage of Tenant's contractors' construction materials, tools and equipment shall be confined to an area designated by Landlord.
17. Tenant acknowledges that it has engaged its architects and shall be solely responsible for the actions and omissions of its architects and for any loss, liability, claim, cost, damage or expense suffered by Landlord or any other entity or person as a result of the acts or omissions of its architects or for delays caused by its architects, as set forth below. Landlord's approval of any of Tenant's architects or engineers and of any documents prepared by any of them shall not be for the benefit of Tenant or any third party, and Landlord shall have no duty to Tenant or to any third parties for the actions or omissions of Tenant's architects or engineers. Tenant shall indemnify and hold harmless Landlord against any and all losses, costs, damages, claims and liabilities arising from the actions or omissions of Tenant's architects and engineers.
18. Landlord shall have the right to post in a conspicuous location on the Buildings or the Premises, as well as record with the County of _______________________, a Notice of Nonresponsibility. Without limiting the generality of the foregoing, any work to be performed outside of the Buildings shall be coordinated with Landlord, and shall be subject to reasonable scheduling requirements of Landlord. Tenant shall, upon completion of its work, submit to Landlord two (2) complete sets of plans (one (1) reproducible) and specifications covering all of the Tenant Improvements, including architectural, electrical, and plumbing, as built. Landlord shall provide Tenant with a marked up set of the Final Shell Plans as reasonably requested by Tenant. As used in this Work Letter or the Lease, the term "Minimum Tenant Improvements" shall mean customary commercial office interior improvements covering at least seventy percent (70%) of the Rentable Square Feet of the Premises.
19. Payment of Costs of the Tenant Improvements. Tenant shall bear and pay the cost of the Tenant Improvements (which cost shall include, without limitation, the costs of construction, the cost of permits and permit expediting, and Tenant's contractor's fees).
20. Evidence of Completion of Tenant Improvements. Upon the completion of the Tenant Improvements, Tenant shall:
(a) Submit to Landlord a cost breakdown of the Landlord's Improvements, together with receipted evidence showing payment thereof, satisfactory to Landlord.
(b) Submit to Landlord certificates of occupancy for the Buildings and any other evidence from the City or other applicable governmental authorities that all building permits have been signed off and that Tenant may legally the Property, as reasonably requested by Landlord.
(c) Submit to Landlord the as-built plans and specifications referred to above.
21. Assignment of Rights Against Architect and Contractor. In the event of a termination of the Lease due to Tenant's default thereunder, Tenant assigns to Landlord on a non-exclusive basis any and all rights Tenant may have against Tenant's architects and contractors relating to the Tenant Improvements, without in any way obligating Landlord to pursue or prosecute such rights. Landlord agrees to enforce for Tenant's benefit or to assign (if reasonably practicable), rights Landlord may have against Landlord's architects, contractors, and suppliers relating to Landlord's Work, which would reduce Tenant's obligations under the Lease.
22. Tenant Delays. The following shall be considered "Tenant Delays:"
(a) Tenant's failure to furnish the information, instructions and plans required in this Work Letter or approve the Preliminary Shell Plans or Final Shell Plans, within the applicable time periods specified in this Work Letter; or
(b) Any changes in the scope of the Building Shells from that set forth on Exhibits B-2 and B-3, or any Changes to Final Shell Plans requested by Tenant after approval thereof as provided herein; or
(c) Any interruption or interference in Landlord's construction of Landlord's Work caused by Tenant, its contractors or its vendors if Tenant fails to remedy such interruption or interference within 24 hours after notice from Landlord; or
(d) Tenant's failure to timely pay any amounts which Tenant is obligated to pay under this Work Letter; or
(e) Any other act, neglect, failure or omission of Tenant, its agents, employees or contractors if Tenant fails to remedy such act, neglect, failure or omission within 24 hours after notice from Landlord.
(2) Two-story buildings connected by a central lobby area.
Building 1- _______ Square Feet
Building 2 - _______ Square Feet
Entry Lobby - _______ Square Feet
(The above square foot calculations are subject to final city approval).
Clear heights of approximately 17'-0" floor to floor height.
Approximate Bay spacing of 30'x30' on the top and bottom floors.
All foundations to include footings, foundation walls or other building foundation components required to support the entire building structure.
Columns shall be steel box
All columns, beams, joists, purlins, headers, or other framing members to support the roof, roofing membrane and stair openings.
Ten inch (10") thick structural concrete slab on grade with #4 reinforcing bars at 18" on center and #6 reinforcing bars at 13" on center. (Subject to final structural engineering calculations)
Two and a half (2-1/2) thick concrete slab over metal deck supported by structural open web and columns at second floor.
Exterior walls that enclose the perimeter of the building with steel reinforcing and structural connections that may be necessary or required.
All exterior glass and glazing to be anodized aluminum frames. Glass to be tinted as appropriate to the aesthetic design of the building. All exterior doors, door closer and locking devices necessary for proper functioning.
Roof system to be a metal deck supported by an open web joist and trust support.
Four (4) ply built-up roofing (including a base sheet, two plys and a cap sheet) and all flashings by Owens-Corning, John Manville, or equal.
Painting of all concrete walls with Tex-Coat or Kel-Tex textural paint. All caulking of exterior concrete joint in preparation for painting.
The foundation and structural framing should be designed to support a minimum live load of 120 pounds per square feet in all areas of top floor and 120 pounds on bottom floor.
The roof framing shall consist of a live load of at least 50 lbs per square foot.
The floor-to-floor height of the building shall allow a minimum of 10'0" interior drop ceiling height. (See Exhibit "B" for proposed cross section)
Roof hatch and ladder within each building.
One (1) 3,500lb. Capacity elevator.
Three (3) interior stairs consisting of stair assemblies with metal handrails to be provided f.o.b. at job site.
Landlord will provide a roof screen (the costs of which will not exceed $150,000.00)
Underground sanitary sewer lateral connected to the city sewer main the street and piped into the building and under the concrete slab on grad for the length of the building. Sewer lines to consist of a six-inch (6") sanitary sewer line and one six-inch (6") biowaste sewer line. Sanitary sewer line under the slabs will be in a close proximity to the building restroom locations.
Domestic water mains connected to the city water main in the street and stubbed to the building. Water main to the building shall be three (3") in size.
Roof drain leaders piped and connected to the site storm drainage systems. Overflow drains daylight two inches (2") above grade.
Gas lines connected from the city public utility mains and gas meters adjacent to, and in close proximity to the building. Meter supplied by utility company.
All primary electrical service to the building that is complete including underground conduit and wire feeders from transformer pads into the building's main switchgear electrical room. The electrical characteristics of the secondary side of transformers shall be 277/480 volt, 3 Phase and the rated capacity of the transformers shall be 3,000 amp for each building (excluding lobby).
Underground pull section, meter, and panel(s), for site lighting and landscaping.
Underground conduit from the street to the building for telephone trunk line service by _______ Telephone. Conduit to the building shall not be less than 4".
An electrically operated landscape irrigation controller that is a complete and functioning system.
Underground conduit from the building to the main fire protection system, shut off valve (PIV) for installation for security alarm wiring.
All parking lot and landscaping lighting to include fixtures, underground conduit, wire, distribution panel and controller. All exterior lighting shall be a complete and functioning system.
A complete and fully functional overhead automatic fire sprinkler system distributed throughout the building with a density of .2/3000.
System shall include all sprinkler heads that may be required by building codes above the ceiling, when ceilings are installed.
Two (2) grade level 10'x12' roll-up doors per building.
(2) equipment yards (exact size to be determined)
All work outside the building perimeter walls shall be considered site work for the building shell and shall include grading, asphalt concrete, paving, landscaping (hard and soft), landscape and irrigation, storm drainage, utility service laterals, curbs, butters, sidewalks, specialty paving (if required), retaining walls, fencing and gates, trash enclosures, planters, parking lot and landscape lighting and other exterior lighting per code.
Paving sections for automobile and truck access shall be according to the Geological Soils Report.
All parking lot striping to include handicap signage and spaces.
Underground site storm drainage system shall discharge to the city storm system main.
The following items are not included in the building shell:
Deck penetrations for mechanical equipment.
Framing and finishes for interior stairs.
Electrical panels and distribution.
Framing and loading for Tenant's specific mechanical equipment.