Build-to-suit Lease Agreement

BUILD-TO-SUIT LEASE AGREEMENT
BETWEEN


CARRAMERICA REALTY, L.P.
(LANDLORD)


AND


J. D. EDWARDS & COMPANY
(TENANT)


DATED AS OF DECEMBER 30, 1996


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TABLE OF CONTENTS


Page
---- 1. Granting Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2


2. Acceptance of Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2


3. Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3


4. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3


5. Base Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4


6. Operating Expense Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4


7. Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5


8. Taxes - Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5


9. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6


10. Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7


11. Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8


12. Restoration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9


13. Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10


14. Subletting, Assignment and Contraction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10


15. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12


16. Inspection and Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12


17. Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13


18. Surrender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13


19. Holding Over . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13


20. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13


21. Landlord's Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14


22. Tenant's Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15


23. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16


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Page
---- 24. Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16


25. Mortgagee Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16


26. Mechanic's Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16


27. Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16


28. Environmental Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17


29. Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18


30. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18


31. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18


32. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18


33. Rules and Regulations; Signage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19


34. No Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20


35. Management and Operation of Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20


36. Self Help . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23


37. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24


38. Options to Extend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24


39. Tenant's Right of First Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25


40. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26


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BUILD-TO-SUIT LEASE AGREEMENT
[Denver, Colorado]


THIS LEASE AGREEMENT is made as of this _____ day of December, 1996, between CARRAMERICA REALTY, L.P., a Delaware limited partnership ("Landlord"), and the Tenant named below.


================================================================================================================ TENANT: J. D. Edwards & Company, a Colorado corporation. - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- TENANT'S REPRESENTATIVE, David M. Hurtado ADDRESS, AND PHONE NO.: J. D. Edwards & Company
8055 E. Tufts Avenue, Suite 1331
Denver, CO 80237
(303) 488-1188 - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- PREMISES: All of the rentable area in the Building, excluding Common Areas, and any
area occupied by an on-site building management office, but including
locker rooms and shower facilities. Attached hereto as Exhibit B is a
document entitled "J.D. Edwards & Company Building Statistics", which
describes the rentable area within the Building. - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- INITIAL IMPROVEMENTS: The improvements to be constructed pursuant to the Supplement to Lease
Agreement on the land described on attached Exhibit A ("Land"). - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- BUILDING: The building being constructed as part of the Initial Improvements, to be
known as the J. D. Edwards Building, or such name as Tenant shall designate
from time to time as provided herein, and to be located at 4555 So. Ulster
Street Parkway, Denver, Colorado. - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- LEASE TERM: Beginning on the date of this Lease and ending on the last day of the 180th
full calendar month after the Rent Commencement Date: - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- RENT COMMENCEMENT DATE: The earlier of (i) October 1, 1997 or (ii) the Beneficial Occupancy Date. - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- BENEFICIAL OCCUPANCY DATE: Ten Business days after issuance of a tenant improvement certificate or
certificates of occupancy (which may be temporary) permitting Tenant to
occupy not less than one full floor of the Premises. In the event of any
dispute as to such date, the decision of the Interiors Architect for the
Building shall be final. - --------------------------------------------------------------------------------------------------------------- BASE RENT: See Paragraph 5 of this Lease and Article 4 of the Supplement to Lease
Agreement - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- BROKER: None - --------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------


5 - --------------------------------------------------------------------------------------------------------------- CONSTRUCTION CONTRACT: That certain Construction Contract dated May 1, 1996 between Tenant and
Hensel Phelps Construction Co. ("General Construction Contractor") duly
assigned to Landlord by Tenant. - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- ARCHITECTS CONTRACTS: That certain Agreement dated May 1, 1996 between Tenant and C.W. Fentress
J.H. Bradburn and Associates, P.C. (the "Core and Shell Architect") (Core
and Shell) and that certain Agreement for Interior Design Services dated
May 1, 1996 between Tenant as client and VOA Associates Incorporated
("Interiors Architect"). - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- SUPPLEMENT TO The Supplement to Lease Agreement (Construction of Improvements) of even LEASE AGREEMENT: date with this Lease, between Landlord and Tenant. - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- MANAGER: The property manager for the Building, which shall be Landlord or its
designee. - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- COMMON AREAS: That portion of the Building which consists of the entrance lobby,
corridors to the lobby and office suites, stairwells, rest rooms for the
building (but not including locker rooms and shower facilities, which shall
be deemed to be part of the Premises), loading dock, plumbing or heating,
ventilation, and air conditioning (HVAC) rooms used for the whole Building,
the roof, general terraces open to all tenants, storage rooms for the
exclusive use of maintaining the Building and operating plant, courtyards,
atriums, elevators, and any other area that is open to all tenants and
their guests or that is for the general good of the whole Building. The
foregoing notwithstanding, so long as the Premises include all of the
rentable area on any floor, the Premises shall include the elevator
vestibules, corridors and all restrooms on such floor and such areas shall
not be deemed to be "Common Areas". ===============================================================================================================


1. GRANTING CLAUSE. In consideration of the obligation of Tenant to pay rent as herein provided and in consideration of the other terms, covenants, and conditions hereof, Landlord leases to Tenant, and Tenant takes from Landlord, the Premises, to have and to hold for the Lease Term, subject to the terms, covenants and conditions of this Lease.


2. ACCEPTANCE OF PREMISES. Tenant is constructing the Initial Improvements and hereby accepts the Premises in its condition as of the date hereof, subject to all provisions of the Supplement to Lease Agreement or restrictions of all applicable covenants of record and the applicable zoning and other laws regulating the use of the Premises. Tenant acknowledges that Landlord has made no representation or warranty as to the suitability of the Premises for the conduct of Tenant's business. The risk of any defect or deficiency in the Premises, or any portion thereof, of any nature, whether patent or latent, as between Landlord and Tenant, is to be borne by Tenant. As provided in the Supplement to Lease Agreement, Tenant shall be entitled to enforce any and all warranties and guarantees under the Construction Contract. Within thirty (30) days after the Beneficial Occupancy Date, the parties will execute an acknowledgment letter for the purpose of confirming the Rent Commencement Date, the amount of Base Rent (separately identifying the components of Base Rent calculated pursuant to Paragraphs 4.1 and 4.2 of the Lease Supplement), the rentable square footage of each floor of the Building, the total rentable square footage of the Building, and the core factors for the Building. To the extent that any of such items differ from the projected square footages shown on Exhibit B, the parties agree to amend Exhibit B to conform. Rentable square footage and core factors shall be determined by the Interiors Architect in accordance with BOMA standards.


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3. USE. The Premises shall be used only for general office purposes, including software demonstration and training, and for no other purposes, which use shall be consistent with use of other first class office buildings in the Denver Technological Center. Tenant will use the Premises in a careful, safe and proper manner and shall not commit waste, overload the floors or structure of the Premises, or subject the Premises to any use that would damage the Premises. Tenant shall not permit any objectionable or unpleasant odors, smoke, dust, gas, noise, or vibrations to emanate from the Premises, or take any other action that would constitute a nuisance. Outside storage, including without limitation, storage of trucks and other vehicles (except vehicles used in connection with Tenant's business), is prohibited except to the extent permitted by and in accordance with any conditions imposed under applicable Legal Requirements (defined in the following Paragraph) and recorded covenants. Tenant shall pay the amount of any increase in the cost of any insurance carried by Landlord for the Premises that is caused by Tenant's use of the Premises. Tenant shall comply with all covenants or restrictions of record applicable to the Premises and any reasonable rules and regulations with respect to the Premises that are not inconsistent with this Lease promulgated by Landlord in accordance with this Lease after reasonable notice to Tenant. Any occupation of the Premises by Tenant before the Rent Commencement Date shall be subject to all obligations of Tenant under this Lease.


Anything in this Lease to the contrary notwithstanding, Tenant may use a portion of the Premises for a cafeteria providing food services to its employees and invitees, and a portion of the basement of the Premises for a florist shop for employees and invitees, subject in each case to the following conditions: (i) Tenant, at its cost, shall obtain and maintain all required permits and licenses and shall comply with all Legal Requirements applicable to each such use; (ii) such cafeteria and florist shop shall not be open to the general public; (iii) the portion of the Premises used for such cafeteria and florist shop shall be subject to Landlord's reasonable approval; and (iv) if Tenant employs or contracts with any third party vendors to provide food or beverage services or operation of or services within the florist shop, any such vendor shall be subject to Landlord's prior written approval, which approval shall not be unreasonably withheld or delayed and Tenant shall be solely responsible for compliance by any such vendor with the requirements of this Paragraph. In addition, the following conditions shall apply with respect to the florist shop: (a) the area of the basement of the Premises occupied by such shop and any related storage facilities shall not exceed 1,000 square feet; (b) the florist shop and any fixtures and equipment incorporated therein shall not be deemed to be part of the Initial Improvements and Landlord shall have no obligation to pay any of the cost of such items; and (c) any alterations or additions to the Premises in connection with the florist shop (including the initial construction thereof) shall be deemed to be Alterations subject to the provisions of Section 11.


4. COMPLIANCE WITH LAWS. Tenant, at its sole expense, shall comply with and make necessary modifications, alterations, or additions, whether substantial or insubstantial required by: (i) all municipal, county, state and federal statutes, laws, ordinances, and regulations and all private covenants, conditions and restrictions applicable to the Premises, the Building or Tenant's use thereof, including, without limitation, the Americans with Disabilities Act of 1990 ("ADA"), as amended and supplemented by further laws from time to time (collectively, "Legal Requirements"); and (ii) all material terms of any insurance policy covering or applicable to the Premises, all material requirements of the issuer of any such policy, and all material orders, rules, regulations, and any other requirements of the National Board of Fire Underwriters (or any other body exercising similar functions) binding upon Landlord or Tenant or the Premises or any use or condition of the Premises (collectively, "Insurance Requirements"). The foregoing notwithstanding, Tenant shall not be responsible for any modifications due to changes in Legal Requirements occurring after Project Close-Out and which are required for general office use (as opposed to any specific use by Tenant or any of its subtenants); and Landlord shall bear the cost of any such modifications; provided that such cost shall be amortized and included in Operating Expenses as provided in Exhibit C. In the event additions, alterations or other accommodations to the Premises, the Building, or the Common Areas are required as a result of Tenant's occupancy or actions, which would not otherwise be required of Landlord under the ADA or regulations promulgated thereunder, Tenant shall be solely responsible for and shall indemnify and hold harmless Landlord, its successors and assigns, for, from and against any loss, damage, cost, claim, expense or liability directly or indirectly arising out of or attributable to such occupancy or action. An order or directive by a building official or other appropriate authority is not a prerequisite for Tenant's obligations under this Paragraph 4. Tenant, at its sole expense, shall obtain and maintain all permits, licenses, and other governmental approvals in a form transferable to Landlord (to the extent permitted by law) required for the use,


3 7 occupancy or possession of the Premises by Tenant and any permits for any constriction in or to the Premises. At Tenant's request, Landlord shall without charge sign, but without any obligation to incur any liability or responsibility, applications for all permits and other instruments that may be necessary or appropriate for the use of the Premises as contemplated herein.


5. BASE RENT. Tenant shall pay Base Rent as calculated in the Supplement to Lease Agreement. The first full or partial month's Base Rent shall be due and payable on the Rent Commencement Date, and Tenant promises to pay to Landlord in advance without demand, deduction or set-off, monthly installments of Base Rent on or before the first day of each calendar month succeeding the Rent Commencement Date. Payments of Base Rent for any fractional calendar month shall be prorated based upon the number of days in such month. All payments required to be made by Tenant to Landlord hereunder shall be payable at such address as Landlord may specify from time to time by written notice delivered in accordance herewith. Tenant shall have no right at any time to abate, reduce, or set-off any rent due hereunder except where expressly provided in this Lease. Tenant waives and releases all statutory liens and offset rights as to rent. If Tenant is delinquent in any monthly installment of Base Rent, and such delinquency continues for more than ten (10) days (provided that such ten-day grace period shall not apply to more than two delinquencies in any twelve-month period) Tenant shall pay to Landlord on demand a late charge equal to two percent (2%) of such delinquent sum. The provision for such late charge shall be in addition to all of Landlord's other rights and remedies hereunder or at law and shall not be construed as a penalty. Base Rent shall increase as of the thirty-seventh month and as of the eighty-fifth month after the Rent Commencement Date by an amount equal to the increase in the Consumer Price Index from the Rent Commencement Date or the third anniversary of the Rent Commencement Date, as the case may be; provided, however, in no event shall the Base Rent be increased on either such date by more than 6% per annum or, in the case of the first such increase, by less than 1% per annum, compounded annually, on a cumulative basis from the beginning of the Lease term. "Consumer Price Index" means the Consumer Price Index for All Urban Consumers (Revised Series) (CPI-U). All Items, U.S. City Average (1982-1984 equals 100) of the United States Department of Labor, Bureau of Labor Statistics. If the manner in which the Consumer Price Index is calculated shall be revised, Landlord shall make an adjustment in such revised index so as to produce results equivalent, as nearly as possible, to those which would have been obtained if the Consumer Price Index had not been so revised. If the Consumer Price Index shall become unavailable to the public because publication is discontinued or otherwise, Landlord will substitute therefor a comparable index based upon changes in the cost of living or purchasing power of the consumer dollar published by any other governmental agency or, if no such index shall be available, then a comparable index published by a major bank or other financial institution or by a university or a recognized financial publication.


6. OPERATING EXPENSE PAYMENTS. During each month of the Lease Term, on the same date that Base Rent is due, Tenant shall pay Landlord an amount equal to 1/12 of the annual cost, as estimated by Landlord from time to time, of the Operating Expenses. Payments thereof for any fractional calendar month shall be prorated based on the number of days in such month. The term "Operating Expenses" is defined in Exhibit C.


Adjustments for overpayment or underpayment on account of Tenant's obligation for Operating Expenses shall be made as soon as practicable after the end of a year, and payment by Tenant or credit and refund by Landlord, as appropriate, shall be effected within fifteen (15) days after a final determination of the amount thereof and billing therefor by Landlord to Tenant, provided that with respect to any overpayment by Tenant, Landlord shall have the option to credit such overpayment against installments of Operating Expenses next due and owing by Tenant.


This Lease is a net lease and any present or future law to the contrary notwithstanding, shall not terminate except as expressly provided herein. Except as may be expressly provided herein, Tenant shall not be entitled to any abatement, reduction, set-off, counterclaim, defense or deduction with respect to any Base Rent, Operating Expenses or other sum payable hereunder, nor shall the obligations of Tenant hereunder be affected other than as expressly provided for herein, for any reason, including any damage to or destruction of the Premises or any part thereof; any taking of the Premises or any part thereof or interest therein by condemnation or otherwise; any prohibition, limitation, restriction or prevention of Tenant's use, occupancy or enjoyment of the Premises or any part thereof or any interference with such use, occupancy or enjoyment by any person or for any other reason; any title defect or encumbrance or any matter affecting title to the Premises or any part thereof; any eviction by paramount title or otherwise; any default by Landlord hereunder; any


4 8 proceeding relating to Landlord; the impossibility or illegality of performance by Landlord, Tenant or both; any action of governmental authority; any breach of warranty or misrepresentation; any defect in the condition, quality or fitness for use of the Premises or any part thereof; or any other cause whether similar or dissimilar to the foregoing and whether or not Tenant shall have notice or knowledge or any of the foregoing. Except as expressly provided in this Lease, Tenant hereby waives and releases (i) all right to terminate or surrender this Lease, (ii) all right to avail itself of any abatement, suspension, deferment, reduction, setoff, counterclaim or defense with respect to any Base Rent, Operating Expenses, Taxes or other sum payable by Tenant hereunder, and (iii) all statutory liens and offset rights as to ...