This excerpt taken from the RVBD 10-Q filed Apr 27, 2007.
INITIAL CONDITION OF THE PREMISES
6.1. Condition of Premises.
Subject to Section 8.1 hereof and Section 6.2 hereof, (a) Tenant shall accept possession of the Premises in the condition that exists on the Commencement Date as is, and (b) Landlord shall have no obligation to perform any work or make any installations in order to prepare the Building or the Premises for Tenants occupancy. Except as expressly set forth herein, Landlord has made no representations or promises with respect to the Building, the Real Property or the Premises. Promptly following Substantial Completion of Landlords Work, Landlord shall deliver to Tenant a Form ACP-5 covering the Premises.
6.2. Landlords Work.
(A) Subject to Section 6.3 hereof, Landlord shall perform, at Landlords expense, the work (such work being collectively referred to herein as Landlords Work) to construct the Premises as described on the plans and specifications based on the Initial Plans, as and to the extent approved by Landlord subject to and in accordance with Article 3 hereof (the Landlords Work Plans) prepared by Tenant, at Tenants expense, which are based on the Initial Plans to the extent approved by Landlord subject to the provisions of Article 3 hereof. On or before December 15, 2006, Tenant shall prepare, at Tenants expense, and provide Landlord with six (6) copies of the plans and specifications for Landlords Work (the Initial Plans) (including, without limitation, layout, architectural, mechanical and structural drawings, to the extent applicable) in CADD format that contain sufficient detail for Landlord and Landlords consultants to reasonably assess the proposed Landlords Work and which are based on the Preliminary Drawing No. SP-1, dated November 7, 2006, prepared by Spin Design, Inc., a copy of which is attached hereto as Exhibit 6.2. Nothing contained herein shall obligate Landlord to install furniture systems, furniture, telecommunications wiring or computer systems even if the same are shown on the Initial Plans or Landlords Work Plans. Notwithstanding anything contained herein to the contrary, in the event that Substantial Completion shall be delayed by reason of (i) failure by Tenant to deliver the Initial Plans to Landlord on or before December 15, 2006, (ii) Tenants delay in revising or supplying additional information with respect to the Initial Plans if requested by Landlord, (iii) any acts or omissions of Tenant including, without limitation, the Early Access, any changes or change orders to the Initial Plans or Landlords Work Plans, (iv) Unavoidable Delays, (v) items of Landlords Work that are Long Lead Work, (vi) any failure of Tenant to make payment due under this Article 6 (with the understanding that Landlord shall not be obligated to perform items of Landlords Work to the extent Tenant fails to timely pay therefor as required hereunder, (vii) Landlords Work requiring materials that are not Building standard or require finishes or fitting in excess of Building standard and (viii) Tenants failure to respond to review the bids referred to in Section 6.3 hereof following receipt (the aggregate period of the delays referred to in clauses (i) through (viii) above being referred to herein as Tenant Delays), then the Commencement Date and Substantial Completion of Landlords Work shall be deemed to have occurred on the date it would have but for Tenant Delays. Landlords Work shall be performed and completed in a good and workmanlike, in accordance with all applicable Requirements. Landlord shall notify Tenant (which notice may be
oral) if any items of Landlords Work are Long Lead Work. Landlord shall transfer to Tenant any warranties received by Landlord in connection with Landlords Work provided that such transfer shall not void such warranties.
(B) Landlord shall have the right to delegate Landlords obligations to perform all or any portion of the Landlords Work to an Affiliate of Landlord (it being understood, however, that Landlords delegating such obligations to an Affiliate of Landlord shall not diminish Landlords liability for the performance of Landlords Work in accordance with the terms of this Section 6.2. Landlord shall also have the right to assign to such Affiliate of Landlord the rights of Landlord hereunder to receive from Tenant the payments for the performance of the portions of Landlords Work (it being understood that if (i) Landlord so assigns such rights to such Affiliate of Landlord, and (ii) Landlord gives Tenant notice thereof, then Tenant shall pay directly to such Affiliate any such amounts otherwise due and payable to Landlord hereunder). Landlord shall not be required to maintain or repair during the Term any items of Landlords Work except as otherwise expressly provided in this Lease, it being agreed that Landlord shall make available to Tenant all guaranties or warranties received by Landlord in connection with Landlords Work to the extent such guaranties or warranties shall not be rendered invalid thereby.
(C) For purposes hereof, the term Long Lead Work shall mean any item which is not a stock item and must be specially manufactured, fabricated or installed or is of such an unusual, delicate or fragile nature that there is a substantial risk that (i) there will be a delay in its manufacture, fabrication, delivery or installation, or (ii) after delivery of such item will need to be reshipped or redelivered or repaired so that, in Landlords reasonable judgment, the item in question cannot be completed when the standard items are completed even though the items of Long Lead Work in question are (1) ordered together with the other items required and (2) installed or performed (after the manufacture or fabrication thereof) in order and sequence that such Long Lead Work and other items are normally installed or performed in accordance with good construction practice. In addition, Long Lead Work shall include any standard item, which in accordance with good construction practice should be completed after the completion of any item of work in the nature of the items described in the immediately preceding sentence.
6.3. Tenants Contribution to the Cost of Landlords Work.
(A) Subject to the terms of this Section 6.2(A), Tenant shall pay to Landlord, as additional rent, an amount equal to the excess, if any, of (I) the Work Cost, over (II) Ninety-Seven Thousand Seven Hundred Seventy-Five Dollars and No Cents ($97,775.00) (the amount of any such excess being referred to herein as Tenants Work Cost). The term Work Cost shall mean the sum of (x) the hard costs that Landlord incurs in performing Landlords Work and (y) the soft costs that Landlord incurs in performing Landlords Work, such as architects and engineers fees, permit costs, and filing fees, and the cost of electricity consumed at the Premises during the performance of Landlords Work. In the event that any change order or a field condition that requires a change to Landlords Work results in an increase of Tenants Work Cost, Landlord shall have the right before proceeding with such change to require Tenant (x) to agree in writing to such increase in cost within two (2) Business Days from the date of Landlords request (which request may be oral) for Tenants agreement and (y) to pay such
increase within thirty (30) days of Landlords invoice therefor. If Tenant shall fail or refuse to so agree to and/or pay for such increase then Landlord shall have the right (but not the obligation) to either refuse to perform such change order and continue the performance of Landlords Work without making the changes thereto contemplated by such change order or to revise the scope of Landlords Work so as not to require a change resulting from a field condition.
(B) Landlord shall submit to at least three (3) reputable construction companies as reasonably designated by Landlord, with reasonable promptness after the date hereof, a bid package that describes Landlords Work. Landlord shall use Landlords diligent efforts to obtain from each of such construction companies a bona fide bid to perform Landlords Work. Landlord shall have the right to request that the construction companies submit alternative bids, assuming, for example, that (a) the construction company acts as a general contractor for a fixed price, (b) the construction company acts as a construction manager for a construction management fee (without providing a guaranteed maximum price), and (c) the construction company acts as a construction manager for a construction management fee and provides a guaranteed maximum price. Landlord shall advise Tenant by facsimile sent to Randy Gottfried at facsimile number (415) 247-8801 of Landlords receipt of the bids from the aforesaid construction companies. Landlord shall provide Tenant with two (2) Business Days to review such bids and to advise Landlord of any changes to Landlords Work Plans in connection with such bids. If Tenant shall fail to so advise Landlord within such two (2) Business Day period then Landlord shall have the right to commence and perform Landlords Work without any such changes thereto. Landlord shall have the right to let the construction contract to the lowest responsible bidder (with the understanding that Landlord shall have the right to exercise Landlords reasonable business judgment in selecting the form of contractual arrangement for the construction contract) (the aforesaid construction contract that Landlord lets for Landlords Work being referred to herein as the Construction Contract).
(C) Landlord shall have the right to give to Tenant, after Landlord lets the Construction Contract, a notice of Landlords reasonable estimate of the Work Cost and the Tenants Work Cost that derives therefrom (such notice being referred to herein as the Work Estimate Notice). Tenant shall pay to Landlord, within thirty (30) days after the date that Landlord gives such notice to Tenant, an amount equal to Tenants Work Cost as reflected in the Work Estimate Notice (any such payment that Tenant makes to Landlord being referred to herein as the Work Estimate Payment). Landlord shall give to Tenant, within sixty (60) days after the date that Landlord Substantially Completes Landlords Work, a notice that sets forth the Work Cost therefor and the Tenants Work Cost that derives therefrom (such notice being referred to herein as the Final Cost Notice). Tenant shall pay to Landlord, within thirty (30) days after the date that Landlord gives the Final Cost Notice to Tenant, an amount equal to the excess (if any) of (I) Tenants Work Cost, as reflected in the Final Cost Notice, over (II) the Work Estimate Payment (if any). Landlord shall pay to Tenant, within ten (10) days after the date that Landlord gives the Final Cost Notice to Tenant, an amount equal to the excess (if any) (I) the Work Estimate Payment, over (II) Tenants Work Cost as reflected in the Final Cost Notice.