Form 10-Q [ntnx-04302018x10qxq3x18.htm]

Exhibit 10.3
FOURTH AMENDMENT
(METRO PLAZA)
THIS FOURTH AMENDMENT (this "Fourth Amendment") is made and entered into as of
April 4, 2018, by and between HUDSON METRO PLAZA, LLC, a Delaware limited
liability company ("Landlord"), and NUTANIX, INC., a Delaware corporation
("Tenant").
RECITALS
A.
Landlord (as successor in interest to CA-Metro Plaza Limited Partnership, a
Delaware limited partnership) and Tenant are parties to that certain lease dated
April 23, 2014 (the "Original Lease"), as previously amended by that certain
First Amendment dated March 23, 2015 ("First Amendment"), by that certain Second
Amendment dated January 28, 2016 ("Second Amendment"), and by that certain Third
Amendment dated July 28, 2016 ("Third Amendment") (as amended, the "Lease").
Pursuant to the Lease, Landlord has leased to Tenant space currently containing
a total of approximately 28,121 rentable square feet (the "Premises") comprised
of approximately 9,716 rentable square feet described as Suite No. 280 located
on the second (2nd) floor and approximately 18,405 rentable square feet
described as Suite No. 300 located on the third (3rd) floor of the building
commonly known as 181 Metro Drive located at 181 Metro Drive, San Jose,
California 95110 (the "Building").

B.
Pursuant to Section 1 of the Third Amendment, the Lease will expire by its terms
on March 31, 2021 (the "Existing Expiration Date"), and the parties wish to
extend the term of the Lease on the following terms and conditions.

NOW, THEREFORE, in consideration of the above recitals which by this reference
are incorporated herein, the mutual covenants and conditions contained herein
and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Landlord and Tenant agree as follows:
1.
Extension. The term of the Lease is hereby extended through May 31, 2024 (the
"Fourth Amendment Expiration Date"). The portion of the term of the Lease
beginning on April 1, 2021 and ending on the Fourth Amendment Expiration Date
shall be referred to herein as the "Fourth Amendment Extended Term."

2.
Base Rent. During the period from the date of this Fourth Amendment through
March 31, 2021, Tenant shall pay Base Rent for the Premises in accordance with
the terms and conditions of the Lease. During the Fourth Amendment Extended
Term, the schedule of Base Rent for the Premises shall be as follows:

Period of the
Fourth Amendment Extended Term
Annual Rate Per Square Foot (rounded to the nearest 100th of a dollar)
Monthly Base Rent
4/1/2021 - 3/31/2022
$43.01
$100,789.72
4/1/2022 - 3/31/2023
$44.30
$103,813.41
4/1/2023 - 3/31/2024
$45.63
$106,927.81
4/1/2024 - 5/31/2024
$47.00
$110,135.65

All such Base Rent shall be payable by Tenant in accordance with the terms of
the Lease. Notwithstanding the foregoing, Base Rent for the Premises shall be
abated, in the amount of $100,789.72, for the month of April 2021; provided,
however, that if a Default exists when any such abatement would otherwise apply,
such abatement shall be deferred until the date, if any, on which such Default
is cured.

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3.
Expenses and Taxes. During the Fourth Amendment Extended Term, Tenant shall pay
Tenant's Share of Expenses and Taxes for the Premises in accordance with the
terms of the Lease; provided, however, that from and after April 1, 2021, the
Base Year for the Premises shall be 2021.

4.
Improvements to the Premises.

4.1
Configuration and Condition of the Premises. Tenant acknowledges that it
currently is, and as of the commencement of the Fourth Amendment Extended Term
will be, in possession of the Premises and agrees to accept them "as is" without
any representation by Landlord regarding their configuration or condition and
without any obligation on the part of Landlord to perform or pay for any
alteration or improvement, except as may be otherwise expressly provided in
Section 5.2 of the Third Amendment and this Fourth Amendment.

4.2
Responsibility for Improvements to the Premises. Tenant shall be entitled to
perform additional improvements to the Premises, and to receive an allowance
from Landlord for such improvements, in accordance with the terms and conditions
of the Work Letter attached to the Third Amendment as Exhibit A; provided that
(i) the Allowance referenced in Section 1.1 of the Work Letter shall be $13.89
per rentable square foot of the Premises (for a total Allowance of $390,600.69)
and shall be available to Tenant from and after May 31, 2018, (ii) the reference
to "March 31, 2019" contained in the last sentence of Section 1.1 of the Work
Letter shall be revised to "December 31, 2021," and (iii) the Coordination Fee,
referenced in Section 2.3 of the Work Letter shall be 1.5% of the cost of the
Tenant Improvement Work.

4.3
Other Modifications with respect to the Premises. The reference to March 31,
2019 contained in the last sentence of Section 1.1 of the Work Letter attached
to the Third Amendment as Exhibit A is hereby replaced with "December 31, 2019"
as it applies to the $10.00 per rentable square foot originally provided in
Exhibit A of the Third Amendment (as opposed to the additional $13.89 per
rentable square foot of the Premises provided in Section 4.2 above, which must
be used by December 31, 2021 per Section 4.2 above).

5.
Security Deposit. Tenant has previously deposited with Landlord $89,495.08 as a
Security Deposit under the Lease. Landlord shall continue to hold the Security
Deposit in accordance with the terms and conditions of Section 21 of the
Original Lease.

6.
Extension Option. Section 6 of the Third Amendment is hereby deleted in its
entirety. Tenant shall retain the right to further extend the term of the Lease
for the entire Premises for one (1) additional period of three (3) years under
the terms and conditions of Section 7 of the First Amendment, provided (a) all
references in such Section 7 to the "Modified Expiration Date" shall mean and
refer to the Fourth Amendment Expiration Date referenced in Section 1 above, and
(b) the reference to "2018" in the last clause of Section 7.2.(B) of the First
Amendment shall be modified to "2024".

7.
California Civil Code Section 1938. Pursuant to California Civil Code § 1938,
Landlord hereby states that the Premises have not undergone inspection by a
Certified Access Specialist (CASp) (defined in California Civil Code § 55.52)
and provides the following notification to Tenant: "A Certified Access
Specialist (CASp) can inspect the subject premises and determine whether the
subject premises comply with all of the applicable construction-related
accessibility standards under state law. Although state law does not require a
CASp inspection of the subject premises, the commercial property owner or lessor
may not prohibit the lessee or tenant from obtaining a CASp inspection of the
subject premises for the occupancy or potential occupancy of the lessee or
tenant, if requested by the lessee or tenant. The parties shall mutually agree
on the arrangements for the time and manner of the CASp inspection, the payment
of the fee for the CASp inspection, and the cost of making any repairs necessary
to correct violations of construction related accessibility standards within the
premises." In accordance with the foregoing, Landlord and Tenant agree that if
Tenant requests a CASp inspection of the Premises, then Tenant shall pay (i) the
fee for such inspection, and (ii) the cost of making any repairs necessary to
correct violations of construction-related accessibility standards within the
Premises;

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provided, that, if Tenant is required to obtain such CASp inspection by
applicable Law or to avoid any penalty imposed under applicable Law, then the
cost of and obligation of making any repairs necessary to correct violations of
construction-related accessibility standards within the Premises shall be
governed by the provisions of the Lease.
8.
Package HVAC Units. In the event Tenant desires to utilize any existing
dedicated heating, ventilation and air conditioning units ("Package Units")
within any portion of the Premises, or installs, as part of the Tenant
Improvement Work or as an Alteration, new Package Units within any portion of
the Premises, the plans and specifications for any Package Units shall be
subject to Landlord's reasonable approval. If Tenant elects to utilize or
install Package Units within the Premises, Tenant shall also install, at
Tenant's sole cost and expense, separate meters or at Landlord's option,
sub-meters, in order to measure the amount of electricity furnished to such
Package Units and Tenant shall be responsible for Landlord's actual cost of
supplying electricity to such units as reflected by such meters or sub-meters,
which amounts shall be payable on a monthly basis as Additional Rent. Tenant
shall be responsible for maintenance and repair of the Package Units pursuant to
Section 25.5 of the Original Lease and such units may be subject to removal by
Tenant upon the expiration or earlier termination of the Lease pursuant to
Section 25.5 of the Original Lease.

9.
Surrender. Except as required under Section 23 of the Original Lease (regarding
removal of Lines) and except as required under Section 25.5 of the Original
Lease and Section 8 above (regarding Units and Package Units), and except for
Tenant's obligation to remove all of Tenant's full floor signage (i.e., any
signage in the elevator lobby, hallways, or other areas of any full floor leased
by Tenant), upon the expiration or earlier termination of the Lease, as amended
hereby, Tenant shall surrender possession of the Premises to Landlord in as good
condition and repair as exists as of the date of this Fourth Amendment, except
for reasonable wear and tear, casualty, condemnation and repairs that are
Landlord's express responsibility hereunder. Notwithstanding the foregoing, (a)
in the event any Alterations are installed by Tenant in the Premises after the
date of this Fourth Amendment which are not approved by Landlord, Tenant shall
remove such non-approved Alterations upon the expiration or earlier termination
of the Lease and repair any damage associated with such removal, and (b) in the
event Alterations are installed by Tenant in the Premises after the date of this
Fourth Amendment (including, without limitation, any Tenant Improvement Work to
be installed in the Premises by Tenant in accordance with the Work Letter
attached to the Third Amendment as Exhibit A), which are approved by Landlord,
Tenant shall not be required to remove such Tenant Improvement Work or
Alterations upon the expiration or earlier termination of the Lease. For
clarity, nothing contained in this Section 10 shall be construed to limit
Tenant's obligation to remove the Lines, Units, Package Units upon the
expiration or earlier termination of the Lease.

10.
Miscellaneous.

10.1
This Fourth Amendment and the attached exhibits, which are hereby incorporated
into and made a part of this Fourth Amendment, set forth the entire agreement
between the parties with respect to the matters set forth herein. There have
been no additional oral or written representations or agreements. Tenant shall
not be entitled, in connection with entering into this Fourth Amendment, to any
free rent, allowance, alteration, improvement or similar economic incentive to
which Tenant may have been entitled in connection with entering into the Lease,
except as may be otherwise expressly provided in this Fourth Amendment.

10.2
Except as herein modified or amended, the provisions, conditions and terms of
the Lease shall remain unchanged and in full force and effect.

10.3
In the case of any inconsistency between the provisions of the Lease and this
Fourth Amendment, the provisions of this Fourth Amendment shall govern and
control.

10.4
Submission of this Fourth Amendment by Landlord is not an offer to enter into
this Fourth Amendment but rather is a solicitation for such an offer by Tenant.
Landlord shall not be bound by this Fourth Amendment until Landlord has executed
and delivered it to Tenant.

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10.5
Capitalized terms used but not defined in this Fourth Amendment shall have the
meanings given in the Lease.

10.6
Tenant shall indemnify and hold Landlord, its trustees, members, principals,
beneficiaries, partners, officers, directors, employees, mortgagee(s) and
agents, and the respective principals and members of any such agents harmless
from all claims of any brokers, other than Savills Studley, claiming to have
represented Tenant in connection with this Fourth Amendment. Landlord shall
indemnify and hold Tenant, its trustees, members, principals, beneficiaries,
partners, officers, directors, employees, and agents, and the respective
principals and members of any such agents harmless from all claims of any
brokers claiming to have represented Landlord in connection with this Fourth
Amendment. Tenant acknowledges that any assistance rendered by any agent or
employee of any affiliate of Landlord in connection with this Fourth Amendment
has been made as an accommodation to Tenant solely in furtherance of
consummating the transaction on behalf of Landlord, and not as agent for Tenant.

10.7
Landlord represents and warrants to Tenant that to Landlord's actual knowledge,
without any duty of inquiry, no Security Agreement which is secured by the
Building exists on the date hereof. Tenant acknowledges and agrees that Landlord
leases the land underlying the Project pursuant to a ground lease (the "Ground
Lease") under which Landlord currently is the lessee and the lessor. Tenant
agrees that in the event of any merger of the ground leasehold interest with fee
ownership of the Premises or other termination of the Ground Lease relating to
the Premises, the Lease (as amended) shall not be terminated or destroyed by the
application of the doctrine of merger and the Lease (as amended) shall continue
in full force and effect notwithstanding any such merger or other termination.

10.8
This Fourth Amendment may be executed in any number of duplicate originals, all
of which shall be of equal legal force and effect. Additionally, this Fourth
Amendment may be executed in counterparts, but shall become effective only after
each party has executed a counterpart hereof; all said counterparts when taken
together, shall constitute the entire single agreement between the parties. This
Fourth Amendment may be executed by a party's signature transmitted by portable
document format ("pdf") or email or by a party's electronic signature
(collectively, "pdf Signatures"), and copies of this Fourth Amendment executed
and delivered by electronic means or originals of this Fourth Amendment executed
by pdf Signature shall have the same force and effect as copies hereof executed
and delivered with original wet signatures. All parties hereto may rely upon
emailed or pdf Signatures as if such signatures were original wet signatures.
Any party executing and delivering this Fourth Amendment by pdf or email shall
promptly thereafter deliver a counterpart signature page of this Fourth
Amendment containing said party's original signature. All parties hereto agree
that a pdf or emailed signature page or a pdf Signature may be introduced into
evidence in any proceeding arising out of or related to this Fourth Amendment as
if it were an original wet signature page.

10.9
Tenant and Landlord's affiliate, Hudson Concourse, LLC, a Delaware limited
liability company ("Hudson Concourse") have concurrently entered into that
certain Lease, of even date herewith, whereby Hudson Concourse leases to Tenant
Suite 500 and Suite 600 (collectively, the "Concourse Premises") of the building
located at 1745 Technology Drive, San Jose, California (the "Concourse"),
contingent upon Hudson Concourse successfully terminating the existing leases
for the Concourse Premises (collectively, the "Existing Leases") prior to their
scheduled expiration dates. In the event Hudson Concourse has not entered into
an agreement, within forty-five (45) days after the date of full execution and
delivery of this Fourth Amendment, to terminate the Existing Leases effective on
or prior to June 1, 2018, Landlord shall so notify Tenant and Tenant may, within
five (5) days after such notice, terminate this Fourth Amendment, unless
Landlord and Tenant mutually agree in writing to extend the forty-five (45) day
period referenced above. In the event Hudson Concourse enters into an agreement,
within forty-five (45) days after the date of full execution and delivery of
this Fourth Amendment, to terminate the Existing Leases effective as of a date
on or prior to June 1, 2018, but fails to deliver the Concourse Premises by June
1, 2018, Tenant may, within five (5) days after such date (but prior to the date
Landlord actually delivers the Concourse Premises to Tenant), terminate this
Fourth Amendment.

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IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Fourth Amendment
as of the day and year first above written.

 
LANDLORD:
 
 
 
HUDSON 1740 TECHNOLOGY, LLC,
a Delaware limited liability company

By:Hudson Pacific Properties, L.P.,
a Maryland limited partnership,
its sole member

By:Hudson Pacific Properties, Inc.,
a Maryland corporation,
its general partner

By: /s/ Mark T. Lammas
Name: Mark T. Lammas
Title: Chief Operating Officer, Chief Financial Officer & Treasurer

 
 
 
 
 
 
 
TENANT:
 

NUTANIX, INC., a Delaware corporation,

By: /s/ Duston Williams
Name: Duston Williams
Title: Chief Financial Officer