<PAGE>
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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q/A-1
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/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
</TABLE>
FOR THE QUARTERLY PERIOD ENDED NOVEMBER 30, 1999
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/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
</TABLE>
FOR THE TRANSITION PERIOD FROM ______________ TO ______________
COMMISSION FILE NUMBER 000-25249
INTRAWARE, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 68-0389976
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
25 ORINDA WAY
ORINDA, CA 94563
(Address of principal executive offices)
925-253-4500
(Registrant's telephone number, including area code)
Indicate by check (X) whether the registrant: (1) filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes /X/ No / /
As of November 30, 1999 there were 24,551,666 shares of the registrant's
Common Stock outstanding.
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<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As of the date hereof, there is no material litigation pending against us.
From time to time, we may be a party to litigation and claims incident to the
ordinary course of our business. Although the results of litigation and claims
cannot be predicted with certainty, we believe that the final outcome of such
matters will not have a material adverse effect on the results of operations,
financial condition or prospects.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On February 25, 1999, we commenced the initial public offering of 4,600,000
shares of common stock, including 600,000 shares subject to an overallotment
option on behalf of certain selling stockholders pursuant to a registration
statement on Form S-1 (Commission File No. 333-69261) declared effective on
February 25, 1999. The managing underwriters of the public offering were Credit
Suisse First Boston Corporation, BancBoston Robertson Stephens Inc., and
Hambrecht & Quist LLC.
The 4,350,000 shares registered on our behalf and 250,000 shares registered
on the behalf of certain selling stockholders were sold at a price per share of
$16.00. The aggregate-offering price of the shares we offered was $69,600,000,
less underwriting discounts and commissions of $4,872,000 and expenses of
approximately $1,300,000. The proceeds are to be used for general corporate
purposes, principally working capital, capital expenditures, potential
acquisitions and additional sales and marketing efforts. For the nine months
ending November 30, 1999, net cash used from the offering for operating
activities totaled $13.3 million and cash flows used for investing activities,
principally the purchase of computer equipment, totaled $53.2 million.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
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EXHIBIT
NUMBER
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3.1* Certificate of Incorporation of Intraware, Inc.
3.2* Bylaws of Intraware, Inc.
4.1* Specimen Common Stock Certificate.
10.1* Form of Indemnification Agreement between the Registrant and
each of its directors and officers.
10.2* 1996 Stock Option Plan (as amended on December 17, 1998) and
form of agreements thereunder.
10.3* 1998 Employee Stock Purchase Plan and form of agreements
thereunder.
10.4* 1998 Director Option Plan and form of agreements thereunder.
10.5* Form of Registration and Information Rights Agreement.
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EXHIBIT
NUMBER
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10.6* Loan Agreement entered into as of July 29, 1998 between the
Registrant and Imperial Bank and related General Security
Agreement and Collateral Assignment as Collateral, Patent
Mortgage and Security Agreement.
10.7* Sleepy Hollow Investment Company Office Lease made
August 23, 1996 between Sleepy Hollow Investment Company
and Intraware, Inc.
10.8* First Amendment to the Lease for Intraware, Inc. entered
into as of May 5, 1997 by and between the Registrant and
Sleepy Hollow Investment Company I.
10.9* Second Amendment to the Lease for Intraware, Inc. entered
into as of March 31, 1998 by and between the Registrant
and Sleepy Hollow Investment Company I.
10.10* Master Lease Agreement dated September 9, 1998 between
Comdisco, Inc. and Intraware, Inc.
10.11* Addendum and Equipment Schedules to the Master Lease
Agreement dated as of September 9, 1998 between
Intraware, Inc., as Lessee and Comdisco, Inc, as Lessor.
10.12 Office Lease between Spieker Properties, L.P. and Intraware,
Inc. dated October 1999.
10.13 Agreement of Lease made as of January 3, 2000 between Crown
Lexington LLC and the Registrant.
10.14+ Intraware Services Agreement effective as of July 1, 1999,
between Sun Microsystems, Inc. and Intraware, Inc.
10.15+ Sun Channel Agreement Master Terms effective as of
September 1, 1999 between Sun Microsystems, Inc. and
Intraware, Inc.
27.1* Financial Data Schedules.
</TABLE>
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+ We are seeking confidential treatment from the Commission for certain
portions of this exhibit. The omitted portions have been separately filed
with the Securities and Exchange Commission.
* Previously filed. See Intraware's Form 10-Q Quarterly Report filed on
January 14, 2000.
b) Reports on Form 8-K
We filed a Form 8-K on October 7, 1999
<PAGE>
The registrant hereby makes an amendment to its Quarterly Report on Form
10-Q filed on January 14, 2000, to file exhibits 10.12, 10.13, 10.14 and 10.15
to the Form 10-Q.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
INTRAWARE INC.
Dated: April 14, 2000 By: /s/ DONALD M. FREED
---------------------------------------
Donald M. Freed
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
<PAGE>
Exhibit 10.12
OFFICE LEASE
THIS OFFICE LEASE ("LEASE") is made between SPIEKER PROPERTIES,
L.P., a California limited partnership ("Landlord"), and INTRAWARE, INC., a
Delaware corporation ("Tenant"), as of November 16, 1999 (the "date of this
Lease").
BASIC LEASE INFORMATION
PROJECT: Watergate Tower III
BUILDING: 2000 Powell Street, Emeryville, California 94608
DESCRIPTION OF PREMISES: Suite 1555 (the Premises is as outlined in red or as
shown in cross-hatching on EXHIBIT B)
RENTABLE AREA OF PREMISES: Approximately Fifteen Thousand Eight Hundred
Twenty-Five (15,825) square feet
PERMITTED USE: General office and administrative use
SCHEDULED TERM COMMENCEMENT DATE: Earlier of commencement operations or
forty-five (45) days after delivery of Premises in condition required under
Section 2(b).
SCHEDULED INITIAL TERM: Thirty-six (36) and one-half (1/2) months
SCHEDULED EXPIRATION DATE: December 31, 2002
BASE RENT:
(a) Initial Annual Base Rent $418,608.00
(b) Initial Monthly Installment of Base Rent: $34,884.00
(c) Subject to increase or decrease, as applicable, pursuant to
Paragraph 3.1(b) as follows:
TERM COMMENCEMENT DATE THROUGH NOVEMBER 30, 1999: $17,442.00,
provided the Premises has been delivered November 16, 1999
DECEMBER 1, 1999 THROUGH DECEMBER 31, 2001: $34,884.00 per month
JANUARY 1, 2002 THROUGH DECEMBER 31, 2002: $50,640.00 per month
SECURITY DEPOSIT: One Hundred Fifty Thousand and No/100 Dollars ($150,000.00),
subject to Paragraph 22.C hereof.
BASE YEAR FOR OPERATING EXPENSES: Calendar Year 2000
TENANT'S PROPORTIONATE SHARE OF BUILDING: 4.3% OF PROJECT: N/A
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PARKING DENSITY: Three (3) spaces per 1,000 usable square OCCUPANCY DENSITY: One (1) person per 125 rentable
feet of the Premises square feet of the Premises
</TABLE>
TENANT'S NAICS CODE: 4899
TENANT CONTACT: Name: Mr. Don Freed, Chief Financial Officer
Telephone Number: (925) 253-4500
FAX: (925) 253-6590
SHORT FORM OFFICE BASE YEAR LEASE (CA)
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ADDRESSES FOR NOTICES : To: Tenant To: Landlord
25 Orinda Way 2200 Powell Street, Suite 325
Orinda, Ca 94563 Emeryville, Ca 94608
Attn: Mr. Don Freed Attn: Project Director
Executive Vice President and FAX: (510) 594-5608
Chief Financial Officer
FAX: (925) 253-6590
</TABLE>
With a copy to:
25 Orinda Way
Orinda, Ca 94563
Attn: John Moss
General Counsel
TENANT'S BILLING ADDRESS [IF DIFFERENT FROM NOTICE ADDRESS]:
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LANDLORD'S REMITTANCE ADDRESS: Spieker Properties, P.O. Box 45587, Department
11473, San Francisco, Ca 94145
GUARANTOR: NONE.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Lease,
consisting of the foregoing Basic Lease Information, the following Standard
Lease Provisions consisting of PARAGRAPHS 1 THROUGH 22 (the "STANDARD LEASE
PROVISIONS") and EXHIBITS A, B, C, D AND E, all of which are incorporated herein
by this reference (collectively, this "LEASE"). In the event of any conflict
between the provisions of the Basic Lease Information and the provisions of the
Standard Lease Provisions, the Standard Lease Provisions shall control.
"LANDLORD" "TENANT"
SPIEKER PROPERTIES, L.P., INTRAWARE, INC.
a California limited partnership, a Delaware corporation
By: Spieker Properties, Inc.,
a Maryland corporation, its general partner
By: By: /s/ Don Freed
------------------------------- -------------------------
John R. Winther Don Freed
Its: Its:
------------------------------ ------------------------
Senior Vice President Executive Vice President,
CFO
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STANDARD LEASE PROVISIONS
1. PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord, subject to all of the terms and conditions set forth herein,
those certain premises (the "PREMISES") described in the Basic Lease
Information and as outlined in red or as shown in the cross-hatched markings
on the floor plan attached hereto as EXHIBIT B. The parties agree that for
all purposes hereunder the Premises shall be stipulated to contain the number
of square feet of rentable area described in the Basic Lease Information. The
Premises are located in that certain office building (the "BUILDING") whose
street address is as shown in the Basic Lease Information. The Building is
located on that certain land which is also improved with landscaping, parking
facilities and other improvements and appurtenances. Such land, together with
all such improvements and appurtenances and the Building, are all or part of
a project which may consist of more than one building and additional
facilities, as described in the Basic Lease Information (collectively
referred to herein as the "PROJECT"). However, Landlord reserves the right to
make such changes, additions and/or deletions to such land, the Building and
the Project and/or the common areas and parking or other facilities thereof
as it shall determine from time to time, provided that any such changes,
additions and/or deletions of the common areas shall not materially and
adversely interfere with Tenant's access to the Premises and the parking
areas of the Project.
2. TERM.
(a) Unless earlier terminated in accordance with the provisions
hereof, the term of this Lease (the "TERM") shall be as set forth in the Basic
Lease Information.
(b) The Term shall commence on the date that Landlord delivers the
Premises to Tenant (the "TERM COMMENCEMENT DATE"). If Landlord fails to deliver
possession of the Premises to Tenant on or before November 19, 1999, Tenant may
terminate this Lease by delivering written notice to Landlord which termination
shall be effective immediately upon Landlord's receipt thereof and Tenant shall
have no further obligations hereunder. Landlord hereby represents that by
delivering possession of the Premises to Tenant, any claims by any former tenant
of the Premises are null and void and Landlord has full legal capacity to
deliver possession of the Premises and a leasehold estate to Tenant in
accordance with the terms of this Lease. Notwithstanding the foregoing, in the
event that Landlord is delayed in delivering the Premises by reason of any act
or omission of Tenant, the Term Commencement Date shall be (unless Tenant takes
possession or commences use of the Premises prior thereto) the date the Premises
would have been delivered by Landlord had such Tenant caused delay(s) not
occurred. This Lease shall be a binding contractual obligation effective upon
execution hereof by Landlord and Tenant, notwithstanding the later commencement
of the Term. Tenant acknowledges that Tenant has inspected and accepts the
Premises "as-is" and in their present condition so long as free of debris,
except for tenant improvements (if any) to be constructed by Landlord in the
Premises pursuant to the Improvement Agreement attached hereto as EXHIBIT C (the
"IMPROVEMENT AGREEMENT"), if any; provided, however, that the foregoing sentence
shall not release Landlord from any of Landlord's compliance obligations with
respect to Regulations (as defined below) as expressly stated in this Lease.
Landlord and Tenant acknowledge and agree that all personal property, including,
but not limited to, the furniture that is in the Premises as of the date hereof
shall be delivered to Tenant at the time of delivery of the Premises and such
personal property shall be the sole property of Tenant.
(c) In the event the Term Commencement Date is delayed or
otherwise does not occur on the Scheduled Term Commencement Date specified in
the Basic Lease Information, this Lease shall not be void or voidable, the Term
shall not be extended, and Landlord shall not be liable to Tenant for any loss
or damage resulting therefrom (except as set forth in Section 22(d) below);
provided that Tenant shall not be liable for any Rent (defined below) for any
period prior to the Term Commencement Date. Landlord may deliver to Tenant
Landlord's standard form "START-UP LETTER" for Tenant's acknowledgment and
confirmation of the Term Commencement Date. Tenant shall execute and deliver
such Start-Up Letter to Landlord within five (5) days after receipt thereof, but
Tenant's failure or refusal to do so shall not negate Tenant's acceptance of the
Premises or affect determination of the Term Commencement Date.
(d) Landlord shall be responsible for complying with
Regulations (defined below), other than the ADA, pertaining to the common
areas of the Project prior to and except to the extent arising out of
Tenant's occupancy or use of the Premises or common areas or construction of
any Tenant Improvements or Alterations made by or on behalf of Tenant,
whether by Landlord or otherwise and whether performed before or after the
Term Commencement Date, or installation of any equipment, fixtures, furniture
or other personal property in or about the Premises; provided, however; that
Landlord may treat costs of such compliance as an Operating Expense. Tenant
shall have the sole responsibility for complying, at Tenant's cost, with any
and all provisions of the Americans with Disabilities Act of 1990, as it has
been and may later be amended ("ADA"), (i) with respect to the Premises; and
(ii) with respect to the common areas of the Project where in the case of
this clause (ii) such compliance has been brought about by: (A) any Tenant
Improvements or Alterations to the Premises or to the common areas made by or
on behalf of Tenant, whether by Landlord or otherwise, and performed after
the Term Commencement Date; (B) requirements of Tenant's employees, or any
changes to Tenant's use of the Premises; or (C) any architectural barriers
caused by Tenant's installation of any equipment, fixtures, furniture, or
other personal property in or about the Premises (items (i) and (ii)
collectively, "TENANT'S ADA RESPONSIBILITIES"). Notwithstanding the
foregoing, Tenant's ADA Responsibilities shall not include any compliance
items (each an "ADDITIONAL ADA COMPLIANCE ITEM") identified during an
inspection or other event made or occurring prior to, during or after
construction of, and solely in connection with, any Tenant Improvement or
Alterations to the Premises or common areas made by or on behalf of Tenant (a
"TENANT CAUSED INSPECTION") if such Additional ADA Compliance Item is: (i)
not a direct or indirect result or consequence of such Tenant Improvement or
Alterations to the Premises or common areas made by or on behalf of Tenant
except that such compliance item was discovered in the Premises, Building or
Project during a Tenant Caused Inspection, and (ii) unrelated in any manner,
either directly or indirectly, with the purpose for the Tenant Caused
Inspection; and (iii) is not otherwise part of Tenant's ADA Responsibilities
as defined above; provided however, that Landlord may allocate the cost of
performing such Additional ADA Compliance Item as an Operating Expense if
such allocation is consistent with the terms of this Lease. Tenant shall
indemnify, defend and hold Landlord, its agents and employees harmless from
and against any and all claims, damages, or liabilities (including, without
limitation, reasonable attorneys' fees and costs) arising directly or
indirectly from Tenant's failure to satisfy any of Tenant's ADA
Responsibilities. Landlord shall indemnify, defend and hold Tenant, its
agents and employees harmless from and against any and all claims, damages or
liabilities arising directly or indirectly from Landlord's failure to comply
with any obligations of a landlord under the ADA, other than such claims,
damages or liabilities arising from Tenant's failure to satisfy any of
Tenant's ADA Responsibilities; provided, however, that Landlord may treat
costs of ADA compliance with respect to the common areas of the Project to
the extent incurred after the Term Commencement Date as an Operating Expense.
Landlord represents that, as of the date of this Lease, to the best of
Landlord's actual knowledge, the Premises and the Building shall comply in
all material respects with Regulations (as defined below) and the ADA as the
Regulations (as defined below) and ADA, respectively, have, as of the date of
this Lease, been interpreted in Alameda County and pertain to the Premises
and the Building.
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3. RENT AND OPERATING EXPENSES.
3.1 BASE RENT
(a) Subject to the provisions of Paragraph 2(b) and this Paragraph 3.1,
Tenant agrees to pay during the Term as Base Rent for the Premises the sums
specified in the Basic Lease Information (as increased from time to time as
provided in the Basic Lease Information or as may otherwise be provided in this
Lease) ("BASE RENT").
(b) Base Rent shall increase as set forth in the Basic Lease
Information or as may otherwise be provided in this Lease.
(c) Except as expressly provided to the contrary herein, Base
Rent shall be payable in equal consecutive monthly installments, in advance,
without deduction or offset, commencing on the Term Commencement Date and
continuing on the first day of each calendar month thereafter. However, the
first installment of Base Rent in the amount of $17,442 shall be payable by
Tenant simultaneously with the execution of this Lease by Landlord and
Tenant. If the Term Commencement Date is a day other than the Scheduled
Commencement Date, then Landlord shall credit Tenant's December Base Rent in
an amount equal to $1,162.80 per day for each day commencing on November 17,
1999 until the Term Commencement Date. Base Rent, all forms of additional
rent payable hereunder by Tenant and all other amounts, fees, payments or
charges payable hereunder by Tenant (collectively, "ADDITIONAL RENT") shall
(i) each constitute rent payable hereunder (and shall sometimes collectively
be referred to herein as "RENT"), (ii) be payable to Landlord in lawful money
of the United States when due without any prior demand therefor, except as
may be expressly provided to the contrary herein, and (iii) be payable to
Landlord at Landlord's Remittance Address set forth in the Basic Lease
Information or to such other person or to such other place as Landlord may
from time to time designate in writing to Tenant. Any Rent or other amounts
payable to Landlord by Tenant hereunder for any fractional month shall be
prorated based on a month of 30 days.
3.2 OPERATING EXPENSES.
(a) Subject to the provisions of this Lease, Tenant shall pay
to Landlord pursuant to this Paragraph 3.2 as Additional Rent an amount equal
to Tenant's Proportionate Share (defined below) of the excess, if any, of
Operating Expenses (defined below) allocable to each Expense Year (defined
below) over Operating Expenses allocable to the Base Year (the "BASE YEAR")
specified in the Basic Lease Information ("BASE YEAR OPERATING EXPENSES").
"TENANT'S PROPORTIONATE SHARE" is, subject to the provisions of this
Paragraph 3.2, the percentage number (representing the Premises' share of the
Building and the Project) set forth in the Basic Lease Information. An
"EXPENSE YEAR" is any calendar year after the Base Year any portion of which
falls within the Term.
(b) "OPERATING EXPENSES" means all costs, expenses and
obligations incurred or payable by Landlord because of or in connection with
the operation, ownership, repair, replacement, restoration, management or
maintenance of the Project during or allocable to the Base Year or an Expense
Year (as applicable) during the Term (other than costs, expenses or
obligations specifically attributable to Tenant or other tenants of the
Building or Project), all as determined substantially in accordance with
generally accepted accounting principles, as reasonably interpreted by
Landlord and consistently applied, including without limitation the following:
(i) All property taxes, assessments, charges or
impositions and other similar governmental ad valorem or other charges levied
on or attributable to the Project (including personal and real property
contained therein) or its ownership, operation or transfer, and all taxes,
charges, assessments or similar impositions imposed in lieu or substitution
(partially or totally) of the same (collectively, "TAXES"). "TAXES" shall
also include (A) all taxes, assessments, levies, charges or impositions on
any interest of Landlord in the Project, the Premises or in this Lease, or on
the occupancy or use of space in the Project or the Premises; or on the gross
or net rentals or income from the Project, including, without limitation, any
gross income tax, excise tax, sales tax or gross receipts tax levied by any
federal, state or local governmental entity with respect to the receipt of
Rent; or (B) any possessory taxes charged or levied in lieu of real estate
taxes; and
(ii) The cost of all utilities, supplies, equipment,
tools, materials, service contracts, janitorial services, waste and refuse
disposal, landscaping, and insurance (with the nature and extent of such
insurance to be carried by Landlord to be determined by Landlord in its sole
and absolute discretion, unless otherwise expressly provided herein);
insurance deductibles; compensation and benefits of all persons who perform
services connected with the operation, management, maintenance or repair of
the Project; personal property taxes on and maintenance and repair of
equipment and other personal property; costs and fees for administration and
management of the Project, whether by Landlord or by an independent
contractor, and other management office operational expenses (provided that
any such management fee shall not exceed five percent (5%)); rental expenses
for or a reasonable allowance for depreciation of, personal property used in
the operation, management, maintenance or repair of the Project, license,
permit and inspection fees; and all inspections, activities, alterations,
improvements or other matters required by any governmental or
quasi-governmental authority or by Regulations (defined below), for any
reason, including, without limitation, capital improvements, whether
capitalized or not; all capital additions, repairs, replacements and
improvements made to the Project or any portion thereof by Landlord (A) of a
personal property nature and related to the operation, repair, maintenance or
replacement of systems, facilities, equipment or components of (or which
service) the Project or portions thereof, (B) required or provided in
connection with any existing or future applicable municipal, state, federal
or other governmental statutes, rules, requirements, regulations, laws,
standards, orders or ordinances including, without limitation, zoning
ordinances and regulations, and covenants, easements and restrictions of
record (collectively, "REGULATIONS"), (C) which are designed to improve the
operating efficiency of the Project, or (D) determined by Landlord to be
required to keep pace or be consistent with safety or health advances or
improvements (with such capital costs to be amortized over such periods as
Landlord shall determine which shall be substantially in accordance with
generally accepted accounting principles); common area repair, resurfacing,
replacement, operation and maintenance; security systems or services, if any,
deemed appropriate by Landlord (but without obligation to provide the same);
and any other cost or expense incurred or payable by Landlord in connection
with the operation, ownership, repair, replacement, restoration, management
or maintenance of the Project. Repairs, replacements, and general maintenance
shall include the cost of any remediation of or repair due to the use of any
common Hazardous Materials, such as office and janitorial supplies and
materials used in connection with the systems and equipment which operate the
Building and the Project, with such Hazardous Materials used in customary
quantities in connection with the ownership, management, maintenance, repair,
preservation, replacement and operation of the Building or Project and its
supporting facilities and such additional facilities now and in subsequent
years as may be determined by Landlord to be necessary or desirable to the
Building and/or Project (as determined in a reasonable manner).
(c) Variable items of Operating Expenses (e.g., expenses that
are affected by variations in occupancy levels) for the Base Year and each
Expense Year during which actual occupancy of the Project is less than
ninety-five percent (95%) of the rentable area of the Project shall be
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<PAGE>
appropriately adjusted, in accordance with sound accounting principles, to
reflect ninety-five percent (95%) occupancy of the existing rentable area of
the Project during such period.
(d) Prior to or shortly following the commencement of (and from
time to time during) each Expense Year of the Term following the Term
Commencement Date, Landlord shall provide to Tenant a good faith written
estimate of Tenant's Proportionate Share of the projected excess, if any, of
the Operating Expenses for the Project for such year over the Base Year
Operating Expenses. Commencing with the first day of the calendar month
following the month in which such estimate was delivered to Tenant, Tenant
shall pay such estimated amount (less amounts, if any, previously paid toward
such excess for such year) to Landlord in equal monthly installments over the
remainder of such calendar year, in advance on the first day of each month
during such year (or remaining months, if less than all of the year remains).
Subject to the provisions of this Lease, Landlord shall endeavor to furnish
to Tenant within a one hundred twenty (120) days after the end of each
Expense Year, a statement (a "RECONCILIATION STATEMENT") indicating in
reasonable detail the excess, if any, of Operating Expenses allocable to such
Expense Year over Base Year Operating Expenses and the parties shall, within
thirty (30) days thereafter, make any payment or allowance necessary to
adjust Tenant's estimated payments to Tenant's actual share of such excess as
indicated by such annual Reconciliation Statement.
(e) Tenant shall pay ten (10) days before delinquency all taxes
and assessments levied against any personal property or trade fixtures of
Tenant in or about the Premises. If any such taxes or assessments are levied
against Landlord or Landlord's property or if the assessed value of the
Project is increased by the inclusion therein of a value placed upon such
personal property or trade fixtures, Tenant shall, within thirty (30) days of
demand, reimburse Landlord for the taxes and assessments so levied against
Landlord, or any such taxes, levies and assessments resulting from such
increase in assessed value.
(f) Any delay or failure of Landlord in (i) delivering any
estimate or statement described in this Paragraph 3.2, or (ii) computing or
billing Tenant's Proportionate Share of excess Operating Expenses shall not
(A) constitute a waiver of its right to subsequently deliver such estimate or
statement or require any increase in Rent contemplated by this Paragraph 3.2,
or (B) in any way waive or impair the continuing obligations of Tenant under
this Paragraph 3.2. Provided that Tenant is not then in default under this
Lease beyond any applicable notice and cure period, subject to compliance
with Landlord's standard procedures for the same, Tenant shall have the
right, upon the condition that Tenant shall first pay to Landlord the amount
in dispute, to have independent certified public accountants of national
standing (who are not compensated on a contingency basis) of Tenant's
selection (and subject to Landlord's reasonable approval) review Landlord's
Operating Expense books and records relating to the Expense Year subject to a
particular Reconciliation Statement during the ninety (90) day period
following delivery to Tenant of the Reconciliation Statement for such Expense
Year. If such review discloses a liability for a refund in excess of six
percent (6%) of Tenant's Proportionate Share of Operating Expenses previously
reported, the cost of such review shall be borne by Landlord; otherwise such
cost shall be borne by Tenant. Tenant waives the right to dispute or contest,
and shall have no right to dispute or contest, any matter relating to the
calculation of Operating Expenses or other forms of Rent under this Paragraph
3.2 with respect to each Expense Year for which a Reconciliation Statement is
given to Tenant if no claim or dispute with respect thereto is asserted by
Tenant in writing to Landlord within ninety (90) days of delivery to Tenant
of the original or most recent Reconciliation Statement with respect thereto.
In addition, notwithstanding anything in the definition of Operating Expenses
in this Lease to the contrary, Operating Expenses shall not include the
following:
(i) Any ground lease rental;
(ii) Costs of capital improvements, replacements or equipment and
any depreciation or amortization expenses thereon, except to
the extent included in Operating Expenses allowed in Paragraph
3.2(b)(ii) above;
(iii) Rentals for items (except when needed in connection with
normal repairs and maintenance of permanent systems) which if
purchased, rather than rented, would constitute a capital
improvement which is specifically excluded in clause (ii)
above (excluding, however, equipment not affixed to the
Building or Project which is used in providing janitorial or
similar services);
(iv) Costs incurred by Landlord for the repair of damage to the
Building or Project, to the extent that Landlord is reimbursed
by insurance proceeds, or repairs or replacements covered by
warranties and for which Landlord has been reimbursed, or
repairs or replacements due to the gross negligence or willful
misconduct of Landlord or Landlord's agents or employees;
(v) Costs, including permit, license and inspection costs,
incurred with respect to the installation of tenant or other
occupant improvements made for tenants or other occupants in
the Building or the Project or incurred in renovating or
otherwise improving, decorating, painting or redecorating
vacant space for or the premises of other tenants or other
occupants of the Building;
(vi) Marketing costs, including leasing commissions, attorneys'
fees in connection with the negotiation and preparation or
enforcement of letters, deal memos, letters of intent, leases,
subleases and/or assignments, space planning costs, and other
costs and expenses incurred in connection with lease, sublease
and/or assignment negotiations and transactions with present
or prospective tenants or other occupants of the Building or
the Project;
(vii) Costs incurred by Landlord due to the violation by Landlord of
the terms and conditions of any lease of space in the Building
or the Project;
(viii) Interest, principal, points and fees on debt or amortization
payments on any mortgage or deed of trust or any other debt
instrument encumbering the Building or Project or the land on
which the Building or Project is situated;
(ix) Except for making repairs or keeping permanent systems in
operation while repairs are being made, rentals and other
related expenses incurred in leasing air conditioning systems,
elevators or other equipment ordinarily considered to be of a
capital nature, except equipment not affixed to the Building
or Project which is used in providing janitorial or similar
services;
(x) Advertising and promotional expenditures;
(xi) Costs incurred in connection with upgrading the Building or
Project to comply with disability, life, fire and safety codes
in effect prior to the issuance of the temporary certificate
of occupancy for the Building;
(xii) Interest, fines or penalties incurred as a result of
Landlord's failure to make payments when due unless such
failure is commercially reasonable under the circumstances;
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(xiii) Costs arising from Landlord's charitable or political
contributions;
(xiv) Costs for acquisition of sculpture, paintings or other objects
of art in common areas;
(xv) The depreciation of the Building and other real property
structures in the Project;
(xvi) Landlord's general corporate overhead and general
administrative expenses not related to the operation of the
Building or the Project;
(xvii) Any bad debt loss, rent loss or reserves for bad debts or rent
loss, or reserves for equipment or capital replacement;
(xviii) Except as expressly provided herein, the cost incurred to
treat, survey, clean, contain, abate, remove or otherwise
remedy Hazardous Materials in, on or about the Building or
Project due to another tenant's default under its lease or due
to an act of Landlord or Landlord's agents, employees or
invitees;
(xix) Legal expenses for disputes with tenants and legal auditing
and consulting fees not incurred in the ordinary operation of
the Project; and
(xx) Operating Expenses shall not include franchise, estate,
succession, inheritance and gift taxes and federal and state
income taxes measured by Landlord's general or net income (as
opposed to rents, receipts or income attributable to the
Project).
4. DELINQUENT PAYMENT; HANDLING CHARGES. In the event Tenant is more
than four (4) days late in paying any amount of Rent or any other payment due
under this Lease, Tenant shall pay Landlord, within ten (10) days of
Landlord's written demand therefor, a late charge equal to five percent (5%)
of the delinquent amount, or $150.00, whichever amount is greater; provided,
however, that during the initial Term hereof, Landlord shall waive such late
fee one (1) time during any twelve (12) month period provided. In addition,
any amount due from Tenant to Landlord hereunder which is not paid within ten
(10) days of the date due shall bear interest at an annual rate (the "DEFAULT
RATE") equal to twelve percent (12%).
5. SECURITY DEPOSIT. Upon delivery of Premises in accordance with
ss.2(b), Tenant shall pay to Landlord the amount of Security Deposit (the
"SECURITY DEPOSIT") specified in the Basic Lease Information, if any, which
shall be held by Landlord to secure Tenant's performance of its obligations
under this Lease. The Security Deposit is not an advance payment of Rent or a
measure or limit of Landlord's damages upon a default by Tenant or an Event
of Default (defined below). If Tenant defaults beyond any applicable cure
period with respect to any provision of this Lease, Landlord may, but shall
not be required to, use, apply or retain all or any part of the Security
Deposit (a) for the payment of any Rent or any other sum in default, (b) for
the payment of any other amount which Landlord may spend or become obligated
to spend by reason of such default by Tenant, and (c) to compensate Landlord
for any other loss or damage which Landlord may suffer by reason of such
Event of Default by Tenant. If any portion of the Security Deposit is so used
or applied, Tenant shall, within ten (10) days after demand therefor by
Landlord, deposit with Landlord cash in an amount sufficient to restore the
Security Deposit to the amount required to be maintained by Tenant hereunder.
Within sixty (60) days following expiration or the sooner termination of this
Lease, provided that Tenant has performed all of its obligations hereunder,
Landlord shall return to Tenant the remaining portion of the Security
Deposit. The Security Deposit may be commingled by Landlord with Landlord's
other funds, and no interest shall be paid thereon. If Landlord transfers its
interest in the Premises, then Landlord shall assign the Security Deposit to
the transferee and thereafter Landlord shall have no further liability or
obligation for the return of the Security Deposit. Tenant hereby waives the
provisions of Section 1950.7 of the California Civil Code, and all other
provisions of any Regulations, now or hereinafter in force, which restricts
the amount or types of claim that a landlord may make upon a security deposit
or imposes upon a landlord (or its successors) any obligation with respect to
the handling or return of security deposits.
6. LANDLORD'S OBLIGATIONS.
6.1 SERVICES. Subject to the provisions of this Lease, Landlord
shall furnish to Tenant during the Term (a) city or utility company water at
those points of supply provided for general use of the tenants of the
Building; (b) subject to mandatory and voluntary Regulations, heating and air
conditioning during ordinary business hours (which hours are as of the date
of this Lease 8:00 a.m. through 6:00 p.m.) of generally recognized business
days designated by Landlord (which in any event shall not include Saturdays,
Sundays or legal holidays) ("BUSINESS HOURS) for the Building at such
temperatures and in such amounts as Landlord reasonably determines is
appropriate for normal comfort for normal office use in the Premises; (c)
janitorial services to the Premises on weekdays, other than on legal
holidays, for Building-standard installations; (d) nonexclusive passenger
elevator service at all times (except in the event of an emergency or, during
after hours maintenance or repair activities); and (e) adequate electrical
current during such Business Hours for equipment that does not require more
than 110 volts and whose electrical energy consumption does not exceed normal
office usage in a premises of the size of the Premises, as determined by
Landlord. If Tenant desires any of the services specified in this Paragraph
6.1 at any time other than during Business Hours, then subject to such
nondiscriminatory conditions and standards as Landlord shall apply to the
same, upon the request of Tenant, such services shall be supplied to Tenant
in accordance with Landlord's customary procedures for the Building,
including such advance request deadlines as Landlord shall require from time
to time, and Tenant shall pay to Landlord Landlord's then customary charge
for such services within thirty (30) days after Landlord has delivered to
Tenant an invoice therefor. Landlord reserves the right to change the
supplier or provider of any such service from time to time. Tenant shall not
have the right to obtain any such service for the Premises directly from a
supplier or provider of such service except as provided in Paragraph 6.4
below.
6.2 EXCESS UTILITY USE. Landlord shall not be required to pay
for or furnish electrical current for (but shall prepare the Premises to
receive electrical current from a utility provider) , and Tenant shall not
install or use, without Landlord's prior written consent, any equipment (a)
that requires more than 110 volts, (b) whose operation is in excess of, or
inconsistent with, the capacity of the Building (or existing feeders and
risers to, or wiring in, the Premises) or (c) whose electrical energy
consumption exceeds normal office usage of up to three (3) watts of connected
load per usable square foot ("STANDARD USAGE"). Subject to the provisions of
this Paragraph 6.2, if Tenant's consumption of electricity exceeds the
electricity to be provided by Landlord above or Standard Usage (which shall
be determined by separate metering to be installed at Tenant's expense or by
such other method as Landlord shall reasonably select), Tenant shall pay to
Landlord Landlord's then customary charge for such excess consumption within
ten (10) days after Landlord has delivered to Tenant an invoice therefor.
6.3 RESTORATION OF SERVICES. Following receipt of Tenant's
request to do so, Landlord shall use good faith efforts to restore any
service specifically to be provided under Paragraph 6.1 that becomes
unavailable and which is in Landlord's reasonable control to restore;
provided, however, that in no case shall the unavailability of such services
or any other service (or any diminution in the quality or quantity thereof)
or any interference in Tenant's business operations within the Premises
render Landlord liable to Tenant or any person using or occupying the
Premises under
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or through Tenant (including, without limitation, any contractor, employee,
agent, invitee or visitor of Tenant) (each, a "TENANT PARTY") for any damages
of any nature whatsoever caused thereby (except to the extent caused solely
by Landlord's gross negligence or willful misconduct), constitute a
constructive eviction of Tenant, constitute a breach of any implied warranty
by Landlord, or entitle Tenant to any abatement of Tenant's rental
obligations hereunder.
6.4 TELECOMMUNICATIONS SERVICES. Tenant may contract separately
with providers of telecommunications or cellular products, systems or
services for the Premises. Even though such products, systems or services may
be installed or provided by such providers in the Building, in consideration
for Landlord's permitting such providers to provide such services to Tenant,
Tenant agrees that Landlord and the Landlord Indemnitees (defined below)
shall in no event be liable to Tenant or any Tenant Party for (i) any damages
of any nature whatsoever arising out of or relating to the products, systems
or services provided by such providers (or any failure, interruption, defect
in or loss of the same) or any acts or omissions of such providers in
connection with the same, except to the extent that such products, systems or
services are in Landlord's actual control and the failure thereof is due
solely to Landlord's gross negligence or willful misconduct, or (ii) any
interference in Tenant's business caused thereby. Tenant waives and releases
all rights and remedies against Landlord and the Landlord Indemnitees that
are inconsistent with the foregoing.
7. IMPROVEMENTS, ALTERATIONS, REPAIRS AND MAINTENANCE.
7.1 IMPROVEMENTS; ALTERATIONS. Any alterations, additions,
deletions, modifications or utility installations in, of or to the
improvements contained within the Premises (collectively, "ALTERATIONS")
shall be installed at Tenant's expense and only in accordance with detailed
plans and specifications, construction methods, and all appropriate permits
and licenses, all of which have been previously submitted to and approved in
writing by Landlord, and by a professionally qualified and licensed
contractor and subcontractors approved by Landlord. Alterations shall not
include the Tenant Improvements described in Exhibit C attached hereto and
Tenant shall not be required to remove such initial Tenant Improvements at
the expiration or earlier termination of this Lease. No Alterations in or to
the Premises may be made without (a) Landlord's prior written consent and (b)
compliance with such nondiscriminatory requirements and construction
regulations concerning such Alterations as Landlord may impose from time to
time. Landlord will not be deemed to unreasonably withhold its consent to any
Alteration that violates Regulations, may affect or be incompatible with the
Building's structure or its HVAC, plumbing, telecommunications, elevator,
life-safety, electrical, mechanical or other basic systems, or the appearance
of the interior common areas or exterior of the Project, or which may
interfere with the use or occupancy of any other portion of the Project.
Landlord shall respond to Tenant's written request for consent described in
this Paragraph 7.1 within five (5) business days after Landlord's receipt
thereof. In the event Landlord fails to so respond to Tenant within such five
(5) business day time period, Landlord shall not be in default hereof nor
shall Tenant be deemed to have received consent to the requested Alterations,
but Tenant may provide a second written request to Landlord. Landlord shall
respond to Tenant's second written request for consent described in this
Paragraph 7.1 within five (5) business days after Landlord's receipt thereof.
In the event Landlord fails to so respond to Tenant's second written request,
Landlord shall be deemed to have rejected Tenant's request to make
Alterations; provided, however, that if the total cost of any proposed
Alterations by Tenant during the previous six (6) month period is less than
Fifty Thousand Dollars ($50,000.00), Landlord shall be deemed to have
consented to Tenant's second request to make such Alterations.
Notwithstanding the foregoing, Tenant shall have the right, without consent
of, but upon at least ten (10) business days' prior written notice to
Landlord to make non-structural, cosmetic Alterations within the interior of
the Premises (and which are not visible from the outside of the Premises),
which do not impair the value of the Building, and which cost, in the
aggregate, less than Fifteen Thousand Dollars ($15,000.00) in any twelve (12)
month period during the Term of this Lease, provided that such Alterations
shall nevertheless be subject to all of the remaining requirements of this
Paragraph 7 and payment of the administration fee referred to in this
Paragraph 7, other than the requirement of Landlord's prior consent. In
addition all Alterations shall be performed by duly licensed contractors or
subcontractors reasonably acceptable to Landlord, proof of insurance shall be
submitted to Landlord as required under this Lease, and Landlord reserves the
right to impose reasonable rules and regulations for contractors and
subcontractors. Tenant shall, if requested by Landlord, promptly furnish
Landlord with complete as-built plans and specifications for any Alterations
performed by Tenant to the Premises, at Tenant's sole cost and expense. All
Alterations made in or upon the Premises shall, (i) at Landlord's option,
either be removed by Tenant prior to the end of the Term (and Tenant shall
restore the portion of the Premises affected to its condition existing
immediately prior to such Alteration), or shall remain on the Premises at the
end of the Term, (ii) be constructed, maintained, insured and used by Tenant,
at its risk and expense, in a first-class, good and workmanlike manner, and
in accordance with all Regulations, and (iii) shall be subject to payment of
Landlord's standard alterations supervision fee which standard fee shall not
exceed ten percent (10%) of the cost of the Alterations. If any Alteration
made or initiated by Tenant or the removal thereof shall cause, trigger or
result in any portion of the Project outside of the Premises, any portion of
the Building's shell and core improvements (including restrooms, if any)
within the Premises, or any Building system inside or outside of the Premises
being required by any governmental authority to be altered, improved or
removed, or may otherwise potentially affect such portions of the Project or
any other tenants of the Project, Landlord shall have the option (but not the
obligation) of performing the same at Tenant's expense, in which case Tenant
shall pay to Landlord (within ten (10) days of Landlord's written demand) in
advance Landlord's reasonable estimate of the cost of such work, and any
actual costs of such work in excess of Landlord's estimate, plus an
administrative charge of ten percent (10%) thereof. At least ten (10) days
before beginning construction of any Alteration, Tenant shall give Landlord
written notice of the expected commencement date of that construction to
permit Landlord to post and record a notice of non-responsibility. Upon
substantial completion of construction, if the law so provides, Tenant shall
cause a timely notice of completion to be recorded in the office of the
recorder of the county in which the Building is located. Notwithstanding
anything to the contrary contained in this Paragraph 7.1, at the time
Landlord gives its consent for any Alterations after the initial Tenant
Improvements, Tenant shall also be notified whether or not Landlord will
require that such Alterations be removed upon the expiration or earlier
termination of this Lease. If Landlord fails to so notify Tenant within five
(5) business days after Landlord's receipt of Tenant's written request for
consent, it shall be assumed that Landlord will not require their removal.
7.2 REPAIRS AND MAINTENANCE. Tenant shall maintain at all times
during the Term the Premises and all portions and components of the
improvements and systems contained therein in a first-class, good, clean,
safe, and operable condition, and shall not permit or allow to remain any
waste or damage to any portion of the Premises. Tenant shall repair or
replace, as needed, subject to Landlord's direction and supervision, any
damage to the Building or the Project caused by Tenant or any Tenant Party.
If any such damage occurs outside of the Premises or relates to any Building
system and is caused by Tenant or any Tenant Party, or if Tenant fails to
perform Tenant's obligations under this Paragraph 7.2 or under any other
paragraph of this Lease within ten (10) days' after written notice from
Landlord (except in the case of an emergency, in which case no notice shall
be required), then Landlord may elect to perform such obligations and repair
such damage itself at Tenant's expense. The cost of all repair or replacement
work performed by Landlord under this Paragraph 7.2, plus an administrative
charge of ten percent (10%) of such cost, shall be paid by Tenant to Landlord
within thirty (30) days of receipt of Landlord's invoice therefor as
Additional Rent. Tenant hereby waives all common law and statutory rights or
provisions inconsistent herewith, whether now or hereinafter in effect
(including, without limitation, Sections 1941, 1941.1, and 1941.2 of the
California Civil Code, as amended from time to time). Landlord shall use
reasonable efforts to maintain the common areas of the Project at all times
during the Term with the cost thereof constituting an Operating Expense under
Paragraph 3.2. Landlord shall maintain in good repair, reasonable wear and
tear excepted, the structural soundness of the roof, foundations, and
exterior walls of the Building. The term "exterior walls" as used herein
shall not include windows, glass or plate glass, doors, special store fronts
or office entries; provided, however that Tenant shall in no event be liable
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for damage to exterior walls to the extent caused by structural defects of
the Building. Any damage caused by or repairs necessitated by any negligence
or act of Tenant or Tenant's Parties may be repaired by Landlord at
Landlord's option and Tenant's expense. Tenant shall immediately give
Landlord written notice of any defect or need of repairs in such components
of the Building for which Landlord is responsible, after which Landlord shall
have a reasonable opportunity and the right to enter the Premises at all
reasonable times to repair same. Tenant's failure to provide such notice
shall not release Landlord from its repair and maintenance obligations
described in this Paragraph 7.2, provided, however, that Landlord's shall not
be deemed to have breached its obligations under this Paragraph 7.2 to
perform such repair and maintenance obligations unless and until Landlord
receives notice of any such defect or need of repairs and subsequently fails
to perform in accordance with the terms of this Paragraph 7.2. Landlord's
liability with respect to any defects, repairs, or maintenance for which
Landlord is responsible under any of the provisions of this Lease shall be
limited to the cost of such repairs or maintenance, and there shall be no
abatement of rent and no liability of Landlord by reason of any injury to or
interference with Tenant's business arising from the making of repairs,
alterations or improvements in or to any portion of the Premises, the
Building or the Project or to fixtures, appurtenances or equipment in the
Building. By taking possession of the Premises, Tenant accepts them "as is,"
as being in good order, condition and repair and the condition in which
Landlord is obligated to deliver them and suitable for the Permitted Use and
Tenant's intended operations in the Premises, whether or not any notice of
acceptance is given.
7.3 MECHANIC'S LIENS. Tenant shall not cause, suffer or permit
any mechanic's or materialman's lien, claim, or stop notice to be filed or
asserted against the Premises, the Building or any funds of Landlord for any
work performed, materials furnished, or obligation incurred by or at the
request of Tenant or any Tenant Party. If any such lien, claim or notice is
filed or asserted, then Tenant shall, within ten (10) days after Landlord has
delivered notice of the same to Tenant, either (a) pay and satisfy in full
the amount of (and eliminate of record) the lien, claim or notice or (b)
diligently contest the same and deliver to Landlord a bond or other security
therefor in substance and amount (and issued by an issuer) satisfactory to
Landlord.
8. USE. Tenant shall occupy and use the Premises only for general
office use or uses incidental thereto, all of which shall be consistent with
the standards of a first class office project (the "PERMITTED USE") and shall
comply, at Tenant's expense, with all Regulations relating to the use,
condition, alteration, improvement, access to, and occupancy of the Premises,
including without limitation, Regulations relating to Hazardous Materials
(defined below). Should any Regulation now or hereafter be imposed on Tenant
or Landlord by any governmental body relating to the use or occupancy of the
Premises or the Project common areas by Tenant or any Tenant Party or
concerning occupational, health or safety standards for employers, employees,
or tenants, then Tenant agrees, at its sole cost and expense, to comply
promptly with such Regulations if such Regulations relate to anything within
the Premises or if compliance with such Regulations is within the control of
Tenant and applies to an area outside of the Premises. Tenant shall conduct
its business and shall use reasonable efforts to cause each Tenant Party to
act in such a manner as to (a) not release or permit the release of any
Hazardous Material in, under, on or about the Project in violation of any
Regulations, (b) use or store any Hazardous Materials (other than incidental
amounts of cleaning and office supplies) in or about the Premises or (c) not
create or permit any nuisance or unreasonable interference with or
disturbance of other tenants of the Project or Landlord in its management of
the Project or (d) not create any occupancy density in the Premises or
parking density with respect to Tenant and any Tenant Party at the Project
greater than those specified in the Basic Lease Information. "HAZARDOUS
MATERIAL" means any hazardous, explosive, radioactive or toxic substance,
material or waste which is or becomes regulated by any local, state or
federal governmental authority or agency, including, without limitation, any
material or substance which is (i) defined or listed as a "hazardous waste,"
"extremely hazardous waste," "restricted hazardous waste," "hazardous
substance," "hazardous material," "pollutant" or "contaminant" under any
Regulation, (ii) a flammable explosive, (iii) a radioactive material, (iv) a
polychlorinated biphenyl, (v) asbestos or asbestos containing material, or
(vi) a carcinogen.
9. ASSIGNMENT AND SUBLETTING.
9.1 TRANSFERS; CONSENT. Subject to Paragraph 9.3 below, Tenant
shall not, without the prior written consent of Landlord, (a) assign,
transfer, mortgage, hypothecate, or encumber this Lease or any estate or
interest herein, whether directly, indirectly or by operation of law, (b)
permit any other entity to become a Tenant hereunder by merger,
consolidation, or other reorganization, (c) if Tenant is a corporation,
partnership, limited liability company, limited liability partnership, trust,
association or other business entity (other than a corporation whose stock is
publicly traded), permit, directly or indirectly, the transfer of any
ownership interest in Tenant so as to result in (i) a change in the current
control of Tenant, (ii) a transfer of twenty-five percent (25%) or more in
the aggregate in any twelve (12) month period in the beneficial ownership of
such entity or (iii) a transfer of all or substantially all of the assets of
Tenant, (d) sublet any portion of the Premises, or (e) grant any license,
concession, or other right of occupancy of or with respect to any portion of
the Premises, or (f) permit the use of the Premises by any party other than
Tenant or a Tenant Party (each of the events listed in this Paragraph 9.1
being referred to herein as a "TRANSFER"). If Tenant requests Landlord's
consent to any Transfer, then at least ten (10) business days prior to the
effective date of the proposed Transfer, Tenant shall provide Landlord with a
written description of all terms and conditions of the proposed Transfer and
all consideration therefor (including a calculation of the Transfer Profits
described below), copies of the proposed documentation, and the following
information relating to the proposed transferee: name and address;
information reasonably satisfactory to Landlord concerning the proposed
transferee's business and business history; its proposed use of the Premises;
banking, financial, and other credit information; and general references
sufficient to enable Landlord to determine the proposed transferee's
creditworthiness and character. Landlord shall not unreasonably withhold its
consent to any assignment or subletting of the Premises, provided that the
parties agree that it shall be reasonable for Landlord to withhold any such
consent if, without limitation, Landlord determines in good faith that (A)
the proposed transferee is not of a reasonable financial standing or is not
creditworthy, (B) the proposed transferee is a governmental agency, (C) the
proposed assignee or subtenant is a person with whom Landlord is negotiating,
or has negotiated during the prior ninety (90) days, to lease space in the
Project or the proposed assignee or subtenant is a present tenant of the
Project and with whom Landlord is negotiating, or has negotiated during the
prior one hundred eighty (180) days and Landlord has space available or will
have space available in the Building or Project which space satisfies the
material requirements of such present tenant with respect to its needs for
additional space, including the approximate square footage, the approximately
timing of the leasehold estate and the nature of the existing improvements or
the ability to construct such improvements for the proposed transferee, or
any affiliate thereof, is then an occupant in the Project or has engaged in
discussions with Landlord concerning a lease of direct space in the Project,
(D) the proposed Transfer would result in a breach of any obligation of
Landlord or permit any other tenant in the Project to terminate or modify its
lease, (E) there is then in effect an uncured Event of Default, (F) the
Transfer would increase the occupancy density or parking density of the
Project or any portion thereof, (G) the Transfer would result in an
undesirable tenant mix for the Project, as determined in good faith by
Landlord, (H) the proposed transferee does not enjoy a good reputation, as a
business or as a tenant; or (I) any guarantor of the Lease does not consent
to such Transfer in a form satisfactory to Landlord. Any Transfer made
without Landlord's consent shall be void and, at Landlord's election, shall
constitute an Event of Default by Tenant. Tenant shall also, within ten (10)
days of written demand therefor, pay to Landlord $500 as a review fee for
each Transfer request, and reimburse Landlord for its reasonable attorneys'
fees (which reasonable attorneys' fees shall not exceed $1,500.00 for each
Transfer request) and all other costs incurred in connection with considering
any request for consent to a proposed Transfer. If Landlord consents to a
proposed Transfer, then the proposed transferee shall deliver to Landlord
Landlord's standard form transfer consent and agreement whereby the proposed
transferee expressly assumes the Tenant's obligations hereunder. Landlord's
consent to a Transfer shall not release Tenant from its obligations under
this Lease (or any guarantor of this Lease
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of its obligations with respect thereto), but rather Tenant and its
transferee shall be jointly and severally liable for all obligations under
this Lease allocable to the space subject to such Transfer. Landlord's
consent to any Transfer shall not waive Landlord's rights as to any
subsequent Transfers. In the event of any claim by Tenant that Landlord has
breached its obligations under this Paragraph 9.1, Tenant's remedies shall be
limited to recovery of its out-of-pocket damages and injunctive relief.
Notwithstanding anything to the contrary in this Lease, the transfer of
outstanding capital stock or other listed equity interests, or the purchase
of outstanding capital stock or other listed equity interests, or the
purchase of equity interests issued in an initial public offering of stock,
by persons or parties other than "insiders" within the meaning of the
Securities Exchange Act of 1934, as amended, through the "over-the-counter"
market or any recognized national or international securities exchange shall
not be included in determining whether control has been transferred.
9.2 CANCELLATION AND RECAPTURE. Notwithstanding Paragraph 9.1,
Landlord may (but shall not be obligated to), within ten (10) business days
after submission of Tenant's written request for Landlord's consent to an
assignment or subletting, cancel this Lease as to the portion of the Premises
proposed to be sublet or subject to an assignment of this Lease ("TRANSFER
SPACE") as of the date such proposed Transfer is proposed to be effective
and, thereafter, Landlord may lease such portion of the Premises to the
prospective transferee (or to any other person or entity or not at all)
without liability to Tenant. If Landlord shall not cancel this Lease within
such ten (10) business day period and notwithstanding any Landlord consent to
the proposed Transfer, Tenant shall pay to Landlord, immediately upon receipt
thereof, the entire excess ("TRANSFER PROFITS") of all compensation and other
consideration paid to or for the benefit of Tenant (or any affiliate thereof)
for the Transfer in excess of Base Rent and Additional Rent payable by Tenant
hereunder (with respect to the Transfer Space) during the remainder of the
Term (after straight-line amortization of any reasonable brokerage
commissions and tenant improvement costs paid by Tenant in connection with
the Transfer over the term of the Transfer). In any assignment or subletting
undertaken by Tenant, Tenant shall diligently seek to obtain the maximum
rental amount available in the marketplace for comparable space available for
primary leasing.
9.3 PERMITTED TRANSFEREES. An "Affiliate" means any entity that
(i) controls, is controlled by, or is under common control with Tenant, (ii)
results from the transfer of all or substantially all of Tenant's assets or
stock, or (iii) results from the merger or consolidation of Tenant with
another entity. Notwithstanding anything to the contrary contained in this
Lease, Landlord's consent is not required for and Landlord's recapture rights
shall not apply to any assignment of this Lease or sublease of all or a
portion of the Premises to an Affiliate so long as the following conditions
are met: (a) at least ten (10) business days before any such assignment or
sublease, Landlord receives written notice of such assignment or sublease (as
well as any documents or information reasonably requested by Landlord
regarding the proposed intended transfer and the transferee); (b) Tenant is
not then in default beyond any applicable cure period under this Lease; (c)
if the transfer is an assignment or any other transfer to an Affiliate other
than a sublease, the intended assignee assumes in writing all of Tenant's
obligations under this Lease relating to the Premises in form satisfactory to
Landlord or, if the transfer is a sublease, the intended sublessee accepts
the sublease in form satisfactory to Landlord; (d) the intended transferee
has a tangible net worth, as evidenced by financial statements delivered to
Landlord and certified by an independent certified public accountant in
accordance with generally accepted accounting principles that are
consistently applied, at least equal to Tenant as reflected in the most
recent 10Q SEC filing prior to the date of this Lease; (e) the Premises shall
continue to be operated solely for the use specified in the Basic Lease
Information; and (f) Tenant shall pay to Landlord Landlord's standard fee for
approving assignments and subleases which amount shall not exceed One
Thousand Five Hundred Dollars ($1,500.00) and all actual, out-of-pocket costs
reasonably incurred by Landlord, or any reasonable costs incurred by any
mortgagee or ground lessor for such assignment or subletting, including,
without limitation, reasonable attorneys' fees. No transfer to an Affiliate
in accordance with this subparagraph shall relieve Tenant named herein of any
obligation under this Lease or alter the primary liability of Tenant named
herein for the payment of Rent or for the performance of any other obligation
to be performed by Tenant, including the obligations contained in Paragraph
25 with respect to any Affiliate.
10. INSURANCE, WAIVERS, SUBROGATION AND INDEMNITY.
10.1 INSURANCE. Tenant shall maintain throughout the Term each
of the insurance policies described on EXHIBIT D attached hereto and shall
otherwise comply with the obligations and requirements provided on EXHIBIT D.
To the extent that the cost of such coverage is commercially reasonable and
provided further that Landlord shall not have instituted a self-insurance
program, Landlord shall carry Commercial General Liability insurance covering
bodily injury and property damage liability occurring in or about the
Building and Project. In the event that Landlord elects to institute a
self-insurance program during the Term of this Lease or any extension
thereof, Landlord shall comply in all material respects with the
self-insurance standards imposed by the appropriate insurance industry
governing entities.
10.2 WAIVER OF SUBROGATION. Landlord and Tenant each waives any
claim, loss or cost it might have against the other for any injury to or
death of any person or persons, or damage to or theft, destruction, loss, or
loss of use of any property (a "LOSS"), to the extent the same is insured
against (or is required to be insured against under the terms hereof) under
any "all risk" property damage insurance policy covering the Building, the
Premises, Landlord's or Tenant's fixtures, personal property, leasehold
improvements, or business, regardless of whether the negligence of the other
party caused such Loss.
10.3 INDEMNITY. Subject to Paragraph 10.2, Tenant shall
indemnify, defend and hold Landlord, Spieker Properties, Inc., and each of
their respective directors, shareholders, partners, lenders, members,
managers, contractors, affiliates and employees (collectively, "LANDLORD
INDEMNITEES") from and against all claims, demands, proceedings, losses,
obligations, liabilities, causes of action, suits, judgments, damages,
penalties, costs and expenses (including, without limitation, reasonable
attorneys' fees and court costs) arising from or asserted in connection with
the use or occupancy of the Premises by Tenant or any Tenant Party,
including, without limitation, by reason of any release of any Hazardous
Materials by Tenant or any Tenant Party in, under, on, or about the Project,
or any negligence or misconduct of Tenant or of any Tenant Party in or about
the Premises, or Tenant's breach of any of its covenants under this Lease,
except in each case to the extent arising from the gross negligence or
willful misconduct of Landlord or any Landlord Indemnitee. Except to the
extent expressly provided in this Lease, Tenant hereby waives all claims
against and releases Landlord and each Landlord Indemnitee for any injury to
or death of persons, damage to property or business loss in any manner
related to (i) Tenant's use and occupancy of the Premises, (ii) acts of God,
(iii) acts of third parties, or (iv) any matter outside of the reasonable
control of Landlord. This Paragraph 10.3 shall survive termination or
expiration of this Lease. Landlord shall indemnify, defend by counsel
reasonably acceptable to Tenant, protect and hold Tenant harmless from and
against any and all claims, liabilities, losses, costs, damages, injuries or
expenses, including reasonable attorneys' and consultants' fees and court
costs, demands, causes of action, or judgments arising out of or relating to
the gross negligence or willful misconduct of Landlord or Landlord's agents,
employees or invitees. Notwithstanding the foregoing or anything to the
contrary contained in this Lease, Landlord shall in no event be liable to
Tenant and Tenant hereby waives all claims against Landlord for any injury or
damage to any person or property in or about the Premises, Building or
Project, including without limitation the common areas, whether caused by
theft, fire, rain or water leakage of any character from the roof, walls,
plumbing, sprinklers, pipes, basement or any other portion of the Premises,
Building or Project, or caused by gas, fire, oil or electricity in, on or
about the Premises, Building or Project, or from any other systems except in
each case to the extent caused by the gross negligence or willful misconduct
of Landlord, or by acts of God (including without limitation flood or
earthquake), acts of a
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public enemy, riot, strike, insurrection, war, court order, requisition or
order of governmental body or authority or from any other cause whatsoever,
or for any damage or inconvenience which may arise through repair, subject to
and except as expressly otherwise provided in Paragraph 7.2 of this Lease. In
addition, Landlord shall in no event be liable for (i) injury to Tenant's
business or any loss of income or profit therefrom or from consequential
damages, or (ii) sums up to the amount of insurance proceeds received by
Tenant. The foregoing indemnity by Landlord shall not be applicable to claims
to the extent arising from the negligence or willful misconduct of Tenant or
Tenant's Parties. The foregoing indemnity by Landlord shall survive the
expiration or earlier termination of this Lease.
11. SUBORDINATION; ATTORNMENT.
11.1 SUBORDINATION. Subject to the terms of this Paragraph 11.1,
this Lease is subject and subordinate to all present and future ground or
master leases of the Project and to the lien of all mortgages or deeds of
trust (collectively, "SECURITY INSTRUMENTS") now or hereafter encumbering the
Project, if any, and to all renewals, extensions, modifications,
consolidations and replacements thereof, and to all advances made or
hereafter to be made upon the security of any such Security Instruments,
unless the holders of any such mortgages or deeds of trust, or the lessors
under such ground or master leases (such holders and lessors are sometimes
collectively referred to herein as "HOLDERS") require in writing that this
Lease be superior thereto. Notwithstanding any provision of this Paragraph 11
to the contrary, any Holder of any Security Instrument may at any time
subordinate the lien of its Security Instrument to this Lease without
obtaining Tenant's consent by giving Tenant written notice of such
subordination, in which event this Lease shall be deemed to be senior to the
Security Instrument in question. Tenant shall, within fifteen (15) days of
request to do so by Landlord, execute, acknowledge and deliver to Landlord
such further instruments or assurances as Landlord may deem necessary or
appropriate to evidence or confirm the subordination or superiority of this
Lease to any such Security Instrument; provided, however, that in the event
this Lease or the leasehold estate created hereunder is subject to the prior
rights of any mortgagee or ground lessor, then Landlord shall secure from
such mortgagee or ground lessor an agreement in writing whereby Tenant, so
long as Tenant is not in default hereunder, may remain in possession of the
Premises pursuant to the terms hereof and without any diminution of Tenant's
rights should Landlord become in default with respect to such mortgage or
ground lease or should the Premises become the subject of any action to
foreclose any mortgage or to dispossess Landlord. Such agreement would
provide, among other things, that the new owner following any foreclosure,
sale or conveyance shall not be (i) liable for any act or omission of any
prior landlord or with respect to events occurring prior to acquisition of
ownership; (ii) subject to any offsets or defenses which Tenant might have
against any prior landlord; (iii) bound by prepayment of more than one (1)
month's Rent; or (iv) liable to Tenant for any security deposit not actually
received by such new owner. Each ground landlord, mortgagee, or beneficiary
under a deed of trust shall be an express third party beneficiary of the
provisions of this Paragraph 11.1 and any other provisions of this Lease that
are for the benefit of such party. Tenant hereby irrevocably authorizes
Landlord to execute and deliver in the name of Tenant any such instrument or
instruments if Tenant fails to do so within said fifteen (15) day period.
11.2 ATTORNMENT. Subject to a purchaser's agreement in writing
to be bound by the terms of this Lease, Tenant covenants and agrees that in
the event that any proceedings are brought for the foreclosure of any
mortgage or deed of trust, or if any ground or master lease is terminated, it
shall attorn, without any deductions or set-offs whatsoever, to the purchaser
upon any such foreclosure sale, or to the lessor of such ground or master
lease, as the case may be, if so requested to do so by such purchaser or
lessor, and to recognize such purchaser or lessor as "Landlord" under this
Lease. If requested, Tenant shall enter into a new lease with that successor
on the same terms and conditions as are contained in this Lease (for the
unexpired portion of the Term then remaining).
12. RULES AND REGULATIONS. Tenant shall comply, and shall use reasonable
efforts to cause each Tenant Party to comply, with the Rules and Regulations
of the Building which are attached hereto as EXHIBIT A, and all such
nondiscriminatory modifications, additions, deletions and amendments thereto
as Landlord shall adopt in good faith from time to time. In the event that a
conflict exists between the terms of the Rules and Regulations of the
Building and this Lease, the terms of this Lease shall govern the
relationship of the parties hereto.
13. CONDEMNATION. If the entire Project or Premises are taken by right
of eminent domain or conveyed by Landlord in lieu thereof (a "TAKING"), this
Lease shall terminate as of the date of the Taking. If any part of the
Project becomes subject to a Taking and such Taking will prevent Tenant from
conducting its business in the Premises in a manner reasonably comparable to
that conducted immediately before such Taking for a period of more than one
hundred eighty (180) days, then Tenant may terminate this Lease as of the
date of such Taking by giving written notice to Landlord within thirty (30)
days after the Taking, and all Rent paid or payable hereunder shall be
apportioned between Landlord and Tenant as of the date of such Taking. If any
material portion, but less than all, of the Project, Building or the Premises
becomes subject to a Taking, or if Landlord is required to pay any of the
proceeds received for a Taking to any Holder of any Security Instrument, then
Landlord may terminate this Lease by delivering written notice thereof to
Tenant within thirty (30) days after such Taking, and all Rent paid or
payable hereunder shall be apportioned between Landlord and Tenant as of the
date of such Taking. If this Lease is not so terminated, then Base Rent
thereafter payable hereunder shall be abated for the duration of the Taking
in proportion to that portion of the Premises rendered untenantable by such
Taking. If any Taking occurs, then Landlord shall receive the entire award or
other compensation for the land on which the Project is situated, the
Project, and other improvements taken, and Tenant may separately pursue a
claim (to the extent it will not reduce Landlord's award) against the
condemnor for the value of Tenant's personal property which Tenant is
entitled to remove under this Lease, moving and relocation costs and the
costs of tenant improvements paid for entirely by Tenant. Landlord and Tenant
agree that the provisions of this Paragraph 13 and the remaining provisions
of this Lease shall exclusively govern the rights and obligations of the
parties with respect to any Taking of any portion of the Premises, the
Building, the Project or the land on which the Building is located, and
Landlord and Tenant hereby waive and release each and all of their respective
common law and statutory rights inconsistent herewith, whether now or
hereinafter in effect (including, without limitation, Section 1265.130 of the
California Code of Civil Procedure, as amended from time to time).
14. FIRE OR OTHER CASUALTY.
14.1 REPAIR ESTIMATE; RIGHT TO TERMINATE. If all or any portion
of the Premises, the Building or the Project is damaged by fire or other
casualty (a "CASUALTY"), Landlord shall, within ninety (90) days after
Landlord's discovery of such damage, deliver to Tenant its good faith
estimate (the "DAMAGE NOTICE") of the time period following such notice
needed to repair the damage caused by such Casualty. Landlord may elect to
terminate this Lease in any case where (a) any portion of the Premises or any
material portion of the Project are damaged and (b) either (i) Landlord
estimates in good faith that the repair and restoration of such damage under
Paragraph 14.2 ("RESTORATION") cannot reasonably be completed (without the
payment of overtime) within two hundred (200) days of Landlord's actual
discovery of such damage, (ii) the Holder of any Security Instrument requires
the application of any insurance proceeds with respect to such Casualty to be
applied to the outstanding balance of the obligation secured by such Security
Instrument, (iii) the cost of such Restoration is not fully covered by
insurance proceeds available to Landlord and/or payments received by Landlord
from tenants, or (iv) Tenant shall be entitled to an abatement of rent under
this Paragraph 14 for any period of time in excess of thirty-three percent
(33%) of the remainder of the Term. Such right of termination shall be
exercisable by Landlord by delivery of written notice to Tenant at any time
following the Casualty until forty-five (45) days following the later of (A)
delivery of the Damage Notice or (B) Landlord's discovery or
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determination of any of the events described in clauses (i) through (iv) of
the preceding sentence, and shall be effective upon delivery of such notice
of termination (or if Tenant has not vacated the Premises, upon the
expiration of thirty (30) days thereafter).
14.2 REPAIR OBLIGATION; ABATEMENT OF RENT. Subject to the
provisions of Paragraph 14.1, Landlord shall, within a reasonable time after
the discovery by Landlord of any damage resulting from a Casualty, begin to
repair the damage to the Building and the Premises resulting from such
Casualty and shall proceed with reasonable diligence to restore the Building
and Premises to substantially the same condition as existed immediately
before such Casualty, except for modifications required by Regulations, and
modifications to the Building or the Project reasonably deemed desirable by
Landlord; provided, however, that Landlord shall not be required as part of
the Restoration to repair or replace any of the Alterations, furniture,
equipment, fixtures, and other improvements which may have been placed by, or
at the request of, Tenant or other occupants in the Building or the Premises.
Landlord shall have no liability for any inconvenience or annoyance to Tenant
or injury to Tenant's business as a result of any Casualty, regardless of the
cause therefor. Base Rent, and Additional Rent payable under Paragraph 3.2,
shall abate if and to the extent a Casualty damages the Premises or common
areas in the Project required and essential for access thereto and as a
result thereof all or a material portion of the Premises are rendered unfit
for occupancy, and are not occupied by Tenant, for the period of time
commencing on the date Tenant vacates the portion of the Premises affected on
account thereof and continuing until the date the Restoration to be performed
by Landlord with respect to the Premises (and/or required common areas) is
substantially complete, as determined by Landlord's architect. Landlord and
Tenant agree that the provisions of this Paragraph 14 and the remaining
provisions of this Lease shall exclusively govern the rights and obligations
of the parties with respect to any and all damage to, or destruction of, all
or any portion of the Premises or the Project by Casualty, and Landlord and
Tenant hereby waive and release each and all of their respective common law
and statutory rights inconsistent herewith, whether now or hereinafter in
effect (including, without limitation, Sections 1932(2) and 1933(4) of the
California Civil Code, as amended from time to time).
15. PARKING. Tenant shall have the right to the nonexclusive use of such
portion of the parking facilities of the Project as are designated by
Landlord from time to time for such purpose for the parking of passenger-size
motor vehicles used by Tenant and Tenant Parties only and are not
transferable without Landlord's approval. The use of such parking facilities
shall be subject to the parking rules and regulations attached hereto as
EXHIBIT E, as such rules and regulations may be modified by Landlord from
time to time, for the use of such facilities. In the event Tenant assigns
this Lease or sublets all or a portion of the Premises in accordance with the
terms of this Lease, Tenant shall be entitled to transfer its rights to
parking described in this Paragraph 15 to such assignee or subtenant.
16. EVENTS OF DEFAULT. Each of the following occurrences shall be an
"EVENT OF DEFAULT" and shall constitute a material default and breach of this
Lease by Tenant: (a) any failure by Tenant to pay any installment of Base
Rent, Additional Rent or to make any other payment required to be made by
Tenant hereunder when due; (b) the abandonment or vacation of the Premises by
Tenant, provided, however, that unless Tenant is using the Premises for a
retail use, abandonment or vacation of the Premises shall not be an Event of
Default so long as no other Event of Default has occurred hereunder and
provided Tenant has given Landlord five (5) days' prior written notice of its
intent to vacate the Premises; (c) any failure by Tenant to execute and
deliver any estoppel certificate or other document or instrument described in
Paragraphs 10 (insurance), 11 (subordination) or 21.2 (estoppel certificates)
requested by Landlord, where such failure continues for five (5) days after
delivery of written notice of such failure by Landlord to Tenant; (d) any
failure by Tenant to fully perform any other obligation of Tenant under this
Lease, where such failure continues for thirty (30) days (except where a
shorter period of time is specified in this Lease, in which case such shorter
time period shall apply) after delivery of written notice of such failure by
Landlord to Tenant; provided that if such failure is not capable of being
completed within such thirty (30) day period through no fault of Tenant, such
failure shall not constitute an event of default hereunder so long as Tenant
undertakes to cure the failure within such thirty (30) day period and
thereafter diligently attempts to complete the cure as soon as reasonably
possible, but the total aggregate cure period shall not exceed forty five
(45) days; (e) the voluntary or involuntary filing of a petition by or
against Tenant or any general partner of Tenant (i) in any bankruptcy or
other insolvency proceeding, (ii) seeking any relief under any state or
federal debtor relief law, (iii) for the appointment of a liquidator or
receiver for all or substantially all of Tenant's property or for Tenant's
interest in this Lease, or (iv) for the reorganization or modification of
Tenant's capital structure (provided, however, that if such a petition is
filed against Tenant, then such filing shall not be an Event of Default
unless Tenant fails to have the proceedings initiated by such petition
dismissed within sixty (60) days after the filing thereof); (f) the default
of any guarantor of Tenant's obligations hereunder under any guaranty of this
Lease, the attempted repudiation or revocation of any such guaranty, or the
participation by any such guarantor in any other event described in this
Paragraph 16 (as if this Paragraph 16 referred to such guarantor in place of
Tenant); or (g) any other event, act or omission which any other provision of
this Lease identifies as an Event of Default. Any notice of any failure of
Tenant required under this Paragraph 16 shall be in lieu of, and not in
addition to, any notice required under Section 1161 et seq. of the California
Code of Civil Procedure.
17. REMEDIES. Upon the occurrence of any Event of Default by Tenant,
Landlord shall have, in addition to any other remedies available to Landlord
at law or in equity (all of which remedies shall be distinct, separate, and
cumulative), the option to pursue any one (1) or more of the following
remedies, each and all of which shall be cumulative and nonexclusive, without
any notice or demand whatsoever:
(a) Terminate this Lease, and Landlord may recover from Tenant
the following: (i) the worth at the time of any unpaid rent which has been
earned at the time of such termination; plus (ii) the worth at the time of
award of the amount by which the unpaid rent which would have been earned
after termination until the time of award exceeds the amount of such rental
loss that Tenant proves could have been reasonably avoided; plus (iii) the
worth at the time of award of the amount by which the unpaid rent for the
balance of the term after the time of award exceeds the amount of such rental
loss that Tenant proves could have been reasonably avoided; plus (iv) any
other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom (specifically including, without limitation, brokerage commissions
and advertising expenses incurred, expenses of remodeling the Premises or any
portion thereof for a new tenant, whether for the same or a different use,
and any special concessions made to obtain a new tenant); and (v) at
Landlord's election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable law. The term
"RENT" as used in this Paragraph 17(a) shall be deemed to be and to mean all
sums of every nature required to be paid by Tenant pursuant to the terms of
this Lease, whether to Landlord or to others. As used in Paragraphs 17(a)(i)
and (ii), above, the "WORTH AT THE TIME OF AWARD" shall be computed by
allowing interest at the Default Rate, but in no case greater than the
maximum amount of such interest permitted by law. As used in Paragraph
17(a)(iii) above, the "WORTH AT THE TIME OF AWARD" shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percent (1%).
(b) Landlord shall have the remedy described in California
Civil Code Section 1951.4 (lessor may continue lease in effect after lessee's
breach and abandonment and recover rent as it becomes due, if lessee has the
right to sublet or assign, subject only to reasonable limitations).
Accordingly, if Landlord does not elect to terminate this Lease on account of
any Event of Default by Tenant, Landlord may, from time to time, without
terminating this Lease, enforce all of its rights and remedies under this
Lease, including the right to recover all Rent as it becomes due.
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(c) Landlord shall at all times have the rights and remedies
(which shall be cumulative with each other and cumulative and in addition to
those rights and remedies available under Paragraphs 17(a) and 17(b) above,
or any law or other provision of this Lease), without prior demand or notice
except as required by applicable law, to seek any declaratory, injunctive, or
other equitable relief, and specifically enforce this Lease, or restrain or
enjoin a violation or breach of any provision hereof.
(d) Following the occurrence of three instances of payment of
Rent more than ten (10) days late in any twelve (12) month period, the late
charge set forth in Paragraph 4 shall apply from the date payment was due and
Landlord may, without prejudice to any other rights or remedies available to
it, upon written notice to Tenant, require that all remaining monthly
installments of Rent payable under this Lease shall be payable by cashier's
check or electronic funds transfer three (3) months in advance, and may
require that Tenant increase the Security Deposit to an amount equal to three
times the current month's Rent at the time of the most recent default. In
addition, (i) upon the occurrence of an Event of Default by Tenant, if the
Premises or any portion thereof are sublet, Landlord may, at its option and
in addition and without prejudice to any other remedies herein provided or
provided by law, collect directly from the sublessee(s) all rentals becoming
due to the Tenant and apply such rentals against other sums due hereunder to
Landlord; (ii) without prejudice to any other right or remedy of Landlord, if
Tenant shall be in default under this Lease, Landlord may cure the same at
the expense of Tenant (A) immediately and without notice in the case (1) of
emergency, (2) where such default unreasonably interferes with any other
tenant in the Building, or (3) where such default will result in the
violation of any Regulation or the cancellation of any insurance policy
maintained by Landlord, and (B) in any other case if such default continues
for ten (10) days following the receipt by Tenant of notice of such default
from Landlord (or such longer cure period that is expressly provided in this
Lease) and all costs incurred by Landlord in curing such default(s),
including, without limitation, attorneys' fees, shall be reimbursable by
Tenant as Rent hereunder upon demand, together with interest thereon, from
the date such costs were incurred by Landlord, at the Default Rate; and (iii)
Tenant hereby waives for Tenant and for all those claiming under Tenant all
rights now and hereafter existing to redeem by order or judgment of any court
or by any legal process or writ, Tenant's right of occupancy of the Premises
after any termination of this Lease.
18. SURRENDER OF PREMISES.
(i) No act by Landlord shall be deemed an acceptance of a surrender of the
Premises, and no agreement to accept a surrender of the Premises shall
be valid unless it is in writing and signed by Landlord. At the
expiration or earlier termination of this Lease, Tenant shall deliver
to Landlord all keys (including any electronic access devices and the
like) to the Premises, and, subject to Paragraphs 18(ii) and 7.1,
Tenant shall deliver to Landlord the Premises in the same condition as
existed on the date Tenant originally took possession thereof, ordinary
wear and tear excepted, provided that ordinary wear and tear shall not
include repair and clean up items. By way of example, but without
limitation, repair and clean up items shall include cleaning of all
interior walls, carpets and floors, replacement of damaged or missing
ceiling or floor tiles, window coverings or cover plates, removal of
any Tenant-introduced markings, and repair of all holes and gaps and
repainting required thereby, as well as the removal requirements below.
In addition, prior to the expiration of the Term or any sooner
termination thereof, (a) Tenant shall remove such Alterations as
Landlord shall request and shall restore the portion of the Premises
affected by such Alterations and such removal to its condition existing
immediately prior to the making of such Alterations, (b) Tenant shall
remove from the Premises all unattached trade fixtures, furniture,
equipment and personal property located in the Premises, including,
without limitation, phone equipment, wiring, cabling and all garbage,
waste and debris, and (c) Tenant shall repair all damage to the
Premises or the Project caused by any such removal including, without
limitation, full restoration of all holes and gaps resulting from any
such removal and repainting required thereby. All personal property and
fixtures of Tenant not so removed shall, to the extent permitted under
applicable Regulations, be deemed to have been abandoned by Tenant and
may be appropriated, sold, stored, destroyed, or otherwise disposed of
by Landlord without notice to Tenant and without any obligation to
account for such items. Notwithstanding anything to contrary in this
Lease, if Landlord delivers the Premises to Tenant with wiring and
cabling existing therein, Tenant shall not be required to remove the
wiring and cabling installed in the Premises by Tenant at the
expiration or earlier termination of this Lease.
(ii) Landlord hereby authorizes Tenant to remove existing improvements from
the Premises to allow Tenant to construct the Premises in accordance
with the Space Plan attached to Exhibit C and subject to the terms and
conditions of Exhibit C. In the event that this Lease terminates on or
before the end of the initial Term hereof, Tenant shall pay to Landlord
on or before the expiration date or earlier termination of this Lease
an amount equal to Twenty Thousand and No/100 Dollars ($20,000.00) (the
"DEMISING WALL COST") to offset a portion of the cost of such demising
walls. In the event Tenant exercises its option to renew the Term of
this Lease as provided in Paragraph 22.A, or otherwise extends the Term
beyond the initial thirty-six (36) month Term, Tenant shall not be
required to deliver the Demising Wall Cost to Landlord. Tenant shall
not be required to pay the Demising Wall Cost if this Lease terminates
prior to the end of the initial Term hereof only if such termination
affects the entire Premises and is due solely to a casualty event or a
total taking of the Premises (each as provided in Paragraph 14 hereof)
or a material default by Landlord of this Lease, and the foregoing
results in the termination of this Lease.
19. HOLDING OVER. If Tenant holds over after the expiration or earlier
termination of the Term hereof, with or without the express or implied
consent of Landlord, Tenant shall become and be only a tenant at sufferance
at a daily rent equal to one-thirtieth of the greater of (a) the then
prevailing monthly fair market rental rate as determined by Landlord in its
sole and absolute discretion, or (b) one hundred fifty percent (150%) of the
monthly installment of Base Rent (and estimated Additional Rent payable under
Paragraph 3.2) payable by Tenant immediately prior to such expiration or
termination which rate shall be applicable during the first two (2) months of
Tenant's holding over and two hundred percent (200%) of the monthly
installment of Base Rent (and estimated Additional Rent payable under
Paragraph 3.2) payable by Tenant immediately prior to such expiration or
termination which rate shall be applicable thereafter, and otherwise upon the
terms, covenants and conditions herein specified, so far as applicable, as
reasonably determined by Landlord. Neither any provision hereof nor any
acceptance by Landlord of any Rent after any such expiration or earlier
termination (including, without limitation, through any "lockbox") shall be
deemed a consent to any holdover hereunder or result in a renewal of this
Lease or an extension of the Term, or any waiver of any of Landlord's rights
or remedies with respect to such holdover. Notwithstanding any provision to
the contrary contained herein, (i) Landlord expressly reserves the right to
require Tenant to surrender possession of the Premises upon the expiration of
the Term or upon the earlier termination hereof or at any time during any
holdover, and the right to assert any remedy at law or in equity to evict
Tenant and collect damages in connection with any such holdover, and (ii)
Tenant shall indemnify, defend and hold Landlord harmless from and against
any and all claims, demands, actions, proceedings, losses, damages,
liabilities, obligations, penalties, costs and expenses, including, without
limitation, all lost profits and other consequential damages, attorneys'
fees, consultants' fees and court costs incurred or suffered by or asserted
against Landlord by reason of Tenant's failure to surrender the Premises on
the expiration or earlier termination of this Lease in accordance with the
provisions of this Lease.
20. SUBSTITUTION SPACE. Intentionally Omitted.
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21. MISCELLANEOUS.
21.1 LANDLORD TRANSFERS AND LIABILITY. Landlord may, without
restriction, sell, assign or transfer in any manner all or any portion of the
Project, any interest therein or any of Landlord's rights under this Lease. If
Landlord assigns its rights under this Lease, then Landlord shall automatically
be released from any further obligations hereunder, provided that the assignee
thereof assumes in writing all of Landlord's obligations hereunder. The
liability of Landlord to Tenant for any default by Landlord under the terms of
this Lease or with respect to any obligation or liability related to the
Premises or the Project shall be recoverable only from the interest of Landlord
in the Project, and neither Landlord nor any affiliate thereof shall have any
personal liability with respect thereto and in no case shall Landlord be liable
to Tenant for any lost profits, damage to business, or any form of special,
indirect or consequential damage on account of any breach of this Lease.
21.2 ESTOPPEL CERTIFICATES; FINANCIAL STATEMENTS. At any time and
from time to time during the Term, Tenant shall, without charge, execute,
acknowledge and deliver to Landlord within ten (10) business days after
Landlord's request therefor, an estoppel certificate in recordable form
containing such factual certifications and other provisions as are found in the
estoppel certificate forms reasonably requested by institutional lenders and
purchasers. Tenant agrees in any case that (a) the foregoing certificate may be
relied on by anyone holding or proposing to acquire any interest in the Project
from or through Landlord or by any mortgagee or lessor or prospective mortgagee
or lessor of the Project or of any interest therein and (b) the form of estoppel
certificate shall be in the form of, at Landlord's election, the standard form
of such present or prospective lender, lessor or purchaser (or any form
substantially similar thereto), or any other form that Landlord shall reasonably
select. At the request of Landlord from time to time, Tenant shall provide to
Landlord within ten (10) days of Landlord's request therefor Tenant's and any
guarantor's current financial statements.
21.3 NOTICES. Notices, requests, consents or other communications
desired or required to be given by or on behalf of Landlord or Tenant under this
Lease shall be effective only if given in writing and sent by (a) registered or
certified United States mail, postage prepaid, (b) nationally recognized express
mail courier that provides written evidence of delivery, fees prepaid, or (c)
facsimile and United States mail, postage prepaid, and addressed as set forth in
the Basic Lease Information, or at such other address in the State of California
as may be specified from time to time, in writing, or, if to Tenant, at the
Premises. Any such notice, request, consent, or other communication shall only
be deemed given (i) if sent by registered or certified United States mail, on
the day it is officially delivered to or refused by the intended recipient, (ii)
if sent by nationally recognized express mail courier, on the date it is
officially recorded by such courier, (iii) if delivered by facsimile, on the
date the sender obtains written telephonic confirmation that the electronic
transmission was received, or (iv) if delivered personally, upon delivery or, if
refused by the intended recipient, upon attempted delivery.
21.4 PAYMENT BY TENANT; NON-WAIVER. Landlord's acceptance of Rent
(including, without limitation, through any "lockbox") following an Event of
Default shall not waive Landlord's rights regarding such Event of Default. No
waiver by Landlord of any violation or breach of any of the terms contained
herein shall waive Landlord's rights regarding any future violation of such
terms. Landlord's acceptance of any partial payment of Rent shall not waive
Landlord's rights with regard to the remaining portion of the Rent that is due,
regardless of any endorsement or other statement on any instrument delivered in
payment of Rent or any writing delivered in connection therewith; accordingly,
Landlord's acceptance of a partial payment of Rent shall not constitute an
accord and satisfaction of the full amount of the Rent that is due.
21.5 CERTAIN RIGHTS RESERVED BY LANDLORD. Landlord hereby reserves
and shall have the following rights with respect to the Premises and the
Project: (a) to decorate and to make inspections, repairs, alterations,
additions, changes, or improvements, whether structural or otherwise, in and
about the Project, the Building, the Premises or any part thereof; upon
reasonable prior notice except in the case of an emergency when no notice shall
be required, to enter upon the Premises and, during the continuance of any such
work, to temporarily close doors, entryways, public space, and corridors in the
Project or the Building; to interrupt or suspend temporarily Building services
and facilities; to change the name of the Building or the Project; and to change
the arrangement and location of entrances or passageways, doors, and doorways,
corridors, elevators, stairs, restrooms, common areas, or other public parts of
the Building or the Project; (b) to take such measures as Landlord deems
advisable in good faith for the security of the Building and its occupants; to
temporarily deny access to the Building to any person; and to close the Building
after ordinary business hours and on Sundays and Holidays, subject, however, to
Tenant's right to enter when the Building is closed after ordinary business
hours under such rules and regulations as Landlord may reasonably prescribe from
time to time during the Term; and (c) upon reasonable prior notice except in the
case of an emergency when no notice shall be required, to enter the Premises at
reasonable hours (or at any time in an emergency) to perform repairs, to take
any action authorized hereunder, or to show the Premises to prospective
purchasers or lenders, or, during the last six (6) months of the Term,
prospective tenants; provided that in any such instances, Landlord shall make
commercially reasonable efforts to avoid any material and adverse interference
with Tenant's Permitted Use of the Premises.
21.6 MISCELLANEOUS. If any clause or provision of this Lease is
illegal, invalid, or unenforceable under present or future laws, then the
remainder of this Lease shall not be affected thereby. This Lease may not be
amended except by instrument in writing signed by Landlord and Tenant. No
provision of this Lease shall be deemed to have been waived by Landlord unless
such waiver is in writing signed by Landlord. The terms and conditions contained
in this Lease shall inure to the benefit of and be binding upon the parties
hereto, and upon their respective successors in interest and legal
representatives, except as otherwise herein expressly provided. This Lease
constitutes the entire agreement between Landlord and Tenant regarding the
subject matter hereof and supersedes all oral statements and prior writings
relating thereto, including, but not limited to, any Lease for the Premises
signed by Tenant and/or Landlord prior to the date hereof. Tenant and the person
or persons signing on behalf of Tenant represent and warrant that Tenant has
full right and authority to enter into this Lease, and that all persons signing
this Lease on its behalf are authorized to do so. If Tenant is comprised of more
than one party, each such party shall be jointly and severally liable for
Tenant's obligations under this Lease. All exhibits and attachments attached
hereto are incorporated herein by this reference. This Lease shall be governed
by and construed in accordance with the laws of the State of California. In any
action which Landlord or Tenant brings to enforce its respective rights
hereunder, the unsuccessful party shall pay all costs incurred by the prevailing
party, including without limitation, reasonable attorneys' fees and court costs.
Tenant shall not record this Lease or any memorandum hereof. TO THE MAXIMUM
EXTENT PERMITTED BY LAW, LANDLORD AND TENANT EACH WAIVE RIGHT TO TRIAL BY JURY
IN ANY LITIGATION ARISING OUT OF OR WITH RESPECT TO THIS LEASE. Submission of
this Lease to Tenant does not constitute an option or offer to lease and this
Lease is not effective otherwise until execution and delivery by both Landlord
and Tenant. This Lease may be executed in any number of counterparts, each of
which shall be deemed an original. Time is of the essence as to the performance
of each covenant hereunder in which time of performance is a factor.
22. ADDENDA/ADDITIONAL PROVISIONS.
A. OPTION TO RENEW. Tenant shall, provided this Lease is in full force and
effect and Tenant is not in default beyond any applicable cure period under any
of the terms and conditions of this Lease on the date Tenant exercises its
option to renew and upon commencement of the renewal term (provided that
Landlord may, in its sole discretion, waive each of the preceding conditions),
have one (1) option to renew this Lease for a term of
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one (1) year, for the Premises in "as is" condition and on the same terms and
conditions set forth in this Lease, except as modified by the terms,
covenants and conditions set forth below:
(1) If Tenant elects to exercise such option, then Tenant shall
provide Landlord with written notice no later than 5:00 p.m.
(Pacific Standard Time) on the date which is 180 days prior to
the expiration of the Term of this Lease. If Tenant fails to
provide such notice, Tenant shall have no further or
additional right to extend or renew the Term of this Lease.
(2) The Base Rent in effect at the expiration of the then current
term of this Lease shall be increased to Fifty-two Thousand
Two Hundred Twenty-two and 50/100 Dollars ($52,222.50) per
month. All other terms and conditions of this Lease shall
remain in full force and effect and shall apply to the renewal
term except that Tenant shall have no additional option to
renew unless otherwise mutually agreed in writing by each of
Landlord and Tenant.
B. ROOF RIGHTS.
1. During the Term, Tenant shall have the nonexclusive right to install on
the roof of the Building one (1) satellite dish(s) which is no more
than twenty-four (24) inches in diameter and does exceed two hundred
(200) pounds installed, which shall be enclosed by a screen and the
nonexclusive right to run connecting lines or cables thereto from the
Premises (such satellite dish/antennae and such connecting lines and
related equipment herein referred to collectively as the "Equipment").
Tenant shall not penetrate the roof in connection with any installation
or reinstallation of the Equipment without Landlord's prior written
consent, which may be withheld in Landlord's sole discretion. The plans
and specifications for all the Equipment shall be delivered by Tenant
to Landlord for Landlord's review and approval. Such plans and
specifications, including, without limitation, the location of the
Equipment, shall be approved by Landlord in writing prior to any
installation. In no event shall the Equipment or any portion thereof be
visible from street level. Prior to the commencement of any
installation or other work performed on or about the Building, Landlord
shall approve all contractors and subcontractors which shall perform
such work. Tenant shall be responsible for any damage to the roof,
conduit systems or other portions of the Building or Building systems
as a result of Tenant's installation, maintenance and/or removal of the
Equipment.
2. During the initial Term of this Lease, Tenant shall not be required to
pay to Landlord rent for the use of the roof and roof space to
accommodate Tenant's Equipment. In the event that Tenant extends the
Term of this Lease, Tenant may be required, at Landlord's election, to
pay rent for the use of the roof and roof space to accommodate Tenant's
Equipment, which amount shall not exceed Three Hundred Dollars
($300.00) per month and shall be due and payable on the first day of
each month with each installment of Base Rent.
3. Tenant, at Tenant's sole cost and expense, shall comply with all
Regulations regarding the installation, construction, operation,
maintenance and removal of the Equipment and shall be solely
responsible for obtaining and maintaining in force all permits,
licenses and approvals necessary for such operations.
4. Tenant shall be responsible for and promptly shall pay all taxes,
assessments, charges, fees and other governmental impositions levied or
assessed on the Equipment or based on the operation thereof.
5. Landlord may require Tenant, upon thirty (30) days prior notice and at
Landlord's sole cost and expense, to relocate the Equipment during the
Term to a location approved by Tenant, which approval shall not be
unreasonably withheld, conditioned or delayed. Tenant shall not change
the location of, or alter or install additional Equipment or paint any
of the other Equipment without Landlord's prior written consent.
6. Operation of the Equipment shall not interfere in any manner with
equipment systems or utility systems of other tenants of the Project,
including without limitation, telephones, dictation equipment,
lighting, heat and air conditioning, computers, electrical systems and
elevators. If operation of the Equipment causes such interference, as
determined by Landlord in Landlord's reasonable discretion, Tenant
immediately shall suspend operation of the Equipment until Tenant
eliminates such interference.
7. Tenant shall maintain the Equipment in good condition and repair, at
Tenant's sole cost and expense. Landlord may from time to time require
that Tenant repaint the satellite dishes at Tenant's expense to keep
the same in an attractive condition. In the event that Tenant fails to
repair and maintain the Equipment in accordance with this Lease,
Landlord may, but shall not be obligated to, make any such repairs or
perform any maintenance to the Equipment and Tenant shall reimburse
Landlord upon demand for all costs and expenses incurred by Landlord in
connection therewith, plus a reasonable administrative fee.
8. Tenant may access the roof for repair and maintenance of the Equipment,
only during normal business hours, on not less than 24 hours prior
written notice to Landlord. Tenant shall designate in writing to
Landlord all persons whom Tenant authorizes to have access to the roof
for such purposes. Upon such designation and prior identification to
Landlords' building security personnel, such authorized persons shall
be granted access to the roof by Landlord's building engineer. Tenant
shall be responsible for all costs and expenses incurred by Landlord in
connection with Tenant's access to the roof pursuant to this Paragraph.
Landlord or Landlord's agent may accompany Tenant during such access.
9. Tenant shall indemnify, defend, protect and hold harmless Landlord from
and against any and all claims related to the Equipment or operation of
the same as if the Equipment were located wholly within the Premises.
Tenant shall provide evidence satisfactory to Landlord that Tenant's
property and liability insurance policies required under this Lease
include coverage for the Equipment and any claim, loss, damage, or
liability relating to the Equipment.
10. Landlord shall have no responsibility or liability whatsoever relating
to (i) maintenance or repair of the Equipment, (ii) damage to the
Equipment; (iii) damage to persons or property relating to the
Equipment or the operation thereof; or (iv) interference with use of
the Equipment arising out of utility interruption or any other cause,
except for injury to persons or damage to property caused solely by the
active negligence or intentional misconduct of Landlord, its agents or
any other parties related to Landlord. In no event shall Landlord be
responsible for consequential damages. Upon installation of the
Equipment, Tenant shall accept the area where the Equipment is located
in its "as is" condition. Tenant acknowledges that the roof location of
the Equipment is suitable for Tenant's needs, and acknowledges that
Landlord shall have no obligation whatsoever to improve, maintain or
repair the area in which the Equipment will be installed.
11. Tenant shall use the Equipment solely for Tenant's operations
associated with the Permitted Use and within Tenant's Premises and
shall not use or allow use of the Equipment, for consideration or
otherwise, for the benefit of other tenants in the Building or any
other person or entity.
Tenant shall, at Tenant's sole cost and expense, remove such portions of the
Equipment as Landlord may designate upon the expiration or earlier termination
of this Lease, and restore the affected areas to their condition prior to
installation of the Equipment. If Tenant fails to so remove the Equipment,
Landlord reserves the right to do so, and the expense of the same shall be
immediately due and payable from Tenant to Landlord as additional rent, together
with interest and late charges as provided in this Lease, plus a reasonable
administrative fee.
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<PAGE>
C. LETTER OF CREDIT.
1. DELIVERY OF LETTER OF CREDIT. Tenant may replace the Security Deposit
delivered to Landlord pursuant to the terms of this Lease, with and
cause to be in effect during the Term, an unconditional, irrevocable
letter of credit ("LOC") in the amount specified for the Security
Deposit in the Basic Lease Information, as it may be increased as
provided in this Lease (the "LOC AMOUNT") which LOC shall renew
automatically from year to year. The LOC shall be in a form reasonably
acceptable to Landlord and shall be issued by an LOC bank selected by
Tenant and acceptable to Landlord. An LOC bank is a bank that accepts
deposits, maintains accounts, has a local office that will negotiate a
letter of credit, and the deposits of which are insured by the Federal
Deposit Insurance Corporation. Tenant shall pay all expenses, points,
or fees incurred by Tenant in obtaining the LOC. The LOC shall not be
mortgaged, assigned or encumbered in any manner whatsoever by Tenant
without the prior written consent of Landlord. Tenant acknowledges that
Landlord has the right to transfer or mortgage its interest in the
Project, the Building and in this Lease and Tenant agrees that in the
event of any such transfer or mortgage, Landlord shall transfer or
assign the LOC and/or the LOC Security Deposit (as defined below) to
the transferee or mortgagee, and in the event of such transfer, Tenant
shall look solely to such transferee or mortgagee for the return of the
LOC and/or the LOC Security Deposit.
2. REPLACEMENT OF LETTER OF CREDIT. Tenant may, from time to time, replace
any existing LOC with a new LOC if the new LOC (a) becomes effective
prior to the expiration of the LOC that it replaces; (b) is in the
required LOC amount; (c) is issued by an LOC bank acceptable to
Landlord; and (d) otherwise complies with the requirements of this
Paragraph 22C.
3. LANDLORD'S RIGHT TO DRAW ON LETTER OF CREDIT. Landlord shall hold the
LOC as security for the performance of Tenant's obligations under this
Lease. If, after notice and failure to cure within any applicable
period provided in this Lease, Tenant defaults on any provision of this
Lease, Landlord may, without prejudice to any other remedy it has, draw
on that portion of the LOC necessary to (a) pay Rent or other sum in
default; (b) pay or reimburse Landlord for any amount that Landlord may
spend or become obligated to spend in exercising Landlord's rights
under Paragraph 7.2 (Repairs and Maintenance); and/or (c) compensate
Landlord for any expense, loss, or damage that Landlord may suffer
because of Tenant's default. If Tenant fails to renew or replace the
LOC at least five (5) business days before its expiration, Landlord
may, without prejudice to any other remedy it has, draw on the entire
amount of the LOC and hold and/or disburse pursuant to the terms of
this Lease.
4. LOC SECURITY DEPOSIT. Any amount of the LOC that is drawn on by
Landlord but not applied by Landlord in accordance with the terms of
this Lease shall be held by Landlord as a security deposit (the "LOC
SECURITY DEPOSIT") in accordance with Paragraph 5 of this Lease.
5. RESTORATION OF LETTER OF CREDIT AND LOC SECURITY DEPOSIT. If Landlord
draws on any portion of the LOC and/or applies all or any portion of
such draw, Tenant shall, within five (5) business days after written
demand by Landlord, either (a) deposit cash with Landlord in an amount
that, when added to the amount remaining under the LOC and the amount
of any LOC Security Deposit, shall equal the LOC Amount then required
under this Paragraph 22C; or (b) reinstate the LOC to the full LOC
Amount.
D. REIMBURSEMENT FEE. The parties acknowledge and agree that Tenant is
relying on Landlord's representation that as of the date hereof, the
lease with the current tenant, Age Wave Communications Corp. ("Age
Wage"), has been rejected by the Bankruptcy Court (subject only to the
payment as directed by the Bankruptcy Court pursuant to the ruling of
the Bankruptcy Court on November 15, 1999) and/or terminated in
accordance with the terms required by the Bankruptcy Court, if any. In
addition, Landlord represents that upon such payment as directed by the
Bankruptcy Court, Landlord has full legal capacity to deliver
possession of the Premises free of any claims by Age Wave, its estate
or any third party. Based on this representation, Tenant hereby agrees
that it shall pay to Landlord simultaneously with the execution of this
Lease, the sum of $523,712.58 (the "Reimbursement Fee") via wire
transfer or immediately available funds; provided that, if the Premises
shall not be delivered to Tenant within three (3) business days hereof
pursuant to the terms and conditions contained herein, Landlord shall
return the Reimbursement Fee to Tenant, this Lease shall terminate, and
neither party shall have any further obligations hereunder and provided
further that in the event Tenant cannot retain possession of the
Premises as a result of any act or claim by any third party, Landlord
shall pay to Tenant the Reimbursement Fee together with all actual
costs incurred by Tenant in connection with preparing the Premises for
occupancy.
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EXHIBIT A
RULES AND REGULATIONS
1. Driveways, sidewalks, halls, passages, exits, entrances, elevators,
escalators and stairways shall not be obstructed by tenants or used by
tenants for any purpose other than for ingress to and egress from their
respective premises. The driveways, sidewalks, halls, passages, exits,
entrances, elevators and stairways are not for the use of the general
public and Landlord shall in all cases retain the right to control and
prevent access thereto by all persons whose presence, in the judgment
of Landlord, shall be prejudicial to the safety, character, reputation
and interests of the Building, the Project and its tenants, provided
that nothing herein contained shall be construed to prevent such access
to persons with whom any tenant normally deals in the ordinary course
of such tenant's business unless such persons are engaged in illegal
activities. No tenant, and no employees or invitees of any tenant,
shall go upon the roof of any Building, except as authorized by
Landlord. No tenant, and no employees or invitees of any tenant shall
move any common area furniture without Landlord's consent.
2. No sign, placard, banner, picture, name, advertisement or notice,
visible from the exterior of the Premises or the Building or the common
areas of the Building shall be inscribed, painted, affixed, installed
or otherwise displayed by Tenant either on its Premises or any part of
the Building or Project without the prior written consent of Landlord
in Landlord's sole and absolute discretion. Landlord shall have the
right to remove any such sign, placard, banner, picture, name,
advertisement, or notice without notice to and at the expense of
Tenant, which were installed or displayed in violation of this rule. If
Landlord shall have given such consent to Tenant at any time, whether
before or after the execution of Tenant's Lease, such consent shall in
no way operate as a waiver or release of any of the provisions hereof
or of the Lease, and shall be deemed to relate only to the particular
sign, placard, banner, picture, name, advertisement or notice so
consented to by Landlord and shall not be construed as dispensing with
the necessity of obtaining the specific written consent of Landlord
with respect to any other such sign, placard, banner, picture, name,
advertisement or notice.
All approved signs or lettering on doors and walls shall be printed,
painted, affixed or inscribed at the expense of Tenant by a person or
vendor approved by Landlord and shall be removed by Tenant at the time
of vacancy.
3. The directory of the Building or Project will be provided exclusively
for the display of the name and location of tenants only and Landlord
reserves the right to charge for the use thereof and to exclude any
other names therefrom.
4. No curtains, draperies, blinds, shutters, shades, screens or other
coverings, awnings, hangings or decorations shall be attached to, hung
or placed in, or used in connection with, any window or door on the
Premises without the prior written consent of Landlord. In any event
with the prior written consent of Landlord, all such items shall be
installed inboard of Landlord's standard window covering and shall in
no way be visible from the exterior of the Building. All electrical
ceiling fixtures hung in offices or spaces along the perimeter of the
Building must be fluorescent or of a quality, type, design, and bulb
color approved by Landlord. No articles shall be placed or kept on the
window sills so as to be visible from the exterior of the Building. No
articles shall be placed against glass partitions or doors which
Landlord considers unsightly from outside Tenant's Premises.
5. Landlord reserves the right to exclude from the Building and the
Project, between the hours of 6 p.m. and 8 a.m. and at all hours on
Saturdays, Sundays and legal holidays, all persons who are not tenants
or their accompanied guests in the Building. Each tenant shall be
responsible for all persons for whom it allows to enter the Building or
the Project and shall be liable to Landlord for all acts of such
persons.
Landlord and its agents shall not be liable for damages for any error
concerning the admission to, or exclusion from, the Building or the
Project of any person.
During the continuance of any invasion, mob, riot, public excitement or
other circumstance rendering such action advisable in Landlord's
opinion, Landlord reserves the right (but shall not be obligated) to
prevent access to the Building and the Project during the continuance
of that event by any means it considers appropriate for the safety of
tenants and protection of the Building, property in the Building and
the Project.
6. All cleaning and janitorial services for the Building and the Premises
shall be provided exclusively through Landlord. Except with the written
consent of Landlord, no person or persons other than those approved by
Landlord shall be permitted to enter the Building for the purpose of
cleaning the same. Tenant shall not cause any unnecessary labor by
reason of Tenant's carelessness or indifference in the preservation of
good order and cleanliness of its Premises. Landlord shall in no way be
responsible to Tenant for any loss of property on the Premises, however
occurring, or for any damage done to Tenant's property by the janitor
or any other employee or any other person.
7. Tenant shall see that all doors of its Premises are closed and securely
locked and must observe strict care and caution that all water faucets
or water apparatus, coffee pots or other heat-generating devices are
entirely shut off before Tenant or its employees leave the Premises,
and that all utilities shall likewise be carefully shut off, so as to
prevent waste or damage. Tenant shall be responsible for any damage or
injuries sustained by other tenants or occupants of the Building or
Project or by Landlord for noncompliance with this rule. On
multiple-tenancy floors, all tenants shall keep the door or doors to
the Building corridors closed at all times except for ingress and
egress.
8. Tenant shall not use any method of heating or air-conditioning other
than that supplied by Landlord. As more specifically provided in
Tenant's lease of the Premises, Tenant shall not waste electricity,
water or air-conditioning and agrees to cooperate fully with Landlord
to assure the most effective operation of the Building's heating and
air-conditioning, and shall refrain from attempting to adjust any
controls other than room thermostats installed for Tenant's use.
9. Landlord will furnish Tenant free of charge with two keys to each door
in the Premises. Landlord may make a reasonable charge for any
additional keys, and Tenant shall not make or have made additional
keys. Tenant shall not alter any lock or access device or install a new
or additional lock or access device or bolt on any door of its
Premises, without the prior written consent of Landlord. If Landlord
shall give its consent, Tenant shall in each case furnish Landlord with
a key for any such lock. Tenant, upon the termination of its tenancy,
shall deliver to Landlord the keys for all doors which have been
furnished to Tenant, and in the event of loss of any keys so furnished,
shall pay Landlord therefor.
10. The restrooms, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be
thrown into them. The expense of any breakage, stoppage, or damage
resulting from violation of this rule shall be borne by the tenant who,
or whose employees or invitees, shall have caused the breakage,
stoppage, or damage.
11. Tenant shall not use or keep in or on the Premises, the Building or the
Project any kerosene, gasoline, or inflammable or combustible fluid or
material.
12. Tenant shall not use, keep or permit to be used or kept in its Premises
any foul or noxious gas or substance. Tenant shall not allow the
Premises to be occupied or used in a manner offensive or objectionable
to Landlord or other occupants of the Building by reason of noise,
odors and/or vibrations or interfere in any way with other tenants or
those having business therein, nor shall any animals or birds be
brought or kept in or about the Premises, the
<PAGE>
Building, or the Project.
13. No cooking shall be done or permitted by any tenant on the Premises,
except that use by the tenant of Underwriters' Laboratory (UL) approved
equipment, refrigerators and microwave ovens may be used in the
Premises for the preparation of coffee, tea, hot chocolate and similar
beverages, storing and heating food for tenants and their employees
shall be permitted. All uses must be in accordance with all applicable
federal, state and city laws, codes, ordinances, rules and regulations
and the Lease.
14. Except with the prior written consent of Landlord, Tenant shall not
sell, or permit the sale, at retail, of newspapers, magazines,
periodicals, theater tickets or any other goods or merchandise in or on
the Premises, nor shall Tenant carry on, or permit or allow any
employee or other person to carry on, the business of stenography,
typewriting or any similar business in or from the Premises for the
service or accommodation of occupants of any other portion of the
Building, nor shall the Premises be used for the storage of merchandise
or for manufacturing of any kind, or the business of a public barber
shop, beauty parlor, nor shall the Premises be used for any illegal,
improper, immoral or objectionable purpose, or any business or activity
other than that specifically provided for in such Tenant's Lease.
Tenant shall not accept hairstyling, barbering, shoeshine, nail,
massage or similar services in the Premises or common areas except as
authorized by Landlord.
15. If Tenant requires telegraphic, telephonic, telecommunications, data
processing, burglar alarm or similar services, it shall first obtain,
and comply with, Landlord's instructions in their installation. The
cost of purchasing, installation and maintenance of such services shall
be borne solely by Tenant.
16. Landlord will direct electricians as to where and how telephone,
telegraph and electrical wires are to be introduced or installed. No
boring or cutting for wires will be allowed without the prior written
consent of Landlord. The location of burglar alarms, telephones, call
boxes and other office equipment affixed to the Premises shall be
subject to the prior written approval of Landlord.
17. Tenant shall not install any radio or television antenna, satellite
dish, loudspeaker or any other device on the exterior walls or the roof
of the Building, without Landlord's consent. Tenant shall not interfere
with radio or television broadcasting or reception from or in the
Building, the Project or elsewhere.
18. Tenant shall not mark, or drive nails, screws or drill into the
partitions, woodwork or drywall or in any way deface the Premises or
any part thereof without Landlord's consent. Tenant may install nails
and screws in areas of the Premises that have been identified for those
purposes to Landlord by Tenant at the time those walls or partitions
were installed in the Premises. Tenant shall not lay linoleum, tile,
carpet or any other floor covering so that the same shall be affixed to
the floor of its Premises in any manner except as approved in writing
by Landlord. The expense of repairing any damage resulting from a
violation of this rule or the removal of any floor covering shall be
borne by the tenant by whom, or by whose contractors, employees or
invitees, the damage shall have been caused.
19. No furniture, freight, equipment, materials, supplies, packages,
merchandise or other property will be received in the Building or
carried up or down the elevators except between such hours and in such
elevators as shall be designated by Landlord.
Tenant shall not place a load upon any floor of its Premises which
exceeds the load per square foot which such floor was designed to carry
or which is allowed by law. Landlord shall have the right to prescribe
the weight, size and position of all safes, furniture or other heavy
equipment brought into the Building. Safes or other heavy objects
shall, if considered necessary by Landlord, stand on wood strips of
such thickness as determined by Landlord to be necessary to properly
distribute the weight thereof. Landlord will not be responsible for
loss of or damage to any such safe, equipment or property from any
cause, and all damage done to the Building by moving or maintaining any
such safe, equipment or other property shall be repaired at the expense
of Tenant.
Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted to the structure of
the Building or to any space therein to such a degree as to be
objectionable to Landlord or to any tenants in the Building shall be
placed and maintained by Tenant, at Tenant's expense, on vibration
eliminators or other devices sufficient to eliminate noise or
vibration. The persons employed to move such equipment in or out of the
Building must be acceptable to Landlord.
20. Tenant shall not install, maintain or operate upon its Premises any
vending machine without the written consent of Landlord.
21. There shall not be used in any space, or in the public areas of the
Project either by Tenant or others, any hand trucks except those
equipped with rubber tires and side guards or such other material
handling equipment as Landlord may approve. Tenants using hand trucks
shall be required to use the freight elevator, or such elevator as
Landlord shall designate. No other vehicles of any kind shall be
brought by Tenant into or kept in or about its Premises.
22. Each tenant shall store all its trash and garbage within the interior
of the Premises. Tenant shall not place in the trash boxes or
receptacles any personal trash or any material that may not or cannot
be disposed of in the ordinary and customary manner of removing and
disposing of trash and garbage in the city, without violation of any
law or ordinance governing such disposal. All trash, garbage and refuse
disposal shall be made only through entry-ways and elevators provided
for such purposes and at such times as Landlord shall designate. If the
Building has implemented a building-wide recycling program for tenants,
Tenant shall use good faith efforts to participate in said program.
23. Canvassing, soliciting, distribution of handbills or any other written
material and peddling in the Building and the Project are prohibited
and each tenant shall cooperate to prevent the same. No tenant shall
make room-to-room solicitation of business from other tenants in the
Building or the Project, without the written consent of Landlord.
24. Landlord shall have the right, exercisable without notice and without
liability to any tenant, to change the name and address of the Building
and the Project.
25. Landlord reserves the right to exclude or expel from the Project any
person who, in Landlord's judgment, is under the influence of alcohol
or drugs or who commits any act in violation of any of these Rules and
Regulations.
26. Without the prior written consent of Landlord, Tenant shall not use the
name of the Building or the Project or any photograph or other likeness
of the Building or the Project in connection with, or in promoting or
advertising, Tenant's business except that Tenant may include the
Building's or Project's name in Tenant's address.
27. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental
agency.
28. Tenant assumes any and all responsibility for protecting its Premises
from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed.
29. The requirements of Tenant will be attended to only upon appropriate
application at the office of the Building by an authorized individual.
<PAGE>
Employees of Landlord shall not perform any work or do anything outside
of their regular duties unless under special instructions from
Landlord, and no employees of Landlord will admit any person (tenant or
otherwise) to any office without specific instructions from Landlord.
30. Landlord reserves the right to designate the use of the parking spaces
on the Project. Tenant or Tenant's guests shall park between designated
parking lines only, and shall not occupy two parking spaces with one
car. Parking spaces shall be for passenger vehicles only; no boats,
trucks, trailers, recreational vehicles or other types of vehicles may
be parked in the parking areas (except that trucks may be loaded and
unloaded in designated loading areas). Vehicles in violation of the
above shall be subject to tow-away, at vehicle owner's expense.
Vehicles parked on the Project overnight without prior written consent
of the Landlord shall be deemed abandoned and shall be subject to
tow-away at vehicle owner's expense. No tenant of the Building shall
park in visitor or reserved parking areas. Any tenant found parking in
such designated visitor or reserved parking areas or unauthorized areas
shall be subject to tow-away at vehicle owner's expense. The parking
areas shall not be used to provide car wash, oil changes, detailing,
automotive repair or other services unless otherwise approved or
furnished by Landlord. Tenant will from time to time, upon the request
of Landlord, supply Landlord with a list of license plate numbers of
vehicles owned or operated by its employees or agents.
31. No smoking of any kind shall be permitted anywhere within the Building,
including, without limitation, the Premises and those areas immediately
adjacent to the entrances and exits to the Building, or any other area
as Landlord elects. Smoking in the Project is only permitted in smoking
areas identified by Landlord, which may be relocated from time to time.
32. If the Building furnishes common area conferences rooms for tenant
usage, Landlord shall have the right to control each tenant's usage of
the conference rooms, including limiting tenant usage so that the rooms
are equally available to all tenants in the Building. Any common area
amenities or facilities shall be provided from time to time at
Landlord's discretion.
33. Tenant shall not swap or exchange building keys or cardkeys with other
employees or tenants in the Building or the Project.
34. Tenant shall be responsible for the observance of all of the foregoing
Rules and Regulations by Tenant's employees, agents, clients,
customers, invitees and guests.
35. These Rules and Regulations are in addition to, and shall not be
construed to in any way modify, alter or amend, in whole or in part,
the terms, covenants, agreements and conditions of any lease of any
premises in the Project.
36. Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular tenant or tenants, but no such waiver by
Landlord shall be construed as a waiver of such Rules and Regulations
in favor of any other tenant or tenants, nor prevent Landlord from
thereafter enforcing any such Rules and Regulations against any or all
tenants of the Building.
37. Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for
safety and security, for care and cleanliness of the Building and the
Project and for the preservation of good order therein. Tenant agrees
to abide by all such Rules and Regulations herein stated and any
additional rules and regulations which are adopted.
<PAGE>
EXHIBIT B
FLOOR PLAN
[GRAPHIC]
<PAGE>
EXHIBIT C
IMPROVEMENT AGREEMENT
This Lease Improvement Agreement ("IMPROVEMENT AGREEMENT")
sets forth the terms and conditions relating to construction of the initial
tenant improvements described in the Plans to be prepared and approved as
provided below (the "TENANT IMPROVEMENTS") in the Premises. Capitalized terms
used but not otherwise defined herein shall have the meanings set forth in the
Lease (the "LEASE") to which this Improvement Agreement is attached and forms a
part.
1. BASE BUILDING WORK. The "Base Building Work" described on SCHEDULE 1 to
this EXHIBIT C, IF ANY, has been or will be performed by Landlord at
Landlord's sole cost and expense.
2. PLANS AND SPECIFICATIONS.
2.1 Tenant has retained the services of Interform/Hansen
& Associates (the "SPACE PLANNER") to prepare the detailed space plan
(the "SPACE PLAN") attached hereto as Schedule 3 for the construction
of the Tenant Improvements in the Premises. Tenant shall submit any
proposed revisions to the Space Plan to Landlord for Landlord's
approval. The Space Plan as attached hereto is hereby approved by
Landlord and Tenant.
2.2 Based on the approved Space Plan, Tenant shall cause
the Space Planner to prepare detailed plans, specifications and working
drawings mutually satisfactory to Landlord and Tenant for the
construction of the Tenant Improvements (the "PLANS"). Landlord and
Tenant shall diligently pursue the preparation of the Plans. Tenant
shall submit the Plans and any proposed revisions thereto, including
the estimated cost of the Tenant Improvements. All necessary revisions
to the Space Plan and the Plans shall be made within two (2) business
days after Landlord's response thereto. This procedure shall be
repeated until Landlord ultimately approves the Space Plan and Plans.
2.3 Tenant shall be responsible for ensuring that the
Plans are compatible with the design, construction and equipment of the
Building, comply with applicable Regulations and the Standards (defined
below), and contain all such information as may be required to show
locations, types and requirements for all heat loads, people loads,
floor loads, power and plumbing, regular and special HVAC needs,
telephone communications, telephone and electrical outlets, lighting,
light fixtures and related power, and electrical and telephone
switches, B.T.U. calculations, electrical requirements and special
receptacle requirements. The Plans shall also include mechanical and
electrical drawings mutually satisfactory to Landlord and Tenant which
shall be prepared by an architect mutually acceptable to each of
Landlord and Tenant. Notwithstanding Landlord's preparation, review and
approval of the Space Plan and the Plans and any revisions thereto,
Landlord shall have no responsibility or liability whatsoever for any
errors or omissions contained in the Space Plan or Plans or any
revisions thereto, or to verify dimensions or conditions, or for the
quality, design or compliance with applicable Regulations of any
improvements described therein or constructed in accordance therewith.
Tenant hereby waives all claims against Landlord relating to, or
arising out of the design or construction of, the Tenant Improvements.
2.4 Landlord may approve or disapprove the Plans or any
proposed revision thereto or to the Space Plan submitted to Landlord in
Landlord's sole discretion. Landlord shall not be deemed to have
approved the Space Plan, the Plans, or any proposed revisions thereto,
unless approved by Landlord in writing. Landlord shall approve or
disapprove any Space Plan, Plans or proposed revisions thereto
submitted to Landlord for Landlord's approval within three (3) business
days after Landlord's receipt thereof. If Landlord has not approved in
writing the Plans or proposed revisions thereto or to the Space Plan
submitted to Landlord within three (3) business days after Landlord's
receipt thereof, Landlord shall be deemed to have approved the same.
3. SPECIFICATIONS FOR STANDARD TENANT IMPROVEMENTS.
3.1 Specifications and quantities of standard building
components which will comprise and be used in the construction of the
Tenant Improvements ("STANDARDS") are set forth in SCHEDULE 2 to this
EXHIBIT C. As used herein, "STANDARDS" or "BUILDING STANDARDS" shall
mean the standards for a particular item selected from time to time by
Landlord for the Building, including those set forth on SCHEDULE 2 of
this EXHIBIT C, or such other standards of equal or better quality as
may be mutually agreed between Landlord and Tenant in writing.
3.2 No deviations from the Standards are permitted
without Landlord's prior written approval.
4. TENANT IMPROVEMENT COST.
4.1 The cost of the Tenant Improvements shall be paid
for by Tenant, including, without limitation, the cost of:
Standards; space plans and studies; architectural and engineering
fees; permits, approvals and other governmental fees; labor,
material, equipment and supplies; construction fees and other
amounts payable to contractors or subcontractors; taxes; off-site
improvements; remediation and preparation of the Premises for
construction of the Tenant Improvements; taxes; filing and recording
fees; premiums for insurance and bonds; attorneys' fees; financing
costs; and all other costs expended or to be expended in the
construction of the Tenant Improvements.
4.2 INTENTIONALLY OMITTED.
4.3 INTENTIONALLY OMITTED.
4.4 INTENTIONALLY OMITTED.
4.5 INTENTIONALLY OMITTED.
5. CONSTRUCTION OF TENANT IMPROVEMENTS.
5.1 Within ten (10) days after Tenant's and Landlord's
approval of the Plans, Tenant shall cause the contractor to proceed
to secure a building permit and commence construction of the Tenant
Improvements provided that the Building has in Landlord's discretion
reached the stage of construction where it is appropriate to
commence construction of the Tenant Improvements in the Premises.
5.2 Tenant shall be responsible for obtaining all
governmental approvals to the full extent necessary for the
construction and installation of the Tenant Improvements and for
Tenant's occupancy of the Premises, in compliance with all
applicable Regulations. Tenant shall employ Wilcox & Co. as the
contractor or such other contractor or contractors as shall be
approved by Landlord in writing to construct the Tenant Improvements
in conformance with the approved Space Plan and Plans. The
construction contracts between Tenant and the
<PAGE>
approved contractor shall be subject to Landlord's prior reasonable
approval and shall provide for progress payments made directly to
the contractor. The contractor(s) shall be duly licensed and
Landlord's approval of the contractor(s) shall be conditioned, among
other things, upon the contractor's reputation for quality of work,
timeliness of performance, integrity and Landlord's prior experience
with such contractor.
5.3 Landlord shall not be liable for any direct or
indirect damages suffered by Tenant as a result of delays in
construction beyond Landlord's reasonable control, including, but
not limited to, delays due to strikes or unavailability of materials
or labor, or delays caused by Tenant (including delays by the Space
Planner, the contractor or anyone else performing services on behalf
of Landlord or Tenant).
5.4 All work to be performed on the Premises by Tenant
or Tenant's contractor or agents shall be subject to the following
conditions:
(a) Such work shall proceed upon Landlord's
written approval of Tenant's contractor, and public liability and
property damage insurance carried by Tenant's contractor, and shall
further be subject to the provisions of Paragraphs 7.1 and 7.3 of
the Lease.
(b) All work shall be done in conformity with
a valid building permit when required, a copy of which shall be
furnished to Landlord before such work is commenced, and in any
case, all such work shall be performed in a good and workmanlike and
first-class manner, and in accordance with all applicable
Regulations and the requirements and standards of any insurance
underwriting board, inspection bureau or insurance carrier insuring
the Premises pursuant to the Lease. Notwithstanding any failure by
Landlord to object to any such work, Landlord shall have no
responsibility for Tenant's failure to comply with all applicable
Regulations. Tenant shall be responsible for ensuring that
construction and installation of the Tenant Improvements will not
affect the structural integrity of the Building.
(c) Tenant shall use its best efforts to
immediately resolve any union activities, including picketing and
labor stoppages, that occur in connection with Tenant's construction
of the Tenant Improvements or other construction by or on behalf of
Tenant of the Premises, Building or Project. Any delay in
construction of the Tenant Improvements due to such union activities
shall not be considered a force majeure event hereunder with respect
to Tenant's performance of its obligations.
(d) Landlord or Landlord's agents shall have
the right to inspect the construction of the Tenant Improvements by
Tenant during the progress thereof. If Landlord shall give notice of
faulty construction or any other deviation from the approved Space
Plan or Plans, Tenant shall cause its contractor to make corrections
promptly. However, neither the privilege herein granted to Landlord
to make such inspections, nor the making of such inspections by
Landlord, shall operate as a waiver of any right of Landlord to
require good and workmanlike construction and improvements erected
in accordance with the approved Space Plan or Plans.
(e) Tenant shall cause its contractor to
complete the Tenant Improvements as soon as reasonably possible but
in any event on or before the Scheduled Term Commencement Date.
(f) Tenant's construction of the Tenant
Improvements shall comply with the following: (i) the Tenant
Improvements shall be constructed in strict accordance with the
approved Space Plan or Plans; (ii) Tenant's and its contractor shall
submit schedules of all work relating to the Tenant Improvements to
Landlord for Landlord's approval within two (2) business days
following the selection of the contractor and the approval of the
Plans. Landlord shall within three (3) business days after receipt
thereof inform Tenant of any changes which are necessary and
Tenant's contractor shall adhere to such corrected schedule; and
(iii) Tenant shall abide by all rules made by Landlord with respect
to the use of freight, loading dock, and service elevators, storage
of materials, coordination of work with the contractors of other
tenants, and any other matter in connection with this Improvement
Agreement, including, without limitation, the construction of the
Tenant Improvements.
(g) Tenant or Tenant's contractor or agents
shall arrange for necessary utility, hoisting and elevator service
with Landlord's contractor and shall pay such reasonable charges for
such services as may be charged by Tenant's contractor. Landlord
shall not impose a charge upon Tenant for any such elevator service.
(h) Tenant's entry to the Premises for any
purpose, including, without limitation, inspection or performance of
Tenant construction by Tenant's agents, prior to the date Tenant's
obligation to pay rent commences shall be subject to all the terms
and conditions of the Lease except the payment of Rent. Tenant's
entry shall mean entry by Tenant, its officers, contractors,
licensees, agents, servants, employees, guests, invitees, or
visitors.
(i) Tenant shall promptly reimburse Landlord
upon demand for any reasonable expense actually incurred by the
Landlord by reason of faulty work done by Tenant or its contractors
or by reason of any delays caused by such work, or by reason of
inadequate clean-up.
(j) Tenant hereby indemnifies and holds
Landlord harmless with respect to any and all costs, losses,
damages, injuries and liabilities relating in any way to any act or
omission of Tenant or Tenant's contractor or agents, or anyone
directly or indirectly employed by any of them, in connection with
the Tenant Improvements and any breach of Tenant's obligations under
this Improvement Agreement, or in connection with Tenant's
non-payment of any amount arising out of the Tenant Improvements.
Such indemnity by Tenant, as set forth above, shall also apply with
respect to any and all costs, losses, damages, injuries, and
liabilities related in any way to Landlord's performance or any
ministerial acts reasonably necessary (i) to permit Tenant to
complete the Tenant Improvements, and (ii) to enable Tenant to
obtain any building permit or certificate of occupancy for the
Premises.
(k) Tenant's contractor and the
subcontractors utilized by Tenant's contractor shall guarantee to
Tenant and for the benefit of Landlord that the portion of the
Tenant Improvements for which it is responsible shall be free from
any defects in workmanship and materials for a period of not less
than one (1) year from the date of completion thereof. Each of
Tenant's contractor and the subcontractors utilized by Tenant's
contractor shall be responsible for the replacement or repair,
without additional charge, of all work done or furnished in
accordance with its contract that shall become defective within one
(1) year after the later to occur of (i) completion of the work
performed by such contractor of subcontractors and (ii) the Term
Commencement Date. The correction of such work shall include,
without additional charge, all additional expenses and damages
incurred in connection with such removal or replacement of all or
any part of the Tenant Improvements, and/or the Building and/or
common areas that may be damaged or disturbed thereby. All such
warranties or guarantees as to materials or workmanship of or with
respect to the Tenant Improvements shall be contained in the
construction contract or subcontract and shall be written such that
such guarantees or warranties shall inure to the benefit of both
Landlord and Tenant, as their respective interests may appear, and
can be directly enforced by either. Tenant covenants to give to
Landlord any assignment or other assurances which may be necessary
to effect such rights of direct enforcement.
<PAGE>
(l) Commencing upon the execution of the Lease, Tenant shall hold
weekly meetings at a reasonable time with the Space Planner and the
contractor regarding the progress of the preparation of the Plans
and the construction of the Tenant Improvements, which meetings
shall be held at a location designated by Tenant, and Landlord
and/or its agents shall receive prior notice of, and shall have the
right to attend, all such meetings, and upon Landlord's request,
certain of Tenant's contractors shall attend such meetings. One such
meeting each month shall include the review of contractor's current
request for payment.
6. INSURANCE REQUIREMENTS.
6.1 All of Tenant's contractors shall carry worker's compensation
insurance covering all of their respective employees, and shall also
carry public liability insurance, including property damage, all
with limits, in form and with companies as are required to be
carried by Tenant as set forth in Exhibit D to the Lease.
6.2 Tenant shall carry "Builder's All Risk" insurance in an amount
approved by Landlord covering the construction of the Tenant
Improvements, and such other insurance as Landlord may require, it
being understood and agreed that the Tenant Improvements shall be
insured by Tenant pursuant to Exhibit D to the Lease immediately
upon completion thereof. Such insurance shall be in amounts and
shall include such extended coverage endorsements as may be
reasonably required by Landlord including, but not limited to, the
requirement that all of Tenant's contractors shall carry excess
liability and Products and Completed Operation coverage insurance,
each in amounts not less than $500,000 per incident, $1,000,000 in
aggregate, and in form and with companies as are required to be
carried by Tenant as set forth in Exhibit D to the Lease.
6.3 Certificates for all insurance carried pursuant to this
Improvement Agreement must comply with the requirements of Exhibit D
to the Lease and shall be delivered to Landlord before the
commencement of construction of the Tenant Improvements and before
the contractor's equipment is moved onto the site. In the event the
Tenant Improvements are damaged by any cause during the course of
the construction thereof, Tenant shall immediately repair the same
at Tenant's sole cost and expense. Tenant's contractors shall
maintain all of the foregoing insurance coverage in force until the
Tenant Improvements are fully completed and accepted by Landlord,
except for any Product and Completed Operation Coverage insurance
required by Landlord, which is to be maintained for ten (10) years
following completion of the work and acceptance by Landlord and
Tenant. All policies carried under this Paragraph 6 shall insure
Landlord and Tenant, as their interests may appear, as well as the
contractors. All insurance maintained by Tenant's contractors shall
preclude subrogation claims by the insurer against anyone insured
thereunder. Such insurance shall provide that it is primary
insurance as respects the owner and that any other insurance
maintained by owner is excess and noncontributing with the insurance
required hereunder. Landlord may, in its discretion, require Tenant
to obtain a lien and completion bond or some alternate form of
security satisfactory to Landlord in an amount sufficient to ensure
the lien-free completion of the Tenant Improvements and naming
Landlord as a co-obligee.
7. COMPLETION AND RENTAL COMMENCEMENT DATE.
7.1 Tenant's obligation to pay Rent under the Lease shall commence
on the Scheduled Term Commencement Date and the Scheduled Term
Commencement Date shall be the Term Commencement Date
notwithstanding anything to the contrary contained in Paragraph 3 of
the Lease. However, Landlord Delays (as defined below) shall extend
the Term Commencement Date, but only in the event that substantial
completion of the Tenant Improvements is delayed despite Tenant's
reasonable efforts to adapt and compensate for such delays. In
addition, no Landlord Delays shall be deemed to have occurred unless
Tenant has provided notice, in compliance with the Lease, to
Landlord specifying that a delay shall be deemed to have occurred
because of actions, inactions or circumstances specified in the
notice in reasonable detail. If such actions, inactions or
circumstances are not cured by Landlord within one (1) business day
after receipt of such notice ("COUNT DATE"), and if such actions,
inaction or circumstances otherwise qualify as a Landlord Delay,
then a Landlord Delay shall be deemed to have occurred commencing as
of the Count Date. The Term Commencement Date shall be extended by
one day for each day from the Count Date that a Landlord Delay has
occurred, as calculated as provided above. The term "Landlord
Delays," as such term may be used in this Improvement Agreement,
shall mean any delays in the completion of the Tenant Improvements
which are due to any act or omission of Landlord, its agents or
contractors. Landlord Delays shall include, but shall not be limited
to: (i) delays in the giving of authorizations or approvals by
Landlord, (ii) delays due to the acts or failures to act, of
Landlord, its agents or contractors, where such acts or failures to
act delay the completion of the Tenant Improvements, provided that
Tenant acts in a commercially reasonable manner to mitigate any such
delay, (iii) delays due to the interference of Landlord, its agents
or contractors with the completion of the Tenant Improvements or the
failure or refusal of any party to permit Tenant, its agents and
contractors, access to and use of the Building or any Building
facilities or services, including elevators and loading docks, which
access and use are necessary to complete the Tenant Improvements,
and (iv) delays due to Landlord's failure to allow Tenant sufficient
access to the Building and/or the Premises during Tenant's move into
the Premises.
7.2 Within ten (10) days after completion of construction of the
Tenant Improvements, Tenant shall cause a Notice of Completion to be
recorded in the office of the Recorder of the county in which the
Building is located in accordance with Section 3093 of the Civil
Code of the State of California or any successor statute, and shall
furnish a copy thereof to Landlord upon such recordation. If Tenant
fails to do so, Landlord may execute and file the same on behalf of
Tenant as Tenant's agent for such purpose, at Tenant's sole cost and
expense. At the conclusion of construction, (i) Tenant shall cause
the Space Planner and the contractor (i) to update the approved
working drawings as necessary to reflect all changes made to the
approved working drawings during the course of construction, (ii) to
certify to the best of their knowledge that the "record-set" of
as-built drawings are true and correct, which certification shall
survive the expiration or termination of the Lease, and (c) to
deliver to Landlord two (2) sets of copies of such record set of
drawings within ninety (90) days following issuance of a certificate
of occupancy for the Premises, and (iii) Tenant shall deliver to
Landlord a copy of all warranties, guarantees, and operating manuals
and information relating to the improvements, equipment, and systems
in the Premises.
7.3 A default under this Improvement Agreement shall constitute a
default under the Lease, and the parties shall be entitled to all
rights and remedies under the Lease in the event of a default
hereunder by the other party (notwithstanding that the Term thereof
has not commenced).
7.4 Without limiting the "as-is" provisions of the Lease, except
for the Tenant Improvements, if any, to be constructed by Landlord
pursuant to this Improvement Agreement, Tenant accepts the Premises in
its "as-is" condition and acknowledges that it has had an opportunity
to inspect the Premises prior to signing the Lease.
<PAGE>
SCHEDULE 1
TO EXHIBIT C
BASE BUILDING WORK
NONE
<PAGE>
SCHEDULE 2
TO EXHIBIT C
BUILDING STANDARDS
Building Standard tenant improvements ("STANDARDS") shall be in accordance with
premises/space recently constructed in the Building for other tenants occupying
space similar to Tenant.
<PAGE>
SCHEDULE 3
TO EXHIBIT C
SPACE PLAN
The following constitutes the Space Plan:
[spaceplan]
<PAGE>
SCHEDULE 3
TO EXHIBIT C
SPACE PLAN
The following constitutes the Dendition Plan:
[spaceplan]
<PAGE>
EXHIBIT D
TENANT'S INSURANCE
Tenant shall, at Tenant's sole cost and expense, procure and keep in effect
from the date of this Lease and at all times until the end of the Term, the
following insurance coverage:
1. PROPERTY INSURANCE. Insurance on all personal property and fixtures of
Tenant and all improvements made by or for Tenant to the Premises on an
"All Risk" or "Special Form" basis, for the full replacement value of
such property.
2. LIABILITY INSURANCE. Commercial General Liability insurance written on
an ISO CG 00 01 10 93 or equivalent form, on an occurrence basis, with
a per occurrence limit of at least $2,000,000, and a minimum general
aggregate limit of at least $3,000,000, covering bodily injury and
property damage liability occurring in or about the Premises or arising
out of the use and occupancy of the Premises or the Project by Tenant
or any Tenant Party. Such insurance shall include contractual liability
coverage insuring Tenant's indemnity obligations under this Lease, and
shall be endorsed to name Landlord, any Holder of a Security Instrument
and any other party specified by Landlord as an additional insured with
regard to liability arising out of the ownership, maintenance or use of
the Premises.
3. WORKER'S COMPENSATION AND EMPLOYER'S LIABILITY INSURANCE. (a) Worker's
Compensation Insurance as required by any Regulation, and (b)
Employer's Liability Insurance in amounts not less than $1,000,000 each
accident for bodily injury by accident and for bodily injury by
disease, and for each employee for bodily injury by disease.
4. COMMERCIAL AUTO LIABILITY INSURANCE. Commercial auto liability
insurance with a combined limit of not less than One Million Dollars
($1,000,000) for bodily injury and property damage for each accident.
Such insurance shall cover liability relating to any auto (including
owned, hired and non-owned autos).
5. ALTERATIONS REQUIREMENTS. In the event Tenant shall desire to perform
any Alterations, Tenant shall deliver to Landlord, prior to commencing
such Alterations (i) evidence satisfactory to Landlord that Tenant
carries "Builder's Risk" insurance covering construction of such
Alterations in an amount and form approved by Landlord, (ii) such other
insurance as Landlord shall nondiscriminatorily require, and (iii) a
lien and completion bond or other security in form and amount
satisfactory to Landlord.
6. GENERAL INSURANCE REQUIREMENTS. All coverages described in this
EXHIBIT D shall be endorsed to (i) provide Landlord with thirty (30)
days' notice of cancellation or change in terms; (ii) waive all
rights of subrogation by the insurance carrier against Landlord; and
(iii) be primary and non-contributing with Landlord's insurance. If
at any time during the Term the amount or coverage of insurance which
Tenant is required to carry under this EXHIBIT D is, in Landlord's
reasonable judgment, materially less than the amount or type of
insurance coverage typically carried by owners or tenants of
properties located in the general area in which the Premises are
located which are similar to and operated for similar purposes as the
Premises or if Tenant's use of the Premises should change with or
without Landlord's consent, Landlord shall have the right to require
Tenant to increase the amount or change the types of insurance
coverage required under this EXHIBIT D. All insurance policies
required to be carried by Tenant under this Lease shall be written by
companies rated AVII or better in "Best's Insurance Guide" and
authorized to do business in the State of California. Deductible
amounts under all insurance policies required to be carried by Tenant
under this Lease shall not exceed $10,000 per occurrence. Tenant
shall deliver to Landlord on or before the Term Commencement Date,
and thereafter at least thirty (30) days before the expiration dates
of the expired policies, certified copies of Tenant's insurance
policies, or a certificate evidencing the same issued by the insurer
thereunder, and, if Tenant shall fail to procure such insurance, or
to deliver such policies or certificates, Landlord may, at Landlord's
option and in addition to Landlord's other remedies in the event of a
default by Tenant under the Lease, procure the same for the account
of Tenant, and the cost thereof (with interest thereon at the Default
Rate) shall be paid to Landlord as Additional Rent.
<PAGE>
EXHIBIT E
PARKING RULES
1. Cars must be parked entirely within painted stall lines.
2. All directional signs and arrows must be observed.
3. All posted speed limits for the parking areas shall be observed. If no
speed limit is posted for an area, the speed limit shall be five (5)
miles per hour.
4. Parking is prohibited:
(a) in areas not striped for parking;
(b) in aisles;
(c) where "no parking" signs are posted;
(d) on ramps;
(e) in cross hatched areas; and
(f) in such other areas as may be designated by Landlord.
5. Handicap and visitor stalls shall be used only by handicapped persons
or visitors, as applicable.
6. Parking stickers or any other device or form of identification supplied
by Landlord from time to time (if any) shall remain the property of
Landlord. Such parking identification device must be displayed as
requested and may not be mutilated in any manner. The serial number of
the parking identification device may not be obliterated. Devices are
not transferable and any device may not be obliterated. Devices are not
transferable and any device in possession of any unauthorized holder
will be void. There will be a replacement charge payable by the parker
and such parker's appropriate tenant equal to the amount posted from
time to time by Landlord for loss of any magnetic parking card or any
parking sticker.
7. Every parker is required to park and lock his or her own car. All
responsibility for damage to cars or persons is assumed by the parker.
8. Loss or theft of parking identification devices must be reported to
Landlord, and a report of such loss or theft must be filed by the
parker at that time. Any parking identification devices reported lost
or stolen found on any unauthorized car will be confiscated and the
illegal holder will be subject to prosecution. Lost or stolen devices
found by the parker must be reported to Landlord immediately to avoid
confusion.
9. Parking spaces are for the express purpose of parking one automobile
per space. Washing, waxing, cleaning, or servicing of any vehicle by
the parker and/or such person's agents is prohibited. The parking areas
shall not be used for overnight or other storage for vehicles of any
type.
10. Landlord reserves the right to refuse the issuance of parking
identification or access devices to any tenant and/or such tenant's
employees, agents, visitors or representatives who willfully refuse to
comply with the Parking Rules and/or all applicable governmental
ordinances, laws, or agreements.
11. Tenant shall acquaint its employees, agents, visitors or
representatives with the Parking Rules, as they may be in effect from
time to time.
12. Any monthly rental for parking shall be paid one month in advance prior
to the first day of such month. Failure to do so will automatically
cancel parking privileges, and a charge of the prevailing daily rate
will be due. No deductions or allowances from the monthly rental for
parking will be made for days a parker does not use the parking
facilities.
13. Each parker shall pay a reasonable deposit for any parking card issued
to such a person. Such deposit shall be paid at the time the parking
card is issued and shall be forfeited if the parking card is lost. Such
deposit shall be returned without interest, at the time such person
ceases to utilize the parking facilities, upon surrender of the parking
card. A reasonable replacement charge shall be paid to replace a lost
card and an amount in excess of the initial deposit may be charged as
the replacement fee.
<PAGE>
Exhibit 10.13
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STANDARD FORM OF OFFICE LEASE
THE REAL ESTATE BOARD OF NEW YORK, INC.
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Agreement of Lease, made as of this 3rd day of January 2000 , between CROWN
LEXINGTON LLC, a New York limited liability company having an address at c/o
Crown Properties Inc., 400 Garden City Plaza, Suite 111, Garden City, NY 11530,
party of the first part, hereinafter referred to as OWNER and INTRAWARE, INC., a
Delaware corporation having an address at 25 Orinda Way, #101, Orinda, CA 94563,
PARTY OF THE SECOND PART, HEREINAFTER REFERRED TO AS TENANT,
WITNESSETH: Owner hereby leases to Tenant and Tenant hereby hires from Owner
that certain portion of rentable space on the 23rd floor as described on the
floor plans annexed hereto as Exhibit "A"
in the building known as 360 Lexington Avenue, New York, New York,
in the Borough of Manhattan, City of New York, for the term of SEE RIDER ANNEXED
HERETO AND MADE A PART HEREOF
at an annual rental rate of SEE RIDER ANNEXED HERETO AND MADE A PART HEREOF
which Tenant agrees to pay in lawful money of the United States which shall be
legal tender in payment of all debts and dues, public and private, at the time
of payment, in equal monthly installments in advance on the first day of each
month during said term, at the office of Owner or such other place as Owner may
designate, without any set off or deduction whatsoever, except that Tenant shall
pay the first monthly installment(s) on the execution hereof (unless this lease
be a renewal).
In the event that, at the commencement of the term of this lease, or
thereafter, Tenant shall be in default in the payment of rent to Owner pursuant
to the terms of another lease with Owner or with Owner's predecessor in
interest, Owner may at Owner's option and without notice to Tenant add the
amount of such arrears to any monthly installment of rent payable hereunder and
the same shall be payable to Owner as additional rent.
The parties hereto, for themselves, their heirs, distributees,
executors, administrators, legal representatives, successors and assigns, hereby
covenant as follows:
RENT: 1. Tenant shall pay the rent as above and as hereinafter
provided.
OCCUPANCY: 2. Tenant shall use and occupy demised premises for SEE RIDER
ANNEXED HERETO AND MADE A PART HEREOF
and for no other purpose.
TENANT ALTERATIONS: 3. Tenant shall make no changes in or to the demised
premises of any nature without Owner's prior written consent which consent
shall not be unreasonably withheld and must be given or denied within fifteen
(15) business days after submission of all final plans and drawings to
Landlord. Subject to the prior written consent of Owner, and to the
provisions of this article, Tenant, at Tenant's expense, may make
alterations, installations, additions or improvements which are
non-structural and which do not affect utility services or plumbing and
electrical lines, in or to the interior of the demised premises by using
contractors or mechanics first approved in each instance by Owner. Landlord's
consent shall not be required for alterations, installations, additions or
improvements (collectively, "Alterations") made by Tenant that cost less than
$25,000.00 and which do not materially affect the plumbing, electrical or the
structural elements of the Building. Tenant shall before making any
alterations, additions, installations or improvements, at its expense, obtain
all permits, approvals and certificates required by any governmental or
quasi-governmental bodies and (upon completion) certificates of final
approval thereof and shall deliver promptly duplicates of all such permits,
approvals and certificates to Owner and Tenant agrees to carry and will cause
Tenant's contractors and sub-contractors to carry such workman's
compensation, general liability, personal and property damage insurance as
Owner may require. If any mechanic's lien is filed against the demised
premises, or the building of which the same forms a part, for work claimed to
have been done for, or materials furnished to, Tenant, whether or not done
pursuant to this article, the same shall be discharged by Tenant within
thirty days thereafter, at Tenant's expense, by payment or filing the bond
required by law. All fixtures and all paneling, partitions, railings and like
installations, installed in the premises at any time, either by Tenant or by
Owner on Tenant's behalf, shall, upon installation, become the property of
Owner and shall remain upon and be surrendered with the demised premises
unless Owner, by notice to Tenant within a reasonable period after Landlord
approves such alteration, elects to relinquish Owner's right thereto and to
have them removed by Tenant, in which event the same shall be removed from
the premises by Tenant prior to the expiration of the lease, at Tenant's
expense. Nothing in this Article shall be construed to give Owner title to or
to prevent Tenant's removal of trade fixtures, moveable office furniture and
equipment, but upon removal of any such from the premises or upon removal of
other installations as may be required by Owner, Tenant shall immediately and
at its expense, repair and restore the premises to the condition existing
prior to installation and repair any damage to the demised premises or the
building due to such removal. All property permitted or required to be
removed, by Tenant at the end of the term remaining in the premises after
Tenant's removal shall be deemed abandoned and may, at the election of Owner,
either be retained as Owner's property or may be removed from the premises by
Owner, at Tenant's expense.
MAINTENANCE AND REPAIRS:
4. Tenant shall, throughout the term of this lease, take good
care of the demised premises and the fixtures and appurtenances therein. Tenant
shall be responsible for all damage or injury to the demised premises or any
other part of the building and the systems and equipment thereof, whether
requiring structural or nonstructural repairs caused by or resulting from
carelessness, omission, neglect or improper conduct of Tenant, Tenant's
subtenants, agents, employees, invitees or licensees, or which arise out of any
work, labor, service, or equipment done for or supplied to Tenant or any
subtenant or arising out of the installation, use or operation of the property
or equipment of Tenant or any subtenant. Tenant shall also repair all damage to
the building and the demised premises caused by the moving of Tenant's fixtures,
furniture and equipment. Tenant shall promptly make, at Tenant's expense, all
repairs in and to the demised premises for which Tenant is responsible, using
only the contractor for the trade or trades in question, selected from a list of
at least two contractors per trade submitted by Owner. Any other repairs in or
to the building or the facilities and systems thereof for which Tenant is
responsible shall be performed by Owner at the Tenant's reasonable expense.
Owner shall maintain in good working order and repair the exterior and the
structural portions of the building, including the structural portions of its
demised premises, and the public portions of the building interior and the
building plumbing, electrical, heating and ventilating systems (to the extent
such systems presently exist) serving the demised premises. Tenant agrees to
give prompt notice of any defective condition in the premises for which Owner
may be responsible hereunder. There shall be no allowance to Tenant for
diminution of rental value and no liability on the part of Owner by reason of
inconvenience, annoyance or injury to business arising from Owner or others
making repairs, alterations, additions or improvements in or to any portion of
the building or the demised premises or in and to the fixtures, appurtenances or
equipment thereof. Landlord represents that it shall use reasonable efforts not
to unreasonably interfere with the conduct of Tenant's business or access to the
Demised Premises in performing the foregoing, but same shall not cause or
require Landlord to incur any overtime expenses. It is specifically, agreed that
Tenant shall not be entitled to any setoff or reduction of rent by reason of any
failure of Owner to comply with the covenants of this or any other article of
this Lease. Tenant agrees that Tenant's sole remedy at law in such instance will
be by way of an action for damages for breach of contract. The provisions of
this Article 4 shall not apply in the case of fire or other casualty which are
dealt with in Article 9 hereof.
WINDOW
CLEANING: 5. Tenant will not clean nor require, permit, suffer or allow
any window in the demised premises to be cleaned from the outside in violation
of Section 202 of the Labor Law or any other applicable law or of the Rules of
the Board of Standards and Appeals, or of any other Board or body having or
asserting jurisdiction.
REQUIREMENTS
OF LAW,
FIRE INSURANCE,
FLOOR LOADS: 6. Prior to the commencement of the lease term, if Tenant is
then in possession, and at all times thereafter, Tenant, at Tenant's sole cost
and expense, shall promptly comply with all present and future laws, orders and
regulations of all state, federal, municipal and local governments, departments,
commissions and boards and any direction of any public officer pursuant to law,
and all orders, rules and regulations of the New York Board of Fire
Underwriters, Insurance Services Office, or any similar body which shall impose
any violation, order or duty upon Owner or Tenant with respect to the demised
premises, whether or not arising out of Tenant's use or manner of use thereof,
(including Tenant's permitted use) or, with respect to the building if arising
out of Tenant's use or manner of use of the premises or the building (including
the use permitted under the lease). Nothing herein shall require Tenant to make
structural repairs or alterations unless Tenant has, by its manner of use of the
demised premises or method of operation therein, violated any such laws,
ordinances, orders, rules, regulations or requirements with respect thereto.
Tenant may, after securing Owner to
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<PAGE>
Owner's satisfaction against all damages, interest, penalties and expenses,
including, but not limited to, reasonable attorney's fees, by cash deposit or by
surety bond in an amount and in a company satisfactory to Owner, contest and
appeal any such laws, ordinances, orders, rules, regulations or requirements
provided same is done with all reasonable promptness and provided such appeal
shall not subject Owner to prosecution for a criminal offense or constitute a
default under any lease or mortgage under which Owner may be obligated, or cause
the demised premises or any part thereof to be condemned or vacated. Tenant
shall not do or permit any act or thing to be done in or to the demised premises
which J s contrary to law, or which will invalidate or be in conflict with
public liability, fire or other policies of insurance at any time carried by or
for the benefit of Owner with respect to the demised premises or the building of
which the demised premises form a part, or which shall or might subject Owner to
any liability or responsibility to any person or for property damage. Tenant
shall not keep anything in the demised premises except as now or hereafter
permitted by the Fire Department, Board of Fire Underwriters, Fire Insurance
Rating Organization or other authority having jurisdiction, and then only in
such manner and such quantity so as not to increase the rate for fire insurance
applicable to the building, nor use the premises in a manner which will increase
the insurance rate for the building or any property located therein over that in
effect prior to the commencement of Tenant's occupancy. Tenant shall pay all
costs, expenses, fines, penalties, or damages, which may be imposed upon Owner
by reason of Tenant's failure to comply with the provisions of this article and
if by reason of such failure the fire insurance rate shall, at the beginning of
this lease or at any time thereafter, be higher than it otherwise would be, then
Tenant shall reimburse Owner, as additional rent hereunder, for that portion of
all fire insurance premiums thereafter paid by Owner which shall have been
charged because of such failure by Tenant. In any action or proceeding wherein
Owner and Tenant are parties, a schedule or "make-up" of rate for the building
or demised premises issued by the New York Fire Insurance Exchange, or other
body making fire insurance rates applicable to said premises shall be conclusive
evidence of the facts therein stated and of the several items and charges in the
fire insurance rates then applicable to said premises. Tenant shall not place a
load upon any floor of the demised premises exceeding the floor load per square
foot area which it was designed to carry and which is allowed by law. Owner
reserves the right to prescribe the weight and position of all safes, business
machines and mechanical equipment. Such installations shall be placed and
maintained by Tenant, at Tenant's expense, in settings sufficient, in Owner's
reasonable judgement, to absorb and prevent vibration, noise and annoyance.
SUBORDINATION: 7. This lease is subject and subordinate to all ground or
underlying leases and to all mortgages which may now or hereafter affect such
leases or the real property of which demised premises are a part and to all
renewals, modifications, consolidations, replacements and extensions of any such
underlying leases and mortgages. This clause shall be self-operative and no
further instrument of subordination shall be required by any ground or
underlying lessor or by any mortgagee, affecting any lease or the real property
of which the demised premises are a part. In confirmation of such subordination,
Tenant shall from time to time execute promptly any certificate that Owner may
request. Landlord shall use reasonable efforts to obtain a non-disturbance
agreement in favor of Tenant from each and every current and future mortgagee
and lessor. Landlord represents that as of the date hereof, there are no
underlying leases or mortgages affecting all or any portion of the real property
of which the demised premises form a part other than a mortgage currently held
by M & T Real Estate, Inc.
PROPERTY
LOSS, DAMAGE
REIMBURSEMENT
INDEMNITY: 8. Owner or its agents shall not be liable for any damage to
property or Tenant or of others entrusted to employees of the building, nor for
loss of or damage to any property of Tenant by theft or otherwise, nor for any
injury or damage to persons or property resulting from any cause of whatsoever
nature, unless caused by or due to the negligence of Owner, its agents, servants
or employees. Owner or its agents will not be liable for any such damage caused
by other tenants or persons in, upon or about said building or caused by
operations in construction of any private, public or quasi public work. If at
any time any windows of the demised premises are temporarily closed, darkened or
bricked up (or permanently closed, darkened or bricked up, if required by law)
for any reason whatsoever including, but not limited to Owner's own acts, Owner
shall not be liable for any damage Tenant may sustain thereby and Tenant shall
not be entitled to any compensation therefor nor abatement or diminution of rent
nor shall the same release Tenant from its obligations hereunder nor constitute
an eviction. Tenant shall indemnify and save harmless Owner against and from all
liabilities, obligations, damages, penalties, claims, costs and expenses for
which Owner shall not be reimbursed by insurance, including reasonable attorneys
fees, paid, suffered or incurred as a result of any breach by Tenant, Tenant's
agents, contractors, employees, invitees, or licensees, of any covenant or
condition of this lease, or the carelessness, negligence or improper conduct of
the Tenant, Tenant's agents, contractors, employees, invitees or licensees.
Tenant's liability under this lease extends to the acts and omissions of any
sub-tenant, and any agent, contractor, employee, invitee or licensee of any
sub-tenant. In case any action or proceeding is brought against Owner by reason
of any such claim, Tenant, upon written notice from Owner, will, at Tenant's
expense, resist or defend such action or proceeding by counsel approved by Owner
in writing, such approval not to be unreasonably withheld. Landlord shall
indemnify and hold harmless Tenant for any liabilities, obligations, damages,
costs and expenses incurred by Tenant caused by any acts or omissions of gross
negligence on the part of Landlord or its agents.
DESTRUCTION,
FIRE AND OTHER
CASUALTY: 9. (a) If the demised premises or any part thereof shall be
damaged by fire or other casualty, Tenant shall give immediate notice thereof to
Owner and this lease shall continue in full force and effect except as
hereinafter set forth. (b) If the demised premises are partially damaged or
rendered partially unusable by fire or other casualty, the damages thereto shall
be repaired by and at the expense of Owner and the rent and other items of
additional rent, until such repair shall be substantially completed, shall be
apportioned from the day following the casualty according to the part of the
premises which is usable. (c) If the demised premises are totally damaged or
rendered wholly unusable by fire or other casualty, then the rent and other
items of additional rent as hereinafter expressly provided shall be
proportionately paid up to the time of the casualty and thenceforth shall cease
until the date when the premises shall have been repaired and restored by Owner
(or sooner reoccupied in part by Tenant then rent shall be apportioned as
provided in subsection (b) above), subject to Owner's right to elect not to
restore the same as hereinafter provided. (d) If the demised premises are
rendered wholly unusable or (whether or not the demised premises are damaged in
whole or in part) if the building shall be so damaged that Owner shall decide to
demolish it or to rebuild it, then, in any of such events, Owner may elect to
terminate this lease by written notice to Tenant, given within 90 days after
such fire or casualty, or 30 days after adjustment of the insurance claim for
such fire or casualty, whichever is sooner, specifying a date for the expiration
of the lease, which date shall not be more than 60 days after the giving of such
notice, and upon the date specified in such notice the term of this lease shall
expire as fully and completely as if such date were the date set forth above for
the termination of this lease and Tenant shall forthwith quit, surrender and
vacate the premises without prejudice however, to Landlord's rights and remedies
against Tenant under the lease provisions in effect prior to such termination,
and any rent owing shall be paid up to such date and any payments of rent made
by Tenant which were on account of any period subsequent to such date shall be
returned to Tenant. Unless Owner shall serve a termination notice as provided
for herein, Owner shall make the repairs and restorations under the conditions
of (b) and (c) hereof, with all reasonable expedition, subject to delays due to
adjustment of insurance claims, labor troubles and causes beyond Owner's
control. After any such casualty, Tenant shall cooperate with Owner's
restoration by removing from the premises as promptly as reasonably possible,
all of Tenant's salvageable inventory and moveable equipment, furniture, and
other property. Tenant's liability for rent shall resume five (5) days after
written notice from Owner that the premises are substantially ready for Tenant's
occupancy. (e) Nothing contained hereinabove shall relieve Tenant from liability
that may exist as a result of damage from fire or other casualty.
Notwithstanding the foregoing, including Owner's obligation to restore under
subparagraph (b) above, each party shall look first to any insurance in its
favor before making any claim against the other party for recovery for loss or
damage resulting from fire or other casualty, and to the extent that such
insurance is in force and collectible and to the extent permitted by law, Owner
and Tenant each hereby releases and waives all right of recovery with respect to
subparagraphs (b), (d), and (e) above, against the other or any one claiming
through or under each of them by way of subrogation or otherwise. The release
and waiver herein referred to, shall be deemed to include any loss or damage to
the demised premises and/or to any personal property, equipment, trade fixtures,
goods and merchandise located therein. The foregoing release and waiver shall be
in force only if both releasors' insurance policies contain a clause providing
that such a release or waiver shall not-invalidate the insurance. If, and to the
extent, that such waiver can be obtained only by the payment of additional
premiums, then the party benefiting from the waiver shall pay such premium
within ten days after written demand or shall be deemed to have agreed that the
party obtaining insurance coverage shall be free of any further obligation under
the provisions hereof with respect to waiver of subrogation. Tenant acknowledges
that Owner will not carry insurance on Tenant's furniture and/or furnishings or
any fixtures or equipment, improvements, or appurtenances removable by Tenant
and agrees that Owner will not be obligated to repair any damage thereto or
replace the same. (f) Tenant hereby waives the provisions of Section 227 of the
Real Property Law and agrees that the provisions of this article shall govern
and control in lieu thereof.
EMINENT
DOMAIN: 10. If the whole or any part of the demised premises shall be
acquired or condemned by Eminent Domain for any public or quasi public use or
purpose, then and in that event, the term of this lease shall cease and
terminate from the date of title vesting in such proceeding and Tenant shall
have no claim for the value of any unexpired term of said lease and assigns to
Owner, Tenant's entire interest in any such award. Tenant shall have the right
to make an independent claim to the condemning authority for the value of
Tenant's moving expenses and personal property, trade fixtures and equipment,
provided Tenant is entitled pursuant to the terms of the lease to remove such
property, trade fixture and equipment at the end of the term and provided
further such claim does not reduce Owner's award.
ASSIGNMENT,
MORTGAGE,
ETC.: 11. Tenant, for itself, its heirs, distributees, executors,
administrators, legal representative, successor and assigns, expressly covenants
that it shall not assign, mortgage or encumber this agreement, nor underlet, or
suffer or permit the demised premises or any part thereof to be used by others,
without the prior written consent of Owner in each instance. Transfer of the
majority of the stock of a corporate Tenant or the majority partnership interest
of a partnership Tenant shall be deemed an assignment. If this lease be
assigned, or if the demised premises or any part thereof be underlet or occupied
by anybody other than Tenant, Owner may, after default by Tenant beyond the
expiration of applicable notice and cure periods expressly set forth in the
Lease collect rent from the assignee, under-tenant or occupant, and apply the
net amount collected to the rent herein reserved, but no such assignment,
underletting, occupancy or collection shall be deemed a waiver of this covenant,
or the acceptance of the assignee, under-tenant or occupant as tenant, or a
release of Tenant from the further performance by Tenant of covenants on the
part of Tenant herein contained. The consent by Owner to an assignment or
underletting shall not in any way be construed to relieve Tenant from obtaining
the express consent in writing of Owner to any further assignment or
underletting.
ELECTRIC
CURRENT: 12. Rates and conditions in respect to submetering or rent
inclusion, as the case may be, to be added in RIDER * attached hereto. Tenant
covenants and agrees that at all times its use of electric current shall not
exceed the capacity of existing feeders to the building Or the risers or wiring
installation and Tenant may not use any electrical equipment which, in Owner's
opinion, reasonably exercised, will overload such installations or interfere
with the use thereof by other tenants of the building. The change at any time of
the character of electric service shall in no way make Owner liable or
responsible to Tenant, for any loss, damages or expenses which Tenant may
sustain.
ACCESS TO
PREMISES: 13. Owner or Owner's agents shall have the right (but shall
not be obligated) to enter the demised premises in any emergency at any time,
and, at other reasonable times upon reasonable prior notice (written or oral) to
examine the same and to make such repairs, replacements and improvements as
Owner may deem necessary and reasonably desirable to the demised premises or to
any other portion of the building or which Owner may elect or is required to
perform. Tenant shall permit Owner to use and maintain and replace pipes and
conduits in and through the demised premises and to erect new pipes and conduits
therein provided they are concealed within the walls, floor, or ceiling. Owner
may, during the progress of any work in the demised premises, take all necessary
materials and equipment into said premises without the same constituting an
eviction nor shall the Tenant be entitled to any abatement of rent while such
work is in progress nor to any damages by reason of loss or interruption of
business or otherwise. Throughout the term hereof Owner shall have the right to
enter the demised premises at reasonable hours for the purpose of showing the
same to prospective purchasers or mortgagees of the building, and during the
last six months of the term for the purpose of showing the
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same to prospective tenants. If Tenant is not present to open and permit an
entry into the demised premises, Owner or Owner's agents may enter the same
whenever such entry may be necessary or permissible by master key or forcibly
and provided reasonable care is exercised to safeguard Tenant's property, such
entry shall not render Owner or its agents liable therefor, nor in any event
shall the obligations of Tenant hereunder be affected. If during the last month
of the term Tenant shall have removed all or substantially all of Tenant's
property therefrom Owner may immediately enter, alter, renovate or redecorate
the demised premises without limitation or abatement of rent, or incurring
liability to Tenant for any compensation and such act shall have no effect on
this lease or Tenant's obligations hereunder. Landlord represents that it shall
use reasonable efforts not to unreasonably interfere with the conduct of
Tenant's business or access to the Demised Premises in performing the foregoing,
but same shall not cause or require Landlord to incur any overtime expenses.
VAULT,
VAULT SPACE,
AREA: 14. No Vaults, vault space or area, whether or not enclosed or
covered, not within the property line of the building is leased hereunder,
anything contained in or indicated on any sketch, blue print or plan, or
anything contained elsewhere in this lease to the, contrary notwithstanding.
Owner makes no representation as to the location of the property line of the
building. All vaults and vault space and all such areas not within the property
line of the building, which Tenant may be permitted to use and/or occupy, is to
be used and/or occupied under a revocable license, and if any such license be
revoked, or if the amount of such space or area be diminished or required by any
federal, state or municipal authority or public utility, Owner shall not be
subject to any liability nor shall Tenant be entitled to any compensation or
diminution or abatement of rent, nor shall such revocation, diminution or
requisition be deemed constructive or actual eviction. Any tax, fee or charge of
municipal authorities for such vault or area shall be paid by Tenant.
OCCUPANCY: 15. Tenant will not at any time use or occupy the demised
premises in violation of the certificate of occupancy issued for the building of
which the demised premises are a part Tenant has inspected the premises and
accepts them as is, subject to the riders annexed hereto with respect to Owner's
work, if any. In any event, Owner makes no representation as to the condition of
the premises and Tenant agrees to accept the same subject to violations, whether
or not of record.
BANKRUPTCY: 16. (a) Anything elsewhere in this lease to the contrary
notwithstanding, this lease may be cancelled by Owner by the sending of a
written notice to Tenant within a reasonable time after the happening of any one
or more of the following events: (1) the commencement of a case in bankruptcy or
under the laws of any sate naming Tenant as the debtor; or (2) the making by
Tenant of an assignment or any other arrangement for the benefit of creditors
under any state statute. Neither Tenant nor any person claiming through or under
Tenant, or by reason of any statute or order of court, shall thereafter be
entitled to possession of the premises demised but shall forthwith quit and
surrender the premises. If this lease shall be assigned in accordance with its
terms, the provisions of this Article 16 shall be applicable only to the party
then owning Tenant's interest in this lease.
(b) it is stipulated and agreed that in the event of the
termination of this lease pursuant to (a) hereof, Owner shall forthwith,
notwithstanding any other provisions of this lease to the contrary, be entitled
to recover from Tenant as and for liquidated damages an amount equal to the
difference between the rent reserved hereunder for the unexpired portion of the
term demised and the fair and reasonable rental value of the demised premises
for the same period. In the computation of such damages the difference between
any installment of rent becoming due hereunder after the date of termination and
the fair and reasonable rental value of the demised premises for the period for
which such installment was payable shall be discounted to the date of
termination at the rate of four percent (4%) per annum. If such premises or any
part thereof be re-let by the Owner for the unexpired term of said lease, or any
part thereof, before presentation of proof of such liquidated damages to any
coat, commission or tribunal, the amount of rent reserved upon such re-letting
shall be deemed to be the fair and reasonable rental value for the part or the
whole of the premises so re-let during the term of the re-letting. Nothing
herein contained shall limit or prejudice the right of the Owner to prove for
and obtain as liquidated damages by reason of such termination, an amount equal
to the maximum allowed by any statute or rule of law in effect at the time when,
and governing the proceedings in which, such damages are to be proved, whether
or not such amount be greater, equal to, or less than the amount of the
difference referred to above.
DEFAULT: 17. (1) If Tenant default in fulfilling any of the covenants
of this lease other than the covenants for the payment of rent or additional
rent; or if the demised premises become vacant or deserted; or if any execution
or attachment shall be issued against Tenant or any of Tenant's property
whereupon the demised premises shall be taken or occupied by someone other than
Tenant; or if this lease be rejected under ss.235 of Title 11 of the U.S. Code
(bankruptcy code); or if Tenant shall fail to move into or take possession of
the premises within thirty (30) days after the commencement of the term of this
lease, then, in any one or more of such events, upon Owner serving a written
twenty (20) days notice upon Tenant specifying the nature of said default and
upon the expiration of said twenty (20) days, if Tenant shall have failed to
comply with or remedy such default, or if the said default or omission
complained of shall be of a nature that the same cannot be completely cured or
remedied within said twenty (20) day period, and if Tenant shall not have
diligently commenced curing such default within such twenty (20) day period, and
shall not thereafter with reasonable diligence and in good faith, proceed to
remedy or cure such default, then Owner may serve a written five (5) days'
notice of cancellation of this lease upon Tenant, and upon the expiration of
said five (5) days this lease and the term thereunder shall end and expire as
fully and completely as if the expiration of such five (5) day period were the
day herein definitely fixed for the end and expiration of this lease and the
term thereof and Tenant shall then quit and surrender the demised premises to
Owner but Tenant shall remain liable as hereinafter provided.
(2) If the notice provided for in (1) hereof shall have been
given, and the term shall expire as aforesaid; or if Tenant shall make default
in the payment of the rent reserved herein or any item of additional rent herein
mentioned or any part of either or in making any other payment herein required;
then and in any of such events Owner may without notice, re-enter the demised
promises either by force or otherwise, and dispossess Tenant by summary
proceedings or otherwise, and the legal representative of Tenant or other
occupant of demised premises and remove their effects and hold the premises as
if this lease had not been made, and Tenant hereby waives the service of notice
of intention to re-enter or to institute legal proceedings to that end. If
Tenant shall make default hereunder prior to the date fixed as the commencement
of any renewal or extension of this lease, Owner may cancel and terminate such
renewal or extension agreement by written notice.
REMEDIES OF
OWNER AND
WAIVER OF
REDEMPTION: 18. Waiver of In case of any such default, re-entry,
expiration and/or dispossess by summary proceedings or otherwise, (a) the rent
shall become due thereupon and be paid up to the time of such re-entry,
dispossess and/or expiration, (b) Owner may re-let the premises or any part or
parts thereof, either in the name of Owner or otherwise, for a term Or terms,
which may at Owner's option be less than or exceed the period which would
otherwise have constituted the balance of the term of this lease and may grant
concessions or free rent or charge a higher rental than that in this lease,
and/or (c) Tenant. or the legal representatives of Tenant shall also pay Owner
as liquidated damages for the failure of Tenant to observe and perform said
Tenant's covenants herein contained, any deficiency between the rent hereby
reserved and/or covenanted to be paid and the net amount, if any, of the rents
collected on account of the lease or leases of the demised premises for each
month of the period which would otherwise have constituted the balance of the
term of this lease. The failure of Owner to re-let the premises or any part or
parts thereof shall not release or affect Tenant's liability for damages. In
computing such liquidated damages there shall be added to the said deficiency
such expenses as Owner may incur in connection with re-letting, such as legal
expenses, reasonable attorneys' fees, brokerage, advertising and for keeping the
demised premises in good order or for preparing the same for re-letting. Any
such liquidated damages shall be paid in monthly installments by Tenant on the
rent day specified in this lease and any suit brought to collect the amount of
the deficiency for any month shall not prejudice in any way the rights of Owner
to collect the deficiency for any subsequent month by a similar proceeding.
Owner, in putting the demised premises in good order or preparing the same for
re-rental may, at Owner's option, make such alterations, repairs, replacements,
and/or decorations in the demised premises as Owner, in Owner's sole judgement,
considers advisable and necessary for the purpose of re-letting the demised
premises, and the making of such alterations, repairs, replacements, and/or
decorations shall not operate or be construed to release Tenant from liability
hereunder as aforesaid. Owner shall in no event be liable in any way whatsoever
for failure to re-let the demised premises, or in the event that the demised
premises are re-let, for failure to collect the rent thereof under such
re-letting, and in no event shall Tenant be entitled to receive any excess, if
any, of such net rents collected over the sums payable by Tenant to Owner
hereunder. In the event of a breach or threatened breach by Tenant of any of the
covenants or provisions hereof, Owner shall have the right of injunction and the
right to invoke any remedy allowed at law or in equity as if re-entry, summary
proceedings and other remedies were not herein provided for. Mention in this
lease of any particular remedy, shall not preclude Owner from any other remedy,
in law or in equity. Tenant hereby expressly waives any and all rights of
redemption granted by or under any present or future laws in the event of Tenant
being evicted or dispossessed for any cause, or in the event of Owner obtaining
possession of demised premises, by mason of the violation by Tenant of any of
the covenants and conditions of this lease, or otherwise.
FEES AND
EXPENSES: 19. If Tenant shall default in the observance or performance of
any term or covenant on Tenant's part to be observed or performed under or by
virtue of any of the terms or provisions in any article of this lease, after
notice if required and upon expiration of any applicable grace period if any,
(except in an emergency), then, unless otherwise provided elsewhere in this
lease, Owner may immediately or at any time thereafter and without notice
perform the obligation of Tenant thereunder. If Owner, in connection with the
foregoing or in connection with any default by Tenant in the covenant to pay
rent hereunder, makes any expenditures or incurs any obligations for the payment
of money, including but not limited to reasonable attorneys' fees, in
instituting, prosecuting or defending any action or proceeding, and prevails in
any such action or proceeding then Tenant will reimburse Owner for such sums so
paid or obligations incurred with interest and costs. The foregoing expenses
incurred by reason of Tenant's default shall be deemed to be additional rent
hereunder and shall be paid by Tenant to Owner within ten (10) days of rendition
of any bill or statement to Tenant therefor.'If Tenant's lease term shall have
expired at the time of making of such expenditures or incurring of such
obligations, such sums shall be recoverable by Owner, as damages.
BUILDING
ALTERATIONS
AND
MANAGEMENT: 20. Owner shall have the right at any time without the same
constituting an eviction and without incurring liability to Tenant therefor to
change the arrangement and/or location of public entrances, passageways, doors,
doorways, corridors, elevators, stairs, toilets or other public parts of the
building and to change the name, number or designation by which the building may
be known. There shall be no allowance to Tenant for diminution of rental value
and no liability on the part of Owner by reason of inconvenience, annoyance or
injury to business arising from Owner or other Tenants making any repairs in the
building or any such alterations, additions and improvements. Furthermore,
Tenant shall not have any claim against Owner by reason of Owner's imposition of
such controls of the manner of access to the building by Tenant's social or
business visitors as the Owner may deem necessary for the security of the
building and its occupants.
NO REPRE-
SENTATIONS
BY OWNER: 21. Neither Owner nor Owner's agents have made any
representations or promises with respect to the physical condition of the
building, the land upon which it is erected or the demised premises, the rents,
leases, expenses of operation or any other matter or thing affecting or related
to the premises except as herein expressly set forth and no rights, easements or
licenses are acquired by Tenant by implication or otherwise except as expressly
set forth in the provisions of this lease. Tenant has inspected the building and
the demised premises and is thoroughly acquainted with their condition and
agrees to take the same "as is" and acknowledges that the taking of possession
of the demised premises by Tenant shall be conclusive evidence that the said
premises and the building of which the same form a part were in good and
satisfactory condition at the time such possession was so taken, except as to
latent defects. All understandings and agreements heretofore made between the
parties hereto are merged in this contract, which alone fully and completely
expresses the agreement between Owner and Tenant and any executory agreement
Page 3 of 6
<PAGE>
hereafter made shall be ineffective to change, modify, discharge or effect an
abandonment of it in whole or in part, unless such executory agreement is in
writing and signed by the party against whom enforcement of the change,
modification, discharge or abandonment is sought.
END OF
TERM 22. Upon the expiration or other termination of the term of
this lease, Tenant shall quit and surrender to Owner the demised premises, broom
clean, in good order and condition, ordinary wear and damages which Tenant is
not required to repair as provided elsewhere in this lease excepted, and Tenant
shall remove all its property Tenant's obligation to observe or perform this
covenant shall survive the expiration or other termination of this lease. If the
last day of the term of this Lease or any renewal thereof, falls on Sunday, this
lease shall expire at noon on the preceding Saturday unless it be a legal
holiday in which case it shall expire at noon on the preceding business day.
QUIET
ENJOYMENT: 23. Owner covenants and agrees with Tenant that upon Tenant
paying the rent and additional rent and observing and performing all the terms,
covenants and conditions, on Tenant's part to be observed and performed, Tenant
may peaceably and quietly enjoy the premises hereby demised, subject,
nevertheless, to the terms and conditions of this lease including, but not
limited to, Article 31 hereof and to the ground leases, underlying leases and
mortgages hereinbefore mentioned.
FAILURE
TO GIVE
POSSESSION: 24. If Owner is unable to give possession of the demised
premises on the date of the commencement of the term hereof, because of the
holding-over or retention of possession of any tenant, undertenant or occupants
or if the demised premises are located in a building being constructed, because
such building has not been sufficiently completed to make the premises ready for
occupancy or because of the fact that a certificate of occupancy has not been
procured or for any other reason, Owner shall not be subject to any liability
for failure to give possession on said date and the validity of the lease shall
not be impaired under such circumstances, nor shall the same be construed in any
way to extend the term of this lease, but the rent payable hereunder shall be
abated (provided Tenant is not responsible for Owner's inability to obtain
possession or complete construction) until after Owner shall have given Tenant
written notice that the Owner is able to deliver possession in condition
required by this lease. If permission is given to Tenant to enter into the
possession of the demises premises or to occupy premises other than the demised
premises prior to the date specified as the commencement of the term of this
lease, Tenant covenants and agrees that such possession and/or occupancy shall
be deemed to be under all the terms, covenants, conditions and provisions of
this lease except the obligation to pay the fixed annual rent set forth in the
preamble to this lease, The provisions of this article are intended to
constitute "an express provision to the contrary" within the meaning of Section
223-a of the New York Real Property Law.
NO WAIVER: 25. The failure of Owner to seek redress for violation of, or
to insist upon the strict performance of any covenant or condition of this lease
or of any of the Rules or Regulations, set forth or hereafter adopted by Owner,
shall not prevent a subsequent act which would have originally constituted a
violation from having all the force and effect of an original violation. The
receipt, by Owner of rent and/or additional rent with knowledge of the breach of
any covenant of this lease shall not be deemed a waiver of such breach and no
provision of this lease shall be deemed to have been waived by Owner unless such
waiver be in writing signed by Owner. No payment by Tenant or receipt by Owner
of a lesser amount than the monthly rent herein stipulated shall be deemed to be
other than on account of the earliest stipulated rent, nor shall any endorsement
or statement of any check or any letter accompanying any check or payment as
rent be deemed an accord end satisfaction, and Owner may accept such check or
payment without prejudice to Owner's right to recover the balance of such rent
or pursue any other remedy in this lease provided. No act or thing done by Owner
or Owner's agents during the term hereby demised shall be deemed an acceptance
of a surrender of said premises, and no agreement to accept such surrender shall
be valid unless in writing signed by Owner. No employee of Owner or Owner's
agent shall have any power to accept the keys of said premises prior to the
termination of the lease and the delivery of keys to any such agent or employee
shall not operate as a termination of the lease or a surrender of the premises.
WAIVER OF
TRIAL BY JURY: 26. It is mutually agreed by and between Owner and Tenant that
the respective parties hereto shall and they hereby do waive trial by jury in
any action proceeding or counterclaim brought by either of the parties hereto
against the other (except for personal injury or property damage) on any matters
whatsoever arising out of or in any way connected with this lease, the
relationship of Owner and Tenant, Tenant's use of or occupancy of said premises,
and any emergency statutory or any other statutory remedy. It is further
mutually agreed that in the event Owner commences any proceeding or action for
possession including a summary proceeding for possession of the premises, Tenant
will not interpose any counterclaim of whatever nature or description in any
such proceeding including a counterclaim under Article 4 except for statutory
mandatory counterclaims.
INABILITY TO
PERFORM: 27. This Lease and the obligation of Tenant to pay rent
hereunder and perform all of the other covenants and agreements hereunder on
part of Tenant to be performed shall in no way be affected, impaired or excused
because Owner is unable to fulfill any of its obligations under this lease or to
supply or is delayed in supplying any service expressly or impliedly to be
supplied or is unable to make, or is delayed in making any repair, additions,
alterations or decorations or is unable to supply or is delayed in supplying any
equipment, fixtures, or other materials if Owner is prevented or delayed from so
doing by reason of strike or labor troubles or any cause whatsoever including,
but not limited to, government preemption or restrictions or by reason of any
rule, order or regulation of any department or subdivision thereof of any
government agency or by reason of the conditions which have been or are
affected, either directly or indirectly, by war or other emergency.
BILLS AND
NOTICES: 28. Except as otherwise in this lease provided, a bill,
statement, notice or communication which Owner may desire or be required to give
to Tenant, shall be deemed sufficiently given or rendered if, in writing,
delivered to Tenant personally or sent by registered or certified mail addressed
to Tenant at the building of which the demised premises form a part or at the
last known residence address or business address of Tenant or left at any of the
aforesaid premises addressed to Tenant with copies to:
Intraware, Inc.
25 Orinda Way
Orinda, California 94563
Attn: Don Freed
Executive Vice-President
Chief Financial Officer -and-
Intraware, Inc.
25 Orinda Way
Orinda, California 94563
Attn: John Moss, Esq.
General Counsel
and time of the rendition of such bill or statement and of the giving of such
notice or communication shall be deemed to be the time when the same is
delivered to Tenant, mailed, or left at the premises as herein provided. Any
notice by Tenant to Owner must be served by registered or certified mail
addressed to Owner at the address first hereinabove given or at such other
address as Owner shall designate by written notice.
SERVICES PROVIDED BY OWNERS: 29. As long as Tenant is not in
default under any of the covenants of this lease beyond the expiration of
applicable notice and cure periods expressly set forth in the Lease, Owner
shall provide: (a) necessary elevator facilities on business days from 8 a.m.
to 6 p.m. and have one elevator subject to call at all other times; (b) heat
to the demised premises when and as required by law, on business days from 8
a.m. to 6 p.m.; (c) water for ordinary lavatory purposes, but if Tenant uses
or consumes water for any other purposes or in unusual quantities (of which
fact Owner shall be the sole judge), Owner may install a water meter at
Tenant's expense which Tenant shall thereafter maintain at Tenant's expense
in good working order and repair to register such water consumption and
Tenant shall pay for water consumed as shown on said meter as additional rent
as and when bills are rendered; (d) cleaning service for the demised premises
on business days at Owner's expense provided that the same are kept in order
by Tenant. If, however, said premises are to be kept clean by Tenant, it
shall be done at Tenant's sole expense, in a manner reasonably satisfactory
to Owner and no one other than persons approved by Owner shall be permitted
to enter said premises or the building of which they are a part for such
purpose. Tenant shall pay Owner the Cost of removal of any of Tenant's refuse
and rubbish from the building; (e) If the demised premises are serviced by
Owner's air conditioning/cooling and ventilating system, air
conditioning/cooling will be furnished to tenant from May 15th through
September 30th on business days (Mondays through Fridays, holidays excepted)
from 8:00 a.m. to 6:00 p.m., and ventilation will be furnished on business
days during the aforesaid hours except when air conditioning/cooling is being
furnished as aforesaid. If Tenant requires air conditioning/cooling or
ventilation for more extended hours or on Saturdays, Sundays or on holidays,
as defined under Owner's contract with Operating Engineers Local 94-94A,
Owner will furnish the same at Tenant's expense. RIDER * to be added in
respect to rates and conditions for such additional service; (f) Owner
reserves the right to stop services of the heating, elevators, plumbing,
air-conditioning, electric, power systems or cleaning or other services, if
any, when necessary by reason of accident or for repairs, alterations,
replacements or improvements necessary or desirable in the judgment of Owner
for as long as may be reasonably required by reason thereof. If the building
of which the demised premises are a part supplies manually operated elevator
service, Owner at any time may substitute automatic control elevator service
and proceed diligently with alterations necessary therefor without in any way
affecting this lease or the obligation of Tenant hereunder.
CAPTIONS: 30. The Captions are inserted only as a matter of convenience
and for reference and in no way define, limit or describe the scope of this
lease nor the intent of any provisions thereof.
DEFINITIONS: 31. The term "office", or "offices", wherever used in this
lease, shall not be construed to mean premises used as a store or stores, for
the sale or display, at any time, of goods, wares or merchandise, of any kind,
or as a restaurant, shop, booth, bootblack or other stand, barber shop, or for
other similar purposes or for manufacturing. The term "Owner" means a landlord
or lessor, and as used in this lease means only the owner, or the mortgagee in
possession, for the time being of the land and building (or the owner of a lease
of the building or of the land and building) of which the demised premises form
a part, so that in the event of any sale or sales of said land and building or
of said lease, or in the event of a lease of said building, or of the land and
building, the said Owner shall be and hereby is entirely freed and relieved of
all covenants and obligations of Owner hereunder, and it shall be deemed and
construed without further agreement between the parties or their successors in
interest, or between the parties and the purchaser, at any such sale, or the
said lessee of the building, or of the land and building, that the purchaser or
the lessee of the building has assumed and agreed to carry out any and all
covenants and obligations of Owner, hereunder. The words "re-enter" and
"re-entry" as used in this lease are not restricted to their technical legal
meaning. The term "business days" as used in this lease shall exclude Saturdays,
Sundays and all days as observed by the State or Federal Government as legal
holidays and those designated as holidays by the applicable building service
union employees service contract or by the applicable Operating Engineers
contract with respect to HVAC service. Wherever it is expressly provided in this
lease that consent shall not be unreasonably withheld, such consent shall not be
unreasonably delayed.
ADJACENT
EXCAVATION-
SHORING: 32. If an excavation shall be made upon land adjacent to the
demised premises, or shall be authorized to be made, Tenant shall afford to the
person causing or authorized to cause such excavation, license to enter upon the
demised premises for the purpose of doing such work as said person shall deem
necessary to preserve the wall or the building of which demised premises form a
part from injury or damage and to support the same by proper foundations without
any claim for damages or indemnity against Owner, or diminution or abatement of
rent.
RULES AND
REGULATIONS: 33. Tenant and Tenant's servants, employees, agents, visitors,
and licensees shall observe faithfully, and comply strictly with, the Rules and
Regulations and such other and further reasonable Rules and Regulations as Owner
or Owner's agents may from time to time adopt so long as same is not
discriminatory or contradictory to the Lease. Notice of any additional rules or
regulations shall be given in such manner as Owner may elect. In case Tenant
disputes the reasonableness of any additional Rule or Regulation hereafter made
or adopted by Owner or Owner's agents, the parties hereto agree to submit the
question of the reasonableness of such Rule or Regulation for decision to the
New York office of the American Arbitration Association, whose determination
shall be final and conclusive upon the parties hereto. The right to dispute the
reasonableness of any additional Rule or Regulation upon Tenant's part shall be
deemed waived unless the same shall be asserted by service of a notice, in
writing upon Owner within fifteen (15) days after the giving of notice thereof.
Nothing
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<PAGE>
in this lease contained shall be construed to impose upon Owner any duty or
obligation to enforce the Rules and Regulations or terms, covenants or
conditions in any other lease, as against any other tenant and Owner shall not
be liable to Tenant for violation of the same by any other tenant, its servants,
employees, agents, visitors or licensees.
SECURITY: 34. Tenant has deposited with Owner the sum of $80,000.00 as
security for the faithful performance and observance by Tenant of the terms,
provisions and conditions of this lease; it is agreed that in the event Tenant
defaults in respect of any of the terms, provisions and conditions of this
lease, including, but not limited to, the payment of rent and additional rent
beyond the expiration of applicable notice and cure periods expressly set forth
in the Lease, Owner may use, apply or retain the whole or any part of the
security so deposited to the extent required for the payment of any rent and
additional rent or any other sum as to which Tenant is in default or for any sum
which Owner may expend or may be required to expend by reason of Tenant's
default in respect of any of the terms, covenants and conditions of this lease,
including but not limited to, any damages or deficiency in the re-letting of the
premises, whether such damages or deficiency accrued before or after summary
proceedings or other re-entry by Owner. In the event that Tenant shall fully and
faithfully comply with all of the terms, provisions, covenants and conditions of
this lease, the security ,shall be returned to Tenant within thirty (30) days
after the date fixed as the end of the Lease and after delivery of entire
possession of the demised premises to Owner. In the event of a sale of the land
and building or leasing of the building, of which the demised premises form a
part, Owner shall have the right to transfer the security to the vendee or
lessee and only upon such transfer Owner shall thereupon be released by Tenant
from all liability for the return of such security; and Tenant agrees to look to
the new Owner solely for the return of said security, and it is agreed that the
provisions hereof shall apply to every transfer or assignment made of the
security to a new Owner. Tenant further covenants that it will not assign or
encumber or attempt to assign or encumber the monies deposited herein as
security and that neither Owner nor its successors or assigns shall be bound by
any such assignment, encumbrance, attempted assignment or attempted encumbrance.
ESTOPPEL
CERTIFICATE: 35. Tenant, at any time, and from time to time. upon at least
10 days' prior notice by Owner, shall execute, acknowledge and deliver to Owner,
and/or to any other person, firm or corporation specified by Owner, a statement
certifying that this Lease is unmodified and in full force and effect (or, if
there have been modifications, that the same is in full force and effect as
modified and stating the modifications), stating the dates to which the rent and
additional rent have been paid, and stating whether or not there exists any
default by Owner under this Lease, and, if so, specifying each such default.
SUCCESSORS
AND ASSIGNS: 36. The covenants, conditions and agreements contained in this
lease shall bind and inure to the benefit of Owner and Tenant and their
respective heirs, distributees, executors, administrators, successors, and
except as otherwise provided in this lease, their assigns. Tenant shall look
only to Owner's estate and interest in the land and building, for the
satisfaction of Tenant's remedies for the collection of a judgment (or other
judicial process) against Owner in the event of any default by Owner hereunder,
and no other property or assets of such Owner (or any partner, member, officer
or director thereof, disclosed or undisclosed), shall be subject to levy.
execution or other enforcement procedure for the satisfaction of Tenant's
remedies under or with respect to this lease, the relationship of Owner and
Tenant hereunder, or Tenant's use and occupancy of the demised premises.
SEE RIDER ANNEXED HERETO AND MADE A PART HEREOF
IN WITNESS WHEREOF, Owner and Tenant have respectively signed and sealed this
lease as of the day and year first above written.
LANDLORD
CROWN LEXINGTON LLC
Witness for Owner:
By: Crown 360 Associates, L.P., Member
By: Crown 360 Corp., General Partner
By: /s/ Davar Rad
-------------------------------------
Davar Rad, President
Witness for Tenant:
/s/ Donna Bull TENANT
- ------------------------------- INTRAWARE, INC.
By:
-------------------------------------
ACKNOWLEDGEMENTS
CORPORATE OWNER
STATE OF NEW YORK, SS.:
County of
On this day of ,19 ,
before me personally came ,
to me known, who being by me duly sworn, did depose and say
that he
resides in ;
that he is the of
the corporation described in and which executed the
foregoing instrument, as OWNER; that he knows the seal
of said corporation; the seal affixed to said instrument
is such corporate seal; that it was so affixed by order
of the Board of Directors of said corporation, and that
he signed his name thereto by like order.
-------------------------------------
INDIVIDUAL OWNER
STATE OF NEW YORK, SS.:
County of
On this day of ,19 ,
before me personally came
to be known and known to me to be the individual
described in and who, as OWNER, executed the foregoing
instrument and acknowledged to me that he
executed the same.
-------------------------------------
CORPORATE TENANT
STATE OF NEW YORK, SS.:
COUNTY OF
On this day of ,19 ,
before me personally came ,
to me known, who being by me duly sworn, did depose and
say that resides in ;
in that he is the of
the corporation described in and which executed the
foregoing instrument, as TENANT; that he knows the
seal of said corporation; the seal affixed to said
instrument is such corporate seal; that it was so
affixed by order of the Board of Directors of said
corporation, and that he signed his name thereto by
like order.
-------------------------------------
INDIVIDUAL TENANT
STATE OF NEW YORK, SS.:
County of
On this day of ,19
before me personally came
to be known and known to me to be the individual
described in and who, as TENANT, executed the foregoing
instrument and acknowledged to me that he
executed the same.
-------------------------------------
Page 5 of 6
<PAGE>
GUARANTY
FOR VALUE RECEIVED, and in consideration for, and as an inducement to
Owner making the within lease with Tenant, the undersigned guarantees to Owner,
Owner's successors and assigns, the full performance and observance of all the
covenants, conditions and agreements, therein provided to be performed and
observed by Tenant, including the "Rules and Regulations" as therein provided,
without requiring any notice of non-payment, non-performance, or non-observance,
or proof, or notice, or demand, whereby to charge the undersigned therefor, all
of which the undersigned hereby expressly waives and expressly agrees that the
validity of this agreement and the obligations of the guarantor hereunder shall
in no way be terminated, affected or impaired by reason of the assertion by
Owner against Tenant any of the rights or remedies reserved to Owner pursuant to
the provisions of the within lease. The undersigned further covenants and agrees
that this guaranty shall remain and continue in full force and effect as to any
renewal, modification or extension of this lease and during any period when
Tenant is occupying the premises as a "statutory tenant." As a further
inducement to Owner to make this lease and in consideration thereof, Owner and
the undersigned covenant and agree that in any action or proceeding brought by
either Owner or the undersigned against the other on any matters whatsoever
arising out of, under, or by virtue of the terms of this lease or of this
guarantee that Owner and the undersigned shall and do hereby waive trial by
jury.
Dated: 19
------------------------------------------------ -----
- -----------------------------------------------------
Guarantor
- -----------------------------------------------------
Witness
- -----------------------------------------------------
Guarantor's Residence
- -----------------------------------------------------
Business Address
- -----------------------------------------------------
Firm Name
STATE OF NEW YORK ) ss.:
COUNTY OF )
On this day of ,19 , before me
personally came________________________________ to me known and known to me to
be the individual described in, and who executed the foregoing Guaranty and
acknowledged to me that he executed the same.
------------------------------
Notary
IMPORTANT - PLEASE READ
RULES AND REGULATIONS ATTACHED TO AND
MADE A PART OF THIS LEASE
IN ACCORDANCE WITH ARTICLE 33.
1. The sidewalks, entrances, driveways, passages, courts, elevators, vestibules,
stairways, corridors or halls shall not be obstructed or encumbered by any
Tenant or used for any purpose other than for ingress or egress from the demised
premises and for delivery of merchandise and equipment in a prompt and efficient
manner using elevators and passageways designated for such delivery by Owner.
There shall not be used in any space, or in the public hall of the building
either by any Tenant or by jobbers or others in the delivery or receipt of
merchandise, any hand trucks, except those equipped with rubber tires and
sideguards. If said premises are situated on the ground floor of the building,
Tenant thereof shall further, at Tenant's expense, keep the sidewalk and curb in
front of said premises clean and free from ice, snow, dirt and rubbish.
2. The water and wash closets and plumbing fixtures shall not be used for any
purposes other than those for which they were designed or constructed and no
sweepings, rubbish, rags, acids or other substances shall be deposited therein,
and the expense of any breakage, stoppage, or damage resulting from the
violation of this rule shall be borne by the Tenant who, or whose clerks,
agents, employees or visitors, shall have caused it.
3. No carpet, rug or other article shall be hung or shaken out of any window of
the building and no Tenant shall sweep or throw or permit to be swept or thrown
from the demised premises any dirt or other substances into any of the corridors
or halls, elevators, or out of the doors or windows or stairways of the building
and Tenant shall not use, keep or permit to be used or kept any foul or noxious
gas or substance in the demised premises, or permit or suffer the demised
premises to be occupied or used in a manner offensive or objectionable to Owner
or other occupants of the building by reason of noise, odors, and/or vibrations,
or interfere in any way with other Tenants or those having business therein, nor
shall any bicycles, vehicles, animals, fish, or birds be kept in or about the
building. Smoking or carrying lighted cigars or cigarettes in the elevators of
the building is prohibited.
4. No awnings or other projections shall be attached to the outside walls of the
building without the prior written consent of Owner.
5. No sign, advertisement, notice or other lettering shall be exhibited,
inscribed, painted or affixed by any Tenant on any part of the outside of the
demised premises or the building or on the inside of the demised premise if the
same is visible from the outside of the premises without prior written consent
of Owner, except that the name of Tenant may appear on the entrance door of the
premises. In the event of the violation of the foregoing by any Tenant, Owner
may remove same without any liability, and may charge the expense incurred by
such removal to Tenant or Tenants violating this rule. Interior signs on doors
and directory tablet shall inscribed, painted or affixed for each Tenant by
Owner at the expense of such Tenant, and shall be of a size, color and style
acceptable to Owner.
6. No Tenant shall mark, paint, drill into, or in any way deface any part of the
demised premises or the building of which they form a part. No boring, cutting
or stringing of wires shall be permitted, except with the prior written consent
of Owner, and as Owner may direct. No Tenant shall lay linoleum, or other
similar floor covering, so that the same shall come in direct contact with the
floor of the demised premises, and, if linoleum or other similar floor covering
is desired to be used an interlining of builder's deadening felt shall be first
affixed to the floor, by a paste or other material, soluble in water, the use of
cement or other similar adhesive material being expressly prohibited.
7. No additional locks or bolts of any kind shall be placed upon any of the
doors or windows by any Tenant, nor shall any changes be made in existing locks
or mechanism thereof. Each Tenant must, upon the termination of his Tenancy,
restore to Owner all keys of stores, offices and toilet rooms, either furnished
to, or otherwise procured by, such Tenant, and in the event of the loss of any
keys, so furnished, such Tenant shall pay to Owner the cost thereof.
8. Freight, furniture, business equipment, merchandise and bulky matter of any
description shall be delivered to and removed from the premises only on the
freight elevators and through the service entrances and corridors, and only
during hours and in a manner approved by Owner. Owner reserves the right to
inspect all freight to be brought into the building and to exclude from the
building all freight which violates any of these Rules and Regulations of the
lease or which these Rules and Regulations are a part.
9. Canvassing, soliciting and peddling in the building is prohibited and each
Tenant shall cooperate to prevent the same.
10. Owner reserves the right to exclude from the building all persons who do not
present a pass to the building signed by Owner. Owner will furnish passes to
persons for whom any Tenant requests same in writing. Each Tenant shall be
responsible for all persons for whom he requests such pass and shall be liable
to Owner for all acts of such persons. Tenant shall not have a claim against
Owner by reason of Owner excluding from the building any person who does not
present such pass.
11. Owner shall have the right to prohibit any advertising by any Tenant which
in Owner's opinion, tends to impair the reputation of the building or its
desirability as a building for offices, and upon written notice from Owner,
Tenant shall refrain from or discontinue such advertising.
12. Tenant shall not bring or permit to be brought or kept in or on the demised
premises, any inflammable, combustible, explosive, or hazardous fluid, material,
chemical or substance, or cause or permit any odors of cooking or other
processes, or any unusual or other objectionable odors to permeate in or emanate
from the demised premises.
13. If the building contains central air conditioning and ventilation, Tenant
agrees to keep all windows closed at all times and to abide by all rules and
regulations issued by Owner with respect to such services. If Tenant requires
air conditioning or ventilation after the usual hours, Tenant shall give notice
in writing to the building superintendent prior to 3:00 p.m. in the case of
services required on week days, and prior to 3:00 p.m. on the day prior in case
of after hours service required on weekends or on holidays. Tenant shall
cooperate with Owner in obtaining maximum effectiveness of the cooling system by
lowering and closing venetian blinds and/or drapes and curtains when the sun's
rays fall directly on the windows of the demised premises.
14. Tenant shall not move any safe, heavy machinery, heavy equipment, bulky
matter, or fixtures into or out of the building without Owner's prior written
consent. If such safe, machinery, equipment, bulky matter or fixtures requires
special handling, all work in connection therewith shall comply with the
Administrative Code of the City of New York and all other laws and regulations
applicable thereto and shall be done during such hours as Owner may designate.
15. Refuse and Trash. (1) Compliance by Tenant. Tenant covenants and agrees, at
its sole cost and expense, to comply with all present and future laws, orders,
and regulations of all state, federal municipal, and local governments,
departments, commissions and boards regarding the collection, sorting,
separation and recycling of waste products, garbage, refuse and trash. Tenant
shall sort and separate such waste products, garbage, refuse and trash into such
categories as provided by law. Each separately sorted category of waste
products, garbage, refuse and trash shall be placed in separate receptacles
reasonably approved by Owner. Such separate receptacles may, at Owner's option,
be removed from the demised premises in accordance with a collection schedule
prescribed by law. Tenant shall remove, or cause to be removed by a contractor
acceptable to Owner, at Owner's sole discretion, such items as Owner may
expressly designate. (2) Owner's Rights in Event of Noncompliance. Owner has the
option to refuse to collect or accept from Tenant waste products, garbage,
refuse or trash (a) that is not separated and sorted as required by law or (b)
which consists of such items as Owner may expressly designate for Tenant's
removal, and to require Tenant to arrange for such collection at Tenant's sole
cost and expense, utilizing a contractor satisfactory to Owner. Tenant shall pay
all costs, expenses, fines, penalties, or damages that may be imposed on Owner
or Tenant by reason of Tenant's failure to comply with the provisions of this
Building Rule 15, and, at Tenant's sole cost and expense, shall indemnify,
defend and hold Owner harmless (including reasonable legal fees and expenses)
from and against any actions, claims and suits arising from such noncompliance,
utilizing counsel reasonably satisfactory to Owner.
Address
Premises
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TO
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STANDARD FORM OF
OFFICE
LEASE
THE REAL ESTATE BOARD OF NEW YORK, INC.
-C- Copyright 1994. All rights Reserved.
Reproduction in whole or in part
prohibited.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated October 1999
Rent Per Year $160,000.00
Rent Per Month $13,333.33
Term
From
To
Drawn by KRISS & FEIT, PC
----------------------------
Checked by
--------------------------
Entered by
--------------------------
Approved by
-------------------------
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Page 6 of 6
<PAGE>
ADDITIONAL CLAUSES ATTACHED TO AND FORMING A PART OF LEASE
DATED NOVEMBER , 1999 BETWEEN CROWN LEXINGTON LLC, AS
LANDLORD, AND INTRAWARE, INC., AS TENANT
------------------------------------------------------------
IN THE EVENT OF ANY INCONSISTENCIES BETWEEN THE PROVISIONS OF
THIS RIDER AND THE PREPRINTED FORM LEASE TO WHICH IT IS ATTACHED, THE PROVISIONS
OF THIS RIDER SHALL CONTROL.
37. DEMISED PREMISES ACCEPTED AS-IS: POSSESSION: Tenant acknowledges that
neither Landlord nor Landlord's agent has made any representations or
promises with regard to the Demised Premises for the term herein demised.
Tenant acknowledges that Tenant has inspected the Demised Premises and agrees
to accept same "as is" and that Landlord shall not be obligated to make any
repairs, alterations, improvements or additions to prepare said Demised
Premises for Tenant's occupancy whatsoever, except that Landlord has agreed
to perform Landlord's Work (as such term is hereinafter defined). Landlord
represent s and warrants that it shall use reasonable efforts upon delivery
to Tenant of the Demised Premises, to conform the Demised Premises with all
applicable codes and laws. Any violations that encumber the Demised Premises
prior to the Commencement Date (as defined hereinbelow) shall not be the
responsibility of Tenant.
38. USE:
(A) Subject to and in accordance with the roles, regulations,
laws, ordinances, statutory limitations and requirements of all governmental
authorities and the fire insurance rating organization and board of fire
underwriters and any similar bodies having jurisdiction thereof, Tenant
covenants and agrees that it shall use the Demised Premises solely for general
and executive offices, and for no other purpose.
(B) Tenant agrees that (i) Landlord shall have the right to
prohibit the continued use by Tenant of any method of operation, advertising or
interior display which shall be in violation of the use permitted herein. Tenant
will not encumber or obstruct or permit to be encumbered or obstructed any
hallway, service elevator, stairway or passageway in the Building.
(C) Tenant acknowledges that the Demised Premises are located
in a first-class commercial building, that the provisions of this Article 38 are
a material inducement to the Landlord for the execution of this Lease and that a
default by Tenant hereunder shall be deemed a material default by Tenant
hereunder shall be deemed a material default entitling Landlord to exercise any
or all of the remedies provided in this Lease.
39. RENTAL: The payments reserved under this Lease for the term hereof shall be
and consist of the aggregate of:
(A) "Minimum Rent" during the term of the Lease shall be as
follows:
<TABLE>
<CAPTION>
Lease Year Annual Rental Monthly Rental
---------- ------------- --------------
<S> <C> <C>
1-5 $160,000.00 $ 13,333.33
</TABLE>
The first "Lease Year" of this Lease shall commence the
commencement date of this Lease (the "Commencement Date"),which shall be the
date on which the Landlord delivers possession of the Demised Premises to Tenant
with Landlord's Work substantially complete, and shall end with the expiration
of the next succeeding twelve (12) months, plus the number of days, if any,
required to have the period end at the expiration of the calendar month, and
each succeeding "Lease Year" shall run concurrently with each succeeding period
of twelve (12) calendar months.
<PAGE>
Landlord agrees to use commercially reasonable efforts to
deliver possession of the Demised Premises to Tenant by March 1, 2000 (the
"Delivery Date"), but Landlord shall not be liable or responsible for any
claims, damages or liabilities by reason of any delay in delivery of possession
of the Demised Premises to Tenant, nor shall the obligations of Tenant hereunder
be affected. Provided, however, that if Landlord is unable to deliver possession
of the Demised Premises to Tenant by the Delivery Date, then in such event
Tenant shall have the right to cancel this Lease upon delivering a ten (10)
written notice to Landlord given by certified mail, return receipt requested
(the "Notice of Cancellation") unless the Delivery Date shall occur within such
10-day period, in which case the Notice of Cancellation shall be deemed
withdrawn, null and void and of no force and effect. If the Delivery Date does
not occur within such 10-day period, the Lease shall be terminated and the
parties shall have no further rights and obligations under the Lease.
Notwithstanding anything to the contrary contained herein, the parties agree
that Tenant's right to cancel as aforesaid shall only be effective on the
condition that this Lease was executed and delivered by Tenant to Landlord
(together with the payment by Tenant to Landlord of the Minimum Rent and
Security Deposit required hereunder) on or prior to December 1, 1999.
Tenant shall, within five (5) days of written request made by
Landlord to Tenant, execute the certificate annexed hereto as Exhibit "C"
certifying the exact date of substantial completion by Landlord of Landlord's
Work in the Demised Premises (the "Landlord's Work Certificate") and such date
shall be deemed conclusive for purposes of this Article. The failure by Tenant
to so execute the Landlord's Work Certificate in good faith by the date so
specified above shall constitute a material default by Tenant under this Lease.
Tenant's obligation to pay Minimum Rent shall commence thirty
(30) calendar days after the Commencement Date (the "Rent Commencement Date").
The expiration date of this Lease and the end of the term of
this Lease shall be five (5) years following the last day of the month in which
the day next preceding the Rein Commencement Date occurs (the "Expiration
Date").
Minimum Rent shall be payable in advance, on the first (1st)
day of each calendar month.
(B) "Additional Rein", consisting of all such other sums of
money as shall become due from and payable by Tenant to Landlord or any other
party hereunder (for default in payment of which Landlord shall have the same
remedies as a default in payment of Minimum Rent).
(C) The obligation of Tenant to pay all sums of Additional
Rent (including, without limitation, Electricity charges as are described in
Article 41 of this Lease) to Landlord or others shall commence on the
Commencement Date of the Lease and there shall be no abatement whatsoever of the
obligation of Tenant to pay all sums of Additional Rent during any period or
part of any Lease Year during the term of the Lease.
40. TENANT'S INSTALLATIONS: Except for that certain work which Landlord has
agreed to perform in the Demised Premises as expressly described in Exhibit "B"
annexed hereto and made a part hereof (collectively, the "Landlord's Work"), all
other work necessary or desirable to make the Demised Premises suitable for
Tenant's use and occupancy shall be performed by Tenant at Tenant's own cost and
expense (hereinafter called "Tenant's Work"). Tenant's Work to be performed by
Tenant in the Demised Premises shall be subject to the following conditions:
(A) Tenant shall comply with all of the laws, orders, roles
and regulations of all governmental authorities, and of the fire insurance
rating organization having jurisdiction thereof, and the local board of fire
underwriters, or any similar body, and Tenant shall procure and pay for, so far
as the same may be required, all governmental permits and authorizations;
(B) Prior to commencing Tenant's Work, all plans and
specifications therefor shall be submitted to Landlord for Landlord's prior
written approval said approval not to be unreasonably withheld as to
nonstructural work and shall be granted or denied within fifteen (15) business
days after submission of all final plans and drawings to Landlord;
2
<PAGE>
(C) Tenant's Work shall be prosecuted (i) with reasonable
dispatch, (ii) in accordance with the plans and specifications submitted to, and
approved in writing by, Landlord pursuant to subparagraph (B) hereof and (iii)
only with the use of new materials and supplies of quality equal to or greater
than used by Landlord;
(D) Tenant shall make all necessary payments required so that
the Demised Premises and Building shall upon completion of Tenant's Work be free
of liens for labor and materials supplied in connection with Tenant's Work;
(E) Prior to commencing Tenant's Work, Tenant shall at its own
cost and expense deliver to Landlord an endorsement of its policy of
comprehensive general liability insurance referred to in Article 46 of this
Lease, covering the risk during the course of performance of Tenant's Work,
together with proof of payment of such endorsement, which policy as endorsed
shall protect Landlord in the same amounts against any claims or liability
arising out of Tenant's Work, and Tenant or Tenant's contractors shall obtain
workmen's compensation insurance to cover all persons engaged in Tenant's Work;
(F) Tenant guarantees to Landlord that Tenant's Work shall be
promptly completed and paid for, and upon completion the Demised Premises and
the Building shall be free and clear of all liens, encumbrances, chattel
mortgages, conditional bills of sale and other charges, and Tenant's Work shall
be substantially completed in accordance with the plans and specifications
approved by Landlord; and
(G) Notwithstanding anything herein contained to the contrary,
Tenant shall make all repairs to the Demised Premises necessitated by Tenant's
Work permitted hereunder, and shall keep and maintain in good order and
condition all of the installations in connection with Tenant's Work, and shall
make all necessary replacements thereto.
(H) All of Tenant's Work shall be done in such a manner so as
not to materially interfere with, delay, or impose any additional expense upon
Landlord in the maintenance or operation of the Building. In no event shall
Landlord be required to consent to any of Tenant's Work which would physically
affect any part of the Building outside of the Demised Premises or would, in
Landlord's sole judgment, adversely affect the proper functioning of any of the
mechanical, electrical, sanitary or other systems of the Building. The approval
by Landlord of any of Tenant's plans and specifications shall not constitute an
assumption of any liability on the part of the Landlord for their accuracy or
their conformity which applicable law, and Tenant shall be solely responsible
therefor. Approval by Landlord of any Tenant's plans and specifications shall
not constitute a waiver by Landlord of the right to thereafter require Tenant to
amend same to provide for omissions therein later discovered by Landlord.
41. ELECTRICITY:
(A) For so long as Tenant shall not be in default hereunder
beyond the expiration of applicable notice and cure periods expressly set forth
in the Lease, Landlord will provide electricity to Tenant on a "rent inclusion"
basis. The Minimum Rent set forth in Article 39 does not presently include any
charges for electricity usage. The Minimum Rent regularly paid by Tenant in
Article 39 of this Lease is herein increased by the sum of $2.75 per rentable
square foot of the Demised Premises ($11,000.00 per annum payable monthly,
commencing on the Commencement Date, on the first day of every month during the
term of this Lease at the rate of $916.67 per month) as the cost for Tenant's
usage of electricity. The $2.75 per square foot rate is the estimate of
providing Tenant with electricity to service the needs of a office tenant
utilizing equipment as set forth in Article 41 (B) hereof. Landlord shall have
the right to conduct a survey of Tenants actual electrical usage and increase
the electric charge if the survey indicates the Tenant's usage of electricity
exceeds the cost so $2.75 per square foot.
(B) Landlord shall not in any way be liable or responsible to
Tenant for any loss or damage or expense which Tenant may sustain or incur if
either the quantity or character of electric service is changed or is no longer
available or suitable for Tenant's requirements. Tenant's use of electric
current in the Demised Premises shall not at any time exceed the capacity of any
of the
3
<PAGE>
electrical conductors and facilities in or otherwise serving the Demised
Premises. In order to insure that such capacity is not exceeded and to avert any
possible adverse effect upon the Building's electric service, Tenant shall not,
without Landlord's prior written consent in each instance, connect any fixtures,
appliances or equipment (other than a reasonable number of table or floor lamps,
typewriters, word processors, small computers, photocopy machines and similar
small office machines using comparable electric current) to the Building's
electric distribution system nor make any alteration or addition to the electric
system of the Demised Premises. Should Landlord grant such consent, all
additional risers or other equipment required therefor shall be provided by
Landlord upon notice to Tenant, and all costs and expenses in connection
therewith, including, without limitation, those for filing and supervision,
shall be paid by Tenant. As a condition to granting such consent, Landlord may
require Tenant to agree to an increase in the Additional Rent by an amount which
will reflect the value to Tenant of the additional service to be furnished by
Landlord, to wit: the potential additional electrical current to be made
available to Tenant based upon the estimated initial total capacity of such
additional risers or other equipment. If Landlord and Tenant cannot agree on the
amount of such Additional Rent increase, the same shall be determined by a
reputable electrical consultant, to be selected by Landlord and paid equally by
both parties. The parties shall then execute an agreement prepared by Landlord
amending this Lease and setting forth the new Additional Rent resulting from
such increases and confirming the effective date thereof, but such increase
shall be effective from such date even if such agreement is not executed.
(C) If Tenant shall default under this Lease beyond any
applicable notice and cure period, Landlord reserves the right, in addition to
any other remedies available under this Lease or at law, to cease providing
electricity to the Demised premises until such default shall be cured.
42. TAX ESCALATION:
(A) As used in this Lease:
(i) "Taxes" shall mean the real estate taxes and
assessments and special assessments imposed upon the Building and/or the land on
which the Building is situated by any governmental bodies or authorities (the
"Land") excluding income taxes to Landlord. If at any time during the term of
this Lease the methods of taxation prevailing at the commencement of the term
hereof shall be altered so that in lieu of, or as an addition to or as a
substitute for the whole or any part of the taxes, assessments, levies,
impositions or charges now levied, assessed or imposed on real estate and the
improvements thereof, there shall be levied, assessed and imposed (a) a tax,
assessment, levy or otherwise on the rents received therefrom, or (b) a license
fee measured by the rent payable by Tenant to Landlord, or (c) any other such
additional or substitute tax, assessment, levy, imposition or charge, then all
such taxes, assessments, levies, impositions or charges or the part thereof so
measured or based shall be deemed to be included within the term "Taxes" for the
purpose hereof.
(ii) "Base Tax" shall mean Taxes, as finally
determined, calculated of the average of the fiscal years of (i) July 1, 1999
through June 30, 2000 and (ii) July 1, 2000 through June 30, 2001.
(iii) "Tax Year" shall mean the fiscal year
commencing on July 1 and ending on June 30 (or such other period as hereinafter
may be duly adopted by the City of New York as its Fiscal Year for real estate
tax purposes).
(iv) "Tenant's Share" shall be one and fifty-six
hundredths percent (1.56 %).
(B) (i) If the Taxes for any Tax Year shall be more than the
Base Tax, Tenant shall pay as Additional Rent for such Tax Year an amount equal
to Tenant's Share of the amount by which the Taxes for such Tax Year are greater
than the Base Tax (the amount payable by Tenant is hereinafter called the "Tax
Payment"). The Tax Payment shall be prorated, if necessary, to correspond with
that portion of a Tax Year occurring within the term of this Lease. At
Landlord's sole option, the Tax Payment shall either (1) be payable by Tenant
within thirty (30) days after receipt of a written demand from Landlord therefor
or (2) shall be payable by Tenant to Landlord in equal monthly installments on
the first day of each month in an amount as reasonably estimated
4
<PAGE>
by the Landlord, and shall in any event be adjusted from time to time with such
adjusted amount being remitted by Tenant to Landlord upon Landlord's written
demand therefor.
(ii) In the event the Base Tax is reduced as a result
of an appropriate proceeding, Landlord shall have the right to adjust the amount
of Tax Payment due from Tenant for any Tax Year in which Tenant is or was
obligated to pay a Tax Payment hereunder, and Tenant agrees to pay the amount of
said adjustment on the next rental installment day immediately following receipt
of a rent statement from Landlord setting forth the amount of said adjustment.
The parties acknowledge that in no event shall the Minimum Rent ever be reduced
as a result of a tax certiorari proceeding or as a result of any reduction in
Taxes or Base Taxes. However, if the Base Tax is reduced at any time during the
term of the Lease, Landlord will adjust the amount payable by Tenant in
proportion to said reduction.
(C) Only Landlord shall be eligible to institute tax reduction
or other proceedings to reduce the assessed valuation of the Land and the
Building. Should Landlord be successful in any such reduction proceedings and
obtain a rebate for periods during which Tenant has paid its share of increases,
Landlord shall after deducting its actual out of pocket expenses, including
reasonable attorneys' fees and disbursements in connection therewith, return
Tenant's Share of such rebate to Tenant.
(D) With respect to any period at the expiration of the term
of this Lease which shall constitute a partial tax year, Landlord's statement
shall apportion the amount of the Additional Rent due hereunder. The obligation
of Tenant in respect to such Additional Rent applicable for the last year of the
term of this Lease or part thereof shall survive the expiration of the term of
this Lease.
43. EXPENSE ESCALATION:
(A) As used in this Lease:
(i) "Wage Rate" shall mean the minimum regular hourly
rate of wages including, without limitation, adjustments of every kind, but
specifically excluding fringe benefits, in effect as of January 1st (of each
year (whether paid by Landlord or any contractor employed by Landlord) computed
as paid over a forty hour week to Porters in Class A office buildings pursuant
to an Agreement between The Realty Advisory Board on Labor Relations,
Incorporated, or any successor thereto, and Local 32B of the Building Service
Employees International Union, AFL-CIO, or any successor thereto; and provided,
however, that if there is no such agreement in effect prescribing a wage rate
for Porters, computations and payments shall thereupon be made upon the basis of
the regular hourly wage rate actually payable to Porters by Landlord or by
Landlord's service contractors over a forty hour week, in effect as of January
1st of each year, and provided, however, that if in any year during the term the
regular employment of Porters shall occur on days or during hours which overtime
or other premium pay rates are in effect pursuant to such Agreement, then the
term "hourly rate of wages" as used herein shall be deemed to mean the average
hourly rate for the hours in a calendar week during which Porters are regularly
employed (e.g., if pursuant to an agreement between Realty Advisory Board and
the Local the regular employment of Porters for forty hours during a calendar
week is at a regular hourly wage rate of $3.00 for the first thirty hours, and
premium or overtime hourly wage rate of $4.50 for the remaining ten hours, then
the hourly rate of wages under this Article during such period shall be the
total weekly rate of $135.00 divided by the total number of regular hours of
employment, forty or $3.375).
(ii) "Base Wage Rate" shall mean the Wage Rate in
effect for calendar year 2000.
(iii) The term "Porters" shall mean that
classification of non-supervisory employees employed in and about the Building
who devote a major portion of their time to general cleaning, maintenance and
miscellaneous services essentially of a non-technical and non-mechanical nature
and are the type of employees who are presently included in the classification
of "Class A-Others" in the Commercial Building Agreement between the Realty
Advisory Board and Local 32B.
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(iv) "Multiplication Factor" shall mean the product
obtained by multiplying the area of the premises (which the parties have agreed
shall be 4,000 square feet for the purposes of this Article) by one (1).
(B) If the Wage Rate for any calendar year during the Term
shall be increased above the Base Wage Rate, then Tenant shall pay, as
additional rent, an amount (the "Wage Increase Charge") equal to the product
obtained by multiplying the Multiplication Factor by the number of cents
(including any fraction of a cent) by which the Wage Rate is greater than the
Base Wage Rate, such payment to be made in equal monthly installments commencing
with the first monthly installments of fixed rent falling due on or after the
effective date of such increase in Wage Rate (payable retroactive from said
effective date) and continuing thereafter until a new adjustment shall have
become effective in accordance with the provisions of this Article. Landlord
shall give Tenant notice of each change in Wage Rate that will be effective to
create or change Tenant's obligation to pay the Wage Increase Charge pursuant to
the provisions of this Article, which notice shall contain Landlord's
calculation of the Wage Increase Charge payable resulting from such increase in
Wage Rate. The Wage Increase Charge shall be prorated, if necessary, to
correspond with that portion of a calendar year occurring within the Term. Such
notice shall be served in accordance with the terms of this Lease and shall be
accompanied by such information which shall be reasonable necessary for Tenant
to evaluate the accuracy thereof.
(C) Every notice given by Landlord pursuant to Paragraph B of
this Article shall be conclusive and binding upon Tenant unless (i) within
thirty (30) days after the receipt of such notice, Tenant shall notify Landlord
that it disputes the correctness of the notice, specifying the particular
respects in which the notice is claimed to be incorrect and (ii) if such dispute
shall not have been settled by agreement, shall submit the dispute to
arbitration, within ninety (90) days after receipt of the notice. Pending the
determination of such dispute, Tenant shall pay the Wage Increase Charge in
accordance with Landlord's notice without prejudice to Tenant's position of such
dispute. In the event such dispute shall be determined in Tenant's favor,
Landlord shall, on demand, pay Tenant the amount so overpaid by Tenant.
(D) The "Wage Rate" is intended to be a substitute comparative
index of economic costs and inflationary pressures and does not necessarily
reflect the actual costs of Wages or other expenses of operating the Building.
The Wage Rate shall be used whether or not the building is a Class A office
building, whether or not porters are employed in the building and without regard
to whether such employees or members of the union referred to in Paragraph A of
this Article.
44. WAIVER OF SUBROGATION: Each party hereby releases the other party (which
term as used in this Article includes the employees, agents, officers and
directors of the other party) from all liability, whether for negligence or
otherwise, in connection with loss covered by any fire and/or extended coverage
insurance policies, which the releasor carries with respect to the Demised
Premises, or any interest or property therein or thereon (whether or not such
insurance is required to be carried under this lease), but only to the extent
that such loss is collected under said fire and/or extended coverage insurance
policies. Such release is also conditioned upon the inclusion in the policy or
policies of a provision whereby any such release shall not adversely affect said
policies, or prejudice any right of the releasor to recover thereunder. Each
party agrees that its insurance policies aforesaid will include such a provision
so long as the same shall be obtainable without extra cost, or if extra cost
shall be charged therefor, so long as the party for whose benefit the clause or
endorsement is obtained shall pay such extra cost. If extra cost shall be
chargeable therefor, each party shall advise the other thereof of the amount of
the extra cost, and the other party at its election, may pay the same, but shall
not be obligated to do so.
45. COMPLIANCE WITH LAWS: Supplementing the provisions of Article 6 hereof,
Tenant shall give prompt notice to Landlord of any notice it receives of the
violation of any law or requirement of any public authority with respect to the
Demised Premises or the use or occupation thereof. Tenant shall promptly comply
with all present and future laws, orders and regulations of all state, federal,
municipal and local governments, departments, commissions and boards or any
direction of any public officer pursuant to law and all orders, roles and
regulations of the New York Board of Fire Underwriters or any similar body
arising out of Tenant's use of the Demised Premises which shall impose any
violation, order or duty upon Landlord or Tenant with respect to Tenant's use or
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manner of use of the Demised Premises (in which event Tenant shall effect such
compliance at its sole cost and expense) or the Building (in which event,
notwithstanding anything herein to the contrary, Landlord shall effect such
compliance but Tenant shall promptly pay to Landlord Tenant's Share, as defined
in Paragraph 42(A) (iv), of the cost thereof).
46. INDEMNITY-LIABILITY INSURANCE:
(A) Tenant covenants and agrees to indemnify and save Landlord
harmless from and against any and all claims arising during the term of this
lease for damages or injuries to goods, wares, merchandise and property and/or
for any personal injury or loss of life in, upon or about the Demised Premises
or on the sidewalks adjoining the Demised Premises, except such claims as may be
the result of the negligence of Landlord, its agents, employees or contractors.
(B) Tenant further covenants and agrees to indemnify Landlord
against the cost of any increase in Landlord's insurance rates resulting from
Tenant's use of the Demised Premises. Tenant shall reimburse Landlord for any
such increase within fifteen (15) days after Landlord bills Tenant therefor.
(C) Tenant covenants to provide on or before the commencement
of the term hereof and to keep in force during the term hereof for the benefit
of Landlord and Tenant a comprehensive policy of liability insurance protecting
Landlord and Tenant against any liability whatsoever occasioned by accident on
or about the Demised Premises or any appurtenances thereto. Such policy is to be
written by good and solvent insurance companies satisfactory to Landlord, and
the amounts of liability thereunder shall not be less than the amount of
$2,000,000 in respect of any one person, in the amount of $5,000,000 in respect
of any one accident, and in the amount of $2,000,000.00 in respect of property
damage. Prior to the time such insurance is first required to be carried by
Tenant, and thereafter at least fifteen (15) days prior to the expiration of any
such policy, Tenant agrees to deliver to Landlord either a duplicate original of
the aforesaid policy or a certificate evidencing such insurance, provided said
certificate contains an endorsement that such insurance may not be canceled or
modified except upon ten (10) days written notice to Landlord, together with
evidence of payment for the policy. Tenant's failure to provide and keep in
force the aforementioned insurance shall be regarded as a material default
hereunder, entitling Landlord to exercise any or all of the remedies as provided
in this Lease in the event of Tenant's default. Landlord covenants that it shall
carry commercially reasonable insurance during the term of the Lease.
47. ASSIGNMENT, SUBLETTING, MORTGAGING:
(A) Subject to the provisions of Section 47 (B)(vii),
Tenant will not by operation of law or otherwise, assign, mortgage or
encumber this Lease, nor sublet or permit the Demised Premises or any part
thereof to be used by others, without Landlord's prior express written
consent in each instance. Any transfer, by operation of law or otherwise, of
Tenant's interest in this Lease (in whole or in part) or of a fifty (50%)
percent or greater interest in Tenant (whether stock, partnership interest or
otherwise) shall be deemed an assignment of this Lease within the meaning of
this Article. (The issuance of shares of stock to other than the existing
shareholders shall be deemed to be a transfer of such stock for the purposes
of this Article.) If there has been a previous transfer of less than a fifty
(50%) percent interest, in Tenant during the term of this Lease, any other
transfer of an interest in Tenant which would then result in an aggregate
transfer of greater than a fifty (50%) percent interest in Tenant shall be
deemed an assignment of Tenant's interest in this Lease within the meaning of
this Article.
(B) (i) In the event that Tenant shall at any time or times
during the term of this Lease desire to assign this Lease or sublet all or any
part of the Demised Premises, Tenant shall give notice (the "Assignment/Sublet
Notice") thereof to Landlord, which notice shall be accompanied by (a) at
Tenant's option, either a conformed or photostatic copy of the proposed
assignment or sublease agreement (provided, however that such proposed
assignment or sublease agreement need not be in executed form if accompanied by
a writing signed by Tenant and the proposed assignee or sublessee indicating
their intent to enter into the proposed assignment or sublease upon Landlord
consenting thereto), or a copy of a letter of intent (the "Letter of Intent")
executed by or on behalf of Tenant and the proposed assignee or subtenant
setting forth the material business terms of the proposed
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assignment or sublease; in either event, the effective or commencement date of
which shall be at least twenty (20) days after the giving of such notice, (b) a
statement setting forth in reasonable detail the identity of the proposed
assignee or subtenant, the nature of its business and its proposed use of the
Demised Premises, (c) current financial information with respect to the proposed
assignee or subtenant, including, without limitation, its most recent financial
report or statement (if same exists, and if not, the equivalent information in a
form reasonably satisfactory to Landlord), and (d) such other information as
Landlord may reasonably request. Such notice shall be deemed an offer from
Tenant to Landlord whereby Landlord (or Landlord's designee) may, at its option:
(i) terminate this Lease (if the proposed transaction is an assignment or
sublease of all or substantially all of the Demised Premises), or (ii) terminate
this Lease with respect to the space covered by the proposed sublease (if the
proposed transaction is a sublease of part of the Demised Premises for all or
substantially all of the remainder of the term of this Lease, i.e., the term of
which expires during the final eighteen (18) months prior to the Expiration
Date). For purposes of this paragraph, "substantially all of the Demised
Premises" shall mean more than seventy (70%) percent thereof. Said options may
be exercised by Landlord by notice to Tenant at any time within twenty (20) days
after Landlord's receipt of the Assignment/Sublet Notice, together with all
other documentation and information required pursuant to this paragraph to be
given by Tenant to Landlord ("Recapture Period"); and during such Recapture
Period Tenant shall not assign this Lease or sublet such space to any person.
Following the expiration of the Recapture Period, Tenant shall have one hundred
twenty (120) days to submit to Landlord Tenant's written request for Landlord's
consent to a proposed assignment or sublease on the same terms and conditions as
were contained in the proposed assignment or sublease or the Letter of Intent,
which was previously submitted to Landlord pursuant to this Section, whichever
is applicable. In the event that Tenant fails to submit such written request for
Landlord's consent as set forth in the preceding sentence within such 120 day
period, then in connection for with any request for Landlord's consent to such
proposed assignment of this Lease or proposed subletting of the Demised Premises
or any portion thereof submitted after such 120 day period, Tenant will be
required to comply with all of the requirements of this paragraph and Landlord
shall have all the options under this paragraph.
(ii) If Landlord exercises its option to terminate this Lease
in the event that Tenant desires either to assign this Lease or to sublet all or
substantially all of the Demised Premises, then this Lease shall end and expire
upon the date that such assignment or subletting was to be effective or to
commence, as the case may be, and the Minimum Rent and Additional Rent shall be
paid and apportioned to such date. If Landlord exercises its option to terminate
this Lease as to a portion of the Demised Premises in the event that Tenant
desires to sublet a portion of the Demised Premises, then this Lease, with
respect to the portion of the Demised Premises affected by such subletting,
shall end and expire upon the date that such subletting was to commence, the
Minimum Rent payable hereunder and the Additional Rent payable pursuant to this
Lease hereof shall be adjusted in proportion to the portion of the Demised
Premises affected by such termination and Tenant shall reimburse Landlord as
Additional Rent hereunder for the cost of erecting such demising walls as are
necessary to separate the Terminated portion of the Demised Premises from the
remainder of the Demised Premises and to provide access thereto within ten (10)
days after demand therefor.
(iii) In the event that Tenant complies with the provisions of
this subparagraph of this Article and Landlord does not exercise an option
provided to it thereunder within the time provided therefor, and provided that
Tenant is not in default of any of Tenant's obligations under this Lease beyond
the expiration of applicable notice and cure periods expressly set forth in this
Lease, Landlord's consent (which must be in writing and in form reasonably
satisfactory to Landlord) to the proposed assignment of this Lease or subletting
of a portion or all of the Demised Premises shall not be unreasonably withheld
or delayed (and shall be given or denied within a reasonable time not to exceed
thirty (30) days after Landlord has been provided with all information or
documentation which it deems necessary in order to make its decision), provided
the following conditions have been satisfied:
(1) in Landlord's reasonable judgment, the proposed assignee
or subtenant is engaged in such a business, and the Demised
Premises will be used in such a manner, that: (x) is limited
to the use expressly permitted under this Lease; and (y) will
not violate any negative covenant as to use contained in any
other Lease of space in the Building about
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which Tenant has been informed following its request to
Landlord for such information;
(2) the proposed assignee or subtenant (and proposed
guarantor(s) of the Lease, who shall execute a guaranty of
this Lease in the form required by the Landlord) has
sufficient financial worth considering the responsibility
involved, and Landlord has been furnished with reasonable
proof thereof. As a condition to granting its consent to any
proposed assignment or subletting, Landlord must receive
executed, notarized guaranties of Lease (in substantially the
form required by the Landlord) from guarantor(s) of the Lease
who control the proposed assignee or subtenant and own the
majority of its stock and/or other ownership interests;
(3) the proposed assignee or sublessee is not then an occupant
of any part of the Building unless there is no vacant, similar
space available at that time for leasing in the Building and
further, unless no existing tenant or occupant of the Building
will be vacating other space in the Building as a result of
the proposed assignment or sublet;
(4) the proposed assignee or sublessee is not a person with
whom Landlord is then, or shall have been during the previous
twelve (12) month period, negotiating to lease space in the
Building unless there is no vacant, similar space available at
that time for leasing in the Building;
(5) Tenant shall have submitted to Landlord a fully executed
counterpart of the proposed assignment or the proposed
sublease, as the case may be, and the form of the same shall
be reasonably satisfactory to Landlord and shall comply with
the applicable provisions of this Article;
(6) the amount of aggregate rent to be paid by the proposed
subtenant is not less than the then commercially reasonable
rent per rentable square foot for a sublease of the Demised
Premises unless there is no vacant, similar space available at
that time for leasing in the Building and the other terms and
conditions of the sublease are the same as those contained in
the proposed sublease furnished to Landlord pursuant to
paragraph (b) of this Article;
(7) Tenant shall reimburse Landlord on demand for any actual
out of pocket costs that may be incurred by Landlord in
connection with said agreement or sublease, including the
costs of making investigations as to the acceptability of the
proposed assignee or subtenant and legal costs incurred in
connection with the granting of any requested consent;
(8) Tenant shall not have (a) advertised or publicized in any
way the availability of the Demised Premises without prior
notice to, and approval by, Landlord, which approval Landlord
agrees not to unreasonably withhold, nor shall any
advertisement state the name (as distinguished from the
address) of the Building, or (b) listed the Demised Premises
for subletting or assignment, with a broker, agent or
representative or otherwise, at a proposed rental less than
the Minimum Rent and Additional Rent at which Landlord is then
offering to Lease other space in the Building;
(9) the sublease shall not provide for an option on behalf of
the subtenant thereunder to extend or renew the term of such
sublease and shall also not grant to subtenant any space
option or other option set forth in this Lease (which
option(s) is (are) only granted to the original Tenant
hereunder);
(10) such subletting shall not result in there being more than
three (3) occupants of the Demised Premises, including Tenant.
(iv) Each subletting pursuant to this Article shall be subject
to all of the covenants, agreements, terms, provisions and conditions contained
in this Lease. Notwithstanding any such
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subletting and/or acceptance of Minimum Rent or Additional Rent by Landlord from
any subtenant, Tenant shall and will remain fully liable for the payment of the
Minimum Rent and Additional Rent due, and to become due, hereunder, for the
performance of all of the covenants, agreements, terms, provisions and
conditions contained in this Lease on the part of Tenant to be performed and for
all acts and omissions of any licensee, subtenant, or any other person claiming
under or through any subtenant that shall be in violation of any of the
obligations of this Lease, and any such violation shall be deemed to be a
violation by Tenant. Tenant further agrees that, notwithstanding any such
subletting, no other and further subletting of the Demised Premises by Tenant,
or any person claiming through or under Tenant shall, or will be, made, except
upon compliance with, and subject to, the provisions of this Article.
(v) Any assignment or transfer shall be made only if, and
shall not be effective until, the assignee shall execute, acknowledge and
deliver to Landlord an agreement, in form and substance reasonably satisfactory
to Landlord, whereby the assignee shall assume all of the obligations of this
Lease on the part of Tenant to be performed or observed and whereby the assignee
shall agree that the provisions contained in paragraph (a) shall,
notwithstanding such assignment or transfer, continue to be binding upon it in
respect of all future assignments and transfers.
(vi) If Landlord shall give its consent to any assignment of
this Lease or to any sublease, Tenant shall, in consideration therefor, pay to
Landlord, as Additional Rent:
(a) in the case of an assignment, an amount equal to fifty
(50%) percent of all sums and other consideration payable to
Tenant by the assignee for, or by reason of, such
assignment; and
(b) in the case of a sublease, fifty (50%) percent, after
payment of costs, of any rents, additional charges, or other
consideration payable under the sublease by the subtenant to
Tenant that are in excess of the Minimum Rent and Additional
Rent accruing during the term of the sublease in respect of
the subleased space (at the rate per square foot payable by
Tenant hereunder) pursuant to the terms hereof, including,
without limitation, all sums paid for the sale or rental of
tenant's fixtures, leasehold improvements, equipment,
furniture or other personal property.
The sums payable under this paragraph (vi) shall be paid to
Landlord as and when payable by the subtenant to Tenant.
(vii) If Tenant (or any subtenant) is a corporation, the
provisions of subparagraph (A) of this Article shall apply to a transfer
(however accomplished, whether in a single transaction or in a series of related
or unrelated transactions) of stock (or any other mechanism such as, by way of
example, the issuance of additional stock, a stock voting agreement or change in
class(es) of stock) which results in a change of control of Tenant (or such
subtenant) as if such transfer of stock (or other mechanism) which results in a
change of control of Tenant (or such subtenant) were an assignment of this
Lease, and if Tenant (or such subtenant) is a partnership, limited liability
company or joint venture, said provisions shall apply with respect to a transfer
(by one or more transfers) of an interest in the distributions of profits and
losses of such partnership, joint venture or limited liability company (or other
mechanism, such as, by way of example, the creation of additional general
partnership or limited partnership interests or limited liability company
interests) which results in a change of control of such partnership or joint
venture or limited liability company, as if such transfer of an interest in the
distributions of profits and losses of such partnership or joint venture or
limited liability company which results in a change of control of such
partnership or joint venture or limited liability company were an assignment of
this Lease; but the provisions of subparagraph (A) of this Article hereof shall
not apply to transactions with (u) a corporation into or with which Tenant is
merged or consolidated, (v) a corporation, partnership or other entity to which
substantially all of Tenant's assets and stock are transferred, (w) any
corporation which controls or is controlled by Tenant or is under common control
with Tenant, (x) any person, persons, entity or entities to whom a controlling
block of Tenant's stock is transferred, (y) an existing shareholder or
shareholders, or (z) a trust established by or for the benefit of existing
shareholder or shareholders, provided that the Tenant hereunder immediately
after such a transfer has a net worth computed in accordance with generally
accepted accounting principles at least equal to the "Minimum Net
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Worth" (as defined below), (ii) proof reasonably satisfactory to Landlord of
such net worth shall have been delivered to Landlord at least ten (10) days
prior to the effective date of any such transaction, (iii) in the event that the
Tenant hereunder immediately after such transfer is other than the Tenant herein
named, a duplicate original instrument of assignment in form and substance
reasonably satisfactory to Landlord, duly executed by Tenant and executed,
notarized guaranties of this Lease (in the form of the guaranty of Lease
required by Landlord) from guarantors of this Lease who control the proposed
assignee or subtenant and own the majority of its stock and/or other ownership
interests, shall have been delivered to Landlord at least ten (10) days prior to
the effective date of any such transaction, (iv) in the event that the Tenant
hereunder immediately after such transfer is other than the Tenant herein named
(a "New Tenant"), an instrument in form and substance reasonably satisfactory to
Landlord, duly executed by such New Tenant, in which such New Tenant assumes (as
of and from the Commencement Date) observance and performance of, and agrees to
be personally bound by, all of the terms, covenants and conditions of this Lease
on Tenant's part to be performed and observed shall have been delivered to
Landlord at least ten (10) days prior to the effective date of any such
transaction, and (v) such merger, consolidation or transfer shall be for a good
business purpose with a view toward continuing Tenant's business as an on-going
concern and not principally for the propose of transferring this Lease. For
purposes of this subparagraph (vii), the term "control" shall mean, in the case
of a corporation, ownership or voting control, directly or indirectly, of more
than fifty percent (50%) of all the voting stock, and in case of a joint venture
or partnership or similar entity, ownership, directly or indirectly, of more
than fifty percent (50%) of all the general or other partnership (or similar)
interests therein. Any agreement pursuant to which (x) Tenant is relieved from
the obligation to pay all or a part of Minimum Rent or Additional Rent under
this Lease, and (y) a third party undertakes or is granted any right to assign
or attempt to assign this Lease or sublet or attempt to sublet all or any
portion of the Demised Premises, shall be deemed an assignment of this Lease and
subject to the provisions of this Article, including, without limitation,
subparagraph (A) hereof. For purposes of this subparagraph, the term "Minimum
Net Worth" shall mean the Tenant's net worth as of the date hereof.
Notwithstanding anything to the contrary contained herein, the transfer of stock
to any family member or members of the shareholders of Tenant who as of the date
hereof own a minimum of fifty-one (51%) percent of the outstanding shares of
Tenant (the "Major Shareholders"), or to any trust established for the benefit
of one or more of the family members of the Major Shareholders shall not in any
event be treated as an assignment of thins Lease and Landlord's consent shall
not be required therefor. Notwithstanding anything to the contrary contained in
this Lease, the transfer of outstanding capital stock or other listed
equal./interests, or the purchase of outstanding capital stock or other listed
equity interests, or the purchase of equity interests issued in an initial
public offering of stock, through the "over-the-counter" market or any
recognized national or international securities exchange shall not constitute an
assignment or transfer for purposes of this Lease.
(C) Subject to the provisions of Section 47 (B)(vii), each
permitted assignee shall assume and bE deemed to have assumed this Lease and
shall be and remain liable jointly and severally with Tenant for the payment of
the Minimum Rent and Additional Rent and for the due performance of all the
terms, covenants, conditions and agreements herein contained on Tenant's part to
be performed for the term of this Lease and any renewals and modifications
hereof. No assignment shall be binding on Landlord unless, as hereinbefore
provided, such assignee or Tenant shall deliver to Landlord a duplicate original
of the instrument of assignment which contains a covenant of assumption by the
assignee of all of the obligations aforesaid and shall obtain from Landlord the
aforesaid written consent prior thereto. Any assignment, sublease or agreement
permitting the use and occupancy of the premises to which Landlord shall not
have expressly consented in writing shall be deemed null and void and of no
force or effect.
(D) Tenant agrees that notwithstanding any subletting or
assignment permitted by Landlord, no other and further subletting of the Demised
Premises by Tenant or any person or entity claiming through or under Tenant
shall or will be made except upon compliance with and subject to the provisions
of this Article.
48. TENANT'S CERTIFICATE: Tenant shall, without charge at any time and from time
to time, within ten (10) days after request by Landlord, certify by written
instrument, duly executed, acknowledged and delivered and given with the express
knowledge that any party may rely on the information set forth in said
instrument, to any mortgagee, assignee of any mortgage or to any
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purchaser, or any proposed mortgagee, assignee of any mortgage or purchaser, or
any other person, firm or corporation specified by Landlord'
(A) that this Lease is unmodified and in full force and effect
(or, if there has been modification, that the Lease is in full force and effect
as modified and stating the modifications) and that both the Landlord and the
Tenant are not then in default under this Lease (or, if there has been a
default, stating the default(s), if any);
(B) whether or not there are then existing any setoffs or
defenses against the enforcement of any of the agreements, terms, covenants or
conditions hereof upon the part of Tenant to be performed or complied with (and,
if so, specifying the same);
(C) the dates, if any, to which the rental, additional rental
and other charges hereunder have been paid in advance, and stating the rental,
additional rent and other charges provided for in the Lease;
(D) the commencement date and expiration date of the Lease;
(E) whether or not any rental has been paid more than 30 days
before the due date, and whether or not the Tenant has any unsatisfied claim
against Landlord;
(F) the security deposit (if any) deposited by Tenant under
the Lease;
(G) whether any actions, whether voluntary or otherwise, are
pending against the Tenant under the bankruptcy laws of the United States or any
state thereof; and
(H) whether the Tenant has any option to renew or expand the
term of the Lease or the leased premises, as the case may be, and whether the
Tenant has any right of first refusal to purchase (or lease) the Demised
Premises or any part thereof or the Building in which the Premises are located.
In the event that Tenant fails to deliver to Landlord the
aforesaid certificate within the time period described hereinabove, then Tenant
herein unconditionally agrees that it shall be liable on demand to pay Landlord
the sum of $750.00 for each day that Tenant is late in delivering the aforesaid
certificate to Landlord, such sum to be as and for Landlord's full and complete
liquidated and agreed monetary damages suffered by reason of Tenant's failure to
timely deliver an estoppel certificate to Landlord. In addition to the
foregoing, Landlord reserves the right to exercise any further rights or
remedies available to it under the Lease, at law or equity by reason of Tenant's
default hereunder.
49. EXCULPATORY CLAUSE: If Landlord shall be an individual, joint venture,
limited liability company, tenancy-in-common, co-partnership, unincorporated
association, or other unincorporated aggregate of individuals and/or entities,
or a corporation, Tenant shall look only to such Landlord's estate and property
in the Building and, where expressly so provided in this Lease, to offset
against the rents payable under this Lease, for the satisfaction of Tenant's
remedies for the collection of a judgment (or other judicial process) requiring
the payment of money by Landlord in the event of any default by Landlord
hereunder, and no other property or assets of such Landlord shall be subject to
levy, execution or other enforcement procedure for the satisfaction of Tenant's
remedies under or with respect to this Lease, the relationship of Landlord and
Tenant hereunder or Tenant's use or occupancy of the Demised Premises.
50. BROKER: Both parties covenant, warrants and represents that there was no
broker instrumental in consummating this lease other than Cushman & Wakefield,
Inc. and Insignia/ESG (collectively, the "Broker"), and no conversations or
negotiations were had with any other broker concerning the renting of the
Demised Premises. Both parties agree to indemnify, defend and hold and save the
other party harmless against any and all liability from any claims of any other
broker who claims to have dealt with the other party (including, without
limitation, the cost of counsel fees in connection with the defense of any such
claims in connection with the renting of the Demised Premises).
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51. CONFLICT OF TERMS: In the event any term, covenant, condition or agreement
contained in this rider to the Lease shall conflict or be inconsistent with any
term, covenant, condition or agreement contained in the printed portion of this
Lease, then the parties agree that the rider provision shall prevail.
52. TENANT'S REMEDIES: With respect to any provision of this Lease which
provides, in effect, that Landlord shall not unreasonably withhold or
unreasonably delay any consent or any approval, Tenant in no event, shall be
entitled to make, nor shall Tenant make, any claim, and Tenant hereby waives any
claim, for money damages; nor shall Tenant claim any money damages by way of
setoff, counterclaim or defense, based upon any claim or assertion by Tenant
that Landlord has unreasonably withheld or unreasonably delayed any consent or
approval; but Tenant's sole remedy shall be an action or proceeding to enforce
any such provision, or for specific performance, injunction or declaratory
judgment.
53. NO EXCESSIVE NOISE: Tenant agrees that it will use the Demised Premises and
will perform all work required or permitted hereunder in such a manner so as not
to creme any excessive noise which disturbs any of the other tenants of the
Building or persons occupying adjacent and neighboring premises.
54. LABOR REGULATIONS: Tenant covenants and agrees that prior to and throughout
the demised term, it shall not take any action which would violate Landlord's
union contract, if any, affecting the Building, nor create any work stoppage,
picketing, labor disruption or dispute, or any interference with the business of
the Landlord or any other tenant or occupant in the Building or with the rights
and privileges of any person(s) lawfully in said Building, nor cause any
impairment or reduction of the good name of the Building. Any default by Tenant
under this Article shall be deemed a material default entitling Landlord to
exercise any or all of the remedies as provided in this Lease.
55. CONTROL OF TENANT: If the Tenant is a corporation (other than one whose
shares are regularly and publicly traded on a recognized stock exchange),
partnership or other entity other than an individual, Tenant represents that the
ownership and power to vote the majority of its entire outstanding capital stock
or other controlling interest (collectively "Controlling Interest") belongs to
and is vested in the person(s) executing this Lease or members of his or their
immediate family.
56. ADDENDUM TO ARTICLE 22: If Tenant shall default in surrendering the Demised
Premises upon the expiration or termination of the term, Tenant's occupancy
subsequent to such expiration or termination, whether or not with the consent or
acquiescence of Landlord, shall be deemed to be that of a tenancy at will and in
no event from month-to-month or from year-to-year, and it shall be subject to
all the terms, covenants and conditions of this lease applicable thereto, except
the Minimum Rent and Additional Rent payable under this Lease shall be 175% of
the amount payable in the last year of the terns, and no extension or renewal of
this Lease shall be deemed to have occurred by such holding over.
57. ADDENDUM TO ARTICLE 18: Should Tenant fail to pay within five (5) days of
when due any installments of Minimum Rent, Additional Rent, or any other sum
payable to Landlord under J the terms of this Lease, then a late charge in the
amount of $0.10 per $1.00 due shall be added to the sum due and shall be deemed
Additional Rent hereunder. If Tenant shall issue a check to Landlord which is
returnable unpaid for any reason, Tenant shall pay Landlord an additional charge
of $100.00 for Landlord's expenses in connection therewith. If Tenant shall
default (i) in the timely (5 days) payment of Fixed Rent or Additional Rent for
any three (3) consecutive months or for a total of six (6) months in any period
of twelve (12) months then, notwithstanding, that such defaults shall have each
been cured within the applicable period, if any, any further similar default
shall be deemed to be deliberate and Landlord thereafter may serve Tenant with a
three (3) days' notice of termination without affording to Tenant an opportunity
to cure such further default at which time the term of this Lease shall
terminate as if that day were the Expiration Date.
58. ENTIRE AGREEMENT: No earlier statement or prior written matter shall have
any force or effect. Tenant agrees that it is not relying on any representations
or agreements other than those
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contained in this Lease. This agreement shall not be modified or canceled except
by writing subscribed by all parties.
59. SAVING PROVISION: If any provision of this Lease, or its application to any
situation shall be invalid or unenforceable to any extent, the remainder of this
Lease, or the application thereof to situations other than that as to which it
is invalid or unenforceable, shall not be affected thereby, and every provision
of this Lease shall be valid and enforceable to the fullest extent permitted by
law.
60. LEASE NOT BINDING UNLESS EXECUTED: Submission by Landlord of the within
Lease for execution by Tenant shall confer no rights nor impose any obligations
on either party unless and until both Landlord and Tenant shall have executed
this Lease and duplicate originals thereof shall have been delivered to the
respective parties.
61. [Intentionally Omitted.]
62. WAIVER OF JURY TRIAL AND RIGHT TO COUNTERCLAIM. Tenant hereby waives all
right to trial by jury in any summary or other action, proceeding or
counterclaim arising out of or in any way connected with this Lease, the
relationship of Landlord and Tenant, the Demised Premises and the use and
occupancy thereof, any claim of injury or damages, and any emergency statutory
or other statutory remedy. Tenant also hereby waives all right to assert or
interpose a counterclaim in any summary proceeding or other action or proceeding
to recover or obtain possession of the Demised Premises.
63. INJUNCTIVE RELIEF: In the event of a breach or threatened breach by Tenant
of any of the covenants or provisions of this Lease, Landlord shall have the
right of injunction and the right to invoke any remedy allowed at law or in
equity as if re-entry, summary proceedings and other remedies were not herein
provided for. Mention in this Lease of any particular remedy shall not preclude
Landlord from any other remedy, at law or in equity. Tenant hereby expressly
waives any and all rights of redemption granted by or under any present or
future laws in the event of Tenant's being evicted or dispossessed, or in the
event of Landlord's obtaining possession of the Demised Premises by reason of
Tenant's violation of the provisions of this Lease. Tenant further agrees that
it shall not interpose any counterclaim or counterclaims in a summary proceeding
or in any other action or proceeding to evict the Tenant or otherwise recover
possession of the Demised Premises and Tenant hereby waives the right to
interpose any noncompulsory counterclaim or noncompulsory counterclaims in any
such proceeding(s).
64. RECORDATION: Tenant covenants not to place this Lease on record or to record
this Lease without the prior written consent of Landlord. At the request of
Landlord, Tenant will execute a memorandum of lease for recording purposes
containing references to such provisions of this Lease as Landlord, in its sole
discretion, shall deem necessary.
65. ATTORNEYS' FEES: Tenant agrees to pay Landlord upon demand, as an Additional
Rental, a sum equal to all costs and expenses (including attorneys' fees, costs
of investigation and disbursements) incurred by Landlord in enforcing any or all
of its rights hereunder, specifically including the cost of collecting sums due,
whether or not an action or proceeding is commenced, or levying and collecting
on any judgment or arbitration award in Landlord's favor. Landlord agrees to
indemnify Tenant for reasonable legal fees incurred by Tenant in enforcing its
rights hereunder after a non-appealable, final judgment is rendered against
Landlord.
66. FORCE MAJEURE: In the event that either party hereto shall be delayed or
hindered in or prevented from the performance or any act required hereunder
other than Tenant's obligation to pay rent by reason of strikes, lockouts, labor
troubles, failure of power, riots, insurrection, war or other reason of like
nature not the fault of the party delayed in performing work or doing acts, such
party shall be excused for the period of delay. The period of performance of any
such act shall then be extended for the period of such delay.
67. [Intentionally Omitted.]
68. [Intentionally Omitted.]
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69. [Intentionally Omitted.]
70. AIR CONDITIONING/HEATING:
(A) Landlord shall provide to the Demised Premises air
conditioning and heating of sufficient capacity to service the Demised Premises
for normal office use only.
(B) Tenant acknowledges that the air conditioning and heating
service to the Demised Premises will be provided only during normal working
hours (8:00 AM to 6:00 PM) on normal weekdays only. Tenant shall notify Landlord
not less than two (2) days in advance in the event Tenant shall require air
conditioning or heating after 6:00 PM on a normal weekday. In the event Landlord
is able to supply air conditioning or heat during such period, Tenant shall pay
to Landlord $450.00 per hour for after hours charges after 6:00 PM on a normal
weekday and for each hour of time on any weekend day for providing air
conditioning or heat to the Demised Premises during such after hours or weekend
periods.
In the event Landlord is unable to provide the electrical/air
conditioning and heating services for a period in excess of fifteen (15)
consecutive days, and as a result thereof, all or any material portion of the
Demised Premises is rendered unusable for Tenant's business at the Demised
Premises, the Minimum and the Additional Rent shall be abated to the extent and
for the period that all or any material portion of the Demised Premises is so
rendered unusable. In the even that Landlord is unable to provide the services
for any period in excess of one hundred eighty (180) consecutive days, Tenant
shall have the right, exercisable within twenty (20) days after the expiration
of said one hundred eighty (180) day period, to terminate this Lease by written
notice to Landlord.
(C) Landlord has installed one supplemental air-conditioning
unit ("Supplementary Unit") to service the Demised Premises.
(a) the electricity used in connection with the usage of the
Supplementary Unit shall be separately submetered by Tenant at its sole cost and
expense (and a separate submeter shall be installed by Tenant at its sole cost
and expense) and paid separately by Tenant and consumption of electricity for
same shall be measured and billed to Tenant in accordance with Landlord's
requirements. As payment for the aforesaid Electricity charges, Tenant shall pay
to Landlord within ten (10) days of receipt of Landlord's bill therefor, as
Additional Rent, the sum of (i) an amount determined by applying the "Electric
Rate" to Tenant's consumption of and demand for electricity for its usage of the
Supplemental Unit as recorded on the submeter or submeters installed by Tenant
as above set forth, and (ii) Landlord's administrative charge of seven (7%)
percent of the amount referred to in (i) above for overhead and supervision and
charges therefor. Bills for same may be rendered monthly at such times as
Landlord may elect and, commencing on the earlier of(i) Tenant's occupancy of
all or any portion of the Demised Premises, or (ii) the Commencement Date of the
term of this lease, the amounts as computed from meter readings shall be deemed
to be, and be paid as, Additional Rent without set-off or deduction.
For the purposes of this Article, Landlord and Tenant agree
that:
(1) The term "Electric Rate" (including all applicable
surcharges, demand charges, energy charges, fuel adjustment
charges, time of day charges, taxes and other sums payable
in respect thereof) shall mean the Service Classification
pursuant to which Landlord purchases electricity from the
utility company servicing the Building, provided, however,
at no time shall the amount payable by Tenant for
electricity be less than the Cost per Kilowatthour
(hereinafter defined).
(2) The term "Cost per Kilowatthour" shall mean the total
cost for electricity incurred by Landlord to service the
Building during a particular time period (including all
applicable surcharges, demand charges, energy charges, fuel
adjustment charges, time of day charges, taxes and other
sums payable in
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respect thereof) divided by the total kilowatthours
purchased by Landlord during such period;
(b) Upon the expiration or sooner termination of the term of
the Lease, the Supplementary Unit shall become Landlord's sole property. Tenant
hereby indemnifies and holds Landlord harmless for any and all damage to the
Building caused by the maintenance of the aforesaid Supplemental Unit on the
Building. Prior to installation, Tenant will obtain insurance to protect
Landlord against any damage by reason of the foregoing, and will deliver
insurance certificates naming Landlord as an additional insured under such
policy prior to commencing installation;
(c) Landlord shall not in any way be liable or responsible to
Tenant for any loss or damage or expense which Tenant may sustain or incur if
either the quantity or character of electric service is changed or is no longer
available or suitable for Tenant's requirements. Tenant's use of electric
current in the Demised Premises shall not at any time exceed the capacity of any
of the electrical conductors and facilities in or otherwise serving the Demised
Premises.
71. CLEANING: Landlord shall provide, at is sole cost and expense, cleaning
services for the Demised Premises in accordance with building standard
specifications.
72. SECURITY. (A) (i) Tenant has deposited with Landlord the sum of; $80,000.00
upon the execution of this Lease, as security for the performance by Tenant of
all of the terms, covenants and conditions of this Lease on Tenant's part to be
performed. Landlord shall have the right, upon the expiration of the required
notice and cure periods under the Lease and regardless of the exercise of any
other remedy Landlord may have by reason of a default, to apply any part of said
deposit to cure any default of Tenant, and, if Landlord does so, Tenant shall
upon five (5) day demand deposit with Landlord the amount so applied so that
Landlord shall have the full amount of the security ($80,000.00) during the term
of this Lease subject to the provisions of subparagraph (B) hereinbelow. If
Tenant shall fail to make such deposit, Landlord shall have the same remedies
for such failure as Landlord has for a default in the payment of Minimum Rent.
In the event of an assignment or transfer of the leasehold estate under the
Lease, (a) Landlord shall have the right to transfer the security to the
assignee only upon such assignment or transfer, (b) Landlord shall thereupon be
automatically released by Tenant from all liability for the return of such
security, and (c) Tenant shall look solely to the assignee for the return of
said security, and the foregoing provisions of this sentence shall apply to
every transfer made of the security to a new assignee of Landlord's interest in
the Lease. The security deposited under this Lease shall not be assigned or
encumbered by Tenant without the prior consent of Landlord, and any such
assignment or encumbrance shall be void. Landlord and Tenant acknowledge and
agree that Tenant hereby waives any right, whether statutory or otherwise, to
any interest earned on said security, and Tenant shall in no event be entitled
to interest on said security.
(ii) Upon the expiration of the eighteenth (18th) month
anniversary of the Rent Commencement Date of this Lease, provided that this
Lease remains in full force and effect, and the original Tenant named herein
remains in possession of the Demised Premises and is not then in default under
this Lease after the expiration of any applicable grace periods expressly stated
in this Lease, the Landlord shall return to Tenant a portion of the security
deposit held by Landlord in the amount of an equivalent of two (2) months of the
current Minimum Rent under this Lease. Landlord shall have the option of either
remitting a check to Tenant for this sum within 30 days of Tenant's written
request to Landlord together with substantiating documentation proving its
entitlement thereto pursuant to the terms hereof, and failing such remission by
Landlord the Tenant shall be entitled to credit same against the next recurring
installments of Minimum Rent which may be due during the term of this Lease.
(iii) In the event that a Letter of Credit has been delivered
by Tenant to Landlord pursuant to subparagraph (B) hereinbelow, any reduction in
or return of security mandated by subparagraphs (A)(i) and (ii) hereinabove may
be implemented by Tenant delivering to the Landlord a replacement Letter of
Credit in the reduced amount indicated in subparagraphs (A)(i) and (ii)
hereinabove provided such replacement Letter of Credit is acceptable to the
Landlord.
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(B) (i) In lieu of a cash security deposit or, within ninety
(90) days of the date hereof, time being of the essence, Tenant may replace the
cash security deposit by delivering to Landlord a clean, automatically self
renewing, non-expiring, irrevocable letter of credit in the original amount of
$80,000.00 (the "Letter of Credit") to be issued to Landlord by a New York-based
federally-insured lending institution acceptable to Landlord. The letter of
credit shall unequivocally state on its face that it shall be effective and in
place for a period commencing on the Commencement Date and finally expiring on a
date no less than sixty (60) days subsequent to the Expiration Date (the "LOC
Expiration Date"). In the event that for any reason whatsoever the Letter of
Credit shall expire or shall fail to be renewed or replaced within 90 days prior
to the LOC Expiration Date or any prior or subsequent renewal date (automatic or
otherwise), then Tenant herein unconditionally acknowledges that (i) Landlord
shall have the unconditional right at any time to draw upon the existing Letter
of Credit and to hold such sums until the LOC Expiration Date as cash security
for Tenant's performance under this Lease and (ii) at Landlord's option, such
failure shall be deemed to be a material default by Tenant under this Lease and
Landlord shall have all of its remedies thereof under the Lease, at law and at
equity. Tenant shall ensure that the foregoing sentence shall appear "in bold"
on the face of the letter of credit. Tenant acknowledged that Landlord shall be
entitled to retain the Letter of Credit until the LOC Expiration Date.
(ii) In the event Tenant shall default during the period in
which the Letter of Credit shall be in place after the expiration of any
applicable grace periods expressly stated in this Lease, Landlord shall have the
right, and regardless of the exercise of any other remedy Landlord may have by
reason of a default, to immediately draw against the Letter of Credit to the
extent necessary to cure the amount of any default and to apply any part of said
Letter of Credit to the extent necessary to cure any default of Tenant, and, if
Landlord does so, Tenant shall upon demand issue a new Letter of Credit in favor
of Landlord in the face amount of the original amount so drawn down so that
Landlord shall at all times have the full amount of the Letter of Credit
required under this Article during the entire term of this Lease. If Tenant
shall fail to issue such new Letter of Credit, Landlord shall have the same
remedies for such failure as Landlord has for a default in the payment of
Minimum Rent. Landlord's right to draw on the Letter of Credit shall continue
for so long as Tenant shall remain in default.
(iii) In the event of an assignment or transfer by the
Landlord of the leasehold estate under the Lease, (a) Landlord shall have the
right without any charge, cost, fee or expense charged to any party, to transfer
or assign the Letter of Credit to the assignee by delivering to said assignee a
blanket assignment of said Letter of Credit (using a form acceptable to Landlord
in its sole discretion), (b) Landlord shall thereupon upon such transfer be
automatically released by Tenant from all liability, if any, for the return of
such Letter of Credit, and (c) Tenant shall look solely to the assignee for the
return of said Letter of Credit, and the foregoing provisions of this sentence
shall apply to every transfer made of the Letter of Credit to a new assignee of
Landlord's interest in the Lease. The Letter of Credit issued under this Lease
shall not be assigned or encumbered by Tenant or by the issuing bank without the
prior consent of Landlord, and any such assignment or encumbrance shall be void.
(iv) The Letter of Credit may not be automatically
self-reducing on its face, but may be replaced and reduced by Tenant to comply
with the express provisions of subparagraphs (A) (i) and (ii) hereinabove
provided such replacement Letter of Credit is acceptable to the Landlord.
SIGNATURE PAGE TO FOLLOW
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IN WITNESS WHEREOF, Owner (Landlord) and Tenant have
respectively executed this Lease as of the day anti year first above written.
LANDLORD
CROWN LEXINGTON LLC
By: Crown 360 Associates, L.P., member
By: Crown 360 Corp., general partner
By: /s/ Davar Rad
---------------------------------------------
Davar Rad, President
TENANT
INTRAWARE, INC.
By:
---------------------------------------------
Donald Freed,
Chief Executive Officer and Executive Vice-President
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<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
[*] Denotes information for which confidential treatment has been requested
pursuant to a confidential treatment request filed with the Securities and
Exchange Commission. Confidential portions omitted have been filed separately
with the Commission.
Exhibit 10.14
INTRAWARE SERVICES AGREEMENT
This SERVICES AGREEMENT is made and entered into to be effective as
of July 1, 1999 (the "Effective Date") between Sun Microsystems, Inc.
("Sun"), a Delaware corporation with offices at 901 San Antonio Road, Palo
Alto, CA 94303, and Intraware Inc., a Delaware corporation ("Intraware"),
with offices at 25 Orinda Way, Orinda California 94563.
WHEREAS, Sun is in the business of developing and offering for sale
certain software products and related support services;
WHEREAS, Intraware is in the business of developing and offering for
sale worldwide proactive software update and management services to and users
through its SubscribNet-Registered Trademark- service; and
WHEREAS, Sun desires to obtain, and Intraware desires to provide,
worldwide subscriptions of Intraware's SubscribNet-Registered Trademark- to
Non-consumer Customers of Sun (as defined below):
NOW THEREFORE, in consideration of the foregoing recitals, and for
other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement terms used and not otherwise defined
herein shall have the following meanings:
"AGREEMENT" OR "THIS AGREEMENT" shall mean this Services Agreement and
the following attachments:
Attachment A Web Site General Terms
Attachment B User Registration and Privacy
Attachment C Escrow Agreement
Attachment D Trademark Guidelines
"CHANNEL DISTRIBUTOR" shall mean any Sun authorized distributor or
reseller of Sun Products, or any Sun authorized distributor or reseller of Third
Party Products on behalf of Sun, other than Intraware, who has purchased a
license from Sun to sell such Sun and Third Party Products.
"CONFIDENTIAL INFORMATION" shall mean this Agreement and all
information about Intraware Products and Sun Products, as well as Intraware and
Sun services, customers, strategy, research.
<PAGE>
development, methods of manufacture, trade secrets, business plans, finances,
personnel data, and other material or Information considered confidential by
either party. Confidential information also includes any third party
confidential information disclosed to either party under this Agreement.
"END USERS" shall mean all Non-consumer Parties who have a Sun
maintenance subscription for their license to use Sun Products which they
acquired from Sun or a Channel Distributor, as well as all Non-consumer Parties
who obtain a maintenance subscription to Third Party Products for which they
currently own a license through Sun or a Channel Distributor.
"EVENT OF DEFAULT" shall have the meaning contained in Section 9.1.
"INTRAWARE CUSTOMER" shall mean any party who receives any product or
service directly or indirectly from Intraware or its non-Sun partners or who
becomes an Intraware Customer under Section 2.7.
"INTRAWARE PRODUCTS" shall mean any Intraware software that
Intraware will use in connection with the Services, including, without
limitation, its SubscribNet-Registered Trademark- products, and any major and
minor updates or functional supersets to any such products to the extent such
products do not incorporate data received by Intraware in providing the
services, as defined below.
"SUN CUSTOMER DATA" shall have the meaning set forth in Section 2.7.
"SUN PRODUCTS" shall mean all current, commercially available software
products provided by Sun to Intraware and listed in the then-current
Sun-Netscape Alliance price books for the Territory (Price Books) excluding
Third Party Products as defined below. If at any time during the Term, Sun
sells, assigns or otherwise transfers its right to distribute directly or
through Channel Distributors any such products listed on the applicable Price
Books, such Sun products shall cease to be "Sun Products" under this Agreement.
"SUN UPDATES" shall mean major and minor updates, if any, or any
functional supersets, to the Sun Products or to Third Party Products. "Major
Updates" involve additions of substantial functionality while "Minor Updates" do
not. Major Updates are designated by a change in the number to the left of the
decimal point of the number appearing after the product name while Minor Updates
are designated by a change in such number to the right of the decimal point.
Minor Updates shall also include bug patches and bug fixes as mutually agreed
upon. Sun is the sole determiner of the availability and designation of an
update as a Major or Minor Update. Major Updates exclude software releases which
are reasonably designated by Sun as new products. Where used herein, "Sun
Updates" shall mean Major Updates and Minor Updates interchangeably.
"SUN WEB SITE" shall mean the collection of Local Language HTML
documents targeted at end users in the Territory and currently accessible by the
public via the Internet at the URL for the Sun-Netscape Alliance and/or at such
other URL or locations as Sun may designate. Sun's Web Site does not include any
future technologies or future uses of existing technologies which might embody a
collection of documents (other than HTML documents) on the Internet.
-2-
<PAGE>
"NON-CONSUMER CUSTOMER / NON-CONSUMER PARTY" shall mean any party or
customer who licenses 10 or more copies and/or seats of a Sun client product, or
a purchaser of any other Sun Product.
"SERVICES" shall mean the services to be provided by Intraware in
accordance with Article 2, Article 4.
"SUBSCRIBNET" shall mean Intraware's software subscription update
service for Non-consumer Customers.
"SUBSCRIBNET UPDATES" shall mean enhancements to SubscribNet.
"SUBSCRIPTION" shall mean an offering by Sun of SubscribNet that
entitles End Users, upon entering into a maintenance agreement with Sun, to
receive Sun Updates for the number of users for which each such End User has
received a license to a Sun or Third Party Product.
"TERRITORY" shall mean worldwide.
"THIRD PARTY PRODUCTS" shall mean all third party vendor products
currently distributed by Sun, or by a Channel Distributor from the worldwide
price book for the Sun-Netscape Alliance, as of the Effective Date, which is
provided by Sun to Intraware under this Agreement. If at any time during the
Term, Sun sells, assigns, ceases selling or otherwise transfers its right to
distribute directly or through Channel Distributors products form any third
party vendor in the Price Books for the Sun-Netscape Alliance such vendor's
products shall cease to be "Third Party Products" under this Agreement.
ARTICLE 2
SERVICES
2.1 GENERAL. Intraware shall perform the Services in accordance with
the terms and conditions set forth herein only for such Sun Products. Sun
reserves the right from time to time to exclude from the Services any particular
Sun Product, in each case upon consideration of such factors as the ease and
quality of electronic download or customer preferences. The Service will not be
disadvantaged, in terms of features, functionality and programming, as the
private label SubscribNet services that Intraware makes available to other
customers.
2.2 [*] However, Sun reserves the right to for Sun or its strategic
third party working through the Sun-Netscape Alliance provide for itself
services similar to the Service.
2.3 TERMS OF DISTRIBUTION. Sun and Intraware shall offer the
Subscription to End Users through Sun's maintenance agreement, and as soon as
practicable after the Effective Date such agreement will clearly state on behalf
of each party and for the benefit of Channel Distributors that maintenance
includes the SubscribNet service. End Users will be able to access the Services
through
-3-
<PAGE>
the Sun Web Site through a URL to be mutually agreed, however, the URL will
include a Sun domain for the Sun-Netscape Alliance. The Service may also be
accessed through other URLs on Sun's Web Site, URLs contained in email
notifications and/or through such other sites within Sun's Web Site as Sun
may specify from time to time. For reporting purposes, all traffic on the
site shall be considered to be Sun traffic, however, Intraware may use
aggregated traffic data for the purposes of this Agreement and as directed by
the Sun contact person identified at paragraph 16.12 below.
2.4 SUBSCRIBNET UPDATES. [*] Such SubscribNet Updates will be
distributed in the same manner as the Services are distributed under this
Agreement.
2.5 PERSONNEL. Each party shall provide adequate resources to assure
its performance under this Agreement. Towards this goal, the parties will
designate the resources set forth in this Section 2.5.
(A) SUN PERSONNEL. Sun will designate an Operations Program
Manager for the implementation of this Agreement and to insure the success of
the Services. Sun will further designate a marketing representative to approve
content and other marketing related issues.
(B) INTRAWARE PERSONNEL. Intraware will assign a dedicated
Operations Program Manager for the implementation of this Agreement and to
insure the success of the Services. Intraware will further assign a dedicated
marketing representative to approve content and other marketing related issues.
2.6 MONTHLY REVIEWS. During the Initial Term, Sun and Intraware shall
meet to conduct monthly reviews at Intraware's and Sun's primary business
addresses in alternating order to discuss and adjust metrics and performance and
to coordinate management information systems or other operational processes
arising out of this Agreement. Each party will bear its own travel or other
costs associated with attending any such meetings. In any renewal Term, the
parties shall mutually agree upon the frequency and scope of periodic reviews.
2.7 END USER DATA:
(A) Except as expressly provided in this subparagraph (A),
all customer data, including channel transaction data, added to the
Sun/SubscribNet Service or existing other data provided by Sun in connection
therewith on the date hereof will be considered Sun data ("Sun Customer
Data") and shall be solely owned by Sun, and [*]. If a Sun customer is also,
independently, an Intraware Customer, and requests that its account be
handled through Intraware, [*] such customer data shall be owned jointly by
Intraware and Sun. All such data shall constitute "Confidential Information"
and shall be subject to the end user and privacy guidelines set forth in
ATTACHMENT B.
-4-
<PAGE>
(B) Intraware will implement procedures reasonably acceptable
to Sun, and use reasonable commercial efforts, to distinguish channel
transaction data files between Sun Customers and Intraware Customers.
(C) [*]
2.8 THIRD PARTIES. Notwithstanding anything in this Agreement to the
contrary, Intraware may perform Services hereunder for Third Party Products only
if and to the extent Sun is authorized to enable electronic download of Third
Party Products. The parties may mutually agree whether and the terms upon which
additional third party vendor products shall be added to the definition of
"Third Party Products" under this Agreement.
2.9 CHANNEL DISTRIBUTORS. Notwithstanding anything in this Agreement to
the contrary, Sun's arrangements with its Channel Distributors may not permit
Intraware to electronically distribute Sun Products, in which case such
arrangement shall be excluded from the Services. In addition, Sun shall be
obligated to provide Intraware with information or access to Third Party data or
information hereunder only to the extent authorized by each Channel Distributor.
2.10 END USERS. Should a Non-consumer Party obtain a license to a Third
Party Product through Sun or a Channel Distributor after the Effective Date, and
should such Non-consumer Party wish to acquire a maintenance subscription from
Sun or a Channel Distributor to receive the SubscribNet services, upon approval
by Intraware and receipt by Intraware of [*] (or such other percentage and terms
as the parties may agree) of the "net Subscription sales price" from Sun for
each such Non-consumer Party, such additional Non-consumer Party will become an
End User. "Net Subscription sales price" means the price indicated in an invoice
for any sale of a Sun Product, i.e., the gross sales price less applicable
discounts, but excluding rebates, if any.
2.11 REPORTING/ACCESS. Sun will have full access to the systems data
records, and such records will be reasonably compatible with Sun systems.
Intraware will provide Sun with an online and flexible direct interface to this
data through a reporting tool.
ARTICLE 3
TERM AND TERMINATION
3.1 TERM. Unless sooner terminated in accordance with this Article or
Article 9 (Default), the term of this Agreement (the "Term") shall commence on
the Effective Date and shall continue for a period ending on September 30, 2000.
(A) If prior to the expiration of the Term, Sun, by written
notice to Intraware, elects to renew this Agreement for an additional term,
but the parties fail to mutually agree upon renewal after the initial Term,
then Intraware shall be obligated to continue to perform the Services for a
period of [*] after the expiration of the Term and Sun will pay Intraware [*]
of Sun's Subscription revenue of Sun Products covered during the period; and
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(B) If the parties agree on a renewal Term, the price for the
Services shall not exceed [*] of Sun's Subscription revenue over the
preceding Term.
3.2 TERMINATION.
(A) For Convenience. This Agreement may be terminated by Sun
for convenience upon one hundred eighty (180) calendar days prior written notice
to Intraware, and in such event, Sun shall pay Intraware for the Services based
upon the pro rata portion of fees earned by Intraware through the effective date
of termination.
(B) WITH CAUSE. If this Agreement is terminated by Sun for
cause by reason of an Event of Default, as set forth in Article 9, Intraware
will pay to Sun on a pro-rate basis over the Term, the quarterly pre-payments
payable by Sun hereunder. Any termination, however, shall not relieve either
party from any obligations hereunder that survive termination under Section 16.3
hereof.
3.3 TECHNOLOGY ESCROW. Intraware agrees that the entire source code for
SubscribNet and other Intraware Products, together with all related listings and
documentation, as it now exists or hereafter becomes available including, but
not limited to, the then current version(s) of such products being used by
Intraware in the performance of the Services, ("Escrow Materials") will be
deposited, maintained and updated at Sun's expense in escrow substantially in
the form of the Escrow Agreement attached hereto as ATTACHMENT C. Intraware
shall deposit the Escrow Materials within thirty (30) days of the Effective Date
or, in the case of updates to the Service, within thirty (30) days after
commercial release of such updates.
ARTICLE 4
WEB SITE RESPONSIBILITIES
4.1 TRADEMARKS AND BRANDING. A name using the format "[generic name ]
by SubscribNet, an authorized Sun-Netscape Alliance provider" will be mutually
agreed between the parties for use on the Sun/SubscribNet site and throughout
all communications and materials, including but not limited to marketing
materials and price lists. relating to the Services. All use of the SubscribNet
brand by Sun will be subject to mutually agreed to trademark guidelines provided
by Intraware to be attached in Attachment D, and all use of the "Sun" or Sun
owned or Netscape or Netscape owned trademarks will be subject to the Sun
Trademark & Logo usage Requirements provided by Sun at
http://www.sun.com/policies/trademarks for Sun and in accordance with Netscape's
current trademark guidelines. Intraware shall not independently use the Sun name
without Sun's prior written consent unless such use occurs in connection with
Intraware's advertising sales and promotional efforts on behalf of the Service
in accordance with the Sun Trademark & Logo Usage Requirements. The use of the
Sun name or brands will be subject to Sun's then-current design guidelines to be
provided by Sun.
4.2 TECHNICAL SUPPORT. Intraware will provide technical support to Sun
to ensure that content is correctly received and displayed by Sun. Intraware
shall provide technical support services for the Service to Sun on a timely
basis, appoint a technical contact to whom Sun may
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address all technical questions relating to the Service, and use reasonable
commercial efforts to promptly remedy any material malfunctioning of the
Service. Intraware shall be solely responsible for the purchase,
implementation, maintenance and support of all software and hardware required
to fulfill its obligations under the Agreement.
4.3 SERVICE IMPLEMENTATION. Intraware shall provide Services on the
Sun's web Site. All content supplied by Intraware for the Service will meet
specifications provided by Sun with regard to page size, loading speed and speed
of access to database driven content; provided that such obligations shall not
be materially more restrictive than the current features, unless the parties
otherwise mutually agree. Intraware shall be responsible for the production,
technology deployment, content programming, and creation of graphic user
interfaces of the Service; all in accordance with Sun's then-current guidelines.
The Service shall use substantially the same technology and advantages that
Intraware uses in its own proprietary SubscribNet service(s), if any, unless
otherwise mutually agreed by the parties. The Service shall not be disadvantaged
or suffer from inferior production, programming or performance relative to
Intraware's similar services, or any similar service that Intraware might make
available to, or operate on behalf of, third parties. The Service shall perform
substantially in accordance with the performance standards of its own
proprietary services, including, but not limited to, load time, timeliness of
content, and quality of programming. Intraware's obligation to produce the
Service, including production services, technology deployment and content
programming that meets or exceeds standards established by Intraware on
Intraware's Web Site or services (or any web site or services Intraware manages
for any third party) and general industry standards is a material obligation of
Intraware under this Agreement.
4.4 LICENSE GRANT. During the Term, Intraware grants to Sun the
non-exclusive, worldwide and royalty-free right to store, display, perform, and
otherwise use the data, information, content or other intellectual property
provided by Intraware for use within the Service.
4.5 WEB SITE GENERAL TERMS. The parties agree and accept the Web
Site General Terms provided herewith as ATTACHMENT A.
ARTICLE 5
PAYMENT TERMS
5.1 PRICE. In consideration for the Services performed hereunder and
subject to the terms and conditions hereof, Sun shall pay Intraware [*] for
the Services.
5.2 PAYMENT TERMS. Sun will pay [*] of the total amount due to
Intraware under this Agreement on a Sun fiscal year quarterly basis with any
remainder amount due to be paid in the final payment. All payments by Sun
will be forwarded within 30 days of Sun's receipt of the Intraware invoice
during the Term of this Agreement until all payments due to Intraware have
been made. Intraware may submit its invoice on the first day of each calendar
month which begins a Sun fiscal year quarter during the Term of this
Agreement. Payment shall be considered a pre-payment for Services to be
provided by Intraware during that Sun fiscal year quarter. All payments made
by Sun hereunder will be made by wire transfer to the bank
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specified by Intraware. A finance charge of one and one-half percent (1.5%) per
month, or the lawful limit if less, shall be assessed on all amounts that are
past due, and Intraware shall be responsible for collection costs if applicable.
Interest shall be calculated from the invoice due date to the date payment is
received.
5.3 To the extent that Sun Products are added to the Price Books
after August 31, 1999, Sun shall pay to Intraware [*] of the Subscription
fees received by Sun for such Sun Product, not to exceed [*], which amount
shall be the total amount due to Intraware from Sun for the addition of Sun
Products as contemplated herein.
ARTICLE 6
REPRESENTATIONS AND WARRANTY
6.1 INTRAWARE'S REPRESENTATIONS AND WARRANTY. Intraware represents
and/or warrants to Sun, as appropriate as follows:
(A) NO RESTRICTIONS. Intraware represents that it is not under
any obligation or restriction which would in any way interfere with or be
inconsistent with its performance obligations under this Agreement.
(B) SERVICES. Intraware warrants that the Services, whether
performed by Intraware or subcontractors, shall be performed in a professional
and workmanlike manner, with all due skill and care, and will meet or exceed the
specifications set forth in the requirements of this Agreement and any
documentation provided by Intraware.
(C) INTRAWARE PRODUCTS. Intraware warrants that (i) the media
on which the Intraware Products are delivered will be free of defects in
material and workmanship, (ii) the Intraware Product(s) will function in
accordance with the specifications for the Intraware Product(s) in applicable
documentation, and (iii) any documentation provided with the Intraware
Product(s) shall be accurate in all material respects. This warranty will not
apply to Intraware Products that have been improperly installed or used in a
manner other than as authorized under this Agreement. Intraware does not warrant
that the Intraware Products will meet Sun's requirements except in accordance
with this Agreement, or that the Intraware Products will operate in the
combinations which Sun may select for users, or that the operation of the
Intraware Products or that all errors will be repaired. Any claim submitted
under this product warranty section must be submitted in writing to Intraware
within the warranty period. In the case of a breach of the warranties in this
subsection (C), Intraware shall repair or replace nonconforming, unsuitable or
inaccurate Intraware Product(s) or documentation within a reasonable period of
time (not to exceed ten (10) days) of receipt of written notice of such
condition.
(D) YEAR 2000. Intraware warrants that the current version of
the Intraware Products, including the SubscribNet software, contain
functionality, including the time-and-date-related code, needed for the December
31, 1999 to January 1, 2000 date change; provided the underlying operating
system of the host machine, and any non-Intraware-owned software provided with
or in the host machine or Product(s), also contain functionality, including the
time-and-date-
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related code, needed for the December 31, 1999 to January 1, 2000 date
change. The sole and exclusive remedy for any breach of this warranty is
repair or replacement of the affected Product(s), excluding any
non-Intraware-owned software or underlying operating system. This warranty is
null and void if Sun alters, modifies or misuses any portion of the
Product(s).
In the case of a breach of the warranty described in this subsection
(D), Intraware shall use reasonable efforts to modify the Intraware Products
such that the Intraware Product(s) is Year 2000 Compliant. [*]
(E) THE WARRANTIES CONTAINED IN THIS ARTICLE 6 ARE THE ONLY
WARRANTIES GIVEN TO SUN IN CONNECTION WITH THIS AGREEMENT AND THE SERVICES
PERFORMED HEREUNDER. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE ARE DISCLAIMED.
6.2 SUN'S REPRESENTATIONS AND WARRANTY. Sun represents and/or warrants
to Intraware, as appropriate, as follows:
(A) USE OF USER INTERFACE. At no time during the term of the
Agreement, or at any time thereafter, will Sun copy, modify or otherwise utilize
the SubscribNet user Interface.
(B) NO RESTRICTIONS. Sun represents that, except as provided
in Sections 2.8 and 2.9, it is not under any obligation or restriction that
would in any way interfere with or be inconsistent with its performance
obligations under this Agreement.
ARTICLE 7
CONFIDENTIAL INFORMATION
7.1 Each party agrees not to use directly or indirectly or reproduce
the Confidential Information of the other for any purpose except for carrying
out the terms of this Agreement and agrees not to disclose the Confidential
Information of the other to any third parties except in accordance with this
Agreement.
7.2 Each party agrees to use its best efforts to protect such
Confidential Information from disclosure to third parties. Disclosures of the
Confidential Information shall be restricted to the parties' employees who are
directly participating in the efforts covered by this Agreement, have a need to
know such Confidential Information and are bound by the provisions of this
Article 7, except that the parties may disclose Confidential Information to
Netscape Communications Corporation employees who directly participate in the
efforts covered by this Agreement and agree to be bound by the terms herein.
7.3 The limitations on reproduction, disclosure, and use of the
Confidential Information shall lapse upon the occurrence of one of the
following:
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(1) If such Confidential Information is publicly available or
later becomes publicly available other than through a breach of this
Agreement; or
(2) If the disclosing party generally furnishes its
Confidential Information to a third party without similar confidentiality
restrictions on the third party's rights; or
(3) If disclosure of such Confidential information is
compelled by court order or judicial or administrative process; or
(4) If such Confidential Information is independently
developed by the receiving party subsequent to such disclosure without use of
Confidential Information disclosed hereunder; or
(5) If such Confidential Information is lawfully obtained by
the receiving party from a third party without obligations of confidentiality.
ARTICLE 8
INDEMNIFICATION
8.1 Each party (the "Indemnitor") will indemnify and hold harmless the
other party (the "Indemnitee") from and against (a) losses, damages, judgments,
settlements, attorney's fees, costs, and expenses which the Indemnitee may
sustain, incur, or be required to pay, arising out of or in connection with
claims for personal injury or damage to real or tangible property resulting from
negligent action or inaction of the Indemnitor or a person employed by the
Indemnitor in the performance of this Agreement; (b) a breach of any of the
representations and warranties made by either party hereunder; or (c) in the
case of Intraware, any third party claim arising from the Service; and (d) any
material, content, or any content to which a party can link, supplied by either
party in connection with this Agreement.
8.2 INTELLECTUAL PROPERTY INDEMNITY:
8.2.1 INTRAWARE INDEMNITY. Intraware shall defend or settle,
at its option, any action brought against Sun to the extent it is based on a
claim that use, reproduction or distribution by Sun of the Intraware portion of
the Intraware Products furnished hereunder within the scope of a license granted
hereunder directly infringes any valid U.S. copyright, U.S. patent or U.S. trade
secret. Intraware shall also defend any action brought against Sun to the extent
that it is based on a claim that the Intraware trademark(s) Sun is permitted to
use hereunder directly infringes any valid United States trademark. Intraware
will pay resulting costs, damages and legal fees finally awarded against Sun in
such action which are attributable to such claim provided that Sun: (a) promptly
notifies Intraware in writing of any such claim and Intraware has sole control
of the defense and all related settlement negotiations; and (b) cooperates with
Intraware, at Intraware's expense, in defending or settling such claim.
Should an Intraware Produce become, or be likely to become in Intraware's
opinion, the subject of infringement of such U.S. patent, copyright or trade
secret, Intraware may
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procure for Sun: (i) the right to continue using the same; or (ii) replace or
modify it to make it non-infringing. In the event that Intraware shall
reasonably determine that neither (i) nor (ii) above is commercially
practicable, Intraware may terminate the license for the infringing Intraware
Product and refund Sun for the fees that Sun has paid hereunder (excluding
the initial payment) up to [*]. Intraware shall have no obligation or
liability for, and Sun shall defend, indemnify and hold Intraware harmless
from and against any claim based upon: (a) use of other than the then
current, unaltered version of the Intraware Product, unless the infringing
portion is also in the then current, unaltered release; (b) use, operation or
combination of Intraware Products with non-Intraware programs, data,
equipment or documentation is such infringement would have been avoided but
for such use, operation or combination; (c) Sun's or its agent's activities
after Intraware has notified Sun that Intraware believes such activities may
result in such infringement; (d) compliance with Sun's designs,
specifications or instructions; (e) any modifications or marking of the
Intraware Products not specifically authorized in writing by Intraware; or
(f) third party software. The foregoing states the entire liability of
Intraware and the exclusive remedy of Sun with respect to infringement of any
intellectual property rights, whether under theory of warranty, indemnity or
otherwise.
8.2.2 SUN INDEMNITY. Sun shall defend or settle, at its
option, any action brought against Intraware to the extent it is based on a
claim that use, reproduction or distribution by Intraware of the Sun portion of
the Sun Products furnished hereunder within the scope of a license granted
hereunder directly infringes any valid U.S. copyright, U.S. patent or U.S. trade
secret. Sun will pay resulting costs, damages and legal fees finally awarded
against Intraware in such action which are attributable to such claim provided
that Intraware: (a) promptly (within twenty (20) days) notifies Sun in writing
of any such claim and Sun has sole control of the defense and all related
settlement negotiations; and (b) cooperates with Sun, at Sun's expense, in
defending or settling such claim.
Should a Sun Product become, or be likely to become in Sun's opinion,
the subject of infringement of such U.S. patent, copyright or trade secret,
Sun may procure for Intraware: (i) the right to continue using the same; or
(ii) replace or modify it to make it non-infringing. In the event that Sun
shall reasonably determine that neither (i) nor (ii) above is commercially
practicable, Sun may terminate the license for the Infringing Sun Product and
pay Intraware an amount representing the fees that Sun has paid hereunder
(excluding the initial payment) up to [*]. Sun shall have no obligation or
liability for, and Intraware shall defend, indemnify and hold Sun harmless
from and against any claim based upon: (a) use of other than the then
current, unaltered version of the Sun Product, unless the infringing portion
is also in the then current, unaltered release; (b) use, operation or
combination of Sun Products with non-Sun programs, data, equipment or
documentation if such infringement would have been avoided but for such use,
operation or combination; (c) Intraware's or its agent's activities after Sun
has notified Intraware that Sun believes such activities may result in such
infringement; (d) compliance with Intraware's designs, specifications or
instructions; (e) any modifications or marking of the Sun Products not
specifically authorized in writing by Sun; or (f) third party software. The
foregoing states the entire liability of Sun and the exclusive remedy of
Intraware with respect to infringement of any intellectual property rights,
whether under theory of warranty, indemnity or otherwise.
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8.2.3 Neither party will have any liability to the other for
any claim of infringement in this Section 8.2 based on (i) the other party's
continued use or distribution, as the case may be, of a superseded product after
the indemnifying party has given reasonable notice and a reasonable opportunity
to update its use, or an altered release, except for such alteration(s) or
modification(s) which have been made by the indemnifying party or under the
indemnifying party's direction, if such infringement would have been avoided by
the use of a current, unaltered release of such product, or (ii) the
combination, operation, or use of any Services furnished under this Agreement
with programs or data not created by the indemnifying party if such infringement
would have been avoided by the use of the Services without such programs or
data.
ARTICLE 9
DEFAULT
9.1 EVENT OF DEFAULT. An "Event of default" shall occur under any of
the following conditions:
(A) Either party fails to perform any material obligation to
be performed by it hereunder within thirty (30) days after written notice from
the other party that time for such performance has passed or, if no such time is
prescribed, within thirty (30) days after written notice from the other party.
(B) Either party becomes insolvent or unable to pay its debts
as they become due, makes an assignment for the benefit of creditors or files a
petition in any insolvency proceeding or in any bankruptcy, reorganization,
scheme of arrangement or reconstruction, or similar proceeding.
(C) A receiver, manager or liquidator is appointed for any of
a party's assets or a petition is filed in any insolvency, bankruptcy,
reorganization, scheme of arrangement, reconstruction or similar proceeding, and
such receiver, manager or liquidator is not discharged, or such petition is not
withdrawn, within ninety (90) days after such appointment or filing.
9.2 REMEDY. If either party causes to occur an Event of Default as
specified in Section 9.1, then the non-defaulting party, at its option, shall
have the right to terminate this Agreement by written notice as provided in
Section 3 and pursue any other remedy hereunder or otherwise available to it at
law or in equity.
9.3 COMPENSATION. The parties hereby expressly agree and acknowledge
that, except as provided in Section 3 and in this Section 9.3, termination of
this Agreement by either party shall not entitle it to any termination
compensation or to any payment in respect of any goodwill established by either
party during the Term or render Sun liable for damages on account of any loss of
prospective profits or on account of any expenditure, Investment or obligation
incurred or made by Intraware.
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ARTICLE 10
LIMITATION OF LIABILITY
EXCEPT FOR A BREACH OF SECTION 7 (CONFIDENTIALITY), 8 (INDEMNIFICATION)
AND 11 (OWNERSHIP):
(A) EACH PARTY'S LIABILITY FOR DIRECT DAMAGES UNDER THIS AGREEMENT
WILL IN NO EVENT EXCEED [*]; AND
(B) NEITHER INTRAWARE NOR SUN WILL BE LIABLE FOR INDIRECT, INCIDENTAL
SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO, LOST DATA OR
LOST PROFITS, HOWEVER, ARISING, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES OR FOR ANY SIMILAR CLAIM AGAINST LICENSEE BY ANY OTHER PARTY.
ARTICLE 11
OWNERSHIP
11.1 SUN OWNERSHIP. Intraware shall acquire no rights in and to the Sun
Products or the Sun Customer Data, and all ownership rights in and to the Sun
Products, Sun Customer Data and any marketing or customer data generated
hereunder shall remain with Sun or its licensors, as appropriate. Intraware
agrees that it shall not (i) sell, transfer or assign any of same or any rights
or interest therein, or (ii) create or suffer to exist any liens with respect to
the Sun Products or its programs or publications, except in accordance with this
Agreement or the specific instructions of Sun or its licensor hereunder or
statutory or common law liens resulting from Sun's failure to pay Intraware
invoices. Intraware acknowledges that Sun (or its licensor) is the owner of all
intellectual and proprietary rights in the Sun Products or its programs and
publications, including source and object code, copyrights and patents relating
to the Sun Products or its programs and publications, and that neither this
Agreement nor the Sun Products or its programs and publications, and that
neither this Agreement nor performance of the Services hereunder shall directly
or indirectly create in or for Intraware any right, title or interest therein,
other than in accordance with the statutory or common law liens referenced
above.
11.2 INTRAWARE OWNERSHIP. Sun shall acquire no rights in and to the
Intraware Products or the Intraware Customer data, and all ownership rights in
and to such Intraware Product, shall remain with Intraware or its licensors, as
appropriate. Sun agrees that it shall not (i) sell, transfer or assign any of
same or any rights or interest therein, or (ii) create or suffer to exist any
liens with respect to the Intraware Products or its programs or publications,
except in accordance with this Agreement or the specific instructions of
Intraware or its licensor hereunder or statutory or common law liens resulting
from Intraware's failure to pay Sun invoices. Sun acknowledges that Intraware
(or its licensor) is the owner of all intellectual and proprietary rights in
such Intraware Product, including source and object code, copyrights and patents
relating to the Intraware Products or its programs and publications, and that
neither this Agreement nor performance of the Services hereunder shall directly
or indirectly create in or for Intraware any right, title or interest therein,
other than in accordance with the statutory or common law liens referenced
above.
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ARTICLE 12
DISPUTES
Should any dispute or differences arise from this Agreement or any
performance hereunder, the parties shall first attempt to arrive at an amicable
settlement, as follows. A party shall identify the existence of a dispute by
notifying the other party in writing. Upon such notice, the matter shall be
referred to a senior executive officer of each party whose responsibilities are
not in the profit center that is the subject of the dispute, for oral
presentations (with minimal written support such as briefing charts or summary
sheets). No outside counsel may appear during this informal process.
If at the completion of such presentation such officers cannot resolve
this dispute within thirty days after escalation, then either party may seek any
available legal relief. This provision will not affect either party's right to
seek injunctive or other provisional relief at any time.
ARTICLE 13
TAXES
All prices are in U.S. Dollars and are inclusive of any applicable
taxes. Intraware shall be responsible for filing all appropriate federal, state
and local tax forms related to payment for its Services under this Agreement.
Intraware shall be responsible for sales or use taxes which are due solely by
reason of Intraware's performance of Services hereunder other than taxes
assessed on Intraware's income. Each party shall cooperate with the other in
minimizing any applicable tax. In addition, each party shall reasonably
cooperate with the other in the event of a government audit.
ARTICLE 14
EXPORT
Intraware shall comply fully with all then current applicable laws,
rules and regulations relating to the export of technical data, including, but
not limited to any regulations of the United States Office of export
Administration and other applicable governmental agencies and Intraware
acknowledges that by virtue of certain security technology embedded in the Sun
Products, that export of such software may not be legal.
ARTICLE 15
MARKETING AND PROMOTION
15.1 MARKETING COLLATERAL. Reasonable amounts of marketing collateral
(i.e., pamphlets, brochures, and the like) associated with the SubscribNet
service will be made available to Sun.
15.2 OUTBOUND MARKETING. All outbound marketing content including all
electronic communication with End Users who are not Intraware Customers will be
approved by Sun. The parties will mutually agree upon the guidelines for
marketing materials.
15.3 SUN MARKETING EFFORTS. Sun will use reasonable commercial efforts
to communicate and disseminate the details of the SubscribNet program to its
sales force, customer service
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representatives, technical support representatives, Channel Distributors,
third party partners and end user customers upon implementation, launch and
on an ongoing basis.
15.4 JOINT PRESS RELEASE. Sun and Intraware will jointly issue a press
release describing Sun usage of Intraware SubscribNet service. Such release will
be issued within 7 days of execution of this Agreement or as soon thereafter as
possible. Sun will support the release with timely and reasonably scheduled
press and analyst calls.
15.5 RESPONSE TIMES. Sun shall respond to Intraware requests for
approval of marketing materials within 24 hours during a business day or as soon
as practicable thereafter, or as otherwise agreed to by the parties, to ensure
timely delivery of such materials to End Users, taking into consideration the
importance of timeliness to the SubscribNet brand.
ARTICLE 16
MISCELLANEOUS
16.1 ORDER OF PRIORITY. In the event of a conflict between this
Agreement, the Statement of Work and any outstanding agreements between Sun and
Intraware, the order of priority of this Agreement shall be as follows:
(a) this Agreement, and (b) other exhibits hereto.
16.2 FORCE MAJEURE. Neither party shall be liable for delays in its
performance of this Agreement occasioned by strikes, fires, accidents, or by
other causes beyond its control. In the event of a stoppage or delay suffered by
Intraware resulting form any such cause, Intraware shall perform such parts of
the work as Intraware is capable of performing and shall resume full performance
of the Services as soon as is reasonably practicable.
16.3 SURVIVAL. The provisions of Sections 2.7 (A) and (C), 3.2
(Termination), 9.2 and 93. (Default), and Articles 10 (Limitation Of Liability),
11 (Ownership), 13 (Taxes), and 16 (Miscellaneous) shall survive termination of
this Agreement. The provisions of Articles 6 (Representations and Warranty) and
8 (Indemnification) shall survive termination for a period of four years
thereafter. The provisions of Article 7 (Confidentiality) shall survive
termination of this Agreement for a period of five years thereafter.
16.4 ASSIGNMENT. Neither party to this Agreement shall assign any
rights hereunder without the prior written consent of the other party, which
consent shall not be unreasonably withheld.
16.5 SEVERANCE. In the event that any provision of this Agreement shall
be held by a court of law or other governmental agency to be void, voidable, or
unenforceable, the remaining portions hereof shall remain in full force and
effect.
16.6 RELATIONSHIP. Intraware is an independent contractor and nothing
contained herein shall be construed to create any other relationship between the
parties. Nothing in this Agreement shall be construed to constitute either party
as the agent of the other party for any purpose whatsoever, and neither party
shall bind or attempt to bind the other party to any contract or the
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performance of any other obligation, or represent to any third party that it
has the right to enter into any binding obligation on the other party's
behalf.
16.7 GOVERNING LAW. All questions concerning the validity and operation
of this Agreement and performance of the obligations imposed upon the parties
hereunder shall be governed by the substantive laws of the State of California.
Jurisdiction and venue shall be in Santa Clara County or the Northern District
of California. Choice of law rules of any jurisdiction and the United National
Convention on Contracts for the International Sale of Goods will not apply.
16.8 HEADINGS. The headings and titles to the Articles and Sections of
this Agreement are inserted for convenience only and shall not be deemed a part
hereof or affect the construction or interpretation of any provision hereof.
16.9 REMEDIES. Unless otherwise expressly provided herein, the rights
and remedies hereunder are in addition to, and not in limitation of, other
rights and remedies available to the parties, and exercise of one right or
remedy shall not be deemed a waiver of any other right or remedy.
16.10 NO AMENDMENT OR WAIVER. No amendment, modification, deletion,
addition or other change in this Agreement or any provision hereof, or waiver of
any right or remedy herein provided, shall be effective for any purpose unless
specifically set forth in a writing signed by the party to be bound thereby. No
Waiver of any right or remedy in respect of any occurrence or event on one
occasion shall be deemed a waiver of such right or remedy in respect of such
occurrence or event on any other occasion.
16.11 ENTIRE AGREEMENT. This Agreement supersedes all other agreements,
oral or written, heretofore made with respect to the subject matter hereof and
the transactions contemplated hereby and, with the Attachments hereto, contains
the entire agreement of the parties.
16.12 NOTICES. Notices and communications required or permitted to be
given under this Agreement shall be written in English and shall be addressed as
set forth below.
If to Sun:
Sun Microsystems, Inc.
901 San Antonio Road, MS _____
Palo Alto, CA 94303-4900
Attention: TBD
Title:
Telephone:
Fax:
And to
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Netscape Communications Corporation
501 E. Middlefield Road
Mountain View, CA 94043
Attention: Tony Weber
Title: Director
Telephone: 650/937-3095
Fax: 650-937-5421
If to Intraware:
Intraware, Inc.
25 Orinda Way
Orinda CA 94563
Attention: Frost Prelow
Title: Vice President Business Development
Telephone: 925/253-6594
Fax: 925-253-4599
Notice shall be sent by registered mail, postage prepaid, return
receipt requested, by reputable overnight courier, paid by the sender, or by
facsimile. The date of receipt shall be deemed to be the date on which such
notice was actually received. Each party shall promptly give the other party
written notice of any change of address or contract.
16.13 COMPLYING WITH THE LAW. Intraware and Sun agree to comply fully
with all applicable federal, state and local laws.
16.14 ATTORNEY'S FEES. The prevailing party in any dispute shall have
all court costs, expenses, reasonable attorneys' fees, and any other relief a
court orders paid by the other party.
16.15 INSURANCE. Intraware, at its sole cost and expense, shall secure
and maintain adequate insurance coverage as is necessary, as a reasonable
prudent businessperson, for Intraware to bear all of its obligations under this
Agreement. On Sun's request, Intraware shall provide Sun with satisfactory
evidence of such insurance. Before any cancellation or material change in any
coverage, Intraware shall provide Sun with 30 days advance written notice.
16.16 COUNTERPARTS. This Agreement may be executed in counterparts or
by facsimile, each of which shall be an original and all of which together with
constitute one and the same agreement.
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IN WITNESS WHEREOF, authorized representatives of the parties hereto
have executed this Agreement as of the Effective Date.
SUN MICROSYSTEMS, INC.
By: /s/ Allen D. Page
------------------------------
Print name: Allen D. Page
Print title: V.P. Operations
INTRAWARE INC.
By: /s/ Donald M. Freed
------------------------------
Print name: Donald M. Freed
Print title: EVP/CFO
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ATTACHMENT A
WEB SITE GENERAL TERMS
UPTIME
The Service will function substantially in accordance with the terms
set forth in this Agreement. In any given twenty-four hour period during the
Service Period, the Service shall have an uptime of at least 98% with industry
standard downtime for maintenance, provided that such downtime not occur at peak
traffic times. Intraware shall repair any malfunctions of the Service within a
reasonable period of time not to exceed (i) 2 days for material malfunctions of
the Service after written notice by any party of such condition, and (ii) 4 days
for any non-material malfunction of the Service after written notice by any
party of such condition or as otherwise agreed to by the parties.
MAIL TO LINK
Notwithstanding the provisions below, Sun may in its discretion require
that the mail to link send certain help requests to Sun, as the parties shall
agree.
A-1
<PAGE>
ATTACHMENT B
USER REGISTRATION AND PRIVACY
I. DEFINITIONS
"Registration" means the portion of the registration that s maintained,
hosted, and controlled by Sun and applies to multiple services across.
Registration includes the assignment of a user name, password, and the
collection of core user profile data including but not limited to: First name,
Last name, Address, City, State, Country, Zip Code, Email Address, Age and
Gender.
Sun Registration means any registration that is maintained, hosted, and
controlled by Sun and applies to Sun's Web Site. Sun Registration includes the
assignment of a user name, password, and the collection of core user profile
data including but not limited to: First name, Last name, Address, City, State,
Country, Zip Code, Email Address, Age and Gender.
II. REGISTRATION PROCESS
To the extent that Intraware desires to offer a registration process,
Intraware will be responsible for the implementation of the Service Registration
and the integration of the Service with Registration. The functionality, design,
and integration of the Service Registration process and Registration will be
subject to Sun's approval, terms and conditions as defined in this Agreement.
Such specifications, terms and conditions may be revised by Sun from time to
time upon 30 days prior notice to Intraware. Intraware will implement changes
within a 30 day period unless the parties mutually agreed otherwise. The point
of entry to the registration area from the Service shall be hosted and
controlled by Sun unless otherwise determined by Sun.
III. REGISTRATION FEATURES
The Service Registration area shall have a look and feel which is
consistent with the implementation of the registration process in other sections
of Sun's Web Site, Intraware shall not launch the Service Registration until Sun
has notified Intraware in writing that Sun has accepted Intraware's
implementation. Intraware shall manage site access using site access models, as
such site access models shall be determined by Sun from time to time upon notice
to Intraware. Sun shall transfer to Intraware all data necessary to provide site
access to registered users. Intraware will make commercially reasonable efforts
to implement such changes within a 30 day period.
IV. DATA COLLECTED BY INTRAWARE DURING SERVICE REGISTRATION PROCESS
Sun will determine the data to be collected in the Service Registration
process considering Intraware's recommendations and technical restrictions. Sun
reserves the right to change such data requirements from time to time. Intraware
will make best efforts to implement those changes within 5 working days unless
mutually agreed to otherwise. If Sun implements a loyalty program, Intraware
shall also offer end user loyalty selections as part of the Service Registration
process at
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Sun's request. Intraware shall deliver to Sun data collected pursuant to such
loyalty programs in a format and timeframe as mutually agreed to by the
parties.
V. DATA TRANSFER
Intraware shall use commercially reasonable efforts to transfer all end
user data collected during the Service Registration process and data collected
by any other means, to Sun in real time data transfer, unless otherwise agreed
to by the parties. Sun reserves the right to request any information collected
during the Service Registration to be supplied in a Sun specified format and
timeframe. If Intraware collects information about users accessing the Service
in addition to information supplied by the users during the registration
process, such information shall be made available to Sun in a format and
timeframe as the parties shall mutually agree.
V. DATA TRANSFER
Intraware shall use commercially reasonable efforts to transfer all end
user data collected during the Service Registration process and data collected
by any other means, to Sun in real time data transfer, unless otherwise agreed
to by the parties. Sun reserves the right to request any information collected
during the Service Registration to be supplied in a Sun specified format and
timeframe. If Intraware collects information about users accessing the Service
in addition to information supplied by the users during the registration
process, such information shall be made available to Sun in a format and
timeframe as the parties shall mutually agree.
VI. WEB SITE CONSIDERATIONS
All third party programs participating in the Service within shall
register users with when the user completes an order, if such user is not
already registered with. If a user is a registered member, Intraware shall
pre-populate relevant customer data fields in the customer order form based on
information in the database or seamlessly pass this information to the third
party provider.
VII. USE OF PERSONAL DATA
Ownership and use of customer data shall be as set forth in the
Agreement. Intraware: (i) shall have the right to aggregate such data and
information and use such data and information and use such aggregated data only
for marketing and reporting pertaining to the SubscribNet service and
specifically not for sales solicitation of customers, except as required for
legal, audit or tax purposes; (ii) shall not disclose to any third party such
end user data and information without Sun's prior written approval; and (iii)
may use information collected about the users during registration or from any
other means ("End User Information") only for the purpose of marketing programs
to the users. The parties shall treat all data pertaining to the Service,
including without limitation Sun Customer Data and Intraware Customer Data, as
Confidential Information. Intraware may not disclose any non-Intraware customer
data to any third party such end user data and information without Sun's prior
written approval.
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It is a material obligation of this Agreement that Intraware shall
adhere to Sun's then-current privacy policy, set forth at
http://www.sun.com/privacy/ or at such other URL as Sun may designate from time
to time. The parties will cooperate to create guidelines for Intraware's
disclosure of aggregate statistical information concerning Service's
demographics and use to advertisers. Intraware shall not resell or disclose such
End User Information to any third party; provided however, that Intraware may
sell or disclose such End User Information to third parties upon prior notice to
and consent from such end users and written approval from Sun. If Sun determines
that Intraware or third party in contract with Intraware is not complying with
the terms of use of personal data published on Sun's Web Site for the
Sun-Netscape Alliance, or such other URL as Sun may determine from time to time,
Sun may terminate this Agreement upon written notice to Intraware if Intraware
is not in compliance within 5 days of written notice from Sun. After a given end
user has requested to be "unsubscribed" from the Service, Intraware will
terminate all Services unless otherwise specified by the user and discontinue
any use of the End User information associated with the given user. After the
termination or expiration of the Service Period, Intraware will transfer all
non-Intraware customer data, including Sun Customer Data, to Sun and destroy all
copies of that data.
B-3
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ATTACHMENT C
ESCROW AGREEMENT
See Attached Pages.
C-1
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ATTACHMENT D
TRADEMARK GUIDELINES
See Attached Pages.
D-1
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
[*] Denotes information for which confidential treatment has been requested
pursuant to a confidential treatment request filed with the Securities and
Exchange Commission. Confidential portions omitted have been filed separately
with the Commission.
Exhibit 10.15
SUN CHANNEL AGREEMENT
MASTER TERMS
THIS SUN CHANNEL AGREEMENT MASTER TERMS ("Master Terms"), is made as of
September 1, 1999 ("Effective Date") between Sun Microsystems, Inc., with its
address at 901 San Antonio Road, Palo Alto CA 94303 ("Sun"), and Intraware Inc.,
with its address at 25 Orinda Way, Orinda, CA 94563 ("Customer").
The parties agree as follows:
1. SCOPE OF AGREEMENT
1.1 EXHIBITS AND SCHEDULES. These Master Terms describe the general
terms by which, Customer may purchase Product and Service from Sun. The specific
terms related to the purchase of Equipment, Software and Service are described
in the appropriate Product or Service Exhibits and Schedules (collectively
referred to as "Exhibits"). The Exhibit will specify whether Customer will
purchase Equipment and/or Service directly from Sun or a Sun authorized
reseller. Each Exhibit and these Master Terms together constitute a separate
agreement ("the Agreement"). Exhibits may be added or deleted from time to time
by the agreement of the parties, but Customer is only authorized to purchase
Product or Service hereunder to the extent that one or more applicable Exhibits
is executed and in force.
1.2 ORDER OF PRECEDENCE. The provisions of any Exhibit will take
precedence over these Master Terms, to the extent that they are inconsistent.
2. DEFINITIONS
2.1 EQUIPMENT means the hardware components (may also be referred to as
"hardware") of Product and includes the media on which Software is pre-loaded.
2.2 PRODUCT means any Equipment and Software delivered by Sun directly
or indirectly to Customer under the Agreement.
2.3 SERVICE means any consulting, educational and support services
provided directly or indirectly to Customer under the Agreement.
2.4 SOFTWARE means any binary software (and related documentation)
provided by Sun directly or indirectly to Customer under the Agreement.
3. TERM AND TERMINATION
3.1 TERM. These Master Terms commence on the Effective Date and will
continue until the expiration or termination of all Exhibits. Each Exhibit shall
detail the commencement date of the Exhibit ("Exhibit Effective Date").
<PAGE>
3.2 TERMINATION AT WILL. Either party may terminate these Master Terms
and/or any Exhibits without cause, for any reason, on one hundred eighty (180)
days written notice to the other party.
3.3 TERMINATION FOR CAUSE: Either party may terminate these Master
Terms and any or all Exhibits:
(a) immediately, by written notice, upon material breach by the
other party of the Agreement, if such breach cannot be remedied;
(b) by written notice, if the other party fails to cure any
material remediable breach of the Agreement within thirty (30) days of
receipt of written notice of such breach;
(c) automatically if Customer ceases to do business in the
normal course, becomes or is declared insolvent or bankrupt, is the subject
of any proceeding relating to the liquidation or insolvency of Customer which
is not dismissed within ninety (90) days or makes an assignment for the
benefit of its creditors;
(d) immediately by written notice if Customer undergoes any
material change in ownership or control (whether by way of voting or contract
rights or otherwise) or in its business, which change Sun considers material,
in the light of the fact that Customer has been appointed by Sun because of
its present financial, technical and managerial conditions.
3.4 TERMINATION BY SUN. In addition to the general reasons set forth in
Sections 3.2 and 3.3 above, Sun may terminate these Master Terms and any or all
Exhibits, immediately by written notice if Customer:
(a) breaches any Sun Software license;
(b) breaches Section 5 (Confidential Information) of these
Master Terms;
(c) breaches (or Sun reasonably believes Customer will breach)
the U.S. Export Administration Regulations, the U.S. Foreign Corrupt
Practices Act or similar laws or regulations of any other government; or
(d) infringes or challenges the validity of any Sun copyright or
Sun Trademark (as defined herein.)
3.5 CONSEQUENCES OF TERMINATION OR EXPIRATION. Upon any expiration or
termination of the Agreement (or all of them), the following will occur:
(a) all outstanding invoices and amounts owing from Customer to
Sun will there upon become immediately due and payable;
(b) Sun will have the right of first refusal to repurchase
Product in Customer's inventory at the lower of net invoice price or the then
fair market value, as may be adjusted for any amounts due but unpaid pursuant
to Section 3.5(a). If Sun desires to exercise this right, it will do so
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by written notice. Except in the case of Sun's termination for material
breach, for a period of ninety (90) days from the date of termination or
expiration, Customer may sell and/or license under the terms of the Agreement
any inventory Sun elects not to repurchase;
(c) Sun will have the right to cancel by written notice all or
part of any unfulfilled order previously accepted by Sun. To the extent that
Sun does not cancel any such order, the Agreement will continue to apply to
such order;
(d) except as otherwise provided in sub-section 3.5(b), Customer
will immediately return all Sun property under Customer's control (including
without limitation all Sun confidential information, schematics, manuals,
Software and Sun business plans) and remove, cancel and/or cease to use the
Sun Trademarks, any signs or other advertising materials referring to Sun, or
Product or Service or to Customer as an authorized reseller of Sun; and
(e) except as otherwise provided in sub-section 3.5(b), all
Customer's rights under the Agreement shall immediately cease and Customer
shall at no time in the future represent that it is an authorized reseller of
Sun or that it is in any way associated with Sun or Products.
3.6 SURVIVAL. Rights and obligations under the Agreement which by their
nature should survive, will remain in effect after termination or expiration of
the Agreement. All provisions of these Master Terms shall continue to apply to
any Exhibit which by its terms survives termination of these Master Terms.
3.7 NO LIABILITY FOR TERMINATION OR EXPIRATION. The right of
termination or expiration provided herein is absolute. Each party waives and
releases the other from any claim to compensation or indemnity related to the
permitted or lawful termination of the business relationship established under
the Agreement.
4. COMMERCIAL TERMS
4.1 Commercial terms for Customers who purchase Products or Services
from a Sun authorized reseller will be determined by Customer's agreement with
such reseller. This Section 4.1 applies only to Customers who purchase Products
or Services directly from Sun.
(a) PRICES AND TAXES. Prices and fees for Product and Service
are [DDP excluding VAT (INCOTERMS 1990) or exclusive of all shipping and
insurance charges, and do not include sales tax or any other tax based upon the
value of Product and/or Service. Customer is responsible for payment of all such
charges and taxes. To the extent that Customer is required to withhold taxes
based upon Sun's income in any country, Customer will provide Sun with written
evidence of such withholding suitable for Sun to obtain a tax credit in the
United States.
(b) PAYMENTS. If Customer satisfies Sun's credit requirements,
payment terms are net thirty (30) days from the date of Sun's invoice or
shipment whichever is the later. Otherwise terms are cash in advance of
delivery. Sun in its reasonable commercial judgment may place Customer on
credit hold, in which event, Sun will promptly inform Customer and may: (i)
with respect to Product purchases, delay or reschedule Customer orders, and
(ii) with respect to Service, discontinue delivery upon thirty (30) days'
written notice to Customer. Interest will accrue from the
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date on which payment is due at the lesser of fifteen percent (15%) per annum
or the maximum rate permitted by applicable law. Customer will not be
required to pay the disputed portion of any invoice, pending resolution of
that dispute, provided that written notice of the dispute has been forwarded
to Sun in writing within (15) days of the date of that invoice.
4.2 RECORDS AND AUDITS. During the term of the Agreement and for a
period of three (3) years thereafter, Customer will maintain accurate records as
necessary to verify compliance with the Agreement. Sun may audit these records
at any time after reasonable written notice to verify compliance. Sun will
conduct this audit through an independent auditor of Sun's choice ("Auditor"),
during Customer's normal business hours. Auditor will be bound to keep
confidential the details of the business affairs of Customer and to limit
disclosure of the audit results to only the sufficiency of the records,
including, whether Customer is in compliance with the terms of the Agreement and
the amount, if applicable, of any required additional payment or other payment
adjustment. Except as described below, Sun will bear all costs and expenses
associated with the exercise of its audit rights. Any errors in payments
identified will be corrected by Customer by appropriate adjustment in payment
for the quarterly period during which the error is discovered. In the event of
an underpayment of more than five percent (5%), Customer will reimburse Sun the
amount of the underpayment, the reasonable charges of the Auditor in performing
the audit that identified the underpayment, and interest on the overdue amount
at the maximum allowable interest rate from the date the obligation accrued.
5. CONFIDENTIAL INFORMATION
If either party desires that information provided to the other party
under the Agreement be held in confidence, that party will, prior to or at the
time of disclosure, identify the information in writing as confidential or
proprietary. The recipient may not disclose such confidential or proprietary
information, may use it only for purposes specifically contemplated in the
Agreement, and must treat it with the same degree of care as it does its own
similar information, but with no less than reasonable care. These obligations do
not apply to information which: a) is or becomes known by recipient without an
obligation to maintain its confidentiality; b) is or becomes generally known to
the public through no act or omission of recipient, or c) is independently
developed by recipient without use of confidential or proprietary information.
This section will not affect any other confidential disclosure agreement between
the parties.
6. LIMITED WARRANTIES
6.1 PRODUCT AND SERVICE WARRANTIES. Any warranties for Product and Service
will be specified in the Exhibit(s).
6.2 YEAR 2000 WARRANTY.
(a) Sun warrants that specified versions of Product identified
on Sun's external Web site (url: www.sun.com/y2000/cpl.html) as being Year 2000
compliant ("Listed Product") will not produce errors in the processing of date
data related to the year change from December 31, 1999 to January 1, 2000. Date
representation, including leap years, will be accurate when Listed Product
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are used in accordance with their accompanying documentation, provided that
all hardware and software products used in combination with Listed Product
properly exchange date data with them.
(b) In addition to the Listed Products, the warranty also
applies to the Products identified in Attachment A to the Software Exhibit
attached hereto.
(c) Versions of Product identified on Sun's external Web site
as not yet compliant, but which are scheduled to be made compliant, will become
Listed Product when remedial replacement parts, patches, software updates or
subsequent releases ("Y2K Fixes") are issued and properly installed.
(d) Other Product are not covered by these warranties.
(e) To the extent that Sun installs Y2K Fixes or performs
other Service under the Agreement for Customer, Sun respectively warrants that:
(i) upon installation of the Y2K Fixes, Product will
become Listed Product; and
(ii) Service performed on Listed Product will not
result in them ceasing to be Listed Product.
(f) Customer's sole and exclusive remedy for Sun's breach of
these warranties will be for Sun: (i) at Sun's expense, to use commercially
reasonable efforts to provide Customer promptly with equivalent Year 2000
compliant Product; or (ii) if (i) is commercially unreasonable, to refund to
Customer its net book value for non-compliant Listed Product.
6.3 [*]
6.4 DISCLAIMER OF WARRANTIES. UNLESS SPECIFIED IN THE AGREEMENT, OR IN
ANY EXHIBIT, ALL EXPRESS OR IMPLIED CONDITIONS, REPRESENTATIONS AND WARRANTIES,
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR NON-INFRINGEMENT, ARE DISCLAIMED, EXCEPT TO THE EXTENT THAT SUCH
DISCLAIMERS ARE HELD TO BE LEGALLY INVALID.
7. IMPORT AND EXPORT LAWS
All Product, Service and technical data delivered under the Agreement
are subject to U.S. export control laws and may be subject to export or import
regulations in other countries. Customer agrees to comply strictly with all such
laws and regulations and acknowledges that it has the responsibility to obtain
such licenses to export, re-export or import as may be required after delivery
to Customer.
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8. NUCLEAR APPLICATIONS
Customer acknowledges that Products are not designed or intended for
use in the design, construction, operation or maintenance of any nuclear
facility. Sun disclaims any express or implied warranty of fitness for such
uses.
9. TRADEMARKS
9.1 TRADEMARKS. "Sun Trademarks" means all names, marks, logos,
designs, trade dress and other brand designations used by Sun in connection with
Product and Service. Customer may refer to Product and Service by the associated
Sun Trademarks provided that such reference is not misleading and complies with
Sun's Trademark and Logo Policies. Customer may not remove or alter any Sun
Trademarks, nor may it co-logo Product. Customer agrees that any use of Sun
Trademarks by Customer will inure to the sole benefit of Sun or its licensors.
Customer agrees not to incorporate any Sun Trademarks into Customer's
trademarks, service marks, company names, internet addresses, domain names, or
any other similar designations.
9.2 SPECIAL PROGRAM LOGOS. Customer may use the special program logo,
if any, applicable to Customer's appointment, as established in any Exhibit
(e.g. Authorized Reseller Logo) only: (a) as shown in the art work provided by
Sun; (b) in pre-sale marketing materials and advertising, but not on goods,
packaging, product labels, documentation or other materials distributed with
Product; (c) in a manner no more prominent than Customer's corporate name and
logo; and (d) otherwise in accordance with the then current Sun Trademark and
Logo Policies.
9.3 USE OF CUSTOMER INFORMATION. Each party has the right to disclose
and publish the other party's name, address and profile information in
connection with it's Customer programs.
10. INTELLECTUAL PROPERTY CLAIMS
Sun will defend or settle at its option and expense any legal
proceeding brought against Customer, to the extent that it is based on a
claim that the use of Product (or the use of the replacement parts,
enhancements, maintenance releases, and patches ("Materials") provided to
Customer by Sun) directly infringe a [*], and will pay all damages and costs
awarded by a court of final appeal attributable to such claim, provided that
Customer: (a) gives written notice of the claim promptly to Sun; (b) gives
Sun sole control of the defense and settlement of the claim; (c) provides to
Sun all available information and assistance; and (d) has not compromised or
settled such claim. If any Product or Materials are found to infringe, or in
Sun's opinion are likely to be found to infringe, Sun may elect to: (a)
obtain for Customer the right to use such Product and/or Materials; (b)
replace or modify such Product and/or Materials so that they become
non-infringing; or if neither of these alternatives is reasonably available,
(c) remove such Product and/or Materials and refund Customer's net book value
for these Product and/or Materials. Sun has no obligation under this Section
10 for any claim which results from: (a) use of Product and/or Materials in
combination with any equipment, software or data not provided by Sun,
provided such infringement claim would have been avoided had the Product not
been used in combination with such equipment, software or data; (b) Sun's
compliance with designs or specifications of Customer; (c) modification of
Product and/or Materials; or (d) use of an allegedly infringing version
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of any Product and/or Materials, if the alleged infringement could be avoided
by the use of a different version made available to Customer. THIS SECTION 10
STATES THE ENTIRE LIABILITY OF SUN AND EXCLUSIVE REMEDIES OF CUSTOMER FOR
CLAIMS OF INFRINGEMENT.
11. LIMITATION OF LIABILITY
11.1 Except for obligations under Section 10 (Intellectual Property
Claims), or Section 12 (Indemnity and Insurance) or breach of any applicable
license grant, and to the extent not prohibited by applicable law, each party's
aggregate liability to the other for claims relating to the Agreement, whether
for breach or in tort, will be [*].
11.2 Neither party will be liable for any indirect, punitive, special,
incidental or consequential damage in connection with or arising out of the
Agreement (including loss of business, revenue, profits, use, data or other
economic advantage) however it arises, whether for breach or in tort, even if
that party has been previously advised of the possibility of such damage.
11.3 Liability for damages will be limited and excluded even if any
exclusive remedy provided for in the Agreement fails of its essential purpose.
12. INDEMNITY AND INSURANCE
Except for claims arising under Section 10 (Intellectual Property
Claims), Customer will indemnify Sun and its suppliers from and against all
claims, liabilities, damages and costs (including legal fees and costs),
relating to (i) Customer's use or distribution of Product and Service under the
Agreement or (ii) any acts or omissions of Customer. Customer shall carry
liability insurance to protect Sun from all such claims, pay the premiums
therefor, and deliver to Sun, upon request, proof of such insurance (which shall
require thirty (30) days' written notice to Sun in event of modification or
termination).
13. FORCE MAJEURE
A party is not liable under the Agreement for non-performance caused by
events or conditions beyond that party's control, if the party makes reasonable
efforts to perform. This provision does not relieve either party of its
obligation to make payments then owing.
14. WAIVER OR DELAY
Any express waiver or failure to exercise promptly any right under the
Agreement will not create a continuing waiver or any expectation of
non-enforcement.
15. ASSIGNMENTS
Neither party may assign or otherwise transfer any of its rights or
obligations under the Agreement, without the prior written consent of the other
party, which consent shall not be unreasonably withheld, except that Sun may
assign its right to payment, assign the Agreement to an
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affiliated company, or subcontract the delivery of Service or Product. If Sun
elects to subcontract Service or Product delivery, Sun will remain primarily
responsible for delivery.
16. RELATIONSHIP OF THE PARTIES
An Agreement is not intended to create a relationship such as a
partnership, franchise, joint venture, agency, or employment relationship.
Neither party may act in a manner which expresses or implies a relationship
other than that of independent contractor, nor bind the other party.
17. NOTICES
All written notices required by the Agreement must be delivered in
person or by means evidenced by a delivery receipt and will be effective upon
receipt.
18. SEVERABILITY
If any provision of the Agreement is held invalid by any law or
regulation of any government or by any court or arbitrator, such invalidity will
not affect the enforceability of any other provisions.
19. GOVERNING LAW
Disputes which cannot be settled amicably will be governed by the laws
of the US and the state of California. Choice of law rules of any jurisdiction
and the United Nations Convention on Contracts for the International Sale of
Goods will not apply.
20. ENTIRE AGREEMENT
20.1 An Agreement (which includes the applicable Exhibit) is the
parties' entire agreement relating to its subject matter. It supersedes all
prior or contemporaneous oral or written communications, proposals, conditions,
representations and warranties and prevails over any conflicting or additional
terms of any quote, order, acknowledgment, or other communication between the
parties relating to its subject matter.
20.2 No modification to the Agreement will be binding, unless in
writing and signed by an authorized representative of each party.
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IN WITNESS WHEREOF, THE DULY AUTHORIZED REPRESENTATIVES OF THE PARTIES
HAVE EXECUTED THESE MASTER TERMS AS OF THE EFFECTIVE DATE.
SUN MICROSYSTEMS, INC. INTRAWARE
By: /s/ Alton D. Page By: /s/ Donald M. Freed
------------------------------------- ---------------------------
Name: Alton D. Page Name: Donald M. Freed
-------------------------------- ---------------------------
Title: VP Operations Title: EVP/CFO
-------------------------------- ---------------------------
Date: 8/31/99 Date: 8/31/99
-------------------------------- ---------------------------
<PAGE>
EXHIBIT A
SOFTWARE PRODUCTS
DIRECT VALUE ADDED RESELLER (DVAR)
This SMI Software Exhibit ("Software Exhibit") between Sun Microsystems, Inc.
and Customer is an attachment to the Master Terms between Sun and Customer and
is effective as of the date of execution by Sun ("Exhibit Effective Date"). The
Master Terms are an integral part of this Software Exhibit and are incorporated
by reference herein.
1. DEFINITIONS
1.1 "BCL" means the Sun binary code license contained in Software or
related documentation.
1.2 "Channel Web" means Sun's proprietary software channel information
system.
1.3 "End User" means the entity licensed to use Software under a BCL.
If End User is a corporation or other entity, then, for license fee purposes,
"End User" includes each individual within such corporation or entity licensed
to use Software under the BCL.
1.4 "Error" means any reproducible failure of Software to perform its
intended function or any significant inaccuracy in its related documentation.
1.5 "Error Correction" means a modification, procedure, patch or
routine intended to correct the practical adverse effect of an Error.
1.6 "Fees" means the fees set forth in the Price List.
1.7 "Guide" means the Sun Channel Program Guide or Guides relating to
Software ordered under this Software Exhibit.
1.8 "NFR Software" means Software designated on the Channel Web as "not
for resale" software.
1.9 "Price List" means the applicable Sun Price List current at the
time of execution of this Software Exhibit and any subsequent price changes made
by Sun under Section 3.4 of this Software Exhibit.
1.10 "Software", in addition to the definition in the Master Terms,
includes Error Corrections, upgrades, NFR Software and Subscription Kits.
1.11 "Software Release" means a release of Software that is designated
by Sun in its sole discretion by a change in the digit(s) to the left of the
decimal point in the Software version number [(x).x.x].
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1.12 "Subscription Kit" means tangible or electronically downloadable
materials designated in the Price List as a Sun Software Subscription Program
Product and delivered in kit form.
1.13 "Territory" means the countries or geographic regions
identified in SCHEDULE 1 to this Software Exhibit.
1.14 "Update" means a release of a Software that is designated by Sun
in its sole discretion by a change in the digit(s) to the right of the tenths
digit in the Software version number [x.x.(x)].
1.15 "Upgrade" means Updates, Version Releases, or Software Releases
that Sun makes generally commercially available.
1.16 "Version Release" means a release of a Software that is designated
by Sun in its sole discretion by a change in the tenths digit in the Software
version number [x.(x).x.]
2. APPOINTMENT OF CUSTOMER
2.1 APPOINTMENT. Sun appoints Customer as a nonexclusive "Authorized
Software Enterprise Partner" and grants Customer the nonexclusive and
nontransferable right to distribute Software to End Users in the Territory
identified in Schedule 1.
2.2 SOFTWARE CATEGORIES. Sun will segregate the Software in three (3)
categories (Level I, Level II, and Level III), as provided in Attachment A.
Level I Software do not require product training and authorization of Customer
by Sun to sell such Software. Customer must be trained and authorized by Sun to
sell Level II and Level III Software to its end user customers. Customer agrees
to successfully complete and pass all training and authorization obligations for
Level II and Level III Software offered by Sun.
2.3 GUIDE. The Guide sets forth additional terms and information
concerning special promotions and programs relating to the Sun Software Channel
Program. Customer may participate in the promotions and programs, provided that
Customer is in compliance with its other obligations under the Agreement, and
any other agreement with Sun or its affiliated companies, including payment and
reporting obligations. Certain Software as identified in the Guide, may only be
purchased from Sun Authorized Distributors. Customer will not advertise, sell,
lease, or ship Software outside the Territory without Sun's prior written
consent, which shall not be unreasonably withheld. Customer may not open
Software prior to delivery to End User. Sun has the right to change the Guide at
any time withhold notice. Changes to the Guide may be provided via the Channel
Web and Customer agrees to be bound by these changes. For Customers who do not
have regular access to the internet and Channel Web, printed copies of changes
to the Guide will be provided by Sun upon written request.
2.4 OBLIGATIONS. Customer agrees to: (a) actively market and support
Software; (b) follow up on any leads provided by Sun (which will be considered
Sun Confidential Information); (c) ensure that the marketing and support efforts
for Software are conducted identified and trained personnel within Customer who
have knowledge of Software and meet the training requirements the Guide; (d)
provide Sun on a quarterly basis with relationship planning document as
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described in the Guide; (e) provide Sun monthly "sales out" activity (including,
but not limited to, end user name and address, dollar volume, and type and
quantity of Software shipped; (f) submit a quarterly, non-binding forecast of
Customer's projected shipments for Software; and (g) not misrepresent Software
or make any representation or warranty inconsistent with the Master Terms, this
Software Exhibit or a BCL.
2.5 ELECTRONIC DISTRIBUTION. Customer may electronically distribute any
Software appearing on Attachment A, excluding Software pending Sun approval for
electronic distribution in the following Level II and Level III Software
categories: ISP Services Product Speciality, Network Security Product
Speciality, Messaging Product Speciality, Application Server Product Speciality,
and Portal Services Product Speciality. Prior to any electronic distribution,
Customer shall: (a) manufacture a secure, electronic version of the Product in a
digital wrapper or "envelope"; (b) appropriate mechanisms to ensure that (i)
Customer can accurately secure and account for the number of electronic
downloads and (ii) electronic distribution occurs only as expressly set forth
herein and that such file transfer protocol (FTP), HTTP and/or SHTTP and/or
other agreed upon site shall not permit any other person or entity to download
or otherwise electronically access any Product except as expressly set forth
herein; and (c) institute systems to accrue payment hereunder for each copy of
Product prior to or contemporaneous with such distribution. Customer represents
and warrants that the secure wrapper oar "envelope" cannot be unlocked and the
Product installed until the End User has registered with, and obtained an
authorized password or key from Customer.
2.6 LIMITED TERRITORY LICENSE. Customer may, on a case by case basis as
approved in advance in writing by Sun, and as part of its electronic
distribution service to U.S. end users, permit downloading to non-U.S.
subsidiaries or to other non-U.S. business sites in the European and
Intercontinental territories.
3. COMMERCIAL TERMS
3.1 REPORTING. Customer will provide to Sun a written [*] by the [*]
working day of each month that includes the [*] and other information
described in the Guide. Customer acknowledges that it will not receive
marketing funds unless it has met all point-of-sale requirements. In
addition, on the first business day of each calendar quarter, upon request
from Sun, Customer will provide Sun a [*] Customer will also provide a
completed relationship management document as described in the Guide. [*]
3.2 RETURNS. Commencing on the Exhibit Effective Date, on a
quarterly basis Customer may request to return for credit, a quantity of
Software (other than NFR Software) the net Fees for which will not exceed [*]
of the cumulative net Fees for Software shipped to Customer during the
immediately preceding quarter. Before returning any Software, Customer must
obtain from Sun a "Return Material Authorization" (RMA). Customer must place
an offsetting order with Sun for Software of dollar value at least equal to
any credit issued hereunder. No more than [*] of all returned Software may be
in opened packages. Customer may not deduct the amount of any credit from
outstanding invoices. Customer will be responsible for paying
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all freight and shipping charges for Software returned under this Section
3.3. Stock rotation is not available for discontinued Software.
3.3 PAYMENTS. For all Software purchased under this Software Exhibit,
Customer will pay Sun an amount equal to the Fee, less the applicable discount
set forth in SCHEDULE 1.
3.4 PRICE CHANGES. Sun reserves the right to change the Price List,
discounts and Fees for any Software [*]. Changes which result in decrease in
Fees will take effect [*]. In the event of a change which increase Fees, Sun
will provide Customer with [*] days prior written notice. If, during the term
of this Software Exhibit Sun decreases the Fee for any Software, Customer
will be entitled to a credit toward new orders for any Software placed within
[*] after announcement by Sun. This credit will be equal to the difference
between the new Fee and the Fee paid by Customer less any previous credit
provided, for the affected Software multiplied by the quantity of that
Software in Customer's inventory as of the date of the announcement. In order
to claim this credit Customer must, within [*] days of announcement of a
change which decreases Fees, supply Sun with a written report including: (a)
the identification of all affected Software which were in Customer's
inventory immediate prior to announcement of the decrease; (b) the net Fee
for this Software before and after the decrease and (c) other information as
Sun may reasonably request. Sun will issue the credit to Customer within
sixty (60) days from the date Sun receives the report. All orders for
Software scheduled for shipment or in transit to Customer at the time of the
announcement will be adjusted to the decreased Fee.
3.5 DELIVERY AND TITLE. Software purchase orders will be submitted to
Sun by Customer under the terms of the Software Exhibit and subject to a minimum
of Five Thousand Dollars ($5,000) per order. Sun will delivery Software Ex
Works, Sun facilities. Customer assumes all risk of loss or damage upon delivery
of Software. Customer acknowledges that it does not take title to Software, with
the exception of media and printed materials, but rather licenses Software under
the terms of this Agreement.
3.6 UPDATES, VERSION RELEASES AND SOFTWARE RELEASES. Fees are for the
Software releases current as of the Effective Date. Except as provided in
Section 4 of this Software Exhibit, Updates, Version Releases and Software
Releases may require additional payment and be subject to addition terms. Sun
may, without Customer's approval and without incurring any liability to
Customer, modify Software discontinue its manufacture, sale or support upon
thirty (30) days prior written notice to Customer.
4. UPGRADES AND OBSOLESCENCE
4.1 DIRECT PURCHASES ONLY. This Section 4 applies only to Customer's
purchase of Software directly from Sun.
4.2 UPGRADES. Subject to the terms below, Customer may upgrade unopened
Software in its inventory before the date Sun commences shipment of a new
Upgrade ("Commencement Date"):
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(a) Updates from the immediately proceeding Update version
will be provided to Customer at no charge.
(b) Upgrades to a Version Release or Software Release from the
immediately preceding Version Release or Software Release will be provided to
Customer at no charge unless Sun increases its Fees for the new release. If Sun
increases its Fees, the new release will be made available to Customer at the
incremental price difference between the original Fee paid by Customer and the
Fee for the new release.
(c) To receive Upgrades under this Section 4, Customer must
provide Sun with a written request for the Upgrade, obtain an RMA and return
to Sun all Software to be upgraded. Customer will pay all shipping charges
for returned Software and Upgrades ordered under this Section 4. Sun will
credit Customer with the total amount Customer paid for the returned Software
if the return is accompanied by a firm order for the immediate delivery of
Upgrades whose total payment amount at least equals that of the returned
Software. Customer is limited to [*] upgrade requests for each Update,
Version Release and Software Release. The first request must be received by
Sun within thirty (30) days of the Commencement Date and the second request
within ninety (90) days of the Commencement Date. If Customer fails to make
the requests within the time frame described, Customer will no longer have
the right to upgrade Software under this Section 4.
(d) For a period of [*] days after Sun discontinues
offering Software, Customer will have the right, shipping prepaid and
retaining all risk of loss, to return the unopened discontinued Software to
Sun. Sun will credit Customer with the total amount Customer paid for the
discontinued Software if the return is accompanied by a firm order for the
immediate delivery of other Software whose total payment amount at least
equals that of the returned Software.
5. SUBSCRIPTION KITS
5.1 DISTRIBUTION OF SUBSCRIPTION KITS. Sun grants to Customer a
non-transferable, nonexclusive, limited license to distribute Subscription Kits
within the Territory. "Subscription Kit" means tangible or electronically
downloadable materials for Licensed Products designated in the applicable Sun
price list as a Sun Software Subscription products and delivered in a kit form.
Subscription Kits contain (i) a certificate for the Sun Software Subscription
services entitling an End User to receive drop-shipments of upgrades for
Licensed Products directly from Sun; (ii) Sun Software Subscription services
program terms; (iii) End User registration and acceptance forms to be completed
and returned to Sun; and (iv) marketing collateral.
5.2 RESTRICTIONS. Customer may not open any Subscription Kit prior to
delivery to End Users. Customer may not sell or distribute Subscription Kits
unless the End User has first provided satisfactory proof of its license for the
most current version of the Licensed Products. Proof of End User's current
license will be satisfied by the End User showing Customer copies of its license
or install disk, cover page of the install disk manual or other form of proof
satisfactory Sun that End User is licensed to the current version level.
Subscription Kits may be purchased only from Authorized Distributors or Sun.
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5.3 RETURNS. In the event an End User does not accept terms provided
in the Subscription Kit and elects within [*] days of purchase to return the
Subscription to Customer, Customer must accept return of the Subscription Kit
and refund the fees paid by End User. Customer may return, shipping prepaid,
to the Authorized Distributor from which the Subscription Kit was purchased,
the Subscription Kit returned by the End User for a refund of the fees paid
by Customer, provided, however, that: (i) the Subscription Kit was properly
returned to Customer by the End User within [*] days of its purchase; and
(ii) Customer requests and has received a Return Material Authorization
("RMA") number from the Authorized Distributor within five (5) business days
of the Subscription Kit's return by the End User to Customer.
5.4 OTHER PROGRAMS. Any additional subscription offerings and
requirements are set forth in the Guide.
6. NOT FOR RESALE SOFTWARE
6.1 PURCHASE. As part of the Sun Software Channel Program, Customer may
obtain not-for-resale copies Licensed Products ("NFR Software"). Licensed
Products available as NFR Software are designated on the Channel Web and may be
ordered only from Authorized Distributors and Sun. Customer may use no more than
one (1) copy of each NFR Software at each Customer business location (including
field sales offices). Each location at which NFR Software is used must be
staffed with Customer employees who have met all applicable training, testing
and authorization requirements set forth in the Guide.
6.2 LABELING AND USE. NFR Software must at all times clearly labeled
"Not For Resale Software" and may be used only for purposes of internal staff
training, presales support, customer demonstrations and Sun approved marketing.
6.3 DESTRUCTION OF NFR SOFTWARE. Applicant must destroy NFR Software:
(i) upon notice that the NFR Software has been discontinued or is available as a
new revision release or (ii) if it is no longer being used on a regular basis by
Applicant for the purposes described in Section 6. To obtain new revision
releases of NFR Software, Applicant may provide Authorized Distributor or Sun
with written certification that the NFR Software has been destroyed.
6.4 RESTRICTIONS. Applicant may not use the NFR Software development of
software programs; nor copy, resell or distribute the NFR Software to any third
party. In addition this Section 6, Applicant's use of NFR Software is further
subject to the terms of the BCL which accompanies the software.
7. SUPPORT
During the term of this Agreement, Customer will provide prospective
End Users with complete pre-sale support, and End Us with post-sale support as
provided in the Guide.
8. SUN SOFTWARE CHANNEL PROGRAM WEB SITE
Subject to the following, Sun will provide Customer with an account
login, password and the site URL for the Channel Web.
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8.1 USE OF WEB CONTENTS. Title to and ownership in all products,
including software products, documents and other program information contained
in the Channel Web ("Web Contents") will solely and exclusively be and remain in
Sun and its licensors. Customer may use Web Contents only for: (a) its internal
evaluation purposes and (b) at its primary business facility. If the software
products accessed as part of Web Contents contain third party code, Customer's
use of the products may be subject to additional terms. Customer is not
authorized to make any modifications or revisions to Web Contents nor distribute
Web Contents to any third party. Customer will indemnify Sun from all liability,
expense, and damage of any type arising from Customer's violation of this
Section 8.1.
8.2 NO SUPPORT FOR WEB CONTENTS. Customer acknowledges that Sun is not
obligated to make any of Web Contents available as a final Sun product. Sun
retains the right to make any modifications or changes to Web Contents at any
time without prior notice to Customer. Web Contents are provided strictly on an
"AS IS" basis. Customer acknowledges that no support will be provided by Sun for
the software product(s) contained in the Web Contents.
9. WARRANTIES AND DISCLAIMER
Sun warrants that for a period of ninety (90) days from Customer's
receipt of Software provided under this Software Exhibit the media on which the
Software is furnished will be free of defects in materials and workmanship under
normal use. Customer's exclusive remedy and Sun's entire liability under this
limited warranty will be for to replace the Software media.
10. ADDITIONAL LIMITATIONS
IN NO EVENT WILL ANY ENTITY WORKING WITH SUN THE DEVELOPMENT AND SUPPLY
OF ANY LICENSED PRODUCT OR PART THEREOF BE LIABLE UNDER THIS AGREEMENT.
11. TERM AND TERMINATION.
This Software Exhibit will commence upon the Software Effective Date.
Unless earlier terminated as provided in the Master Terms, this Software Exhibit
will remain in effect until the date established in following schedule:
EFFECTIVE DATE EXPIRATION DATE
-------------- ---------------
(OF THE FOLLOWING YEAR)
-----------------------
July 1 - September 30 September 30
October 1 - December 31 December 31
January 1 - March 31 March 31
April 1 - June 30 April 30
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IN WITNESS WHEREOF, the parties have authorized their representatives
to execute this Software Exhibit effective as of the Effective Date written
below.
SUN MICROSYSTEMS, INC. INTRAWARE, INC.
By: /s/ Alton D. Page By: /s/ Donald M. Freed
-------------------------------------- ---------------------------
Name: Alton D. Page Name: Donald M. Freed
------------------------------- --------------------------
(printed or typed) (printed or typed)
Title: VP Operations Title: EVP/CFO
------------------------------ -------------------------
Effective Date: 8/31/99 Effective Date: 8/31/99
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SCHEDULE I
TO SOFTWARE EXHIBIT
(DVAR)
1. Territory: United States and Canada
2. Discount Schedule: Customer's discount for the Sun-Netscape Alliance
Software shall be [*] off the MSRP as set forth in the Sun-Netscape Alliance
Price List for the first [*] of revenue from fees. Customer's discount for
revenue in excess of [*] shall be [*] off the MSRP as set forth in the
Sun-Netscape Alliance Price List.
3. Discretionary Rebates/Offset: If and to the extent Sun makes
available to its resellers a discretionary rebate program to which Customer,
as a Sun reseller would be entitled, then the rebate will not initiate until
it exceeds [*]. In the event Customer is entitled to such rebate, then Sun
will only be obligated to pay a rebate in the amount that exceeds [*].
4. "Accumulated Savings" is calculated as [*] of MSRP, as set forth in
the Sun-Netscape Alliance Price List, of Products sold by Customer plus the
total of discretionary rebates forfeited by Customer at any point in time.
Accumulated Savings shall not exceed [*]. As of September 30, 2000, or
sooner, if terminated, if the Accumulated Savings is not equal to [*],
Customer will remit to Sun an amount equal to the difference between the
Accumulated Savings and [*], or the prorated portion thereof, within thirty
days from September 30, 2000 or the date of termination. This provision shall
survive termination of the Agreement.
5. Co-op Accrual Program: Customer will accrue [*] Co-op funds on
Alliance Software net revenue sold, and be eligible to access Market
Development Funds pursuant to the Guide.
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ATTACHMENT A
ALLIANCE PRODUCTS - LEVEL I, LEVEL II AND LEVEL III
I. LEVEL I ALLIANCE PRODUCTS(S)
Netscape Directory Server
Netscape Certificate Management System
Netscape Delegated Administrator
Netscape Meta-Directory
Netscape Directory for Secure E-Commerce
Netscape Process Manager
Netscape Calendar Server
Netscape Messaging Server
Netscape Messaging Server Hosting
Netscape Hosting Suite
Netscape Enterprise Server
Netscape FastTrack Server
Netscape SuiteSpot Standard
Netscape SuiteSpot Professional
II. LEVEL II AFFIANCE PRODUCT(S)
ISP SERVICES PRODUCT SPECIALITY
Solaris ISP Server
NETWORK SECURITY PRODUCT SPECIALITY
SunScreen EFS
SunScreen SecureNet
SunScreen SKIP
SunScreen SPF-200
SUITESPOT PRODUCT SPECIALITY
Netscape SuiteSpot (Standard/Professional)
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III. LEVEL III ALLIANCE PRODUCT(S)
MESSAGING PRODUCT SPECIALITY
Sun Internet Mad Server
Sun Calendar Server
APPLICATION SERVER PRODUCT SPECIALITY
Netscape Application Server
Netscape Application Builder
Netscape Extension Building
Netscape Extension for MQSeries
Netscape Extension for Tuxedo
Netscape Application Server for R/3
Netscape Application Server for CICS/MS
NetDynamics Application Server
NetDynamics PAC for COM
Net Dynamics PAC for SAP
NetDynamics PAC for PeopleSoft
NetDynamics PAC SDK
Net Dynamics Developer Studio
E-Commerce Product Speciality
Netscape BuyerXpert
Netscape MerchantXpert
Netscape SellerXpert
Netscape BillerXpert
Netscape PublisherXpert
Netscape TradingXpert
Netscape ECXpert
Netscape ECXpert Enterprise
Netscape ECXpert Extension for MQSeries
Netscape ECXpert Extension for Oracle Applications
Netscape ECXpert Extension for SAP R/3
Netscape ECXpert Mercator Authoring Tool
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Netscape ECXpert SAP R/3 Authoring Tool
PORTAL SERVICES PRODUCT SPECIALITY
Custom Netcenter
I-Planet
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