First Amendment to Industrial Lease Agreement
This First Amendment To Industrial Lease Agreement (this "Amendment") is
made as of November 23, 1998, by and between Aetna Life Insurance Company, a
Connecticut corporation ("Landlord"), and Centigram Communications Corporation,
a Delaware corporation ("Tenant").
Recitals
A. Landlord and Tenant have previously entered into that certain Industrial
Lease Agreement, dated as of June 7, 1993 (the "Lease"), which Lease covers
certain premises consisting of approximately thirty-four thousand seven hundred
thirty-four (34,734) rentable square feet located at 000 Xxxxxx Xxxxx, Xxx Xxxx,
Xxxxxxxxxx. Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Lease.
B. Tenant has exercised its option (the "Renewal Option") contained in
Addendum Two to the Lease to extend the Term thereof through November 30, 2003
("New Expiration Date").
C. Landlord and Tenant desire to amend the Lease to reflect the extension
of the Term thereof pursuant to the Renewal Option and to make certain
modifications to the Lease, all upon and subject to the terms, covenants and
conditions hereinafter set forth.
Agreement
Now Therefore, in consideration of the agreements of Landlord and Tenant
herein contained and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:
1. Extension of Term
The term of the Lease is hereby extended for a period of sixty (60) months,
commencing on December 1, 1998 and expiring on November 30, 2003 (the "Extension
Period"). All references in the Lease to the term of the Lease shall mean the
previous term of the Lease as extended through the Extension Period.
2. "As-Is" Possession
Tenant shall continue to occupy the Premises in its "as-is" condition and
Landlord shall have no obligation to improve, remodel or otherwise alter the
Premises. Nothing contained herein shall be deemed to release Landlord from any
of its covenants or obligations under the Lease.
3. Base Monthly Rent
Notwithstanding anything to the contrary contained in the Lease, during the
Extension Period, Tenant shall pay Base Monthly Rent in the amounts set forth
below:
--------------------------------------------------------- ----------------------
Term: Base Monthly Rent:
--------------------------------------------------------- ----------------------
December 1, 1998 - November 30, 1999 ..................... $ 57,311.10
December 1, 1999 - November 30, 2000 ..................... $ 59,603.54
December 1, 2000 - November 30, 2001 ..................... $ 61,987.68
December 1, 2001 - November 30, 2002 ..................... $ 64,467.19
December 1, 2002 - November 30, 2003 ..................... $ 67,045.88
4. Additional Rent
(a) Paragraph 4(b) of the Lease is hereby deleted in its entirety and the
following provision is hereby substituted therefor:
(b) Additional Rent. In addition to the Base Rent, Tenant shall pay to
Landlord, in accordance with this Paragraph 4, Tenant's Proportionate
Share(s) of all costs and expenses paid or incurred by Landlord in
connection with the ownership, operation, maintenance, management and
repair of the Premises, the Building, the Outside Areas (as defined in
Paragraph 4(b)(3)) and/or Zanker Northpointe Business Park (the "Project"
or the "Park") or any part thereof (collectively, the "Expenses"),
including, without limitation, all the following items (the "Additional
Rent"):
(b) The phrase "life safety systems" is hereby inserted in Paragraph
4(b)(3) immediately after "sprinkler systems."
(c) Paragraph 4(b)(5) of the Lease is hereby deleted in its entirety and
the following provision is hereby substituted therefor:
(5) Maintenance and Repair Costs. Except for costs which are the
responsibility of Landlord pursuant to Paragraph 12(c) of the Lease, all
costs to maintain, repair, and replace the Premises and/or the Building,
including without limitation, (i) all costs paid under maintenance,
management and service agreements such as contracts for janitorial,
security and refuse removal, (ii) all costs to maintain, repair and replace
the roof coverings of the Building or any part thereof, (iii) all costs to
monitor, maintain, repair and replace the heating, ventilating and air
conditioning systems ("HVAC") and the plumbing, sewer, drainage,
electrical, fire protection, life safety and security systems and other
mechanical and electrical systems and equipment serving the Premises and/or
the Building.
(d) The following provision is hereby added to the Lease as new Paragraph
4(b)(7):
(7) Utilities. The cost of all water, sewer use, sewer discharge fees
and permit costs and sewer connection fees, refuse pick-up, janitorial
service and all other utilities that are not separately metered to Tenant,
and any amounts, taxes, charges, surcharges, assessments or impositions
levied, assessed or imposed upon the Premises, the Building or the Project
or any part thereof, or upon Tenant's use and occupancy thereof, as a
result of any rationing of Utility services or restriction on Utility use
affecting the Premises, the Building and/or the Project.
(e) Paragraph 3 of Addendum One to the Lease is hereby deleted in its
entirety and the following provision is hereby substituted therefor:
Notwithstanding anything in this Paragraph 4(b) to the contrary, with
respect to all sums payable by Tenant as Additional Rent under this
Paragraph 4(b) for the replacement of any item in connection with the
physical operation of the Premises, the Building or the Project (i.e.,
HVAC, roof membrane or coverings and parking area) which is a capital
item the replacement of which would be capitalized under Landlord's
commercial real estate accounting practices, Tenant shall be required
to pay only the prorata share of the cost of the item falling due
within the Term (including any Renewal Term) based upon the
amortization of the same over the useful life of such item, together
with interest thereon at the rate of ten percent (10%) per annum, as
reasonably determined by Landlord in accordance with generally
accepted accounting principles, consistently applied
(f) Paragraph 4(v) of Addendum One to the Lease is hereby deleted in its
entirety and the following provision is hereby substituted therefor:
Excess costs incurred due to violation by the Landlord of any of the
terms and conditions of any other leases in the Project; for purposes
of this clause (v), "excess costs" shall mean the excess costs
resulting from such violation and shall exclude the ordinary costs
which would have been incurred in complying with such terms and
conditions absent such violation;
(g) The word "not" is hereby inserted in the second line of Paragraph 4(vi)
of Addendum One to the Lease between the words "would" and "have".
(h) Paragraph 4(ix) of Addendum One to the Lease is hereby deleted in its
entirety and the following provision is hereby substituted therefor:
Excess costs, fines or penalties incurred due to violations by
Landlord of any governmental rule or authority; for purposes of this
clause (ix), "excess costs" shall mean the excess costs resulting from
such violation and shall exclude the ordinary costs which would have
been incurred in complying with such governmental rule or authority
absent such violation;
(i) Paragraph 4(x) of Addendum One to the Lease is hereby deleted in its
entirety.
(j) The word "gross" is hereby inserted in the first line of Paragraph
4(xiii) of Addendum One to the Lease between the words "the" and "negligence".
(k) Paragraph 4(c)(1) of the Lease is hereby deleted in its entirety and
the following provision is hereby substituted therefor:
Upon commencement of this Lease, Landlord shall submit to Tenant an
estimate of monthly Additional Rent for the period between the
Commencement and the following December 31 and Tenant shall pay such
estimated Additional Rent on a monthly basis, in advance, on the first
day of each month. Tenant shall continue to make said monthly payments
until notified by Landlord of a change therein. If at any time or
times Landlord determines that the amounts payable under Paragraph
4(b) for the current year will vary from Landlord's estimate given to
Tenant, Landlord, by notice to Tenant, may revise the estimate for
such year, and subsequent payments by Tenant for such year shall be
based upon such revised estimate; provided, however, that Landlord
shall not revise such estimate more than one (1) time per calendar
year. By April 1 of each calendar year, Landlord shall endeavor to
provide to Tenant a statement ("Expense Statement") showing the actual
Additional Rent due to Landlord for the prior calendar year, to be
prorated during the first year from the Commencement Date. If the
total of the monthly payments of Additional Rent that Tenant has made
for the prior calendar year is less than the actual Additional Rent
chargeable to Tenant for such prior calendar year, then Tenant shall
pay the difference in a lump sum within thirty (30) days after receipt
of such Expense Statement from Landlord. Any overpayment by Tenant of
Additional Rent for the prior calendar year shall be credited towards
the Additional Rent next due.
(l) Paragraph 4(c)(2) of the Lease is hereby deleted in its entirety and
the following provision is hereby substituted therefor:
(2) Landlord's then-current annual operating and capital budgets
for the Building and the Project or the pertinent part thereof shall
be used for purposes of calculating Tenant's monthly payment of
estimated Additional Rent for the current year, subject to adjustment
as provided above. Landlord shall make the final determination of
Additional Rent for the year in which this Lease terminates as soon as
possible after termination of such year. Even though the Term has
expired and Tenant has vacated the Premises, Tenant shall remain
liable for payment of any amount due to Landlord in excess of the
estimated Additional Rent previously paid by Tenant, and, conversely,
Landlord shall promptly return to Tenant any overpayment. Failure of
Landlord to submit statements as called for herein shall not be deemed
a waiver of Tenant's obligation to pay Additional Rent as herein
provided.
(m) The following provision is hereby added to the Lease as new
Paragraph 4(c)(4):
(4) With respect to Expenses which Landlord allocates to the
Building, Tenant's "Proportionate Share" shall be the percentage
set forth in Paragraph 24 of Addendum One to this Lease as
Tenant's Proportionate Share of the Building, as adjusted by
Landlord from time to time in connection with a change in the
physical size of the Premises or the Building. With respect to
Expenses which Landlord allocates to the Project as a whole or to
only a portion of the Project, Tenant's "Proportionate Share"
shall be, with respect to Expenses which Landlord allocates to
the Project as a whole, the percentage set forth in the Basic
Lease Information as Tenant's Proportionate Share of the Project
and, with respect to Expenses which Landlord allocates to only a
portion of the Project, a percentage calculated by Landlord from
time to time in its reasonable discretion and furnished to Tenant
in writing, in either case as adjusted by Landlord from time to
time in connection with a change in the physical size of the
Premises or the Project. No remeasurement shall affect the Base
Rent payable under this Lease by Tenant. Notwithstanding anything
herein to the contrary, Landlord may equitably adjust Tenant's
Proportionate Share(s) for all or part of any item of expense or
cost reimbursable by Tenant that relates to a repair,
replacement, or service that benefits only the Premises or only a
portion of the Building and/or the Project or that varies with
the occupancy of the Building and/or the Project. Without
limiting the generality of the foregoing, Tenant understands and
agrees that Landlord shall have the right to adjust Tenant's
Proportionate Share(s) of any services as reasonably estimated
and determined by Landlord based upon factors such as size of the
Premises and intensity of use of such services by Tenant such
that Tenant shall pay the portion of such charges reasonably
consistent with Tenant's use of such services.
(n) Paragraph 4(d) of the Lease is hereby deleted in its entirety
and the following provision is hereby substituted therefor:
(d) General Payment Terms. The Base Rent, Additional Rent
and all other sums payable by Tenant to Landlord hereunder, if
any, any late charges assessed pursuant to Paragraph 5 below and
any interest assessed pursuant to Paragraph 44 below, are
referred to as the "Rent". All Rent shall be paid without
deduction, offset or abatement in lawful money of the United
States of America. Checks are to be made payable to Aetna Life
Insurance Company and shall be mailed to: XXXX XXXX XX00 REI#
7944-Zanker, Department #44466/P.O. Xxx 00000, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000-0000 or to such other person or place as
Landlord may, from time to time, designate to Tenant in writing.
The Rent for any fractional part of a calendar month at the
commencement or termination of the Lease term shall be a prorated
amount of the Rent for a full calendar month based upon a thirty
(30) day month.
(o) Paragraph 5 of Addendum One to the Lease is hereby deleted in
its entirety and the following provision is hereby substituted
therefor:
Provided Tenant is not in Default under the terms of this Lease
(nor is any event occurring which with the giving of notice or
the passage of time, or both, would constitute a Default
hereunder), Tenant, at its sole expense subject to the last
sentence of this Paragraph 4(e), shall have the right within one
hundred eighty (180) days after the delivery of each Expense
Statement to review and audit Landlord's books and records
regarding such Expense Statement and the Expense Statement for
the prior calendar year for the sole purpose of determining the
accuracy of such Expense Statement(s). Such review or audit shall
be performed by a nationally recognized accounting firm that
calculates its fees with respect to hours actually worked and
that does not discount its time or rate (as opposed to a
calculation based upon percentage of recoveries or other
incentive arrangement), shall take place during normal business
hours in the office of Landlord or Landlord's property manager
and shall be completed within seven (7) business days after the
commencement thereof. If Tenant does not so review or audit
Landlord's books and records, the applicable Expense Statement(s)
shall be final and binding upon Landlord and Tenant. In the event
that Tenant determines on the basis of its review of Landlord's
books and records that the amount of Expenses paid by Tenant
pursuant to this Paragraph 4 for the period covered by such
Expense Statement is less than or greater than the actual amount
properly payable by Tenant under the terms of this Lease, Tenant
shall promptly pay any deficiency to Landlord or, if Landlord
concurs with the results of such audit, Landlord shall promptly
refund any excess payment to Tenant, as the case may be. If
Landlord does not concur with the results of such audit, the
parties shall meet at least two (2) times during the thirty (30)
day period commencing on the date Landlord notifies Tenant of its
disapproval of Tenant's audit and shall attempt to reach
agreement during such period on the audit. If the parties fail to
reach agreement within such thirty (30) day period, then the
parties shall mutually select an accountant with a nationally
recognized accounting firm or, depending on the nature of the
issue in dispute, another appropriate professional (collectively,
the "Independent Professional") who, within thirty (30) days of
his or her selection, shall review Landlord's Expense Statement
and the results of Tenant's audit and make a determination
concerning the results thereof. The decision of the Independent
Professional shall be final and binding on the parties hereto
and, following the rendering of such decision, Tenant shall
promptly pay any resulting deficiency to Landlord or Landlord
shall promptly refund any excess payment to Tenant, as the case
may be. The Independent Professional shall have not less than ten
(10) years of experience in commercial real estate accounting,
finance or law and shall neither be affiliated with nor have
previously performed services for Landlord or Tenant or any
affiliate of either party. The fees of the Independent
Professional shall be paid by Tenant; provided, however, that if
the Independent Professional determines that the applicable
Expense Statement(s) overstate(s) the actual Expenses for the
year(s) in question by more than five percent (5%), then Landlord
shall pay the costs of the audit and the fees of the Independent
Professional.
5. Refurbishment Allowance
Landlord shall provide Tenant with an allowance (the "Refurbishment
Allowance") of Thirty-Four Thousand Seven Hundred Thirty-Four Dollars ($34,734)
to pay the cost of painting the Premises and/or replacing the existing carpeting
therein with equal or higher-grade carpeting. Landlord shall disburse the
Refurbishment Allowance to reimburse Tenant for out-of-pocket costs actually
incurred in repainting and/or recarpeting the Premises; provided, however, that
Landlord shall have no obligation to make such disbursement until Tenant has
furnished Landlord with invoices and receipts to substantiate such costs and
lien waivers to evidence the lien-free installation of such carpeting. In the
event the cost of such carpeting exceeds the Refurbishment Allowance, then
Tenant shall be solely responsible for the excess cost. If the actual cost of
such carpeting is less than the Refurbishment Allowance, then the Refurbishment
Allowance shall be reduced to equal said actual cost.
6. Renewal Option
(a) Tenant shall have one (1) option (the "Renewal Option") to extend the
Term with for a period of three (3) years and ten (10) months beyond the New
Expiration Date (the "Renewal Term"). The Renewal Option shall be effective only
if Tenant is not in Default under this Lease, nor has any event occurred which
with the giving of notice or the passage of time, or both, would constitute a
Default hereunder, either at the time of exercise of the Renewal Option or the
time of commencement of the Renewal Term. The Renewal Option must be exercised,
if at all, by written notice (the "Election Notice") from Tenant to Landlord
given not more than nine (9) months nor less than seven (7) months prior to the
expiration of the Extension Period. Except as hereinafter provided in this
Paragraph 6(a), any such notice given by Tenant to Landlord shall be
irrevocable. If Tenant fails to exercise the Renewal Option in a timely manner
as provided for above, the Renewal Option shall be void (time being of the
essence) and this Lease shall automatically terminate on the New Expiration Date
without the necessity of notice from either party to the other. The Renewal Term
shall be upon the same terms and conditions as the Extension Period, except that
the annual Base Rent during the Renewal Term shall be equal to the prevailing
market rate for space in similarly situated buildings in the vicinity of the
Building comparable to the Premises in location, size, condition, quality and
type at the commencement of the Renewal Term; provided however that in no event
shall the Base Rent for the Renewal Term be less than the Base Rent for the last
month of the Term. As used herein, the term "prevailing market rate" shall mean
the base annual rental for such comparable space, taking into account any
additional rental and all other payments and escalations payable hereunder and
by tenants under leases of such comparable space, any tenant improvement
allowances, leasing commissions and other monetary concessions offered hereunder
and under such other leases, and the relative creditworthiness of Tenant and
such other tenants. Landlord shall notify Tenant in writing (such notice being
hereinafter referred to as the "Renewal Rate Notice") of the prevailing market
rate for the Renewal Term within thirty (30) days after Landlord's receipt of
the Election Notice. Tenant shall have sixty (60) days after receipt of the
Renewal Rate Notice (the "Response Period") to advise Landlord whether or not
Tenant agrees with Landlord's determination of the prevailing market rate and,
if Tenant disagrees with such determination, to discuss and negotiate such rate
with Landlord. If Tenant agrees with Landlord's determination, or if during the
Response Period the parties agree in writing on a different rental rate, then
Landlord and Tenant shall promptly enter into an amendment to this Lease
providing for the lease of the Premises by Tenant during the Renewal Term upon
the terms stated in the Renewal Rate Notice or such other terms as may be agreed
to by the parties during the Response Period, each in the exercise of its sole
and absolute discretion. If Tenant disputes Landlord's determination of the
prevailing market rate and if the parties fail to agree in writing on a
different rental rate prior to the expiration of the Response Period, Tenant
shall have the right to rescind its Election Notice in writing within the
Response Period and neither party shall have any further rights or obligations
under this Paragraph 6(a). If Tenant fails to provide Landlord with written
notice of rescission prior to the expiration of the Response Period, then Tenant
shall be deemed to have accepted Landlord's determination of the prevailing
market rate (except to the extent that Landlord and Tenant have agreed in
writing on a different rental rate as provided in this Paragraph 6(a)).
(b) Except as expressly provided in Paragraph 6(a) above Tenant shall have
no further options, rights of negotiation or rights to renew or extend the Term
of the Lease. Without limiting the foregoing, Addendum Two to the Lease is
hereby deleted in its entirety.
7. Environmental Covenants
Prior to executing this Amendment, Tenant has completed, executed and
delivered to Landlord a Hazardous Materials Disclosure Certificate ("Initial
Disclosure Certificate"), a fully completed copy of which is attached hereto as
Exhibit A and incorporated herein by this reference. Tenant covenants,
represents and warrants to Landlord that the information on the Initial
Disclosure Certificate is true and correct and accurately describes the
Hazardous Materials which are being manufactured, treated, used or stored on or
about the Premises by Tenant or Tenant's Agents. Tenant shall, on or about
January 1 of each year during the Term and at such other times as Tenant desires
to manufacture, treat, use or store on or about the Premises new or additional
Hazardous Materials which were not listed on the Initial Disclosure Certificate,
complete, execute and deliver to Landlord an updated Disclosure Certificate
(each, an "Updated Disclosure Certificate") describing Tenant's then current and
proposed future uses of Hazardous Materials on or about the Premises, which
Updated Disclosure Certificates shall be in the same format as that which is set
forth in Exhibit A or in such updated format as Landlord may require from time
to time. Tenant shall deliver an Updated Disclosure Certificate to Landlord not
less than thirty (30) days prior to the date Tenant intends to commence the
manufacture, treatment, use or storage of new or additional Hazardous Materials
on or about the Premises, and Landlord shall have the right to approve or
disapprove such new or additional Hazardous Materials in its sole and absolute
discretion. Notwithstanding anything to the contrary contained in the Lease,
Tenant shall make no use of Hazardous Materials on or about the Premises except
as described in the Initial Disclosure Certificate or as otherwise approved by
Landlord in writing in accordance with this Paragraph 7.
The provisions of this Paragraph 7 shall survive the expiration or earlier
termination of this Lease.
8. Destruction And Damage
Paragraph 22 of the Lease and Paragraphs 9 and 10 of Addendum One thereto
are hereby amended to provide that the time periods specified in Paragraphs
22(a)(1), 22(a)(2), and 22(b) of the Lease and Paragraphs 9 and 10 of Addendum
One shall commence to run on the date Landlord obtains actual knowledge of the
damage or destruction, rather than on the actual date of such damage or
destruction, if different.
9. Brokers
Tenant represents and warrants to Landlord that neither it nor its officers
or agents nor anyone acting on its behalf has dealt with any real estate broker
except Xxxxxxx Realty Corporation/Xxxxx Xxxx, in the negotiating or making of
this Amendment, and Tenant agrees to indemnify and hold harmless Landlord from
any claim or claims, and costs and expenses, including attorneys' fees, incurred
by the Landlord in conjunction with any such claim or claims of any other broker
or brokers to a commission in connection with this Amendment as a result of the
actions of Tenant.
10. Miscellaneous
(a) As amended hereby, the Lease is hereby ratified and confirmed in all
respects. In the event of any inconsistencies between the terms of this
Amendment and the Lease, the terms of this Amendment shall prevail.
(b) This Amendment shall bind and inure to the benefit of Landlord and
Tenant and their respective legal representatives and successors and assigns.
In Witness Whereof, Landlord and Tenant have executed this Amendment as of
the date first above written.
Landlord: Aetna Life Insurance Company,
a Connecticut corporation
By: Allegis Realty Investors llc,
Its Investment Advisor and Agent
By: /s/Xxxxxx Xxxxxxxx
Its: Vice President
Tenant: Centigram Communications Corporation,
a Delaware corporation
By: /s/Xxx Xxxxxxx
Its: Sr. VP and CFO
