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EXHIBIT 10.12
SUBLEASE
THIS SUBLEASE (hereinafter referred to as the "Lease"), dated for
reference purposes only June 23, 1998, is made by and between SAN FRANCISCO
MERCANTILE COMPANY, INC., a California corporation (herein called "Landlord"),
and QUOKKA SPORTS, INC., a Delaware corporation (herein called "Tenant").
1. RECITALS.
(a) XXXXXXX STREET PARTNERS, a California limited partnership, as
Landlord ("Master Lessor"), and SAN FRANCISCO MERCANTILE COMPANY, INC., a
California corporation, as Tenant ("Landlord"), are parties to that certain
Lease dated December 1, 1985, as amended ("Master Lease"), pursuant to which
Landlord has leased from Master Lessor those certain Premises (as hereinafter
defined) for a term ending on December 14, 2005, and otherwise upon the terms
and conditions set forth in the Master Lease.
(b) Landlord desires to sublease the Premises to Tenant pursuant to the
terms and conditions of this Lease.
(c) By its signature to this Lease, Master Lessor hereby consents to
this Lease, agrees to contribute the consideration referred to in par. 3 below
and agrees to assume and perform all of the terms and condition of this Lease to
be performed by Landlord hereunder in the event of termination of the Master
Lease while this Lease is still in full force and effect.
(d) Landlord agrees that, to the extent that the Lease requires Master
Lessor to perform any obligations in connection with the Premises, Tenant shall
have direct privity with Master Lessor in order to enforce Tenant's rights
hereunder.
(e) Upon any termination of the Master Lease, this Lease shall also
terminate; provided, however, that to the extent the Master Lease grants
Landlord any discretionary rights to terminate the Master Lease, whether due to
casualty, cancellation, or otherwise, Landlord shall not exercise such right
without the consent of Tenant, which consent may be granted or withhold in
Tenant's sole discretion. In addition, Landlord shall not amend or modify the
Master Lease in any manner without the prior written consent of Tenant, which
may be granted or withheld in Tenant's sole discretion.
(f) In the event that, without the fault of Tenant, Landlord shall
default under the Master Lease and Master Lessor shall terminate this Lease,
Master Lessor shall enter into a direct lease with Tenant the remainder of the
term of this Lease upon the same terms and conditions as set forth herein.
[Signature] [Signature]
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Landlord's Initials Tenant's Initials
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(g) Landlord certifies and acknowledges the following: as of the date
hereof, (i) the master Lease, a copy of which is attached hereto as Exhibit "A",
is in full force and effect, has not been terminated, and is enforceable in
accordance with its terms, (ii) neither Landlord, nor, to Landlord's knowledge,
Master Lessor, is in default under any of the terms, covenants or conditions of
the Master Lease, and (iii) Landlord has not received from Master Lessor any
notice of any outstanding default as of the date hereof.
2. PREMISES. Landlord does hereby lease to Tenant and Tenant hereby leases from
Landlord that certain office space (herein called "Premises") indicated on
Exhibit "A-1" attached hereto and hereby reference thereto made a part hereof,
said Premises being agreed, for the purpose of this Lease, to have an area of
Seven Thousand Eight Hundred Twenty-Four (7,824) rentable sq. ft. on the Second
Floor of that certain Building known as 000 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx ("Building").
Said Lease is subject to the terms, covenants and conditions herein set
forth and the Tenant covenants as a material part of the consideration for this
Lease to keep and perform each and all of said terms, covenants and conditions
by it to be kept and performed and that this Lease is made upon the condition of
said performance.
3. TERM. The term of this Lease shall commence fifteen (15) days following
written notice from Landlord to Tenant of Landlord's substantial completion of
Landlord's Work as described below and shall expire on March 31, 2002, subject
to Tenant's option to terminate as provided in paragraph 31 below. Following
commencement, Landlord and Tenant shall execute a Memorandum to be attached
hereto confirming the occupancy date.
LANDLORD'S WORK. As partial consideration for this Lease, Master Lessor
agrees to provide and pay for tenant improvements to the Premises up to the
total sum of ONE HUNDRED THOUSAND AND NO/HUNDREDTHS DOLLARS ($100,000.00)
("Landlord's Work") pursuant to plans and specifications mutually agreed upon
between Master Lessor and Tenant. In addition, upon such date specified by
Tenant (which date shall not be later than 60 days from June 12, 1998), Master
Lessor shall purchase 33,333 shares of Series B Preferred Stock, par value
$0.0001 per share, of Tenant, for an aggregate purchase price of FORTY-NINE
THOUSAND NINE HUNDRED NINETY-NINE AND 50/HUNDREDTHS DOLLARS ($49,999.50)
pursuant to the terms of that certain Series B Preferred Stock Purchase
Agreement dated June 12, 1998, among Tenant and certain purchasers of Tenant's
Series B Preferred Stock. The foregoing shall constitute Master Lessor's and
Landlord's total responsibility concerning improvement of the Premises. Master
Lessor shall pay amounts constituting Landlord's Work as such costs are
incurred. After Master Lessor's contribution, Tenant shall pay any and all costs
of improvement of the Premises, as such costs are incurred.
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Landlord's Work shall include, but not be limited to, the costs of all
labor and materials, architectural, design, permits, fees and costs of
construction of Tenant's improvements. Master Lessor and Tenant shall diligently
pursue the preparation of all plans and specifications for all improvements to
the Premises, whether Landlord's Work or Tenant's Work. All such plans and
specifications shall have the approval of both Master Lessor and Tenant, which
approval shall not be unreasonably withheld by either party. Upon execution of
this Lease, Tenant, at its expense, shall have provided Master Lessor's
architect with instructions sufficient to enable Master Lessor's architect to
prepare complete plans and specifications for Landlord's Work. Such plans and
specifications and a cost estimate for Landlord's Work shall also have been
prepared by Master Lessor's architect and submitted to Master Lessor and Tenant
for preliminary approval within ten (10) business days from the date of
execution of this Lease. When the plans, specifications and cost estimate are so
approved by Master Lessor and Tenant, Master Lessor shall obtain from its
general contractor a quotation of the cost of Landlord's Work under Master
Lessor's construction contract and, if Master Lessor approves such quotation, it
shall submit the same to Tenant for approval. If Tenant disagrees with the
quotation from Master Lessor's general contractor, Tenant may obtain its own
quotation for Master Lessor's approval. If Master Lessor and Tenant are unable
to agree upon a quotation for the cost of Landlord's Work and the contractor to
do Landlord's Work, the parties agree to submit the dispute to arbitration under
the Construction Arbitration Rules of the American Arbitration Association. One
arbitrator shall be Master Lessor's architect; one arbitrator shall be appointed
by Tenant and the third arbitrator shall be appointed by the two arbitrators or,
lacking agreement, the Presiding Judge of the Superior Court of the City and
County of San Francisco. The arbitrators shall be appointed within ten (10) days
of the parties' disagreement and there shall be a hearing and decision within
twenty (20) days' of the arbitrators' appointment. Upon written approval by
Tenant or determination by arbitration, Master Lessor and Tenant shall be deemed
to have given final approval to the plans and specifications on the basis of
which the quotation was made, or cost determined, and Master Lessor shall be
authorized to proceed with Landlord's Work to the Premises in accordance with
such plans and specifications. Tenant shall bear the cost of any changes in the
work requested by Tenant after final approval of plans and specifications.
All work, labor, materials and supplies furnished to the Premises other
than Landlord's Work shall be furnished and installed at Tenant's sole cost and
expense ("Tenant's Work"). All of Tenant's Work shall be subject to the terms
and conditions of par. 10 of this Lease and shall be coordinated with Landlord's
Work if undertaken at the same time. All of Tenant's Work shall comply with all
state, Federal and local laws and regulations, with the standards of the
National Board of Fire Underwriters (NBFU), the National Electrical Code (NEC)
, the American Gas Association (AGA), and the American Society of Heating and
Ventilating Engineers (ASHVE), and shall conform to the following: Tenant's
Work shall be performed in a first-class, workmanlike manner and prosecuted
diligently to completion, free of defects in workmanship and materials. All
contracts for Tenant's Work shall require that the contractor repair or replace
in a first-class, workmanlike manner, without additional charge, all defective
work done under such contract whether by the contractor or its subcontractors,
for a period which shall not be less than one year following recording notice of
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completion. Tenant's Work shall be performed by licensed Contractors and
licensed subcontractors who will work harmoniously with each other and with
Master Lessor and its contractors and subcontractors, and who shall be capable
of providing a completion and a mechanics' and materialmen's xxxx xxxx to Tenant
for such work.
Upon Landlord's fifteen (15)-day notice to Tenant, Tenant shall have
access to the Premises for cabling and move-in, provided Tenant does not
interfere with Master Lessor's contractor. Tenant shall not be required to pay
any rent during such fifteen (15)-day period.
4. POSSESSION.
4.a. Master Lessor, and Master Lessor's agents and contractors, shall
use their best efforts and diligence to complete Landlord's Work and deliver
possession of the Premises to Tenant on or before October 1, 1998. If the
Landlord, for any reason whatsoever, cannot deliver possession of the said
Premises to the Tenant at the commencement of the term hereof, this Lease shall
not be void or voidable, nor shall Landlord be liable to Tenant for any loss or
damage resulting therefrom, nor shall the expiration date of the above term be
in any way extended, but in that event, all rent shall be abated under this
Lease during the period between the commencement of said term and the time when
Landlord delivers possession. Notwithstanding the provisions of this paragraph,
if Landlord has not delivered the Premises to Tenant in the condition required
under this Lease on or before December 1, 1998, Tenant shall have the right to
cancel this Lease. Upon such cancellation, Landlord shall return to Tenant all
sums theretofore deposited by Tenant with Landlord, and both parties shall be
released from all further liability under this Lease.
4.b. In the event that Landlord shall permit Tenant to occupy the
Premises prior to the commencement date of the term, such occupancy shall be
subject to all the provisions of this Lease, except for payment of rent. Said
early possession shall not advance the termination date hereinabove provided.
5. RENT. Tenant agrees to pay to Landlord as rental, without prior notice or
demand, for the Premises the sum of EIGHTEEN THOUSAND FIVE HUNDRED EIGHTY-TWO
AND NO/HUNDREDTHS DOLLARS ($18,582.00) per month on or before the first day of
the first full calendar month of the term hereof and a like sum on or before the
first day of each and every successive calendar month thereafter during the term
hereof, except that the first month's rent shall be paid upon the execution
hereof Rent for any period during the term hereof which is for less than one (1)
month shall be a prorated portion of the monthly installment herein, based upon
a thirty (30)-day month. Said rental shall be paid to Landlord without
deduction or offset in lawful money of the United States of America, which shall
be legal tender at the time of payment at the office of the Building, or to such
other person or at such other place as Landlord may from time to time designate
in writing.
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6. SECURITY DEPOSIT. Tenant has deposited with Landlord the sum of THIRTY-SEVEN
THOUSAND ONE HUNDRED SIXTY-FOUR AND NO/HUNDREDTHS DOLLARS ($317,164.00), which
sum and shall be held by Landlord as security for the faithful performance by
Tenant of all the terms, covenants, and conditions of this Lease to be kept and
performed by Tenant during the term hereof. If Tenant defaults with respect to
any provision of this Lease, including, but not limited to the provisions
relating to the payment of rent, Landlord may (but shall not be required to)
use, apply or retain all or any part of this security deposit for the payment of
any rent or any other sum in default, or for the payment of any amount which
Landlord may spend or become obligated to spend by reason of Tenant's default,
or to compensate Landlord for any other loss or damage which Landlord may suffer
by reason of Tenant's default. If any portion of said deposit is so used or
applied, Tenant shall within seven (7) business days after written demand
therefor, deposit cash with Landlord in an amount sufficient to restore the
security deposit to its original amount and Tenant's failure to do so shall be a
material breach of this Lease. Landlord shall not be required to keep this
security deposit separate from its general funds, and Tenant shall not be
entitled to interest on such deposit. If Tenant shall fully and faithfully
perform every provision of this Lease to be performed by it, the security
deposit or any balance thereof shall be returned to Tenant (or, at Landlord's
option, to the last assignee of Tenant's interest hereunder) at the expiration
of the Lease term. In the event of termination of Landlord's interest in this
Lease, Landlord shall transfer said deposit to Landlord's successor in interest.
7. OPERATING EXPENSE ADJUSTMENTS. [DELETED]
8. USE. Tenant shall use the Premises for general office purposes, software
development, multimedia studio, occasional special events for the "trade" and
related uses, and shall not use or permit the Premises to be used for any other
purpose without the prior written consent of Landlord.
Tenant shall not do or permit anything to be done in or about the
Premises nor bring or keep anything therein which will in any way increase the
existing rate of or affect any fire or other insurance upon the Building or any
of its contents, or cause cancellation of any insurance policy covering said
Building or any part thereof or any of its contents. Tenant shall not do or
permit anything to be done in or about the Premises which will in any way
obstruct or interfere with the rights of other tenants or occupants of the
Building or injure or annoy them or use or allow the Premises to be used for any
improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause,
maintain or permit any nuisance in, or about the Premises. Tenant shall not
commit or suffer to be committed any waste in or upon the Premises.
9. COMPLIANCE WITH LAW. Tenant shall not use the Premises or permit anything to
be done in or about the Premises which will in any way conflict with any law,
statute, ordinance or governmental rule or regulation now in force, or which may
hereafter be enacted or promulgated. Tenant shall, at its sole cost and expense,
promptly comply with all laws, statutes, ordinances and governmental rules,
regulations or requirement snow in force or which may hereafter be in force, and
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with the requirements of any board of fire insurance underwriters or other
similar bodies now or hereafter constituted, relating to, or affecting Tenant's
use or occupancy of the Premises, excluding structural changes not related to or
affected by Tenant's improvements or acts. The judgment of any court of
competent jurisdiction or the admission of Tenant in any action against Tenant,
whether Landlord be a party thereto or not, that Tenant has violated any law,
statute, ordinance or governmental rule, regulation or requirement, shall be
conclusive of that fact as between the Landlord and Tenant.
10. ALTERATIONS AND ADDITIONS. Tenant shall not make or suffer to be made any
alterations, additions or improvements to or of the Premises, or any part
thereof, in excess of a value of $5,000.00 without the written consent of
Landlord first had and obtained and any alterations, additions or improvements
to or of said Premises, including, but not limited to, wall covering, paneling
and built-in cabinet work, but excepting movable furniture and trade fixtures,
shall on the expiration of the term become a part of the realty and belong to
the Landlord and shall be surrendered with the Premises. In the event Landlord
consents to the making of any alterations, additions or improvements to the
Premises by Tenant, the same shall be made by Tenant at Tenant's sole cost and
expense, and any contractor or person selected by Tenant to make the same must
first be approved of in writing by the Landlord. Tenant shall provide Landlord
with written notice of the value and description of alterations, additions or
improvements with a value of $2,000 to $5,000.00. Upon the expiration or sooner
termination of the term hereof, Tenant shall, upon written demand by Landlord,
given at least thirty (30) days prior to the end of the term, at Tenant's sole
cost and expense, forthwith and with all due diligence remove any alterations,
additions, or improvements made by Tenant, designated by Landlord to be removed
by written notice to Tenant at the time of Landlord's granting approval for such
addition, alteration or improvement (or Landlord's receiving notice from Tenant
if the value is $2,000.00 to $5,000.00) and Tenant shall, forthwith and with all
due diligence at its sole cost and expense, repair any damage to the Premises
caused by such removal.
11. REPAIRS.
11.a. By taking possession of the Premises, Tenant shall be deemed to
have accepted the Premises as being in good, sanitary order, condition and
repair. Tenant shall, at Tenant's sole cost and expense, keep the Premises and
every part thereof in good condition and repair, damage thereto from causes
beyond the reasonable control of Tenant and ordinary wear and tear excepted.
Tenant shall upon the expiration or sooner termination of this Lease hereof
surrender the Premises to the Landlord in good condition, ordinary wear and tear
and damage from causes beyond the reasonable control of Tenant excepted. Except
as specifically provided in an addendum, if any, to this Lease, Landlord shall
have no obligation whatsoever to alter, remodel, improve, repair, decorate or
paint the Premises or any part thereof and the parties hereto affirm that
Landlord has made no representations to Tenant respecting the condition of the
Premises or the Building except as specifically herein set forth.
11.b. Notwithstanding the provisions of par. 11.a. hereinabove, Landlord
shall repair and maintain the structural portions of the Building, including the
basic plumbing, air conditioning, heating, and electrical systems, installed or
furnished by Landlord, unless such maintenance and repairs are
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caused in part or in whole by the act, neglect, fault or omission of any duty by
the Tenant, its agents, servants, employees or invitees in which case Tenant
shall pay to Landlord the reasonable cost of Tenant's share of such maintenance
and repairs. Landlord shall not be liable for any failure to make any such
repairs or to perform any maintenance unless such failure shall persist for an
unreasonable time after written notice of the need of such repairs or
maintenance is given to Landlord by Tenant. Except as provided in par. 22
hereof, 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 any repairs, alterations or improvements in or to any portion of the
Building or the Premises or in or to fixtures, appurtenances and equipment
therein. Tenant waives the right to make repairs at Landlord's expense under any
law, statute or ordinance now or hereafter in effect.
11.c. Notwithstanding any provision of this Lease, Landlord warrants to
Tenant that on the commencement of the term hereof, the Premises and any
improvements to be constructed by Landlord (a) shall be free from material
structural defects and (b) shall comply with all applicable covenants and
restrictions of record, statutes, ordinances, codes, rules, regulations, orders,
and requirements, including Title 24 of the California Administrative Code and
the Americans with Disabilities Act. In the event of a breach of the foregoing
warranties, Landlord shall promptly rectify such breach at its sole cost and
expense. Landlord also shall protect, indemnify, defend, and hold Tenant
harmless from an against any and all liability, loss, suits, claims, actions,
costs, and expense (including, without limitation, attorneys' fees) arising from
any breach of the foregoing warranties. The provisions of this section shall
survive the termination of this Lease.
12. LIENS. Tenant shall keep the Premises and the property in which the Premises
are situated free from any liens arising out of any work performed, materials
furnished or obligations incurred by Tenant. Landlord may require, at Landlord's
sole option, that Tenant shall provide to Landlord, at Tenant's sole cost and
expense, a lien and completion bond in an amount equal to one and one-half
(1-1/2) times any and all estimated costs of any improvements, additions, or
alterations in the Premises, to insure Landlord against any liability for
mechanics' and materialmen's liens and to insure completion of the work.
13. ASSIGNMENT AND SUBLETTING. Except as set forth in this paragraph 13, Tenant
shall not either voluntarily or by operation of law, assign, transfer, mortgage,
pledge, hypothecate or encumber this Lease or any interest therein, and shall
not sublet the said Premises or any part thereof, or any right or privilege
appurtenant thereto, or suffer any other person (the employees, agents, servants
and invitees of Tenant excepted) to occupy or use the said Premises, or any
portion thereof, without the written consent of Landlord first had and obtained,
which consent shall not be unreasonably withheld, and a consent to one
assignment, subletting, occupation or use by any other person shall not be
deemed to be a consent to any subsequent assignment, subletting, occupation or
use by another person. Any such assignment or subletting without such consent
shall be void, and shall, at the option of the Landlord, constitute a default
under this Lease. An assignment or subletting shall include, but not be limited
to, a merger or a sale or exchange of more than 50% of Tenant's stock or assets.
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(a) If at any time or from time to time during the term of this Lease
Tenant desires to sublet all or any part of the Premises, including any
expansion space, Tenant shall give notice to Landlord setting forth the terms of
the proposed subletting and the space so proposed to be sublet. Landlord shall
have the option, exercisable by notice given to Tenant within twenty (20) days
after Tenant's notice is given, either to sublet from Tenant such space at the
rental and other terms set forth in Tenant's notice, or, if the proposed
subletting is for the entire Premises for the balance of the term of this Lease,
to terminate this Lease; provided, however, that should Landlord so notify
Tenant, Tenant shall have the right to withdraw its request within twenty (20)
days after receiving Landlord's notice. If Landlord does not exercise such
option, Tenant shall be free to sublet such space to any third party subject to
the following conditions:
(1) The sublease shall be on the same terms set forth in the
notice given to Landlord;
(2) No sublease shall be made without the prior written consent
of Landlord, which consent Landlord agrees will not unreasonably be withheld or
delayed;
(3) No sublease shall be valid and not subtenant shall take
possession of the Premises sublease until an executed counterpart of such
sublease has been delivered to Landlord;
(4) No subtenant shall have a right further to sublet; and
(5) Any sums or other economic consideration received by Tenant
as a result of such subletting (except all out-of-pocket costs incurred in
connection with such subletting or assignment ((including, without limitation,
leasing commissions, advertising costs, rental concessions and legal fees) ) and
rental or other payments received which are attributable to the amortization of
the cost of leasehold improvements, other than building standard tenant
improvements, made to the sublet portion of the Premises by Landlord) whether
denominated rentals under the sublease or otherwise, which exceed, in the
aggregate, the total sums which Tenant is obligated to pay Landlord under this
Lease (prorated to reflect obligations allocable to that portion of the Premises
subject to such sublease) shall be payable to Landlord as additional rental
under this Lease without affecting or reducing any other obligation of Tenant
hereunder.
(b) Notwithstanding the provisions of paragraphs 13 and 31(a) above,
Tenant may "go public" under the Securities Act of 1933 (even if it involves
trading in excess of 50% of the Company's stock) or assign this Lease or sublet
the Premises or any portion thereof, including any expansion space, without
Landlord's consent and without extending any option to Landlord, to any
corporation which controls, is controlled by or is under common control with
Tenant, or to any corporation resulting from the merger or consolidation with
Tenant or to any person or entity which acquires all the assets of Tenant as a
going concern of the business that is being conducted on the Premises, provided
that said assignee has substantially the same or better financial condition then
Tenant and assumes, in full, the obligations of Tenant under this Lease.
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(c) Regardless of Landlord's consent, no subletting or assignment shall
release Tenant of Tenant's obligation or alter the primary liability of Tenant
to pay the rental and to perform all other obligations to be performed by Tenant
hereunder. The acceptance of rental by Landlord from any other person shall not
be deemed to be a waiver by Landlord of any provision hereof. Consent to one
assignment or subletting shall not be deemed consent to any subsequent
assignment or subletting. In the event of default by any assignee of Tenant or
any successor of Tenant in the performance of any of the terms hereof, Landlord
may proceed directly against Tenant without the necessity of exhausting remedies
against such assignee or successor.
(d) In the event Tenant shall assign or sublet the Premises or request
the consent of Landlord to any assignment or subletting or if Tenant shall
request the consent of Landlord for any act that Tenant proposes to do, then
Tenant shall pay Landlord's reasonable attorneys' fees (not to exceed $500.00
per request) incurred in connection therewith.
14. HOLD HARMLESS. Tenant shall indemnify and hold harmless Landlord against and
from any and all claims arising from Tenant's use of the Premises for the
conduct of its business or from any activity, work, or other thing done or
permitted by the Tenant in or about the Building (or suffered by Tenant in the
Premises), and shall further indemnify and hold harmless Landlord against and
from any and all claims arising from any breach or default in the performance of
any obligation on Tenant's part to be performed under the terms of this Lease,
or arising from any willful misconduct or negligence of the Tenant, or any
officer, agent, employee, guest, or invitee of Tenant, and from all and against
all costs, attorneys' fees, expenses and liabilities incurred in or about any
such claim or any action or proceeding brought thereon, and, in any case, action
or proceeding be brought against Landlord by reason of any such claim, Tenant
upon notice from Landlord shall defend the same at Tenant's expense by counsel
reasonably satisfactory to Landlord. Tenant as a material part of the
consideration to Landlord hereby assumes all risk of damage to property or
injury to persons, in, upon or about the Premises, from any cause other than
negligence or willful misconduct of Landlord or its agents and Tenant hereby
waives all claims in respect thereof against Landlord. Landlord or its agents
shall not be liable for any damage to property entrusted to employees of the
Building, nor for loss or damage to any property by theft or otherwise, nor for
any injury to or damage to persons or property resulting from fire, explosion,
falling plaster, steam, gas, electricity, water or rain which may leak from any
part of the Building or from the pipes, appliances or plumbing works therein or
from the roof, street or subsurface or from any other place resulting from
dampness or any other cause whatsoever, unless caused by or due to the
negligence or willful misconduct of Landlord, its agents, servants or employees.
Landlord or its agents shall not be liable for interference with the light or
other incorporeal hereditaments, loss of business by Tenant, nor shall Landlord
be liable for any latent defect in the Premises or in the Building unless known
to Landlord or its agents. Tenant shall give prompt notice to Landlord in case
of fire or accidents in the Premises or in the Building or of defects therein or
in the fixtures or equipment.
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Landlord hereby indemnifies and holds harmless Tenant and its agents,
employees and successors and assignees against any and all liability, loss:
suits, claims, actions, costs and expense arising from (i) Landlord's or
Landlord's agents' breach of this Lease and (ii) the negligence or willful
misconduct of Landlord or its agents.
15. SUBROGATION. As long as their respective insurers so permit, Landlord and
Tenant hereby mutually waive their respective rights of recovery against each
other for any loss insured by fire, extended coverage and other property
insurance policies existing for the benefit of the respective parties. Each
party shall obtain any special endorsements, if required by their insurer, to
evidence compliance with the aforementioned waiver.
16. LIABILITY INSURANCE. Tenant shall, at Tenant's expense, obtain and keep in
force during the term of this Lease a policy of comprehensive public liability
insurance insuring Landlord and Tenant against any liability arising out of the
ownership, use, occupancy or maintenance of the Premises and all areas
appurtenant thereto. The limit of said insurance shall not, however, limit the
liability of the Tenant hereunder. Tenant may carry said insurance under a
blanket policy, providing, however, said insurance by Tenant shall have a
Landlord's protective liability endorsement attached thereto. If Tenant shall to
procure and maintain said insurance, Landlord may, but shall not be required to,
procure and maintain same, but at the expense of Tenant. Insurance required
hereunder, shall be in companies rated A+ AAA or better in "Best's Insurance
Guide". Tenant shall deliver to Landlord prior to occupancy of the Premises
copies of policies of liability insurance required herein or certificates
evidencing the existence and amounts of such insurance with loss payable clauses
satisfactory to Landlord. No policy shall be cancellable or subject to reduction
of coverage except after ten (10) days' prior written notice to Landlord.
17. SERVICES AND UTILITIES. Provided that Tenant is not in default hereunder,
Landlord agree to furnish to the Premises during reasonable hours of generally
recognized business days, to be determined by Landlord at its reasonable
discretion (minimum 8:00 a.m. - 6:00 p.m. Monday through Friday) and subject to
the rules and regulations of the Building of which the Premises are a part,
electricity for normal lighting and fractional horsepower office machines, heat
and air conditioning required in Landlord's judgment for the comfortable use and
occupation of the Premises and janitorial service. Landlord shall also maintain
and keep lighted the common stairs, common entries and toilet rooms in the
Building of which the Premises are a part. Landlord shall not be liable for, and
Tenant shall not be entitled to, any reduction of rental by reason of Landlord's
failure to furnish any of the foregoing when such failure is caused by accident
breakage, repairs, strikes, lockouts or other labor disturbances or labor
disputes of any character, or by any other cause, similar or dissimilar, beyond
the reasonable control of Landlord. Landlord shall not be liable under any
circumstances for a loss of or injury to property, however occurring, through or
in connection with or incidental to failure to furnish any of the foregoing
unless such loss or injury is caused by the negligence or willful misconduct of
Landlord or Landlord's agents. Wherever heat generating machines or equipment
are used in the
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Premises which affect the temperature otherwise maintained by the air
conditioning system, Landlord reserves the right to install supplementary air
conditioning units in the Premises and the cost thereof, including the cost of
installation, and the cost of operation and maintenance thereof shall be paid by
Tenant to Landlord upon demand by Landlord.
Tenant will not, without written consent of Landlord, use any apparatus
or device in the Premises, including, but without limitation thereto, electronic
data processing machines, punch card machines, and machines using in excess of
120 volts, which will in any way materially increase the amount of electricity
usually furnished or supplied for the use of the Premises as general office
space; nor connect with electric current except through existing electrical
outlets in the Premises, any apparatus or device, for the purpose of using
electric current. If Tenant shall require water or electric current in excess of
that usually furnished or supplied for the use of the Premises as general office
space, Tenant shall first procure the written consent of Landlord, to the use
thereof and Landlord may cause a water meter or electrical current meter to be
installed in the Premises, so as to measure the amount of water and electric
current consumed for any such use, or otherwise charge Tenant the reasonably
estimated cost thereof. The cost of any such meters and of installation,
maintenance and repair thereof shall be paid for by the Tenant and Tenant agrees
to pay to Landlord promptly upon demand therefor by Landlord for all such water
and electric current consumed as shown by said meters or estimate, at the rates
charged for such services by the local public utility furnishing the same, plus
any additional expense incurred in keeping account of the water and electric
current so consumed. If a separate meter is not installed, such excess cost for
such water and electric current will be established by an estimate made by a
utility company or electrical engineer.
18. PROPERTY TAXES. Tenant shall pay, or cause to be paid, before delinquency,
any and all taxes levied or assessed and which become payable during the term
hereof upon all Tenant's leasehold improvements, equipment, furniture, fixtures
and personal property located in the Premises; except that which has been paid
for by Landlord and is the standard of the Building. In the event any or all of
the Tenant's leasehold improvements, equipment, furniture, fixtures and personal
property shall be assessed and taxed with the Building, Tenant shall pay to
Landlord its share of such taxes within ten (10) days after delivery to Tenant
by Landlord of a statement in writing setting forth the amount of such taxes
applicable to Tenant's property.
19. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with the
rules and regulations that Landlord shall from time to time promulgate. Landlord
reserves the right from time to time to make all reasonable modifications to
said rules, provided any such modifications do not unreasonably interfere with
Tenant's use of, or access to, the Premises. The additions and modifications to
those rules shall be binding upon Tenant upon delivery of a copy of them to
Tenant.
20. HOLDING OVER. If Tenant remains in possession of the Premises or any part
thereof after the expiration of the term hereof, with the express written
consent of Landlord, such occupancy
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shall be a tenancy from month to month at a rental in the amount of the last
monthly rental, plus all other charges payable hereunder, and upon all the terms
hereof applicable to a month to month tenancy.
21. ENTRY BY LANDLORD. Landlord reserves and shall at any and all times have the
right (upon reasonable notice to Tenant except in cases of emergency) to enter
the Premises, inspect the same, supply janitorial service and other service to
be provided by Landlord to Tenant hereunder, to submit said Premises to
prospective purchasers or tenants, to post notices of non-responsibility, and to
alter, improve or repair the Premises and any portion of the Building of which
the Premises are a part that Landlord may deem necessary or desirable, without
abatement of rent and may for that purpose erect scaffolding any other necessary
structures where reasonably required by the character of the work to be
performed, always providing that the entrance to the Premises shall not be
blocked thereby, and further providing that the business of the Tenant shall not
be interfered with unreasonably. Tenant hereby waives any claim for damages or
for any injury or inconvenience to or interference with Tenant's business, any
loss of occupancy or quiet enjoyment of the Premises, and any other loss
occasioned thereby, unless caused by the negligence or willful misconduct of
Landlord or its agents. For each of the aforesaid purposes, Landlord shall at
all times have and retain a key with which to unlock all of the doors in, upon
and about the Premises, excluding Tenant's vaults, safes and files, and Landlord
shall have the right to use any and all means which Landlord may deem proper to
open said doors in an emergency, in order to obtain entry to the Premises
without liability to Tenant except for any failure to exercise due care for
Tenant's property. Any entry to the Premises obtained by Landlord by any of said
means, or otherwise shall not under any circumstances be construed or deemed to
be a forceable or unlawful entry into, or a detainer of, the Premises, or an
eviction of Tenant from the Premises or any portion thereof.
22. RECONSTRUCTION. In the event the Premises or the Building of which the
Premises are a part are damaged by fire or other perils covered by extended
coverage insurance, Landlord agrees to forthwith repair the same; and this Lease
shall remain in full force and effect, except that Tenant shall be entitled to a
proportionate reduction of the rent while such repairs are being made, such
proportionate reduction to be based upon the extent to which the making of such
repairs shall materially interfere with the business carried on by the Tenant in
the Premises. If the damage is due to the fault or neglect of Tenant or its
employees, there shall be no abatement of rent.
In the event the Premises or the Building of which the Premises are a
part are damaged as a result of any cause other than the perils covered by fire
and extended coverage insurance, then Landlord shall forthwith repair the same,
provided the extent of the destruction be less than twenty-five percent (25%) of
the then full replacement cost of the Premises or the Building of which the
Premises are a part. In the event the destruction of the Premises or the
Building is to an extent greater than twenty-five percent (25%) of the full
replacement cost, then Landlord shall have the option: (1) to repair or restore
such damage within forty-five (45) days (if Landlord is unable to do so, Tenant
shall have the right to terminate this Lease upon written notice to Landlord) ,
this Lease continuing in full force and effect, but the rent to be
proportionately reduced as hereinabove in this Article provided; or
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(2) give notice to Tenant at any time within twenty (20) days after such damage
terminating this Lease as of the date specified in such notice, which date shall
be thirty (30) days after the giving of such notice. In the event of giving such
notice, this Lease shall expire and all interest of the Tenant in the Premises
shall terminate on the date so specified in such notice and the Rent reduced by
a proportionate amount, based upon the extent if any, to which such damage
materially interfered with the business carried on by the Tenant in the
Premises, shall be paid up to date of said such termination.
Notwithstanding anything to the contrary in this Article, Landlord shall
not have any obligation whatsoever to repair, reconstruct or restore the
Premises when the damage resulting from any casualty covered under this Article
occurs during the last nine (9) months of the term of this Lease or any
extension thereof.
Landlord shall not be required to repair any injury or damage by fire or
other cause, or to make any repairs or replacements of any panels, decoration,
office fixtures, railings, floor covering, partitions, or any other property
installed in the Premises by Tenant unless such damage or injury is caused by
the negligence or willful misconduct of Landlord or Landlord's agents.
Tenant shall not be entitled to any compensation or damages from
Landlord for loss of the use of the whole or any part of the premises, Tenant's
personal property or any inconvenience or annoyance occasioned by such damage,
repair, reconstruction or restoration unless caused by the negligence or willful
misconduct of Landlord or Landlord's agents.
23. DEFAULT. The occurrence of any one or more of the following events shall
constitute a default and breach of this Lease by Tenant.
23.a. The vacating or abandonment of the Premises by Tenant.
23.b. The failure by Tenant to make any payment of rent or any other
payment required to be made by Tenant hereunder, as and when due, where such
failure shall continue for a period of five (5) business days after written
notice thereof by Landlord to Tenant.
23.c. The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by the
Tenant, other than described in par. 23.b. above, where such failure shall
continue for a period of thirty (30) days after written notice thereof by
Landlord to Tenant; provided, however, that if the nature of Tenant's default is
such that more than thirty (30) days are reasonably required for its cure, then
Tenant shall not be deemed to be in default if Tenant commences such cure within
said thirty (30) day period and thereafter diligently prosecutes such cure to
completion.
23.d. The making by Tenant of any general assignment or general
arrangement for the benefit of creditors; or the filing by or against Tenant of
a petition to have Tenant adjudged a bankrupt, or a
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petition or reorganization or arrangement under any law relating to bankruptcy
(unless, in the case of a petition filed against Tenant, the same is dismissed
within sixty (60) days) ; or the appointment of a trustee or a receiver to take
possession of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where possession is not restored to Tenant
within thirty (30) days; or the attachment, execution or other judicial seizure
of substantially all of Tenant's assets located at the Premises or of Tenant's
interests in this Lease, where such seizure is not discharged in thirty (30)
days.
24. REMEDIES IN DEFAULT. In the event of any such material default or breach by
Tenant, Landlord may at any time thereafter, with or without notice or demand
and without limiting Landlord in the exercise of a right or remedy which
Landlord may have by reason of such default or breach:
24.a. Terminate Tenant's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Premises to Landlord. In such event
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default including, but not limited to, the cost
of recovering possession of the Premises; expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable attorney's fees,
any real estate commission actually paid; the worth at the time of award by the
court having jurisdiction thereof of the amount by which the unpaid rent for the
balance of the term after the time of such award exceeds the amount of such
rental loss for the same period that Tenant proves could be reasonably avoided;
that portion of the leasing commission paid by Landlord and applicable to the
unexpired term of this Lease. Unpaid installments of rent or other sums shall
bear interest from the date due at the rate of ten (10%) per cent per annum. In
the event Tenant shall have abandoned the Premises, Landlord shall have the
option of (a) taking possession of the Premises and recovering from Tenant the
amount specified in this paragraph, or (b) proceeding under the provisions of
the following par. 24.b.
24.b. Maintain Tenant's right to possession, in which case this Lease
shall continue in effect whether or not Tenant shall have abandoned the
Premises. In such event Landlord shall be entitled to enforce all of Landlord's
rights and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder.
24.c. Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decision of the State in which the Premises are
located.
25. EMINENT DOMAIN. If more than twenty-five (25%) per cent of the Premises
shall be taken or appropriated by any public or quasi-public authority under the
power of eminent domain, either party hereto shall have the right, at its
option, to terminate this Lease, and Landlord shall be entitled to any and all
income, rent, award, or any interest therein whatsoever which may be paid or
made in connection with such public or quasi-public use or purpose, and Tenant
shall have no claim against Landlord for the value of any unexpired term of this
Lease. If either less than or more than twenty-five (25%) per cent of the
Premises is taken and neither party elects to terminate as herein
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provided, the rental thereafter to be paid shall be equitably reduced based upon
the proportion of the Premises taken. If more than fifty percent (50%) of the
Building other than the Premises may be so taken or appropriated, Landlord shall
have the right at its option to terminate this Lease and shall be entitled to
the entire award as above provided. Notwithstanding any of the foregoing in the
event that any taking under the power of eminent domain shall affect the
Premises in such a manner that, in Tenant's reasonable opinion, such damage
materially and adversely interferes with the conduct of Tenant's business,
Tenant shall have the right to terminate this Lease upon written notice thereof
to Landlord. Notwithstanding the foregoing, Tenant shall be entitled to that
portion of any award which is separately stated which compensates Tenant for
Tenant's relocation expenses and loss of fixtures, equipment and personal
property.
26. OFFSET STATEMENT. [DELETED]
27. PARKING. [DELETED]
28. AUTHORITY OF PARTIES.
28.a. CORPORATE AUTHORITY. If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of said
corporation, in accordance with a duly adopted resolution of the board of
directors of said corporation or in accordance with the by-laws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms.
28.b. LIMITED PARTNERSHIPS. If the Landlord herein is a limited
partnership, it is understood and agreed that any claims by Tenant on Landlord
shall be limited to the assets of the limited partnership, and furthermore,
Tenant expressly waives any and all rights to proceed against the individual
partners or the officers, directors or shareholders of any corporate partner,
except to the extent of their interest in said limited partnership.
29. GENERAL PROVISIONS.
(i) PLATS AND RIDERS. Clauses, plats and riders, if any, signed by the
Landlord and the Tenant and endorsed on or affixed to this Lease are a part
hereof.
(ii) WAIVER. The waiver by Landlord of any term, covenant or condition
herein contained shall not be deemed to be a waiver of such term, covenant or
condition on any subsequent breach of the same or any other term, covenant or
condition herein contained. The subsequent acceptance of rent hereunder by
Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of
any term, covenant or condition of this Lease, other than the failure of the
Tenant to pay
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the particular rental so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of the acceptance of such rent.
(iii) NOTICES. All notices and demands which may or are to be required
or permitted to be given by either party to the other hereunder shall be in
writing. All notices and demands by the Landlord to the Tenant shall be sent by
United States Mail, postage-prepaid or overnight courier, addressed to the
Tenant at the Premises, or to such other place as Tenant may from time to time
designate in a notice to the Landlord. All notices and demands by the Tenant to
the Landlord shall be sent by United States Mail, postage prepaid or overnight
courier, addressed to the Landlord at the office of the Building, or to such
other person or place as the Landlord may from time to time designate in a
notice to the Tenant.
(iv) JOINT OBLIGATIONS. If there be more than one Tenant the obligations
hereunder imposed upon Tenants shall be joint and several.
(v) MARGINAL HEADINGS. The marginal headings and paragraph titles to the
paragraphs of this Lease are not a part of this Lease and shall have no effect
upon the construction or interpretation of any part hereof.
(vi) TIME. Time is of the essence of this Lease and each and all of its
provisions in which performance is a factor.
(vii) SUCCESSORS AND ASSIGNS. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
(viii) RECORDATION. Neither Landlord nor Tenant shall record this Lease
or a short form memorandum hereof without the prior written consent of the other
party.
(ix) QUITE POSSESSION. Upon Tenant paying the rent reserved hereunder
and observing and performing all of the covenants, conditions and provisions on
Tenant's part to be observed and performed hereunder, Tenant shall have quiet
possession of the Premises for the entire term hereof, subject to all the
provisions of this Lease.
(x) LATE CHARGES. Tenant hereby acknowledges that late payment by Tenant
to Landlord of rent or other sums due hereunder will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Landlord by terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or of a sum due from Tenant shall not be
received by Landlord or Landlord's
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designee within ten (10) days after Tenant's receipt of written notice that said
amount is past due, then Tenant shall pay toe Landlord a late charge equal to
seven (7%) per cent of such overdue amount. The parties hereby agree that such
late charges represent a fair and reasonable estimate of the cost that Landlord
will incur by reason of the late payment by Tenant. Acceptance of such later
charges by the Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder.
(xi) PRIOR AGREEMENTS. This Lease contains all of the agreements of the
parties hereto with respect to any matter covered or mentioned in this Lease,
and no prior agreements or understanding pertaining to any such matters shall be
effective for any purpose. No provision of this Lease may be amended or added to
except by an agreement in writing signed by the parties hereto or their
respective successors in interest. This Lease shall not be effective or binding
on any party until fully executed by both parties hereto.
(xii) INABILITY TO PERFORM. This Lease and the obligations of the Tenant
and Landlord hereunder shall not be affected, or impaired because either party
is unable to fulfill any of its obligations hereunder or is delayed in doing so,
if such inability or delay is caused by reason of strike, labor troubles, acts
of God, or any other cause beyond the reasonable control of such party. This
provision shall not excuse or extend performance of Tenant's rental payment
obligation hereunder.
(xiii) ATTORNEYS' FEES. In the event of any action or proceeding brought
by either party against the other under this Lease the prevailing party shall be
entitled to recover all costs and expenses including the fees of its attorneys
in such action or proceeding in such amount as the court may adjudge reasonable
as attorneys' fees.
(xiv) SALE OF PREMISES BY LANDLORD. In the event of any sale of the
Building, after delivery to the purchaser of Tenant's security deposit and any
other funds of Tenant held by Landlord on account of Tenant's obligations
hereunder, Landlord shall be and is hereby entirely freed and relieved of all
liability under any and all of its covenants and obligations contained in or
derived from this Lease arising out of any act, occurrence or omission occurring
after the consummation of such sale; and the purchaser, at such sale or any
subsequent sale of the Premises shall be deemed, without any further agreement
between the parties or their successors in interest or between the parties and
any such purchaser, to have assumed and agreed to carry out any and all of the
covenants and obligations of the Landlord under this Lease.
(xv) SUBORDINATION, ATTORNMENT. Upon request of the Landlord, Tenant
will in writing subordinate its rights hereunder to the lien of any first
mortgage, or first deed of trust to any bank, insurance company or other lending
institution, now or hereafter in force against the land and Building of which
the Premises are a part, and upon any buildings hereafter placed upon the land
of which the Premises are a part, and to all advances made or hereafter to be
made upon the security thereof,
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provided that such bank, insurance company or other lending institution delivers
to Tenant a non-disturbance agreement reasonably satisfactory to Tenant.
In the event any proceedings are brought for foreclosure, or in the
event of the exercise of the power of sale under any mortgage or deed of trust
made by the Landlord covering the Premises, the Tenant shall attorn to the
purchaser upon any such foreclosure or sale and recognize such purchaser as the
Landlord under this Lease, provided that such bank, insurance company or other
lending institution delivers to Tenant a non-disturbance agreement reasonably
satisfactory to Tenant.
The provisions of this Article to the contrary notwithstanding, and so
long as Tenant is not in default hereunder, this Lease shall remain in full
force and effect for the full term hereof.
Within 30 days of execution of this Lease, Landlord shall deliver to
Tenant a non-disturbance agreement in a form reasonably satisfactory to Tenant
executed by each beneficiary or mortgagee holding a lien on the Premises.
(xvi) NAME. Tenant shall not use the name of the Building or of the
development in which the Building is situated for any purpose other than as an
address of the business to be conducted by the Tenant in the Premises.
(xvii) SEPARABILITY. Any provision of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision hereof and such other provision shall remain in full force and effect.
(xviii) CUMULATIVE REMEDIES. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
(xix) CHOICE OF LAW. This Lease shall be governed by the laws of the
State in which the Premises are located.
(xx) SIGNS AND AUCTIONS. Tenant shall not place any sip upon the
Premises or Building or conduct any auction thereon without Landlord's prior
written consent, which shall not be unreasonably withheld or delayed. Landlord,
at its sole cost and expense, shall provide building directory signage for
Tenant in the first floor lobby. Tenant shall have the right to install exterior
Building signage both in the front and back of the Building, with the design to
be mutually agreed upon by Landlord and Tenant. Said design is to be tasteful
and fully integrated into the design of the Building.
30. BROKERS. Tenant warrants that it has had no dealings with any real estate
broker or agents in connection with the negotiation of this Lease excepting only
Xxxxxxx Xxxxxxxx Limited (for Landlord)
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and Xxxxxxx & Wakefield (for Tenant) and it knows of no other real estate broker
or agent who is entitled to a commission in connection with this Lease.
31. OPTION TO TERMINATE. On or after December 1, 1999, if Landlord is unable to
accommodate Tenant's expansion needs, Tenant shall have the option to terminate
this Lease by providing Landlord one hundred twenty (120) days' advanced written
notice to Landlord and paying Landlord all current rent and performing all
covenants and conditions of this Lease to the effective date of termination. In,
addition, in the event Tenant exercises its option to terminate, as
consideration, Tenant shall pay to Master Lessor one-half (1/2) of the
unamortized (i.e. assuming a commencement date of October 1, 1998, 42 months
less the period commencing October 1, 1998, to the date of termination divided
by 42 months) portion of (a) Master Lessor's contribution to tenant improvements
of $100,000.00 and (b) leasing commissions of $45,711.72 with respect to the
Premises.
32. REASONABLE CONSENT OR APPROVAL. When any provision of this Lease, or the
accompanying Rules and Regulations, calls for a party's consent or approval,
Landlord and Tenant each agree that such consent or approval shall not be
unreasonably withheld or delayed.
33. ESTOPPEL CERTIFICATE. Tenant shall at any time and from time to time upon
not less than ten (10) business days' prior notice from Landlord execute,
acknowledge and deliver to Landlord a statement in writing, which may be in the
form specified by Landlord, which shall certify: (a) that the Premises have been
completed to the satisfaction of Tenant and accepted and possessed by Tenant,
(b) the date the term of Lease commenced, the term of the Lease, any portions to
renew or extend, the amount of any security deposit and the date to which rental
and any other charges are paid in advance, (c) that the Lease is in full force
and effect and unmodified (or if there have been modifications, stating the
nature of the modifications and certifying that the Lease so modified is in full
force and effect), (d) that no notice has been received by Tenant of any
default of Tenant which has not been cured (or specifying such notices), (e)
that there are no uncured defaults on the part of Landlord (or specifying such
defaults if any are claimed), off-sets, counterclaims or credits against the
rents, obligations or stipulations due or to become due or required, (f) that
Tenant has no knowledge of any prior assignment, hypothecation or pledge of
rents and (g) such other matters as may be reasonably requested by Landlord. Any
such certificate may be relied upon by any prospective purchase of all or any
portion of the real property of which the Premises are a part.
34. SUBORDINATION. This Lease shall be subject and subordinated at all times to
(a) all ground or underlying leases which may hereafter be executed affecting
the real property of which the Premises are a part, and (b) the lien of all
mortgages and deeds of trust in any amount or amounts whatsoever now or
hereafter placed on or against said real property or on or against Landlord's
interest or estate therein or on or against all such ground or underlying
leases, all without the necessity of having further instruments executed on the
part of Tenant to effectuate such subordination. Notwithstanding the foregoing,
(1) in the event of termination for any reason whatsoever of any such
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ground or underlying lease, this Lease shall not then be barred, terminated, cut
off or foreclosed nor shall the rights and possession of Tenant hereunder be
disturbed if Tenant shall not then be in default in the payment of rental or
other sums or be otherwise in default under the terms of this Lease and Tenant
shall attorn to Landlord of any such ground or underlying lease, or, if
requested, enter into a new lease for the balance of the original or extended
term hereof then remaining upon the same terms and provisions as are in this
Lease contained; (2) in the event of a foreclosure of any such mortgage or deed
of trust or of any other action or proceeding of the enforcement thereof, or of
any sale thereunder, this Lease will not be barred, terminated, cut off or
foreclosed nor will the rights and possession of Tenant thereunder be disturbed
if Tenant shall not then be in default in the payment of rental or other sums or
be otherwise in default under the terms of this Lease and Tenant shall attorn to
the purchaser at such foreclosure, sale or other action or proceeding; and (3)
Tenant agrees to execute and deliver upon demand such further instrument
evidencing such subordination of this Lease to said deed, to such ground or
underlying leases, and to the lien of any such mortgages or deeds of trust as
may reasonably be required by Landlord. Tenant's covenant to subordinate this
Lease to ground or underlying leases and/or mortgages or deeds of trust
hereafter executed is conditioned upon each such senior instrument containing
the commitments specified in the preceding clauses (1) and (2) .
THE PARTIES HERETO HAVE EXECUTED THIS LEASE AT THE PLACE AND ON THE
DATES SPECIFIED IMMEDIATELY ADJACENT TO THEIR RESPECTIVE SIGNATURES.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION TO
YOUR ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY
THE REAL ESTATE BROKER OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY,
LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTIONS RELATING
THERETO.
DATED: June 23, 1998 SAN FRANCISCO MERCANTILE
COMPANY, INC., a California
corporation
Address: 000 Xxxxxxx Xxxxxx, Xxxxx 000 By /s/ X. XXXXX XXXXXXXX
Xxx Xxxxxxxxx, XX 00000 ----------------------------------
Attn: Xxxxx X. Xxxx W. Xxxxx Xxxxxxxx, Chairman
By /s/ XXXXX X. XXXX
----------------------------------
Xxxxx X. Xxxx,
Secretary-Treasurer
"LANDLORD"
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DATED: June 23, 1998. QUOKKA SPORTS, INC., a Delaware
corporation
Address: 000 Xxxxxxx Xxxxxx, Xxxxx 000 By [Signature]
Xxx Xxxxxxxxx, XX 00000 ----------------------------------
Attn: President
By [Signature]
----------------------------------
Secretary
"TENANT"
[Signature] [Signature]
-------------------------- ----------------------------------
Landlord's Initials Tenant's Initials
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The undersigned, as Master Lessor under that certain Lease dated
December 1, 1985, as amended ("Master Lease"), hereby consents to the foregoing
Sublease, agrees to contribute the consideration referred to in par. 3 of the
foregoing Sublease and agrees to assume and perform all of the terms and
conditions of the Sublease to be performed by Landlord thereunder in the event
of termination of the Master Lease while the Sublease is still in full force and
effect.
DATED: June 23, 1998. XXXXXXX STREET PARTNERS, a
California limited partnership
By /s/ W. XXXXX XXXXXXXX
----------------------------------
W. Xxxxx Xxxxxxxx, General Partner
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RULES AND REGULATIONS
1. No sign, placard, picture, advertisement name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the
outside or inside of the Building (excluding the interior of the
Premises) without the written consent of Landlord first had and obtained
and Landlord shall have the right to remove any such sign, placard,
picture, advertisement, name or notice without notice to and at the
expense of Tenant.
2. The sidewalks, halls, passages, exits, entrances, elevators and
stairways shall not be obstructed by any of the tenants or used by them
for any purpose other than for ingress and egress from their respective
Premises.
3. Tenant shall not alter any lock or install any new or additional locks
or any bolts on any doors or windows of the Premises.
4. The toilet rooms, 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 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
employees or invitees shall have caused it.
5. Tenant shall not overload the floor of the Premises or in any way deface
the Premises or any part thereof.
6. No heavy or large volume of furniture, freight or equipment of any kind
shall be brought into the Building without the prior notice to Landlord
and all moving of the same into or out of the Building shall be done at
a reasonable time and manner as Landlord shall designate. Landlord shall
have the right to prescribe the weight, size and position of all safes
and other heavy equipment brought into the Building and also the times
and manner of moving the same in and out of the Building Safes or other
heavy objects shall, if considered necessary by Landlord, stand on
supports of such thickness as is necessary to properly distribute the
weight. Landlord will not be responsible for loss of or damage to any
such safe or property from any cause and all damage done to the Building
by moving or maintaining any such safe or other property shall be
repaired at the expense of Tenant.
7. Tenant shall not use, keep or permit to be used or kept any foul or
noxious gas or substance in the Premises, or permit or suffer the
Premises to be occupied or used in a manner offensive or objectionable
to the 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
in or kept in or about the Premises or the Building.
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8. No cooking shall be done or permitted by any Tenant on the Premises, nor
shall the Premises be used for the storage of merchandise, for washing
clothes, for lodging, or for any improper, objectionable or immoral
purposes.
9. Tenant shall not use or keep in the Premises or the Building any
kerosene, gasoline or inflammable or combustible fluid or material or
use any method of heating or air conditioning other than that supplied
by Landlord.
10. Landlord will direct electricians as to where and how telephone and
telegraph wires are to be introduced. No boring or cutting for wires
will be allowed without the consent of the Landlord. The location of
telephones, call boxes and other office equipment affixed to the
Premises shall be subject to the approval of Landlord.
11. On Saturdays, Sundays and legal holidays, and on other days between the
hours of 6:00 P.M. and 8:00 A.M. the following day, access to the
Building, or to the halls, corridors, elevators or stairways in the
Building, or to the Premises may be refused unless the person seeking
access is known to the person or employee of the Building in charge and
has a pass or is properly identified. The Landlord shall in no case be
liable for damages for any error with regard to the admission to or
exclusion from the Building of any person. In case of invasion, mob,
riot, public excitement, or other commotion, the Landlord reserves the
right to prevent access to the Building during the continuance of the
same by closing of the doors or otherwise, for the safety of the tenants
and protection of property in the Building and the Building.
12. Landlord reserves the right to exclude or expel from the Building any
person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in
violation of any of the rules and regulations of the Building.
13. No vending machine or machines of any description shall be installed,
maintained or operated upon the Premises without the written consent of
the Landlord.
14. Landlord shall have the right, exercisable without notice and without
liability to Tenant, to change the name and street address of the
Building of which the Premises are a part.
15. Tenant shall not disturb, solicit, or canvass any occupant of the
Building and shall cooperate to prevent same.
16. Without the written consent of Landlord, Tenant shall not use the name
of the Building in connection with or in promoting or advertising the
business of Tenant except as Tenant's address.
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17. Landlord shall have the right to control and operate the public portions
of the Building, and the public facilities, and heating and air
conditioning, as well as facilities furnished for the common use of the
tenants, in such manner as it deems best for the benefit of the tenants
generally.
18. All entrance doors in the Premises shall be left locked when the
Premises are not in use, and all doors opening to public corridors shall
be kept closed except for normal ingress and egress from the Premises.
19. Except for seeing eye dogs, no animals shall be allowed in the Building
at any time.
20. 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
of the Tenants of the Building.
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26
EXHIBIT A
AMENDMENT TO LEASE
This Amendment to Lease (this "Amendment") dated as of April 1, 1997, is
entered into by and between XXXXXXX STREET PARTNERS, a California limited
partnership ("Brannan"), and THE SAN FRANCISCO MERCANTILE COMPANY, INC., a
California corporation ("Mercantile"), in accordance with the following facts:
X. Xxxxxxx and Mercantile are landlord and tenant, respectively, under a
lease dated December 1, 1985 (the "Lease") for premises at 000 Xxxxxxx Xxxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx (the "Premises").
B. Pursuant to a lease amendment effective October 1, 1986, the Premises
were expanded to include the front portion of the third floor of the building.
As a result of such expansion, the size of the Premises increased from 27,306
square feet to 29,298 square feet and the monthly rent increased from
$__________ to $__________.
C. Pursuant to a lease amendment effective December 15, 1987, the
monthly rent increased by five percent, from $_________ to $_________ per month.
D. Pursuant to a lease amendment effective October 1, 1994, the Premises
were reduced in size to exclude the front portions of the second and third
floors of the building. As a result of such reduction in space, the size of the
Premises decreased from 29,298 square feet to 25,184 square feet and the monthly
rent decreased from $_________ to $________.
E. Pursuant to a lease amendment effective June 1, 1996, the Premises
were reduced in size to exclude the first floor of the building. This space
reduction occurred to accommodate a new tenant (Quokka Sports) which desired to
lease the first floor of the building. As a result of such reduction in space,
the size of the Premises decreased from 25,184 square feet to 15,954 square feet
and the monthly rent decreased from $________ pursuant to a two-step process:
(1) upon Mercantile's relinquishment of the first floor space, Brannan reduced
the monthly rent to $_________ and (2) Brannan agreed to further reduce the
monthly rent upon the date Quokka Sports became obligated to remit monthly rent
to Brannan for use of the first floor, as provided below.
F. Pursuant to a lease amendment effective September 1, 1996, the
Premises were reduced in size to exclude a portion of the second floor of the
building, which is now known as suite 203. As a result of such reduction in
space, the size of the Premises decreased from 15,954 square feet to 14,442
square feet and the monthly rent decreased from $_________ to $________.
27
G. Quokka Sports is obligated to being ________________ April 1, 1997.
The parties intend by this Amendment to clarify Mercantile's new monthly rent as
a result of such event.
NOW, THEREFORE, in consideration of the mutual covenants expressed in
this Amendment , the parties agree as follows:
1. NEW RENT. Commencing on April 1, 1997, Mercantile's monthly rent for
the Premises shall be $___________.
2. NO OTHER CHANGES. The Lease, as modified by this Amendment, remains
in full force and effect.
Executed at San Francisco, California, as of the date first written
above.
"LANDLORD" "TENANT"
XXXXXXX STREET PARTNERS, THE SAN FRANCISCO MERCANTILE COMPANY,
a California limited Partnership INC., a California corporation
By /s/ XXXXXXX XXXXX XXXXXXXX By /s/ XXXXXX XXXXXXXXXX
--------------------------------- ------------------------------------
General Partner Its President
---------------------
- 2 -
28
EXHIBIT A
AMENDMENT TO LEASE
THIS AMENDMENT TO LEASE ("Amendment") is made and entered into this 23rd
day of June, 1998, by and between XXXXXXX STREET PARTNERS, a California limited
partnership ("Landlord") and SAN FRANCISCO MERCANTILE COMPANY, INC., a
California corporation ("Tenant").
RECITALS
WHEREAS, Landlord and Tenant have made and entered into that certain
Lease dated December 1, 1985, as amended April 1, 1997 (collectively, "Lease"),
for the lease and improvement by Landlord to Tenant of certain premises located
in the building commonly known as 000 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx,
as more particularly described in the Lease ("Premises");
WHEREAS, Landlord and Tenant desire to amend the Lease to adjust the
Premises and rent and agree upon certain other and related matters upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual promises,
covenants and conditions hereinafter set forth, Landlord and Tenant agree to
amend the Lease as follows:
1. PREMISES. The lease amendment effective September 1, 1996, is
cancelled and that certain space known as Suite 203 is added back to the
Premises. The Premises now consist of a total of 17,747 rentable square feet.
2. RENT. Effective October 1, 1998, the monthly rent for the Premises
shall be in the amount of __________________________ AND _____/HUNDREDTHS
DOLLARS ($_______) per month, payable on or before the first day of the first
full calendar month of the term hereof and a like sum on or before the first day
of each and every successive calendar month thereafter during the term hereof.
Concurrently herewith, Tenant is entering into a Sublease of a portion of the
Second Floor of the Premises to Quokka Sports, Inc. Commencing with the
commencement of the term of the Sublease, and continuing so long as the Sublease
1
29
remains in full force and effect, the total rental for the Premises shall be
increased to the total sum of _________________________ AND ____/HUNDREDTHS
DOLLARS ($___________) per month. Rent for any period during the term hereof
which is for less than one month shall be a prorated portion of the monthly
installment, based upon a thirty-day month. Paragraph 35 of the Lease is deleted
in its entirely.
3. SERVICES AND UTILITIES. In consideration for this Amendment, par. 37
of the Lease is deleted and Landlord confirms its agreement to provide
janitorial service and utilities pursuant to paragraph 17 of the Lease,
including to Quokka Sports, Inc. pursuant to paragraph 17 of the sublease.
4. RATIFICATION. Landlord and Tenant hereby ratify, confirm and readopt
all of the terms and provisions of the Lease, as amended.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as
of the date first above written.
"LANDLORD" "TENANT"
XXXXXXX STREET PARTNERS, THE SAN FRANCISCO MERCANTILE COMPANY,
a California limited Partnership INC., a California corporation
By By
--------------------------------- --------------------------------------
Xxxxxxx Xxxxx Xxxxxxxx Xxxxxx Westerbeke, President
General Partner
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[FLOOR PLAN]
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EXHIBIT A
RULES AND REGULATIONS
1. No sign, placard, pictures, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside or
inside of the Building without the written consent of Landlord first had and
obtained and Landlord shall have the right to remove any such sign, placard,
picture, advertisement, name or notice without notice to and at the expense of
Tenant.
All approved signs or lettering on doors shall be printed, painted,
affixed or inscribed at the expense of Tenant by a person approved of by
Landlord.
Tenant shall not place anything or allow anything to be placed near the
glass of any window, door, partition or wall which may appear unsightly from
outside the Premises; provided, however, that Landlord may furnish and install
a Building standard window covering at all exterior windows. Tenant shall not
without prior written consent of Landlord cause or otherwise sunscreen any
window.
2. The sidewalks, halls, passages, exits, entrances, elevators and stairways
shall not be obstructed by any of the tenants or used by them for any purpose
other than for ingress and egress from their respective Premises.
3. Tenant shall not alter any lock or install any new or additional locks or
any bolts on any doors or windows of the Premises.
4. The toilet rooms, 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 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 employees or invitees
shall have caused it.
5. Tenant shall not overload the floor of the Premises or in any way deface
the Premises or any part thereof.
6. No furniture, freight or equipment of any kind shall be brought into the
Building without the prior notice to Landlord and all moving of the same into
or out of the Building shall be done at such time and in such manner as
Landlord shall designate. Landlord shall have the right to prescribe the
weight, size and position of all safes and other heavy equipment brought into
the Building and also the times and manner of moving the same in and out of the
Building. Safes or other heavy objects shall, if considered necessary by
Landlord, stand on supports of such thickness as is necessary to properly
distribute the weight. Landlord will not be responsible for loss of or damage
to any such safe or property from any cause and all damage done to the Building
by moving or maintaining any such safe or other property shall be repaired at
the expense of Tenant.
7. Tenant shall not use, keep or permit to be used or kept any foul or
noxious gas or substance in the Premises, or permit or suffer the Premises to
be occupied or used in a manner offensive or objectionable to the 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 in or kept in or about the Premises or
the Building.
8. No cooking shall be done or permitted by any Tenant on the Premises, nor
shall the Premises be used for the storage of merchandise, for washing clothes,
for lodging, or for any improper, objectionable or immoral purposes.
9. Tenant shall not use or keep in the Premises or the Building any kerosene,
gasoline or inflammable or combustible fluid or material, or use any method of
heating or air conditioning other than that supplied by Landlord.
10. Landlord will direct electricians as to where and how telephone and
telegraph wires are to be introduced. No boring or cutting for wires will be
allowed without the consent of the Landlord. The location of telephones, call
boxes and other office equipment affixed to the Premises shall be subject to
the approval of Landlord.
11. On Saturdays, Sundays and legal holidays, and on other days between the
hours of 6:00 P.M. and 8:00 A.M. the following day, access to the Building, or
to the halls, corridors, elevators or stairways in the Building, or to the
Premises may be refused unless the person seeking access is known to the person
or employee of the Building in charge and has a pass or is properly
identified. The Landlord shall in no case be liable for damages for any error
with regard to the admission to or exclusion from the Building of any person.
In case of invasion, mob, riot, public excitement, or other commotion, the
Landlord reserves the right to prevent access to the Building during the
continuance of the same by closing of the doors or otherwise, for the safety of
the tenants and protection of property in the Building and the Building.
12. Landlord reserves the right to exclude or expel from the Building any
person who, in the judgment of Landlord, is intoxicated or under the influence
of liquor or drugs, or who shall in any manner do any act in violation of any
of the rules and regulations of the Building.
13. No vending machine or machines of any description shall be installed,
maintained or operated upon the Premises without the written consent of the
Landlord.
14. Landlord shall have the right, exercisable without notice and without
liability to Tenant, to change the name and street address of the Building of
which the Premises are a part.
15. Tenant shall not disturb, solicit, or canvass any occupant of the Building
and shall cooperate to prevent same.
16. Without the written consent of Landlord, Tenant shall not use the name of
the Building in connection with or in promoting or advertising the business of
Tenant except as Tenant's address.
17. Landlord shall have the right to control and operate the public portions
of the Building, and the public facilities, and heating and air conditioning,
as well as facilities furnished for the common use of the tenants, in such
manner as it deems best for the benefit of the tenants generally.
18. All entrance doors in the Premises shall be left locked when the Premises
are not in use, and all doors opening to public corridors shall be kept closed
except for normal ingress and egress from the Premises.
19. Except for seeing eye dogs, no animals shall be allowed in the Building at
any time.
20. 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 of the Tenants of the Building.
(PAGE 5 - OFF. BLDG.)
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EXHIBIT A
L E A S E
1. PARTIES. This Lease, dated for reference purposes only, December 1, 1985,
is made by and between XXXXXXX STREET PARTNERS (herein called "Landlord") and
SAN FRANCISCO MERCANTILE COMPANY, INC. (herein called "Tenant").
2. PREMISES. Landlord does hereby lease to Tenant and Tenant hereby leases
from Landlord that certain space (herein called "Premises") listed on Exhibit
"A" attached hereto and hereby reference thereto made a part hereof, said
Premises being agreed, for the purpose of this Lease, to be an area of
approximately 27,306 square feet and being situated on various floors of that
certain building known as 000 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx. Said
Lease is subject to the terms, covenants and conditions herein set forth and
the Tenant covenants as a material part of the consideration for this lease to
keep and perform each and all of said terms, covenants and conditions by it to
be kept and performed and that this Lease is made upon the condition of said
performance.
3. TERM. The term of this Lease shall be for 20 years, commencing on the 15th
day of December, 1985, and ending on the 14th day of December, 2005.
4. POSSESSION.
4.a. If the Landlord, for any reason whatsoever, cannot deliver
possession of the said Premises to the Tenant at the commencement of the term
rent, this Lease shall not be void or voidable, nor shall Landlord be liable to
Tenant for any loss or damage resulting therefrom, nor shall the expiration date
of the above term be in any way extended, but in that event, all rent shall be
abated during the period between the commencement of said term and the time when
Landlord delivers possession.
4.b. In the event that Landlord shall permit Tenant to occupy the
Premises prior to the commencement date of the term, such occupancy shall be
subject to all the provisions of this Lease. Said early possession shall not
advance the termination date hereinabove provided.
5. RENT. Tenant agrees to pay to Landlord as rental, without prior notice or
demand, for the Premises, the sum of: _________________________________________
($_____________) Dollars, on or before the first day of the first full calendar
month of the term hereof and a like sum on or before the first day of each and
every successive calendar month thereafter during the term hereof, except that
the first month's rent shall be paid upon the execution hereof. Rent for any
period during the term hereof which is for less than one (1) month shall be a
prorated portion of the monthly installment herein, based upon a thirty (30) day
month. Said rental shall be paid to Landlord without deduction or xxxxxxx in
lawful money of the United States of America, which shall be legal tender at
the time of payment at the Office of the Building, or to such other person or
at such other place as Landlord may from time to time designate in writing.
6. SECURITY DEPOSIT. Tenant has deposited with Landlord the sum of -0-
Dollars. Said sum shall be held by Landlord as security for the faithful
performance by Tenant of all the terms, covenants, and provisions of this Lease
to be kept and performed by Tenant during the term hereof. If Tenant defaults
with respect to any provision of this Lease, including, but not limited to the
provisions relating to the payment of rent, Landlord may (but shall not be
required to) use, apply or retain all or any part of this security deposit for
the payment of any rent or any other sum in default, or for the payment of any
amount which Landlord may spend or become obligated to spend by reason of
Tenant's default, or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant's default. If any portion of said
deposit is so used or applied, Tenant shall within five (5) days after written
demand therefor, deposit cash with Landlord in an amount sufficient to restore
the security deposit to its original amount and Tenant's failure to do so shall
be a material breach of this Lease. Landlord shall not be required to keep this
security deposit separate from its general funds, and Tenant shall not be
entitled to interest on such deposit. Tenant shall fully and faithfully perform
every provision of this Lease to be performed by it, the security deposit or any
balance thereof shall be returned to Tenant (or at Landlord's option, to the
last assignee of Tenant's interest hereunder) at the expiration of the Lease
term. In the event of termination of Landlord's interest in this Lease, Landlord
shall transfer said deposit to Landlord's successor in interest.
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7. [DELETED]
8. USE. Tenant shall use the Premises for general garment manufacturing and
related purposes and shall not use or permit the Premises to be used for any
other purpose without the prior written consent of Landlord.
Tenant shall not do or permit anything to be done in or about the Premises
nor bring or keep anything therein which will in any way increase the existing
rate of or affect any fire or other insurance upon the Building or any of its
contents, or cause cancellation of any insurance policy covering said Building
or any part thereof or any of its contents. Tenant shall not do or permit
anything to be done in or about the Premises which will in any way obstruct or
interfere with the rights of other tenants or occupants of the Building or
injure or annoy them or use or allow the Premises to be used for any improper,
immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or
permit any nuisance in, on or about the Premises. Tenant shall not commit or
suffer to be committed any waste in or upon the Premises.
9. COMPLIANCE WITH LAW. Tenant shall not use the Premises or permit
anything to be done in or about the Premises which will in any way conflict with
any law, statute, ordinance or government rule or regulation now in force or
which may hereafter be enacted or promulgated. Tenant shall, at his sole cost
and expense, promptly comply with all laws, statutes, ordinances and
governmental rules, regulations or requirements now in force or which may
hereafter be in force, and with the requirements of any board of fire insurance
underwriters or other similar bodies now or hereafter constituted, relating to,
or affecting the condition, use or occupancy of the Premises, excluding
structural changes not related to or affected by Tenant's improvements or acts.
The judgment of any court of competent jurisdiction or the admission of Tenant
in any action against Tenant, whether Landlord be a party therein or note, that
Tenant has violated any law, statute, ordinance or governmental rule, regulation
or requirement, shall be conclusive of that fact as between the Landlord and
Tenant.
10. ALTERATIONS AND ADDITIONS. Tenant shall not make or suffer to be made any
alterations, additions or improvements to or of the Premises or any part thereof
without the written consent of Landlord first had and obtained any alterations,
additions or improvements to or of said Premises, including, but not limited to,
wall covering, paneling and built-in cabinet work, but excepting moveable
furniture and trade fixtures, shall on the expiration of the term become a part
of the realty and belong to the Landlord and shall be surrendered with the
Premises. In the event Landlord consents to the making of any alterations,
additions or improvements to the Premises by Tenant, the same shall be made by
Tenant of Tenant's sole costs and expense, and any contractor or person selected
by Tenant to make the same must first be approved of in writing by the Landlord.
Upon the expiration or sooner termination of the term hereof, Tenant shall, upon
written demand by Landlord, given at least thirty (30) days prior to the end of
the term, at Tenant's sole cost and expense, forthwith and with all due
diligence remove any alternations, additions, or improvements made by Tenant,
designated by Landlord to be removed, and Tenant shall, forthwith and with all
due diligence at its sole costs and expense, repair any damage to the Premises
caused by such removal.
11. REPAIRS.
11.a. By taking possession of the Premises, Tenant shall be deemed to have
accepted the Premises as being in good, sanitary order, condition and repair.
Tenant shall, at Tenant's sole cost and expense, keep the Premises and every
part thereof in good condition and repair, damage thereto from causes beyond the
reasonable control of Tenant and ordinary wear and tear excepted. Tenant shall
upon the expiration or sooner termination of this Lease hereof surrender the
Premises to the Landlord in good condition, ordinary wear and tear and damage
from causes beyond the reasonable control of Tenant excepted. Except as
specifically provided in an addendum, if any, to this Lease, Landlord shall have
no obligation whatsoever to alter, remodel, improve, repair, decorate or paint
the Premises or any part thereof and the parties hereto affirm that landlord has
made no representation to Tenant respecting the condition of the Premises or the
Building except as specifically herein set forth.
11.b. Notwithstanding the provisions of Article 11.a. hereinabove,
Landlord shall repair and maintain the structural portions of the Building,
including the basic plumbing, air conditioning, heating, and electrical systems,
installed or furnished by Landlord, unless such maintenance and repairs are
caused in part or in whole by the act, neglect, fault or omission of any duty by
the Tenant, its agents, servants, employees or invites, in which case Tenant
shall pay to Landlord the reasonable cost of such maintenance and repairs.
Landlord shall not be liable for any failure to make any such repairs or to
perform any maintenance unless such failure shall persist for an unreasonable
time after written notice of the need of such repairs or maintenance is given to
Landlord by Tenant. Except as provided in Article 22 hereof, there shall be no
abatement of rent and no liability by Landlord by reason of any injury to or
interference with Tenant's business arising from the making of any repairs,
alterations or improvements in or to any portion of the Building or the Premises
or in or to fixtures, appurtenances and equipment therein. Tenant waives the
right to make repairs at Landlord's expense under any law, statute or ordinance
now or hereafter in effect.
12. LIENS. Tenant shall keep the Premises and the property in which the
Premises are situated free from any liens arising out of any work performed,
materials furnished or obligations incurred by Tenant. Landlord may require, at
Landlord's sole option, that Tenant shall provide to Landlord, as Tenant's sole
cost and expense, a lien and completion bond in an amount equal to one and
one-half (1 1/2)) times any and all estimated cost of any improvements,
additions, or alterations in the Premises, to insure Landlord against any
liability for mechanics' and materialmen's liens and to insure completion of the
work.
13. [DELETED]
14. HOLD HARMLESS. Tenant shall indemnify and hold harmless Landlord against
and from any and all claims arising from Tenant's use of the Premises for the
conduct of its business or from any activity, work, or other thing done,
permitted or suffered by the Tenant in or about the Building, and shall further
indemnify and hold harmless Landlord against and from any and all claims arising
from any breach or default in the performance of any obligation on Tenant's part
to be performed under the terms of this Lease, or arising from any act or
negligence of the Tenant, or any officer, agent, employee, guest, or invitee of
Tenant, and from all and against all cost, attorney's fees, expenses and
liabilities incurred in or about any such claim or any action or proceeding
brought thereon, and, in any case, action or proceeding be brought against
Landlord by reason of any such claim. Tenant upon notice from Landlord shall
defend the same at Tenant's expense by counsel satisfactory to Landlord. Tenant
as a material part of the consideration to Landlord hereby assumes all risk of
damage to property or injury to persons, in, upon or about the Premises, from
any cause other than Landlord's negligence, and Tenant hereby waives all claims
in respect thereof against Landlord.
Landlord or his agents shall not be liable for any damage to property
entrusted to employees of the Building, nor for loss or damage to any property
by theft or otherwise, nor for any injury to or damage to persons or property
resulting from fire, explosion, falling plaster, steam, gas, electricity, water
or rain which may leak from any part of the Building or from the pipes,
appliances or plumbing works therein or from the roof, street or subsurface or
from any other place resulting from dampness or any other cause whatsoever,
unless caused by or due to the negligence of Landlord, its agents, servants or
employees. Landlord or its agents shall not be liable for interference with the
light or other incorporeal hereditaments, loss of business by Tenant, nor shall
Landlord be liable for any latent defects in the Premises or in the Building.
Tenant shall give prompt notice to Landlord in case of fire or accidents in the
Premises or in the Building or of defects therein or in the fixtures or
equipment.
15. SUBROGATION. As long as their respective insurers so permit, Landlord and
Tenant hereby mutually waive their respective rights of recovery against each
other for any loss insured by fire, extended coverage and other property
insurance policies existing for the benefit of the respective parties. Each
party shall obtain any special endorsements, if required by their insurer in
evidence compliance with the aforementioned waiver.
16. LIABILITY INSURANCE. Tenant shall, at Tenant's expense, obtain and keep in
force during the term of this Lease a policy of comprehensive public liability
insurance insuring Landlord and Tenant against any liability arising out of the
ownership, use, occupancy or maintenance of the Premises and all areas
appurtenant thereto. The limit of said insurance shall not, however, limit the
liability of the Tenant hereunder. Tenant may carry said insurance under a
blanket policy, providing, however, said insurance by Tenant shall have a
Landlord's protective liability endorsement attached thereto. If Tenant shall
fail to process and maintain said insurance, Landlord may, but shall not be
required to, procure and maintain same, but at the expense of Tenant. Insurance
required hereunder, shall be in companies rated A+ or better in "Best's
Insurance Guide". Tenant shall deliver to Landlord prior to occupancy of the
Premises copies of policies of liability insurance required herein or
certificates evidencing the existence and amounts of such insurance with loss
payable clauses satisfactory to Landlord. No policy shall be cancellable or
subject to reduction of coverage except after ten (10) day's prior written
notice to Landlord.
17. SERVICES AND UTILITIES. Provided that Tenant is not in default hereunder,
Landlord agrees to furnish to the Premises during reasonable hours of generally
recognized business days, to be determined by Landlord at his sole discretion,
and subject to the rules and regulations of the Building of which the Premises
are a part, electricity for normal lighting and functional horsepower office
machines, heat and air conditioning required in Landlord's judgment for the
comfortable use and occupation of the Premises, and janitorial service. Landlord
shall also maintain and keep lighted the common stairs, common entities and
toilet rooms in the Building of which the Premises are a part. Landlord shall
not be liable for, and Tenant shall not be entitled to, any reduction of rental
by reason of Landlord's failure to furnish any of the foregoing when such
failure is caused by accident, breakage, repairs, strikes, lockouts or other
labor disturbances or labor disputes of any character, or by any other cause,
similar or dissimilar, beyond the reasonable control of
SEE ADDENDUM
(PAGE 2)
34
Landlord. Landlord shall not be liable under any circumstances for a loss of or
injury to property, however occurring, through or in connection with or
incidental to failure to furnish any of the foregoing. Whereever heat
generating machines or equipment are used in the Premises which affect the
temperature otherwise maintained by the air conditioning system, Landlord
reserves the right to install supplementary air conditioning units in the
Premises and the cost thereof, including the cost of installation, and the cost
of operation and maintenance thereof shall be paid by Tenant to Landlord upon
demand by Landlord.
Tenant will not, without written consent of Landlord, use any apparatus or
device in the Premises, including, but without limitation thereto, electronic
data processing machines, punch card machines, and machines using in excess of
120 volts, which will in any way increase the amount of electricity usually
furnished or supplied for the use of the Premises as general office space; nor
connect with electric current except through existing electrical outlets in the
Premises, any apparatus or device, for the purpose of using electric current.
If Tenant shall require water or electric current in excess of that usually
furnished or supplied for the use of the Premises as general office space,
Tenant shall first procure the written consent of Landlord, which Landlord may
refuse, to the use thereof and Landlord may cause a water meter or electrical
current meter to be installed in the Premises, so as to measure the amount of
water and electric current consumed for any such use. The cost of any such
meters and of installation, maintenance and repair thereof shall be paid for
the Tenant and Tenant agrees to pay to Landlord promptly upon demand
therefor by Landlord for all such water and electric current consumed as shown
by said meters, at the rates charged for such service by the local public
utility furnishing the same, plus any additional expense incurred in keeping
account of the water and electric current so consumed. If a separate meter is
not installed, such excess cost for such water and electric current will be
established by an estimate made by a utility company or electrical engineer.
18. PROPERTY TAXES. Tenant shall pay, or cause to be paid, before
delinquency, any and all taxes levied or assessed and which become payable
during the term hereof upon all Tenant's leasehold improvements, equipment,
furniture, fixtures and personal property located in the Premises; except that
which has been paid for by Landlord, and is the standard of the Building. In
the event any or all of the Tenant's leasehold improvements, equipment,
furniture, fixtures and personal property shall be assessed and taxed with the
building, Tenant shall pay to Landlord his share of such taxes within ten (10)
days after delivery to Tenant by Landlord of a statement in writing setting
forth the amount of such taxes applicable to Tenant's property.
19. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with
the rules and regulations that Landlord shall from time to time promulgate.
Landlord reserves the right from time to time to make all reasonable
modifications to said rules. The addition and modifications to those rules
shall be binding upon Tenant upon delivery of a copy of them to Tenant.
Landlord shall not be responsible to Tenant for the nonperformance of any said
rules by any other tenants or occupants.
20. HOLDING OVER. If Tenant remains in possession of the Premises or any part
thereof after the expiration of the term hereof, with the express written
consent of Landlord, such occupancy shall be tenancy from month to month at a
rental in the amount of the last monthly rental, plus all other charges payable
hereunder, and upon all the terms hereof applicable to a month to month tenancy.
21. ENTRY BY LANDLORD. Landlord reserves and shall at any and all times have
the right to enter the Premises, inspect the same, supply janitorial service and
any other service to be provided by Landlord to Tenant hereunder, to submit said
Premises to prospective purchasers or tenants, to post notices of
non-responsibility, and to alter, improve or repair the Premise and any portion
of the Building of which the Premises are a part that Landlord may deem
necessary or desirable, without abatement of rent and may for the purpose erect
scaffolding and other necessary structures where reasonable required by the
character of the work to be performed, always providing that the entrance to the
Premises shall not be blocked thereby, and further providing that the business
of the Tenant shall not be interfered with unreasonably. Tenant hereby waives
any claim for damages or for any injury or inconvenience to or interference with
Tenant's business, any loss of occupancy or quiet enjoyment of the Premises, and
any other loss occasioned thereby. For each of the aforesaid purposes, Landlord
shall at all times have and retain a key with which to unlock all of the doors
in, upon and about the Premises, excluding Tenant's vaults, safes and files, and
Landlord shall have the right to use any and all means which Landlord may deem
proper to open said doors in an emergency, in order to obtain entry to the
Premises without liability to Tenant except for any failure to exercise due care
for Tenant's property. Any entry to the Premises obtained by Landlord by any of
said means, or otherwise shall not under any circumstances be construed or
deemed to be a or unlawful entry into, or a detainer of, the Premises, or an
eviction of Tenant from the Premises or any portion thereof.
22. RECONSTRUCTION. In the event the Premises or the Building of which the
Premises are a part are damaged by fire or other perils covered by extended
coverage insurance, Landlord agrees to forthwith repair the same; and this
Lease shall remain in full force and affect, except that Tenant shall be
entitled to a proportionate reduction of the rent while such repairs are being
made, such proportionate reduction to be based upon the extent to which the
making of such repairs shall materially interfere with the business carried on
by the Tenant in the Premises. If the damage is due to the fault or neglect of
Tenant or its employees, there shall be no abatement of rent.
In the event the Premises or the Building of which the Premises are a part
are damaged as a result of any cause other than the perils covered by fire and
extended coverage insurance, then Landlord shall forthwith repair the same,
provided the extent of the destruction be less than ten (10%) per cent of the
then full replacement cost of the Premises or the Building of which the
Premises are a part. In the event the destruction of the Premises or the
Building is to an extent greater than ten (10%) per cent of the full
replacement cost, then Landlord shall have the option: (1) to repair or restore
such damage, this Lease continuing in full force and effect, but the rent to be
proportionately reduced as hereinabove in this Article provided; or (2) give
notice to Tenant at any time within sixty (60) days after such damage
terminating this Lease as of the date specified in such notice, which date
shall be no less than thirty (30) and no more than sixty (60) days after the
giving of such notice. In the event of giving such notice, this Lease shall
expire and all interest of the Tenant in the Premises shall terminate on the
date so specified in such notice and the Rent, reduced by a proportionate
amount, based upon the extent, if any, to which such damage materially
interfered with the business carried on by the Tenant in the Premises, shall be
paid up to date of said such termination.
Notwithstanding anything to the contrary in this Article, Landlord shall not
have any obligation whatsoever to repair, reconstruct or restore the Premises
when the damage resulting from any casualty covered under this Article occurs
during the last twelve (12) months of the term of this Lease or any extension
thereof.
Landlord shall not be required to repair any injury or damage by fire or
other cause, or to make any repairs or replacements of any panels, decoration,
office fixtures, railings, floor covering, partitions, or any other property
installed in the Premises by Tenant.
The Tenant shall not be entitled to any compensation or damages from
Landlord for loss of the use of the whole or any part of the premises, Tenant's
personal property or any inconvenience or annoyance occasioned by such damage,
repair, reconstruction or restoration.
23. DEFAULT. The occurrence of any one or more of the following events shall
constitute a default and breach of this Lease by Tenant.
23.a. The vacating or abandonment of the Premises by Tenant.
23.b. The failure by Tenant to make any payment of rent or any other
payment required to be made by Tenant hereunder, as and when due, where such
failure shall continue for a period of three (3) days after written notice
thereof by Landlord to Tenant.
23.c. The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by the
Tenant, other than described in Article 23.b above, where such failure shall
continue for a period of thirty (30) days after written notice thereof by
Landlord to Tenant; provided, however, that if the nature of Tenant's default
is such that more than thirty (30) days are reasonably required for its cure,
then Tenant shall not be deemed to be in default. If Tenant commences such cure
within said thirty (30) day period and thereafter diligently prosecutes such
cure to completion.
23.d. The making by Tenant of any general assignment or general
arrangement for the benefit of creditors; or the filing by or against Tenant of
a petition to have Tenant adjudged a bankrupt, or a petition or reorganization
or arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60) days);
or the appointment of a trustee or a receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within
thirty (30) days; or the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged in thirty (30)
days.
24. REMEDIES IN DEFAULT. In the event of any such material default or breach
by Tenant, Landlord may at any time thereafter, with or without notice or
demand and without limiting Landlord in the exercise of a right or remedy which
Landlord may have by reason of such default or breach:
24a. Terminate Tenant's right to possession of the Premises by any lawful
means, in which case this Lease shall terminate and Tenant shall immediately
surrender possession of the Premises to Landlord. In such event Landlord shall
be entitled to recover from Tenant all damages incurred by Landlord by reason
of Tenant's default including, but not limited to, the cost of recovering
possession of the Premises; expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorney's fees, any real
estate commission actually paid; the worth at the time of award by the court
having jurisdiction thereof of the amount of which the unpaid rent for the
balance of the term after the time of such award exceeds the amount of such
rental loss for the same period that Tenant proves could be reasonably avoided;
that portion of the leasing commission paid by Landlord and applicable to the
unexpired term of this Lease. Unpaid installments of rent or other items shall
bear interest from the date due at the rate of ten (10%) per cent per annum. In
the event Tenant shall have abandoned the Premises, Landlord shall have the
option of (a) taking possession of the Premises and recovering from Tenant the
amount specified in this paragraph, or the proceeding under the provisions of
the following Article 24.4.
24.b. Maintain Tenant's right to possession, in which case this Lease
shall continue in effect whether or not Tenant shall have abandoned the
Premises. In such event Landlord shall be entitled to enforce all of Landlord's
rights and remedies under this Lease, including the right to recover the rent
(PAGE 3)
35
as it becomes due hereunder.
24c. Pursue any other remedy now or hereafter available to Landlord under
the laws or judicial decision of the State in which the Premises are located.
25. EMINENT DOMAIN. If more than twenty-five (25%) per cent of the Premises
shall be taken or appropriated by any public or quasi-public authority under
the power of eminent domain, either party hereto shall have the right, at its
option, to terminate this Lease, and Landlord shall be entitled to any and all
income, rent, award, or any interest therein whatsoever which may be paid or
made in connection with such public or quasi-public use or purpose, and Tenant
shall have no claim against Landlord for the value of any unexpired term of
this Lease. If either less than or more than twenty-five (25%) per cent of the
Premises is taken, and neither party elects to terminate as herein provided,
the rental thereafter to be paid shall be equitably reduced. If any part of the
Building other than the Premises may be so taken or appropriated, Landlord
shall have the right at its option to terminate this Lease and shall be
entitled to the entire award as above provided.
26. OFFSET STATEMENT. Tenant shall at any time and from time to time upon not
less than ten (10) days' prior written notice from Landlord execute,
acknowledge and deliver to Landlord a statement in writing, (a) certifying that
this Lease is unmodified and in full force and effect (or, if modified, stating
the nature of such modification and certifying that this Lease as so modified,
is in full force and effect), and the date to which the rental and other
charges are paid in advance, if any, and (b) acknowledging that there are not,
to Tenant's knowledge, any uncured defaults on the part of the Landlord
hereunder, or specifying such defaults if any are claimed. Any such statement
may be relied upon by any prospective purchaser or encumbrancer of all or any
portion of the real property of which the Premises are a part.
27. PARKING. Tenant shall have the right to use in common with other tenants
or occupants of the Building the parking facilities of the Building, if any,
subject to the monthly rates, rules and regulations, and any other charges of
Landlord for such parking facilities which may be established or altered by
Landlord at any time or from time to time during the term hereof.
28. AUTHORITY OF PARTIES.
28a. Corporate Authority. If Tenant is a corporation, such individual
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of said
corporation, in accordance with a duly adopted resolution of the board of
directors of said corporation or in accordance with the by-laws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms.
28b. Limited Partnerships. If the Landlord herein is a limited
partnership, it is understood and agreed that any claims by Tenant on Landlord
shall be limited to the assets of the limited partnership, and furthermore,
Tenant expressly waives any and all rights to proceed against the individual
partners or the officers, directors or shareholders of any corporate partner,
except to the extent of their interest in said limited partnership.
29. GENERAL PROVISIONS.
(i) Plats and Riders. Clauses, plats and riders, if any, signed by the
Landlord and the Tenant and endorsed on or affixed to this Lease are a part
hereof.
(ii) Waiver. The waiver by Landlord of any term, covenant or condition
herein contained shall not be deemed to be a waiver of such term, covenant or
condition on any subsequent breach of the same or any other term, covenant or
condition herein contained. The subsequent acceptance of rent hereunder by
Landlord shall not be deemed to be a waiver of any preceding breach by Tenant
of any term, covenant or condition of this Lease, other than the failure of the
Tenant to pay the particular rental so accepted, regardless of Landlord's
knowledge of such preceding breach at the time of the acceptance of such rent.
(iii) Notices. All notices and demands which may or are to be required or
permitted to be given by either party to the other hereunder shall be in
writing. All notices and demands by the Landlord to the Tenant shall be sent by
United States Mail, postage prepaid, addressed to the Tenant at the Premises,
or to such other place as Tenant may from time to time designate in a notice to
the Landlord. All notices and demands by the Tenant to the Landlord shall be
sent by United States Mail, postage prepaid, addressed to the Landlord at the
Office of the Building, or to such other person or place as the Landlord may
from time to time designate in a notice to the Tenant.
(iv) Joint Obligation. If there be more than one Tenant the obligations
hereunder imposed upon Tenants shall be joint and several.
(v) Marginal Headings. The marginal headings and Article titles to the
Articles of this Lease are not a part of this Lease and shall have no effect
upon the construction or interpretation of any part hereof.
(vi) Time. Time is of the essence of this Lease and each and all of its
provisions in which performance is a factor.
(vii) Successors and Assigns. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
(viii) Recordation. Neither Landlord nor Tenant shall record this Lease or a
short form memorandum hereof without the prior written consent of the other
party.
(ix) Quiet Possession. Upon Tenant paying the rent reserved hereunder and
observing and performing all of the covenants, conditions and provisions on
Tenant's part to be observed and performed hereunder, Tenant shall have quiet
possession of the Premises for the entire term hereof, subject to all the
provisions of this Lease.
(x) Late Charges. Tenant hereby acknowledges that late payment by Tenant
to Landlord of rent or other sums due hereunder will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Landlord by terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or of a sum due from Tenant shall not
be received by Landlord or Landlord's designee within ten (10) days after
written notice that said amount is past due, then Tenant shall pay to Landlord
a late charge equal to ten (10%) per cent of such overdue amount. The parties
hereby agree that such late charge represents a fair and reasonable estimate of
the cost that Landlord will incur by reason of the late payment by Tenant.
Acceptance of such late charges by the Landlord shall in no event constitute a
waiver of Tenant's default with respect to such overdue amount, nor prevent
Landlord from exercising any of the other rights and remedies granted hereunder.
(xi) Prior Agreements. This Lease contains all of the agreements of the
parties hereto with respect to any matter covered or mentioned in this Lease,
and no prior agreements or understanding pertaining to any such matters shall
be effective for any purpose. No provision of this Lease may be amended or
added to except by an agreement in writing signed by the parties hereto
or their respective successors in interest. This Lease shall not be effective
or binding on any party until fully executed by both parties hereto.
(xii) Inability to Perform. This Lease and the obligations of the Tenant
hereunder shall not be affected or impaired because the Landlord is unable to
fulfill any of its obligations hereunder or is delayed in doing so, if such
inability or delay is caused by reason of strike, labor troubles, acts of God,
or any other cause beyond the reasonable control of the Landlord.
(xiii) Attorneys' Fees. In the event of any action or proceeding brought by
either party against the other under this Lease the prevailing party shall be
entitled to recover all costs and expenses including the fees of its attorneys
in such action or proceeding in such amount as the court may adjudge reasonable
as attorneys' fees.
(xiv) Sale of Premises by Landlord. In the event of any sale of the
Building, Landlord shall be and is hereby entirely freed and relieved of all
liability under any and all of its covenants and obligations contained in or
derived from this Lease arising out of any act, occurrence or omission
occurring after the consummation of such sale; and the purchaser, at such sale
or any subsequent sale of the Premises shall be deemed, without any further
agreement between the parties or their successors in interest or between the
parties and any such purchaser, to have assumed and agreed to carry out any and
all of the covenants and obligations of the Landlord under this Lease.
(xv) Subordination, Attornment. Upon request of the Landlord, Tenant will
in writing subordinate its rights hereunder to the lien of any first mortgage,
or that deed of trust to any bank, insurance company or other lending
institution, now or hereafter in force against the land and Building of which
the Premises are a part, and upon any buildings hereafter placed upon the land
of which Premises are a part, and to all advances made or hereafter to be made
upon the security thereof.
In the event any proceedings are brought for foreclosure, or in the event
of the exercise of the power of sale under any mortgage or deed of trust made
by the Landlord covering the Premises, the Tenant shall attorn to the purchaser
upon any such foreclosure or sale and recognize such purchaser as the Landlord
under this Lease.
The provisions of this Article to the contrary notwithstanding, and so
long as Tenant is not in default hereunder, this Lease shall remain in full
force and effect for the full term hereof.
(xvi) Name. Tenant shall not use the name of the Building or of the
development in which the Building is situated for any purpose other than as an
address of the business to be conducted by the Tenant in the Premises.
(xvii) Separability. Any provision of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision hereof and such other provision shall remain in full force and effect.
(xviii) Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies
at law or in equity.
(xix) Choice of Law. This Lease shall be governed by the laws of the State
in which the Premises are located.
(xx) Signs and Auctions. Tenant shall not place any sign upon the Premises
or Building or conduct any auction thereon without Landlord's prior written
consent.
(PAGE 4)
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EXHIBIT A
30. BROKERS. Tenant warrants that it has had no dealings with any real estate
broker or agents in connection with the negotiation of this Lease excepting
only ___________________________________________________________________________
and it knows of no other real estate broker or agent who is entitled to a
commission in connection with this Lease.
31. ASSIGNMENT AND SUBLETTING. (a) If at any time or from time to time during
the term of this Lease Tenant desires to sublet all or any part of the Premises,
Tenant shall give notice to Landlord setting forth the terms of the proposed
subletting and the space so proposed to be sublet. Landlord shall have the
option, exercisable by notice given to Tenant within twenty (20) days after
Tenant's notice is given, either to sublet from Tenant such space at the rental
and other terms set forth in Tenant's notice, or, if the proposed subletting is
for the entire Premises for the balance of the terms of this Lease, to terminate
this Lease. If Landlord does not exercise such option, Tenant shall be free to
sublet such space to any third party subject to the following conditions:
(1) The sublease shall be on the same terms set forth in the
notice given to Landlord;
(2) No sublease shall be made without the prior written consent of
Landlord, which consent Landlord agrees will not unreasonably be withheld as to
a subletting of the entire Premises;
(3) No sublease shall be valid and no subtenant shall take
possession of the Premises subleased until an executed counterpart of such
sublease has been delivered to Landlord;
(4) No subtenant shall have a right further to sublet; and
(5) Any sums or other economic consideration received by Tenant as a
result of such subletting (except rental or other payments received which are
attributable to the amortization of the cost of leasehold improvements, other
than building standard tenant improvements, made to the public portion of the
Premises by Landlord) whether denominated rentals under the sublease or
otherwise, which exceed, in the aggregate, the total sums which Tenant is
obligated to pay Landlord under this Lease (prorated to reflect obligations
allocable to that portion of the Premises subject to such sublease) shall be
payable to Landlord as additional rental under this Lease without affecting or
reducing any other obligation of Tenant hereunder.
(b) Notwithstanding the provisions of paragraph 13 and 31(a) above,
Tenant may assign this Lease or sublet the Premises or any portion thereof,
without Landlord's consent and without extending any option to Landlord, to any
corporation which controls, is controlled by or is under common control with
Tenant, or to any corporation resulting from the merger or consolidation with
Tenant, or to any person or entity which acquires all the assets of Tenant as a
going concern of the business that is being conducted on the Premises, provided
that said assignee has substantially the same or better financial condition
than Tenant and assumes, in full, the obligations of Tenant under this Lease.
(c) Regardless of Landlord's consent, no subletting or assignment
shall release Tenant of Tenant's obligation or alter the primary liability of
Tenant to pay the rental and to perform all other obligations to be performed
by Tenant hereunder. The acceptance of rental by Landlord from any other person
shall not be deemed to be a waiver by Landlord of any provision hereof. Consent
to one assignment or subletting shall not be deemed consent to any subsequent
assignment or subletting. In the event of default by any assignee of Tenant or
any successor of Tenant in the performance of any of the terms hereof, Landlord
may proceed directly against Tenant without the necessity of exhausting
remedies against such assignee or successor. Landlord may consent to subsequent
assignments or subletting of this Lease or amendments or modifications to this
Lease with assignee of Tenant's, without notifying Tenant, or any successor of
Tenant, and without obtaining its or their consent thereto and such action
shall not relieve Tenant of liability under this Lease.
(d) In the event Tenant shall assign or sublet the Premises or
request the consent of Landlord to any assignment or subletting or if Tenant
shall request the consent of Landlord for any act that Tenant proposes to do,
then Tenant shall pay Landlord's reasonable attorneys' fees incurred in
connection therewith.
32. ESTOPPEL CERTIFICATE. Tenant shall at any time and from time to time upon
not less than five (5) days prior notice from Landlord execute, acknowledge and
deliver to Landlord a statement in writing, which may be in the form specified
by Landlord, which shall certify: (a) that the Premises have been completed to
the satisfaction of Tenant and accepted and possessed by Tenant, (b) the date
the term of Lease commenced, the term of the Lease, any portions to renew or
extend, the amount of any security deposit and the date to which rental and any
other charges are paid in advance, (c) that the Lease is in full force and
effect and unmodified (or if there have been modifications, stating the nature
of the modifications and certifying that the Lease so modified is in full force
and effect), (d) that no notice has been received by Tenant of any default of
Tenant which has not been cured (or specifying such notices), (e) that there
are no uncured defaults on the part of Landlord (or specifying such defaults if
any are claimed), off-sets, counterclaims or credits against the rents,
obligations or stipulations due or to become due or required, (f) that Tenant
has no knowledge of any prior assignment, hypothecation or pledge of rents and
(g) such other matters as may be reasonably requested by Landlord. Any such
certificate may be relied upon by any prospective purchaser of all or any
portion of the real property of which the Premises are a part.
33. SUBORDINATION. This Lease shall be subject and subordinated at all
times to (a) all ground or underlying leases which may hereafter be executed
affecting the real property of which the Premises are a part, and (b) the lien
of all mortgages and deeds of trust in any amount or amounts whatsoever now or
hereafter placed on or against said real property or on or against Landlord's
interest or estate therein or on or against all such ground or underlying
leases, all without the necessity of having further instruments executed on the
part of Tenant to effectuate such subordination. Notwithstanding the foregoing,
(1) in the event of termination for any reason whatsoever of any such ground or
underlying lease, this Lease shall not then be barred, terminated, cut off or
foreclosed nor shall the rights and possession of Tenant hereunder be disturbed
if Tenant shall not then be in default in the payment of rental or other sums or
be otherwise in default under the terms of this Lease and Tenant shall attorn to
Landlord of any such ground or underlying lease, or, if requested, enter into a
new lease for the balance of the original or extended term hereof then remaining
upon the same terms and provisions as are in this Lease contained; (2) in the
event of a foreclosure of any such mortgage or deed of trust or of any other
action or proceeding of the enforcement thereof, or of any sale thereunder, this
Lease will not be barred, terminated, cut off or foreclosed nor will the rights
and possession of Tenant thereunder be disturbed if Tenant shall not then be in
default in the payment of rental or other sums or be otherwise in default under
the terms of this Lease and Tenant shall attorn to the purchaser at such
foreclosure, sale or other action or proceeding; and (3) Tenant agrees to
execute and deliver upon demand such further instruments evidencing such
subordination of this Lease to said deed, to such ground or underlying leases,
and to the lien of any such mortgages or deeds of trust as may reasonably be
required by Landlord. Tenant's covenant to subordinate this Lease to ground or
underlying leases and/or mortgages or deeds of trust hereafter executed is
conditioned upon each such senior instrument containing the commitments
specified in the preceding clauses (1) and (2).
34. ADJUSTMENTS TO RENT. Commencing with the third year of the term of
this Lease, the monthly rent to be paid Landlord by Tenant shall be increased
annually effective on the anniversary of the commencement date of this Lease by
a percentage equal to the annual percentage increase in the Consumer Price
Index. As used herein, the term "Consumer Price Index" shall mean the United
States Department of Labor Statistics' Consumer Price Index, All Union
Consumers, All Items, San Francisco/Oakland, California (1967-1(I)), or the
successor of such index. The lease of the index for computation of the increase,
if any, shall be the month in which this Lease commences. If no publication is
made for the month in which this Lease commences, the Lease shall be the last
prevailing month for which publication is made. The index for the same month
shall be compared annually to determine the percentage increase and the
resulting percentage shall be applied to the monthly rental rate then in effect
to determine the monthly rent to be paid the ensuing year. Landlord shall notify
Tenant of any increase in the monthly rental rate resulting from such
computation and Tenant shall pay Landlord the amount of such increase
retroactively to the effective date thereof. In no event shall the rate of
increase exceed seven percent (7%) per annum. In the case of the initial rental
adjustment, its rate of increase shall not exceed fourteen percent (14%).
35. OPTION TO EXTEND. Tenant shall have the option to extend the term of
this Lease for an additional period of ten (10) years at a rental equal to the
then current fair market rate in the area of the Premises. Such option may be
exercised by written notice to Landlord given not less than ninety (90) days
prior to the expiration of the Lease term.
36. UTILITIES. All utilities provided to the Premises shall be separately
metered if possible. If not Landlord shall pro-rate utility costs for the
Premises and xxxx Tenant for them monthly. Tenant shall pay all such utility
bills promptly upon receipt.
The parties hereto have executed this Lease at the place and on the dates
specified immediately adjacent to their respective signatures.
If this Lease has been filled in, it has been prepared for submission to
your attorney for his approval. No representation or recommendation is made by
the real estate broker or its agents or employees as to the legal sufficiency,
legal effect, or tax consequences of this Lease or the transactions relating
thereto.
XXXXXXX STREET PARTNERS
Address By /s/ [Signature Illegible]
--------------------------- -------------------------------------
General Partner
-----------------------------------
"LANDLORD"
San Francisco Mercantile Company, Inc.
By
-------------------------------------
Address By
--------------------------- -------------------------------------
----------------------------------- "TENANT"
(PAGE 5)
37
FIRST AMENDMENT TO SUBLEASE
THIS FIRST AMENDMENT TO SUBLEASE ("First Sublease Amendment") is made and
entered into this 12th day of June, 1999, by and between SAN FRANCISCO
MERCANTILE COMPANY, INC., a California corporation (herein called "Sublessor"),
QUOKKA SPORTS, INC., a Delaware corporation (herein called "Sublessee"), and
XXXXXXX STREET PARTNERS, a California limited partnership ("Master Lessor").
RECITALS
WHEREAS, Master Lessor, as Landlord, and Sublessor, as Tenant, have made
and entered into that certain Lease dated December 1, 1985, as amended April 1,
1997 and June 23, 1998 (collectively, the "Master Lease"), relating to certain
premises consisting of 27,306 square feet of the Building (the "Building")
commonly known as 000 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx, as more
particularly described in the Master Lease (the "Master Leased Premises");
WHEREAS, Sublessor and Sublessee, have made and entered into that certain
Sublease dated June 23, 1998 ("Sublease"), with the consent of Master Lessor,
for the sublease by Sublessee of those certain premises consisting of 7,824
rentable square feet on the second floor of the Building, as more particularly
described in the Sublease (the "Subleased Premises");
WHEREAS, Master Lessor and Sublessee have made and entered into: (a) that
certain Lease (the "Original Lease") dated October 1, 1996, for the lease by
Sublessee of those certain premises (the "Leased Premises") consisting of
approximately 10,000 rentable square feet on the ground floor of the Building,
and (b) that certain First Amendment to Lease dated August 17, 1998, adding a
portion (consisting of 1,352 square feet) of the second floor of the Building to
the Leased Premises (the "First Lease Amendment"), and, concurrently herewith
are entering into a Second Amendment to Lease, adding portions of the second,
third, and fourth floors of the Building (consisting of 13,297 square feet) to
the Leased Premises, extending the term of the Lease, and agreeing on other
matters consistent with this First Sublease Amendment (the "Second Lease
Amendment"). The Original Lease, the First Lease Amendment, and the Second Lease
Amendment are sometimes referred to collectively hereinafter as the "Lease;"
WHEREAS, Sublessor and Sublessee desire to enter into this First Sublease
Amendment to amend the Sublease to add to the Subleased Premises additional
portions of the third floor of the Building, to extend the term of the Sublease,
to increase the rental under the Sublease, to provide for a contribution by
Master Lessor to a tenant improvement allowance under the Sublease, to provide
for options to extend the term of the Sublease, and to agree upon certain other
and related matters upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual promises, covenants
and conditions hereinafter set forth, Sublessor and Sublessee agree to amend the
Sublease further as follows:
1. ADDITIONAL SUBLEASED PREMISES. Paragraph 2 of the Sublease is hereby
amended to add to the Subleased Premises 8,418 rentable square feet on the third
floor of the Building, as
1.
38
shown on EXHIBIT A attached hereto, sometimes known as Suite 300 (the foregoing
shall be sometimes hereinafter specifically referred to as the "Additional
Subleased Premises").
2. COMMENCEMENT OF RENT FOR THE ADDITIONAL SUBLEASED PREMISES. The
obligation to pay rent for the Additional Subleased Premises shall commence
thirty (30) days following the date Sublessor delivers physical possession of
the Additional Subleased Premises to Sublessee, "as-is," in broom-clean
condition (the "Additional Rent Commencement Date"). Sublessor agrees to use its
best efforts to deliver physical possession of all of the suites constituting
the Additional Subleased Premises, on or before September 15, 1999. Upon the
taking of physical possession, Sublessee shall deliver to Sublessor amended
certificates of liability insurance pursuant to Paragraph 16 of the Sublease and
Paragraph 8 of this First Sublease Amendment below.
Sublessor and Sublessee agree that the expiration of the initial term of
the Sublease is hereby extended to March 31, 2006.
Sublessor and Sublessee agree that Paragraph 31 of the Sublease, entitled
"OPTION TO TERMINATE", is hereby deleted in its entirety and declared null and
void and of no further force and effect.
3. CONDITION OF THE ADDITIONAL SUBLEASED PREMISES; TENANT ALLOWANCE.
Sublessee acknowledges that it has had an opportunity to inspect and investigate
the condition of the Additional Subleased Premises and Sublessee accepts the
Additional Subleased Premises in its present condition, "as-is," subject only to
being delivered physically vacant and "broom-clean" by Sublessor, except in all
cases subject to latent defects which severely impair Sublessee's ability to use
the Additional Subleased Premises for their intended purpose and which are not
reasonably discoverable by Sublessee at this time; provided that Sublessee's
sole remedy in such event shall be to terminate the Sublease as to the portion
of the Subleased Premises affected by such defect. Any changes or alterations to
the Subleased Premises (including the Additional Subleased Premises) shall be
made pursuant to paragraph 10 of the Sublease and shall be subject to
Sublessor's prior written consent, which consent shall not be unreasonably
withheld.
Master Lessor agrees to pay Sublessee the following sums as tenant
allowances for improvements to be made to the Subleased Premises pursuant to
Paragraph 10 of the Sublease (said payments to be made on invoices presented to,
and approved by, Master Lessor, which approval shall not be unreasonably
withheld:
(a) For the original 7,824 square feet of Subleased Premises, the
sum of $3.87 per square feet, or the total sum of $30,278.88; provided, however,
upon the request of Sublessee, Master Lessor agrees to loan Sublessee an
additional sum up to $7.50 per square foot ($58,680.00), said sum to be
amortized as additional rent over the period from the Additional Rent
Commencement Date through March 31, 2002, together with interest at 10% per
annum on the unpaid balance.
(b) For the Additional Subleased Premises, the sum of $11.37 per
square feet, or the total sum of $95,712.67.
2.
39
4. RENT. Paragraph 5 of the Sublease is hereby amended, with respect to
rent due for the periods after the Additional Rent Commencement Date, to provide
that Sublessee agrees to pay to Sublessor as rental, without prior notice or
demand, the following:
----------------------------------------------------------------------------------------------------------------------
PORTION OF SUBLEASED PREMISES PERIOD MONTHLY RENT
----------------------------------------------------------------------------------------------------------------------
2nd Floor, 7,824 sq. ft. Additional Rent Commencement Date through 3/31/2002 $18,582.00/mo.
4/1/2002 - 3/31/2006 22,820.00/mo.
----------------------------------------------------------------------------------------------------------------------
Additional Subleased Premises, 8418 sq. ft. Additional Rent Commencement Date through 3/31/2006 24,552.50/mo.
----------------------------------------------------------------------------------------------------------------------
5. SECURITY DEPOSIT. Sublessee's present security deposit pursuant to
the Sublease is in the sum of Thirty-Seven Thousand One Hundred Sixty-Four and
No/Hundredths Dollars ($37,164.00), which represents two months' rent for 7,824
square feet of the Subleased Premises. Upon execution hereof, the foregoing sum
shall be increased to $37,500.00, and Sublessee shall make an additional deposit
in the form of a Letter of Credit (in the form attached hereto as EXHIBIT B) in
the total sum of $112,500 as an additional security deposit for Sublessee's
performance of all of the terms and conditions of the Sublease (the "Letter of
Credit"). The Security Deposit shall be governed by the terms of paragraph 6 of
the Sublease; provided, however, that at such time as Sublessee has had an
initial public offering and has demonstrated that it has earned net profits
after taxes from its business operations as shown on published or certified
financial statements for at least two (2) calendar quarters, said Letter of
Credit shall be reduced to an amount which, together with the cash portion of
the Security Deposit, shall equal one (1) month's base rent under the Sublease,
to be held by Sublessor pursuant to paragaph 6 of the Sublease for the entire
term of the Sublease
6. PARKING. Sublessor, Sublessee and Master Lessor agree that the
tenant under the Lease may elect in its sole discretion to allow Sublessee to
use parking spaces pursuant to such tenant's rights under and on the terms set
forth in the Lease, and in such event there shall be no charge by Sublessor or
Landlord for the same, the only charge therefor being the charge specifically
set forth in the Lease to be paid by the tenant.
7. SATELLITE DISHES. Sublessor, Sublessee and Master Lessor agree that
the tenant under the Lease may elect in its sole discretion to allow Sublessee
to use satellite dishes pursuant to such tenant's rights under and on the terms
set forth in the Lease, and in such event there shall be no charge by Sublessor
or Landlord for the same, the only charge therefor being the charge specifically
set forth in the Lease to be paid by the tenant.
8. LIABILITY INSURANCE. Paragraph 16 of the Sublease is hereby amended
to provide that Sublessee shall obtain and maintain comprehensive general
liability insurance on an occurrence basis with limits of liability in an amount
not less than Two Million Dollars ($2,000,000) combined single limit for each
occurrence. The comprehensive general liability
3.
40
policy shall include contractual liability which includes the provisions of
Paragraph 14 of the Sublease (it is the parties' intent to provide coverage to
the maximum extent possible of Sublessee's indemnification obligations under the
Sublease; however, it is understood that the insurance requirements are
independent of Sublessee's exculpation, indemnification and other obligations
under the Sublease and shall not be construed or interpreted in any way to
restrict, limit or modify Sublessee's exculpation, indemnification and other
obligations or to limit Sublessee's liability under the Sublease). Sublessee
shall furnish to Sublessor certificates of insurance and copies of the policies
evidencing the aforesaid insurance coverage, including naming Sublessor as an
additional insured. Renewal certificates must be furnished to Sublessor at least
thirty (30) days prior to the expiration date of such insurance policies showing
the above coverage to be in full force and effect. Sublessee's liability
coverage shall include all of the coverages typically provided by the Broad Form
Comprehensive General Liability Endorsement, including broad form property
damage coverage (which shall include coverage for completed operations).
Sublessee's liability coverage shall further include premises-operations
coverage, products-completed operations coverage and owners and contractors
protective coverage (when reasonably required by Sublessor). Sublessee's general
liability policies shall be endorsed as needed to provide cross-liability
coverage for Sublessee, Sublessor and any lender of Sublessor of which Sublessee
has been notified and to provide severability of interests. Said liability
policies shall be endorsed as needed to provide that the insurance afforded by
the policies to the additional insureds relating to the Subleased Premises is
primary and that all insurance carried by Sublessor is strictly excess and
secondary and shall not contribute with Sublessee's liability insurance. The
coverage afforded to Sublessor and any lender of Sublessor by Sublessee must be
at least as broad was that afforded to Sublessee and may not contain any terms,
conditions, exclusions or limitations applicable to Sublessor or any lender of
Sublessor that do not apply to Sublessee.
9. CROSS-DEFAULT, RIGHTS. Concurrently with entering into this First
Sublease Amendment, Sublessee has entered into the Second Lease Amendment for
additional portions of the second, third, and fourth floors of the Building.
Sublessor and Sublessee hereby agree that it shall be an additional covenant of
the Sublease that Sublessee perform all covenants and pay all rent due and to
become due under the Lease. Sublessor further agrees that the additional
covenants contained in the Sublease as to parking and the satellite dishes shall
be equally available to Sublessee under the terms of the Lease.
10. OPTIONS TO EXTEND TERM. Sublessee shall have the right, to be
exercised as hereinafter provided, to convert the Sublease to a direct lease
with Master Lessor (the "Converted Sublease"), such conversion to be effective
from and after the expiration of the original term of the Sublease, and
simultaneously with such conversion to extend the term of the Converted Sublease
for the following additional periods: (a) the first option, if exercised, shall
extend the term of the Converted Sublease for the period from April 1, 2006
through December 31, 2010, and (b) the second option, if exercised, shall extend
the term of the Converted Sublease for the period from January 1, 2011 through
December 31, 2015. Said extensions shall be upon all of the terms and conditions
of the Sublease, except as modified by the following terms and conditions:
(a) That Sublessee is not then in default under any of the terms,
covenants, conditions, provisions or agreements of the Sublease or the Lease;
4.
41
(b) Sublessee shall exercise its right to extend term by notifying
Master Lessor not less than one (1) year prior to the termination of the
original term (or previously extended term) hereof of its election to exercise
such right, otherwise said option (including any options for further extensions
of the term) shall be null and void; and
(c) The new rental shall be subject to the mutual agreement of
both Master Lessor and Sublessee but in no event shall the rental be less than
the then fair market value of the Subleased Premises. The parties shall have
thirty (30) days after Master Lessor receives Sublessee's notice in which to
agree on the new rental for the extended term. If Master Lessor and Sublessee
are unable to agree on the new rental for the extended term within said 30-day
period, then, within ten (10) days thereafter, Master Lessor and Sublessee will
each choose an appraiser to determine the fair market rental value of the
Subleased Premises by giving notice to the other party of the identity of the
appraiser it selected.
If a party does not appoint an appraiser within such ten day period, the
single appraiser appointed shall be the sole appraiser and shall set the new
base rental for the extended term. If the two appraisers are appointed by the
parties as stated in this paragraph, they shall meet promptly and attempt to set
the new rental for the extended term. If they are unable to agree within twenty
(20) days after the second appraiser has been appointed, they shall select a
third impartial appraiser meeting the qualifications stated in this paragraph
within five (5) days after the aforesaid twenty (20) day period; if the two
appraisers are unable to agree upon the third appraiser, either party may apply
to the Presiding Judge of the San Francisco Superior Court for appointment of
the third appraiser meeting the qualifications described below. Each of the
parties shall bear one-half of the cost of appointing the third appraiser and of
paying the third appraiser's fee. The third appraiser shall be a person who has
not previously acted in any capacity for either party. All of the appraisers
shall be California licensed real estate brokers with at least ten (10) years
experience leasing office space in San Francisco.
Within fifteen (15) days after the selection of the third appraiser, a
majority of the appraisers shall set the new rental for the extended term. If a
majority of the appraisers are unable to set the rental within the stipulated
period of time, the three appraisals shall be added together and their total
divided by three; the resulting quotient shall be the rental for the Subleased
Premises during the extended term. After the new rental for the extended term
has been set, the appraisers shall immediately notify the parties and Master
Lessor and Sublessee shall promptly enter into an amendment of the Sublease
setting forth said new rental.
11. REAL ESTATE BROKERS. Any real estate commission or other
compensation to be paid to any real estate brokers or others in connection with
this First Sublease Amendment shall be determined in accordance with, and be
subject to, the terms and provisions of Paragraph 11 of the Second Lease
Amendment ($70,365.00 for this First Sublease Amendment).
12. RATIFICATION. Sublessor and Sublessee hereby ratify, confirm and
readopt all of the terms and provisions of the Sublease, as amended by this
First Sublease Amendment.
5.
42
IN WITNESS WHEREOF, Sublessor and Sublessee have executed this First
Sublease Amendment as of the date first above written.
Dated: June 12, 1999 SAN FRANCISCO MERCANTILE COMPANY, INC.,
a California Corporation
Address: 000 Xxxxxxx Xxxxxx, Xxxxx 000 By: /s/ X. XXXXX XXXXXXXX
Xxx Xxxxxxxxx, XX 00000 --------------------------------------
Attn: Xxxxx X. Xxxx W. Xxxxx Xxxxxxxx, Chairman
By: /s/ XXXXX X. XXXX
--------------------------------------
Xxxxx X. Xxxx, Secretary-Treasurer
"SUBLESSOR"
Dated: June 12, 0000 XXXXXXX XXXXXX PARTNERS,
a California limited partnership
Address: 000 Xxxxxxx Xxxxxx, Xxxxx 000 By: /s/ X. XXXXX XXXXXXXX
Xxx Xxxxxxxxx, XX 00000 --------------------------------------
Attn: Xxxxx X. Xxxx W. Xxxxx Xxxxxxxx, General Partner
"MASTER LESSOR"
Dated: June 12, 1999 QUOKKA SPORTS, INC.,
a Delaware corporation
Address: 000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxx By: /s/ XXXX XXXXXXX
Xxx Xxxxxxxxx, XX 00000 --------------------------------------
Attn: Xxxx Xxxxxxx, President
By: /s/ XXX XXXXXXX
--------------------------------------
Xxx Xxxxxxx, Secretary
"SUBLESSEE"
6.
