Quokka Sports Inc. Contracts
Sample Business Contracts
California-San Francisco-525 Brannan Street Lease - Brannan Street Partners and Quokka Sports Inc.
Lease Forms
- Start a state-specific lease for the rental of commercial property. Specify the term and rent due, as well as whether the landlord or tenant is responsible for property taxes, insurance, and maintenance and repairs.
- When a tenant vacates commercial property before the lease term has expired, it may be able to rent the premises to a third party. The tenant would be the sublessor and the third party would be the sublessee. Besides preparing a sublease, both parties will want to review the provisions for assignment or subletting in the original lease agreement between the landlord and the sublessor.
- Tenants of residential property should prepare a sublease agreement if they are seeking to sublease a room or the entire apartment or house to a third party. All parties should review the original lease agreement to see if there are any restrictions on subletting or assigning the premises.
- Triple net leases are a type of commercial leases where the tenant has to pay for property taxes, insurance, utilities, and maintenance, in addition to the monthly rent.
- When renting an office space, tenants should understand the amount of the rent and duration of the lease. Other important terms include whether the space can be subleased, which parties are responsible for maintenance, and whether any furniture and furnishings will be provided.
LEASE
1. PARTIES. This Lease, dated, for reference purposes only October 1, 1996, is
made by and between BRANNAN STREET PARTNERS, a California limited partnership
(herein called "Landlord"), and QUOKKA SPORTS, INC., a Delaware corporation
(herein called "Tenant").
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" 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
approximately 10,000 square feet and being situated on the ground floor of that
certain Building known as 525 Brannan Street, San Francisco, California
("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 be for five (5) years, commencing fifteen
(15) days following written notice from Landlord to Tenant of Landlord's
substantial completion of Landlord's Work as described 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, Landlord
agrees to provide and pay for tenant improvements to the Premises up to the
total sum of TWO HUNDRED THOUSAND AND NO/HUNDREDTHS DOLLARS ($200,000.00)
("Landlord's Work") pursuant to plans and specifications mutually agreed upon
between Landlord and Tenant. In the event Landlord's Work costs in excess of
$200,000, but less than $250,000, Landlord agrees to amortize the additional
cost as part of the rent over the five (5)-year term of this Lease, together
with interest at 10% per annum on the unpaid balance (Landlord would prefer that
Tenant pay this excess in cash at the time of construction). To the extent
Landlord's Work costs in excess of $250,000, Tenant agrees to pay such
additional costs in cash prior to the commencement of construction. In the event
Landlord's Work costs less than $200,000, the rent shall be reduced pursuant to
the following formula:
$750,000 + Cost of Landlord's Work x $15,833.33 = new monthly rental
----------------------------------
$950,000
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; provided, however, the following items
shall be completed by Landlord, and the cost thereof shall be excluded:
demolition, code compliance (e.g., ADA, general fire safety), new entrance in
the front of the building, entrance in the rear freight lobby, convert loading
dock doors to windows, landscape the atrium and installation of HVAC system to
(but not within) the Premises.
Landlord 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 Landlord and Tenant, which approval shall not be unreasonably withheld by
either party.
Upon execution of this Lease, Tenant, at its expense, shall have
provided Landlord's architect with instructions sufficient to enable Landlord's
architect to prepare complete plans and specifications for Landlord's Work. Such
plans and specifications and a cost estimate for Landlord's
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work shall also have been prepared by Landlord's architect and submitted to
Landlord 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 Landlord and Tenant, Landlord shall obtain from its
general contractor a quotation of the cost of Landlord's Work under Landlord's
construction contract and, if Landlord approves such quotation, it shall submit
the same to Tenant for approval. If Tenant disagrees with the quotation from
Landlord's general contractor, Tenant may obtain its own quotation for
Landlord's approval. If Landlord 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 Landlord'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, Landlord 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 Landlord shall be authorized to
proceed with the 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
completion. Tenant's Work shall be performed by licensed contractors and
licensed subcontractors who will work harmoniously with each other and with
Landlord and its contractors and subcontractors, and who shall be capable of
providing a completion and a mechanics' and materialmen's lien bond 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 Landlord's contractor. Tenant shall not be required to pay any
rent during such fifteen (15)-day period.
4. POSSESSION.
4.a. Landlord and Landlord's agents and contractors shall use their best
efforts and diligence to complete Landlord's work and deliver possession of the
Premises to the Tenant on or before February 1, 1997. 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 (but
not as to the second floor "temporary premises," par. 31) during the period
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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
oil or before April 1, 1997, 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 NINE HUNDRED FIFTY THOUSAND DOLLARS
($950,000.00) for the term of this Lease or FIFTEEN THOUSAND EIGHT HUNDRED
THIRTY-THREE AND NO/HUNDREDTHS DOLLARS ($15,833.33) per month (subject to
adjustment pursuant to par. 3) 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.
6. SECURITY DEPOSIT. Tenant has deposited with Landlord the sum of THIRTY-ONE
THOUSAND SIX HUNDRED SIXTY-SIX AND 66/HUNDREDTHS DOLLARS ($31,666.66). In
addition, a Letter of Credit, in form and substance acceptable to Landlord for
an additional equivalent sum (i.e., $31,666.66) will be delivered to Landlord
upon written notice from Landlord to Tenant of Landlord's substantial completion
of Landlord's Work Said sum and Letter of Credit 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. Provided Tenant is not then in default after
expiration of any applicable cure period, at the second (2nd) anniversary of the
commencement of the term of this Lease, if Landlord determines in Landlord's
reasonable discretion that Tenant has a sufficient financial condition, income,
profits and net worth, Tenant's security deposit shall be reduced to $15,833.33
cash and a Letter of Credit for an additional equivalent sum (i.e., $15,833.33).
7. OPERATING EXPENSE ADJUSTMENTS. [DELETED]
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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
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
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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 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 (1/2)
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.
(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
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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 (lie 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 oil 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.
(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.
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14. HOLD HARMLESS. Tenant shall indemnify and hold harmless Landlord against and
from any and all claims arising from Tenant's use of tile 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 tile 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 tile 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.
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 tile 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 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.
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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 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 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.
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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 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
after, 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 (2) give
notice to Tenant at any time within twenty (20) days after such damage
terminating this Lease as of the (late 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
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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 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 (lie
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
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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 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.
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(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 (lie 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 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.
(xi) 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 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.
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(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.
(xiii) 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, 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.
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(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, 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
Whitney Cresinan Limited (for Landlord) and Cushman & 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. TEMPORARY PREMISES. Upon the Landlord's completion of construction of a
demising wall or October 1, 1996, Landlord shall lease to Tenant, and Tenant
shall lease from Landlord, approximately 1,545 sq. ft. of office space located
on the second floor of the building containing the Premises, as indicated on
Exhibit "B" attached hereto and hereby reference to and made a part hereof,
"AS-IS" at a monthly rent of $2,446.25 per month, and otherwise subject to all
of the terms and conditions of this Lease. Tenant shall pay Landlord the first
month's rent upon execution of this Lease. The lease of this temporary premises
shall automatically terminate upon commencement of the term of this Lease, or
become month-to-month, pursuant to par. 3 of this Lease.
32. RIGHT OF FIRST OPPORTUNITY TO LEASE ADDITIONAL SPACE. Provided Tenant is not
then in default after expiration of any applicable cure period under any of the
terms and provisions of this Lease, Tenant shall have a "right of first
opportunity" to lease any additional space that comes available in the Building
during the term of this Lease. Landlord shall notify Tenant in writing of any
such space becoming available after receiving notice from an existing tenant
intending to vacate such space. Tenant shall respond to Landlord's notice of the
right of first opportunity within fifteen (15) business days of the date of
written notice from Landlord.
The term of the lease of the additional space shall coincide with the
remaining term of this Lease. The rent shall be the fair market value for the
space as a gross lease for comparable space in similar buildings in the area of
the building. Within fifteen (15) days of Tenant's response, Landlord and Tenant
shall attempt to agree upon a mutually acceptable rent.
If the parties are unable to agree on the new rent within that period,
then within ten (10) days after expiration of that period each party, at its
cost and by giving notice to the other party, shall appoint a real estate
appraiser with at least five (5)-years' full-time commercial appraisal
experience in (he area in which the Premises are located to appraise and set the
new rent for the additional space. If a party does not appoint an appraiser with
ten (10) days after the other party has given notice of the name of its
appraiser, the single appraiser appointed shall be the sole appraiser and shall
set the new rent for the additional space. If the two appraisers are appointed
by the parties as stated in this paragraph, they shall meet promptly and attempt
to set the new rent. If they are unable to agree within thirty (30) days
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after the second appraiser has been appointed, they shall attempt to select a
third appraiser meeting the qualifications stated in this paragraph within ten
(10) days after the last day the two appraisers are given to set the new rent.
If the parties are unable to agree oil the third appraiser, either of the
parties to this Lease by giving ten (10) days' notice to the other party can
file a petition with the American Arbitration Association solely for the purpose
of selecting a third appraiser who meets the qualifications stated in this
paragraph. Each party shall bear half the cost of the American Arbitration
Association's appointing the third appraiser and of paying the third appraiser's
fee. The third appraiser, however selected, shall be a person who has not
previously acted in any capacity for either party. Within thirty (30) days after
the selection of the third appraiser, a majority of the appraisers shall set the
new rent for the additional space. If a majority of the appraisers are unable to
set the new rent 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 new rent for the additional space and the parties shall execute an
Amendment to this Lease describing the space as part of the Premises and setting
forth the rent. The additional space shall be otherwise subject to all of the
terms and conditions of this Lease.
33. OPTION TO TERMINATE. Upon expiration of the thirty-second (32nd) month of
the term of this Lease, 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
Landlord the unamortized portion of tenant improvements and leasing commissions
(e.g., by way of example, $20.00 per sq. ft. T.I. allowance + $5.00 per sq. ft.
commission x 10,000 sq. ft./60 months = $4,166.66 per month).
34. 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.
35. 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 an, 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.
36. 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
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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: October 1, 1996 BRANNAN STREET PARTNERS, a
California limited partnership
Address: 525 Brannan Street, Suite 300 By: /s/ W. LANEY THORNTON
San Francisco, CA 94105 --------------------------------
Attn: Diana E. Lees W. Laney Thornton, General
Partner
LANDLORD
Dated: September __, 1996 QUOKKA SPORTS INC., a Delaware
corporation
By: /s/ [Signature Illegible]
--------------------------------
President
Address: 525 Brannan Street, Suite 203 By: /s/ [Signature Illegible]
San Francisco, CA 94105 --------------------------------
Attn: Secretary
16
<PAGE> 17
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 (lie
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.
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.
17
<PAGE> 18
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 (lie
right to prevent access to (lie 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 ally
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.
18
<PAGE> 19
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE ("First Amendment") is made and entered
into this 17th day of August 1998, by and between BRANNAN STREET PARTNERS, a
California limited partnership ("Landlord"), and QUOKKA SPORTS, INC., a Delaware
corporation ("Tenant").
RECITALS
WHEREAS, Landlord and Tenant have made and entered into that certain
Lease dated October 1, 1996, as amended by that letter agreement dated July 10,
1997 (collectively, "Lease"), for the lease and improvement by Landlord to
Tenant of those certain premises consisting of approximately 10,000 rentable
square feet on the ground floor of the building commonly known as 525 Brannan
Street San Francisco, California, as more particularly described in the Lease
("Premises"); and
WHEREAS, Landlord and Tenant desire to amend the Lease further to
provide for adding additional premises on the Second Floor of the Building to
the Premises 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. ADDITIONAL PREMISES. Upon commencement of the Additional Premises
Term (as hereinafter defined), paragraph 2 of the Lease is hereby amended to add
the following to the Premises, subject to all of the terms and conditions of the
Lease and this Amendment: that certain office space, known as "Suites 207 and
208," indicated on Exhibit "A-l" attached hereto consisting of One Thousand
Three Hundred Fifty-Two (1,352) sq. ft. on the Second Floor of the Building
(said space shall be sometimes hereinafter specifically referred to as the
"Additional Premises").
1
<PAGE> 20
2. TERM OF THE ADDITIONAL PREMISES. The term of the lease of the
Additional Premises ("Additional Premises Term") shall commence on August 17,
1998. The Additional Premises Term shall expire on August 31, 1999; provided,
however, that Tenant may give Landlord written notice on or before June 1, 1999,
of Tenant's election to extend the Additional Premises Term so as to be
co-terminus with the term of the Premises. The term of this Lease for the
Premises (including the Additional Premises if Tenant gives the notice referred
to in the preceding sentence) shall expire on March 31, 2002, subject to
Tenant's option to terminate as provided in paragraph 33 of the Lease, as
amended by this First Amendment.
3. CONDITION OF THE ADDITIONAL PREMISES. Tenant acknowledges that it has
had an opportunity to inspect and investigate the condition of the Additional
Premises and Tenant accepts the Premises in its present condition, "as-is." Any
changes or alterations to the Premises shall be made pursuant to paragraph 10 of
this Lease and shall be subject to Landlord's prior written consent.
4. RENT FOR THE ADDITIONAL PREMISES. Upon commencement of the Additional
Premises Term; paragraph 5 of the Lease is hereby amended to provide that Tenant
agrees to pay to Landlord as rental, without prior notice or demand, for the
Additional Premises the sum of THREE THOUSAND TWO HUNDRED ELEVEN AND
NO/HUNDREDTHS DOLLARS ($3,211.00) per month on or before the first day of the
first full calendar month of the term hereof, commencing with the commencement
of the Additional Premises Term, 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 partial month's rent of $1,533.71 (15/31ths) shall be paid
upon the execution hereof. The aforesaid sum of rental is payable in addition to
payment of the sum of $15,833.33 per month, making the total rental to be in the
sum of NINETEEN THOUSAND FORTY-FOUR AND 33/HUNDREDTHS DOLLARS ($19,044.33) 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.
5. SECURITY DEPOSIT. Paragraph 6 of the Lease is hereby amended to
delete the reference to the Letter of Credit and that Absolute Guaranty of Lease
dated July 10, 1997, executed by John E. Bertrand, Alan S. Ramadan and Richard
Williams ("Guaranty") which replaced it and reduction in the security deposit.
In lieu thereof upon execution hereof, Tenant agrees to deposit with Landlord
the additional sum of SIX THOUSAND FOUR HUNDRED TWENTY-TWO AND N0/HUNDREDTHS
DOLLARS ($6,422.00), representing two (2) months' rent for the Additional
Premises which, when added to the present security deposit of $31,666.66 (two
months' rent prior to this Amendment), makes the total security deposit the sum
of THIRTY-EIGHT THOUSAND EIGHTY-EIGHT AND 66/HUNDREDTHS DOLLARS ($38,088.66),
which sum shall not be reduced, but rather, shall be held by
2
<PAGE> 21
Landlord pursuant to paragraph 6 for the entire term of the Lease. Upon
execution of this First Amendment Landlord shall return to Tenant the original
Guaranty, which is null and void as of June 23, 1998.
6. OPTION TO TERMINATE. Paragraph 33 of the Lease is hereby amended to
provide that Tenant's option to terminate the Lease shall not be effective until
on or after March 31, 2000. Landlord and Tenant also confirm that Landlord's
contribution to the total amount of tenant improvements for the ground floor was
in the sum of $200,000.00 and leasing commissions for the ground floor were in
the sum of $53,199.99 and that the unamortized portion is 60 months less the
period commencing April 1, 1997, to the date of termination divided by 60
months.
7. RATIFICATION. Landlord and Tenant hereby ratify, confirm and readopt
all of the terms and provisions of the Lease, as amended by this First
Amendment.
IN WITNESS WHEREOF, Landlord and Tenant have executed this First
Amendment as of the date first above written.
LANDLORD TENANT
BRANNAN STREET PARTNERS, QUOKKA SPORTS, INC.,
a California limited partnership a Delaware corporation
By: /s/ WILLIAM LANEY THORNTON By: /s/ [Signature Illegible]
-------------------------------- -------------------------------------
William Laney Thornton, President
General Partner
By: /s/ [Signature Illegible]
-------------------------------------
Secretary
3
<PAGE> 22
[FLOOR PLAN]
<PAGE> 23
SECOND AMENDMENT TO LEASE
THIS SECOND AMENDMENT TO LEASE ("Second Lease Amendment") is made and
entered into this 12th day of June, 1999, by and between BRANNAN STREET
PARTNERS, a California limited partnership (herein called "Landlord"), and
QUOKKA SPORTS, INC., a Delaware corporation (herein called "Tenant").
RECITALS
WHEREAS, Landlord and San Francisco Mercantile Company, Inc., a California
corporation ("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 525
Brannan Street, San Francisco, California, as more particularly described in the
Master Lease (the "Master Leased Premises");
WHEREAS, Landlord and Tenant have made and entered into that certain Lease
dated October 1, 1996, as amended by that letter agreement dated July 10, 1997
(collectively, "Original Lease"), for the lease and improvement by Landlord to
Tenant of those certain premises consisting of approximately 10,000 rentable
square feet on the ground floor of the Building (the "Leased Premises");
WHEREAS, Landlord and Tenant have made and entered into that certain First
Amendment to Lease dated August 17, 1998 (the "First Amendment"), adding a
portion of the second floor of the Building to the Leased Premises, making the
total Leased Premises approximately 11,352 sq. ft., confirming the Lease
expiration date of March 31, 2002, and amending the amount of the security
deposit to be in the total amount of $38,088.66. The Original Lease and First
Amendment are sometimes hereinafter collectively referred to as the "Lease;"
WHEREAS, Sublessor and Tenant (as "Sublessee") have made and entered into
that certain Sublease dated June 23, 1998 (the "Original Sublease"), with the
consent of Landlord, for the lease by Tenant of those certain premises
consisting of 7,824 rentable sq. ft. on the second floor of the Building and,
concurrently herewith have entered into a First Amendment to Sublease (the
"First Sublease Amendment"), adding portions of the third floor of the Building
to the subleased premises, consisting of 8,418 sq. ft., extending the term of
the Sublease and agreeing on other matters consistent with this Second Lease
Amendment (the above-described subleased premises are sometimes hereinafter
referred to collectively as the "Subleased Premises"); and
WHEREAS, Landlord and Tenant desire to enter into this Second Lease
Amendment to amend the Lease to add additional portions of the second, third,
and fourth floors of the Building to the Leased Premises, to extend the term of
the Lease, to increase the rental, to provide for a contribution by Landlord to
a tenant improvement allowance, to provide for options to extend, and to agree
upon certain other and related matters upon the terms and conditions hereinafter
set forth.
1.
<PAGE> 24
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. ADDITIONAL LEASED PREMISES. Paragraph 2 of the Lease is hereby
amended to add the following to the Leased Premises, as shown on EXHIBIT A
attached hereto, subject to all of the terms and conditions of the Lease and
this Second Lease Amendment:
<TABLE>
<CAPTION>
FLOOR SUITE REFERENCE RENTABLE SQ. FT.
<S> <C> <C>
Second Suite 201 1,720
Third Suite 302 2,500
Third Suite 304 891
Third Suite 305 542
Third Suite 306 320
Third Suite 307 987
Third Suite 308 741
Third Suite 309 560
Fourth Suite 400 1,932
Fourth Suite 404 1,803
Fourth Suite 408 741
Fourth Suite 409 560
------
13,297
======
</TABLE>
The foregoing suites shall be sometimes hereinafter specifically referred
to as the "Additional Leased Premises."
2. COMMENCEMENT OF RENT FOR THE ADDITIONAL LEASED PREMISES. Tenant
acknowledges that Suite 302 is presently subject to a written lease with a term
expiring on September 30, 1999. The obligation to pay rent for the Additional
Leased Premises shall commence thirty (30) days following the date Landlord
delivers physical possession of the Additional Leased Premises to Tenant,
"as-is," in broom-clean condition (the "Additional Rent Commencement Date").
Landlord agrees to use its best efforts to deliver physical possession of all of
the suites constituting the Additional Leased Premises, on or before September
15, 1999, except Suite 302 shall be delivered on October 1, 1999. Upon the
taking of physical possession, Tenant shall deliver to Landlord amended
certificates of liability insurance pursuant to Paragraph 16 of the Lease and
Paragraph 8 of this Second Lease Amendment.
Landlord and Tenant agree that the expiration of the initial term of the
Lease is hereby extended to expire on March 31, 2006.
2.
<PAGE> 25
Landlord and Tenant agree that Paragraph 33 of the Lease, "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 LEASED PREMISES; TENANT ALLOWANCE.
Tenant acknowledges that it has had an opportunity to inspect and investigate
the condition of the Additional Premises and Tenant accepts the Premises in its
present condition, "as-is," subject only to being delivered physically vacant
and "broom clean" by Landlord, except in all cases subject to latent defects
which severely impair Tenant's ability to use the Additional Leased Premises for
their intended purpose and which are not reasonably discoverable by Tenant at
this time; provided that Tenant's sole remedy in such event shall be to
terminate the Lease as to the portion of the Leased Premises affected by such
defect. Any changes or alterations to the Leased Premises (including the
Additional Leased Premises) shall be made pursuant to paragraph 10 of the Lease
and shall be subject to Landlord's prior written consent, which consent shall
not be unreasonably withheld.
Landlord agrees to pay Tenant the following sums as tenant allowances for
improvements to be made to the Leased Premises pursuant to Paragraph 10 of the
Lease (said payments to be made on invoices presented to, and approved by,
Landlord, which approval shall not be unreasonably withheld):
(a) For the present 11,352 sq. ft. of Leased Premises, the sum of
$3.87 per sq. ft., or the total sum of $43,932.24; provided, however, upon the
request of Tenant, Landlord agrees to loan Tenant an additional sum up to $7.50
per sq. ft. ($85,140.00), 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 Leased Premises, the sum of $11.37 per sq.
ft., or the total sum of $151,186.89.
4. RENT. Upon commencement of the term of the lease of the Additional
Premises, Paragraph 5 of the Lease is hereby amended to provide that Tenant
agrees to pay to Landlord as rental, without prior notice or demand, the
following:
<TABLE>
<CAPTION>
PORTION OF PREMISES PERIOD MONTHLY RENT
<S> <C> <C>
1st Floor, 10,000 sq. ft. Additional Rent Commencement Date through 3/31/2002 $15,833.33/mo.
4/1/2002-3/31/2006 $29,166.67/mo.
2nd Floor, 1,352 sq. ft. Additional Rent Commencement Date through 3/31/2002 $3,211.00/mo
4/1/2002-3/31/2006 $3,943.33/mo.
Additional Premises (as Additional Rent Commencement Date through 3/31/2006 $35.00 per sq. ft. per year
delivered, up to 13,297 sq. ft.) ($2.92 per sq. ft. per month),
up to $38,782.92/mo. total
</TABLE>
3.
<PAGE> 26
5. SECURITY DEPOSIT. Tenant's present security deposit pursuant to the
First Amendment to Lease is in the sum of Thirty-Eight Thousand Eighty-Eight And
66/Hundredths Dollars ($38,088.66), which represents two months' rent for 11,532
sq. ft. of the Premises. Upon execution hereof, the foregoing sum shall be
reduced to $37,500.00, and Tenant 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 Tenant's performance of
all of the terms and conditions of the Lease (the "Letter of Credit"). The
Security Deposit shall be governed by the terms of the Lease; provided, however,
that at such time as Tenant 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 Lease, to be held by Landlord pursuant to
paragraph 6 of the Original Lease for the entire term of the Lease.
6. PARKING; LANDLORD'S USE. Landlord and Tenant agree that there are
presently thirteen (13) parking spaces in the Building, of which nine (9) are
inside. Landlord agrees to rent to Tenant for the term of this Lease and
Sublease, plus any extension thereof, all of said parking spaces, as said spaces
become available due to vacation by other tenants, except (1) interior space,
upon the following terms and conditions: (1) Tenant shall pay initial rent for
the parking spaces in the amount of $200.00 per space as additional rent under
this Lease, as and when such spaces are leased by Tenant, (2) Landlord shall be
entitled to raise the monthly rent per space to the prevailing rental being
charged to third party, nontenants for comparable interior parking in the area
(e.g., 330 Townsend) upon thirty (30) days' prior written notice to Tenant; and
(3) Tenant shall not remove or disturb the existing "car lifts" in the garage
area and shall allow Landlord occasional access thereto, e.g. 5 days per month,
without charge (Landlord shall be responsible for all repairs, maintenance,
permits, etc.). Tenant may, at Tenant's sole option, share the foregoing rights
with Sublessee at any time and from time to time, at no additional charge to
Tenant or Sublessee.
7. SATELLITE DISHES. For the monthly sum of $1,200.00 payable by Tenant
as additional rent from and after the installation of the platform described
below, to be paid with Tenant's payment of Monthly Rent, Tenant shall have the
right to install, operate, and maintain a platform on the roof of the Building
capable of holding up to fifteen (15) satellite dishes, and to install, operate,
and maintain on such platform such satellite dishes, subject to reasonable
restrictions to be agreed upon by Landlord and Tenant with respect to the
allowable number of roof penetrations, permissible loads, and Tenant's
insurance, maintenance, repair, and removal obligations relating thereto. The
approximate dimensions of the platform described above are set forth on EXHIBIT
C attached hereto. Tenant may, at Tenant's sole option, share the foregoing
rights with Sublessee at any time and from time to time, at no additional charge
to Tenant or
4.
<PAGE> 27
Sublessee. Tenant reaffirms and confirms that, in addition to providing Landlord
with certificates of insurance naming Landlord as an additional insured for any
liability in connection with the satellite dishes, Tenant shall indemnify and
hold harmless Landlord against and from any and all claims arising from Tenant's
installation and use of the satellite dishes, including, but not limited to
claims for personal injury or injury to health, 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. In any case, if an 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.
8. LIABILITY INSURANCE. Paragraph 16 of the Lease is hereby amended to
provide that Tenant shall obtain and maintain comprehensive general liability
insurance on an occurrence basis with limits of liability in an amount not less
than $2,000,000 (Two Million Dollars) combined single limit for each occurrence.
The comprehensive general liability policy shall include contractual liability
which includes the provisions of Paragraph 14 of the Lease (it is the parties'
intent to provide coverage to the maximum extent possible of Tenant's
indemnification obligations under this Lease; however, it is understood that the
insurance requirements are independent of Tenant's exculpation, indemnification
and other obligations under this Lease and shall not be construed or interpreted
in any way to restrict, limit or modify Tenant's exculpation, indemnification
and other obligations or to limit Tenant's liability under this Lease). Tenant
shall furnish to Landlord certificates of insurance and copies of the policies
evidencing the aforesaid insurance coverage, including naming Landlord as an
additional insured. Renewal certificates must be furnished to Landlord 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. Tenant'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).
Tenant's liability coverage shall further include premises-operations coverage,
products-completed operations coverage and owners and contractors protective
coverage (when reasonably required by Landlord). Tenant's general liability
policies shall be endorsed as needed to provide cross-liability coverage for
Tenant, Landlord and any lender of Landlord of which Tenant 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 Premises is primary and that all insurance
carried by Landlord is strictly excess and secondary and shall not contribute
with Tenant's liability insurance. The coverage afforded to Landlord and any
lender of Landlord by Tenant must be at least as broad as that afforded to
Tenant and may not contain any terms, conditions, exclusions or limitations
applicable to Landlord or any lender of Landlord that do not apply to Tenant.
9. CROSS-DEFAULT, RIGHTS. Concurrently with entering into this Second
Lease Amendment, Tenant has entered into the First Sublease Amendment with
Sublessor. Landlord and Tenant hereby agree that it shall be an additional
covenant of this Lease that Tenant perform all covenants and pay all rent due
the Sublease. Landlord further agrees that the additional covenants contained in
this Lease as to parking and the satellite dishes shall be equally available to
Tenant under the terms of the Sublease.
5.
<PAGE> 28
10. OPTIONS TO EXTEND TERM. Tenant shall have the right to be exercised
as hereinafter provided, to extend the term of the Lease for the following
additional periods: (a) the first option, if exercised, shall extend the term of
the Lease for the period from April 1, 2006 through December 31, 2010, and (b)
the second option, if exercised, shall extend the term of the Lease for the
period from January 1, 2011 through December 31, 2015. Said extensions shall be
upon all of the terms and conditions of the Lease, except as modified by the
following terms and conditions:
(a) That Tenant is not then in default under any of the terms,
covenants, conditions, provisions or agreements of this Lease or the Sublease;
(b) Tenant shall exercise its right to extend the term of the
Lease by notifying Landlord not less than one (1) year prior to the termination
of the original term (or previously extended term) of the Lease of Tenant's
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 Landlord and Tenant but in no event shall the rental be less than the then
fair market value of the Leased Premises. The parties shall have thirty (30)
days after Landlord receives Tenant's notice in which to agree on the new rental
for the extended term. If Landlord and Tenant are unable to agree on the new
rental for the extended term within said 30-day period, then, within ten (10)
days thereafter, Landlord and Tenant will each choose an appraiser to determine
the fair market rental value of the Leased 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 Leased
Premises during the extended term. After the new rental for the extended term
has been set, the appraisers shall immediately notify the parties and Landlord
and Tenant shall promptly enter into an amendment of the Sublease setting forth
said new rental.
6.
<PAGE> 29
11. REAL ESTATE BROKERS. Except for the Brokers (as defined below),
Landlord and Tenant each agrees to protect, defend, indemnify and hold the other
harmless from any and all claims, loss, cost, damage and/or expense (including,
without limitation, reasonable attorneys' fees and court costs) by any real
estate broker or salesperson or other entity or party ("Other Broker") for a
commission or finder's fee as a result of such other party's dealings with such
Other Broker. Landlord represents and warrants that on all matters concerning
this Lease and the Sublease Landlord has had Whitney Cressman Limited
("Whitney") as its exclusive agent. Tenant represents and warrants that Tenant
has retained Triton Commercial Real Estate, Inc. ("Triton") as its exclusive
agent. Whitney and Triton are defined herein as the "Brokers." Landlord shall be
responsible for the payment of all compensation to the Brokers (totaling
approximately $179,000) be paid one-half to Whitney and one-half to Triton
($109,134.00 for this Second Lease Amendment). Tenant further agrees to protect,
defend, indemnify and hold Landlord and Whitney harmless from any and all
claims, loss, cost, damage and/or expense (including, without limitation,
reasonable attorneys' fees and court costs) by Cushman & Wakefield for a
commission or finder's fee as a result of such Tenant's dealings with Cushman &
Wakefield. Notwithstanding and in addition to the foregoing indemnity, hold
harmless and defense provisions, should Landlord believe in good faith that
Cushman may assert a claim for leasing commissions or other compensation in
connection with these transactions, Landlord shall be entitled to withhold an
equitable amount of Triton's leasing commission until such claim is resolved;
provided, however, that if no such claim is filed by Cushman within thirty (30)
days after the date hereof, Landlord shall release any amount then due so
withheld.
12. RIGHT OF FIRST OPPORTUNITY TO LEASE ADDITIONAL SPACE. Landlord and
Tenant hereby amend Paragraph 32 of the Lease to provide that, notwithstanding
anything contained in the Lease to the contrary, that certain Penthouse known as
Suite 400R, containing approximately 1505 sq. ft., shall be excluded from the
provisions of Paragraph 32 of the Lease and Tenant's "right of first
opportunity" unless otherwise expressly agreed to in writing by Landlord.
13. RATIFICATION. Landlord and Tenant hereby ratify, confirm and readopt
all of the terms and provisions of the Lease, as amended by this Second Lease
Amendment.
7.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Second Lease
Amendment as of the date first above written.
LANDLORD
BRANNAN STREET PARTNERS,
a California limited partnership
By /s/ WILLIAM LANEY THORNTON
--------------------------------------
William Laney Thornton,
General Partner
TENANT
QUOKKA SPORTS, INC.,
a Delaware corporation
By /s/ SIGNATURE
--------------------------------------
General Counsel
By /s/ SIGNATURE
--------------------------------------
Executive Vice President and Chief
Financial Officer