Exhibit 10.5
LEASE TERMINATION AGREEMENT
THIS LEASE TERMINATION AGREEMENT ("Termination Agreement") is made as
of the ____ day of January, 2004 by and between DAVENPORT BUILDING LIMITED
PARTNERSHIP, a Delaware limited partnership ("Landlord") and ART TECHNOLOGY
GROUP, INC., a Delaware corporation ("Tenant").
RECITALS:
A. Landlord (as successor in interest to DVPT Limited Partnership) and
Tenant are parties to that certain lease dated as of March 11, 1999,
which lease has been previously amended by Amendment No. 1 dated
December 15, 1999, Second Amendment to Lease dated December 29, 2000,
Revocable Parking License Agreement dated August 25, 2000, and Special
Use Event License Agreement dated August 25, 2002 (as so amended, the
"Lease") relating to approximately 60,471 rentable square feet located
on the second floor ("Space A") and approximately 30,498 rentable
square feet located on the third floor ("Space B"; Space A and Space B
are hereinafter collectively referred to as the "Premises") of the
building commonly known as the Davenport Building, located at 25 First
Street, Cambridge, Massachusetts (the "Building"), all as more
particularly described in the Lease.
B. The Term is scheduled to expire on August 31, 2006 with respect to
Space A (the "Space A Stated Termination Date") and December 31, 2007
with respect to Space B (the "Space B Stated Termination Date"; the
Space A Stated Termination Date and the Space B Stated Termination Date
are hereinafter collectively referred to as the "Stated Termination
Dates").
C. Tenant has requested to terminate the Lease prior to the Stated
Termination Dates and to enter into a new lease (the "New Lease") with
respect to Space A only, in consideration of Tenant's payment of the
Termination Fee described in Section 7 below.
D. Landlord has agreed to such termination, and to enter into such New
Lease, on the terms and conditions contained in this Termination
Agreement, including without limitation the payment of the Termination
Fee. Tenant acknowledges that Landlord's willingness so to terminate
the Lease is made in reliance upon Tenant's representations contained
in Section 6 below.
E. The New Lease will be executed concurrently with this Termination
Agreement; however, the New Lease shall not commence until 12:00 a.m.
(meaning thereby the midnight between March 31 and April 1) on April 1,
2004.
NOW, THEREFORE, in consideration of the above recitals which by this
reference are incorporated herein, the mutual covenants and conditions contained
herein and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Landlord and Tenant agree as follows:
1. Effective as of 11:59 p.m. on March 31, 2004 (the "Early Termination
Date") and subject to the agreements, representations, warranties and
indemnities contained in this Termination Agreement, including, without
limitation, payment of the Termination Fee described in Section 7
below, the Lease is terminated and the Term of the Lease shall expire
with the same force and effect as if the Term was, by the provisions
thereof, fixed to expire on the Early Termination Date.
2. Effective as of the Early Termination Date, Tenant remises, releases,
quitclaims and surrenders to Landlord, its successors and assigns, the
Lease and all of the estate and rights of Tenant in and to the Lease
and the Premises, and Tenant forever releases and discharges Landlord
from any and all claims, demands or causes of action whatsoever against
Landlord or its successors and assigns arising out of or in connection
with the Premises or the Lease and forever releases and discharges
Landlord from any obligations to be observed or performed by Landlord
under the Lease after the Early Termination Date.
3. Subject to the agreements, representations, warranties and indemnities
contained in this Termination Agreement, Landlord agrees to accept the
surrender of the Lease and the Premises from and after the Early
Termination Date and, except for the continuing obligation set forth in
Section 8 below and Tenant's ongoing obligations under the New Lease,
effective as of the Early Termination Date, forever releases and
discharges Tenant from any and all claims, demands or causes of action
whatsoever against Tenant or its successors and assigns arising out of
or in connection with the Premises or the Lease and forever releases
and discharges Tenant from any obligations to be observed and performed
by Tenant under the Lease after the Early Termination Date, provided
that Tenant has satisfied, performed and fulfilled all of the
agreements set forth in this Termination Agreement, and each of the
representations and warranties set forth in Section 6 below are true
and correct.
4. (a) On or prior to the Early Termination Date, Tenant shall
fulfill all covenants and obligations of Tenant under the
Lease applicable to the period prior to and including the
Early Termination Date.
(b) With respect to Space B, Tenant shall completely vacate and
surrender Space B to Landlord in accordance with the terms of
the Lease on or before January 31, 2004. Without limitation,
Tenant shall leave Space B in a condition that is free of all
of Tenant's personal property (including all movable furniture
and equipment) and free of trash or other debris, and shall
deliver the keys to Space B to Landlord or Landlord's
designee. Furthermore, Tenant agrees that Landlord shall be
permitted to enter Space B and relocate all of Tenant's
belongings and personal property from a twenty thousand square
foot section thereof designated by Landlord (the "Vacated
Portion") to the remaining portion of Space B prior to January
31, 2004, and if Landlord elects so to do, then Tenant shall
vacate and surrender the Vacated Portion of Space B to
Landlord upon the completion of such relocation.
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(c) With respect to Space A, Landlord and Tenant acknowledge that
Tenant will be occupying Space A immediately after the Early
Termination Date pursuant to the New Lease, as defined above,
which New Lease shall become effective immediately upon the
Early Termination Date. Accordingly, provided that Space A is
in the condition that the terms of the Lease require it to be
in at the expiration of the term of the Lease, but for the
continued presence therein of Tenant's personal property and
the continued occupancy thereof by Tenant, then the terms of
this Section 4(b) shall be deemed to be satisfied with respect
to Space A.
5. Tenant acknowledges that Landlord is currently holding a letter of
credit in the amount of One Million Six Hundred Seventy Thousand 00/100
US Dollars (US$1,670,000.00) (the "Letter of Credit") securing Tenant's
obligations under the Lease. Tenant shall, on or prior to the effective
date of the New Lease, amend the Letter of Credit (which amendment
shall be in form and substance reasonably acceptable to Landlord's
attorney) to reduce the amount thereof to One Million Three Hundred
Thirty Thousand Three Hundred Sixty-Two and 00/100 US Dollars
(US$1,330,362.00) and to provide that the Letter of Credit will
continue to secure Tenant's obligations under the New Lease. Such
Letter of Credit shall be subject to further amendment as set forth in
the last paragraph of Section 6 of the New Lease.
6. Tenant represents and warrants that (a) Tenant is the rightful owner of
all of the Tenant's interest in the Lease; (b) Tenant has not made any
disposition, assignment, sublease, or conveyance of the Lease or
Tenant's interest therein; (c) Tenant has no knowledge of any fact or
circumstance which would give rise to any claim, demand, obligation,
liability, action or cause of action arising out of or in connection
with Tenant's occupancy of the Premises; (d) no other person or entity
has an interest in the Lease, collateral or otherwise; (e) there are no
outstanding contracts for the supply of labor or material and no work
has been done or is being done in, to or about the Premises which has
not been fully paid for and for which appropriate waivers of mechanic's
liens have not been obtained, (f) Tenant is not currently in default
under the Lease, and (g) as of the date hereof, the fair value of
Tenant's assets exceed the amount of its liabilities and Tenant
continues to pay its debts as and when they become due. The foregoing
representations and warranty shall be deemed to be remade by Tenant in
full as of the Early Termination Date.
7. Not later than January 20, 2004, Tenant shall pay to Landlord, by
cashier's or certified check or by wire transfer of immediately
available funds to an account designated by Landlord, the sum of Three
Million Three Hundred Forty Thousand and 00/100 Dollars ($3,340,000.00)
(the "Termination Fee").
8. Section 11(c) of the Lease shall survive the termination of the Lease
pursuant to this Agreement.
9. This Termination Agreement shall be binding upon and inure to the
benefit of Landlord and Tenant and their respective successors, assigns
and related entities.
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10. Each signatory of this Amendment represents hereby that he or she has
the authority to execute and deliver the same on behalf of the party
hereto for which such signatory is acting.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Termination
Agreement under seal on the day and year first above written.
LANDLORD:
DAVENPORT BUILDING LIMITED PARTNERSHIP,
a Delaware limited partnership
By: IBUS Davenport Cambridge, Inc., its
general partner
By: /s/ Thomas McDonough
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Name: Thomas McDonough
Title: Vice President
TENANT:
ART TECHNOLOGY GROUP, INC., a Delaware
corporation
By: /s/ Edward Terino
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Name: Edward Terino
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Title: Chief Financial Officer
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