EXHIBIT 10.6
LEASE AGREEMENT
THIS LEASE (this "Lease") is made as of July 10, 2000 by and between Genesis
Partners, LLC of Bozeman, Montana, herein referred to as "Landlord", and Right
Now Technologies, Inc., a Montana corporation, of Bozeman, Montana, hereinafter
referred to as "Tenant".
WITNESSETH:
1. Leased Property. Landlord hereby leases to Tenant the office building
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located on the real property in Gallatin County, Montana more particularly
described on attached Exhibit A whose address is 40 Enterprise Blvd., Bozeman,
Montana, consisting of approximately 29,724 square feet together with (i) the
non-exclusive right of ingress and egress for Tenant and its employees, agents,
invitees and contractors between the building and the nearest public streets as
depicted on attached Exhibit B, and (ii) the right to use the parking as
depicted on attached Exhibit A for its employees, agents, invitees and
contractors in common with others (the "premises"). Landlord represents and
agrees that the parking lot will provide, at all times during the term of this
Lease, a parking ratio of not less than 3.5 spaces per 1000 square feet of
rentable square footage in buildings whose tenants are or will be using the
parking lot.
2. Terms of Lease. The primary term of this Lease shall be for one
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hundred twenty (120) months commencing on the day the Temporary Occupancy Permit
is obtained from the City of Bozeman, estimated to be approximately 1st day of
April, 2001, and ending one hundred twenty (120) months later, or sooner
terminated as herein provided.
3. Option to Extend. Upon expiration of the primary term of this Lease,
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Tenant is granted an option to extend the term of this Lease for one (1)
additional one hundred twenty (120) month period, (an "extension term") upon the
same terms and conditions as are included in this Lease, subject, however, to
renegotiation of the rent provided in paragraph 4 of this Lease. The primary
term and the extension terms will be collectively referred to in this Lease as
the "term." Tenant shall notify Landlord within not less than one hundred twenty
(120) days prior to the expiration of the primary term of this Lease or prior to
the expiration of each extension term of Tenant's exercise of its option to
extend this Lease, provided that in the circumstances described in paragraph 13,
the options to extend the term may be exercised earlier as provided in paragraph
13, and if the option to
extend is exercised earlier as provided in paragraph 13, nevertheless, the
rental payable as provided in paragraph 4 shall be determined at the time and in
the manner provided in paragraph 4 and this paragraph 3. During the following
sixty (60) day period, Tenant and Landlord shall negotiate and arrive at an
agreement or disagreement of the amount of rent to be paid during the applicable
extension term. If Landlord and Tenant agree upon the rent to be paid during the
applicable extension term, Landlord and Tenant shall at the end of the sixty
(60) day period enter into a new written lease or an amendment agreement setting
forth the amount of rental Tenant shall be required to pay pursuant paragraph 4
for the applicable extension term and any other additional terms to which
Landlord and Tenant have agreed. If Tenant and Landlord fail to agree upon the
rent to be paid during the applicable extension term during the sixty (60) day
period of negotiations, a fair market appraisal comparison of comparable
properties will be completed by an independent party upon which the Landlord and
Tenant may use to negotiate the amount of rent to be paid during the applicable
extension term. If Tenant and Landlord fail to agree upon the rent to be paid
during the applicable extension term during the sixty (60) day period of
negotiations, either Landlord or Tenant may, by written notice to the other
party given within the ensuing thirty (30) day period, elect to invoke the
arbitration provisions of this Lease to determine the rent Tenant shall be
required to pay pursuant to paragraph 4 for the applicable extension term.
4. Rent. Tenant shall pay as rental for the premises for the first year
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of the primary term of the Lease the sum of $401,374.00; computed at the rate of
$13.50 per square foot on 29,724 square feet of office space, payable monthly,
in advance on the first day of each month (beginning approximately April 1st,
2001, the estimated date of building occupancy), in installments of $33,477.83
per month. On each anniversary date of this Lease during the primary term, the
annual rent shall be adjusted by the percentage increase or decrease in the Base
Index as compared to the Comparison Index. The Base Index shall be the Consumer
Price Index for December 2000, and the Comparison Index shall be the Consumer
Price Index for each December during the primary term of this Lease. For
purposes of this paragraph 4, "Consumer Price Index means United States
Department of Labor, Bureau of Labor Statistics Consumer Price Index, All Urban
Consumers, All Items, 1982-1984=100, or if discontinued, any successor index
which, in Landlord's reasonable opinion, is most nearly equivalent to the
Consumer Price Index. During any extension term, the
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rental shall be determined as provided in paragraph 3. Rent shall be paid
without notice or demand by Landlord to Landlord at 895 Technology Blvd, Suite
101, Bozeman, Montana 59718 or at such other place as Landlord may direct in
writing.
5. Covenants. Tenant hereby acknowledges and agrees:
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A. Tenant is familiar with the premises. Tenant's taking of possession of
the premises shall be conclusive evidence that the premises were in good, clean
and sanitary condition, are in all respects satisfactory and acceptable to
Tenant, and are in the condition in which Landlord represented the premises to
be.
B. Tenant will keep the premises in a clean and sanitary condition during
the term of this Lease. Landlord shall have no obligation to make any
alterations or improvements of any kind in or about the premises other than as
set forth in this Lease. Tenant shall repair or replace promptly all damages to
the premises due to acts of Tenant, its agents, employees, invitees, or
subtenants, reasonable wear and tear excepted. Tenant also shall not cause any
waste to be committed in or about the premises; Tenant will keep the premises
free and clear of any and all refuse and debris; and Tenant agrees to observe
all rules and regulations of the County of Gallatin and State of Montana in any
way relating to maintenance, use and occupancy of the premises.
C. Tenant will not use or permit anything to be used upon the premises
which is likely to deface or damage the premises, or do anything that will
increase the rate of insurance thereof (unless Tenant first agrees to pay any
increased premiums), or permit anything to be done upon the premises or in the
areas, sidewalk or streets adjacent to the premises, which will amount to or
create a nuisance.
D. Tenant shall make no alterations in or additions to the premises
without first obtaining Landlord's written consent, which consent will not be
unreasonably withheld, delayed or conditioned. Tenant shall not erect or permit
to be erected upon the premises any signs without written consent of Landlord,
which consent will not be unreasonably withheld, delayed or conditioned.
E. Tenant agrees, with respect to all alterations or improvements to the
premises or any part thereof, which Tenant undertakes with written consent of
Landlord, that Tenant shall in all instances save Landlord and the premises
forever harmless and free from all damages, loss and liability of
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every kind and character which may be claimed, asserted or charged, including
liability to adjacent owners or tenants, based upon the acts or negligence of
Tenant or its agents, contractors or employees, for any negligence, or for the
failure of any of them to observe and comply with the requirements of the law,
including the regulations and the authorities in the City of Bozeman, and Tenant
will preserve and hold Landlord and the premises free and clear from all liens
or encumbrances for labor and materials furnished. Any and all alterations,
additions, and improvements made by Tenant to or upon the premises (with the
exception of furnishings, equipment, and removable trade fixtures installed by
Tenant) shall, upon installation, be deemed attached and part of the premises,
provided however, that if prior to termination of this Lease, or within fifteen
(15) days thereafter, Landlord so directs by written notice to Tenant, promptly
following said termination of this Lease, Tenant shall remove such of the said
additions, improvements, fixtures, and installations placed upon the demised
premises by Tenant as shall by designated in said notice from Landlord, and
Tenant shall repair any damages occasioned by such removal. Further, in this
regard, Tenant hereby agrees that it will, during the continuance of this Lease,
keep the premises and interior of the premises in good condition and repair,
reasonable wear and tear excepted.
F. Tenant may use and occupy the premises for the purpose of a business
office and all activities incidental thereto, including the manufacture of
software, and not otherwise. Tenant shall not use or knowingly permit any part
of the premises to by used for any unlawful purposes and shall comply with all
applicable laws and regulations of the County of Gallatin, State of Montana, and
the United States of America.
G. Tenant agrees that Landlord shall not be liable for any damage or
injury to persons or property or for the loss of property sustained by Tenant or
by any other person or persons on the premises due to any act of negligence of
Tenant.
H. Tenant agrees that it will not assign this Lease or sublease any
portion of the premises or permit this Lease to transferred by operation of law
or otherwise without the written consent of Landlord, which consent shall not be
unreasonably withheld, delayed or conditioned; provided, however, that any
merger and reorganization of Tenant for the purpose of incorporating under
another state law shall not be deemed to be an assignment for purposes of this
paragraph and shall
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not require Landlord's consent, or that any merger or change in control of the
Tenant shall not be deemed to be an assignment for purposes of this paragraph
and shall not require Landlord's consent. Tenant shall remain responsible under
this Lease for any portion of the premises sublet by Tenant (even if Landlord
approved the subletting), unless Landlord shall agree otherwise. Any subtenant
to whom any portion of the property is sublet shall agree to abide by the
provisions of this Lease which are applicable to the sublet portion of the
premises, before Landlord will be required to consent to the proposed subleasing
of any portion of the premises.
I. Tenant will permit Landlord, at all reasonable times and after
reasonable notice to Tenant at Landlord's sole risk and expense and in a manner
that causes the least practical disruption to Tenant, to enter upon the premises
(i) to inspect their condition and to make reasonable and necessary repairs for
the protection and preservation of the premises, (ii) to ascertain whether
Tenant has performed its covenants under this Lease, and (iii) to show the
premises to persons who may wish to rent the premises after the expiration of
the term of this Lease or to purchase the premises, provided that any showing of
the premises to persons who may wish to rent the premises shall be only during
the last year of the term of the Lease.
J. Tenant, upon leaving the premises, shall at its own expense, remove all
dirt, rubbish, and refuse and upon failure to do so, Landlord may immediately,
without further notice, do so at Tenant's expense. Tenant shall immediately pay
Landlord's expenses upon receipt of a bill for the same from Landlord.
6. Default and Landlord's Rights. If the premises shall be deserted or
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vacated, or if proceedings are commenced against Tenant for the appointment of a
trustee or receiver of a substantial portion of Tenant's property, or there
shall be a default in payment of any rent for more than five (5) days after
written notice of such default from Landlord, or there shall be a default in the
performance or any other covenant, agreement, condition, rule or regulation
herein contained, or hereafter established with Tenant's consent, which shall
continue for more than thirty (30) days (or, if the default is not curable
within thirty (30) days and if Tenant begins to cure the default within such
thirty (30) day period and diligently pursues curing the same, then for such for
additional period as shall be reasonably necessary to cure the default) after
Tenant's receipt of written notice of such default from Landlord, Tenant's
rights in this Lease (if Landlord so elects, and such election is
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reserved) shall thereupon terminate and end without the necessity for any
further notice, and Landlord shall have the right to re-enter and repossess the
premises in the manner permitted by law and dispossess or remove there from
Tenant or other occupants thereof and their effects without being liable to any
prosecution or action therefore. Landlord may likewise, at Landlord's option,
and in addition to any other remedies which Landlord may have upon default, let
and relet the premises in whole or in part, altering, changing or subdividing
the same as in its reasonable judgment may accomplish the best rental results,
and upon such terms and for such length of time, whether lesser or greater than
the unexpired portion of the term of this Lease, as Landlord may reasonably see
fit, and Tenant shall be liable to Landlord for any deficiency between the
remaining unpaid rental and the rental so procured by Landlord for the period of
said letting or reletting which is during the remaining term of this Lease and
shall further be liable for the reasonable costs of reletting and alterations or
changes required to enable Landlord to let and relet the premises, the
deficiency and costs not to exceed, however, the balance of the unpaid rental
due from tenant for the remaining term of the Lease. Landlord any institute
action for the whole of any such deficiency immediately upon effecting a letting
or reletting and shall not thereafter be precluded from further like action in
the event such letting or reletting shall not cover the entire unexpired portion
of the term hereof, or Landlord may monthly, or at such greater intervals as it
may see fit, require Tenant to pay said deficiency then existing, and Tenant
agrees to pay said deficiency to Landlord from time to time when called upon by
Landlord to do so. Should this Lease not be terminated, Landlord may,
notwithstanding such letting or reletting, at any time thereafter elect to
terminate it. Tenant, upon termination as herein provided, will yield quiet and
peaceful possession to Landlord, subject to any letting or reletting Landlord
has effected of the premises. If Landlord shall give the notice of termination
as herein provided, then, at the expiration of such period, this Lease shall
terminate as completely as if that were the date herein fixed for the expiration
of the term of this Lease, and Tenant shall then surrender the premises to
Landlord.
7. No Waiver of Breach. Tenant agrees that no consent, expressed or
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implied, by Landlord to any breach of Tenant's covenants or agreements shall be
deemed a waiver of any succeeding breach.
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8. Notice. It is agreed that all notices herein required to be given shall
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be effective upon mailing, postage prepaid, addressed to Landlord at 895
Technology Blvd, Suite 101 Bozeman, Montana 59718 or addressed to Tenant at 40
Enterprise Blvd, Bozeman, Montana or such other place as either may designate in
writing to the other. In addition, any notice from Landlord to Tenant relating
to this Lease or the premises shall be deemed duly served if personally
delivered to an officer of Tenant at the premises.
9. Surrender Upon Termination. Tenant shall, upon termination of the
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term, peacefully and quietly surrender the premises to Landlord in as good
condition as it was at the beginning, reasonable use and wear and damage by the
elements excepted. Tenant shall remove all of its personal property and trade
fixtures (repairing any damage to the premises such removal causes) so that
Landlord can repossess and enjoy the premises not later than noon on the day
upon which the term ends, whether upon notice or by holdover or otherwise.
Landlord shall have the right to enforce this covenant by ejectment, for
damages, or for breach of any other condition or covenant of this Lease.
10. Peaceful Possession. Landlord covenants and agrees, at its sole
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expense, that the exterior, structure, the roof and the heating, ventilating,
air conditioning, electrical, plumbing and all utility systems on or in the
premises shall be maintained in good repair and tenantable condition, excepting
damage resulting from neglect or intentional acts of Tenant, its agents,
employees, contractors and invitees. So long as Tenant pays the rent and
performs the covenants and agreements herein contained, Tenant shall peacefully
and quietly hold the premises for the primary term and any extensions thereof.
11. Time of Essence. Time is of the essence of this Lease with respect to
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the performance by Tenant and Landlord of their obligations hereunder.
12. Attorney's Fees. In the event any action to enforce any of the terms
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of this Lease is brought, the prevailing party shall be entitled to its
reasonable attorney's fees as provided in paragraph 25.
13. Liability - Premises. Landlord shall not be responsible or liable (i)
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for any personal injury to Tenant or any other person on the premises, or for
injury or damage to personal property or improvements of Tenant or of any third
party on the premises unless such injury or damage is caused
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by the neglect or omissions of Landlord, its agents or employees; (ii) for
injury or damage caused by the neglect or omissions of Tenant or its agents,
contractors, invitees or employees; or (iii) on account of any inconvenience or
annoyance or damage caused by fire, explosion, earthquake, flood or other causes
beyond the control of Landlord. Tenant will obtain general liability insurance
in an amount of not less than $1,000,000 on which Landlord shall be named as an
additional insured. If Tenant shall sublet any portion of the premises, the
subtenant shall also furnish the general liability insurance required of Tenant
or be covered under Tenant's policy.
In addition, Tenant will at all times hold Landlord harmless from any claim
or damages by reason of any personal injury, property damage, or otherwise,
arising from its operation or use of the premises or any of Tenant's equipment
used in connection therewith, provided the claim or damage is not caused by
negligence or omission of Landlord, its agents, contractors or employees.
Landlord shall carry, at its sole expense, all risk casualty insurance,
covering the premises, in the amount equal to the full replacement cost of the
premises. The policy shall be endorsed so that it may be terminated or amended
only upon not less than thirty (30) days prior written notice to Tenant. The
policy shall contain no co-insurance clause, a deductible amount not exceeding
$5,000, and the insurance company's consent to the waivers of subrogation set
forth in the next sentence. Landlord waives any claims it may have against
Tenant and any rights to grant subrogation rights to others for any loss, damage
or claim which is covered by Landlord's insurance. In the event that the
premises shall be rendered wholly or partially untenantable by fire, explosion,
earthquake, Act of God, or any other cause beyond the control of Landlord
(collectively, the "casualties"), Landlord (i) shall rebuild and restore the
premises as soon as reasonably practicable to the premises' former condition and
use but only (A) to the extent of the insurance proceeds Landlord receives, and
(B) if the casualties do not occur during the last two (2) years of the term
(and for this purpose the term shall include all extension terms Tenant notifies
Landlord it will exercise on or before thirty (30) days after the occurrence of
any of the casualties), or (ii) in circumstances not described in clause (ii)
may, at its option, either terminate this Lease by written notice given to
Tenant within sixty (60) days after the casualty or commence to repair the
premises within sixty (60) days after the casualty. If Landlord shall elect or
be required to repair the premises, the rental hereunder shall be abated in
proportion to the part of the premises that are untenantable, and no rental
shall be payable hereunder
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for the period that said premises shall be wholly untenantable, provided that in
the event any of the casualties is caused by the carelessness, negligence or
improper conduct of Tenant, or of Tenant's agents, employees, contractors or
invitees, the rental shall not be so abated.
All fixtures or improvements placed on the premises by Tenant, which shall
be damaged or destroyed, shall be repaired and replaced by Tenant at its own
expense and not at the expense of Landlord.
If any of the glass or plate glass in the premised shall be damaged or
become broken from the inside, Tenant shall replace, at Tenant's own cost and
expense, all such glass or plate glass broken. If the glass is damaged or broken
from the outside, Landlord shall replace the same at its own cost and expense.
14. Repairs and Maintenance. Landlord shall bear the entire expense of all
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repairs, maintenance, alterations, or improvements to the basic structure
(exterior walls, roof, heating, ventilating, air conditioning, electrical,
plumbing and other systems on the premises). Landlord shall, in addition, bear
the entire expense for the repair and maintenance of the parking area, including
landscaping and keeping the parking area free of rubbish, ice and snow. Tenant
shall pay at its own expense, all repairs, maintenance, and alterations of
Tenant installed fixtures or improvements and utilities.
15. Utilities, Taxes Etc. Tenant shall pay for all telephone, water/sewer,
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electricity, natural gas, fire system monitoring, security systems, and
janitorial services used in the operation of the premises. Tenant agrees to pay
for replacement of light bulbs. Landlord shall pay for all real property taxes
and assessments levied and assessed against the premises and for snow removal
and lawn maintenance.
16. No Smoking Policy. There will be no smoking allowed anywhere in the
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premises by anyone. It will be Tenant's responsibility to convey to and enforce
this policy by its employees, agents and all other invitees.
17. Paragraph Headings. The paragraph headings in this instrument are for
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convenience only and do not limit or construe the contents or any paragraphs.
18. Severability. It is the intent of the parties that if a part of this
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Lease is invalid, all valid parts that are severable from the invalid part shall
remain in effect. If a part of this Lease is invalid in
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one or more of it applications, that part remains in effect in all valid
applications that are severable from the invalid applications.
19. Landlord's Liability. The term "Landlord" as used herein shall mean
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only the owner or owners at the time in question of the premises. In the event
of any transfer of such title or interest, Landlord herein named (and in case of
any subsequent transfers the then grantor) shall be relieved from and after the
date of such transfer of all liabilities as respects Landlord's obligations
thereafter to be performed, provided that any funds in the hands of Landlord or
the then grantor at time of such transfer in which Tenant has an interest shall
be delivered to the grantee, who shall assume the obligations of Landlord or the
then grantor to Tenant with respect to those funds. The obligations contained in
this Lease to be performed by Landlord shall, subject to the foregoing
provisions of this paragraph 19, be binding on Landlord's successors and
assigns.
20. Supersedes. This Lease supersedes all prior agreements between the
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parties.
21. Exercise of Rights. The omission of Landlord or Tenant to exercise any
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right provided for on the default of the other at any time shall not preclude
Landlord or Tenant from the exercise of such right at any subsequent default of
the other or be deemed a waiver thereof or the right to do so.
22. Binding Effect. This Lease shall be binding upon and inure to the
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benefit of the heirs, successors, administrators, and permitted assigns of the
parties hereto.
23. Security Deposit. At the execution of this Lease, Tenant will pay
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Landlord the sum of $25,000 as a security deposit. Landlord shall hold and use
the security deposit as security for Tenant's performance of its obligations
under this Lease. At the termination of this Lease and if at that time Tenant
has fully complied with all of its obligations under this Lease, Landlord shall
return the security deposit, without interest (or the part of the security
deposit which Landlord has not applied to satisfy Tenant's obligations under
this Lease), to Tenant
24. Governing Law. This Agreement and all matters relating thereto shall
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be governed by the laws of Montana.
25. Arbitration. Any dispute under this Lease shall be decided by binding
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arbitration initiated and conducted in accordance with the commercial
arbitration rules of the American Arbitration Association ("AAA"). The parties
shall decide upon the arbitrator. If the parties are unable to decide upon the
arbitrator within ten (10) days after a notice from one party to the other
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that a dispute exists under this Lease, the AAA shall select the arbitrator. The
decision of the arbitrator shall be binding. All costs of arbitration shall be
borne by the party the arbitrator determines to be the non-prevailing party.
Such costs shall include the costs and reasonable attorneys' fees of the
prevailing party.
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IN WITNESS WHEREOF, the parties have hereunto set their hands as of the date and
year first written above.
GENESIS PARTNERS, LLC - Landlord
By:
/s/ Steve Daines 7/17/00
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Steve Daines, member - Landlord date
/s/ Clair Daines 7/17/00
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Clair Daines, member - Landlord date
/s/ Greg Gianforte 7/14/00
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Greg Gianforte, member - Landlord date
Right Now Technologies, Inc. - Tenant
By /s/ Susan Carstensen 7/14/00
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Susan Carstensen date
Chief Financial Officer
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