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Sample Business Contracts

California-Pacific Grove-734 Lighthouse Avenue Lease - NewCon Software Inc. and Embarcadero Technology Inc.

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                          COMMERCIAL REAL ESTATE LEASE

                   734 Lighthouse Av., Pacific Grove, CA 93950

         This Lease Agreement (this "Lease") is dated effective August 1, 1999,
by and between NewCon Software Inc., a California corporation, ("Landlord"), and
Embarcadero Technology Inc., a California corporation ("Tenant").

THE PARTIES AGREE AS FOLLOWS:

1.  PREMISES. Landlord, in consideration of the lease payments provided in
this Lease, leases to Tenant a Victorian house used as a commercial office
building (the "Premises"), except for the North East Office on the third
floor and the detached storage area, located at 734 Lighthouse Ave., Pacific
Grove, CA 93950.

2.  TERM. The lease term shall be for a term of three (3) years and will
begin on August 1, 1999 and shall terminate on July 31, 2002. Thereafter,
Tenant shall have two (2) consecutive, one year options to renew and extend
the Lease on all of the same terms and conditions including rent, provided
Tenant shall give Landlord written notice of exercise of such option not less
than ninety (90) days prior to the end of the preceding term, and provided
further, there shall be no further right to renew or extend the Lease.

3.  LEASE PAYMENTS. Tenant shall pay to Landlord monthly installments of rent
in the amount of $10,000.00, payable in advance on the first day of each
month, commencing on August 1, 1999, for a total lease payment of $360,000
during the original term. Lease payments not made by the tenth of the month
shall be deemed late and subject to a late charge of ten percent (10%) of the
amount then due. Rental payments shall be made to the Landlord at 734
Lighthouse Ave., Pacific Grove, CA 93950, which address may be changed from
time to time by the Landlord.

4.  POSSESSION. Tenant shall be entitled to possession on the first day of
the term of this Lease, and shall yield possession to Landlord on the last
day of the term of this Lease, unless otherwise agreed by both parties in
writing. At the expiration of the term, Tenant shall remove its goods and
effects and peaceably yield up the Premises to Landlord in as good a
condition as when delivered to Tenant, ordinary wear and tear excepted.
Tenant has no option or other right to renew or further extend this Lease
beyond the termination date.

5.  USE OF PREMISES. Tenant may use the Premises only for development of
software. The Premises may be used for any other purpose only with the prior
written consent of Landlord, which shall not be unreasonably withheld. Tenant
shall notify Landlord of any anticipated extended absence from the Premises
not later than the first day of the extended absence.

6.  PARKING. Tenant may use the public on-street parking in front of the
premises on a non-exclusive basis with other members of the public or to such
greater degree as may be allowed by the City of Pacific Grove ("City") or to
which Landlord may be entitled.

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<PAGE>

7.  PROPERTY INSURANCE. Landlord and Tenant shall each maintain appropriate
insurance for their respective interests in the Premises and property located
on the Premises. Landlord shall be named as an additional insured in such
policies. Tenant shall deliver appropriate evidence to Landlord as proof that
adequate insurance is in force issued by companies reasonably satisfactory to
Landlord. Landlord shall receive advance written notice from the insurer
prior to any termination of such insurance policies. Tenant shall also
maintain any other insurance which Landlord may reasonably require for the
protection of Landlord's interest in the Premises. Tenant is responsible for
maintaining casualty insurance on its own property.

8.  LIABILITY INSURANCE. Tenant shall maintain liability insurance on the
Premises with personal injury limits of at least $1,000,000.00 for injury to
one person, and $3,000,000.00 for any one accident, and a limit of at least
$450,000.00 for damage to property. Tenant shall deliver appropriate evidence
to Landlord as proof that adequate insurance is in force issued by companies
reasonably satisfactory to Landlord. Landlord shall receive advance written
notice from the insurer prior to any termination of such insurance policies.

9.  MAINTENANCE. Landlord shall have the responsibility to maintain the roof,
bearing walls and foundation of the Premises in good repair at all times.
Tenant shall be responsibile for all interior maintenance of the Premises
including but not limited to plumbing, heating, and electrical systems.

10. UTILITIES AND SERVICES.

    10.1  Landlord shall be responsible for payment of the following
utilities and services in connection with the Premises:

          10.1.1 water and sewer
          10.1.2 garbage and trash disposal
          10.1.3 janitorial services
          10.1.4 pest control, water purification

    10.2  Tenant shall be responsible for payment of the following utilities
and services in connection with the Premises:

          10.2.1 electricity
          10.2.2 gas
          10.2.3 heating
          10.2.4 telephone service
          10.2.5 security and alarm system.

    10.3  Tenant shall cooperate with Landlord with regard to any future
water rationing requirements that may be imposed and shall be responsible for
it pro-rata share of any fines or assessments for excessive water use. Tenant
acknowledges that Landlord has fully explained to Tenant the utility rates,
charges and services for which Tenant will be required to pay to Landlord (if
any), other than those to be paid directly to the third-party provider.

                                       2

<PAGE>


11.  TAXES. Taxes attributable to the Premises or the use of the Premises shall
be allocated as follows:

     11.1  REAL ESTATE TAXES. Landlord shall pay all real estate taxes and
assessments for the Premises.

     11.2  PERSONAL TAXES. Tenant shall pay all personal taxes and any other
     charges which may be levied against the Premises and which are
     attributable to Tenant's use of the Premises, along with all sales and/or
     use taxes (if any) that may be due in connection with lease payments.

12.  TERMINATION UPON SALE OF PREMISES. Notwithstanding any other provision
of this Lease, Landlord may terminate this lease upon 90 days' written notice
to Tenant that the Premises have been sold.

13.  DESTRUCTION OR CONDEMNATION OF PREMISES. If the Premises are partially
destroyed by fire or other casualty to an extent that prevents the conducting
of Tenant's use of the Premises in a normal manner, and if the damage is
reasonably repairable within sixty days after the occurrence of the
destruction, and if the cost of repair is less than $50,000.00, Landlord
shall repair the Premises and a just proportion of the lease payments shall
abate during the period of the repair according to the extent to which the
Premises have been rendered untenantable. However, if the damage is not
repairable within sixty days, or if the cost of repair is $50,000.00 or more,
or if Landlord is prevented from repairing the damage by forces beyond
Landlord's control, or if the property is condemned, this Lease shall
terminate upon twenty days' written notice of such event or condition by
either party and any unearned rent paid in advance by Tenant shall be
apportioned and refunded to it. Tenant shall give Landlord immediate notice
of any damage to the Premises.

14. DEFAULTS.

    14.1 Tenant shall be in default of this Lease if Tenant fails to fulfill
any lease obligation or term by which Tenant is bound. Subject to any
governing provisions of law to the contrary, if Tenant fails to cure any
financial obligation within ten (10) days (or any other obligation within
thirty (30) days, provided Tenant commences such cure within 10 days) after
three (3) days written notice of such default is provided by Landlord to
Tenant, Landlord may take possession of the Premises without further notice
(to the extent permitted by law), and without prejudicing Landlord's rights
to damages. In the alternative, Landlord may elect to cure any default and
the cost of such action shall be added to Tenant's financial obligations
under this Lease. Tenant shall pay all costs, damages, and expenses
(including reasonable attorney fees and expenses) suffered by Landlord by
reason of Tenant's defaults. All sums of money or charges required to be paid
by Tenant under this Lease shall be additional rent, whether or not such sums
or charges are designated as "additional rent". The rights provided by this
paragraph are cumulative in nature and are in addition to any other rights
afforded by law.

                                       3

<PAGE>


    14.2 In the event of any breach of this Lease by Tenant, beside other
rights or remedies they may have, Landlord shall have the immediate right to
re-entry and may remove all persons and property from the premises; such
property may be removed and stored in a public warehouse or elsewhere at the
cost of, and for the account of Tenant. Should Landlord elect to re-enter as
herein provided or should they take possession pursuant to legal proceedings
or pursuant to any notice provided for by law, they may either terminate this
Lease or they may from time to time without terminating this Lease, relet the
premises or any part thereof for such term or terms (which may be for a term
extending beyond the term of this Lease) and at such rental or rentals and
upon such other terms and conditions as Landlord in their sole discretion may
deem reasonable and advisable with the right of making reasonable repairs of
the premises. Upon each such re-letting (a) Tenant shall be immediately
liable to pay to Landlord, in addition to any indebtedness other than rent
due hereunder, the cost and expenses of such re-letting and of such
reasonable repairs incurred by Landlord and the amount, if any, by which the
rent reserved in this Lease for the period of such re-letting (up to but not
beyond the term of this Lease) exceeds the amount agreed to be paid as rent
for the premises for such period of such re-letting; or, (b) at the option of
Landlord, rents received by Landlord from such reletting shall be applied
first to the payment of any indebtedness other than rent due hereunder from
Tenant to Landlord; second, to the payment of any costs and expenses of such
re-letting and of such reasonable repairs; third, to the payment of rent due
and unpaid hereunder and the residue, if any, shall be held by Landlord and
applied in payment of future rent as the same may become due and payable
hereunder. If Tenant has been credited with any rent to be received by such
re-letting under option (a), and such rent shall not be promptly paid to
Landlord by the new tenant, or if such rentals received from such re-letting
under option (b) during any month be less than that to be paid during that
month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord.
Such deficiency shall be calculated and paid monthly. No such re-entry or
taking possession of the premises by Landlord shall be construed as an
election on their part to terminate this Lease unless a written notice of
such intention be given to Tenant or unless the termination thereof be
decreed by a court of competent jurisdiction.

    14.3 Landlord may terminate Tenant's right to possession of the premises
at any time by giving written notice to Tenant of such termination, and no
other act by Landlord relating to the premises shall terminate this Lease. On
termination Landlord has the right to recover from Tenant:

         a. The worth,  at the time of the  award,  of the  unpaid  rent that
had been  earned at the time of termination of this Lease;

         b. The worth, at the time of the award, of the amount by which the
unpaid rent that would have been earned after the date of termination of this
Lease until the time of award exceeds the amount of the loss of rent that
Tenant proves could have been reasonably avoided;

         c. The worth, at the time of the award, of the amount by which the
unpaid rent for the balance of the term after the time of award exceeds the
amount of the loss of rent that Tenant proves could have been reasonably
avoided; and

         d. Any other amount necessary to compensate Landlord for all
detriment caused by Tenant's default.


                                       4

<PAGE>


The term "the worth, at the time of the award", as used in SUBPARAGRAPHS A AND B
of this Paragraph is to be computed by allowing interest at the rate of ten
percent (10%) per annum, and the term, as referred to in SUBPARAGRAPH C of this
Paragraph, is to be computed by discounting the amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of the award, plus one
percent (1%).

    14.4 Landlord and Tenant, at any time after the other party commits a
default, may cure the default at the defaulting party's cost, except as
otherwise limited by this Lease. If Landlord or Tenant at any time pays any
sum or incurs any cost or expense in curing the default, the sums paid or
cost or expense incurred by the non-defaulting party shall be due immediately
from the defaulting party at the time the sum is paid or the costs or
expenses incurred, and shall bear interest at the rate of ten percent (10%)
per annum from the date the sum is paid by the non-defaulting party until the
non-defaulting party is reimbursed.

    14.5 Rent not paid when due shall bear interest from the date due until
paid at ten percent (10%) per annum. Payments received from Tenant shall be
used applied as follows: first to any non-rent obligations including late
charges, second to any costs of curing any default including attorney fees
and interest accrued, then to any additional rent obligation, and finally to
the base rent.

15. HOLDOVER. If Tenant maintains possession of the Premises for any period
after the termination of this Lease ("Holdover Period"), Tenant shall pay to
Landlord lease payment(s) during the Holdover Period at a rate equal to 125% of
the normal payment rate set forth in PARAGRAPH 3 above titled "Lease Payments."

16. CUMULATIVE RIGHTS. The rights of the parties under this Lease are
cumulative, and shall not be construed as exclusive unless otherwise required by
law.

17. REMODELING OR STRUCTURAL IMPROVEMENTS; SIGNS.

    17.1 Tenant shall have the obligation to conduct any construction or
remodeling, at Tenant's sole expense, including but not limited to any
required compliance with the American's With Disabilities Act ("ADA") that
may be required to use the Premises as specified above. Tenant may also
construct such fixtures on the Premises, at Tenant's sole expense, that
appropriately facilitate its use for such purposes. Such construction shall
be undertaken and such fixtures may be erected only (i) in compliance with
all local, state, and federal governmental laws, regulations, and building
permits, (ii) shall be non-structural in nature, (iii) shall not exceed the
cumulative, aggregate amount of $10,000, and (iv) shall only be undertaken
with the prior written consent of the Landlord.. At the end of the lease
term, Tenant shall be entitled to remove, or at the request of Landlord shall
remove at Tenant's expense, such fixtures, and shall restore the Premises to
substantially the same condition of the Premises at the commencement of this
Lease.

    17.2 Tenant shall not install signs, awnings or advertisements on any
part of the Premises without (i) compliance with any local ordinances of the
City of Pacific Grove, and (ii) Landlord's prior written consent.

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<PAGE>


18. ACCESS BY LANDLORD TO PREMISES. Subject to Tenant's consent, which shall not
be unreasonably withheld, Landlord, and its agents, shall have the right to
enter the Premises to make inspections and repairs, perform maintenance, provide
necessary services, or show the unit to prospective buyers, mortgagees, tenants
or workers. However, Landlord does not assume any liability for the care or
supervision of the Premises. As provided by law, in the case of an emergency,
Landlord may enter the Premises without Tenant's consent. During the last three
months of this Lease, or any extension of this Lease, Landlord shall be allowed
to display the usual "To Let" signs and show the Premises to prospective
tenants.

19. INDEMNITY REGARDING USE OF PREMISES. Tenant hereby agrees to and shall
protect, indemnify, defend, and hold Landlord harmless from and against any and
all losses, claims, liabilities, and expenses, including actual attorney fees
and costs, if any, which Landlord may suffer or incur in connection with
Tenant's possession, use or misuse of the Premises, except for Landlord's
intentional acts or gross negligence.

20. MECHANICS LIENS. Neither the Tenant nor anyone claiming through the Tenant
shall have the right to file mechanics liens or any other kind of lien on the
Premises and the filing of this Lease constitutes notice that such liens are
invalid. Further, Tenant agrees to (1) give actual advance notice to any
contractors, subcontractors or suppliers of goods, labor, or services that such
liens will not be valid, and (2) take whatever additional steps that are
necessary in order to keep the premises free of all liens resulting from
construction done by or for the Tenant. Tenant shall notify Landlord at least
twenty (20) days prior to the start of any construction so that Landlord may
post and record appropriate "Notices of Non-responsibility."

21. NOTICE. Any and all notices or demands by or from Landlord to Tenant, or
Tenant to Landlord, shall be in writing. Notices may be served personally, or by
certified mail, by Express Mail, by overnight delivery or by facsimile as
permitted by Code of Civil Procedure Section 1013. If served personally, service
shall be conclusively deemed made at the time of service. If served by certified
mail, service shall be conclusively deemed made upon the deposit thereto in the
United States mail, postage prepaid, addressed to the party to whom such notice
or demand is to be given, as hereinafter provided, and the issuance of the
receipt for certified mail therefor. Any notice or demand to Landlord or Tenant
shall be given at the address set forth below or at such other addresses as may
be designated by written notice by the party desiring such change.

                  TO LANDLORD:      NewCon Software Inc.
                                    734 Lighthouse Ave.
                                    Pacific Grove, CA 93950

                  TO TENANT:         Embarcadero Technology Inc.
                                     425 Market St. Suite 425
                                     San Francisco, CA  94105

22. GOVERNING LAW. This Lease shall be construed in accordance with the laws of
the State of California with venue at Pacific Grove, California.

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<PAGE>


23. ENTIRE AGREEMENT/AMENDMENT. This Lease Agreement contains the entire
agreement of the parties and there are no other promises, conditions,
understandings or other agreements, whether oral or written, relating to the
subject matter of this Lease. This Lease may be modified or amended in writing,
if the writing is signed by the party obligated under the amendment.

24. SEVERABILITY. If any portion of this Lease shall be held to be invalid or
unenforceable for any reason, the remaining provisions shall continue to be
valid and enforceable. If a court finds that any provision of this Lease is
invalid or unenforceable, but that by limiting such provision, it would become
valid and enforceable, then such provision shall be deemed to be written,
construed, and enforced as so limited.

25. WAIVER. The failure of either party to enforce any provisions of this Lease
shall not be construed as a waiver or limitation of that party's right to
subsequently enforce and compel strict compliance with every provision of this
Lease.

26. BINDING EFFECT. The provisions of this Lease shall be binding upon and inure
to the benefit of both parties and their respective legal representatives,
successors and assigns.

27. TIME.   Time is of the essence of this Lease.

28. SECURITY DEPOSIT.  None.

29. HAZARDOUS MATERIALS.

    29.1 Tenant shall not at any time during the term of this Lease use,
generate, store, release or dispose of, on, under or about the premises any
hazardous substance, hazardous material, hazardous waste, toxic substance,
pollutant, contaminant, or related materials ("Hazardous Materials") except
in compliance with applicable laws. For the purposes of this covenant,
Hazardous Materials shall include, but shall not be limited to, substances
defined as "hazardous substance" or "pollutant or contaminant" in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, 42 U.S.C. Section 9601 et seq., those substances defined as
"hazardous waste" by the Resource Conservation and Recovery Act, as amended,
42 U.S.C. Section 6901 et seq., and by Section 25117 of the California Health
and Safety Code, and those substances defined as "hazardous substance" in
Section 25316 of the California Health and Safety Code, and the regulations
adopted and publications promulgated pursuant to the laws. Tenant shall
protect, indemnify, defend, and hold Landlord harmless from and against all
liability, including all foreseeable consequential damages, directly arising
out of the use, generation, storage, release or disposal of Hazardous
Material by Tenant, including, without limitation, the cost of any required
or necessary remediation, repair, clean-up or detoxification and the
preparation of any closure or other required plans, to the full extent that
such action is attributable, directly or indirectly, to the use, generation,
storage, release or disposal of Hazardous Materials on the premises at any
time by Tenant in violation of applicable laws. Tenant's obligations shall
include, but not be limited to, the effects of any contamination or injury to
person, property or the environment created or suffered by Tenant, and the
cost of investigation (including consultant's and attorney's fees and
testing), removal, remediation, restoration and/or abatement thereof, or of
any contamination therein involved, and shall survive the expiration or
earlier termination of this Lease.

                                       7

<PAGE>


    29.2 Landlord represents and warrants that, to the best of their
knowledge and belief, no Hazardous Materials are located in the premises.
Landlord shall not at any time during the term of the Lease use, generate,
store, release or dispose of, on, under or about the premises any Hazardous
Materials except in compliance with applicable laws. Landlord shall protect,
indemnify, defend and hold Tenant harmless from and against all liability,
directly or indirectly, arising out of the use, generation, storage, release
or disposal of Hazardous Materials on, under or about the Building at any
time by Landlord in violation of applicable laws.

    29.3 No termination, cancellation or release agreement entered into by
Landlord and Tenant shall release Tenant or Landlord from its respective
obligations under this Lease with respect to Hazardous Materials unless
specifically so agreed by the other party in writing at the time of such
agreement.

    29.4 If Tenant knows, or has reasonable cause to believe, that a
Hazardous Material, or a condition involving or resulting from same, has come
to be located in, on, under or about the premises either before or after the
commencement date of this Lease, other than as previously consented to by
Landlord, Tenant shall immediately give written notice of such fact to
Landlord. Tenant shall also immediately give Landlord a copy of any
statement, report, notice, registration, application, permit, business plan,
license, claim, action or proceeding given to, or received from, any
governmental authority or private party, or persons entering or occupying the
premises, concerning the presence, spill, release, discharge of, or exposure
to, any Hazardous Material or contamination in, on, or about the premises.

30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE; ESTOPPEL.

    30.1 SUBORDINATION. This Lease shall be subject and subordinate to any
mortgage, deed of trust, or other hypothecation or security device
(collectively, "Security Device"), now or hereafter placed by Landlord upon
the real property of which the premises are a part, to any and all advances
made on the security thereof, and to all renewals, modifications,
consolidations, replacements and extensions thereof. Tenant agrees that the
Lenders holding any such Security Device shall have no duty, liability or
obligation to perform any of the obligations of Landlord under this Lease,
but that in the event of Landlord's default with respect to any such
obligation, Tenant will give any Lender whose name and address have been
furnished Tenant in writing for such purpose notice of Landlord's default and
allow such Lender thirty (30) days following receipt of such notice for the
cure of the default before invoking any remedies Tenant may have by reason
thereof. If any Lender shall elect to have this Lease superior to the lien of
its Security Device and shall given written notice thereof to Tenant, this
Lease shall be deemed prior to such Security Device, notwithstanding the
relative dates of the documentation or recordation thereof.

    30.2 ATTORNMENT. Subject to the non-disturbance provisions of PARAGRAPH
30.3 below, Tenant agrees to attorn to a Lender or any other party who
acquires ownership of the premises by reason of a foreclosure of a Security
Device, and that in the event of such foreclosure, such new owner shall not:
(i) be liable for any act or omission of any prior landlord with respect to
events occurring prior to acquisition of ownership, (ii) be subject to any
offsets or defenses which Tenant might have against any prior landlord except
to the extent resulting from a default of which Landlord has been put on
notice by Tenant prior to attornment and that remains uncured at the time of
acquisition of ownership, or (iii) be bound by prepayment of more than one
month's rent.

                                       8

<PAGE>


    30.3 NON-DISTURBANCE. With respect to Security Devices entered into by
Landlord after the execution of this Lease, Tenant's subordination of this
Lease shall be subject to receiving assurance (a "non-disturbance agreement")
from the Lender that Tenant's possession and this Lease, including any
options to extend the term hereof, will not be disturbed so long as Tenant is
not in breach hereof and attorns to the record owner of the premises.

    30.4 ESTOPPEL. Tenant, within ten (10) days after written notice from
Landlord, shall execute and deliver to Landlord, in recordable form, a
certificate stating that this Lease is unmodified and in full force and
effect, or in full force and effect as modified, and stating the
modifications, and shall also state the amount of monthly rent, the dates to
which the rent has been paid in advance, and the amount of any Security
Deposit or prepaid rent.

    30.5 SELF-EXECUTING. The agreements contained in this Paragraph 30 shall
be effective without the execution of any further documents; provided,
however, that, upon written request from Landlord or a Lender in connection
with a sale, financing or refinancing of the premises, Tenant and Landlord
shall execute such further writings as may be reasonably required to
separately document any such subordination or non-subordination, attornment
and/or non-disturbance agreement as is provided for herein. Tenant's failure
to deliver any of the foregoing documents to Landlord within ten (10) days
after written notice or request therefore is a material breach and default
under this Lease.

31. CONSTRUCTION OF LEASE. Landlord and Tenant have negotiated this Lease,
have had an opportunity to be advised respecting the provisions contained
herein and have had the right to approve each and every provisions hereof;
therefore, this Lease shall not be construed against either Landlord or
Tenant as a result of the preparation of this Lease by or on behalf of either
party.

32. COUNTERPARTS; FAX; NON-BINDING. This Lease may be executed in
counterparts which when taken together shall constitute one and the same
original. This Lease may be executed and transmitted by facsimile
transmission so long as Tenant's signed original of the Lease is returned to
Landlord within seventy two (72) hours of the date the facsimile copy was
transmitted. Tenant's signature on this Lease shall be considered an offer to
lease and nothing herein shall bind Landlord until the Lease is signed by
Landlord and an executed copy is delivered to Tenant.

LANDLORD:                                   TENANT:

NEWCON SOFTWARE INC.                        EMBARCADERO TECHNOLOGY INC.

By:                                         By:
     -----------------------------               ---------------------------
     Jeffrey Newman, President                   Stephen Wong, CEO