Shutterfly 2008 Annual Report Download - page 109

EXHIBIT “C”
Upfit of Premises
1. LANDLORD’S WORK
Landlord, at Tenant’s sole cost and expense (except as provided in paragraph 2 of this Exhibit ”C” )
shall construct all improvements to the Premises which constitute a part of
Landlord’s Work (collectively, the “Improvements”)
in a good and workmanlike manner and in accordance with the Final Plans and Specifications (as hereinafter defined) and all
applicable Legal Requirements. “ Landlord’s Work” shall mean that certain work related to Tenant’
s occupancy of the Premises which shall be mutually agreed upon by Landlord and
Tenant. Tenant acknowledges that Landlord’s Work shall proceed in multiple phases (each a “Phase”).
Tenant has not yet completed final design plans for all Phases. Landlord and
Tenant shall mutually decide upon the scope and completion date(s) for each of the Phases.
For purposes of this Lease, Landlord’s Work for each Phase shall be deemed “substantially complete” when (i) Landlord has completed Landlord’
s Work for such Phase
except for punchlist items which do not prevent or materially impair Tenant’
s use or occupancy of such Phase, (ii) Tenant can occupy the completed Phase for the purpose of carrying
on its intended business therein, and (iii) Landlord has procured a temporary or permanent certificate of occupancy for such Phase, which shall allow Tenant to operate its business
within the Phase. Landlord represents and warrants that the Building has been constructed in (a) a good and workmanlike manner, (b) in accordance with applicable Legal
Requirements, and (c) in accordance with Landlord’
s base building shell specifications per the architectural drawings dated February 21, 2006 prepared by Merriman Schmitt which
have been approved by both Tenant and Landlord (the “Base Building”).
Notwithstanding anything contained herein to the contrary, Tenant (and not Landlord) shall be solely responsible for any increases in the cost of Landlord’
s Work which are
attributable to (i) any change orders requested by Tenant to the Final Plans and Specifications which are agreed to between Landlord and Tenant and/or (ii) any Tenant Delay Factors
(as described in Paragraph 4
of the Lease). Such cost increases (subject to application of the Improvements Allowance and Additional Tenant Improvement Allowance, each as
hereinafter defined) shall be payable by Tenant to Landlord within 30 days of Landlord’s written demand therefor.
Landlord shall have the final plans and specifications prepared for Phase I of Landlord’s Work (the “Final Phase I Plans and Specifications”)
and delivered to Tenant for its
review and approval (which approval shall not be unreasonably withheld) on or before March 13, 2007. Tenant, acting reasonably and in good faith, shall have seven (7) days from
Landlord’
s delivery of the Final Phase I Plans and Specifications to advise Landlord, in writing, as to whether or not Tenant desires any changes to the Final Phase I Plans and
Specifications. If Tenant fails to respond during such seven (7) day period, Tenant shall automatically be deemed to have approved the Final Phase I Plans and
Specifications. Landlord, acting reasonably and in good faith, shall have four (4) business days from Tenant’s delivery of Tenant’
s response to advise Tenant, in writing, as to whether
or not Landlord desires any changes to Tenant’
s proposed changes to the Final Phase I Plans and Specifications. If Landlord fails to respond during such four (4) day period, Landlord
shall automatically be deemed to have approved Tenant’s proposed changes to the Final Phase I Plans and Specifications.
Landlord, acting reasonably and in good faith, shall have seven (7) days from Tenant’
s delivery of the final plans and specifications for the Phases (other than Phase I) of
Landlord’s Work (the “Final Remaining Phases Plans and Specifications”)
to advise Tenant, in writing, as to whether or not Landlord desires any changes to the Final Remaining
Phases Plans and Specifications. If Landlord fails to respond during such seven (7) day period, Landlord shall automatically be deemed to have approved the Final Remaining Phases
Plans and Specifications. Tenant, acting reasonably and in good faith, shall have four (4) business days from Landlord’s delivery of Landlord’
s response to advise Landlord, in writing,
as to whether or not Tenant desires any changes to Landlord’
s proposed changes to the Final Remaining Phases Plans and Specifications. If Tenant fails to respond during such four (4)
business day period, Tenant shall automatically be deemed to have approved Landlord’
s proposed changes to the Final Remaining Phases Plans and Specifications. Within seven (7)
business days after the Final Remaining Phases Plans and Specifications have been finally approved (or deemed approved) by Landlord and Tenant, Landlord shall submit such Final
Remaining Phases Plans and Specifications to the contractors for bidding purposes in accordance with the provisions set forth below.
The Final Phase I Plans and Specifications and the Final Remaining Phases Plans and Specifications, shall sometimes collectively be referred to as the “Final Plans and
Specifications.”
In the essence of time, Landlord shall hire DSS Corporation as the general contract for Landlord Work. DSS Corporation agrees to competitively bid the work to all
subcontractors and open-book all bids for Tenant and Landlord review and selection. DSS Corporation shall receive a “cost plus 5%”
fee. Tenant shall have the opportunity to review
and provide input concerning the subcontractor bids, which Tenant agrees to do in a timely and good faith manner.
Tenant acknowledges and agrees that Tenant Delay Factors, as defined in paragraph 4 of the Lease, shall include, without limitation, any delays resulting from (i) change
orders to the Final Phase I Plans and Specifications or subsequent approved plans and specifications for the remaining phases of construction, requested by Tenant or by those acting for
or under the direction of Tenant; (ii) the performance or completion by Tenant, or any entity or person employed by Tenant, of any work in or about the Premises; (iii) the failure of
Tenant to supply adequate information to Landlord to prepare the Final Phase I Plans and Specifications by March 13, 2007; or (iv) the failure of Landlord and Tenant to mutually
agree on the Final Phase I Plans and Specifications or subsequent plans and specifications for the remaining phases of construction in a timely manner, provided that in each such
instance Landlord first gives Tenant two (2) business days notice that if Tenant does not so cure its act or omission the same will thereafter be considered a Tenant Delay Factor.
Except to the extent expressly provided in the Lease, Landlord shall have no liability or obligation whatsoever to remedy, replace or correct any alleged defects and
deficiencies in Landlord’
s Work; provided, however, that Landlord specifically warrants that (i) all loading doors will be properly operational for three (3) months after the
Commencement Date, absent any negligence of Tenant, and (ii) Landlord shall throughout the term of this Lease (as same may be extended) be responsible for repairing any latent
defects in the Improvements at Landlord’
s sole cost. Landlord shall, to the extent permitted by law, assign all warranties associated with the Premises to, and cooperate with, Tenant in
the enforcement of any express warranties or guarantees of workmanship or materials given by any contractors, subcontractors, architects, draftsmen, or materialmen relative to
Landlord’
s Work, the roof or any relevant Building systems. Notwithstanding anything to the contrary contained herein or in the Lease, Landlord shall not be responsible, to any extent
whatsoever, for the repair, remediation or correction of any alleged deficiencies or defects in any materials and workmanship in and concerning Landlord’
s Work to the extent that the
existence or occurrence of such defects or deficiencies are the result of, or due to, any negligent, willful or intentional or other acts or omissions of Tenant, its agents, employees,
contractors, subcontractors, representatives or invitees. Tenant may not conduct any activities on the Premises that would have the effect of rendering any relevant warranties related to
the performance of Landlord’
s Work void (unless previously approved by the Landlord), and if Tenant does conduct any such activities and renders any relevant warranty void,
Landlord will no longer have any obligations under the terms of the Lease with respect to the component, element or feature of the Improvements that the warranty voided by Tenant’
s
activities had previously covered. Except as otherwise provided in this Lease, at no time during the Lease term (as same may be extended pursuant to any renewal option, if any) shall
Tenant have any right, of any nature whatsoever, to withhold the timely payment of any rental due under the Lease as a result of, or due to, or because of, any alleged breaches by
Landlord under the Lease or the alleged existence of any defects or deficiencies in the Improvements.
Landlord shall obtain all applicable licenses, permits and approvals to complete the Tenant Improvements in accordance with all applicable laws.
Landlord shall give Tenant estimates of the schedule for completion of each Phase of the Improvements and thirty (30) days prior written notice of the anticipated date each
Phase of the Premises will be ready for occupancy. Within thirty (30) days following the Commencement Date, and thereafter within thirty (30) days following the completion of each
remaining Phase, Landlord and Tenant shall mutually conduct a walk-
through of the Premises and compile a punch list which sets forth any corrective work to be performed by
Landlord with respect to the Improvements which Landlord, upon receipt, shall diligently pursue to correct.
Landlord represents and warrants to Tenant with respect to each completed Phase, that as of the date each Phase is delivered to Tenant:
(i) such Phase, including the HVAC, electrical, mechanical, plumbing, sewer and other systems serving that Phase within the Building, shall be in good working order;
(ii) the Improvements within such completed Phase, and the Building upon completion of all Phases, shall not violate any covenants or restrictions of record (if any), or
any applicable Legal Requirements having jurisdiction over the Project, and