Shutterfly 2008 Annual Report Download - page 89

(vii) income, profit, franchise, rent, sales, gift, estate, succession, inheritance, foreign ownership, foreign control, transfer, capital levy, and/or personal property taxes payable
by Landlord,
(viii) any and all costs of Landlord for any clean-
up, remediation, environmental surveys/assessments, compliance with environmental laws, consulting fees, treatment and
monitoring charges, transportation expenses and disposal fees, etc., and
(ix) rent under any ground or underlying lease.
(e) Payment of Proportionate Share . Subject to the terms set forth in Section 3(j) below, Tenant shall pay to Landlord each month, along with Tenant’
s installments of
Minimum Rental a sum equal to one-twelfth (1/12) of the amount estimated by Landlord (in its reasonable discretion) as Tenant’
s proportionate share of the taxes, insurance premiums
and common area maintenance costs for each calendar year during the Lease term (such amounts, together with any other sums payable by Tenant to Landlord hereunder other than
Minimum Rental being referred to as “Additional Rent”). Landlord will provide Tenant with Landlord’s estimate of Tenant’
s proportionate share of taxes, insurance premiums and
common area operating and maintenance expenses amount for the year this Lease commences within sixty (60) days after the Rent Commencement Date and for each future upcoming
calendar year on or before December 31 of each calendar year during the term hereof. If Landlord fails to notify Tenant of Tenant’
s revised proportionate share amount by such date,
Tenant shall continue to pay the monthly installments of the proportionate share amount last payable by Tenant until notified by Landlord of such new estimated amount. No later than
April 30 of each calendar year of the term, Landlord shall deliver to Tenant a written statement setting forth the actual amount of Tenant’
s proportionate share for taxes, insurance
premiums and all common area operating and maintenance costs for the preceding calendar year. Tenant shall pay the total amount of any balance due shown on such statement within
thirty (30) days after its delivery. In the event such annual costs and increases decrease for any such year, Landlord shall, at its sole election, either reimburse Tenant for any overage
paid within ten (10) days after delivery of such statement, or apply the overage against the monthly installment(s) of any Annual Rental next due from Tenant until such overage has
been recovered by Tenant. For the calendar year in which this Lease commences, Tenant’
s proportionate share shall be prorated from the Commencement Date through December 31
of such year. Further, Tenant shall be responsible for the payment of Tenant’
s proportionate share of taxes, insurance premiums and common area operating and maintenance costs for
the calendar year in which this Lease term expires, prorated from January 1 thereof through the Expiration Date. Upon the Expiration Date, Tenant shall pay any unpaid estimated
proportionate shares within thirty (30) days after the Expiration Date, which estimate shall be made by Landlord based upon actual and estimated costs for such year.
(f) Tenant’s Share of Mechanical Maintenance and Inspection Costs
. Pursuant to Paragraph 10 herein, Tenant shall be responsible, at its sole cost, for routine
mechanical maintenance and inspection services to the heating, ventilation and air conditioning (“HVAC”) equipment supplying the Premises.
(g) Intentionally deleted.
(h) Late Payment
. If any monthly installment of Minimum Rental, Additional Rent (if any) or any other sum due and payable pursuant to this Lease remains due and
unpaid ten (10) days after said amount becomes due, Tenant shall pay as Additional Rent hereunder a late payment charge of a sum equal to five percent (5%) of the unpaid rent or
other payment (“Late Charge”).
All unpaid rent and other sums of whatever nature owed by Tenant to Landlord under this Lease shall bear interest from the fifteenth (15th) day after
the due date thereof until paid at the lesser of fifteen percent (15%) per annum or the maximum interest rate per annum allowed by law (“Interest Charge”).
Acceptance by Landlord of
any payment from Tenant hereunder in an amount less than that which is currently due shall in no way affect Landlord’
s rights under this Lease and shall in no way constitute an accord
and satisfaction. Notwithstanding the foregoing, for the first two late payments by Tenant in any Lease Year, Tenant shall have five (5) days from receipt of written notice from
Landlord to make such late payment before such Late Charge and Interest Charge shall apply.
(i) Audit . Tenant shall have the right, from time to time, to audit Landlord’
s books and records as they relate to any costs and expenses for which Tenant is responsible
under this Lease during the previous calendar year of the Lease term. Any such audit shall be conducted during Landlord’
s regular business hours at the offices of Landlord where such
records are kept utilizing an independent third party (which shall be the same entity that Tenant uses for similar auditing functions for other building(s) owned or leased by Tenant)
designated by Tenant, on a non-contingency basis. In the event any such audit reveals that the costs and expenses for which Tenant has paid Tenant’
s proportionate share of such costs
relative to any audit period exceed actual costs and expenses for which Tenant is responsible for paying its proportionate share, either: (i) Landlord shall credit or refund any
overpayment to Tenant within thirty (30) days of such audit report; or (ii) Tenant shall pay to Landlord any underpayment within thirty (30) days of such audit report, as applicable. All
costs and expenses of any such audit shall be paid by Tenant, unless such audit discloses a discrepancy in the amount of five percent (5%) or more in which case Landlord shall pay for
such audit, up to a maximum amount of $5,000. Tenant may perform such an audit no more than once each calendar year during the Lease term and Tenant shall maintain all
information reviewed during such audit in a confidential manner, only disclosing such information to Tenant’s accountants, legal counsel, officers and managers. Tenant’
s right to
audit shall in no way relieve Tenant’s obligations to pay Common Area Expenses due to Landlord within thirty (30) days after receipt of an invoice therefor.
(j) Controllable Operating Expenses Cap . In no event shall Tenant’
s Controllable Operating Expenses, as defined in herein, for any calendar year from and after 2008
exceed the Controllable Operating Expenses Cap. As used herein, the term “Controllable Operating Expenses Cap”
shall mean: (i) relative to the calendar year 2008, the amount
obtained by multiplying the amount of Controllable Operating Expenses for calendar year 2007 by 1.05; and (ii) relative to each calendar year subsequent to calendar year 2008, the
amount obtained by multiplying the Controllable Operating Expenses Cap for the previous calendar year by 1.05. “Controllable Operating Expenses”
shall mean all operating and
maintenance costs chargeable pursuant to this Lease other than: (i) property taxes, including but not limited to, personal and ad valorem taxes; (ii) cost of all insurance coverage for the
Building and the common areas, including, but not limited to, the cost of fire, casualty, rental abatement, boiler and machinery, worker’
s compensation and liability insurance
applicable to the Building and the common areas and Landlord’
s personal property used in connection therewith; (iii) all charges for gas, water, sewerage service, electricity and other
utilities furnished to the Building and the common areas; (iv) ice and snow removal; and (v) the Building’
s proportionate share of any and all assessments and other charges payable by
Landlord relative to the Business Park under the terms of any applicable restrictive covenants, agreements or similar documents.
4. DELIVERY OF POSSESSION . Landlord will deliver the Premises to Tenant on the Commencement Date, with Landlord’
s Work (as defined in Paragraph 1 of
Exhibit ”C” attached hereto) substantially completed in accordance with the Final Plans and Specifications (as defined in paragraph 1 of said Exhibit ”C” ),
subject to revisions as
mutually agreed to in writing by Landlord and Tenant, as evidenced, if requested by Tenant, by the certification of Landlord’
s architect or other designated
engineering representative. Tenant shall be given access to the Premises upon written request to Landlord not more than sixty (60) days prior to the Commencement Date, for the
purposes of preparing the Premises for Tenant’
s use. With the exception of any Annual Rental payments due, all terms and conditions of this Lease shall apply to Tenant upon such
occupancy. Tenant shall coordinate such occupancy with Landlord and shall not interfere with Landlord’s completion of Landlord’
s Work. If Landlord for any reason whatsoever
cannot substantially complete Landlord’
s Work and deliver possession of the Premises to Tenant on the Commencement Date as above specified, this Lease shall not be void or
voidable nor shall Landlord be liable to Tenant for any loss or damage resulting therefrom; but in that event (except to the extent that any such delay(s) has been caused by Tenant or
its agent(s), employee(s), contractor(s) or subcontractor(s) (collectively, “Tenant Delay Factors”),
and provided that in each such instance Landlord first gives Tenant written notice that
if Tenant does not so cure its act or omission within two (2) business days the same will thereafter be considered a Tenant Delay Factor, the Commencement Date shall be adjusted to
be the date when Landlord does in fact substantially complete Landlord’
s Work and deliver possession of the Premises to Tenant. Notwithstanding anything herein to the contrary, in
the event Landlord’
s Work is not complete by the date which is one hundred twenty (120) days after the later to occur of: (i) waiver or expiration of the Contingency (as defined in
Section 7 of Exhibit “E” hereof); and (ii) approval by Landlord and Tenant of space plans and construction drawings for the Premises (such date referred to herein as the “
Delivery
Date”),
except for reasons of Tenant Delay Factors or force majeure, which force majeure delays shall only be extended by up to 45 days, Tenant shall be granted three (3) days of free
Minimal Rental for every day beyond the Delivery Date until Landlord’
s Work has been complete, and the Rent Commencement Date shall be adjusted accordingly. In the event
Landlord is unable to deliver the Premises by September 30, 2007, Tenant may terminate this Lease with no further obligation by providing Landlord written notice on or before
October 10, 2007.
5. ALTERATIONS AND IMPROVEMENTS BY TENANT .
(a) Tenant shall make no structural changes respecting the Premises or the Building and shall make no changes of any kind respecting the Premises or the Building that
are visible from the exterior of the Premises or the Building, without Landlord’
s approval, which shall not be unreasonably withheld. Any interior nonstructural changes or other
alterations, additions, or improvements to the Premises costing in excess of $20,000 in any single instance shall be made by or on behalf of Tenant only with the prior written consent
of Landlord, which consent shall not be unreasonably withheld or delayed. Prior to any such consent by Landlord, Tenant shall submit to Landlord reasonably detailed plans and
specifications covering the proposed work. If Landlord notifies Tenant of any objections to the proposed alterations, Tenant must (i) revise the plans and specifications to the extent
reasonably necessary to secure the Landlord’s approval and (ii) submit such revised plans and specifications for Landlord’
s approval. Tenant shall thereafter have the alterations
performed in accordance with the approved plans and specifications. After completion, Tenant shall deliver to Landlord an “as-built” set of plans and specifications.
(b) Tenant shall not permit any lien or claim of lien against the Premises to exist or come into being as a result of any construction work performed on behalf of or at the