Shutterfly 2008 Annual Report Download - page 98

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 shall submit to Landlord the proposed floor plan (including description of Landlord’
s Work) on or before December 26, 2006. Landlord shall within five (5) business
days from receipt deliver to Tenant, in writing, either approval of the floor plan or detailed comments on any changes reasonably necessary. If Landlord responds within such five (5)
business day period, Tenant shall be responsible for obtaining such changes to the floor plan as may be agreed upon by the parties and resubmitting for written approval. If Landlord
fails to respond during such five (5) business day period (the “Initial Floor Plan Response Period”),
Landlord shall automatically be deemed to have approved the initial floor
plan. The final floor plan, as approved (or deemed approved) by both Landlord and Tenant, is herein referred to as the “Initial Floor Plan”.
If Landlord and Tenant cannot mutually
agree upon the Initial Floor Plan on or before January 15, 2007 (the “Initial Floor Plan Approval Deadline Date”), Landlord or Tenant shall have the option, to terminate the Lease.
For purposes of this Lease, Landlord’s Work shall be deemed “substantially complete” when (i) Landlord has completed Landlord’
s Work except for punchlist items which do
not prevent or materially impair Tenant’
s use or occupancy of the Premises, (ii) Tenant can occupy the Premises for the purpose of carrying on its intended business therein, and (iii)
Landlord has procured a temporary or permanent certificate of occupancy for the Premises, which shall allow Tenant to operate its business within the Premises. Landlord represents
and warrants that the Building has been constructed in (i) a good and workmanlike manner, (ii) in accordance with applicable Legal Requirements, and (iii) 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 (the “Final Plans and Specifications”) for Landlord’
s Work prepared, based upon the Initial Floor Plan, and delivered to
Tenant for its review and approval (which approval shall not be unreasonably withheld) on or before January 22, 2007. Such review and approval by Tenant of the Final Plans and
Specifications shall be limited solely to those specific items that do not materially conform to the Initial Floor Plan. Tenant, acting reasonably and in good faith, shall have seven (7)
days from Landlord’
s delivery of the Final Plans and Specifications to advise Landlord, in writing, as to whether or not Tenant desires any changes to the Final Plans and
Specifications. If Tenant fails to respond during such seven (7) day period (the “Response Period”),
Tenant shall automatically be deemed to have approved the Final Plans and
Specifications. If Landlord and Tenant cannot mutually agree upon the Final Plans and Specifications on or before January 30, 2007 (the “Final Plans Approval Deadline Date”
),
Landlord or Tenant shall have the option, to terminate the Lease.
Within seven (7) business days after the Final Plans and Specifications have been finally approved (or deemed approved) by Tenant, Landlord shall submit the Final Plans and
Specifications to the contractors for bidding purposes in accordance with the provisions set forth below. 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 Plans and Specifications 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 or (iii) the failure of Landlord and Tenant to agree on the Final Plans and Specifications on or before the Final Plans
Approval Deadline Date, 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 the Improvements and thirty (30) days prior written notice of the anticipated date the Premises will be
ready for occupancy. Within thirty (30) days following the Commencement Date, 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 that as of the Commencement Date:
(i) the Premises, including the HVAC, electrical, mechanical, plumbing, sewer and other systems serving the Premises, shall be in good working order;
(ii) the Improvements and the Building shall not violate any covenants or restrictions of record (if any), or any applicable Legal Requirements having jurisdiction over
the Project, and
(iii) Landlord shall deliver the Premises to Tenant clean and free of debris.
Except as provided in Section 5(c) of the Lease, Tenant shall have no obligation to restore the Premises to their original condition as of the Commencement Date upon lease
termination or expiration of the Lease.
Landlord agrees that there shall be no construction management fee payable by Tenant to Landlord to oversee the construction of the Improvements.
2. IMPROVEMENTS ALLOWANCE